Biogen Inc. (BIIB) Q3 2025 Earnings Call Transcript

Access earnings results, analyst expectations, report, slides, earnings call, and transcript.

Overview

Biogen's earnings call reflects a positive outlook with strong financial guidance, product growth, and strategic advancements. The Q&A section revealed management's confidence in pipeline expansion and strategic focus on Alzheimer's and immunology, despite some concerns about competition and capacity challenges. The announcement of increased revenue expectations and strategic product developments, along with positive feedback on new formulations, suggests a favorable market reaction. However, the lack of specific guidance on some products and competitive pressures could temper enthusiasm. Overall, the sentiment leans towards a positive stock price movement.

Key Financial Performance

Launch Products Revenue Growth 67% year-on-year growth in the third quarter. This growth has offset the MS decline on a year-to-date basis. Reasons include strong demand for products like LEQEMBI, SKYCLARYS, and ZURZUVAE.

LEQEMBI Global Sales $121 million in the third quarter. Year-over-year growth of 82%. Reasons include sustained sequential global demand growth and the launch of the IQLIK subcutaneous injection for maintenance.

SKYCLARYS Revenue Growth 30% year-over-year growth. The growth is lower than patient growth due to early access programs in some countries while negotiating pricing.

ZURZUVAE Revenue Growth 150% year-over-year growth. Reasons include increased awareness and changing perceptions of postpartum depression, supported by media coverage and strong commercial execution.

VUMERITY Sales Almost $0.5 billion in the first 9 months of the year. Reasons include strong demand and market exclusivity beyond the end of the decade.

MS Business Revenue Resilient performance in the U.S. with favorable gross-to-net adjustments ($38 million) and strong demand for VUMERITY. However, TECFIDERA in Europe faced accelerated erosion due to generic competition.

SPINRAZA Revenue Global revenue expected to remain relatively similar in 2025 compared to 2024. Reasons include consistent demand globally.

Free Cash Flow $1.2 billion in the third quarter. Reasons include strong business performance and disciplined cost management.

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Operating Highlights

LEQEMBI: Continues to show strong global demand growth with $121 million in sales this quarter. The IQLIK subcutaneous injection for maintenance is now approved in the U.S. and rolled out for patient benefit.

SKYCLARYS: Available in 34 markets globally with 30% year-over-year revenue growth. Early access programs are in place in some countries to benefit patients while negotiating pricing.

ZURZUVAE: Achieved 150% revenue growth year-over-year. It is revolutionizing the perception of postpartum depression and driving significant revenue growth.

VUMERITY: Achieved almost $0.5 billion in sales in the first 9 months of the year, showing strong growth and market exclusivity beyond the end of the decade.

Global Expansion of SKYCLARYS: Now available in 34 countries, with multiple commercial launches planned in the first half of 2026.

LEQEMBI Market Growth: Captured roughly half of all new patients treated with anti-amyloid therapies in 2025. The anti-amyloid market grew by approximately 15% this quarter.

Operational Efficiency: Delivered $1 billion in gross savings while maintaining flat OpEx growth despite new investments in product launches and R&D.

Cost Management: Reduced development costs by 25% and research costs by 40%, while maintaining a stronger pipeline.

Pipeline Development: Fully enrolled Phase III studies for litifilimab in SLE, with readouts expected in 2026. Initiated Phase I study for BIIB142 and plan to add 3-4 molecules to the early-stage pipeline in the next 18 months.

Acquisitions and Licensing: Acquired Alcyone Therapeutics and licensed C5aR1 antagonist from Vanqua Bio to strengthen the immunology portfolio.

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Risk or Challenges

Market Competition in Lupus Treatments: Lupus is an extremely competitive area with many ongoing studies. Recruiting patients for clinical trials in this space is challenging, which could impact the commercial success of new products.

Regulatory and Pricing Challenges: Negotiations with governments and pricing for products like SKYCLARYS in various countries are ongoing, which could delay patient access and revenue realization.

Generic Erosion in Europe: TECFIDERA is facing accelerated erosion due to generic competition in Europe, particularly in Germany, impacting revenue.

Biosimilar Competition for TYSABRI: The entry of biosimilars for TYSABRI in the U.S. and Europe poses a risk to market share and revenue.

Supply Chain and Inventory Management: LEQEMBI sales in China were impacted by inventory build-up in Q2, leading to minimal revenue in Q3 as demand was met with existing inventory.

Economic and Policy Impacts: The Inflation Reduction Act (IRA) changes to Medicare impacted SKYCLARYS revenue in the U.S., reflecting broader economic and policy risks.

High Development Costs: The company is investing heavily in its late-stage pipeline and pre-launch activities, which could strain financial resources if expected returns are not realized.

Dependence on Legacy Products: The company still relies significantly on its MS portfolio, which is under pressure from generic and biosimilar competition, posing a risk to long-term revenue stability.

Uncertain Market Creation for New Products: Creating new markets for first-in-class products like ZURZUVAE and LEQEMBI is challenging and resource-intensive, with no guaranteed success.

Litigation and Legal Risks: A $100 million charge related to a judgment on Genentech's claim for past royalties and interest on TYSABRI highlights ongoing legal risks.

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Guidance & Outlook

Revenue Growth: Biogen expects sales to be roughly flat to up 1% as compared to last year at constant currency, reflecting strong business performance and resilience in the U.S. MS business.

