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Biogen reports third quarter 2023 results and updates full year 2023 guidance

On November 8, 2023 Biogen Inc. (NASDAQ: BIIB) reported third quarter 2023 financial results (Press release, Biogen, NOV 8, 2023, View Source [SID1234637250]). Commenting on the quarter, President and Chief Executive Officer Christopher A. Viehbacher said:

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"We believe we have the key elements in place to position Biogen for long-term sustainable growth. Biogen has made significant progress on the business priorities outlined at the beginning of the year. During the third quarter alone, we received FDA approval for LEQEMBI and ZURZUVAE, announced the closing of the Reata transaction, and initiated our $1 billion Fit for Growth cost savings program. As we look ahead, the focus remains on execution. We aim to further our leadership in Alzheimer’s disease by both driving the LEQEMBI launch and advancing development of our tau-directed ASO, where we have the potential to establish another foothold in the fight against Alzheimer’s disease. In addition to potential revenue and EPS growth from new launches, Fit for Growth is expected to significantly strengthen our bottom line growth."
Financial Highlights
Q3 ’23 Q3 ’22 △
r (CC#)
Total Revenue (in millions)*
$2,530 $2,508 1% 3%
GAAP diluted EPS $(0.47) $7.84 (106)% —%
Non-GAAP diluted EPS $4.36 $4.77 (9)% —%

Note: Percent changes represented as favorable/(unfavorable) versus the prior year period.
* Beginning in the third quarter of 2023, we modified our presentation of the commercialization expenses incurred within the LEQEMBI Collaboration. Our 50% portion of LEQEMBI product revenue, net and cost of sales, including royalties, will continue to be classified as a component of revenue. We will now present our 50% share of all global pre- and post-commercialization sales & marketing expenses for the LEQEMBI Collaboration within SG&A expense and will no longer present the post-commercialization portion of these expenses as a reduction to revenue. To reflect this modification, during the third quarter of 2023 we reclassified $38.7 million in collaboration costs (from the first and second quarters of 2023) from revenue from LEQEMBI Collaboration to SG&A expense within our condensed consolidated statements of income.

# Percentage changes in revenue growth at constant currency (CC) 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.

A reconciliation of GAAP to Non-GAAP financial measures can be found in Table 4 at the end of this news release.
Revenue Summary
(in millions) Q3 ’23 Q3 ’22 △
r (CC#)
Multiple sclerosis (MS) product revenue(1)
$1,159 $1,340 (14)% (12)%
Spinal muscular atrophy revenue(2)
$448 $431 4% 7%
Biosimilars revenue $194 $188 4% 7%
Other product revenue(3)
$4 $3 25% 23%
Total product revenue $1,805 $1,962 (8)% (6)%
Revenue from anti-CD20 therapeutic programs $421 $417 1% 1%
Contract manufacturing, royalty and other revenue(4)
$304 $130 135% 135%
Total revenue $2,530 $2,508 1% 3%

Note: Percent changes represented as favorable/(unfavorable) versus the prior year period. Numbers may not foot or recalculate due to rounding.
(1) MS includes TECFIDERA, VUMERITY, AVONEX, PLEGRIDY, TYSABRI and FAMPYRATM.
(2) Spinal muscular atrophy includes SPINRAZA.
(3) Other includes ADUHELM, FUMADERMTM and QALSODY.
(4) Also includes Biogen’s 50% share of revenue, net cost of sales, including royalties, from the LEQEMBI Collaboration and revenue from manufacturing of LEQEMBI beginning in the first quarter of 2023. Beginning in the third quarter of 2023, we modified our presentation of the commercialization expenses incurred within the LEQEMBI Collaboration. Our 50% portion of LEQEMBI product revenue, net and cost of sales, including royalties, will continue to be classified as a component of revenue. We will now present our 50% share of all global pre- and post-commercialization sales & marketing expenses for the LEQEMBI Collaboration within SG&A expense and will no longer present the post-commercialization portion of these expenses as a reduction to revenue. To reflect this modification, during the third quarter of 2023 we reclassified $38.7 million in collaboration costs (from the first and second quarters of 2023) from revenue to SG&A expense within our condensed consolidated statements of income.
•Third quarter 2023 in-market product revenue for LEQEMBI recorded by Eisai was approximately $2 million.
Expense Summary
(in millions) Q3 ’23 Q3 ’22 △
GAAP and Non-GAAP cost of sales*
$660 $470 (40)%
% of Total Revenue 26% 19%
GAAP R&D expense $736 $549 (34)%
Non-GAAP R&D expense $539 $549 2%
GAAP SG&A expense#
$788 $563 (40)%
Non-GAAP SG&A expense#
$553 $562 2%

