On April 22, 2021 Biogen Inc. (Nasdaq: BIIB) reported first quarter 2021 financial results (Press release, Biogen, APR 22, 2021, View Source [SID1234578337]).
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"Our first quarter 2021 results were consistent with our expectations across MS, SMA, and biosimilars despite increased competition," said Michel Vounatsos, Biogen’s Chief Executive Officer. "The launch of VUMERITY has continued to accelerate, providing a valuable new option for patients, and we continue to diligently manage operating expenses. We are pleased with our operational performance during the quarter, and we are increasing our earnings guidance for the full year."
"With an anticipated regulatory decision for aducanumab in the U.S. and a number of exciting pivotal readouts expected this year in depression, choroideremia, and ALS, we continue to believe that 2021 will be a transformative year for Biogen," Vounatsos said.
First Quarter 2021 Financial Results
•First quarter total revenue of $2,694 million decreased 24% versus the prior year at actual currency and decreased 25% at constant currency*.
◦Multiple sclerosis (MS) revenue, including royalties on sales of OCREVUS, of $1,693 million decreased 26% versus the prior year at both actual and constant currency.
◦SPINRAZA revenue of $521 million decreased 8% versus the prior year at actual currency and decreased 12% at constant currency.
◦Biosimilars revenue of $205 million decreased 6% versus the prior year at actual currency and decreased 13% at constant currency.
•First quarter GAAP net income and diluted earnings per share (EPS) attributable to Biogen Inc. were $410 million and $2.69, respectively.
•First quarter Non-GAAP net income and diluted EPS attributable to Biogen Inc. were $813 million and $5.34, 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.
•First quarter 2021 GAAP amortization and impairment of acquired intangible assets was $98 million, including an impairment charge of approximately $44 million related to vixotrigine (BIIB074) for the potential treatment of trigeminal neuralgia. These amounts are excluded from Non-GAAP results.
•First quarter 2021 GAAP and Non-GAAP net expense related to collaboration profit sharing was $68 million.
•First quarter 2021 GAAP other expense was $507 million, primarily driven by unrealized losses on our strategic equity investments of $442 million. First quarter 2021 Non-GAAP other expense was $61 million, primarily driven by interest expense and foreign exchange losses.
•First quarter 2021 effective GAAP and Non-GAAP tax rates were 9.5% and 15.7%, respectively. The first quarter 2021 effective GAAP tax rate was impacted by non-cash tax favorability from mark-to-market losses.
Financial Position
•As of March 31, 2021, Biogen had $7,267 million in total debt, and cash, cash equivalents, and marketable securities totaling $3,359 million, resulting in net debt of $3,908 million.
•In the first quarter of 2021 Biogen repurchased approximately 2.2 million shares of the Company’s common stock for a total value of $600 million. As of March 31, 2021, there was $4,000 million remaining under the share repurchase program authorized in October 2020.
•For the first quarter of 2021 the Company’s weighted average diluted shares were 152 million.
•First quarter 2021 cash from operations was $769 million. Capital expenditures were $93 million, and free cash flow, defined as cash flow from operations less capital expenditures, was $676 million.
This financial guidance assumes a currency headwind of approximately $80 million, net of hedging activities, to full year 2021 revenue due primarily to the strengthening of the U.S. dollar from January 1, 2021 through March 31, 2021. This guidance also assumes that foreign exchange rates as of March 31, 2021, will remain in effect for the remainder of the year, net of hedging activities.
This financial guidance continues to assume that aducanumab, an investigational treatment for Alzheimer’s disease, will be approved in the U.S. by June 7, 2021, although uncertainty remains on the U.S. Food and Drug Administration’s (FDA) decision. If aducanumab is approved in the U.S., Biogen expects an immediate launch with only modest revenue in 2021, ramping thereafter. This guidance also continues to assume rapid erosion of TECFIDERA in the U.S. as well as significant erosion of RITUXAN in the U.S. Biogen expects the decreased revenue from these high margin products to reduce its gross margin percentage. Non-GAAP R&D expense is expected to be between $2.3 billion and $2.4 billion, and Non-GAAP SG&A expense is expected to be between $2.6 billion and $2.7 billion. This guidance reflects our expectation that both Non-GAAP R&D and Non-GAAP SG&A expense will increase beginning in the second quarter of 2021 due to new collaborations, program readouts, and aducanumab investments as we prepare for the potential launch.
We expect that we will utilize a portion of the remaining share repurchase authorization of $4,000 million throughout 2021.
This financial guidance does not include any impact from potential acquisitions or large business development transactions, as both are hard to predict, or any impact of potential tax or healthcare reform.
