BIIB

Good morning. My name is Cynthia, and I will be your conference operator today. At this time, I would like to welcome everyone to the Biogen first quarter 2026 earnings call and business update. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star one on your telephone keypad. Please limit yourself to one question to allow other participants time for questions. If you require any further follow-up, you may press star one again to rejoin the queue. Today's conference is being recorded. Thank you. I would now like to turn the conference over to Mr. Tim Power, Head of Investor Relations. Mr. Power, you may begin your conference.

Thank you, and good morning, and welcome to Biogen's first quarter 2026 earnings call. During this call, we'll make forward-looking statements which involves risks and uncertainties that may cause actual results to differ materially from our forward-looking statements. We provide a comprehensive list of risk factors in our SEC filings, which we encourage you to review. Our earnings release and other documents related to our results, as well as reconciliations between GAAP and non-GAAP results discussed on this call, can be found in the Investors section of biogen.com. We've also posted the slides on our website that will be used during the call. On today's call, I'm joined by our President and Chief Executive Officer, Chris Viehbacher; Dr. Priya Singhal, Head of Development; and Robin Kramer, our Chief Financial Officer.

Alisha Alaimo, President of North America, will also be joining for the Q&A section of the call. We'll make some opening comments and move to the Q&A section. To allow us to get through as many questions as possible, we kindly ask that you limit yourself to one question. I'll now hand the call over to Chris.

Thank you, Tim. Good morning, everyone. We've had a very strong start to the year. You know, I was thinking about where we have been as a company. In 2023, we had just completed four years of declining revenue and profit. You know, since then, we've been able to pretty much stabilize the business, and that's really been a huge amount of work by all of our teams. You know, the interesting about this business is it's not enough to just trim some costs, and we did have to cut some excess costs. One of the things that we have really been doing is going through every single line of the P&L and thinking about, are we investing for growth? You do have to invest in this business. You cannot save your way to prosperity.

There's been a lot of really careful thought about how do we, how do we invest for growth, be it in research and development or in commercial. You know, as Robin has talked about in the past, you know, we actually have shifted a lot of costs. 90% of our commercial costs were really behind the MS portfolio in 2023. By shifting that to our growth products, I think one of the things you see here on the first slide is that the growth products are now generating $850 million in the first quarter, and that's up 12%. The 12% is actually even a little bit of an understatement because SPINRAZA declined slightly.

SPINRAZA declined mostly because of a timing of shipments, and there was a one-off event last year on VAT, I think, in Europe somewhere. Remember, timing of shipments is a big thing at Biogen. Out of the 15,000 patients on SPINRAZA that we treat every year, about 9,000 are ex-U.S. In a lot of countries, we only ship once or twice a year into those countries. It tends to be lumpy by nature. What is good news is the new High Dose SPINRAZA. As you've seen, this has now been approved in the U.S., and we already have patients on the new dosage regimen. It has already been approved in Japan, who's the first country to approve the high dose, and then Europe.

We're getting a lot of positive feedback from those countries where it's been launched. Not only is this gonna be significant in terms of competitiveness in a highly competitive area, but we're also seeing some anecdotal reports of switch backs. You know, in this market, whenever you have one of these devastating diseases, efficacy is really paramount. I think the high dose really should help us have an edge on the efficacy front in this market. We're very happy to see the growth products growing like that. We look to our major opportunity with LEQEMBI. As you know, over the past few years since launch, a lot has been done to try to improve the care pathway, make it easier for both physicians and patients.

The IQLIK is really fundamental to that. Last year, we had the approval for the maintenance indication. You'll see numbers where we have significant numbers of patients who are continuing on after the first 18 months regimen to remove the plaques and going on to maintenance. We have a PDUFA date of May 24th for the induction subcutaneous. Again, we see this as an opportunity to facilitate the care pathway, improve patient convenience, and improve our competitive profile versus Kisunla. That's the business. The Biogen business is doing well. Now on top of that, we have the proposed Apellis acquisition. We haven't yet closed, but we're limited in what we can say.

Obviously, this expands our commercial growth portfolio. There are two marketed products. You know, I'll just remind everybody that this is one molecule. It has three indications, and it has two brands. You know, as I talk to a number of investors on SYFOVRE, there is this focus on ophthalmology. What I think a lot of people forget is that geographic atrophy is really an autoimmune disease. It is caused by the formation of lesions as a result of aberrant immune activity. What we're really trying to do with geographic atrophy is to prevent the growth of these lesions. When people start talking about visual acuity, that's probably gonna be very difficult because the eye tends to adjust around these lesions.

