Analyst Conference Summary

conference date: October 27, 2017 @ 5:00 AM Pacific Time
for quarter ending: September 30, 2017 (third quarter 2017)

Forward-looking statements

Overview: Revenue up 27% y/y. Profits down on increased R&D spend.

Comparisons to year-earlier periods are pro-forma.

Basic data (GAAP):

Revenue was $296.1 million, up 2% sequentially from $289.1 million, and up 27% from $229.2 million year-earlier.

Net income was $67.9 million, down 12% sequentially from $77.1 million, and down 16% from $80.5 year-earlier.

EPS (diluted) was $0.63, down 11% sequentially from $0.71, and down 16% from $0.75 year-earlier.

Guidance:

.

Conference Highlights:

John Cox, CEO of Bioverativ, said "We made significant progress advancing our pipeline with the initiation of the Phase 1/2a trial for BIVV001 and the FDA’s acceptance of an IND application for ST-400, a gene-edited cell therapy candidate to treat beta-thalassemia being developed in collaboration with Sangamo Therapeutics. We also entered into a strategic research collaboration with Bicycle Therapeutics to develop innovative therapies to treat rare blood disorders. . . Business development remains a priority."

Non-GAAP results: net income $87.1 million, down 9% sequentially from $95.4 million. EPS $0.80, down 9% sequentially from $0.88.

Eloctate revenue was $186.3 million, up 7% sequentially from $174.2 million, and up 41% y/y from $131.9 million.

Alprolix revenue was $88.5 million, down 1% sequentially from $89.7 million and up 4% from $85.2 million year-earlier.

Revenue can continue to expand through increased market share in existing markets and adding new international markets.

Cash and equivalents ended at $224.1 million, up sequentially from $177.4 million. Cash flow from operations year-to-date was $378 million. No debt.

Bioverativ formed a strategic collaboration with Invicro to improve imaging, diagnosis and management of joint disease caused by hemophilia.

Started a BIVV001 Phase 1/2a study for once weekly or less frequent dosing of FVIII in the second half of 2017. The FDA accepted the IND.

The BIVV009 phase 3 trials for cold agglutinin disease will begin this year. One trial for more severe patients, one for less severe. Investigating possible other indications for 009.

The FDA accepted the IND for ST-400 for beta-thalassemia. Patient enrollment should start in the first half of 2018.

Cost of sales was $65.5 million. R&D expense $70.1 million. SG&A expense $52.2 million. Total expenses $187.8 million. Leaving income from operations of $103.8 million. Other income $1.2 million. Income tax expense $37.1 million.

Cost of sales include royalties to Sobi. [But revenue includes Sobi collaboration sales in Europe].

Continues to review tax planning strategies due to the high tax rate.

Vision is to become the leading rare blood disorders company.

Q&A:

Factor VIII market long acting share? The extended half life market segment is increasing, particularly in the U.S. Both for heme A and B. We are seeing 57% prophylactic use for A in the U.S., which is up 5% in a year. Eloctate is capturing share in all markets we are in. It is capturing switches from all products.

Alprolix flattish sales? Heme B market is a small market, with more milder patients. We captured over 40% of the serious patients during the initial ramp. It is a competitive market. B is about 20%, A about 80%. Prophylactic use is not growing fast for B. We are looking at the effects on joint health. We have a very high retention rate. We believe we can continue to grow revenue.

BIVV001 for A? X10 technology prior failure? The goal is to get to 1 time per week dosing. FC for eloctate can only go so far. We believe the 001 technology behaves the same as eloctate, with longer between doses. The X10s may not be the same, and are placed in the molecule differently. First patient should be dosed shortly.

Latin American reimbursement? First, we are happy with the Australian reimbursement decision. Latin America has also been difficult, but we are working hard to get them to understand the value of the drugs. Conversations last week went extremely well.

BIVV009 timeline? Anticipates first patient around the end of the year. If all goes well, we could launch the product in late 2020.

Sickle Cell Disease program? We have a broad strategy. Our pre-clinical work is early. No timetable yet to get into the clinic. We are excited about gene editing. We will learn from beta-thalassemia work.

We will provide guidance for 2018 along with our Q4 2017 earnings release. We don't intend to update more than annually unless there is a material event.

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