Analyst Conference Call Summary |
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biotechnology
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Biogen Inc.
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Therapy Revenue in Millions |
Q3 2020 |
Q2 2020 |
Q3 2019 |
y/y % |
Tecfidera | $953 | $1,182 | $1,122 | -15% |
Vumerity | 15 | 9 | 0 | na |
Avonex + Plegridy | 474 | 481 | 530 | -11% |
Tysabri | 516 | 432 | 484 | 7% |
Fampyra | 27 | 23 | 24 | 10% |
Spinraza | 495 | 495 | 547 | -10% |
Benepali | 124 | 106 | 116 | 7% |
Imraldi | 56 | 45 | 49 | 14% |
Flixabi | 27 | 21 | 18 | 49% |
Fumaderm | 3 | 3 | 4 | -16% |
Rituxan*+Gazyva royalty | 288 | 270 | 408 | -29% | Ocrevus royalty | 272 | 208 | 188 | 45% |
Other** | 126 | 408 | 110 | 15% |
* unconsolidated joint business revenue, Anti-CD20 products
** mainly contract manufacturing
Cash and equivalents (including marketable securities) balance ended at $4.59 billion, up sequentially from $5.25 billion. $7.43 billion notes payable. $1.25 billion was spent to repurchase shares, completing the authorized program, but an additional $5 billion was authorized. $1.18 billion cash flow from operations. $84 million cap ex. $1.10 billion free cash flow.
Cost of sales was $449 million. Research and development expense was $1.14 billion. Selling, general and administrative expense $573 million. Amortization of acquired intangible assets $83 million. Collaboration profit sharing $73 million.Gain on fair value remeasurement of contingent consideration $29.0 million. Total cost and expenses $2.29 billion. Leaving income from operations of $ billion. Other expense $129 million. Income taxes $241 million. Equity in loss of investee, $13 million. Income attributable to noncontrolling interests $2 million.
In September 2020 first patient dosed in Phase 3 AHEAD 3-45 clinical study of BAN2401, an anti-amyloid beta antibody, in individuals with preclinical Alzheimer's disease, collaborating with Eisai.
In August 2020 the first patient was dosed in the Phase 3 program for dapirolizumab pegol in patients with active systemic lupus erythematosus despite being treated by standard of care therapies. This is in collaboration with UCB.
An IND was submitted and accepted for BIIB105 for sporadic ALS in April 2020.
BIIB059 Phase 2 results for CLE (cutaneous lupus erythematosus) produced positive results in Q2 2020. Plans Phase 3 study to launch in H1 2020. Plans Phase 3 dapirolizumab pegol for systemic lupus erythematosus trial in Q3 2020.
In Q2 2020 Biogen executed a licensing agreement with Massachusetts Eye and Ear to develop treatments for inherited retinal degeneration due to PRPF31 gene mutations.
BIIB074 Phase 2 for small fiber neuropathy is enrolling. BIIB074 (vixotrigine)for trigeminal neuralgia Phase 3 initiation now planned.
Data from the Phase 1/2 studyof BIIB112 for XLRP ophthalmology study were positive, reported in Q2 2020. Now in Phase 2 study.
In Q2 2020 the collaboration between Biogen and Sangamo to develop gene regulation therapies for Alzheimer's disease, Parkinson's disease, neuromuscular disease, and other neurological diseases became effective. The companies will use Sangamos proprietary zinc finger protein technology delivered via adeno-associated virus to modulate the expression of key genes involved in neurological diseases. Upon closing Biogen paid Sangamo $225 million for Sangamo stock, approximately 24 million shares at $9.21 per share. Biogen will pay a $125 million license fee. In addition, Biogen may pay Sangamo up to $2.37 billion in milestone payments as well as tiered high single digit to sub-teen royalties.
See also the Biogen product pipeline. The entire pipeline includes 27 clinical programs. 10 mid to late stage trial readouts are expected by the end of 2020.
Q&A summary:
Advisory Committee, any new data? We have done a lot of analysis in cooperation with the FDA.
EU filing, any differences from US? We just filed, expecting to hear back shortly.
Expenses, why no restructuring given Tecfidera? We are always looking at efficiency. We took out $400 million from our infrastructure, but are preparing for adicanumab, and the MS environment is highly competitive. We need to keep at the Vumerity launch. SG&A is about 16% of revenue. Tax rate was high in the quarter because of Tecfidera deferred taxes.
Advisory Committee, subgroups? Will share all the data with the Committee, including potential subgroups.
Other national agencies want to meet re aducanumab.
Why the share repurchase new authorization? We expect to continue making business development investments and returning cash to shareholders. Cash flow will remain significant.
Could the FDA act early? They have had the data since last June, and the advisory committee was earlier than expected. We will be ready to launch even if the approval comes early. We are working on pricing with payers.
Spinraza color? Patients are up 21% y/y, but royalties were down 10%. Partly due to less loading doses for fewer new patients. Some patients missed doses due to pandemic. Some patient growth is coming from lower-priced countries. Then there is competition, including Evrysdi. We saw 200 patients switch to Evrysdi, but we expect Spinraza to remain the foundational therapy.
We are confident about our long term growth and consistent in our cost discipline. We will continue with business development activities.
Competitive landscape in Parkinson's? Roche antibody showed some efficacy. We have our own antibody, which is more targetted. We have an antisense program (Ionis) and the Denali small molecule. GBA gene is also a potential target, we have preclinical programs for that and could get a Denali molecule.
Japan feedback on aducanumab? We are optimistic, we are not as advanced in discussions, we have not actually filed in Japan yet.
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Disclaimer: Our analyst summaries may include both our condensations of statements made by company representatives and my own analysis. They are not covered by any warranty. I cannot guarantee anything said by company representatives is true. I try not to make errors, but it is possible. These are my personal notes, which I am sharing with the investment community, not financial advice.
Copyright 2020 William P. Meyers