Biogen Q3 2022 Earnings Call Transcript

Quartr
Provided by Quartr
October 25, 2022

Key Takeaways

  • CLARITY AD Phase 3 Success: Lecanemab showed a 27% reduction in clinical decline over 18 months with ARIA rates within expectations, supporting an FDA accelerated approval PDUFA date of January 6, 2023.
  • Tofersen in SOD1 ALS: The FDA accepted the accelerated approval filing with priority review after data showed slower functional decline in patients remaining on therapy, with a decision expected by April 25, 2023.
  • Upward Guidance Revision: Biogen raised its full-year 2022 guidance to $10.0–10.15 billion in revenue and $16.50–17.15 in non-GAAP EPS, reflecting stronger-than-expected performance and cost control.
  • MS Franchise Erosion: Q3 MS revenues fell 11% (9% CC) as Tecfidera declined 30% CC due to generic competition and OCREVUS royalty growth was offset by Rituxan biosimilars.
  • Diversified Late-Stage Pipeline: Biogen is advancing 12 Phase 3/filing programs across CNS and immunology—including zuranolone in depression and multiple lupus studies—and targets five key franchises by 2025.
AI Generated. May Contain Errors.
Earnings Conference Call
Biogen Q3 2022
00:00 / 00:00

There are 11 speakers on the call.

Operator

Morning. My name is Jennifer, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Biogen Third Quarter 2022 Earnings Call and Business Update. All lines have been placed on mute to prevent any background noise. Quarter.

Operator

After the speakers' remarks, there will be a question and answer session. Quarter. Please limit yourself to one question to allow other participants time for questions. Quarter. Thank you.

Operator

I would now like to turn the conference over to Mr. Mike Henke, Head of Investor Relations. Mr. Henke, you may begin your conference.

Speaker 1

Good morning, and welcome to Biogen's Q3 2022 earnings call. Quarter. Before we begin, I encourage everyone to go to the Investors section of biogen.com to find the earnings release and related financial tables, quarter, including our GAAP financial measures and the reconciliation of the GAAP to non GAAP financial measures that we will discuss today. Quarter. Our GAAP financials are provided in Tables 12, and Table 4 includes a reconciliation of our GAAP to non GAAP financial results.

Speaker 1

Quarter. We believe non GAAP financial results better represent the ongoing economics of our business and reflect how we manage the business internally. Quarter. 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.

Speaker 1

These statements are subject to certain risks and uncertainties, and our actual results may differ materially. Quarter. I encourage you to consult the risk factors discussed in our SEC filings in additional detail. On today's call, I am joined by our Chief Executive Officer, Michelle Bounatsos quarter Doctor. Priya Singhal, Interim Head of Research and Development and our CFO, Mike McDonnell.

Speaker 1

As a reminder, during the Q and A portion of the call, we kindly ask that you limit yourself quarter. I will now turn the call over to Michel.

Speaker 2

Good morning, everyone, and thank you for joining us. This is an exciting time for Biogen. Quarter. In addition to key developments across our pipeline, which includes 12 programs in Phase 3 are filed, quarter. We continue to execute on and we are pleased to be raising our full year financial guidance.

Speaker 2

I I would like to begin by reviewing the important advances we made this quarter and what we believe they mean for Biogen. Priya will then review our recent progress in R and D quarter and Mike will discuss our Q3 performance. 1st, together with Eisai, we were excited to announce the positive results from CARIT AD, quarter. The Phase 3 study of lekanimab in early Alzheimer's disease. For over 15 years, quarter.

Speaker 2

Biogen has been working relentlessly to bring forward new therapeutics in Alzheimer disease, incorporating both quarter. And today, we celebrate the positive CLARITY AD readout quarter as a significant achievement in the treatment of Alzheimer's disease. The results from Claritin AD illustrated quarter. We have several key aspects of lekanimab's clinical profile, which we believe could provide a meaningful benefit for patients. Quarter.

Speaker 2

First, lekanimab administration showed a highly statistically significant reduction in clinical decline quarter, which expanded over the 18 months study period on an absolute basis quarter consistent with the disease modifying effect. 2nd, the study was quarter. This includes measure of cognition as well as activities of daily living quarter, such as conducting personal finances, performing household tasks and independently traveling out of home. Quarter. 3rd, the rate of ARIA in Claritin AD was within expectations.

Speaker 2

Quarter. With an FDA decision on accelerated approval expected by January 6 next year and Eisai's plan to quarter trial for traditional approval in the U. S, EU and Japan. By the end of Q1 2023, lekadimab has the potential to be the 1st quarter globally approved treatment to slow the progression of Alzheimer's disease. We look forward to working with Eisai quarter as they continue to engage both regulators and CMS with the goal of ensuring that people with Alzheimer's disease quarter.

Speaker 2

We believe the Claritie AD results underscore the progress quarter. We are making in the fight against Alzheimer's, but Biogen will not stop here. We plan to build upon our current learnings as we continue to advance a diversified pipeline of potential Alzheimer's treatment. Quarter. This includes 2 clinical stage assets targeting tau pathology, BIIB080, our Phase II ready antisense oligonucleotide quarter and BIIB113, a Phase I small molecule.

Speaker 2

Beyond Alzheimer's, Biogen has important quarter.

Speaker 1

We continue to see opportunities in other therapeutic areas

Speaker 2

where the unmet medical need remains significant. This includes depression, where together with Sage, We are continuing to advance the regulatory filing for zuranolone in both major depressive disorders and postpartum depression quarter. With a novel mechanism of action, efficacy observed as early as 3 days quarter and the consistent safety and tolerability profile across 8 clinical studies, we believe that duanolone, if approved, quarter. 2nd, the FDA has accepted our filing for tocassen in SOD1 ALS quarter and the accelerated approval pathway and granted priority review. While the study did not meet the primary endpoint at 6 months, quarter.

Speaker 2

Longer follow-up has shown that patients who remain on top of their strengths experience a slow rate of decline in key clinical measures, quarter, including lung functions, muscle strengths and quality of life. We are truly encouraged by these results in such a debilitating quarter and fatal disease and look forward to an FDA decision expected by April of next year. Quarter. We believe these near term opportunities along with new launches of biosimilars quarter. We have the potential to drive renewed growth and position us to have 5 key franchises by 2025.

