Analyst Conference Call Summary

biotechnology

conference date: February 12, 2025 @ 5:30 AM Pacific Time
for quarter ending: December 31, 2024 (fourth quarter, Q4 2024)

Forward-looking statements

Overview: Okay quarter, weak 2025 guidance.

Basic data (GAAP):

Revenues were $2.46 billion, down slightly sequentially from $2.47 billion and up 3% from $2.39 billion in the year-earlier quarter.

Net income $267 million, down 31% sequentially from $389 million and up 7% from $250 million in the year-earlier quarter.

EPS (earnings per share, diluted) were $1.83, down 31% sequentially from $2.66 and up 7% from $1.71 year-earlier.

Guidance:

2025 non-GAAP diluted EPS $15.25 to $16.25. Revenue down mid-single digit %.

Conference Highlights:

CEO Christopher A. Viehbacher said: "We believe 2024 was an important year on our journey to deliver long-term sustainable growth. We delivered continued revenue growth from our ongoing product launches including Leqembi, where we believe there remains a significant long-term opportunity. We also achieved key development milestones across our late-stage pipeline, where we continue to prioritize high-conviction assets with the potential to drive growth well into the next decade. Our financial discipline has enabled a restructuring of our operating expenses with a reallocation of resources toward potential future growth drivers. We believe that continued execution against these key strategic elements, as well as a disciplined approach to business development, will allow us to generate long-term value for our shareholders by bringing innovative medicines to patients." Given competition in MS, focus is on selling newer products and prioritizing the pipeline. There will be key readouts in 2026; if the pipeline comes to market, new revenue could exceed our current revenue.

Decline in MS going forward will depend on timing of patent expirations.

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.

In Q3 2024 Dapirolizumab pegol for systemic lupus erythmatosus (SLE) Phase 3 data was positive. Detailed data presented in November at ACR. A second Phase 3 study will start this year.

Leqembi (lecanemab) for Alzheimer's patients global growth accelerated, with U.S. sales at $50 million, up sequentially from $39 million, and global at $80 million, up sequentially from $67 million. Not in table below because Biogen gets half of net after expenses. Now has a trial for Leqembi in preclinical AD, AHEAD 3-045. In Q4 2024 the intravenous maintenance dosing was approved by the FDA. A subcutaneous formulation BLA was filed with a PDUFA of August 31, 2025. Underlaying demand is strong, some providers are now treating multiple patients. Large infusion centers set up to meet growing demand. Expanded field force by 30%. Partnered with Eisai, which is doing strong sales in Asia, including China. EU rejected, but Eisai seeking further review. Introduction of blood-based diagnostics in H2 would also help. AHEAD 3-45 study in presymptomatic AD should readout in 2028.

Biogen and Sage's Zurzuvae [zuranolone] for the treatment of major postpartum depression (PPD) main launch started in Q1 2024. Enourmous unmet need, good media coverage. Half million potential patients per year. Early indications are strong. Making progress with payers, number of prescribers. Ex-US expansion could start this year as filings are under review in EU, UK and Canada.

Dapirolizumab pegol started a second Phase 3 study for systemic lupus erythematosus, data readout in late 2027 or early 2028.. First Phase 3 study results were positive.

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

In Q4 2024 Felzartamab for organ transplants and IgA nephropathy granted orphan status in EU. Readouts in 2027, 2029, and 2030.

Skyclarys could see its first South American approval this year.

Litifilimab for CLE and SLE (lupus) Phase 3 readouts expected in 2026-27 timeframe.

Non-GAAP net income was $502 million, down 16% sequentially from $596 million and up 17% from $430 million year-earlier. Non-GAAP EPS diluted was $3.44, down 16% sequentially from $4.08 and up 17% from $2.95 year-earlier.

Total product revenue was $1.83 billion, up 3% sequentially from $1.77 billion and flat from $1.83 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 $2.38 billion, up sequentially from $1.7 billion. $4.5 billion debt. $0 million was spent to repurchase shares. $761 million cash flow from operations. $39 million cap ex. $722 million free cash flow. $2.1 billion remains authorized for share repurchases.

GAAP Cost of sales was $584 million. R&D expense was $532 million. SG&A expense $680 million. Amortization of acquired intangible assets $151 million. Collaboration profit sharing income $57 million. Restructuring charges $5 million. Loss on contingent consideration $4 million. Other expense $150 million. Total cost and expenses $2.16 billion. Leaving income from operations of $292 million. Income tax $25 million.

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

Q&A selective summary:

Capacity for external business development? Excited about current pipeline. Would still like to reinforce it. Prefer research as primary source due to high price of late-stage therapies. We are most looking at early stage pipeline expansion. Must make financial sense. We have an excellent balance sheet and free cash flow if we do want to acquire anything.

Can blood based diagnostics for Alzheimer's replace PET? Tests are available for triage today. FDA approval would mean reimbursement and trust of the results. Should see milestones in the near term.

$200 million from Royalty Pharma in 2025 would be shown as a reduction in expense. It is already in our guidance.

Skyclarys outside US? We are looking across social media to find prescribers and patients. We also are educating physicians about FA. It can currently take 3 or 4 years for a young person to get a definite diagnosis. It is still finding one patient at a time. We are not seeing a problem with reimubursement in Europe, where 10 countries currently reimburse.

Spinraza? It is a competitive market with a limited number of patients. There are also undiagnosed, potential patients. High dose will help, cuts loading doses from 4 to 2. We are also developing a device, a port inserted under the skin to aid intrathecal injections.

Some of our MS products are quite sticky with patients, so decline might be slower than expected.

In the last two years we have culled our pipeline and have much more confidence in the potential therapies that remain in it. But no guarantees. Which like the Reata transaction, we believe Skyclarys is and will be a significant product. The IRA is a de facto reduction in patent life for our industry, so pricing of potential products should decline, but have not yet. Believe share price does not reflect the true value of Biogen.

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