What really is the goal of treatment is to prevent progression of the disease, which could potentially lead to blindness. I think there's a lot that we need to do in terms of thinking about how we really position this drug and where the benefit is. EMPAVELI, you know, is an enormous benefit to us. We have greater conviction every day on felzartamab, and we look forward to seeing the first data, and hopefully that those data will realize our aspirations for this product. You know, if you went back six, seven years ago, nobody was interested in nephrology.

Now, you know, really with the advent of the FDA acceptance of proteinuria as a biomarker, a lot of companies have come into this space, and IgAN is obviously the biggest market in this. As we think about recruiting for felzartamab and our pre-launch activities, you're finding that, you know, you got a lot of companies out there that are recruiting in nephrology. I mean, Vertex is, Vera is, just to name a few, for example. With EMPAVELI and with the addition of the Apellis team, we have a whole team ready to go in nephrology. We'll be present in the nephrology offices, building those relationships, going to congresses now with a marketed product and not a future product.

We believe both in the growth of EMPAVELI, but what that can do for a whole nephrology franchise at Biogen, and we're pretty excited about that, I have to say. I think, you know, all the conversations that we've been having with the Apellis team leading up to a potential integration, I think there's first of all, there's an incredible talent in the Apellis team. But I think it's also fair to say that within Biogen, I think we can probably bring more resources to really support those teams. You know, I don't see a big inflection in SYFOVRE, for example, but I do think there is an opportunity for a growing product there.

I think, as I say, EMPAVELI within a broader nephrology franchise, that could be a game changer for Biogen in the future. You know, as we look at this, we do expect the acquisition to be accretive in 2027. When you look out over the next few years, this materially increases Biogen's EPS outlook. If I turn to the next chart here. Now, don't get your micrometers out here and try to measure these arrows here. This is meant to be illustrative of where we think this is going.

If we just take what Wall Street thinks Biogen is going to do, I can't say that we would be happy with that, but that's what's out there in the public domain. It's roughly flat through 2030. When you look at what Apellis can do is, you know, this allows Biogen to start growing now, is our belief. You know, the pipeline starts to read out. We've got a lot of data readouts already starting this year and consecutively over the years. You know, as one investor told me, he said, "I get this. Before we had a pipeline coming on a flat business.

I see a pipeline coming on a growing business. I think that's the fundamental difference in what the Apellis acquisition does for us. You know, we're still gonna continue to do business development. You know, in all of this, we just acquired the China rights for felzartamab. You know, that's an important market for IgAN, but China's a big, important market for us, and Biogen has been relatively small in China. China is the world's second-biggest pharmaceutical market. Felzartamab and acquiring these rights, not only just to acquire the worldwide rights for felza, but also really to build our business in China.

Again, we continue to invest in growth, but I think a lot of the investments, a lot of the work that we have done over the last two, three years is now coming to fruition. At least this is the vision. Now we are very conscious of the fact that, you know, in business, 10% is strategy, 90% is execution. We need to now execute as a team to bring all of this, but at least this is the aspiration that we have for our company. With that, let's talk about that pipeline, and I'll pass it to Priya.

Thank you, Chris. This was a very strong quarter for Biogen from a development standpoint, with meaningful progress across both our marketed products and our late-stage pipeline. Starting on the left-hand side of the slide, you can see the continued progress in supporting our marketed portfolio. First, the U.S. approval of High Dose SPINRAZA represents a meaningful advancement for people living with SMA and reinforces Biogen's leadership in the category. Additionally in Alzheimer's disease, new real world data for LEQEMBI shows strong treatment persistence with nearly 80% of patients remaining on therapy at 18 months and almost 70% at two years. We believe that these data underscore the importance that patients and HCPs attribute to ongoing treatment of this progressive disease, extending beyond just amyloid plaque reduction. Turning to the right-hand side, we presented important new data that reinforced the potential of our late-stage high conviction pipeline.

New data from salanersen demonstrate durable benefit over one year in children previously treated with gene therapy, highlighting the potential for high efficacy with once-yearly dosing. Importantly, the first patient has now been dosed in the pivotal STELLAR-1 study evaluating salanersen in treatment-naive pre-symptomatic infants. At the same time, we continue to build confidence in litifilimab, where we presented positive phase II data from the ongoing phase II/III AMETHYST study in CLE. All of this progress reinforces our confidence in our late-stage pipeline. As you can see from this slide, we don't expect to wait long for that potential impact. This year marks the start of a multi-year registrational data flow that includes multiple programs and extends through the end of the decade. We believe these data, as you also heard from Chris, will continue to strengthen our growth outlook.