Speaker 2

Quarter. Furthermore, we see the potential for additional growth drivers in the mid to late 2020s quarter in areas such as Parkinson's disease, lupus and stroke, all with programs currently in Phase 3. Quarter. Overall, we believe that we had an inflection point in CNS drug discovery and development. Quarter and this recent developments and benefits the advancements that are being made in neuroscience.

Speaker 2

Quarter. For years, Biogen has been expanding our expertise and capabilities in this area, and we believe that we are well positioned quarter. We are pleased to remain a leader in neuroscience as we work to usher in the new next wave of quarter CNS Therapeutics, while also advancing our portfolio in specialized immunology, quarter where we have 4 late stage studies in lupus. I will now turn the call over to Priya for a more detailed update on our recent progress in R and D.

Speaker 3

Quarter. Thank you, Michelle, and good morning, everyone. As Michelle mentioned, we had several exciting R and D achievements this past quarter quarter that meaningfully advanced the potential of our pipeline, which includes 30 programs, 12 of which are in Phase 3 of vial quarter in order to deliver new impactful therapies for patients and drive renewed growth for the company. Quarter. Starting with Alzheimer's disease, together with Eisai, we were very excited to announce the positive results of the CLARITY AD study quarter evaluating leucanumab in early Alzheimer's disease.

Speaker 3

The primary endpoint of the study was the change from baseline quarter on CDR Summer Boxes, a well established measure of cognition function in Alzheimer's disease. Quarter. The study met the primary endpoint and lekanamab reduced clinical decline on the CDR summer boxes quarter compared with placebo at 18 months by 0.45, representing a treatment difference of 27%. Quarter. We also observed a highly statistically significant reduction in CDR summer boxes versus placebo as early as 6 months.

Speaker 3

Quarter. We believe this demonstrates a rapid onset of efficacy and a significant change in CDR summer boxes versus placebo. Quarter. Furthermore, the effect on CDR summer boxes expanded over the 18 month study period on an absolute basis, quarter suggesting that lekanamab was exerting a disease modifying effect. The study also met all key secondary endpoints, quarter.

Speaker 3

This includes a statistically significant reduction quarter. In amyloid plaques in the brain, as well as additional clinical assessments such as the ADCS MCI ADL, quarter. Quarter. We believe that these efficacy results, when combined with an observed overall incidence of ARIA of quarter. The 21% highlight the potential for lecanumab to be a leading disease modifying treatment for Alzheimer's disease.

Speaker 3

Quarter. Eisai will present the CLARITY AD study results at CTAD in November and intends to publish the findings quarter in a peer reviewed medical journal. The lecanumab filing under the accelerated approval pathway is currently under review quarter with a PDUFA date of January 6, 2023. The FDA has also agreed that the CLARITY AD could quarter and we will be conducting a brief survey of the clinical benefit of lecanumab. Accordingly, we expect Eisai quarter.

Speaker 3

We will file for traditional approval of lekanumab in the U. S. As soon as possible following a positive FDA decision quarter on accelerated approval. This filing is expected by the end of Q1 2023 along with quarter marketing authorization applications in the EU and Japan expected by the end of Q1 2023 as well. Quarter.

Speaker 3

Eisai has also been engaging with the Centers of Medicare and Medicaid Services as they work to maximize access for patients. Quarter. Beyond these regulatory and access engagements, together with Eisai, we are also advancing a comprehensive quarter development program for lekanamab, which includes: 1st, the ongoing AHEAD-three forty five preclinical study quarter to evaluate lekanamab when administered earlier in disease, when amyloid pathology is present, but before the onset of cognitive impairment. Quarter. 2nd, investigating a potential maintenance dosing regimen with the goal of reducing the necanumab dosing frequency quarter and the development of a subcutaneous formulation of licanumab.

Speaker 3

Quarter. At AAIC earlier this year, Eisai presented bioavailability data from a Phase 1 study quarter comparing IV versus subcutaneous dosing as well as modeling and simulation data illustrating that a fixed quarter. Subcutaneous dose of 7 20 milligrams administered weekly may potentially result in comparable exposure quarter and efficacy to the current IV formulation, while potentially lowering the incidence of ARIA. Quarter. With these results in hand, we are focused now on maintaining our leadership position in Alzheimer's disease over the long term.

Speaker 3

Quarter. We have an industry leading portfolio addressing both amyloid and cell pathologies as well as a multi target, multi modality, preclinical portfolio targeting a broad range of Alzheimer's disease biology. Now I will turn to neuropsychiatry, quarter, where this quarter Biogen and Sage presented new data that supports zuranolone's potential, if approved, as a novel treatment quarter for both major depressive disorder and postpartum depression. This includes an updated analysis quarter of the open label ongoing longitudinal SHORELINE study in MDD, which showed that the median time to onset first quarter. I'm sorry, the median time to first repeat treatment for patients who responded to the original 14 day treatment was 135 days quarter for the 30 milligram cohort and 2 49 days for the 50 milligram cohort.

Speaker 3

We believe these data further support zuranolone quarter and a potential meaningful new treatment for people suffering from depression, and we are continuing to work with Sage quarter to advance a single U. S. Regulatory filing for Thoramolone in MDD and PPD expected to be completed by the end of this year. Quarter. Moving on to our neuromuscular portfolio, the New England Journal of Medicine recently published quarter and full year 2018.

Speaker 3

We are now ready to begin with the Phase 3 VALOR study and its open label extension evaluating tofersen in SOD1 ALS, quarter, a progressive and rare genetic form of ALS, which currently has no targeted therapy. The published data quarter. We are pleased to announce that patients who initiated to first in VALOR experienced slower rates of decline across critical measures of function, quarter. We are pleased to announce that we are making progress on our progress on our progress on our progress on our progress on our progress on our progress on quarter. Furthermore, Tofersen led to a robust and sustained reduction in neurofilament, quarter.

Speaker 3

In July, the Tofersen filing was accepted by the FDA quarter under the accelerated approval pathway with priority review. Subsequently, we submitted responses quarter. We will now begin the Q4 of 2019. We will now begin the Q4 of 2019. We will now begin the Q4 of 2019.

Speaker 3

Quarter. As a result, the review period has been extended by 3 months with an FDA decision now expected by April 25, 2023. Quarter. In movement disorders, together with Denali, we initiated our 2nd late stage clinical trial for BIIB122, quarter, a small molecule LOCK2 inhibitor. The Phase 3 LIGHTHOUSE study will evaluate BIP122 in individuals with a confirmed pathogenic LOCK2 mutation.