Biogen may incur charges, realize gains or losses, or experience other events or circumstances in 2021 that could cause any of these assumptions to change and/or actual results to vary from this financial guidance.
Biogen does not provide guidance for GAAP reported financial measures (other than revenue) or a reconciliation of forward-looking Non-GAAP financial measures to the most directly comparable GAAP reported financial measures because the Company is unable to predict with reasonable certainty the financial impact of items such as the transaction, integration, and certain other costs related to acquisitions or large business development transactions; unusual gains and losses; potential future asset impairments; gains and losses from our equity security investments; and the ultimate outcome of pending significant litigation without unreasonable effort. These items are uncertain, depend on various factors, and could have a material impact on GAAP reported results for the guidance period. For the same reasons, the Company is unable to address the significance of the unavailable information, which could be material to future results.
Recent Events
•In April 2021 Biogen and Eisai Co., Ltd. (Eisai) announced the publication of the results from Study 201, a Phase 2b proof-of-concept clinical trial that explored the impact of treatment with lecanemab (BAN2401) on reducing brain amyloid beta and clinical decline, in the journal Alzheimer’s Research and Therapy. The companies also announced that the lecanemab Clarity AD Phase 3 clinical trial completed enrollment in March 2021 with 1,795 symptomatic patients with early Alzheimer’s disease. Biogen is collaborating with Eisai on the development of lecanemab.
•In April 2021 Biogen announced that China’s National Medical Products Administration approved TECFIDERA (dimethyl fumarate) for the treatment of relapsing MS.
•In April 2021 Biogen and Sage announced that the Phase 2 study of BIIB124 (SAGE-324), a GABAA positive allosteric modulator, met its primary endpoint of a statistically significant reduction in tremor score in individuals treated with BIIB124 compared to placebo at Day 29 in adults with essential tremor (p=0.049), corresponding to a 36% reduction in upper limb tremor amplitude from baseline in the BIIB124 group compared to a 21% reduction in the placebo group. Down-titration of dose occurred in 62% of patients who received BIIB124, and discontinuations were noted in 38% of patients receiving BIIB124. Adverse events were generally consistent with the safety profile of BIIB124 seen to date. The most common treatment-emergent adverse events that occurred in ≥10% of patients in the BIIB124 treatment group and at a rate at least twice as high as that of patients in the placebo group were: somnolence 68%; dizziness 38%; balance disorder 15%; diplopia 12%; dysarthria 12%; and gait disturbance 12%. Biogen and Sage are currently planning next steps for development of BIIB124.
•In April 2021 Biogen and Bio-Thera Solutions, Ltd announced that they entered into a commercialization and license agreement to develop, manufacture, and commercialize BAT1806, a Phase 3 clinical stage anti interleukin-6 (IL-6) receptor monoclonal antibody that is a proposed biosimilar referencing ACTEMRA (tocilizumab). ACTEMRA’s primary indication is for moderate to severe rheumatoid arthritis in adults as well as juvenile idiopathic polyarthritis, systemic juvenile idiopathic arthritis, giant cell arteritis, and cytokine release syndrome. Closing of the transaction is contingent upon completion of review under antitrust laws, including the Hart-Scott-Rodino Antitrust Improvements Act of 1976 in the U.S. The transaction is expected to close in the second quarter of 2021.
•In April 2021 Biogen announced that the European Commission granted marketing authorization for a subcutaneous injection of TYSABRI (natalizumab) to treat relapsing-remitting MS. The new route of administration offers comparable efficacy and safety to the TYSABRI intravenous formulation building on the therapy’s long-term data, established clinical benefits, and well-characterized safety profile. TYSABRI is the only high-efficacy MS therapy to offer two routes of administration options providing patients and physicians the flexibility to choose the one that best fits their individual needs.
•In the first quarter of 2021 Biogen submitted a Marketing Authorization Application (MAA) to ANVISA in Brazil for aducanumab. This application is currently in queue for review. Biogen also submitted MAAs for aducanumab to Health Canada, the Therapeutic Goods Agency in Australia, and Swissmedic in Switzerland, all of which are subject to agency validation of whether the applications are accepted. Biogen is collaborating with Eisai on the development of aducanumab.
•In the first quarter of 2021 Biogen announced plans to build a new gene therapy manufacturing facility at its Research Triangle Park manufacturing campuses in North Carolina to support its growing gene therapy pipeline across multiple therapeutic areas.
Conference Call and Webcast
The Company’s earnings conference call for the first quarter will be broadcast via the internet at 8:00 a.m. ET on April 22, 2021, and will be accessible through the Investors section of Biogen’s website, www.biogen.com. Supplemental information in the form of a slide presentation is also accessible at the same location on the internet and will be subsequently available on the website for at least one month.