On July 22, 2021 Biogen Inc. (Nasdaq: BIIB) reported second quarter 2021 financial results (Press release, Biogen, JUL 22, 2021, View Source,%24448%20million%20and%20%242.99%2C%20respectively.&text=Second%20quarter%20Non%2DGAAP%20net,%24852%20million%20and%20%245.68%2C%20respectively. [SID1234585115]).
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"We were pleased with our operational performance in the second quarter," said Michel Vounatsos, Biogen’s Chief Executive Officer. "Biogen has the market-leading portfolio of therapies for MS, has launched the first approved and market-leading therapy for SMA, and now has the first approved therapy to address a defining pathology of Alzheimer’s disease. In addition, we recently reported positive data in depression and stroke, and we look forward to the expected Phase 3 data for tofersen, the first genetically-targeted potential therapy for ALS, for which we have begun offering individual compassionate use access." Second Quarter 2021 Financial Results
• Second quarter total revenue of $2,775 million decreased 25% versus the prior year at actual currency and decreased 26% at constant currency*. o Multiple sclerosis (MS) revenue, including royalties on sales of OCREVUS, of $1,786 million decreased 24% versus the prior year at both actual and constant currency. o SPINRAZA revenue of $500 million increased 1% versus the prior year at actual currency and decreased 3% at constant currency. o ADUHELM revenue was $2 million. o Biosimilars revenue of $202 million increased 18% versus the prior year at actual currency and increased 9% at constant currency. 2 o Other revenue of $99 million decreased 76% versus the prior year at both actual and constant currency, primarily due to approximately $330 million in revenue in the second quarter of 2020 related to the license of certain manufacturingrelated intellectual property to one of our corporate partners.
• Second quarter GAAP net income and diluted earnings per share (EPS) attributable to Biogen Inc. were $448 million and $2.99, respectively.
• Second quarter Non-GAAP net income and diluted EPS attributable to Biogen Inc. were $852 million and $5.68, respectively. A reconciliation of GAAP to Non-GAAP financial measures included in this news release can be found in Table 4 at the end of this news release. * Percentage changes in revenue growth at constant currency are presented excluding the impact of changes in foreign currency exchange rates and hedging gains or losses. The current period’s foreign currency revenue values are converted into U.S. dollars using the average exchange rates from the prior period Beginning in the second quarter of 2021 material upfront payments and premiums paid on the acquisition of common stock associated with significant collaboration and licensing arrangements along with the related transaction costs incurred are no longer excluded from Non-GAAP R&D and SG&A expenses. Non-GAAP financial results for the second quarter of 2020 have been updated to reflect the $208 million payment related to the collaboration with Sangamo Therapeutics, Inc. along with the associated transaction costs and income tax effect. o Second quarter 2021 GAAP and Non-GAAP R&D expense includes a $30 million upfront payment related to a commercialization and license agreement with Bio-Thera Solutions, Ltd. (Bio-Thera) in addition to $20 million in upfront payments related to collaboration agreements with Capsigen Inc. (Capsigen) and Ginkgo Bioworks (Ginkgo).
• Second quarter 2021 GAAP amortization and impairment of acquired intangible assets was $604 million, including an impairment charge of approximately $350 million 3 related to BIIB111 (timrepigene emparvovec) in choroideremia and a $192 million impairment charge related to BIIB112 (cotoretigene toliparvovec) in X-linked retinitis pigmentosa, both of which were based on recent data readouts. These amounts are excluded from Non-GAAP financial results.
• Second quarter 2021 GAAP and Non-GAAP collaboration profit sharing reduced our net operating expenses by $15 million, which includes a reimbursement of $85 million from Eisai Co., Ltd. (Eisai) related to the commercialization of ADUHELM in the U.S.
• Second quarter 2021 GAAP other income was $96 million, primarily driven by unrealized gains on our strategic equity investments of $154 million. Second quarter 2021 Non-GAAP other expense was $58 million, primarily driven by interest expense.
• Second quarter 2021 effective GAAP and Non-GAAP tax rates were (70%) and 16%, respectively. The second quarter 2021 effective GAAP tax rate was impacted by a deferred tax benefit associated with the accelerated approval of ADUHELM by the U.S. Food and Drug Administration (FDA). We recorded a deferred tax asset of approximately $500 million related to Neurimmune SubOne AG’s (Neurimmune) tax basis in ADUHELM, with an equal and offsetting amount assigned to noncontrolling interest, resulting in zero net impact to net income attributable to Biogen Inc.
• Second quarter 2021 GAAP and Non-GAAP income attributable to noncontrolling interest were $577 million and $84 million, respectively, which includes a milestone payment of $100 million to Neurimmune related to the launch of ADUHELM in the U.S. GAAP income attributable to noncontrolling interest also includes the offset to a deferred tax benefit related to Neurimmune’s tax basis in ADUHELM of approximately $500 million. Financial Position
• As of June 30, 2021, Biogen had $7,269 million in total debt. Cash, cash equivalents, and marketable securities totaled $3,966 million. This resulted in net debt of $3,303 million.
• In the second quarter of 2021 Biogen repurchased approximately 1.6 million shares of the Company’s common stock for a total value of $450 million. As of June 30, 2021, there was $3,550 million remaining under the share repurchase program authorized in October 2020.
• For the second quarter of 2021 the Company’s weighted average diluted shares were 150 million.
• Second quarter 2021 cash from operations was $1,227 million. Capital expenditures were $72 million, and free cash flow, defined as cash flow from operations less capit
al expenditures, was $1,155 million.This financial guidance continues to assume modest ADUHELM revenue in 2021, ramping thereafter. This guidance also continues to assume erosion of TECFIDERA and RITUXAN in the U.S. Biogen expects the decreased revenue from these high margin products to reduce its gross margin percentage compared to 2020.
Non-GAAP R&D expense is expected to be between $2.45 billion and $2.55 billion, an increase from prior guidance primarily due to an expected $125 million upfront payment in the third quarter of 2021 associated with our recently announced collaboration with InnoCare Pharma Limited (InnoCare).
This payment was not included in our prior guidance. Non-GAAP SG&A expense is expected to be between $2.6 billion and $2.7 billion, consistent with our previous guidance. This guidance continues to reflect our expectation that both Non-GAAP R&D and Non-GAAP SG&A expenses will be higher in the second half of the year than they were in the first half due to collaborations, program readouts, and investments in ADUHELM.
We expect that we will utilize a portion of the remaining share repurchase authorization of $3,550 million throughout 2021. This guidance assumes that foreign exchange rates as of June 30, 2021, will remain in effect for the remainder of the year, net of hedging activities.