Biogen Inc.

Good morning, my name is Ann and I will be your conference operator today. At this time, I would like to welcome everyone to the Biogen second quarter 2024 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 a question and answer session. If you would like to ask a question during this time, simply press star one on your telephone keypad. 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. Today's conference is being recorded. Thank you. I would now like to turn the conference over to Mr. Chuck Triano, Head of Investor Relations. Mr. Triano, you may begin your conference.

Thank you. Good morning, good afternoon, and welcome to Biogen's second quarter 2024 earnings call. During this call, we'll make forward-looking statements which involve risks and uncertainties that may cause actual results to differ materially from those in our forward-looking statements. We provide a comprehensive list of risk factors in our SEC filings, which I encourage you to review. Our earnings release and other documents related to our results, as well as the reconciliation between GAAP and non-GAAP results discussed on the call, can be found in the Investors section at Biogen.com. We have also posted the slides on our website that will be used during this call. On today's call, I'm joined by our President and Chief Executive Officer, Chris Wiebacher, our Head and President of North America, Alicia Alaimo, Dr. Priya Singhal, Head of Development, Mike McDonnell, Chief Financial Officer, and we'll be introducing Dr. Travis Murdock from HiBio on the call. We'll make some opening comments, and then we'll move to the Q&A session. And to allow us to get through as many questions as possible, we ask that you limit yourself to one question. With that, I'll now turn the call over to Chris.

Thanks, Chuck. We got a lot to cover this morning, but, you know, first, in addition to our regular team of Priya, Alicia, and Mike, I'd like to welcome a new member to our team, Dr. Travis Murdock. Travis is a physician who trained as a gastroenterologist and then studied immunology as a Rhodes Scholar at Oxford. Following a career at McKinsey, Third Rock, and SoftBank, he became the founder and CEO of HyBio. I'm pleased to welcome Travis and the HyBio team to Biogen. We now have, again, a presence on the West Coast, and the HyBio team, working in collaboration with their Biogen colleagues on the East Coast, will drive forward the development of felzartamil. So we're announcing really strong quarterly results this morning, but I would say this is really a quarter that has lasted 18 months. I think the results we're presenting really reflect the hard work of Team Biogen to transform our company. 18 months ago, we were a company that had been declining for four years in revenue and profit, and we have been working pretty tirelessly for the last 18 months to really turn that around and create a new future for ourselves. You know, at the Q4 earnings in February of 2023, we outlined five priorities. The first one was focus on new launches. Second was to reduce our cost base and align resources with growth opportunities. Third was to focus our investments in R&D on the most promising assets and improve the risk-reward profile. Four was to optimize our existing portfolio, and five was external growth. You know, we've had a few setbacks along the way, but nonetheless, I think the results today really show that Biogen has done what it said it would do, and that to me has been always important in business. So if I take each one of those, I think, you know, if we look at our new product launches, all of the launches are either in line or ahead of expectations. I'm particularly happy to see the very strong results for Lakembi, not only in the U.S., but there's been a very successful launch in Japan, and the early data from China are also extremely promising, and Alicia will talk more about that. Last year, we set out to reduce our cost base, and we are more than on track on delivering on those results, and you can see that in not only the reduction in OPEX, but the very strong improvement in margins, and Mike will talk about that, but You know, one of the things that you don't see in the P&L that I'm particularly proud of is, although we've really reduced our cost base and improved our margins, we have invested massively where we need to for growth opportunities, both in Lakembi and the other launches, but also on really trying to turbocharge some of the key assets in R&D. And, you know, Priya will talk more about that, but, you know, one of the beneficiaries of that is Bib80. And another one is litophilumab. You know, we also have, though, although we have seen a declining MS portfolio due to increased competition from biosimilars and from generics, we still had a number of products where we still had long patent protection. And one was Spinraza. And, you know, I think we've seen some very good performance. This is a very competitive space. And Spinraz has been able to hold its own. I think when I first joined the company, most people were predicting the decline of that. Today, I would say the bumpiness tends to be in some countries where we only ship every now and then. I think in Russia, for example, we do one shipment per year. So that business has always been a little bit bumpy. But if you look at market share, I think Spinraz has done extremely well. I'm very pleased to see Vumerity growing at double digits again now in the U.S. This is the only patent-protected product in the oral segment of MS. We see an awful lot of movement in the injectable part, but the oral segment has stayed pretty much constant. It's a great opportunity, and I'm glad to see Alicia and her team really taking advantage of that. We always said we were going to be open to external growth, and I think the REATA transaction last year is really starting to pay dividends. We're seeing a very strong launch, not only in the U.S., but now also in Europe. As you know, we tend to get patients on access programs and then the reimbursement follows. But we are expecting to be approved in 20 countries by the end of this year. And I think we're extremely happy with that. So Zerzuve addresses a huge unmet need, and that launch is also well in excess of expectations. So as I sit here today, I would say, you know, the results that you're seeing are not, as I say, just the results of what we've done in the second quarter, but really I think we're putting up scores on the scoreboard here that really now are starting to demonstrate the all of those initiatives that we put in place last year and we're starting to deliver on them. Now, of course, we're not done yet. And I think there's a real opportunity to continue to develop a sustainable growth platform. And we'll do that in two ways. The first is really now that we have prioritized R&D. I see the Alzheimer's portfolio as being a core franchise for us for the coming years. We're obviously continuing to invest heavily in Lekembe with the maintenance indication, the subcutaneous, but also I think the AHEAD study, if we can really get the evidence, that it will really demonstrate the importance of early treatment. Priya will talk about it, but the 36-month data that we showed at AAIC this week are extremely important for the future growth of Lekembe. But, you know, we've always known there'll be other modalities, and I think tau is emerging as an extremely important modality for the treatment of Alzheimer's, and I think Biogen is a clear leader in that, and again, Priya will say more about that. We're also seeing an emerging lupus portfolio. We'll have a readout later this year with dipyriluzumab that we share with UCB, but we're quite excited about lidofilumab, both for SLE as well as cutaneous lupus, and You know, we add another element to the lupus portfolio with Felza because that is actually in phase one for lupus nephritis. And, you know, to me, and, you know, Travis will go into this more, but the acquisition of high bio is extremely important for our longer-term growth outlook. You know, this is an opportunity to present a set of opportunities that have a different risk... benefit profile. You know, we have very strong phase two results, which gives us a whole lot more confidence in phase three results than some of the other assets that we have in our portfolio. Neuroscience is in an area of a very important unmet need, but it's also one of the riskiest and hardest areas. And so I think we get a little bit more balance in our portfolio by pursuing things in immunology. And so I personally am extremely excited about Felza and what Travis and his team can do. The other axis to this is, you know, we're going to continue to look at business development. I think you have seen that we're pretty disciplined. I think both of the acquisitions that we've done so far with Riata and HiBio will drive an awful lot of shareholder value, and that is certainly top of mind. as we look at business development. So I think Biogen is in a much different place than we were 18 months ago. We still have a number of challenges like any other company, but I think we're really positioned for longer-term growth now at the company. And with that, I'd like to turn it over to Alicia to give us a little more color on the successful launches.