Analyst Conference Call Summary

biotechnology

conference date: July 31, 2025 @ 5:30 AM Pacific Time
for quarter ending: June 30, 2025 (second quarter, Q2 2025)

Forward-looking statements

Overview: Excellent revenue growth driven by Leqembi, Skyclarys, and Zurzuvae.

Basic data (GAAP):

Revenues were $2.65 billion, up 9% sequentially from $2.43 billion and up 7% from $2.47 billion in the year-earlier quarter.

Net income $635 million, up 163% sequentially from $241 million and up 9% from $584 million in the year-earlier quarter.

EPS (earnings per share, diluted) were $4.33, up 164% sequentially from $1.64 and up 8% from $4.00 year-earlier.

Guidance:

Raising non-GAAP EPS for 2025 from prior $14.50 to $15.50 per share to range of $15.50 to $16.00 per share. But y/y revenue approximately flat.

Conference Highlights:

CEO Christopher A. Viehbacher said: "We delivered another quarter of strong execution against our strategy to transform our portfolio and build the new Biogen. Our performance reflects robust financial results, ongoing cost discipline, continued growth of our launch products, and meaningful strides expanding and advancing our late-stage pipeline. We are now progressing salanersen to registrational studies in SMA following exciting interim Phase 1b results, and have initiated all three Phase 3 studies for felzartamab in rare kidney disease. These achievements reinforce our commitment to building a stronger company, with the potential for sustainable growth and long-term value for our shareholders." Vumerity sales were good, newer product revenue replacing declines in older MS products. Fit For Growth program is going well.

Second quarter 2025 GAAP and Non-GAAP diluted EPS reflects the approximately $0.26 negative impact from $47 million of acquired IPR&D, upfront and milestone expense, which includes a $30 million milestone to MorphoSys as part of the initiation of the Phase 3 trial of felzartamab in IgA nephropathy and a $16 million upfront payment as part of a strategic research agreement with City Therapeutics.

Cost of sales in Q2 increased partly for batch production in preparation for plant mainenance shutdowns in Q4. Investing is increased plant capacity in U.S.

Announced that plans to hold the second virtual investor event to highlight the development pipeline on September 3, 2025 at 10:00 a.m. ET with a focus on its late-stage lupus assets. Biogen does not intend to disclose new clinical data on the call.

In Q2 2025 agreed on strategic research with City Therapeutics for RNAi therapies.

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

Leqembi (lecanemab) for Alzheimer's patients global growth continued, with U.S. sales at $63 million, up sequentially from $52 million, and global at $160 million (including a one-time $35 million shipment to China), up sequentially from $96 million. 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. Positive data announced in Q2 2025 shows continuous treatment has sustained benefit.

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, exceding expectations, received positive EU CHMP opinion. Well over 10,000 women now treated for PPD. Physicians are writing repeat prescriptions and are becoming more proactive about diagnosing PPD.

Salanersen for SMA high dose filings accepted by FDA and EMA. PDUFA September 22, 2025. Oonce yearly dosing for patients who have had gene therapy Phase 1B results encouraging.

In Q2 2025 Dapirolizumab pegol Phase 3 data presented at EULAR show improvement in fatigue and reduction of disease activity in SLE.

Non-GAAP net income was $803 million, up 81% sequentially from $443 million and up 4% from $771 million year-earlier. Non-GAAP EPS diluted was $5.47, up 81% sequentially from $3.02 and up 4% from $5.28 year-earlier.

Total product revenue was $1.88 billion, up 9% sequentially from $1.73 billion and down 1% from $1.90 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 $2.8 billion, up sequentially from $2.60 billion. $6.3 billion debt. $0 million was spent to repurchase shares. $161 million cash flow from operations [impacted by $745 million in cash tax payments]. $27 million cap ex. $134 million free cash flow.

GAAP Cost of sales was $605 million. R&D expense was $399 million. Acquired in-process R&D expense $47 million. SG&A expense $584 million. Amortization of acquired intangible assets $131 million. Collaboration profit sharing income $75 million. Restructuring charges $ million. Loss on contingent consideration $13 million. Other expense $49 million. Total cost and expenses $1.902 billion. Leaving income from operations of $744 million. Income tax $109 million.

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

Q&A selective summary:

345 trial, early Alzheimer's, design? Potential for amyloid therapies is high in the pre-symptom population. A positive competitor trial would be a plus for us. We are asking different science questions. Ahead 3 asks whether we can prevent further accumulation of amyloid. Ahead 45 asks whether we can prevent cognitive declines in patients with amyloid already above a threshold in the brain. We also were more specific in our recruitment of patients, differing from the competitor. We have a biomarker endpoint in 3, but a composit endpoint in 45. Readout in 2028, could be an interim analysis.

Leqembi market share? We believe a second therapy helps expand the market. Grew by 15% on new patient starts. Kisunia (donanemab) faces the same friction points we have seen for Leqembi. Believe growth of competitor is with HCPs already prescribing Leqembi. We have almost 70% of the market, physicians are going to try a new product. With maintenance and subq options we will be in a stronger position. New labels will influence physician choices. Aria remains an important consideration.

SMA mysostatin competition? We believe myostatin will be a good combination therapy, but we do not see it as a direct competitor for Spinraza.

Lupus competititive landscape? The way we tackled lupus was to look at the unmet need. Dapi was only the third agent ever to have a positive Phase 3 trial. Unmet need is still outstanding. Litiflimab and Dapirolibumab have differing mechanisms of action to target differing high unmet needs. Phase 3 data in Dapi gives us confidence. Also excited about Felzaramab Phase 1 data for Lupus nephritis.

Asi relationship is better than it has ever been. The specific issue will go to arbitration.

Alheimers blood tests are evolving at an incredible pace. Testing nearly tripled in the past year. Convenient, faster, cheaper tests are on their way. Many neurologists are already using these tests. PCPs are currently early adopters. Driving awareness and real world evidence. Tests now hit the 90% specificity threshold.

Business development is more likely to be with early stage assets, which have better financial potential. We have plenty of late stage assets. Must be strategic fits.

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