Speaker 3

Given that LOCK2 activity is believed to regulate lysosomal function quarter. We are also advancing the Phase 2b Luma study quarter in idiopathic Parkinson's disease, which we initiated earlier this year. Quarter. Moving on to Specialized Immunology, we were excited to announce the initiation of the Phase twothree study of litifilumab quarter or BIIB059 in cutaneous lupus erythematosus or CLE. The prior Phase 2 lilac study of litafilumab quarter and we will discuss the primary endpoints in both parts of the study, evaluating safety and efficacy in individuals with CLE and systemic lupus erythematosus or SLE.

Speaker 3

The detailed Phase 2 results were recently published quarter as 2 separate manuscripts in the New England Journal of Medicine. The Phase twothree study in CLE quarter. We are pleased to announce that our mid- to late stage pipeline in specialized immunology, which also includes 3 Phase 3 studies in SLE, quarter. 2 for litifilumab and 1 for daparolizumab pegol, which we are developing in collaboration with UCP. Quarter.

Speaker 3

Looking ahead, we also have a number of exciting opportunities on the horizon. Quarter. This includes the potential to deliver new therapies in Alzheimer's, depression and SOD1 ALS, quarter initiation of mid to late stage programs in Alzheimer's disease and stroke and a proof of concept study readout in broad ALS. Quarter. In conclusion, we believe that our recent progress exemplifies important elements quarter of our broader approach to R and D at Biogen.

Speaker 3

This includes a focus on genetically validated targets and biology, quarter. The use of novel biomarkers to better characterize disease biology and target engagement as well as our ability quarter to employ the right therapeutic modality for the specific disease area or target. Together, we believe these principles, quarter, combined with our ongoing prioritization effort, have the potential to increase the probability of success quarter in disease areas with significant unmet need. I will now pass the call over to Mike.

Speaker 4

Quarter. Thank you, Priya, and good morning, everyone. I will provide some highlights of our financial performance for the Q3 quarter and an update to our full year 2022 guidance. Please note that all financial comparisons are versus the Q3 of 2021. Quarter.

Speaker 4

Total revenue for the Q3 was $2,500,000,000 a decrease of 10% at actual currency and 8% at constant currency. Quarter. Non GAAP diluted EPS in the 3rd quarter was $4.77 which was flat versus the Q3 of 2021. Quarter. Total MS revenue inclusive of OCREVUS royalties was $1,600,000,000 which was a decrease of 11% at actual currency and 9% at constant currency.

Speaker 4

Quarter. Global Tecfidera revenue of $339,000,000 decreased 32% at actual currency and 30% at constant currency. Quarter. We saw continued erosion of TECFIDERA in the U. S.

Speaker 4

Due to generics and an impact from generics outside of the U. S. Primarily in Germany. Quarter. We continue to see new generic launches in the EU.

Speaker 4

Earlier this month, the Advocate General of the European Court of Justice issued a non binding advisory opinion. Quarter. We would expect TECFIDERA to have statutory market protection until at least February of 2024 if the court adopts the advisory opinion. Quarter. There is no deadline for the court to issue its final decision, but we understand that approximately 3 to 5 months after issuance of the Advocate General's opinion is typical.

Speaker 4

Quarter. Separately, we are filing actions to enforce our recently granted European Tecfidera dosing patent, which expires in 2028. Quarter. We have been successful in obtaining preliminary injunctions in some countries and unsuccessful in others, including Germany and France. Quarter.

Speaker 4

Until we either affirm Tecfidera's entitlement to statutory market protection in the EU or successfully asserted our patent, quarter. Generics can continue to sell in the countries where we do not have preliminary injunctions in place. Quarter. Global VUMERITY revenue of $138,000,000 increased 14% at actual currency and 15% at constant currency. Quarter.

Speaker 4

U. S. PUMERITY revenue increased 6% with higher volumes partially offset by increased discounts and allowances. PUMERITY is being impacted quarter. We continue to work with our contract manufacturing supplier to address quarter.

Speaker 4

We continue to work with our contract manufacturing supplier to address potential supply constraints for VUMERITY. We have identified the root cause, quarter. We quarter. We do not anticipate a supply shortage in 2022 and are currently focused on rebuilding adequate inventory with the goal of assuring supply quarter and reinitiating new country launches in 2023. Global Tysabri revenue of $505,000,000 decreased 3% quarter.

Speaker 4

U. S. TYSABI revenue was negatively impacted by higher discounts and allowances and lower volume. Quarter. Outside the U.

Speaker 4

S, we were pleased to see continued patient growth as well as good uptake of the subcutaneous formulation in the EU, quarter, which has now been launched in over 25 markets with an average conversion rate of approximately 40%. Quarter. Although the composition of matter patents for Tysabri have expired, we have quarter. We continue to enforce this IP, quarter, including filing suit against Sandoz in the United States. Global interferon revenue of $336,000,000

Speaker 1

quarter. We increased 13% at

Speaker 4

actual currency and 12% at constant currency and was impacted by the continued shift from the injectable platforms to oral quarter. Moving to SMA, global SPINRAZA revenue of $431,000,000 declined 3% at actual currency and quarter. In the United States, SPINRAZA revenue was flat versus the prior year, and we believe we may be seeing signs of stabilization

Speaker 1

quarter in the U. S.

Speaker 4

Outside the U. S, excluding negative currency impacts, revenue increased due to volume growth quarter in certain Asian markets as well as some positive pricing dynamics, partially offset by competition and the timing of shipments. Quarter. Overall, we continue to believe that SPINRAZA has the potential to grow over time. Moving to our biosimilars business, revenue of 188 quarter.

Speaker 4

We saw an increase in sales volumes, which was offset by unfavorable pricing quarter as well as negative currency impacts. We continue to expect a gradual launch of BioViz with more meaningful revenue contribution expected to begin quarter in 2023. Total anti CD20 revenue of $417,000,000 was flat versus the prior year. Quarter. Revenue from OCREVUS royalties increased 6%, which was offset by continued RITUXAN declines due to biosimilar competition.