Importantly, as previously reflected, we have several data-related inflection points in 2026. As you know, we have a PDUFA date coming up for our LEQEMBI IQLIK initiation next month. We also have readouts from our pre-proof of concept pipeline, where we continue to pioneer and address key scientific questions that could benefit patients. Our registrational readout cycle begins later this year, and over the next 18 months, we expect to see SLE and CLE data from all the phase III studies of litifilimab, as well as readouts from the first phase III study of felzartamab in AMR and the phase III study for zorevunersen in Dravet syndrome. I believe this is a very exciting time for the Biogen pipeline. I would now like to turn the call over to Robin for an update on our financial performance.

Thank you, Priya. I'd like to start with key highlights from our strong first quarter 2026 results. Total revenue was $2.5 billion, up 2% year-over-year, with GAAP diluted EPS of $2.15, up 31% year-over-year, and non-GAAP diluted EPS of $3.57, up 18% year-over-year. We're pleased to see our growth products continue to perform well, generating $851 million of revenue, up 12% year-over-year. Our growth products, which includes VUMERITY, generated more revenue in first quarter of 2026 than our remaining MS products. We also maintained our cost discipline while supporting our late-stage pipeline development and product launches with approximately $1.1 billion of non-GAAP core operating expenses in the first quarter of 2026.

As a result, we generated $594 million of free cash flow in the quarter, allowing us to further support the business and invest in future growth, including the expected Apellis transaction, which we believe represents a capital allocation opportunity that will further bolster both our top line and bottom line growth prospects and therapeutic areas aligned to our immunology and rare disease strategy. I'll speak more about the transaction in a few moment. I'll now turn to our revenue performance for the quarter, starting with our growth products. LEQEMBI end market revenue was $168 million for the first quarter of 2026, up 74% year-over-year. We saw a continuation of sequential market growth in key markets, including the U.S., Japan, and China.

In China, we saw strong uptake with Q1 reflecting continued demand growth and sequential revenue benefited from completing the drawdown of inventory in Q4 2025. LEQEMBI remains the market leader by total patient share in the U.S., Japan, and China, and we look forward to next month's U.S. PDUFA date for IQLIK initiation. SKYCLARYS saw sequential global patient demand growth with first quarter 2026 global revenue of $151 million, representing 22% growth year-over-year. For SKYCLARYS, U.S. revenue was impacted by the inventory dynamics we discussed on the Q4 2025 call with moderate growth and demand. Outside the U.S., we continued to see demand growth as we continue our SKYCLARYS launch. SKYCLARYS is now available in 35 countries, and we continue to expect SKYCLARYS growth to come from ex-U.S. as we advance the launch.

Turning to the highlights of our key P&L items for the quarter. Non-GAAP R&D expense in Q1 2026 was $480 million, with the increase year-over-year reflecting investments in our phase III clinical programs, including felzartamab and litifilimab, and due to phasing of spend within the year. Non-GAAP SG&A expense in Q1 2026 was $600 million, with the increase year-over-year reflecting planned pre-launch activities supporting lupus and nephrology, direct-to-consumer advertising for VUMERITY and ZURZUVAE, and due to phasing of spend within the year. First quarter 2026 GAAP and non-GAAP effective tax rates were 15.4% and 15.3% respectively.

The year-over-year decrease was due to favorable impacts from a foreign tax settlement and vesting of certain share-based awards, partly offset by the increase in U.S. taxation on foreign earnings in 2026 under the One Big Beautiful Bill Act. As we previously announced, we recorded approximately $34 million of acquired IPR&D in the first quarter of 2026, related primarily to our Alcyone and Alloy transaction, resulting in an approximately $0.20 per share impact to GAAP and non-GAAP EPS. As a reminder, in the first quarter of 2025, we recorded $165 million of acquired IPR&D associated with the upfront payment to Stoke Therapeutics as part of our collaboration for zorevunersen for the treatment of Dravet syndrome in all the territories outside the U.S., Canada, and Mexico, resulting in approximately $0.95 per share impact to GAAP and non-GAAP EPS.

This strong commercial execution, coupled with disciplined financial management, drove continued robust free cash flow performance. We generated $594 million of free cash flow in the first quarter of 2026 and exited the quarter with $4.7 billion of cash and marketable securities and $1.5 billion of net debt. With the Apellis transaction expected to close in the second quarter of 2026, we plan to fund the transaction with $3.6 billion of cash from the balance sheet and $2 billion from bank borrowing. Given our expected strong cash flow generation, we expect to repay the $2 billion in new borrowings by the end of 2027. Given the dynamic policy environment, we have updated the slide we first provided you this time last year.

