CAMBRIDGE, Mass.--(BUSINESS WIRE)--Biogen Inc. (NASDAQ: BIIB) today reported second quarter 2017 financial results, including:

• Total revenues of $3.1 billion, a 6% increase versus the prior year and a 15% increase excluding hemophilia revenues*.
  • Revenue growth was driven by strength in MS revenues, which increased 5% versus prior year. This included a 13% increase in TECFIDERA® revenues versus the prior year.
  • Additionally, SPINRAZA® revenues grew to $203 million and BENEPALITM revenues increased to $89 million in the second quarter of 2017.
• GAAP net income and diluted earnings per share (EPS) attributable to Biogen Inc. of $863 million and $4.07, respectively.
• Non-GAAP net income and diluted EPS attributable to Biogen Inc. of $1.1 billion and $5.04, respectively.

* In Q1 2017, Biogen completed the separation of its global hemophilia business into a new company, known as Bioverativ. The 15% increase in total revenues excludes all hemophilia revenues from Q2 2016. Hemophilia revenues include ELOCTATE® and ALPROLIX® product revenues as well as royalty and contract manufacturing revenue related to Sobi.

A reconciliation of GAAP to Non-GAAP quarterly financial results can be found in Table 3 at the end of this press release.

“Biogen continued to perform well across multiple areas of our business. This quarter demonstrated our ability to advance and expand the pipeline, deliver strong commercial results, and build our senior management team,” said Michel Vounatsos, Biogen’s Chief Executive Officer. “Our market-leading MS portfolio continues to perform as we anticipated at the beginning of the year, as an increasing number of patients worldwide are benefiting from our therapies. Through Biogen’s efforts, patients are gaining access to SPINRAZA around the world for a disease that previously had no approved therapies. And, we have added exciting assets to our pipeline to drive future growth.”

Vounatsos continued, “We are developing transformational therapies to address what we believe are becoming the world’s most significant unmet medical needs. Our mission is clear - the world needs a leader in neuroscience, and we aim to be that leader.”

Revenue Highlights

• In the second quarter of 2017, TECFIDERA revenues comprised $875 million in sales in the U.S. and $236 million in sales outside the U.S. In the U.S., inventory levels for TECFIDERA were relatively flat compared to the first quarter of 2017, following a drawdown of approximately $50 million to $60 million in the first quarter of 2017. U.S. TECFIDERA revenues benefitted from seasonal recovery in both unit volumes and discounts and allowances.
• In the second quarter of 2017, SPINRAZA revenues comprised $195 million in sales in the U.S. and $8 million in sales outside the U.S. U.S. SPINRAZA revenues included approximately $30 million related to an inventory build reflecting strong demand. Outside the U.S., SPINRAZA revenues included sales from the initial launch in the Nordics as well as named patient sales in the Middle East and Latin America.
• In the second quarter of 2017, TYSABRI revenues comprised $289 million in sales in the U.S. and $207 million in sales outside the U.S. TYSABRI revenues were stable versus the same period in the prior year. In the first quarter of 2017, TYSABRI revenues outside the U.S. benefitted by approximately $45 million due to reaching an agreement with the Price and Reimbursement Committee of the Italian National Medicines Agency (AIFA) related to TYSABRI sales in prior periods.

Business Development Highlights

• In May 2017, Biogen completed an asset purchase of Remedy Pharmaceuticals’ Phase 3-ready candidate, CIRARA™ (intravenous glibencamide), now known as BIIB093. The target indication for BIIB093 is large hemispheric infarction, a severe form of ischemic stroke where brain swelling (cerebral edema) often leads to a disproportionately large share of stroke-related morbidity and mortality. In the second quarter of 2017, Biogen recorded a $120 million GAAP-only charge related to this acquisition to acquired in-process research and development expense, which is reflected as a separate line item within our condensed consolidated statement of income.
• In June 2017, Biogen completed an exclusive license agreement with Bristol-Myers Squibb for BIIB092 (formerly known as BMS-986168), an anti-tau antibody with potential in Alzheimer’s disease and progressive supranuclear palsy (PSP). Biogen recently initiated the Phase 2 study in PSP with the first patient dosed in June 2017. These events triggered an upfront payment of $300 million to Bristol-Myers Squibb as well as a $60 million milestone payment to the former stockholders of iPierian, Inc. These amounts were included in both GAAP and non-GAAP R&D expense in the second quarter of 2017.

Other Financial Highlights

• As of June 30, 2017, Biogen had cash, cash equivalents and marketable securities totaling approximately $5.5 billion, with approximately 80% of this outside the U.S., and approximately $6.5 billion in notes payable and other financing arrangements.
• For the second quarter of 2017, the Company’s weighted average diluted shares were approximately 212 million. The Company ended the quarter with approximately 211 million basic shares outstanding.
• During the second quarter of 2017, Biogen repurchased approximately 2.9 million shares of the Company’s common stock for a total value of $782 million.

