Biogen Inc. (BIIB) September 2026 Conference Transcript

Awesome. Thank you very much. Thank you very much for joining us today. Assassin 2 for me. So we have Biogen management team with us today. We have Robin Kramer, the chief financial officer of the company, and we also are joined by Adam Keeney, the head of corporate development of the company. Thank you very much for joining us today.

Thank you for having us.

Great. So I think I'm hosting you for the first time at the West Fargo conference. So again, thank you very much, you and Tim and the other team basically, for making it happen. So Robin, it has been one and a half years for you as a CFO of the company. And a lot has changed at Biogen in those 18 months. So from your lenses, where do you think Biogen has done really well in those 18 months or so? And where do you think that you see the room for improvement as there is always a room for improvement?

Thanks for the question. It's actually been an incredibly exciting time to be the CFO at Biogen. I've been at the company now almost eight years, but in the CFO role just over a year and a half. And it's really been an exciting time under Chris's leadership, and I think he was very clear from the get-go on what the strategic focus for the company was, and really diversification of Biogen and its portfolio, but also returning the company to growth. And so when I look at the really significant progress we've made on a number of fronts, the first would be that, you know, the launch of the growth products and the key products there. We've really had an opportunity to launch those effectively and help to offset the erosion in the MS portfolio. So really putting the base business in a really good spot. that, also looking at the pipeline and looking at diversification of the pipeline beyond the neurology area and really broadening that, and execution of transactions that supported that, like HiBio and the felzardomab assets. And then really taking that updated and revised pipeline and pulling programs into phase three. and so we now have 10 phase three programs and those begin reading out here in the fourth quarter so we're really the pipeline is at a pivotal point for us from a growth perspective and really deploying capital and things like the Appellus acquisition which has the opportunity to have near-term growth both top and bottom line while we wait for the pipeline products to launch and contribute to the long-term trajectory of the company so amidst all of that We're really continue to be focused on managing the OPEX, making sure we're also delivering growth on the bottom line. And I say, you know, that's a bit of a tricky thing when you're investing in the launch products, but also deploying capital into the pipeline. But that continues to be an area of focus for us.

Got it. And I think I just go back to, I think, January of 2024, where Chris laid out that for a product revenue base of about $8 billion, our expense base is a little bit higher than what it should And it kind of coincided with you being the CFO of the company as well. So for both of you, this question is that you did trim some pipeline, you prioritized some assets there. So what was the philosophy behind, like, what is the guiding principle there that, you know, these are the assets you will take forward versus these are the assets you will charge here?

Yeah, so I had the opportunity to lead the project around the Fit for Growth initiative, which was our initiative to look at the cost base and infrastructure to make sure that we were, you know, taking a prudent approach to optimizing that. But also we were at a pivotal time where we needed to redeploy investments from the MS portfolio to the four launch products, including Lakembi, Skyclaris, Zerzuvay. And so the process of doing that was very much a holistic contribution by everyone in the organization to make that pivot. But it was necessary in order to have the capital to put towards deploying towards the launch products. And from a philosophical standpoint, being very disciplined in thinking about capital allocation has been a strong suit. Coming out of the fit for growth, making sure that from an R&D portfolio perspective, that we were investing in those assets that we had the highest conviction on, and really making sure that we're advancing those 10 phase three programs where we are really focused on making sure that we're bringing those to market and that they're set up for the highest level of success.

Got it. And there's another thing which, you know, which I have noticed that I mean, like it was like a over-indexed company to Neuro to like, I mean, now you are more INI and all that. So that is also part of that just to manage the overall riskiness of the business probably.

Yeah, Chris, very from really from the get-go was looking for making sure that we were diversifying the pipeline beyond neurology and having these high risk high reward bets as it relates to progression of assets in the pipeline and and diversifying in areas that where we believe we have a right to play rare immunology and maybe I'll hand it to Adam because he's been the architect behind finding these wonderful assets for us to put into the pipeline and to can put us on that trajectory.

