Biogen Inc. (BIIB) May 13, 2026 Conference Transcript

Well, good morning. Thank you, everyone, for joining us here on our second day of B of A's annual healthcare conference in very toasty Las Vegas. My name is Jason Zemansky. I'm one of the SmidCAP analysts here at the bank. Very pleased to have joined me, Biogen, and specifically Adam Meyers' head immunology and new disease areas franchise. So, Adam, thank you so much for joining us.

Yeah, thanks. Thanks for having me.

Maybe for those of you who may be less familiar with your role at Biogen, could you please provide an overview of your focus within the organization?

Yeah, absolutely. And as we open the session, just disclosing, obviously, I'll be making forward-looking statements, suggest folks looking at risk factors we outline in our SEC filings. But yeah, very happy to be here. I've been with the company actually about 14 years, and I'm leading our immunology and new disease area franchise, and really immunology is a growing space for the organization. And my team works to lead our late-stage immunology programs cross-functionally in prep to bring these new assets to market.

You know, Biogen seems to be making more of a deliberate pivot towards immunology. Certainly, Chris has spoken a lot lately about multiple sclerosis being not only a neurology-based disease, but also an immunology-based disease. And so, can you expand on how, I guess, you and the organization as a whole envisions immunology fitting in moving forward?

Yeah, absolutely. I mean, immunology is obviously a broad area treated by a variety of specialists. But when you look at biogen's history and really the field of MS history in MS, most of the therapies that have been brought forward are really targeting an underlying source of inflammation that is causing multiple sclerosis. And so the time that we've spent building expertise around the biology of MS helps us as we expand into new areas of immunology with different specialty call points. You know, when you look actually at some of the therapies currently used for MS, something like a CD20, obviously there's a lot of interest in BTK inhibition. These assets are being studied not just for MS, but a variety of autoimmune diseases. And so the history that we have in MS, the research team that we continue to expand, some of the expertise that we've been acquiring through business development, all of these things position us well from an immunology perspective.

Maybe just to delve a little bit deeper, I mean, what specifically aligns in immunology with the company's core capabilities? Is it more of the research side? Is it something else?

Yeah, I mean, I think that certainly it has started from an R&D lens. You know, we certainly have the capability to develop therapies with underlying INI type implications. But beyond that, I think it translates very well also into medical and commercialization. So when you think about MS, obviously, the main call point there is an MS specialist. And, you know, we've been very successful with a portfolio of therapies for MS over the past many years. And so from a commercialization perspective, not just a scientific perspective with the shared underpinnings, the ability to build a portfolio, build a set of relationships in a specialty space with customers, you know, follow science, demonstrate that we can build value. and frankly, some of the underpinnings, things like patient services. And we really have some world-class patient services to enable education and access for patients. All of these things, I think, are immediately transferable from what we've done, say, with an MS neurologist to a rheumatologist for lupus or a nephrologist for IGAN.

You know, as you think about moving forward, How willing is the organization to stretch? When you think about some of the parameters of an INI-based disease, while it might align biologically, pathologically, in terms of the market opportunities, they're a little different from neurology and rare diseases. They tend to be much more competitive, patient populations much more heterogeneous. Help us walk through some of the puts and takes here.

Yeah. I mean, I think, look, there's always synergies in being in the call points you already have. There's no doubt about that. But obviously, we needed to diversify beyond neurology. And I think you can see demonstrated where there's good science and a substantial unmet need, we have been willing to go towards, in particular, nephrology as a new area. And so, I think willing to stretch, but in the end, the science and the patient need have to guide that this is a place Biogen is really well positioned to uniquely bring value to the patient and physician community.

Got it. Well, let's turn to certainly the pipeline. The next potential commercial asset, litafilumab, has two phase threes that reading out for SLE. Lupus is a challenging indication. So what do you think you need to show to differentiate the profile, whether it's skin joint or SRI for?