2017 Financial Guidance

Biogen is updating its full year 2017 financial guidance. This guidance consists of the following components:

• Revenue is expected to be approximately $11.5 to $11.8 billion.
  • The increase from prior guidance is primarily related to faster than anticipated adoption of SPINRAZA in the U.S.
  • This guidance continues to reflect a decrease, effective July 1, 2017, to 37.5% in Biogen’s share of RITUXAN annual pre-tax co-promotion profits in the U.S.
• GAAP and non-GAAP R&D expense is expected to be approximately 18% to 19% of total revenue.
  • The increase from prior guidance is primarily a result of $360 million in business development expense related to the recent licensing agreement with Bristol-Myers Squibb.
• GAAP and non-GAAP SG&A expense is expected to be approximately 15% to 16% of total revenue.
• GAAP diluted EPS is expected to be between $17.05 and $17.65 compared to prior guidance range of $18.00 and $18.80.
• Non-GAAP diluted EPS is expected to be between $20.80 and $21.40, representing an increase over prior guidance range of $20.45 to $21.25.

Full year guidance for GAAP diluted EPS reflects the impact of the $120 million GAAP-only pre-tax charge recognized in the second quarter related to the transaction with Remedy Pharmaceuticals as well as the impact of the GAAP-only pre-tax impairment charge recognized in the first quarter related to the settlement and license agreement with Forward Pharma.

Biogen may incur charges, realize gains or experience other events or circumstances in 2017 that could cause actual results to vary from this guidance.

Corporate Strategy Update

Today Biogen announced an updated strategic framework to drive long-term growth. The Company aims to maximize the value of its core business while building its future growth engines. Through the end of the decade, Biogen expects cash flows to significantly increase, driven by continued performance of commercial assets and the anticipated expiration of the contingent consideration payments to Fumapharm in the first half of 2019, thus enabling the Company to invest in and build an industry leading neuroscience pipeline. With an overarching goal of being the world’s leading neurosciences company, Biogen is focused on the following top priorities:

1. Maximize Resilience in Multiple Sclerosis (MS):In MS, the Company plans to evolve its operating model around a portfolio-first, customer-centric approach, and to strengthen its leadership in MS through new services and solutions while continuing to invest in MS-focused R&D. Biogen believes a healthy, resilient MS business is the primary driver of future cash flow generation, allowing the Company to invest for growth.

2. Accelerate Efforts in Spinal Muscular Atrophy (SMA):SPINRAZA, and SMA more broadly, represent an important potential growth driver for the Company. Biogen plans to continue launching SPINRAZA in multiple new markets worldwide, develop additional data in teens and adults, accelerate diagnosis and newborn screening, and pursue additional treatment advancements such as an optimized dose, gene therapy, and symptomatic therapies.

3. Develop and Expand Neuroscience Portfolio: Biogen’s focus on R&D excellence centers on (1) building a translational machine in neuroscience to increase the probability of success; (2) investing in assets and capabilities in the Company's prioritized growth areas; and (3) augmenting its pipeline to emphasize both innovation and risk balance. Biogen intends to remain focused on neuroscience and adjacencies, including MS and neuroimmunology, Alzheimer’s disease and dementias, Parkinson’s disease and related movement disorders, neuromuscular disease including SMA and ALS, and emerging growth areas such as pain, ophthalmology, neuropsychiatry, and acute neurology.

4. Focus Capital Allocation on Investing for Future Growth: Biogen’s new priority for capital deployment is to invest in building its pipeline through increased business development activity. The Company continues to focus on maximizing long-term shareholder value creation, and aims to deploy capital to generate returns meaningfully above its cost of capital. Biogen views investment in growth as its top priority, but also recognizes the value of opportunistically returning excess capital to shareholders through share repurchases.

5. Create a Leaner and Simpler Operating Model: Biogen aims to implement a plan to streamline its operations and unlock resources that can be reallocated towards investment in growth. The Company expects that by 2019 up to $400 million annually may be available to be redirected towards prioritized R&D and commercial value creation opportunities.

Biogen may experience events, circumstances, or changes in its corporate strategy that could cause actual results to vary from the anticipated goals, targets, and objectives outlined in this corporate strategy update.