We continue to believe the structure of our U.S. manufacturing footprint, supply chain, and overall business model position us to be potentially more resilient to macroeconomic factors and policy uncertainty. Currently, based on potential tariffs as announced to date, we do not expect to see material impact to our business in 2026. This information does not reflect the impact of the pending acquisition of Apellis. Turning now to guidance. Our overall belief in the strength of the underlying business is as strong as when we guided in February. We also continue to believe it's important to make investments for growth. In addition to the roughly $0.20 EPS impact from the acquired IPR&D charges we incurred in Q1, we also expect to incur $145 million or an $0.80 EPS impact of acquired IPR&D charges in the second quarter.

Specifically, the TJ Bio transaction for felzartamab rights in China, which further enhances our nephrology franchise and gives us worldwide rights to felzartamab, is expected to comprise $0.55 of this EPS impact. As Priya noted, we also achieved the first patient dosed in STELLAR-1, our pivotal phase III salanersen study, triggering a milestone in the second quarter, which results in approximately $0.25 of EPS impact. Turning to some key considerations for this updated guidance. You can see that our expected business outlook and underlying assumptions, including our revenue outlook, remain consistent with our prior guidance. As I mentioned earlier, we expect roughly $600 million of contract manufacturing revenue this year to be phased as roughly 2/3 coming in the first half of the year. We expect Q2 core operating expenses to be roughly consistent with Q1.

It remains our objective to be disciplined on costs as we continue to invest, including supporting the programs that we've been bringing into our pipeline through business development. Please be sure to review this slide and our press release for other important full year 2026 guidance assumptions. Finally, a few points on the expected impacts from the Apellis transaction. The transaction is not yet closed, so we won't provide consolidated guidance today. That said, we do plan to provide 2026 guidance inclusive of Apellis when we report second quarter results following the transaction's close. We can say today that we believe we will be gaining two best-in-class commercialized medicines that enhance our growth portfolio. We believe SYFOVRE and EMPAVELI will contribute meaningfully to our top line growth in the near and long term.

We expect approximately $120 million-$130 million of impact to our non-GAAP and other income expense line in 2026, driven largely by financing and foregone interest income. We expect that our strong combined cash flow generation will provide us with the opportunity to de-lever by the end of 2027, and that the transaction will be accretive to non-GAAP EPS in 2027. We believe this transaction represents an attractive use of capital that will further bolster both our top line and bottom line growth prospects in therapeutic areas aligned to our immunology and rare disease strategy. With that, I would like to pass the call back to Tim to open us up for questions.

Thanks, Robin. Can we go to our first question, please?

Thank you.

If you would like to ask a question, please press star one on your telephone keypad. As a reminder, please limit yourself to one question. If you require any further follow-up, you may press star one again to rejoin the queue. Your first question comes from the line of Brian Abrahams with RBC Capital Markets.

Hey, guys. Good morning. Congrats on the quarter, and thanks for taking my question. As we look towards the upcoming BIIB080 data, I'm curious your latest views on, like, what kinds of signals you'd be looking for there to move forward, and how much would that be impacted by your expected potential to further improve the administration form there? Thanks.

Priya?

Thanks, Brian. Just stepping back, you know, BIIB080 is an antisense oligonucleotide. It addresses tau and aims to reduce tau. We've seen that in prior trials, an extracellular approach using an antibody has really not worked. That's where the ASO approach is differentiated. We believe it could target both intracellular and extracellular tau. We did see tau reduction in our phase Ib. It was a small trial, but it was very encouraging, which prompted us to get to a proof of concept study. That is what the CELIA readout will tell us. Because this is a pioneering effort, and what we're looking to see is whether reduction of tau leads to and translates into a clinical benefit, specifically on cognition. As we do that, we're exploring several dosing regimens, several treatment frequencies.

We'll be looking at the totality of data. We're expecting the data sometime mid-year, and I think our goal would be to look at the data and then communicate it and present it, you know, at upcoming forums. That's the plan.

On the dosing regimen?

Yes. you know, on the dosing regimen, I'd like to say that really the trial enrolled very quickly from an intrathecal perspective. We recognize that if this actually, translates into a medicine, we would be considering other options. We are looking at other options of delivery. These are in preclinical and research. We recently acquired Alcyone, as you know, and that gives us another potential avenue to explore if, and as we continue with intrathecal delivery.

Thanks, Priya. Let's go to the next question, please.

Your next question comes from the line of Andrew Tsai with Jefferies.

Hey, thanks. Good morning. As we think about your other catalysts for 2026, just wanted to ask on litifilimab, actually, and the filing strategy. Would you guys consider filing for SLE right away if both phase IIIs were positive later this year? Would you wait, opt to wait to file after the CLE data set right after? Do you file one or two NDAs? If just one SLE study hits that sig, but the other one was trending, would you still file in SLE? Thank you.