Speaker 4

Quarter. Now moving on to expenses and the balance sheet. 3rd quarter non GAAP cost of sales was $470,000,000 which includes $12,000,000 of idle capacity charges. Going forward, we expect further pressure on gross margins due to shifts in product mix and potential idle capacity charges, quarter largely resulting from the suspension of drug product manufacturing for Agilem. 3rd quarter non GAAP R and D expense was $549,000,000 quarter.

Speaker 4

This is compared to $702,000,000 in the Q3 of 2021, which included approximately $165,000,000 in upfront payments quarter related to business development transactions as well as clinical trial closeout costs. Non GAAP SG and A was $562,000,000 quarter. This is compared to $651,000,000 in the Q3 of 2021. The decrease in SG and A expense was driven primarily by cost savings initiatives. Quarter collaboration profit sharing was a net expense of $45,000,000 primarily driven by our collaboration with Samsung BioEpis.

Speaker 4

Quarter. Non GAAP other expense was $55,000,000 primarily driven by interest expense. Quarter. In the Q3, we generated $661,000,000 in cash flow from operations. Capital expenditures were $59,000,000 and free cash flow was 60 $2,000,000 We repurchased 1,200,000 shares of the company's common stock during the quarter for $250,000,000 quarter at an average price of $2.14 per share.

Speaker 4

We ended the quarter with $5,800,000,000 in cash and marketable securities, quarter and approximately $500,000,000 in net debt. Of note, in the Q3, we received net proceeds quarter of $583,000,000 from the sale of 1 of our buildings in Cambridge as part of our office footprint optimization initiative. Quarter. Additionally, in October, we paid $900,000,000 plus fees and expenses to resolve the previously disclosed qui tam litigation. Quarter.

Speaker 4

As a reminder, we expect to receive an additional $1,250,000,000 over the next year and a half from the sale of our equity quarter and a strong stake in Samsung Bioepis, including approximately $813,000,000 due in April of next year. Quarter. Overall, we remain in a very strong financial position with significant cash and financial capacity, including a $1,000,000,000 undrawn revolving credit facility quarter to invest in growing the business over the long term. Before I turn to our updated guidance, let me say a few words about lucanumab. Quarter.

Speaker 4

We are excited to be collaborating with Eisai on this important opportunity under a global fifty-fifty profit sharing agreement. As a reminder, Biogen has the right to quarter. We will now be conducting a question and answer session. I will now turn the call over to quarter. The lekanimab component of other revenue may be negative in the initial quarters of the launch.

Speaker 4

Quarter. Please see Slide 26 in our earnings presentation for other accounting considerations. Let me now discuss our updated full year 2022 guidance. Quarter. We are increasing our full year revenue guidance from our previous range of $9,900,000,000 quarter to a new range of $10,000,000,000 to $10,150,000,000 quarter and increasing our full year non GAAP diluted EPS guidance from our previous range of $15.25 quarter to $16.75 to a new range of $16.50 to $17.15 quarter.

Speaker 4

This guidance increase is primarily a result of better than expected top line performance and continued cost management. Quarter. Our guidance ranges for non GAAP R and D expense, non GAAP SG and A expense and our non GAAP tax rate quarter. As a reminder, we typically see a seasonally higher SG and A spend quarter. This guidance assumes that foreign exchange rates as of September 30 will remain in quarter and expect for the remainder of the year, net of hedging activities.

Speaker 4

This financial guidance also assumes continued declines in RITUXAN revenue due to biosimilar competition quarter as well as continued erosion of TECFIDERA revenue due to generic entry. Please see our press release for other important guidance assumptions. Quarter. In summary, we continue to execute well across our core business and are pleased to be raising our financial guidance for the year. Quarter.

Speaker 4

We are excited about the recent lucanumab readout and believe our diversified pipeline across neuroscience, quarter. Specialized immunology and biosimilars has the potential to return Biogen to growth over time as we continue to build a multi franchise portfolio. Quarter. As always, we remain focused on creating long term value for our shareholders. And with that, we will now open the call for questions.

Operator

Your first question comes from the line of Umer Raffat with Evercore.

Speaker 5

Good morning, guys. I had a question on the status of your relationship with Eisai. There's a lot of investor questions on it. And quarter. I was just really curious if you could speak to sort of the status of the relationship, if you expect Eastside to allow you to commercialize quarter.

Speaker 5

And that there's not been any sort of contractual disputes or anything like that. Thank you very much.

Speaker 2

Quarter. Thanks for the question, Omar. I can tell you that the relationship is very solid since many years. Quarter. I have the opportunity to meet and to align with my counterpart on a very regular basis, quarter.

Speaker 2

And I will do that once more in the coming days. The team are working together very closely. Quarter. The co commercialization, co marketing is being discussed while we speak and is not yet determined. And but overall, the relationship is quarter.

Speaker 2

Mike, do you want to add something?

Speaker 4

No, I think that covers it. I would say that as we work quarter on the commercialization strategy. Obviously, Eisai has final decision making rights, but it is a fifty-fifty quarter and together we're excited for the upcoming CTAD presentation where more detailed study results will be shared.

Speaker 1

Quarter.

Speaker 6

Hey, good morning. Thanks for taking my question and congrats on the quarter and on the lucanumab data. Quarter. I'm curious how you envision reimbursement access for lucanumab with an accelerated versus a full approval. And I guess I'm wondering based on your and your partners' ongoing CMS discussions, quarter.

Speaker 6

What your latest views are on whether top line results from Claroty AD would satisfy CMS' high level evidence requirements quarter.

Speaker 2

Thanks for this important question. I think it all depends quarter. To the strength of the evidence, we are very pleased with the top line results on the primary and secondaries. Quarter. We are all looking forward for SITAD and for a coming publication in order to assess the level of evidence quarter that will be considered by CMS and that will imply the path forward.

Speaker 2

Priya?

Speaker 3

Thank you, Michelle. That's exactly right. Quarter. And I'll just add that there is a there are a couple of scenarios that are outlined in the NCD. Quarter.

Speaker 3

So for the accelerated approval scenario, it's essentially coverage only in the situation of a randomized controlled trial, quarter, which is essentially non coverage. But for traditional approval, there is a range of options, I think, that the NCD indicates, quarter, which is that it could be covered in a CMS approved prospective comparative study, including registries. Quarter. The strength and rigor of that kind of study will depend on the strength and rigor of the randomized controlled trial quarter that affords the final traditional approval. So in that sense, we feel very confident about the strength of evidence.