LEQEMBI: Momentum is expected to continue into 2026, driven by focused strategies, positive perceptions of efficacy and safety, and increased healthcare provider understanding of anti-amyloid therapies. The company is also working on securing Part D coverage and supporting patient access.

SKYCLARYS: Continued growth is expected, with multiple commercial launches planned in the first half of 2026. Efforts are focused on geographic expansion and securing reimbursement in European and Latin American markets.

ZURZUVAE: The product is performing above expectations, with increasing breadth of writers and strong first-line prescription rates. Growth is expected to continue.

Litifilimab: Phase III studies for SLE are fully enrolled, with readouts expected in the second half of 2026. This acceleration is seen as a positive indicator for commercial success.

Salanersen: A registrational study for presymptomatic infants is expected to initiate in early 2026, following alignment with the FDA on the pivotal study design.

Felzartamab: A potential registrational trial in Late MVI is expected to initiate in the coming months.

High-Dose SPINRAZA: The FDA has provided a path forward, with a PDUFA date set for April 2026.

LEQEMBI Subcutaneous Initiation: A rolling submission to the FDA is ongoing, with the aim to provide differentiated treatment options for Alzheimer's patients.

Pipeline Expansion: Biogen plans to add 3 to 4 molecules to its early-stage pipeline over the next 18 months and expects to announce 1 to 2 additional research-stage deals by the end of the year.

Cash Flow Utilization: The company is focused on reinvesting in strategic growth initiatives, including advancing the pipeline, supporting product launches, and exploring growth opportunities.

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Shareholder Return Plan

The selected topic was not discussed during the call.

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Key Q&A

Q:How does the EVOKE trial impact the LEQEMBI franchise and the company's portfolio strategy?

A:Management stated that the impact of the EVOKE trial would depend on the results. If positive, it could lead to more use in primary care settings at earlier stages. They emphasized their interest in a full portfolio for Alzheimer's, including the BIIB080 program and brain shuttle technology. They are open to evaluating GLP-1 collaborations or assets based on data availability.

Q:What is Biogen's strategy for growth and pipeline expansion in immunology?

A:Biogen views immunology as a core area, leveraging its experience in MS and rare immunology. They aim to build a portfolio affecting broader immunology over the next decade, focusing initially on rare diseases like lupus. They highlighted their understanding of pathways like Nrf2 and microglia, which cross over diseases, as a competitive advantage.

Q:What is the confidence level in Biogen's late-stage pipeline and its impact on early-stage pipeline development?

A:Management expressed high confidence in their late-stage pipeline, citing compelling Phase II data for felzartamab and BIIB080. They believe their pipeline has been thoughtfully derisked. They are building commercial capabilities for late-stage launches while investing in early-stage products to ensure long-term growth.

Q:What is the early experience with LEQEMBI subcutaneous maintenance uptake and access?

A:Feedback has been positive from payers, HCPs, and patients. Subcutaneous maintenance is expected to enable longer therapy duration. Uptake is gradual, with non-formulary exemptions being navigated successfully. Full Medicare Part D access is anticipated by 2027. Patients appreciate the flexibility of subcutaneous administration.

Q:What are the commercial implications of positive prevention studies for Alzheimer's drugs?

A:Management acknowledged potential capacity challenges in diagnosing and treating asymptomatic patients. They are focusing on improving referral quality through blood-based biomarkers and educating PCPs. They believe subcutaneous forms and simpler care pathways will increase capacity and throughput over time.

Q:What is the current status and growth of SKYCLARYS?

A:SKYCLARYS is available in 34 countries, with steady growth overseas. In the U.S., growth is focused on community settings, as centers of excellence are highly penetrated. Discontinuation rates have declined due to improved education. Patients who discontinued and experienced decline have returned to therapy.

Q:What are the expectations for the Phase II tau data set in Alzheimer's?

A:Management aims to see impact on biomarkers and at least a trend in clinical benefit. If positive, they will explore combination or sequential dosing strategies. They view tau as a central target in Alzheimer's and are cautiously optimistic about the potential.

Q:How does J&J's anti-tau antibody program relate to Biogen's ASO program?

A:Biogen noted differences in approach, with J&J targeting extracellular tau. They are awaiting J&J's Phase II data, particularly on tau PET, to assess its relevance. Positive results could support the hypothesis of tau reduction's impact, benefiting the field overall.

Q:What is Biogen's perspective on ZURZUVAE's fit in their portfolio?

A:Biogen sees ZURZUVAE as a significant opportunity despite its focus on women's health. They highlighted synergies in back-office support and omnichannel presence. They are leveraging their experience to shape the market and plan direct-to-consumer efforts to accelerate growth.

Q:How is Biogen approaching capital allocation for BD and pipeline development?

A:Biogen is focused on long-term growth, balancing late-stage pipeline launches with early-stage investments. They prioritize cost-effective pre-IND assets and collaborations while maintaining discipline in evaluating later-stage opportunities. They believe their current capital is sufficient to support their strategy.

Q:Review of Unclear Management Responses

A:Management avoided directly addressing the potential net price parity between IV and subcutaneous forms of LEQEMBI, providing only general comments on positive feedback and gradual uptake. Additionally, they did not provide specific details on SKYCLARYS' volume growth or persistence rates overseas, focusing instead on general trends and improvements.

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Earnings Word Cloud

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