Biogen Inc. · NASDAQ:BIIB
Biogen — Q4 2016 Earnings Presentation
44 slides from Biogen's earnings presentation, Jan 26, 2017
Slide 1: Q4 & Full Year 2016 Financial Results and Business Update
Q4 & Full Year 2016 Financial Results and Business Update January 26, 2017 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements, including statements relating to: Biogen’s strategy and plans; potential of our commercial business and pipeline programs; clinical trials and data readouts; regulatory filings and the timing thereof; the timing of the
Slide 3: Q4 & Full Year 2016 Earnings Call Agenda
Q4 & Full Year 2016 Earnings Call Agenda Matt Calistri Introduction Investor Relations Overview & Michel Vounatsos Commercial Update Chief Executive Officer Michael Ehlers, M.D., Ph.D. R&D Update EVP, Research & Development Paul Clancy Financial Update EVP, Chief Financial Officer Michel Vounatsos C
Slide 4: Overview & Commercial Update
Overview & Commercial Update Michel Vounatsos Chief Executive Officer 4
Slide 5: Recent Highlights
Recent Highlights Financial Update Data Readouts • Total full year revenues grew 6% vs prior year • Positive interim analyses of ENDEAR and • 10% growth in full year GAAP diluted EPS and CHERISH for SPINRAZA 19% growth in non-GAAP diluted EPS vs prior year • Phase 2 SYNERGY data for opicinumab • On-
Slide 6: Global Leader in Multiple Sclerosis
Global Leader in Multiple Sclerosis Biogen Products Treat ~ 38% of All Treated MS Patients Globally1 2016 Highlights Biogen MS Patients • MS revenues increased 3% versus 2015, while total Biogen MS patients grew 4% Thousands • 5% revenue growth on a constant currency basis2 +12% CAGR 335k 325k 299k
Slide 7: Growing Biosimilars Business
Growing Biosimilars Business SAMSUNG BIOEPIS JOINT VENTURE • Option to acquire up to 49.9% equity stake Biosimilars Revenue ($M) • Commercialization rights to three anti-TNFs in Europe $53 • Leveraging expertise in protein engineering and biologics manufacturing • Advancing biosimilars of insulin gl
Slide 8: SPINRAZA Launch
SPINRAZA Launch First SPINRAZA Patients Dosed in US Working with Clinicians and Advocacy Groups to Minimize Delays in Time to Treatment Filed in the E.U., Japan, Australia and Canada; Other Countries to Follow throughout 2017 8
Slide 9: R&D Update
R&D Update Michael Ehlers, M.D., Ph.D. EVP, Research & Development 9
Slide 10: SPINRAZA (nusinersen): The First Treatment for SMA
SPINRAZATM (nusinersen): The First Treatment for SMA FDA Approval Received Within 3 Months of Regulatory Filing U.S. Label Highlights Broad label: Approved for the treatment of SMA in pediatric and adult patients Highlights efficacy on the achievement of motor milestones and measures of motor functi
Slide 11: Significantly Reduces Risk of Death or Permanent Ventilation in Infantile-Onset SMA
43rd Annual Congress of the British Paediatric Neurology Association Significantly Reduces Risk of Death or Permanent Ventilation in Infantile-Onset SMA SPINRAZA met both primary endpoints in the ENDEAR study which showed: • A greater percentage of infants treated with SPINRAZA achieved a motor mile