Yeah, I mean, I begin by reflecting on our phase two program, and we were able to run a two-part phase two study, one in SLE patients with skin activity and another in CLE patients with or without SLE. So we really were able to study a very broad spectrum of patients with lupus. In the SLE part, the primary endpoint was focused on joint. And the reason being joint is the other most common manifestation of lupus beyond skin. And so the idea is through demonstration of proof of concept in being able to reduce joint activity in that part of the study, complemented by the CLE side of the study and also measuring skin in SLE patients, we have proof of concept in both skin and joint disease. In the SLE side, we also did measure the primary endpoint we're now using in phase three, that's called the SRI-4. It's probably more complex and not as clearly understood in clinical practice, but it is the regulatory endpoint. And we saw a treatment effect in phase two on that SLE, SRI-4 of over 25%, which was very marked. And so, you know, when you think across these two areas, entering a lupus market that is growing and will probably become very crowded over the next few years, and I think we're on the precipice of tremendous gains for our SLE patients, and potentially creating a new CLE market, I think we feel very good about where we are. It is a heterogeneous disease, but these study designs have been very thoughtful, and we've taken really the best of the phase twos and the confidence we gained and implemented that into the phase three program. So what do we need to see from that phase three program to think that we're successful? I mean, really, when you think about these patients, you know, an SRI-4 does not mean a whole lot to them. It may mean something to the physician, but that physician is looking to protect their organ systems. Obviously, it's a multi-organ impacting disease. But the patient, what we hear from them is, I just want to be able to approach every day and live my life. So that comes to fatigue, reducing pill burden. on the cutaneous side obviously there's a huge psychosocial impact of very visible scarring lesions so they just want to be able to engage in their life with their family their job their community and so I think what you'll see is of course we're going to focus on skin joint and those composite endpoints and I do think that litafilumab has the potential to be very very competitive and certainly superior on the CLE side to no option being available. But I think we'll have to complement that with additional patient-focused data coming out of phase three.

So in terms of the actual SRI for outcome, I mean, what should we look for come Q4 here? I mean, what level of benefit here would be enough to differentiate, as you said, the level there that that you think you could drive, you know, a pretty sizable commercial outcome?

Yeah, I mean, ultimately, SRI-4 will be one piece of the puzzle. When you look at the current competitive set that is already approved, SRI-4 outcomes or BICLA, which is a similar composite outcome, have usually been in the low to mid to maybe upper teens. And we saw 27, I think, percent in phase two. So ultimately, that's a piece of the puzzle. But I think that number alone really isn't going to be, in my mind, what drives use of olidofilamab. The totality of the data, the potential from a safety profile perspective of having a very targeted mechanism of action, you know, blocking production of problematic type one interferon from these PDCs versus broad blockade of interferon, which does have some positive benefits, or heavy B cell modification or depletion, there's some potential benefit from a safety perspective as it relates to infections and other things. The convenience factor is going to be very real in this patient population. And so right now we're at sub-Q monthly delivered at home. That is very different than a weekly sub-Q or an IV therapy. So those components combined with a breadth of efficacy across skin, joint, and hopefully some good patient-reported outcomes, I feel like litafilumab is in a good position relative to incumbents and even other products in later development.

If litafilumab performs as expected, how do you think it will compare to daprilolizumab in SLE. Is there an ideal subpopulation in SLE for each agent or is it more of a staging question?

Yeah, I mean, we're very fortunate to have two late stage assets in the portfolio. In fact, right now that is an anomaly in industry. And that's because we actually believe lupus is heterogeneous enough as a disease that one therapy is not going to be the answer for all patients. So for us, it's really more about complementary and building a portfolio with options for patients than it is about viewing or comparing and contrasting the two assets. You know, when you think about what DAPI was able to show in its phase three study with the second study due to readout in 2028, you saw a breadth of efficacy and certainly some nice response on composite endpoints. But you saw the ability to reduce steroids, reduce disease flares. You've seen nice impact on fatigues. these are things that you will see out of a larger phase three study. And so in the end, there isn't a one-size-fits-all therapy. And thinking about how we've been successful with MS in developing a portfolio, the option is really what matters. I don't think at this point the world of biomarkers and patient segmentation and lupus is strong enough to say it's easy to pick the right patient for a product, but having multiple options, you know, litafilumab more on the innate immune system side for those that have type 1 interferon, perhaps driven disease, ADAPI more on the adaptive immune system, targeting BET exchange, and that type of signaling gives you the ability to perhaps provide some judgment as to right drug for right patient.

I think Jackie from the team has a follow-up on the Appellus deal.

Yeah, so switching more to BD. So as you think about the Appellus deal, Faijin has focused a lot on its outlook for both assets, but can you give us more of a sense of the commercial implications or benefits as you build out a nephrology franchise?

Yeah, I mean, obviously pending close of that deal, the intent was to do two things, right? One, it does represent new products, growing products that can add to top-line revenue. And the other, for me, that sits with these pipeline products that I'm especially enthusiastic about is the expertise coming from Apellas and the established field force. Nephrology is an area that has really exploded in activity for the past few years, but the number of people that have deep expertise in nephrology, especially working in the field-building relationships, is very limited. And that's something that we would have built, but Apellas immediately brings. When you think about the broader opportunity, I think when we think about the next couple of years, somewhat in line with consensus, we think these products can grow in the mid to upper teens space. Sifovary, obviously, it's really about building what is an underpenetrated market and educating on the value of staying on therapy. With M. Paveli, it's very early in its launch cycle. It has a broad label. It is a rare disease. We obviously have a lot of experience in that space, and we do see a progressive linear growth that is consistent with other rare disease products we've commercialized over the longer term. So between what it does in terms of near-term revenue and then also preparing us with a field force for felsardimab is a really, really valuable set of attributes.