Thank you, Andrew. We are excited about the potential for litifilimab. We have 2 phase III trials in SLE. We expect them to read out this year. We accelerated the second trial, and we are really doing well on our CLE trial. We expect that to read out early next year. Now, with regards to the filing strategy, we don't usually comment on it, but I'd like to say that we think that this would be a package as of now, and we'll communicate more as this the studies read out. Secondly, whether, you know, if we saw one positive trial and one negative trial, I think again, we'd be looking at the totality of data. You know, there is precedent for that with the other product in the field.

We don't think that by itself, it would be a showstopper. We remain very encouraged, and we are very, you know, pleased with the breakthrough designation that litifilimab got for CLE earlier this year. We also just presented data from a second phase II that was positive in CLE. You know, we continue to be optimistic.

Can we go to our next question, please?

Your next question comes from the line of Geoff Meacham with Citi.

Great. Hey, guys. Thanks for the question. Chris, you mentioned you're still looking at BD opportunities, you know, even post-Apellis. Maybe just help us with how maybe you rank external innovation versus investments and, you know, internal R&D and SG&A. Obviously, post-Apellis, you need to make investments to get that, to get the growth profile going. Thanks.

Thanks, Geoff. We feel as we have said in the past, I think we're feeling very good about our late stage pipeline. You know, lupus, I think could be quite a significant franchise for us because in addition to litifilimab, we also have a partnership with UCB on dapirolizumab. We have, we'll be taking the marketing lead in the U.S. and Japan on that product. Of course, we have some other assets in early stage development coming along for lupus. The whole nephrology franchise, I think is gonna be quite significant for us as well. Obviously we have Apellis.

As we look at BD, I would say really that most of what we're going to be focusing on is early stage development and research, because that part of the pipeline is quite thin. We have strengthened that with a few collaborations, particularly in immunology with Vanqua and Dara, for instance, last year, and the partnership with Citi, and there's some other ones in there. We're looking at really building the next generation of growth. I think, you know, if we execute well and, you know, we can bring everything and the pipeline does come through, this should be a company that can grow well into the 2030s. And what we need to really be thinking about is what comes after that.

That's where, as I say, the early stage of research stage, pre-IND and perhaps phase I, is where the focus is gonna be. I think on M&A, we would probably be more opportunistic. I don't think there's any particular need at that point to do that, but, I guess we'll keep an eye out, but we're not gonna be doing the search. Over the last two, three years, we have had a very systematic search and felt that we wanted to do M&A. I would say with the Apellis transaction and with the pipeline, we don't see the same need to be as proactive on that front.

Chris, can we go to the next question, please?

Your next question comes from the line of Michael Yee with UBS.

Hey, guys. Thanks. Good morning. Going back to BIIB080, you guys had downsized the study from 700 patients. I think you ultimately targeted or ultimately enrolled about 400 and wisely cut expenses to get a signal. Can you just remind us, given the context of wanting to be thoughtful about expenses, what type of trend would make sense for you to push forward? On the other hand, when you come out with the data, if you don't think there's a really strong trend, that you'd be pretty clear about that and would therefore signal to the street that we don't plan to invest there. Maybe just add some color to that, Chris or Priya. Help us understand in terms of the disclosure how we should be thoughtful about it. Thanks.

Thanks, Mike. I think just stepping back, yes, we had designed the original CELIA trial with a larger N, and I think it was our phase Ib trial readout that gave us the confidence to redo the power for that study and redesign that trial. We feel quite confident that the trial is adequately set up to give us an answer on really testing this very important hypothesis. We already saw the tau reduction in phase Ib, and now we're looking for the translation of tau reduction to clinical efficacy. Just as a reminder, the primary endpoint of the trial is CDR Sum of Boxes, which as you know, is a validated endpoint. We are looking at a few different doses and two treatment paradigms, quarterly as well as six monthly.

We'll be again looking at the totality of that to see if we can isolate a signal of clinical efficacy. I think we'll be very disciplined in how we look at that. The way we've really changed that over several years now is that we think about our go/no-go criteria well ahead of data readouts. This data readout is expected mid-year. You can expect that we'll be looking at that data very carefully, but with really being very disciplined about what the next step is, because that is what this proof of concept is designed for, if and how we get to phase III.

I think, you know, one of the interesting here is that, again, there's just no precedent here, right? You know, in designing the study, I think, Priya, it'd be fair to say we basically looked at what we did with amyloid trials, right? We've got the 18-month follow-up. We're looking at a similar population because that's the only thing we knew. We're gonna be discovering an awful lot in this study. Certainly, you know, you wanna see the right reduction in tau and tau PET results will be important. Obviously, you know, can you see some movement on cognition? That would be important to be able to advance. Does that have to be statistically significant? Does that have to be a certain percentage? I think that's where the totality of information is gonna be.