Slide 12: Repair & Regeneration Programs for MS
Repair & Regeneration Programs for MS OPICINUMAB (ANTI-LINGO) BIIB061 • Monoclonal antibody targeting LINGO-1, an important regulator of myelination • Potential novel oral remyelinating agent for MS • Phase 2 RENEW Trial (AON) – first clinical study • Small molecule with a different mechanism from t
Slide 13: Natalizumab for Acute Ischemic Stroke
HIGH UNMET NEED • Over 1.7M first-time ischemic strokes occur each year, Natalizumab for Acute common cause of death and disability • Need for new treatments that can be used alone or as add- Ischemic Stroke on to current therapies over extended time window ACTION STUDY RESULTS • Natalizumab targets
Slide 14: Portfolio of Alzheimer's Disease Candidates
Portfolio of Alzheimer's Disease Candidates First Patients Dosed in Phase 3 for Elenbecestat (E2609) Dec. ‘16 Enrolled 1,032 Patients in Phase 3 for Aducanumab in 2016; Full Enrollment Expected Mid-18 Aducanumab Elenbecestat* (E2609) Phase 3 Phase 3 Anti-amyloid antibody Oral inhibitor of β secretas
Slide 15: Pipeline
Pipeline PHASE I PHASE II PHASE III FILED Nusinersen (IONIS-SMNRx)* Spinal Muscular Atrophy Approved in US Aducanumab (Aβ mAb)* Alzheimer's Disease Elenbecestat (E2609)* Alzheimer's Disease BAN2401 (Aβ mAb)* Alzheimer's Disease BIIB074‡ (Nav1.7 inhibitor) Trigeminal Neuralgia BIIB074‡ (Nav1.7 inhibi
Slide 16: Financial Results Update
Financial Results Update Paul Clancy EVP, Chief Financial Officer 16
Slide 17: 2016 Financial Performance
2016 Financial Performance Revenues ($B) Diluted EPS ($) +6% +7% +10% +19% $11.4 $20.22 $10.8 $16.93 $17.01 $9.8 $15.34 $9.2 2015 2016 2015 2016 2015 2016 2015 2016 Total Product GAAP Non-GAAP A reconciliation of our GAAP to non-GAAP financial results is at the end of this presentation. 17
Slide 18: Global TECFIDERA Performance
Global TECFIDERA Performance Most Prescribed Oral MS Therapy Globally TECFIDERA Revenue ($M) Q4 2016 Highlights • Revenue vs. Q3 2016 and Q4 2015 ∆Q/Q ∆Y/Y WW (3%) and + 1% $1,034 US (5%) and + 2% $993 $987 $1,002 $946 ROW + 7% and (3%) $189 $208 $206 $202 $202 • Approved in Japan • In Q3 2016, US T
Slide 19: Global Interferon Performance
Global Interferon Performance Market Leading Interferon Franchise for MS Interferon Revenues ($M) Q4 2016 Highlights • Total interferon Revenue vs. Q3 2016 and Q4 2015 ∆Q/Q ∆Y/Y $740 $728 WW (3%) and (7%) $708 $688 $670 $46 US (3%) and (4%) $36 $44 $48 ROW (1%) and (14%) $197 $39 $163 $158 $152 $164
Slide 20: Global TYSABRI Performance
Global TYSABRI Performance Market Leading High Efficacy Therapy for MS TYSABRI Revenue ($M) Q4 2016 Highlights • Revenue vs. Q3 2016 and Q4 2015 $497 $515 ∆Q/Q ∆Y/Y $481 $477 $474 WW (8%) and (1%) US (4%) and + 4% $192 $214 $203 $189 $185 ROW (14%) and (9%) • Versus Q4 2015, foreign exchange and hed
Slide 21: Q4 & FY 2016 Financial Results Summary: Revenues
Q4 & FY 2016 Financial Results Summary: Revenues Q4 Q3 Q4 $ in Millions FY 2016 FY 2015 2016 2016 2015 Q/Q Y/Y FY/FY ELOCTATE US $126 $110 $96 15% 32% $445 $308 44% ELOCTATE ROW $23 $22 $5 5% 336% $68 $11 498% Total ELOCTATE Sales $149 $132 $101 13% 47% $513 $320 61% ALPROLIX US $74 $67 $60 10