Note: Percent changes represented as favorable/(unfavorable) versus the prior year period
*Excluding amortization and impairment of acquired intangible assets
# As referenced above, beginning in the third quarter of 2023, our 50% share of all global pre- and post-commercialization sales & marketing expenses for the LEQEMBI Collaboration will be presented within SG&A expense and will no longer present the post-commercialization portion of these expenses as a reduction to revenue. During the third quarter of 2023 we reclassified $38.7 million in collaboration costs (from the first and second quarters of 2023) from revenue to SG&A expense within our condensed consolidated statements of income.

•Third quarter 2023 GAAP and Non-GAAP cost of sales includes approximately $35 million of idle capacity charges. Third quarter 2022 GAAP and Non-GAAP cost of sales includes approximately $11 million of idle capacity charges. The increase in third quarter 2023 GAAP and Non-GAAP cost of sales as a percentage of total revenue was driven primarily by product mix, particularly the year-over-year increase in contract manufacturing revenue.

•The increase in GAAP R&D and SG&A expense in the third quarter of 2023, as compared to the third quarter of 2022, of approximately $187 million and $225 million, respectively, was primarily due to acquisition related charges incurred in connection with our recent acquisition of Reata, including of stock-based compensation expense associated with the accelerated vesting of stock options previously granted to Reata employees.

•Third quarter 2023 GAAP and Non-GAAP R&D expense includes approximately $44 million related to Biogen’s portion of R&D expense related to the LEQEMBI Collaboration, and approximately $37 million in close out costs relating to the EMBARK trial for ADUHELM.

•Third quarter 2023 GAAP and Non-GAAP SG&A includes approximately $82 million related to Biogen’s portion of SG&A expense related to the LEQEMBI Collaboration, which includes a reclassification of $38.7 million in collaboration costs from the first and second quarters of 2023 from revenue to SG&A expense.

•Third quarter 2023 GAAP restructuring expense was $76 million.

•Third quarter 2023 GAAP transaction and integration costs related to the acquisition of Reata was approximately $30 million.
Other Financial Highlights

•Third quarter 2023 GAAP and Non-GAAP collaboration profit sharing was a net expense of $51 million, which includes $56 million of net profit sharing expense related to Biogen’s collaboration with Samsung Bioepis, partially offset by net reimbursement of $6 million from Sage Therapeutics related to the commercialization of ZURZUVAE in the U.S.

•Third quarter 2023 GAAP other expense was $300 million, primarily driven by net unrealized loss on strategic equity investments of $302 million. Third quarter 2023 Non-GAAP other income was $26 million, primarily driven by net interest income.

•Third quarter 2023 GAAP income tax benefit was $73 million, corresponding to an effective tax rate of 51.6%, as compared to an expense of $236 million, or 17.2%, in the third quarter of 2022. The third quarter 2023 GAAP tax benefit was driven by the non-cash changes in the value of Biogen’s equity investments and expenses related to the Reata acquisition. Third quarter 2023 Non-GAAP income tax expense was $100 million, or 14.7%, as compared to an expense of $129 million, or 15.7%, in the third quarter of 2022.
Financial Position

•Third quarter 2023 net cash flow from operations was $592 million. Capital expenditures were $74 million, and free cash flow, defined as net cash flow from operations less capital expenditures, was $518 million.

•As of September 30, 2023, Biogen had cash, cash equivalents, and marketable securities totaling $2,288 million and $7,286 million in total debt, resulting in net debt of $4,998 million.