Speaker 3

As you know, quarter. We met the primary endpoint with a treatment difference of 0.45%, which translated to 27% versus placebo with lekanamab. Quarter. And also all secondary endpoints were met in a highly statistical significant manner. And in addition, I would add that we had about 25% quarter of an underrepresented population.

Speaker 3

So we believe that it's very well designed and the results are very encouraging. The rest will remain to be seen quarter. You specifically asked about reconsideration, so I'll just add a note there quarter. In the final scenario that NCD the final NCD did put out was that CMS would act with urgency quarter. Potentially, a reconsideration could be considered.

Speaker 3

That could take 9 to 12 months from a historic precedent perspective. Quarter. But I think in this sense, they have said that they would act with urgency and that would be a full coverage without the need for prospective comparative studies. So I think we need to wait for the C TAD data and continue the engagement.

Operator

Quarter. Your next question comes from the line of Salveen Richter with Goldman Sachs. Quarter. Good morning. Thanks for taking my question.

Operator

On the back of the leucanumab data, can you just walk us through how you're thinking about business development and portfolio prioritization?

Speaker 2

I can tell you that we do remain very active on BD quarter. In evaluating BD, obviously, the portfolio is strong. And as we said quarter. During the prepared remarks, we have 12 Phase 3s of file products, and we are getting prepared for AD, ALS, quarter. MDD and PPD, so we are all very busy.

Speaker 2

Nevertheless, busy is on the table because the portfolio quarter. And we are evaluating every week prospects, and we are making progress. We've made more than 30 deals in the past years, quarter. But we continue to be very active. Priya and Mike?

Speaker 2

Thank you.

Speaker 3

So I think that's a great question. And just stepping back, quarter. As Michelle mentioned during the remarks, we've seen we see ourselves as leaders in the Alzheimer's space. We believe that we've done a lot of evaluation of the quarter. Hypothesis, the biology, and we have set up our portfolio to be able to address quarter.

Speaker 3

Both what in terms of the biology and also the when. So I think in terms of the biology, we've now had success with lecanumab. Quarter. Previously, we've seen the results also with aducanumab and that's the abeta hypothesis. In addition, quarter.

Speaker 3

We had our own study with the monoclonal antibody against tau, which did not work. So we did test that hypothesis with the extracellular quarter. And now we are positioned to initiate our Phase 2 with BIIB080, which is an antisense oligonucleotide that will address quarter. So we believe that this is a very exciting place to be. We believe we have a leading antisense oligonucleotide.

Speaker 3

Quarter. Also, we have BIM113 in Phase 1, which addresses tau aggregation and addresses an enzymatic quarter. So we are really trying to tackle this from all the from the amyloid and the tau pathology basis. Quarter. Behind that, in the preclinical space, we have also several other biologies that we are looking at very carefully in terms of targets quarter and also modalities.

Speaker 3

So I think we have a very comprehensive approach. And with regards to when, I'm very pleased quarter. We have lekanamab already being tested in preclinical Alzheimer's disease. Quarter. So that's a study that's already ongoing, which will address what happens when you intervene with an anti amyloid therapy prior when you do have the amyloid aggregation, but you don't have symptoms.

Speaker 3

So I think it's a very comprehensive approach. We are not going to stop here. We continue to look at very attractive targets, and I think BD and internal development will continue to be important. Quarter. And finally, with lekanumab, we are testing 2 very important aspects in our development plan.

Speaker 3

Isai is obviously the lead on this. Quarter. In the Phase 2 open label extension, we're looking at maintenance dosing. So what's the right frequency to continue to preserve quarter. The clinical decline progression stop and we are looking at subcutaneous development in the Phase 3 open label quarter.

Speaker 3

So I think overall, it's very, very comprehensive, and I think this will be a space that we will continue to invest to win. Thank you.

Speaker 2

Quarter. Mark, do you want to add anything

Speaker 4

to BD? No, the only thing I would just quickly add is that I think you covered it, but I would just quickly add you did not see quarter. Be the activity during the quarter in the way of new collaborations or M and A, you should not read anything into that. We continue to have a very robust pipeline and we quarter. We continue to look at a variety of deals.

Speaker 4

It does tend to be lumpy. And you should fully expect that there will be more transactions in the future. Thanks.

Speaker 2

Quarter. So as Priya said very eloquently, neurodegeneration takes more prominence quarter. In our prioritization process, and we are in a position to lead in AB, and we are looking at actively at quarter. All the targets and assets we could acquire, but also beyond.

Operator

Quarter. We'll take our next question from Tim Anderson with Wolfe Research.

Speaker 7

Thank you. I have a question quarter. Actually on Aduhelm and it kind of relates to earlier comments about your role with lucanumab still being under contemplation. I think a lot of folks are under the impression you've all but washed your hands and aren't really doing anything with that at home. Quarter.

Speaker 7

But from what I hear that may not be the case. You're still pursuing a subcu version of the product. It sounds like you still may be trying to figure out quarter. A path forward to get CMS reimbursement for APOE4 carriers. And I'm wondering if that is true and if that could be a source of tension with Eisai.

Speaker 7

Quarter. It's just not intuitive to me why you wouldn't be all in on lecanumab instead and why you still may be active with Agile. Thank you. Quarter.

Speaker 2

So we'll be all in on Leka together with the great partners that we have, and we'll do everything we can to quarter. Nevertheless, the parity AD reinforces quarter. The finding that removing aggregated form of A beta in the brain can be associated with the slowing down of the quarter. And this is very important and this is what we have shown with Adeo. And we have patients currently being dosed on the quarter.

Speaker 2

And Priya will say more about that.

Speaker 3

Yes. I'll actually I don't have a lot to add. What I'll say is that quarter. We are continuing to look at aducanumab and we haven't made any decisions. For now, we believe that the EMBARK data set quarter.

Speaker 3

This is going to

Speaker 1

be very valuable to the

Speaker 3

scientific community. These are patients who've been on aducanumab and an anti amyloid quarter. In addition, we have a post marketing requirement given that aducanumab was the first product to get accelerated approval. Quarter. This is called the Envision study.

Speaker 3

So for now both Envision and Embark continue.

Operator

Quarter. Your next question comes from Chris Raymond with Piper Sandler.

Speaker 8

Quarter. Hey, thanks. Just maybe a related question, the last one. So with your commercial infrastructure for Atahome largely quarter. How should we think about the ramp maybe in spend on lecanumab infrastructure quarter.