Thank you. So Chris joined Biogen just over three and a half years ago. I joined about six months after that, and one of the early conversations was how do we diversify outside of neurology. Historically, Biogen had taken the hardest path possible, trying to find first-in-class, unvalidated biology in new spaces without any clinical or regulatory precedent to really build de novo brand new markets and so we said to ourselves well we can do that in some instances you know in certain areas but we can't do that across the portfolio so we were very intentional to look for opportunities that were in areas that we had conviction from a data standpoint but where the endpoints were validated where the phase two studies were approachable where the phase three designs were understood where the endpoints were clear and and where you had a faster opportunity to get to a commercial product. So if you take nephrology as an area now, this has been an emerging area of interest in the last 10 years due to the fact that you can use proteinuria as a validated surrogate, but then EGFR is a very well-recognized full approval endpoint. So with the high bioacquisition, borosfilzatumab, that was our entrance into nephrology, but the overall risk profile there is very different, and then we leveraged that opportunity across four indications within nephrology. So you can see that there's a pipeline in the product there that has a very different risk profile, different investment profile compared to an Alzheimer's project, for example.

Got it. So glad that you mentioned Fizatlamab, I buy a drug. So investors do see multiple indications there, AMR, IGN, and all that. But because the uncertainty around duration and whatnot, they are struggling to understand the size of all these opportunities. So if you had to rank like, you know, AMR to IGAN and all that, IGAN is a little bit more competitive and members of property is there. So how would you rank them? Like, how would you think about this overall size of these markets?

I think we think of AMR as the foundational opportunity for Felzartamab. AMR currently, antibody-mediated rejection of kidney transplantations, has no approved therapeutics. There's 11,000 patients in the U.S. that have secondary rejections for their transplantation. It's a very, very significant health care burden. And so we see falzatumab in AMR both as the first data readout, but also as the opportunity to expand from there. If you look at the overall pricing dynamics in nephrology space, they're actually seeing very robust pricing. So we're able to actually anchor falzatumab at a high price into a well-defined high unmet need indication. And that data will replicate the phase two data that was really transformational in terms of the ability to save the grafts and save the transplants. So a really unique opportunity. From there, we can expand into IGAN, PMN, MVI, and there we can leverage, again, the regulatory and clinical expertise and knowledge that has been built over the last few years to give us a differentiated value proposition. We see this as a unique opportunity where you can have a course of therapy, reset the immune system, but then it provides a durable response. So we think that actually, in IGAM, for example, which is younger patients, that's an attractive profile where you have your administration, then you have a drug holiday, you track disease and only redose if disease recurs. So we think that's an interesting value proposition that's differentiated. And then fazatomab with CD38 has the opportunity to explore non-nephrology indications, and we've launched two additional proof-of-concept studies in phase two. So we see really a broad scope exploring not only nephrology, but also CD38 as a mechanism for auto-antibody-driven diseases. So we see a lot of value there and a lot of longevity in terms of the franchise that can be built behind that product. Which two indications are those? We've not disclosed those externally.

And one of the exciting things about that transaction is that we took a different approach there, and the approach being to leave the team in place, create the opportunity to have a West Coast hub, and to make sure that we were creating an environment where they could continue to accelerate these potential additional indications into the clinic. And so it's been quite productive, even since the point where we did the acquisition, on advancing the programs into phase three so the ones that are in phase three now all advanced in the time since we've actually acquired the company and then the you know moving of the additional indications into the clinic so you know leaving them in place agile executing on the work that they're doing in order to try and get to the clinic and and to market as quickly as possible got it Very helpful.

So one question I have is that, like, so when I look at your P&L for next five years, I mean, projections and all, Oak River's royalties still contribute a meaningful portion of the profits right now. and there is a there's a step down coming once the first five similar launches but before that step down you have multiple cards turning over from the pipeline side Salazar Sun launch HD spin Raza and all that so I mean when you think about 2028 to 30 timeframe when when all these launches are happening what factors do you think would be more important for us to understand whether

