Analyst Conference Call Summary

biotechnology

conference date: May 1, 2025 @ 5:30 AM Pacific Time
for quarter ending: March 31, 2025 (first quarter, Q1 2025)

Forward-looking statements

Overview: Good y/y revenue growth, guidance lower on Stoke transaction.

Basic data (GAAP):

Revenues were $2.43 billion, down 1% sequentially from $2.46 billion and up 6% from $2.29 billion in the year-earlier quarter.

Net income $241 million, down 10% sequentially from $267 million and down 39% from $393 million in the year-earlier quarter.

EPS (earnings per share, diluted) were $1.64, down 10% sequentially from $1.83 and down 39% from $2.70 year-earlier.

Guidance:

2025 updated to reflect Stoke Therapeutics transaction and $0.20 foreign exchange benefit: lowered to non-GAAP diluted EPS of $14.50 to $15.50. Still expects a mid-single digit decline in revenue due to generic competition.

Conference Highlights:

CEO Christopher A. Viehbacher said: "Biogen delivered strong first-quarter results, supporting our strategy for long-term growth. We are encouraged by the transformation in our commercial product portfolio, with approximately 45% of total product revenue in the first quarter derived from important medicines outside of our MS business. In an environment of potential tariffs and medical supply security concerns, Biogen operates a significant manufacturing presence in the U.S. Roughly 75% of our 2024 U.S. product revenues were generated by products which have manufacturing operations in the U.S. In addition, Biogen pays substantial taxes in the U.S. since our U.S. market revenues are almost entirely taxable in the U.S. at Federal and state tax rates." There will be key readouts in 2026; if the pipeline comes to market, new revenue could exceed our current revenue. Our non-MS commercial products have long runways ahead. New focus, besides neuroscience, is immunology.

GAAP and non-GAAP diluted EPS includes a -$0.95 impact from a $165 million upfront payment to Stoke Therapeutics. For a collaboration and license agreement to develop and commercialize zorevunersen, an investigational therapy for Dravet syndrome, in all territories outside the United States, Canada, and Mexico. Phase 3 to begin in 2025. This also impacted 2025 guidance.

Biogen reached an agreement with Royalty Pharma in February 2025 to provide up to $250 million research funding for litifilimab. If approved, Royalty would be eligible for milestones and mid-single digit percentage royalties.

Regarding tarifffs, about 75% of product revenue is from products with manufacturing operations in the U.S. But sales from outside the U.S. accounts for 55% revenue. So even if tariffs are imposed, would not affect 2025 U.S. guidance.

In Q2 2025 a Phase 3 Felzartamab sutdy in late antibody-mediated kidney transplant rejection (AMR) initiated. Plans Phase 3 trials in IgA nephropathy and primary membranous nephropathy later in 2025.

Leqembi (lecanemab) for Alzheimer's patients global growth continued, with U.S. sales at $52 million, up sequentially from $50 million, and global at $96 million, up sequentially from $80 million. Not in table below because Biogen gets half of net after expenses. Partnered with Eisai, which is doing strong sales in Asia, including China. EU approved Leqembi in Q1 2025. Introduction of blood-based diagnostics in H2 2025 would also help. Has approval for IV maintenance; expects approval for subc version in August. AHEAD 3-45 study in presymptomatic AD should readout in 2028.

In Q2 2025 BIIB080 for tau in Alzheimer's received FDA Fast Track. Currently in a Phase 2 trial with data readout due in 2026.

Zurzuvae launch is going well, over 10,000 women now treated for PPD. Physicians are writing repeat prescriptions and are becoming more proactive about diagnosing PPD.

Spinraza (Nusinersen) for SMA high dose filings accepted by FDA and EMA. PDUFA September 22, 2025.

Skyclarys launch for Friedreich's ataxia doing well, but impacted by IRA pricing in Q1. Using new tools to identify patients. An approval in Brazil will increase the patient pool.

Non-GAAP net income was $443 million, down 12% sequentially from $502 million and down 18% from $535 million year-earlier. Non-GAAP EPS diluted was $3.02, down 12% sequentially from $3.44 and down 18% from $3.67 year-earlier.

Total product revenue was $1.73 billion, down 5% sequentially from $1.83 billion and up 1% from $1.71 billion year-earlier. That excludes the Rituxan revenue, royalties and other revenue.

* unconsolidated joint business revenue, Anti-CD20 products
** mainly contract manufacturing

Cash and equivalents (including marketable securities) balance ended at $2.60 billion, up sequentially from $2.38 billion. $6.3 billion debt. $0 million was spent to repurchase shares. $259 million cash flow from operations. $37 million cap ex. $222 million free cash flow. $2.1 billion remains authorized for share repurchases.

GAAP Cost of sales was $629 million. R&D expense was $434 million. SG&A expense $573 million. Amortization of acquired intangible assets $112 million. Collaboration profit sharing income $58 million. Restructuring charges $35 million. Loss on contingent consideration $10 million. Other expense $68 million. Total cost and expenses $2.12 billion. Leaving income from operations of $311 million. Income tax $71 million.

See also the Biogen product pipeline. The entire pipeline includes 27 clinical programs.

Q&A selective summary:

Leqembi strategy in EU? Reimbursement will take some time. This is a first in class agent, which will add to national drug budgets. Lots of eligible patients. Launches and reimbursements are country by country.

Leqembi subcutaneous impact? First will be for mainenance. Patients had been getting biweekly infusions. Long-term data shows patients should stay on treatment. When (if) it gets approved for initiation, it will first appeal where infusion centers are hard to get to. AD workload is heavy, this will reduce work for physicians.

There is still a need for earlier diagnosis for Alzheimer's.

Lilly Alzheimer's competition? Donanemab appeal will depend on the physician. Once you have removed the plaque you are not done, it will return. May also appeal to certain patients, so the market will get split between us, but it is a market that should expand dramatically.

BD? Valuations are low, but financing is difficult. As venture capital dries up, larger companies can provide capital. We are well positioned for collaborations. But you have to stay disciplined.

Clearly the work to get Leqembi to market has helped Lilly Donanemab ramp faster. The important factor is market expansion. Does not believe there will be switching between the drugs once patients are initiated.

Any FDA problems due to new regime? We are not seeing any changes at a high level. We remain on track with our FDA engagements.

Do you have excess U.S. capacity you could partner out? RTP facility is capable and could do some partnering.

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