•No shares of the Company’s common stock were repurchased in the third quarter of 2023. As of September 30, 2023, there was $2,050 million remaining under the share repurchase program authorized in October 2020.

•For the third quarter of 2023 the Company’s GAAP weighted average diluted shares were 145 million. Third quarter 2023 Non-GAAP weighted average diluted shares were 146 million.

Full Year 2023 Financial Guidance

For the full year 2023, Biogen is updating its guidance ranges to reflect the completed acquisition of Reata and its previously projected dilution to 2023 Non-GAAP diluted EPS, regulatory approval for ZURZUVAE in PPD, and the modification made to our presentation of LEQEMBI expenses.
Prior FY 2023 Guidance Updated FY 2023 Guidance
Total revenue Mid-single digit percentage decline versus reported full year 2022
Low-single digit percentage decline versus reported full year 2022
Non-GAAP diluted EPS $15.00 to $16.00
$14.50 to $15.00 Reflecting ~$0.75 of dilution from Reata acquisition which closed September 26, 2023

This guidance assumes that foreign exchange rates as of September 30, 2023, will remain in effect for the remainder of the year, net of hedging activities.

This financial guidance does not include any impact from potential acquisitions or large business development transactions or pending and future litigation, as all 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 2023 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 or future 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.

Conference Call and Webcast

The Company’s earnings conference call for the third quarter will be broadcast via the internet at 8:00 a.m. ET on November 8, 2023 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 90 days.

Bicara Therapeutics to Present at Upcoming November Investor Conferences

On November 8, 2023 Bicara Therapeutics, a clinical-stage biotechnology company developing dual-action biologics designed to modulate the tumor microenvironment to elicit a potent and durable anti-tumor response, reported that company leadership will present at two upcoming investor conferences in November (Press release, Bicara Therapeutics, NOV 8, 2023, View Source;utm_medium=rss&utm_campaign=bicara-therapeutics-to-present-at-upcoming-november-investor-conferences-2 [SID1234637249]):

Stifel 2023 Healthcare Conference on Wednesday, November 15 at 9:10 a.m. ET in New York, NY.
Piper Sandler 35th Annual Healthcare Conference on Thursday, November 30 at 12:30 p.m. ET in New York, NY.

BeiGene to Present at the Jefferies London Healthcare Conference

On November 8, 2023 BeiGene, Ltd. (NASDAQ: BGNE; HKEX: 06160; SSE: 688235), a global biotechnology company, reported that the Company will participate in the Jefferies London Healthcare Conference on Wednesday, November 15th, 2023 with a fireside chat at 2:00 pm GMT (Press release, BeiGene, NOV 8, 2023, View Source [SID1234637248]).

A live webcast of this event can be accessed from the investors section of BeiGene’s website at View Source, View Source, View Source Archived replays will be available for 90 days following the event.

Beam Therapeutics Reports Pipeline and Business Updates and Third Quarter 2023 Financial Results

On November 8, 2023 Beam Therapeutics Inc. (Nasdaq: BEAM), a biotechnology company developing precision genetic medicines through base editing, reported third quarter 2023 financial results and provided an update on the business and its clinical and pipeline progress (Press release, Beam Therapeutics, NOV 8, 2023, View Source [SID1234637247]).

"This year, Beam has established an exceptional foundation for future growth, with significant financial strength, a broad portfolio of differentiated base editing programs in large addressable markets driving toward clinical milestones, and a fully operational suite of research, development, and manufacturing capabilities for precision genetic medicines," said John Evans, chief executive officer of Beam. "We have made critical decisions on where to focus and how to prioritize our investments over the coming years, creating significant momentum in our business and portfolio. In the BEACON trial, patient enrollment, mobilization, and manufacturing are progressing well, and we remain on track to treat the first trial patient with BEAM-101 this year and report clinical trial data on multiple patients next year. We’re also advancing our first in vivo program, BEAM-302, for patients with alpha-1 anti-trypsin deficiency with a regulatory filing expected in the first quarter of next year, followed by our planned IND submission for BEAM-301 shortly thereafter. External interest in our base editing technology continues to grow, illustrated most recently by our transaction with Lilly. With a strong balance sheet, a focused team, and leading capabilities, we are well positioned to advance our base editing programs and platform, which we believe have transformative potential for patients."