you could go to grow through this like it's not a pattern cliff in a traditional sense but it is kind of a cliff in the on the P&L so how would you think about how do you make us think about that yeah first I would focus on the full breadth of the Roche-Genentech relationship so so we have the right you know we have our royalty associated with Ocrevus so I'll touch on that one first so there you know they recently lost this launched the subcutaneous version of Ocrevus and they've had quite good traction on that so if you think about the time frame around when folks are thinking about this or trying to project that we're going to be at a higher level given the subcutaneous and the transaction there of the exit at the point of the entry of the biosimilar so exiting dollar revenue ramp in addition we have through the profit share we have Rites and Rituxan and Gaziva and Gaziva actually they've had the the approval both in the US and the EU is it relates to lupus nephritis this year so they we have a launch product happening there so as the the Ocrevus it'll still be in that launch phase and not at peak revenue at the time that we we hit the endpoint on the at the point of the step down on the Ocrevus and then I would say you know the the work that we've been talking about having done over the course of the last three years has diversified our our revenue portfolio some of some of this diversification or investment has been in growth products that we had in the portfolio like HD for Spinraza which is we're having a really great infiltration of that across the the patient population and so that's off to a really great start. So even in the products that have been in the portfolio for a bit, we still have opportunities as it relates to that. And so then across to Sabri, we've had good resiliency there, which has been important.

And then very importantly, the transaction that we did with Appellus added two additional commercial products to our portfolio and increased diversification top line as well and so the breadth of our product offering and commercial products is quite quite different than it was two or three years ago got it completely makes sense so so why don't you talk about a palace deal as well here so investors are still not fully convinced about the durability of cypher as and they understand the c3g asset a little bit more and the durability there but Cypherway they're still digesting this the durability part of it so what could we learn in next 12 months in terms of you know

discontinuations persistency and all those aspects that that will help us like get more comfort around this yes so so if you just think about the geographic atrophy market it's a very large market right but very under penetrated. So both products actually have the opportunity to really add new patients. And I think that is the key to activating physicians and patients around the urgency to treat and the need to intervene early and maintain treatment. So we're looking at both adding new patients and we're considering DTC and other campaigns to improve awareness of the need to treat GA the availability of effective therapeutics but then once patients are on treatment maintaining the treatment is a critical factor and because this is a treatment you don't see an immediate visual benefit you've got to continue to educate the patient for the need to be retreated and so we're doing a lot of work commercially around how do we ensure persistency So I think new patient starts and persistency are critical, but the opportunity to grow Sifovary, but also the space, is very considerable, given the large number of patients that are available in the U.S.

So there's a very significant opportunity for growth, but it's really about bringing new patients in and maintaining treatment for those patients that are on therapy. got it very helpful and then the financial side of the question here is that you did talk about about at least 250 million dollars of run rate synergies by the end of 27 so how much of that is already logged in versus depending on execution and then like what would make the numbers to move numbers to move higher or lower here yeah it's so as it relates to 2026 so it will be diluted in 2026, but we've already implemented some of the cost actions, and largely the dilution

is being driven by the interest expense. So from an operating margin perspective, we've already done some right sizing there. As we exit the end of the year, most of the actions will have taken place. We'll still be doing some system-type integration activities through the middle part of next And as you noted, what we've indicated is that exiting next year annualized savings are expected to be roughly $250 million. That is largely being driven by R&D and G&A. As we've said, one of the strategic elements of the Appelis acquisition was bringing on the medical and commercial nephrology expertise in anticipation of the felzardomab AMR launch. and so the the sales and medical organizations are essentially being left intact so our optimization activities are really in that R&D and G&A area got it very very helpful and then so you did mention to Sabri a little bit at the beginning it has performed very well compared to what we were thinking in the face of competition from biosimilists and all so what are the what are the reasons why it has been more resilient than than everyone expected and how should we think about the durability of this franchise going forward yes so the the biosimilar essentially entered in in the first quarter and Sabri has for the the quarters in 2026 really done very well as far as the exhibiting resiliency. We put that into a couple of reasons. The first is, you know, Tassabri is very well respected by neurologists and the patient community. And so we have, you know, longstanding relationships in regards to that. Supported by our patient services organization, which is, we think, part of our special sauce. So the team of folks that are part of that patient services organization really have a high-touch relationship with both patients and HCPs and long-standing relationships from the point that the patients come on to Tsabri from a therapeutic perspective. In addition, Tsabri is supported by the JCV assay, which we have patent protection on and is an FDA-approved assay. So given the potential side effects in PML, you know, the fact that we have that assay is also, we think, contributing to the resiliency that we're seeing into Sabri. Ex-US, we have the subcutaneous offering. So when you look to Europe, part of what is creating the resiliency ex-US is also that subcutaneous administration.