Speaker 8

Come January and maybe talk about the lessons learned from Aduhelm and walk us through how quarter. You'll resource this launch here, as you move from a potential accelerated approval to full approval. Thanks.

Speaker 2

Quarter. Thanks for the question. I will start and Mike will add on. It was not reasonable based on the time line and the gap between the AdeU quarter NCD decision and the lekanimab readout and then regulatory process quarter. This would not have been reasonable, so we had no choice than to take the actions that we took.

Speaker 2

Quarter. Now there is a new page. And together with the partners, we are assessing considering the benefits, quarter. The relative strength of each company in each continent since we intend to file for full approval at the same time approximately in the U. S, quarter.

Speaker 2

In Europe and Japan, should we have the accelerated approval early in the year? We are planning quarter. The investment, but we are not yet completely there. So we'll do that in a very paced and controlled manner and we'll take it from here. Mike?

Speaker 4

Quarter. Yes. I would just add to that that as we continue discussions with Eisai on the commercialization strategy, quarter. It's a fifty-fifty profit share. They have the final decision rights as we've said.

Speaker 4

There are learnings from the Aduhelm quarter and we'll be happy to take your questions. Thank you. Thank you. Thank you. Thank you.

Speaker 4

Thank you. Thank you. Thank you. Our next question comes from the line of quarter. There were a number of things on Aduhelm that didn't go the direction that we had anticipated, but I do feel confident that we'll be able to gauge it in a way that quarter.

Speaker 4

And Eisai will be able to gauge it in a way that the ramp and spend will have better proximity to revenue than what you saw on Agile.

Operator

Quarter. Your next question comes

Speaker 1

from And

Speaker 2

I would say and if I may, I would say that quarter. We have a new process ahead of us. What we thought a couple of years ago is that an accelerated will mean product launch, and this was not the case. Quarter. So here now we have a new process that was outlined and then we'll be very much controlled in the way we spend the company's resource

Operator

quarter. Your next question comes from Matthew Harrison with Morgan Stanley.

Speaker 1

Great. Good morning. Thanks for taking the question. Quarter. I wanted to address another question that I think we get a lot from investors, which is about the potential for certain subgroups quarter.

Speaker 1

So can you just maybe confirm quarter. If that was the case, if for example, a certain subgroup was a major driver of the response that you would have called that out in the top line or How should we think about that going in the CTAD? Thanks.

Speaker 3

I can take that question. Quarter. So overall, I'll just say that the Claroty AD met its primary endpoint, which was CDR sum of boxes, quarter. And this was with a p value of 0.0005. So it was very, very highly significant.

Speaker 3

Quarter. And this was a large trial. So it was about 1800 participants with well quarter, including the underrepresented population and it met all its secondary endpoints, which were independent quarter domains of cognition and function. So overall, we feel that the results are very, very positive quarter and that they're very encouraging. Now details of subgroup analyses have not been shared by Eisai quarter.

Speaker 3

And I think we need to wait for the C TAD to see more details about the both the primary and the secondary endpoints. Quarter. But at this point, I would say that overall, we believe that we just have to wait and we feel very encouraged by what we've seen at the top line. I quarter. I won't be able to comment on exactly what you may or may not see.

Speaker 3

I think we have to wait for CTAD for that.

Operator

Quarter. Your next question comes from Brian Skorney with Baird.

Speaker 7

Hey, good morning, everyone.

Speaker 6

Thanks for taking my question.

Speaker 7

I was wondering if you could outline any broad timeline that you have for subcu lukanumab. Just wondering what the pathway looks like and if maybe you're seeking to get initial and chronic dosing approved or would this be more like initially a label where you could have quarter and just any learnings from your interactions with FDA on subcu to Savory that you think might be applied as we think

Speaker 3

quarter. Thank you, Brian. So overall, what I can tell you is that this is a very important part of quarter. The long term comprehensive clinical development plan for lekanamab and the subcutaneous formulation development quarter. It's already being pursued in the Phase 3 open label extension.

Speaker 3

We're also Eisa is also engaging with FDA. Quarter. So there's lots of discussions ongoing. I would just say that the Phase 1 bioavailability data has already been shared publicly. Isai already quarter.

Speaker 3

And as I mentioned in my remarks, they are currently looking at the 7 20 milligram weekly quarter. And this is being evaluated, but the timelines and the details of what else the package might need, that has not been shared. Quarter. And so I would say just let's wait for that to be shared and we will share that when it's appropriate. But it is a very important endeavor and it is ongoing.

Operator

Your next question comes from Michael Yee with Jefferies.

Speaker 1

Quarter. Hey, thanks. Good morning. Going back to the comments about CMS reimbursement quarter. And having to wait for CTAD data, I guess maybe you could talk about what pathways or what types of interactions, if any, or what approach you can have with CMS quarter to push urgency, whether that be patient advocacy groups, whether you guys are working hard to do that or whether they just see quarter.

Speaker 1

That there's clearly a change from the at home situation a year ago and they will act fast. Thank you.

Speaker 2

Quarter. So Eisai has the lead in engaging regulators and payers. And from what we know is that Eisai has already quarter. So they're responsible for this activity. And at this stage, I will not provide more details.

Speaker 2

Quarter. The engagement is there, which is the most important.

Operator

Quarter next to Robyn Karnauskas with Truist Securities.

Speaker 9

Thank you. My question is two fronts. So quarter. We're hearing a lot that Lilly has a very big presence right now and mind share of doctors in this space. And you mentioned, Mike, that quarter.

Speaker 9

You tend to see that you think that we'll have more I'm trying to interpret what you said is that you're going to ramp up spend in line with quarter revenue. Can you just elaborate a little bit there because you will have competitors in the space? And a small question for Priya. Quarter. We also hear that tau pathology that you may not want to do trials in patients that already have abeta plaque with tau.

Speaker 9

Quarter.

Speaker 4

Yes. I'll just clarify the point that I made before. Quarter. As Eisai develops the commercialization strategy along with us, the goal there, obviously, the first and quarter. Primary goal will be to get the launch right and put an infrastructure in place that supports the best launch possible

Speaker 1

quarter and

Speaker 4

we'll be in position. And obviously, in the situation that we had with Aduhelm, when we received approval in June of 2021, we had a large infrastructure that was built up quarter and ready to go. And then obviously, we encountered significant delays. And the point that I was making is that, we would hope that that wouldn't be a repeat and that we would have quarter. The appropriate infrastructure to support a successful launch, that's priority 1.