Pipeline Updates and Key 2023-2024 Anticipated Milestones

Beam recently announced portfolio priorities and plans to streamline its business operations to support potential near-term value drivers and long-term growth and, as such, is now focusing its efforts as follows:

Hematology Portfolio

•
Beam continues to advance its BEACON Phase 1/2 clinical trial, an open-label, single-arm, multicenter study evaluating the safety and efficacy of BEAM-101 in adult patients with severe sickle cell disease (SCD). Treatment with BEAM-101, in which the edited cell product is delivered in an autologous bone marrow transplant, will occur on a sequential basis for the first three patients treated in the trial, and then will be given in parallel for all subsequent patients.
o
Beam has continued to consent additional patients in the BEACON trial, all of whom are now moving in parallel through the screening, mobilization, and manufacturing activities required to enable treatment with BEAM-101. Beam anticipates that currently consented patients are sufficient to both fill the sentinel cohort (n=3) and to initiate the expansion cohort.
o
The first patient in the trial is expected to be treated with BEAM-101 by year-end 2023.
o
Beam will continue adding additional patients to the BEACON trial through the end of year and beyond, with a total target of 45 treated patients.
o
The company anticipates reporting initial data on multiple patients from the BEACON trial in 2024.
•
Beam continues to advance and invest in its Engineered Stem Cell Antibody Paired Evasion (ESCAPE) conditioning platform. ESCAPE aims to avoid toxicity challenges associated with currently available conditioning regimens for patients with SCD and beta-thalassemia ahead of autologous transplant.
•
In addition, the company is exploring the potential for in vivo base editing programs for SCD, in which base editors would be delivered to the patient through an infusion of lipid nanoparticles (LNPs) targeted to hematopoietic stem cells (HSCs), eliminating the need for transplantation altogether.
Genetic Disease (in vivo) Portfolio

•
Beam continues to advance its two lead in vivo base editing product candidates, BEAM-302 for the treatment of alpha-1 antitrypsin deficiency (AATD) and BEAM-301 for the treatment of glycogen storage disease Ia (GSDIa). BEAM-302 and BEAM-301 have the potential to be the first clinical programs to directly correct a genetic mutation back to a normal functional gene sequence.
•
BEAM-302 is a liver-targeting LNP formulation of base editing reagents designed to correct the PiZ allele, the most common gene variant associated with severe AATD. The company expects to submit a regulatory application in the first quarter of 2024 for authorization to initiate clinical trials initially outside of the U.S., with an Investigational New Drug (IND) expected to be filed with the U.S. Food and Drug Administration (FDA) subsequently during early development.
o
In September 2023, Beam reported the first preclinical data demonstrating the ability of BEAM-302 to significantly increase levels of corrected and functional alpha-1 antitrypsin (AAT) and reduce mutant PiZ AAT in multiple in vivo rodent disease models at clinically relevant doses in an oral presentation at the Alpha-1 Antitrypsin Deficiency 2023 Meeting in Naples, Italy. These findings support the potential of BEAM-302 to efficiently correct the disease-causal PiZ mutation after a single dose and potentially address both the liver and lung disease associated with AATD.
o
An encore presentation at the ESGCT/SFTCG/NVGCT Collaborative Congress in October 2023 showed additional preclinical data supporting the durable effects of BEAM-302.
•
BEAM-301 is a liver-targeting LNP formulation of base editing reagents designed to correct the R83C mutation, the most common disease-causing mutation that results in the most severe form of GSDIa. Given its rare nature and geographic distribution of disease burden, the company will focus development of BEAM-301 in the U.S. and expects to submit an IND application in the first half of 2024.
o
In October 2023, Beam presented new preclinical data demonstrating the ability of a single administration of BEAM-301 to directly and durably correct the R83C mutation in vivo, with results lasting more than one year, in an oral presentation at the 30th Annual European Society of Gene & Cell Therapy (ESGCT) Congress in Brussels.