Got it. That makes sense. So your growth portfolio is actually becoming a bigger part of your story now. I think there the question is more about whether you're, because this is always the case, not just Biogen specifically, it's the case with every company, that the legacy products always have higher margin versus the growth portfolio. So especially in the case of Le Cambie and also, talk to us a little bit about, how do you think about the margin profile of the growth business versus the legacy portfolio and then how do you think it could evolve over time?

Yeah, so you're right, exiting 2025 and actually for most of the quarters in 2025, the growth portfolio was able to more than offset the erosion that was in the legacy MS portfolio. portfolio, and we had very exciting results in Q2 where you could see the growth portfolio, even excluding the two products from Appalice, exceeded the legacy MS portfolio. And so we're excited to have that diversification there. From a margin perspective, there are still high margin products, in large part because of the areas that we play and the fact that we are generally in areas where it's rare, we're seeking to meet an unmet need and so even beyond the u.s. your pricing XUS tends to be in closer and parameter to the u.s. pricing just because of the nature of the areas we we plan and some of those growth products when you look at the commercial infrastructure that's necessary to support them it's a little bit more agile and lean than the commercial area the commercial investments that you had to make in neurology or MS so some of it has to do with getting below the margin like it's largely what you're talking about is getting to the margin line the fact that you can have a sales and medical base that is more agile and again part of the reason that the the appellus transaction was really a good transaction for us is helping to be able to leverage that infrastructure as we enter into new spaces with with Velzardimab so we look for optimization and how how we're diversifying our therapeutic areas but also as we think about the areas that we started to play in there there tend to have a lighter touch on the sales and medical efforts got it completely makes

sense they won't I do want to talk about the this the SMA franchise here so you seem to have turned a leaf there with HD. Even before we get to HD, I think Spring Browser's decline has been arrested a little bit in the last few years, and then now HD, you are saying that you are also taking some share from some of the orals out there. So talk to us a little bit about, before we get to Selenersen, do you think HD could make it a stable franchise, or how do you envision it?

So we've been very excited with the rapid nature by which the patients have been switching from the low dose to the high dose. And when you sort of peel back and you talk to the folks on the R&D and our development side, it was a patient driven expansion into HD and the patients were asking for more. And so we put in place the study to be able to see whether a high-dose option would be appropriate. And so I think you had the health care community and the patients seeking to have a Spinraza with a higher dose. And we do think that Spinraza is viewed very favorably from an efficacy standpoint. And I think seeing the rapid nature of the switch over to high dose is a good indication. That's happening both in the U.S. and in the EU. And the nice part of that is it gives us an opportunity to have a bridge to salinersen. And so you're right, it has stabilized. The patient volumes have stabilized over the last year or two. and what we are starting to see is some level of switching a little too early to tell the degree to which when we might see more sort of pediatric cases because for the most part that those were going the gene therapy route but we're starting to see those and we're starting to see some switchbacks and so that will be something that we monitor but we think there's an opportunity there got it and then can you talk a little bit about the port device that is in development right now so how does this help in terms of like I think they're you're developing it for SMA first and then eventually maybe in Alzheimer's and also so yes we have been in collaboration with a company called

Alcyon for some time but we went ahead and acquired the company last year so this provides us so as you know the SMA market Spinraza is a once a quarterly intrathecal administration but the device is actually implanted so that it is an indwelling catheter that stays in the spinal canal and then there's a port that comes up to the side and so you just can inject Spinraza directly into the port you don't have to do the spinal tap every time so for certain patients I think that's going to offer a very significant benefit and that allows us to maintain longevity and make sure that we're reducing the barriers to use Spinraza from an administration standpoint. That also has opportunity, though, as you think about other intrathecal administered ASOs. And so we have a collaboration with Stoke, for example, in Dravet. We have Bib80 from an Alzheimer's perspective, and we have other preclinical assets as well as Salonursen. So we think that having an optionality around the device just provides a lot of flexibility and opportunity for certain patients to choose their preference when they're thinking about administering of different therapeutics. We do believe that efficacy drives choice, but then if you can remove or reduce the barriers to treatment, that I think is going to be an effective strategy.

Yeah, and the nice thing about salinersin that we're excited to explore is that that would be a once yearly.

It does look like a better drug as well. Like, how do you think about salinersin profile here?

We were very excited about the results and excited to be putting that into phase three.