Chris mentioned Felsardimab a lot in his discussion following the acquisition. So I guess drilling down a little bit further, what about these assets or the infrastructure will be key to unlocking Felsardimab's potential?

Yeah, I mean, I think in terms of unlocking FELSA's potential. Obviously, really enthusiastic about entering this growing nephrology space. Certainly, I think that looking at FELSA and its unique CD38 targeted biology, along with now what we have coming to us from Apellas, really our job is to conduct these late stage programs while make sure we do the right disease state education, especially as we try to build a new AMR market, understand how we can differentiate an IGAN. And so as we build out that strategy and complement with a talent base, I think we'll be in a very nice spot.

Over the years, Biogen has advanced a number of ophthalmologically based assets. Does the acquisition and specifically SIFOVRI signal a renewed plans to enter the space?

You know, honestly, I think that really you have to look at the acquisition holistically. And obviously, I've spent time sort of emphasizing the nephro side of it. And really what we believe is a significant growth opportunity with Empavelli. And so I think those synergies are probably a greater driving force. But certainly, I think Biogen has proven on multiple occasions that, again, where there's science and where we think we have a unique ability to provide value to patients and payers, certainly, I think there's always that possibility. And a lot, I think, will be dependent on, you know, how Sifovry performs and then what else appears in potential pipelines.

Got it. Maybe pivoting back to Pilsartimab, you're looking at three different opportunities, so AMR, IGAN, and PMN. What's the evidence for CD38's broad role in these indications, and what gives you confidence that it's going to be efficacious in each of these?

Yeah, I think, you know, it really is something I would dichotomize between transplant, which is AMR and MVI, which we opened the phase two registrational quality study in as well, and then more on the GN side of things with IGAN and PMN. So I'll maybe start with transplant and specifically focus on AMR. So this is a space where with AMR, there's potentially 11,000 patients. You know, AMR is a leading cause of kidney rejection, and obviously that's highly problematic because you think about the patient experience, usually there's some form of kidney dysfunction or disease that has led to the need for dialysis and a transplant. And that is not only an expensive proposition for the healthcare system because these transplants in the U.S. average about $450,000, but it's a really, really terrible experience for a transplant patient who has basically been given the gift of life to immediately find that over time they're developing AMR. And so certainly CD38 in this space and targeting and depleting the plasma cells appears to play a strong role. And when you look at the phase two data, we were fortunate to see about 80% of patients having a reduction in disease activity and actually about two thirds having full resolution of AMR and that's biopsy confirmed. So that's a really, really strong indicator coming out of phase two that will hopefully replicate in the ongoing phase three study with 120 patients. On the IGAN side of the equation, obviously a very active space. And the common question is, you know, how will you compete against April baths and what is happening with these first few accelerated approvals and probably several to come? But CD38 biology is quite different in this space. So you're talking about, again, depleting plasma cells that are CD38 positive. And in doing so, we know those plasma cells are creating the autoantibodies that lead to the immune complexes that are finding themselves on the fold of the kidney and impacting kidney filtration. So it is those plasma cells creating that effect. So really targeting the direct source of the disease, whereas these APRO-BAFFs are broader B-cell modulators, but maybe not as directly implicated in the production of these autoantibodies. And so between the unique mechanism, some of the unique constructs of FELSA, so for instance, lack of CDC, potential implication for longer-term chronic use, the fact that FELSA has a chronic toxin repro package that most CD38s do not, these things will hopefully provide some data to reinforce safety. And ultimately, we think the CD38 biology will play a strong role in treatment of IGAN. And additionally, when you look at that phase two data after the initial course of therapy over five months, you have patients showing potential durability out to two years. So whereas an April bath is a chronic therapy, weekly, twice weekly, maybe monthly, you can take FELSA over the course of five months and then potentially not need another course of therapy out to two years.

Got it. Maybe one quick follow-up on IGAN. Does this mean that you think Felza is a replacement for the April BAPS, or is it something that could be used to complement them?

Yeah, I mean, it's hard to think about combo therapy at this point. I think it's early days with the April BAPS. I think when you combine immunomodulators, there are things we don't understand. And I think that at least to start, the view is this is a very viable alternative to an April BATH. Based on the phase two data, we saw roughly 50% reduction in proteinuria. That's very consistent with what these phase three programs have been demonstrating for their accelerated approvals. Time will tell on the EGFR. But I think the idea is it is a potential choice that, again, targets CD38 as a key mechanism of disease and potentially provides durable treatment outcomes rather than sort of constant chronic therapy.

Got it. And then pivoting back to AMR, I guess, what do you need to see from the data to feel optimistic about kind of the broader opportunities of an anti-CD38 monoclonal?