Immunology/Oncology Portfolio

•
In September 2023, Beam announced dosing of the first patient in the Phase 1/2 clinical trial of BEAM-201, a multiplex-edited allogeneic CAR-T product candidate, for the treatment of relapsed/refractory T-cell acute lymphoblastic leukemia (T-ALL)/T-cell lymphoblastic lymphoma (T-LL). The Phase 1/2 trial continues to enroll, and the company expects to report initial data in 2024.
•
Beam plans to generate a focused clinical dataset for BEAM-201 and seek potential partnership for this and other potential ex vivo CAR-T programs, including Beam’s ongoing research into creating next-generation allogeneic cell therapies with multiplex base editing.
Research Portfolio

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Beam plans to focus near-term research and platform investments on specific applications leveraging Beam’s in vivo editing capabilities in the liver targeting both rare genetic and common disorders, as well as select opportunities in hematology and immunology/oncology.

Corporate Updates

•
Manufacturing: Beam has initiated current good manufacturing practice (GMP) operations at its North Carolina manufacturing facility, where capabilities include both CD34 cell manufacturing and LNP production, with additional capabilities expected to be added in the future.
•
Business Development: In October 2023, Beam announced that Eli Lilly and Company (Lilly) acquired certain rights under Beam’s amended collaboration and license agreement with Verve Therapeutics, Inc. (Verve), including Beam’s opt-in rights to co-develop and co-commercialize Verve’s base editing programs for cardiovascular disease, which includes programs targeting PCSK9, ANGPTL3, and an undisclosed liver-mediated, cardiovascular target. Beam received a $200 million upfront payment and a $50 million equity investment from Lilly. Beam is also eligible to receive up to $350 million in potential future development-stage payments from Lilly upon the completion of certain clinical, regulatory and alliance events for a total of up to $600 million in potential total deal consideration.
Third Quarter 2023 Financial Results

•
Cash Position: Cash, cash equivalents and marketable securities, excluding upfront proceeds from Lilly, were $1.0 billion as of September 30, 2023, as compared to $1.1 billion as of December 31, 2022.
•
Research & Development (R&D) Expenses: R&D expenses were $100.0 million for the third quarter of 2023, compared to $85.3 million for the third quarter of 2022.
•
General & Administrative (G&A) Expenses: G&A expenses were $25.4 million for the third quarter of 2023, compared to $21.8 million for the third quarter of 2022.
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Net Loss: Net loss was $96.1 million for the third quarter of 2023, or $1.22 per share, compared to $109.6 million for the third quarter of 2022, or $1.56 per share.
Cash Runway

Beam expects that its cash, cash equivalents and marketable securities as of September 30, 2023, together with upfront and equity investment proceeds received from Lilly, will enable the company to fund its anticipated operating expenses and capital expenditure requirements into the second half of 2026. This expectation assumes anticipated cost savings related to the company’s portfolio prioritization and streamlining of operations and includes funding directed toward reaching each of the key anticipated milestones for BEAM-101, BEAM-201, BEAM-301 and BEAM-302 described above, as well as continued investments in platform advancements and manufacturing capabilities.

Avidity Biosciences Reports Third Quarter 2023 Financial Results and Recent Highlights

On November 8, 2023 Avidity Biosciences, Inc. (Nasdaq: RNA), a biopharmaceutical company committed to delivering a new class of RNA therapeutics called Antibody Oligonucleotide Conjugates (AOCs), reported financial results and recent highlights for the third quarter ended September 30, 2023 (Press release, Avidity Biosciences, NOV 8, 2023, View Source [SID1234637246]). Avidity ended the third quarter of 2023 with cash, cash equivalents and marketable securities totaling $542.6 million.