You know, while we feel relatively confident being able to reduce the tau, nobody knows how long you have to reduce the tau for to get a benefit on cognition. You know, when you think about the progression of plaque, that is a longer onset and, you know, tau is a shorter onset, so we don't really know exactly who the right patient population is going to be. That might be the same as amyloid. It might be different. That's why we've said from the outset, this is a, this is a pioneering study and we and the whole medical academic community are gonna learn from that.

The bar doesn't necessarily have to be that high, but I think we do have to see some signs that, you know, give us obviously hope that this would have a clinical benefit.

Let's go to the next question, please.

Your next question comes from the line of Salveen Richter with Goldman Sachs.

Good morning. Thanks for taking my question. On LEQEMBI, could you update us on the adoption and use of blood-based biomarkers and whether you're seeing patients who completed Kisunla switch to LEQEMBI maintenance?

Sure. Maybe, Alisha, you'd like to take that one?

Sure. Thank you. Blood-based biomarkers have been growing, you know, almost at the same clip as that we've been seeing in the past over 2025, which we know they've had really rapid adoption. Haven't typically been used for confirmation solely. What we are seeing, there is a PCP pilot that is going on right now, as you know, with Biogen and Eisai, and we do have early indicators that from that pilot, we're seeing a higher usage now of blood-based biomarkers in the PCP than what we do to the territories who do not have that pilot running. We're showing that once we educate, they are doing it more and more. Also, more importantly, recently CMS did add that blood-based biomarkers can be used as a confirmation when you go into their database.

When you go and use the drug, you can actually get it reimbursed. I know last year that was a big question that physicians had, and now that has also been put into place. I believe moving forward, we are going to see that blood-based biomarkers will be used more and more for confirmation what they are today. The adoption will be a little bit slow, but awareness is extremely high. I do think the more that they use it, test and try it, the more they'll be used for confirmation. When you move towards something, the question that you asked about Kisunla, you know, in this first quarter of the year is when you'll expect to see the tranche of patients that started on Kisunla that are now hitting their 18-month mark.

Quarter one is when you will see the patients now, typically stopping the product and for us to start getting the feedback. I can say that physicians are asking, what do we do? Some patients, and if you look at market research, patients in general who are on either of the products wanna stay on product. There is a fear of coming off and having a decline in their cognition. We do have several accounts that are looking at how do they switch them to LEQEMBI. As you know, we cannot provide data on that because we don't have data, but we do have physicians that are looking at can we switch them to maintenance or to subcute maintenance of LEQEMBI.

Thanks, Alisha. Let's go to the next question, please.

Your next question comes from the line of David Amsellem with Piper Sandler.

Thanks. High-level question on SYFOVRE, if you can talk to it. I know the transaction hasn't closed, but can you comment at a high level on evolving competitive dynamics, particularly with other agents that are in development that are focused in terms of their primary outcome measures on visual acuity as opposed to lesion burden? Help us just understand, you know, how are you thinking about where SYFOVRE is going to fit in this evolving landscape, and ultimately what kind of data you can point to regarding the product regarding its impact on visual acuity. Thank you.

Thanks, David. Just stepping back, I mean, I think SYFOVRE is indicated for geographic atrophy. This is, you know, a very highly prevalent, irreversible, and progressive disease that leads to blindness. I think the median time point is about six, 6.5 years. The gold standard for assessing efficacy has been lesion growth. I think that is where SYFOVRE has very compelling data, 42% statistically significant reduction in lesion growth. That's kind of at the time of launch. Subsequently, Apellis has also presented five-year long-term data that shows that you can actually slow down progression by 1.5 years. That's obviously really meaningful in that timeframe of six years. Totally agree that there is competitive dynamics here.

I think with IZERVAY, that's on the other product that's on the market, it targets C5, which is upper, upstream of C3, which is the target for SYFOVRE. We haven't really seen that long-term data as of now from IZERVAY. Moving into what's on the horizon from a competitive landscape, I think we are seeing more targeting of C5 again. That's one. The other is that with Annexon, we haven't seen that the phase II data were very persuasive. Actually, it did not impact geographic atrophy lesion growth, which we believe is the standard, gold standard. Chris mentioned the lesion growth is really important to focus on. Eventually, the best-corrected visual acuity would be impacted. At the outset, that's not really the goal because the eye adjusts to peripheral vision.