And, you know, from a, you know, serving the unmet need, we think it's, you know, we're very excited about the advancing of it. got it and then I mean you are really going big in nephrology right now so like now that I have you Adam here so can you walk through the thought process behind going deeper in not just for that map but again you are in lupus nephritis and you like I mean like and then a bunch of lupus They're not nephritis per se, but again, just talk a little bit about.

Yeah, so again, I think three years ago we set out on a plan to diversify the company, have a different type of R&D risk. And so we were looking at areas where we could get comfortable with phase two proof of concepts that had reasonable reproducibility to phase three in spaces that still had very significant unmet need. But where the path to approval was clear, the endpoints were validated, the clinical trials were approachable from a size length of time. And if you think about nephrology, that ticks a number of those criteria. We do see end-stage renal disease is a very significant burden. Transplantation, kidney transplantation is a very significant health care issue. So if we can find opportunities where we can bend the curve in terms of renal preservation, we think that that's a very important value proposition, not only in the US but outside the US. So then it comes down to what are the assets that you can get excited by. We think that CD38 is a differentiated mechanism and value proposition. And then it gets to where do you position those in different indications. And nephrology, again, is a series of smaller rare diseases. And so we started with AMR, IGAN, PMN, MVI. With Mpavelli, we're also exploring not only C3G but also FSGS. So these are indications all within nephrology. So there's a lot of commercial synergy there because you can basically set your relationship, your sales force, your medical to the nephrologists and the transplant centers, which are very well-defined commercially, approachable in terms of the number of nephrologists. But then you can have multiple products for different diseases within that specialty. So there's a lot of efficiency there. And so with Hybio initially, but then with Apelis, we are really building out a franchise in nephrology. We continue to be active externally, looking at additional investments and early-stage assets in nephrology. and we continue to be excited by the opportunity there from a scientific standpoint.

So if by... Sorry, by...

No, and then just lupus is another example where we've been able to diversify outside of neurology. Lilifilumab is actually a homegrown biogen asset and now on the brink of readout in both SLE and CLE that we're very excited by. And then we have a collaboration with UCB on DAPA Nuzumab that, again, allows us to really build out a lot of internal expertise in that space not only clinically but now hopefully commercially got it so if Biogen does more BD what would be the gating factor now because you're just out of the palace deal so like that how like is it therapeutic area is the size of the deal like how would you think about it well I do think that we're very excited by the near-term growth prospects for the existing portfolio that we have in terms of commercial products, but also the new pipeline readouts. So I think our attention through this year and into 27 will be more early stage. I think our stated areas of immunology, rare disease, neurology will be maintained. I do think we're interested to establish franchises now, but we have rheumatology, dermatology, nephrology, neurology. So we have an opportunity to find additional assets that supplement those areas with earlier stage projects. Robin can speak a little bit to the financing capacity, but we're not constrained from a financial standpoint, particularly early stage deals. As we go into next year, I think the balance sheet builds and we're able to think about larger single transactions. That may be dependent on some of these pipeline readouts where we deploy that capital, but we're a very fortunate position that we have now the scope to invest in many different areas a robust late-stage pipeline and growth products so we're able now to think about how do we ensure long-term sustainability by investing in early stage started and maybe just touching on the capital available so what we've said is that we we fully expect to pay down the debt associated with the appellas transaction by the time we exit 2027 in the meantime we have sufficient capital to do the the activities that Adams talked about and making sure that we are deploying capital in the front end of

the pipeline exhibited by the recent announcement we had as on Raythera which we closed in Q3 which is an immunology asset going into phase one and so but we're really you know back to optimal liquidity here as we exit at 2027 got it So one last question for both of you.

Fast forward one year, September 2027, Wells Fargo Conference. I hope you are here. I hope I am here.

So if we are sitting here next year, what would make you look back at the year and say it was a great year for us? two things one we meet our commitments as it relates to the existing growth portfolio both top and bottom line performance and the second would be that we are extraordinarily busy working on doing pre-launch and launch activities associated with lupus and with amr yeah i would just add i think that the continued progress of the growth the commercial growth products is an area that will really underpin the midterm stability for the organization.

So I think delivering on those commitments are going to be key. And so we look forward to giving those updates next year.

Awesome. On that high note, thank you very much and good luck.

Thank you very much. Thank you for your time.