Speaker 4

And then hopefully we wouldn't experience delays like that. Quarter. And so that you would see a spend that would ramp in front of revenue, but it wouldn't have the gap that it did on Aduhelm. Quarter.

Speaker 3

And I can add to that Robin. Thanks, Mike. I can add to that. In terms of doctors and mind share, quarter. I think that obviously this is a very highly rapidly evolving space from a scientific perspective.

Speaker 3

And I think lecanumab quarter. That's a great question. Thank you. Thank you. Thank you.

Speaker 3

Our next question comes from the line of quarter. I'd also like to add that the safety profile is going to be really, really important here. For example, with lucanumab, we've got quarter. Reeds of ARIA that are about 21%. We've seen this to be within expectations.

Speaker 3

And I think that this, together with the efficacy results, quarter. So overall, while I think the question was a little bit more maybe about the launch, I would say that the mind share quarter. And I think the data needs to be seen from the other anti amyloid therapies before we decide quarter. The other piece I think here is we see ourselves as pioneers. We've got this very encouraging data.

Speaker 3

We think that quarter. This is a very broad and complex patient population and the need and unmet need is very, very high. So we think it's a very quarter. Important place where we can really make a difference to patients. And then Robin on the second question, can you please clarify that?

Speaker 3

I didn't quite catch

Speaker 9

quarter. Yes, sorry. So for tau pathology, some scientists believe that you want to clear plaque quarter before you give the tau. So in other words, tau may not work alone. You may need to actually combine it with lincadabab now that we understand the biology.

Speaker 9

Quarter. The thoughts on all these trials that are ongoing, including 80, like how do you think that there is a chance that they may not work

Speaker 3

quarter. Got it. Quarter. So I think I'll just step back to say that, obviously, amyloid pathology is very key. Quarter.

Speaker 3

We also believe that it's potentially upstream of tau pathology. And with aducanumab, with our data with aducanumab, we did quarter. So we think that this cascade overall is going to be very important. Quarter. Having said that, I think that you're right, that maybe the future of Alzheimer's disease is going to be quarter.

Speaker 3

The timing of intervention, which I already spoke to and that's a very different matter, but it could also be that quarter. One type of approach may not be adequate. The question here is that we're trying to be very systematic and methodical quarter. So we've now demonstrated with lucanumab that really there is the removal of aggregated plaque, which results in clinical impact. Quarter.

Speaker 3

And I think Isai has also shared earlier this year that this could result with based on data from Phase 2b quarter and modeling that this could result in a preservation of about 2 to 3 years before patients progress to significantly more severe stages quarter of Alzheimer's. This is based on modeling and data from Phase 2, and I know that they have said publicly that they will also do this quarter. So I think that we are making significant progress. And then separately, quarter. We are tackling the BIIB8C, which we had very encouraging results from our Phase 1b trial quarter where we showed a dose and time dependent reduction of tau.

Speaker 3

And we believe it addresses all forms of tau. Quarter. So now we are in the process of initiating our Phase 2, but you're absolutely right. We will be looking at many different approaches quarter in how we can benefit patients in the best way that we can. So yes, all biologies need to be considered, quarter.

Speaker 3

But we need to go stepwise and we need to be systematic about this.

Speaker 2

And if I may add on the mind share, quarter. The epidemiology is so large. There is so much to be built in terms of infrastructure that I we all welcome the efforts of other companies. Quarter. Specifically about lekanimab, and I know that you have engaged with scientific leaders, some of you.

Speaker 2

We have engaged with scientific leaders and clinicians. Quarter. I think the feedback is very positive from what we hear. And at the end of the day, it will be the efficacy quarter. At 6 months and expanded over a period of 18 months study and the safety quarter.

Speaker 2

That will make the difference between the compounds. But at this stage, we welcome every effort to prepare the market for the patients in need. Quarter.

Operator

Your next question comes from Jay Olson with Oppenheimer.

Speaker 7

Quarter. Hey, thanks for taking the question and congrats on the Claroty AD results. Quarter. I'm curious about the potential for your collaboration with Denali and how you plan to leverage their TV platform quarter for A beta antibodies, including leucanumab and adelalum. Now that we have positive clear DAD results, Do you think better brain penetration could improve the therapeutic profile of abeta antibodies?

Speaker 7

And what is the timeline to nominate a candidate from the TV program. Thank you.

Speaker 3

Thank you, Jay. It's a very good question. What I can share with quarter. We are looking across our portfolio and we're looking at several of our existing partnerships to see quarter. How we can actually move and build on the strength of these data and the strength of the biological hypothesis that we've seen.

Speaker 3

Quarter. I can't comment more specifically on the Denali TV platform. But yes, everything is on the table. We'll be looking at everything very carefully quarter, and we'll make announcements as they become relevant and as it's appropriate. Thank you.

Operator

Quarter. We'll go next to Bill Nadeau with Cowen and Company.

Speaker 10

Quarter. Good morning. Thanks for taking our questions. A follow-up question on the learnings from the aducanumab launch. What are Biogen's recent thoughts on lucanumab's quarter.

Speaker 10

Would you expect to price at a premium to Aduhelm because of the better data, a discount because of the pushback? And appreciating that Isai quarter. As final say on all commercialization decisions, what role will Biogen play in saying the price of leucanumab? Thank you.

Speaker 2

Quarter. As you can anticipate, we cannot comment. It's a size decision and we will not interfere with this process.

Operator

Quarter. We'll go next to Mark Goodman with SVB Securities. Yes. Hi. Could you

Speaker 8

give us a little more color on OUS SPINRAZA? Just quarter. What the dynamics were, it's something about price increases or positive pricing dynamics there. And then just Priya, can you just confirm, quarter. Is the subcu dose 7 20 weekly, is that the one that we're going to be using?

Speaker 8

Are we still working on the dose and regimen?

Speaker 2

I think your question was about ex U. S. SPINRAZA?

Speaker 1

Yes.

Speaker 2

Yes. So we see 2 types of dynamic. Quarter. We see a European momentum that is being slowed down by the launch of risdiplam, quarter. But we are sharing data on the switch from patients issued from the U.