That's an important aspect to kinda keep in mind. When we saw the data from Annexon, this was obviously a very important aspect of our diligence. We saw that, actually the BCVA for placebo really went down, and therefore, you know, the drug arm looked good, but I think it remains to be seen. With regards to Regeneron, I know that's competition as well, also targets C5, and it's systemic, and it's a combination. We believe there also SYFOVRE, because it's targeted to the eye, it really enables that tissue delivery, which we believe is really important. Regeneron, the proof of concept still has to come, so we'll wait for that. We do know that SOLIRIS actually with a very similar mechanism of action failed in phase II in GA.

I think a lot to watch out for, but we feel really that the SYFOVRE data are compelling, and it's going to be a very huge effort for us from an educational, medical, scientific leadership to make the case on why it's important to treat now.

Yeah. I think just from a commercial point of view, the fact that SYFOVRE has five-year data creates sort of a data moat here. you know, this is a progressive, slowly progressive disease and you know, people wanna have confidence in the safety and how this also develops over time. I think it's gonna take a, quite a long time for any competitor actually to generate the same level of data that is gonna be necessary for the confidence of physician and patients.

Let's go to the next question, please.

Your next question comes from the line of Paul Matteis with Stifel.

Great. Thanks so much and congrats on a great quarter. A couple other just quick hits on SYFOVRE, if I may. As it relates to just thinking about spending on that franchise over the next few years, how are you at least qualitatively right now thinking about, you know, synergies and leveraging existing capabilities with also the reality that GA may still be a pretty promotionally sensitive market that could require things like DTC? Then maybe just any quick thoughts on the pre-filled syringe, your level of optimism there, and how meaningful that could be? Thank you.

Alisha, you've done a lot of work in this space.

Yeah, I'll take that question. Thank you. You know, first I can say that, you know, we've met several of the leaders over at Apellis, and I wanna say that I'm very impressed with that team and with the leadership that they actually have. Many of those individuals have had the ophthalmology background for quite a long time and know the space very well. I will say they've done a very good job, and a tremendous job, especially with the vasculitis cases that came up early on handling that, and I think they're doing a very nice job today. When we look at this market and see the opportunities that it has, you know, it is a very large market. It's 1.5 million patients, as you know, and only 20% are treated.

There is a really significant unmet need for this patient population. This launch has sustained growth in injections and in patient growth. We believe there is a very large number of patients who are untreated. There's around 500,000 that currently sit in these targeted physician offices that this team currently calls on for GA. In our experience, when you have a product that slows progression, activating the patients and creating urgency with these HCPs is critically important. Therefore, we know moving forward we will need thoughtful education, very strong messaging, and an explanation as to why there is a strong value to slowing this progression.

With that being said, and knowing that we obviously do not, we have not closed the deal yet, we know that activating these patients will be critical in this space because when you go in and ask for something, you typically get it. We do know we will be spending money on DTC and TV ads. As you know, they did run TV ads for two quarters, and they did stop those TV ads. I think that would be something that we'd be looking at once we close the deal because educating these patients will be critically important. We'll also be looking at the messaging for how they're able to handle this in the office.

We have no idea up until this space, you know, how much time have they had to spend on vasculitis versus actually being able to compete, hand in hand in these offices. Thirdly, I think that they are gonna benefit greatly from our patient services and also from this machine that we've had the luxury of building over the last seven years. If you really take a step back and look at Biogen, especially in North America, we've launched seven products over the last seven years in completely different spaces, which means we've created this dynamic engine that has been able to support the launches across all of the TAs that we now have.

Therefore, we believe, going to your question, we will find synergies in a lot of the headquarters capabilities that we will bring to them that maybe they have not been able to invest in. We're also gonna look at where they currently spend money that maybe we could reallocate to some of these other areas that we believe will, you know, drive the growth. We're gonna be able to do a great analytics on understanding which tactics they're using now they think are working and which ones we might be able to tweak moving forward. I also have an understanding that they might have a wish list of things they'd like to do, maybe they haven't done so far for the launch.

We're going to be looking at all of that with them and believe, you know, with Apellis and with Biogen, both of them together will be much stronger than either one of them alone. I know my teams are very excited about welcoming them into North America, and we're looking at giving especially SYFOVRE a lot of support, so they feel like they have everything they need to succeed in this space.

Thanks, Alisha. Let's go to the next question, please.

Your next question comes from the line of Mohit Bansal with Wells Fargo.

Great. Thank you very much for taking my question, and congrats on all the progress. Would love to understand how High Dose SPINRAZA helps with switching and persistence as a new offering. Do you think it can stabilize the franchise or even grow at this point? Would love to understand how you're thinking about it. Thank you.

You wanna take that from North America, Alisha?

Is the question specifically about SPINRAZA or SPINRAZA High Dose?

High dose.