Slide 22: Q4 & FY 2016 Financial Results Summary
Q4 & FY 2016 Financial Results Summary Q4 Q3 Q4 FY FY $ in Millions 2016 2016 2015 Q/Q Y/Y 2016 2015 FY/FY GAAP Cost of Sales $378 $417 $332 9% (14%) $1,479 $1,240 (19%) % of Total Revenues 13% 14% 12% 13% 12% Non-GAAP Cost of Sales $363 $396 $332 8% (9%) $1,426 $1,240 (15%) % of Total Revenue
Slide 23: Q4 & FY 2016 Financial Results Summary
Q4 & FY 2016 Financial Results Summary $ in Millions except EPS Q4 Q3 Q4 FY FY Shares in Millions 2016 2016 2015 Q/Q Y/Y 2016 2015 FY/FY GAAP other Income (Expense) ($48) ($58) ($82) 17% 42% ($217) ($124) (75%) Non-GAAP other Income ($52) ($58) ($82) 10% 36% ($222) ($124) (79%) (Expense) GAAP
Slide 24: 2017 Guidance
2017 Guidance Paul Clancy EVP, Chief Financial Officer 24
Slide 25: 2017 Financial Guidance
2017 Financial Guidance “WholeCo” = (Biogen ex. + (Hemophilia Spin-Off) Hemophilia Spin-Off) Previously Communicated Guidance GAAP Non-GAAP Revenue 17% - 19% 17% - 19% Growth Operating 38% - 42% 43% - 47% Today’s Margin Focus Tax Rate 36% - 38% 36% - 38% Note: Bioverativ guidance was provided as of
Slide 26: 2017 Revenue Guidance
2017 Revenue Guidance Total Revenues $12.1 to $12.4 Billion “WholeCo” $11.4 Billion Bioverativ 17% to 19% Hemophilia Growth2 ~ $75 Million3 $888 Million1 Biogen Biogen (Ex. Hemophilia) (Ex. Hemophilia) $11.1 5% to 7% to $10.6 Billion Growth $11.4 Billion4 (Ex. Hemophilia) 2016 Actuals 2017 Guidance
Slide 27: 2017 Operating Expense Perspective
2017 Operating Expense Perspective Efficiencies Offsetting duplicative G&A costs created by hemophilia spin-off Focus over the last 24 months in reducing layers, controlling promotional spend, and ensuring cost discipline Renewed leadership effort to simplify many aspects of business and reduc
Slide 28: Biogen 2017 Full Year Financial Guidance
Biogen 2017 Full Year Financial Guidance Expense ratios apply to both GAAP and Non-GAAP 2017 Full 2016 Actual 2017 Guidance Year Guidance. $11.4 billion Revenues $11.1 to $11.4 billion (including hemophilia) R&D Expense 17.2% 16% to 17% (as a % of revenues) SG&A Expense 16.9% 15% to 16% (as a % of r
Slide 29: 2017 Financial Guidance "WholeCo"
2017 Financial Guidance “WholeCo” = (Biogen ex. + (Hemophilia Spin-Off) Hemophilia Spin-Off) 2017 EPS Guidance2 2017 Guidance3 GAAP EPS GAAP Non-GAAP Shareholders1 to $18.00 to $18.80 Revenue Benefit from Earnings Growth 17% - 19% 17% - 19% Potential from Both Non-GAAP Operating Biogen & Bioverativ
Slide 30: Closing Remarks
Closing Remarks Michel Vounatsos Chief Executive Officer 30
Slide 31: Potential Events in 2017
Potential Events in 2017 Bioverativ Spin-Off SPINRAZA approval in E.U. OCREVUS approvals in U.S. and E.U. Rulings on TECFIDERA IP cases TECFIDERA launch in Japan Phase 2b for natalizumab in stroke fully enrolled Phase 2b initiation for opicinumab in MS Potential BAN2401 data in Alzheimer’s Phase 2a
Slide 32: Questions & Answers
Questions & Answers 32
Slide 33: Appendix
Biogen Appendix * Biogen.
