BIOGEN INC. Q1 FY2025 earnings call

Management Statement and Operational Highlights

• Biogen has a dual landscape: a declining MS portfolio and an emerging company with rare disease products (ZURZUVAE, LEQEMBI, VUMERITY).
• LEQEMBI: Key catalysts include EU approval, IV maintenance approval (dosing to once per month), pending subcutaneous formulation approval for August (enabling at-home administration), and potential approval for subcutaneous initiation in H1 2026.
• ZURZUVAE: Has treated 10,000 women with PPD, with 80% of scripts from OB-GYNs and a 20% increase in physicians writing prescriptions.
• SKYCLARYS: Available in 26 markets with ~2,400 patients on therapy globally, up 59% year-over-year.
• Pipeline: BIIB080 received FDA Fast Track designation, felzartamab initiated Phase 3 TRANSCEND study in AMR, and Biogen acquired zorevunersen for Dravet syndrome outside the US, Canada, and Mexico.
• Financials: Total revenue for Q1 was $2.4 billion, up 6% year-over-year. Non-GAAP diluted EPS was $3.02, down 18% but up 8% excluding the Stoke transaction charge. Free cash flow was $222 million.

Segment Performance

• MS Franchise: Global product revenue declined 11% year-over-year due to competition (biosimilar for TYSABRI in Europe, generic competition for TECFIDERA globally). VUMERITY saw increased demand and remains the #1 branded oral therapy.
• Rare Disease Business (AD-related):
  • ZURZUVAE: Q1 sales of $28 million, with 80% of scripts from OB-GYNs and a 20% increase in physicians writing prescriptions.
  • LEQEMBI: Global end market sales booked by Eisai in Q1 were ~$96 million, up 11% sequentially from Q4 2024.
  • SKYCLARYS: Worldwide sales of $124 million, up 59% year-over-year and 21% quarter-over-quarter. QALSODY continued to grow sequentially.
  • These rare disease products account for about 45% of product revenue.

Guidance

• Full-year 2025 non-GAAP diluted EPS expected between $14.50 and $15.50, reflecting ~$0.95 impact from the Stoke transaction and $0.20 from foreign exchange tailwind.
• Total revenue expected to decline mid-single-digit percentage, driven primarily by MS revenue decline, but launch products expected to have sequential growth.
• Tariffs: Biogen doesn't expect material impact in 2025 even if the pharmaceutical exemption is removed, due to a significant portion of US revenue from products with US manufacturing and current inventory position.

Risks

• Tariffs: Uncertainty in the US and international tariff landscape, though Biogen doesn't anticipate material impact in 2025.
• Competition: Continued competition in the MS franchise with biosimilars and generics.
• Regulatory: Uncertainty in regulatory reviews and approvals for pipeline products.

Question and Answer

• Q: Congrats on recent LEQEMBI approval in Europe. Talk about rollout strategy and reimbursement?

A: Chris Viehbacher discussed LEQEMBI's rollout in Europe as an incremental add to healthcare budgets and the need for market-by-market consideration, noting reimbursement is a key factor.

• Q: On LEQEMBI subcutaneous formulation, how does at-home admin help sales in US?

A: Chris Viehbacher highlighted easier administration for patients, particularly older patients who may struggle to reach infusion centers, and the potential to extend treatment life through subcutaneous maintenance.

• Q: On LEQEMBI vs Lilly's Kisunla, market parse out?

A: Chris Viehbacher noted LEQEMBI's launch is still early, emphasizing the focus on expanding the market rather than just market share competition, and the importance of getting more patients on treatment.

• Q: Business development size and scope of deals?

A: Chris Viehbacher discussed market shifts, valuation considerations, and Biogen's position as a trusted partner for collaborations, with plans to sign 4-5 new research collaborations in 2025.

• Q: Early AHEAD 3-45 study on LEQEMBI in presymptomatic AD?

A: Priya Singhal explained the study's design with parallel trials for different amyloid burden levels, aiming to evaluate LEQEMBI's impact across the presymptomatic AD spectrum, with a planned 2028 readout.

• Q: FDA interactions on Dravet program?

A: Priya Singhal and Chris Viehbacher discussed positive interactions with regulators, the importance of the Phase 3 trial design, and confidence in the potential of zorevunersen as a disease-modifying therapy for Dravet syndrome.

• Q: Manufacturing capacity and onshoring?

A: Chris Viehbacher and Robin Kramer mentioned Biogen's RTP facility's role in CDMO business and their openness to manufacturing partnerships, leveraging existing capacity for both own products and third-party manufacturing.