Yeah, I mean, I would say that as I think about this development program in general, I mean, AMR is a very different disease than IGAN. And so successful efficacy in AMR will be confidence-inspiring, but not necessarily predictive of a positive IGAN outcome, for instance. I think what we will learn is, one, we'll get a much better sense of the safety profile through larger studies. And then from a dosing perspective, from a PKPD perspective, things we learn in AMR may help us understand some of the PKPD that we can anticipate in the IGAN program. So in some senses, distinct opportunities, but some of the foundational information we'll get from AMR should help build confidence for IGAN to follow.

What fraction of the, as you mentioned, 11,000 transplant patients could benefit from an agent like this?

Yeah, so, you know, with these 11,000 patients that are developing AMR, we know time to onset median is about two years. We know over the course of a decade, probably 75% of them are at risk of losing their graft and hence needing to go back to dialysis or needing another transplant. And again, I think about that in terms of not only that patient and needing a new kidney, but what it means to a patient that otherwise would be waiting for that next kidney. So clearly, treating AMR benefits the patient and future patients. But I think, you know, on the whole, when we think about this, it is, AMR is a leading cause of kidney rejection in the 25,000 transplants a year. The prevalence is about 11,000. And, you know, how many will stay responsive beyond the data we've generated thus far? very contingent on the long-term studies, but obviously very appreciative of the results we've seen in the phase two and at least getting to that high efficacy rate.

Well, is there a chance that they could hold off rejection indefinitely, or do you think that there's at some point it's going to happen?

Yeah, I mean, I think the premise is with the dosing regimen we've placed into phase three, the goal, of course, is for this to be chronically there to hold off rejection indeterminably, we're going to have to obviously follow these patients in the phase three program for much longer to see if that plays out.

Got it. Let's finally pivot to, you have a number of upcoming proof of concept readouts, I think that are somewhat overlooked, but let's focus in on BIB091. So this is your BTK inhibitor. What prompted the reinvestment in MS after, you know, essentially not investing that much in the space for some time?

Yeah. I mean, what I would say is I probably don't characterize it as a reinvestment. We've been working on BTK inhibitors for MS continuously since, well, as long as I've been working in immunology at the organization. Obviously, finding the right BTK, given what we've learned about covalent versus non-covalent, potential hepatotoxicity, all of these things play a role in what would make for a BTK with the right benefit risk profile, not only for MS, but potentially more broadly in autoimmune diseases, because we know these BTK inhibitors are being used more broadly. Additionally, on top of that asset, we do have a BTK degrader. So, would degradation provide advantages versus inhibition? So, that readout is pending mid-year, and we will provide an update on it. And, you know, I think the idea being very much, though, that this is really just a continuation of the work we've been doing and BTK inhibition has been one of the more promising areas for MS. So on Vumerity and the legacy portfolio, they've continued to do well.

How attractive an area of growth is the landscape still for the company?

Yeah, I mean, I think Vumerity has certainly done very well and certainly happy to see that it is continuing to grow. It's the number one prescribed oral, branded oral in the U.S. You know, it's fair to note that the other products in the MS portfolio have still been undergoing that slow decline. I would say in general, the RMS patient is probably more well served than patients with progressive disease, in particular with that type of disability progression. And so I do think opportunities remain in particular in that space when you can find the right molecule with the right safety profile. And so, you know, we'll see this data set shortly and I'm looking forward to sharing what we think are the appropriate next steps for the asset.

Just give us an idea of the benchmarks here. I mean, what does it take to compete? essentially given that a lot more new agents have launched in MS?

Yeah, I mean, you know, on the RMS side, I think what we've seen is there are several good agents that really control formation of new lesions, right? So you have to meet the bar that is already set by the heavy players in the field. On the progressive side, you know, even the products approved for progressive MS seem to be working more in the patients with active lesions versus the patients without active lesions who are still seeing disability progression. So I would say the bars is lower in that space because there's limited treatment options. And ultimately, again, even the things that have been successful are really more in an active type of patient than not. So it's hard to give you a specific bar in that type of patient because the efficacy is pretty modest.

All right. Well, we're heading up on time here, but maybe just to finish things, given the new focus on INI, what part of the portfolio do you think that's going to look like in a couple of years? Understanding a lot needs to play out.

Yeah. I mean, as I think about it, I've been fortunate to work in INI at Biogen for 12 years through the ebbs and flows. And what you can see, especially under Chris's leadership, is a diversification of our portfolio. Obviously, one of the great benefits about targets in INI is they have multi-indication potential. They have the ability to generate proof of concept data sometimes in weeks or months rather than years. And so, you know, I think we'll continue down the path we have of making select investments where we really appreciate the science and find a disease where there is less saturation and substantial unmet need. And ultimately that just brings more balance to the portfolio that we have. And so I think the future is bright for INI at Biogen starting with the lupus readouts end of year and going into next year with Velza for AMR. Perfect. Adam, thank you so much for joining us. Yeah, thanks very much for having me.