Biogen Inc.

good morning my name is Cecilia and I will be your conference operator today at this time I would like to welcome everyone to the Biogen first quarter 2022 earnings call and business update all lines have been placed on mute to prevent any background noise after the speaker's remarks there will be question and answer session if you would like to ask a question during this time simply press star 1 on your telephone keypad and Please limit yourself to one question to allow other participants time for questions. If you require any further follow-up, you may press star 1 again to rejoin the queue. Thank you. I would now like to turn the conference over to Mr. Mike Henke, Head of Investor Relations. Mr. Henke, you may begin your conference.

Thank you. Good morning, and welcome to Biogen's first quarter 2022 earnings call. Before we begin, I encourage everyone to go to the Investors section of Biogen.com to find the earnings release and related financial tables, including our GAAP financial measures and a reconciliation of the GAAP to non-GAAP financial measures that we will discuss today. Our GAAP financials are provided in Tables 1 and 2, and Table 4 includes a reconciliation of our GAAP to non-GAAP financial results. We believe non-GAAP financial results better represent the ongoing economics of our business and reflect how we manage the business internally. We have also posted slides on our website that follow the discussions related to this call. I would like to point out that we will be making forward-looking statements, which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. I encourage you to consult the risk factors discussed in our SEC filings for additional detail. On today's call, I am joined by our Chief Executive Officer, Michelle Bunatsos, Dr. Priya Singhal, Interim Head of Research and Development, and our CFO, Mike McDonald. As a reminder, during the Q&A portion of the call, we kindly ask that you limit yourself to one question. I will now turn the call over to Michel. Thank you, Mike.

Good morning, everyone, and thank you for joining us. We continue to execute on our core business objectives in the first quarter. Mike and Priya will review our quarterly performance and recent progress in R&D, while I focus on our strategy and near-term operational priorities. Let me start with a few comments on the recent national coverage determination by CMS for amyloid beta-targeted therapies for Alzheimer's disease. This decision effectively denies all Medicare beneficiaries access to Aduhelm. We are very disappointed by the final NCD, and as a result, we will substantially eliminate our commercial infrastructure for Aduhelm. We will retain minimal resources to manage patients access programs, including a continued free drug program for patients currently on treatment in the US. We expect to continue funding certain regulatory and R&D activities for Aduhelm, including the continuation of our EMBARQ redosing study and the initiation of our phase four post-marketing requirement study and vision. Additional actions regarding Aduel may be informed by upcoming data readouts expected for this class of antibodies, as well as further engagement with the FDA and CMS. In parallel, we are committed to working closely with SI on the potential launch of Lecanimab. We are now looking forward as we work to advance our broader pipeline, including Lecanimab and Zuranolone. execute on our base business, and deploy our capital in the best interest of shareholders. We recognize that Biogen is facing a number of near-term challenges. These challenges, including generic erosion of TechFedera, competition for Spinraza and Biosimilar and DTNS, and a declining profit share from Rituxan in the U.S. These challenges are all part of the biopharmaceutical business lifecycle, and we believe that potential new product launches such as lecadimab, zuranolone, and additional biosimilars can help return the company to growth over time. Further, we see the potential for additional growth drivers in the mid to late 2020s in other areas such as stroke, lupus, and Parkinson's disease, And of course, we will be pursuing new business development opportunities as well. However, given that we are in a long product cycle business and in light of the CMS decision, we recognize there is more we must do today to provide better clarity and visibility into the company's future. Let me share the priority actions we are implementing now. First, We are increasing our focus on R&D prioritization with the goal of maximizing the probability of success, which Priya will further discuss. This prioritization process will be informed in part by key data readouts expected in 2022. In Alzheimer's disease, together with SI, we plan to complete the rolling submission for leucanumab under the accelerated approval pathway in the U.S., during the second quarter of this year. In addition, we expect a readout of the Phase III Clarity-AD Procurementary Trial for lecadimab this fall. Based on the results of the study, we plan to submit for full FDA approval by the first quarter of 2023 with the opportunity for lecadimab to become the first anti-amyloid antibody to obtain full approval for Alzheimer's disease in the U.S. In neuropsychiatry, we are working with SAGE to advance uranolone as an important new potential option for MDD and PPD. We recently initiated the rolling submission of uranolone in MDD and expect to complete the filing in the second half of 2022. We also look forward to the phase three Skylark study readout in PPD, expected mid this year. with an associated filing for PPD anticipated early next year. Also, in neuropsychiatry, we expect the Phase II readout for B104 in cognitive impairment associated with schizophrenia in mid-2022. Second, we will implement additional cost reduction and productivity measures above and beyond our previously communicated initiatives to further align our costs with our revenue base. These measures will include the substantial elimination of our commercial infrastructure supporting Aduhelm, as well as all the cost reduction while we continue to form promising pipelines and commercial opportunities. Third, we are executing on international growth opportunities with a focus on key emerging markets, such as China and certain markets in both Latin America, and the Middle East. This includes the continued launch of Spinarasa and may also include pursuing local business development opportunities. Fourth, we plan to drive renewed growth in our biosimilar business, although our portfolio of anti-TNF products is likely past the peak of its life cycle. We currently have four more programs in development, and in the near term, we are preparing to launch BioVis, referencing Lucentis in the US in the coming months. Our fifth new term priority is capital allocation. Biogen is fortunate to have a strong balance sheet with 4.8 billion cash as of the end of the quarter and modest net debt, as well as strong cash flow generation. Going forward, we plan to continue to focus the deployment of cash towards initiatives designed to create incremental revenue growth opportunities while continuing to return cash to shareholders through share repurchases. In summary, the challenges faced by the company over the past 12 months have been significant. We are committed to taking advantage of all the strengths we have, including our talent, our commercial portfolio, our manufacturing capabilities, our pipeline, which includes 10 programs in phase three of FILED. And of course, our strong balance sheet to deliver on the performance that is expected from us. Let me conclude by saying that it has been an honor to lead this outstanding company during such a challenging period of time and to work closely with so many dedicated and talented colleagues. I am very proud of all that we have achieved. I want to thank the board of directors and my colleagues for their support during this period. I will be leaving at a time of promise for Biogen with not worthy potential for value creation, and I look forward working with my successor through a smooth transition. I will now turn the call over to Priya for an update on our recent progress in R&D.