Slide 34: Q4 & FY 2016 Financial Results Summary: MS Revenues
Q4 & FY 2016 Financial Results Summary: MS Revenues Q4 Q3 Q4 FY FY $ in Millions 2016 2016 2015 Q/Q Y/Y 2016 2015 FY/FY TECFIDERA US $800 $845 $785 (5%) 2% $3,169 $2,908 9% TECFIDERA ROW 1 $202 $189 $208 7% (3%) $799 $730 9% Total TECFIDERA Sales1 $1,002 $1,034 $993 (3%) 1% $3,968 $3,638 9% AV
Slide 35: Q4 2016 Impact of Foreign Exchange and Hedging
Q4 2016 Impact of Foreign Exchange and Hedging FX Impact w/o Hedge Impact Total Impact Hedge Gains (Losses) Hedge Actuals Favorable/ Favorable/ in the Quarter Favorable / (Unfavorable) (Unfavorable) (Unfavorable) Vs. Vs. Vs. Vs. Vs. Vs. Q4’16 Q4’16 Q3’16 Q4’15 Q3’16 Q4’15 Q3’16 Q4’15 Q3’16 Q4’15 Tot
Slide 36: FY 2016 Impact of Foreign Exchange and Hedging
FY 2016 Impact of Foreign Exchange and Hedging Hedge Gains FX Impact w/o Hedge Hedge Impact Total Impact Actuals (Losses) in the Favorable / Favorable/ Favorable/ Year (Unfavorable) (Unfavorable) (Unfavorable) FY 16 FY 16 FY 15 Vs. FY 15 Vs. FY 15 Vs. FY 15 Total Revenues $11,449 $5 $173 ($43) ($168
Slide 37: RITUXAN and GAZYVA Performance
RITUXAN and GAZYVA Performance Revenues from Anti-CD20 Therapeutic Programs ($M) $1,033 $947 $975 $962 $972 $317 $334 $313 $329 $334 $349 $301 $318 $302 $318 $17 $17 $15 $17 $17 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 1 ROW Royalty BIIB US Profit Share BIIB Revenue US Net Sales Q4 2016 Highlights Revenue vs.
Slide 38: ELOCTATE Performance
ELOCTATE Performance ELOCTATE Revenue ($M) Q4 2016 Highlights $149 • Revenue vs. Q3 2016 and Q4 2015 ∆Q/Q ∆Y/Y $132 $125 $23 WW + 13% and + 47% $22 US + 15% and + 32% $108 $14 $101 ROW + 5% and + 336% $9 $5 Full Year 2016 Highlights ROW • Revenue vs. FY 2015 $126 US ∆Y/Y $110 $110 WW + 61% $96 $99 U
Slide 39: ALPROLIX Performance
ALPROLIX Performance ALPROLIX Revenue ($M) Q4 2016 Highlights • Revenue vs. Q3 2016 and Q4 2015 ∆Q/Q ∆Y/Y $93 WW + 9% and + 31% $85 US + 10% and + 23% $80 $75 $20 ROW + 5% and + 73% $71 $19 $10 $17 $11 Full Year 2016 Highlights • Revenue vs. FY 2015 ROW ∆Y/Y $74 WW + 42% $60 $65 $63 $67 US US + 28%
Slide 40: Accounting Treatment for ZINBRYTA
Accounting Treatment for ZINBRYTA Overall Economics with AbbVie • Biogen and AbbVie conduct ZINBRYTA co-promotion activities in the US, E.U., and Canadian territories (Collaboration Territory). Biogen is solely responsible for commercialization in the rest of the world. • Profits and costs shared 50
Slide 41: GAAP to Non-GAAP Reconciliation
Use of Non-GAAP Financial Measures GAAP to Non-GAAP Reconciliation We supplement our consolidated financial statements presented on a GAAP basis by providing additional measures which may be considered “Non-GAAP” financial measures under applicable SEC rules. We believe that the disclosure of these
Slide 42: GAAP to Non-GAAP Reconciliation
Use of Non-GAAP Financial Measures GAAP to Non-GAAP Reconciliation We supplement our consolidated financial statements presented on a GAAP basis by providing additional measures which may be considered “Non-GAAP” financial measures under applicable SEC rules. We believe that the disclosure of these
Slide 43: GAAP to Non-GAAP Reconciliation
Use of Non-GAAP Financial Measures GAAP to Non-GAAP Reconciliation We supplement our consolidated financial statements presented on a GAAP basis by providing additional measures which may be considered “Non-GAAP” financial measures under applicable SEC rules. We believe that the disclosure of these
Slide 44: Bioverativ GAAP to Non-GAAP Reconciliation
Bioverativ GAAP to Non-GAAP Reconciliation Operating margin reconciliation: GAAP operating margin 38 - 42% One time separation and set up costs 2% Equity based compensation 2% Amortization of intangibles 1% Non-GAAP operating margin 43% - 47% 44