Speaker 2

S. Quarter. Back to SPINRAZA for efficacy reason. So I think and we are learning from the U. S.

Speaker 2

So it's a matter of time. We are learning from the U. S. Quarter. We're delighted by the U.

Speaker 2

S. Results, and we believe that this becomes a model for what other continents should learn from. Quarter. And ex core Europe, we see a very rapid growth in terms of volume, but the price is not the same. Quarter.

Speaker 2

So this is the momentum ex U. S. Overall, we are delighted by the U. S. Results quarter.

Speaker 2

So we can see SPINRAZA coming back and we believe the product will resume its momentum to growth gradually. Mike, quarter.

Speaker 4

Yes. I would just add in the spirit of your question, Mark was directed more at OUS. We mentioned the U. S. Was flat.

Speaker 4

And OUS quarter. Overall, there was a modest decline, but if you strip out FX on a constant currency basis, there was actually growth. Quarter and that growth to the points that we made in our prepared remarks. There was a modest volume decline, primarily due to competition in places like Germany and Canada and Japan, and we had some timing items, Russia, Brazil, a few others, quarter, which was partially offset by volume growth in China, but we did have price increases in a few of our markets quarter throughout Europe that more than offset the volume. So to kind of unpack it, you had modest volume declines quarter slightly more than offset by price increases and then you had the FX going against you OUS.

Speaker 4

Quarter.

Speaker 3

And I'll just wrap up really quickly on the second point. I think that you second question you had. Quarter. You know, Eisai has communicated that the 7 20 milligrams weekly fixed dose is the dose that shows the equivalence quarter to intravenous dosing, 10 milligram per kg biweekly. And it's also actually now listed quarter for the auto injector study that was recently announced.

Speaker 3

I think that was the question. Please correct me if

Speaker 4

No, that's good. Thank you. Thank

Operator

you. Quarter.

Speaker 3

Thank you.

Speaker 2

Thank you.

Operator

Quarter. We'll go next to Chris Schott with JPMorgan.

Speaker 7

Great. Thanks so much for the questions. Can you just talk a little bit more around the dynamics about the quarter. 2 week IV therapy for lucanumab as we wait for the subcu and maintenance programs. I guess reimbursement aside, How challenging do you think this is going to be from a commercial and infrastructure standpoint?

Speaker 7

And I know you're not talking about timing, but is this a relatively short window that you envision that we'll be using

Speaker 3

quarter. Okay. So I think overall, we've quarter. We've seen very good data with the 10 milligram per kg biweekly dose. I think the important point that quarter.

Speaker 3

It's very, very, I think, relevant here is that the separation is seen at 6 months as early as 6 months, there's no titration and that expands on an quarter. And on an absolute basis until the 18 month primary endpoint readout in CLARITY AD. So this is very encouraging data. Quarter. I would say that, as the infrastructure around Alzheimer's disease and all of this is being built out, quarter.

Speaker 3

It will actually be quite important for patients to be seen by physicians. So we don't see it necessarily as a disadvantage, quarter. If that was the question, we don't see it as a disadvantage. But having said that, we are doing everything. Isai is leading this quarter and we're trying to make sure that we are keeping patient convenience in mind, which is the premise of the quarter.

Speaker 3

So I can't comment beyond that on how long it will be intravenous and when would it transition to subcutaneous. Quarter. We're looking at all these aspects very carefully at a high level and also at a granular level as we build out quarter, the clinical development program with all these topics in mind. So overall, we believe in the early stages, it will actually be really important

Speaker 1

quarter.

Operator

Quarter. Your next question comes from Paul Matteis with Stifel.

Speaker 7

Great. Thanks so much. I was wondering based on your experience quarter. In the field of adjuvant, how would you characterize infusion capacity today in neurology clinics quarter ahead of the lekanamab launch, where is it today and how much ramp up do you think needs to happen for there to be

Speaker 2

quarter. So what we saw for Aduhelm is that quarter. The system has shown some adaptability by shifting some of the existing infusion center quarter. To a potentially add your helm at that time, should there be reimbursement? We never got reimbursement, so this never happened.

Speaker 2

Quarter. And overall, I believe there is a need to upscale and the capacity has to be much larger. Quarter. But from our learning, we could see that the system was flexible and adaptable based on the current capacities. Quarter.

Operator

Your next question comes from Geoff Meacham with Bank of America. Quarter.

Speaker 7

Good morning, guys. Thanks so much for the question. Just a follow-up on lekanimab launch spending. Quarter. Post the restructuring that you guys had earlier this year, can you talk a little bit about the manufacturing assets that you can redeploy or quarter.

Speaker 7

Maybe some of the commercial investments that you made for Aduhelm that can be reallocated for the lecanumab launch. I'm just trying to get a sense for kind of the magnitude quarter. Mike?

Speaker 4

Quarter. Yes. So a couple of comments, Jeff. Thanks for the question. I would say first on manufacturing, we have quarter.

Speaker 4

A significant facility in Raleigh, North Carolina and that we have a relatively new facility in Soliturn, Switzerland. Quarter. And the Soliturn, Switzerland facility will be largely dedicated to our Alzheimer's disease products, which quarter. For now involves a ramp up of getting inventory ready for launch. Quarter.

Speaker 4

For lucanumab, I think we had a little over $100,000,000 of inventory on hand as of the end of the quarter. And quarter. That facility, its efficiency, so to speak, is heavily tied to the lecanumab launch. Quarter. And then to the extent that Aduhelm becomes more marketable, we could utilize that facility as well.

Speaker 4

So quarter. That's the state of play there. There will be some idle capacity. You saw about $12,000,000 this quarter. There'll be some idle capacity charges that we'll have to incur over time quarter as that product ramps.

Speaker 4

I would say on the commercial infrastructure, there's not a lot that can or will be repurposed from quarter. Ajahelm, we did make the decision, as we've said before, to take that infrastructure down. It was just too long of a time gap quarter from the time that we received the NCD in April of 2022 to when leucanumab would become fully commercialized quarter to maintain that infrastructure. So most of that's been eliminated as part of our $1,000,000,000 cost savings that we've committed. Quarter.

Speaker 4

And so for the most part, the leucanumab commercialization will be a new ramp and a new infrastructure that will be built.

Speaker 1

Quarter. That concludes our call for this morning. Thank you everyone for joining us. Quarter.

Operator

This concludes today's call. Thank you for your participation. You may now disconnect.

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