Other Recent Events

• In July 2017, Biogen presented a new post-hoc analysis of the Phase 1b PRIME study of aducanumab in Alzheimer’s disease at the Alzheimer’s Association International Conference (AAIC) in London. Data presented included changes in the cognitive and functional subscores of the clinical dementia rating (CDR) score. Aducanumab slowed decline on both the cognitive and functional assessments compared to placebo, and the results of all subgroups studied were consistent with the overall study population.
• In June and July 2017, SPINRAZA (nusinersen) was approved in Canada and Japan, respectively, for the treatment of SMA. In Canada, SPINRAZA was approved for 5q SMA, which is the most common form of the disease and represents approximately 95% of all SMA cases. In Japan, SPINRAZA was approved for infantile SMA.
• In July 2017, the European Medicines Agency (EMA) announced that it has provisionally restricted the use of ZINBRYTA (daclizumab) to adult patients with highly active relapsing disease despite a full and adequate course of treatment with at least one disease modifying therapy (DMT) or with rapidly evolving severe relapsing MS who are unsuitable for treatment with other DMTs. This follows the initiation of an EMA review of ZINBRYTA, following the report of a case of fatal fulminant liver failure, as well as four cases of serious liver injury.
• In July 2017, Ginger Gregory, PhD, joined Biogen as Executive Vice President, Chief Human Resources Officer. Dr. Gregory, who was most recently the Chief Human Resources Officer at Shire Pharmaceuticals, brings more than 20 years of human resources experience to Biogen. Dr. Gregory also served in HR leadership roles at Dunkin’ Brands, Bristol-Myers Squibb, Novo Nordisk, and Novartis.
• In July 2017, Biogen announced that Alisha A. Alaimo will be joining the Company as Senior Vice President of U.S. Therapeutic Operations, where she will lead sales and marketing, market access, patient services, and commercial operations and strategy. Alaimo will join Biogen from Novartis, where she was Vice President and Head of its Cardiovascular Business Unit.
• In July 2017, Biogen entered into four value-based contracts, effective July 1, with health plans across the U.S. Through these agreements, Biogen is piloting two separate pricing approaches, the first aligning price to patient outcomes, and the second adjusting price for patients initiating therapy who discontinue for any reason including efficacy or tolerability concerns. Three of the outcomes-based contracts are with regional health plans and the fourth contract is with a Medicaid provider.
• In June 2017, Biogen presented robust efficacy and safety data from Phase 2 and Phase 3 SPINRAZA studies at the Cure SMA 2017 Annual SMA Conference in Orlando, FL. Data demonstrated motor function improvements in infants on permanent ventilation and no increase in the risk of adverse events in children with scoliosis.
• In June 2017, the U.S. Food and Drug Administration (FDA) approved RITUXAN HYCELA™ (rituximab and hyaluronidase human) for subcutaneous injection for the treatment of adults with the following blood cancers: previously untreated and relapsed or refractory follicular lymphoma, previously untreated diffuse large B-cell lymphoma, and previously untreated and previously treated chronic lymphocytic leukemia. This new treatment includes the same monoclonal antibody as intravenous RITUXAN® (rituximab) in combination with hyaluronidase human, an enzyme that helps to deliver rituximab under the skin. Roche and Biogen collaborate on RITUXAN in the U.S.
• In June 2017, the Committee for Medicinal Products for Human Use (CHMP) of the EMA issued a positive opinion for IMRALDITM (also known as SB5), an adalimumab biosimilar candidate referencing HUMIRA®. IMRALDI marks the third anti-TNF candidate to be submitted to the EMA by Samsung Bioepis, the joint venture between Samsung BioLogics and Biogen.
• In June 2017, Jean-Paul Kress, MD, joined Biogen as Executive Vice President, President, International, and Head of Global Therapeutic Operations. Dr. Kress was most recently senior vice president, head of North America at Sanofi Genzyme, where he oversaw the MS, oncology, and immunology business units in the U.S. and Canada. Dr. Kress has direct responsibility for worldwide commercial operations outside the U.S. and oversees the Rare and Specialty Disease Asset teams.
• Effective as of June 30, 2017, Paul Clancy, Executive Vice President, Finance & Chief Financial Officer (CFO), left the Company to join another biopharmaceutical company. Greg Covino, Biogen’s Chief Accounting Officer, is serving as the Company’s interim Principal Financial Officer as the Company conducts a search for a new CFO.
• In June 2017, the European Commission (EC) granted a marketing authorization for SPINRAZA for the treatment of 5q SMA. SPINRAZA is the first approved treatment in the European Union for SMA. SPINRAZA was reviewed under the EMA’s accelerated assessment program.
• In May 2017, Biogen announced that it has amended the protocol of the Phase 3 trials of aducanumab in Alzheimer’s disease. ApoE4 carriers that previously would be on a high dose of 6 mg/kg may now be titrated up to 10 mg/kg. This amendment is being reviewed by regulatory bodies and clinical study ethic independent review boards globally and may be implemented on a country by country basis. The change has already been incorporated in the U.S.
• In May 2017, the EC granted a standard marketing authorization for FAMPYRA (prolonged-release fampridine tablets) for walking improvement in people with MS. The EC granted a conditional marketing authorization for FAMPYRA in 2011.

About Biogen
Through cutting-edge science and medicine, Biogen discovers, develops, and delivers innovative therapies worldwide for people living with serious neurological and neurodegenerative diseases. Founded in 1978, Biogen is a pioneer in biotechnology and today the Company has the leading portfolio of medicines to treat multiple sclerosis, has introduced the first and only approved treatment for spinal muscular atrophy, and is at the forefront of neurology research for conditions including Alzheimer’s disease, Parkinson’s disease, and amyotrophic lateral sclerosis. Biogen also manufactures and commercializes biosimilars of advanced biologics. For more information, please visit www.biogen.com. Follow us on social media - Twitter, LinkedIn, Facebook, YouTube.