"In early October we announced new positive AOC 1001 data that demonstrated improvement in multiple additional functional endpoints, as well as favorable long-term safety and tolerability, in people living with DM1," said Sarah Boyce, president and chief executive officer. "In addition, we announced the completion of the 12-participant dose escalation from 2 mg/kg to 4 mg/kg as part of the partial clinical hold easement and look forward to finalizing the Phase 3 study design and global regulatory path for AOC 1001. We continue to make significant strides across all three of our clinical development programs, remaining on track to report data this year for AOC 1044 in DMD and in the first half of 2024 for both AOC 1001 in DM1 and AOC 1020 in FSHD".

"With funding into the second half of 2025 and continued execution across our portfolio, we remain very confident in the progress we are making in advancing our clinical development programs for DM1, DMD and FSHD," said Mike MacLean, chief financial officer and chief business officer. "The recently presented positive AOC 1001 data at World Muscle Society (WMS) Congress reinforces our confidence in our AOC platform, which spans multiple therapeutic areas, and our ability to deliver on our vision to profoundly improve people’s lives by revolutionizing the delivery of RNA therapeutics".
Recent Highlights
•In October 2023, Avidity announced new positive AOC 1001 data demonstrating improvement in multiple additional functional endpoints and favorable long-term safety and tolerability in people with DM1 at WMS. The new data demonstrated improvement in additional functional measures including hand grip, muscle strength (Manual Muscle Testing composite score and both upper and lower Quantitative Muscle Testing composite scores) and patient reported outcomes, augmenting previously reported positive data showing improvements in myotonia, muscle strength and mobility.
•Data from the dose escalation of 12 participants from 2 mg/kg to 4 mg/kg of AOC 1001 as part of the easement of the partial clinical hold showed no neurological events and no MRI changes following dosing. Avidity continues to work as quickly as possible to resolve the partial clinical hold. In parallel, the company is finalizing a Phase 3 study design and a global regulatory path for AOC 1001.
•Avidity has initiated dosing participants living with Duchenne muscular dystrophy with mutations amenable to exon 44 skipping (DMD44).
•In August and October 2023, the FDA and EMA respectively, granted Orphan Designation for AOC 1044 for DMD44.
Upcoming Milestones
•The company continues to advance three distinct rare disease clinical programs with AOC 1001 for DM1, AOC 1020 for the treatment of facioscapulohumeral muscular dystrophy (FSHD) and AOC 1044 for the treatment of DMD44. Upcoming milestones include:
◦Data from healthy volunteers in the EXPLORE44 trial planned for Q4 of this year
◦A first look at efficacy data from the MARINA-OLE trial planned for first half of 2024
◦Data from a preliminary assessment in approximately half of participants in the FORTITUDE trial planned for the first half of 2024

Third Quarter 2023 Financial Results

Cash, Cash Equivalents and Marketable Securities: Cash, cash equivalents and marketable securities totaled $542.6 million as of September 30, 2023, compared to $610.7 million as of December 31, 2022.

•Collaboration Revenue: Collaboration revenue, including reimbursable expenses, primarily relates to Avidity’s partnership with Eli Lilly and Company and totaled $2.8 million for the third quarter of 2023 compared with $2.5 million for the third quarter of 2022, and $7.4 million for the first nine months of 2023 compared with $6.5 million for the first nine months of 2022.

•Research and Development (R&D) Expenses: R&D expenses include external and internal costs associated with research and development activities. These expenses were $47.7 million for the third quarter of 2023 compared with $37.3 million for the third quarter of 2022, and $138.2 million for the first nine months of 2023 compared with $104.8 million for the first nine months of 2022. The increases were primarily driven by the advancement of AOC 1001, AOC 1020 and AOC 1044, as well as external and internal costs related to the expansion of the company’s overall research capabilities.

•General and Administrative (G&A) Expenses: G&A expenses primarily consist of employee-related expenses, professional fees, insurance costs and patent filing and maintenance fees. These expenses were $13.7 million for the third quarter of 2023 compared with $10.1 million for the third quarter of 2022, and $38.1 million for the first nine months of 2023 compared with $27.3 million for the first nine months of 2022. The increases were primarily due to higher personnel costs and professional fees to support the company’s expanded operations.