High dose. Okay. Well, first of all, I'll say that, I'm sitting in the same boardroom I was sitting in when we had a patient advocacy group, and I pitched to a couple executive committee members that we had feedback from patients that they wanted more. You fast-forward to today, we all of a sudden have SPINRAZA HD. First and foremost, I will say this is one area of the business which I have never seen in my career, where this patient community is smart, they are savvy, they know exactly what comes out, when it's coming out, and they will make those requests prior to any approval in the market. When you look at what has happened, the SPINRAZA HD has been out less than a month.

I will tell you that 20% of my patient base have already have start forms in to go on SPINRAZA High Dose. We also have patients that are switching from competitors and patients that are adding on to ZOLGENSMA. For the U.S. organization specifically, I do believe that high dose, which we've had a pretty stable business so far with SPINRAZA. My team has done an excellent job with SPINRAZA 12 mg. We do believe high dose now has a new opportunity for us. We are seeing great interest in high dose from not just patients, but also physicians. We're off to a great start. Hundreds of start forms have been submitted. I think that this is gonna be very positive as we transition from SPINRAZA High Dose and hopefully one day to salanersen.

Maybe Chris, I can cover ex-U.S.

Yep.

Similarly, we had the approval ex-U.S. in Europe. We're seeing similar traction, particularly in Germany, with roughly 20% of the patients converting over to high dose. Off to a really strong launch in Europe as well.

Yeah, I think when you think about high dose, you think about Alcyone, the being able to potentially replace the intrathecal injection coming along. Then obviously salanersen, I think Priya can say we've had our first patient dosed in the phase III study here. You know, I think this is a franchise that is going to be durable and can grow over time as we introduce these things that make it easier. You know, I talk to physicians around the world when I go visit our affiliates. You know, every time they talk about someone who has switched off SPINRAZA, there's always a tone of regret in their voice. It generally is because of intrathecal fatigue.

They, they have the regret because they know that in their view, that this is the most efficacious drug. I think the HD now gives them even more reason to defend the efficacy. I think, again, with the Alcyone device, we hopefully can eliminate some of the intrathecal fatigue. Certainly by the time we get salanersen, that's expected to be a once yearly intrathecal, and that should also help with the administration. You know, it's amazing that to hear the emotion of physicians. You know, these are children who are now going to school who would have died years before.

This is just one of those amazing medicines that Biogen has come up with that has had such an impact on healthcare for particularly in the pediatric population.

Let's go to the next question, please.

Your next question comes from the line of Evan Seigerman with BMO Capital Markets.

Hi, guys. Thank you so much for taking my question. Congrats on all the progress. I'd love to know, drill down a little more on the strength we saw with SKYCLARYS. You know, can you walk me through some of the drivers of this? I know it's been a lumpy product, you know, is this traction something we should really start to think through later in the year? Kind of what are some of the drivers there? Thank you so much.

Let's start with you.

Let you start with the U.S., and then we can talk about ex.

Yeah. For SKYCLARYS, what you saw for the quarter, is with the $72 million year-over-year, it was a 4% growth. Quarter-over-quarter, it was down. It was down because the inventory was built at the end of Q4 last year. Fast-forward to Q1, if you look at the amount of buying weeks, Q1 has two fewer buying weeks than the prior quarter. If you look at patient demand, our patient demand was right on par. It's just we had a little bit of lumpiness with the inventory. Now, the second thing, though, just to remind everyone, is where the U.S. is at launch, is we are now at the launch phase where we are going out, we are using our patient finding our next best action in the field.

Where, you know, our reps every week receive a list of all the different offices they can go visit because we believe a patient is there, and then they go on the hunt. With that being said, now, you know, the majority of our patients are coming from doctors who will only ever write one prescription, ever for Friedreich's ataxia. These patients tend to be slower progressers, and they're much older than what we had predicted when we first launched the product. It will take more time as we find them. The good news is that we are finding them, and they are going on product. It does take time from finding the patient to when they finally put in their script.

In ex-U.S., actually our revenue in the quarter exceeded the U.S. for the first time from SKYCLARYS as we continue to execute on the launch there, both in Europe and starting in Latin America. We do see from a demand perspective, demand increasing ex-U.S. and expect that to continue as we continue the launches. As I mentioned earlier, it's already available in 35 countries.

Yeah, in ex-U.S., we have a little different strategy. You know, as Alisha said, it's really finding the patient. As we found the patients, we have put them on drug, and they're on early access programs while we negotiate reimbursement. As we get reimbursement, you'll start to see the revenue suddenly flow through. It might be lumpy because we can switch potentially several hundred patients all at once from being a zero revenue patient to a full revenue patient. Right now we have not only more revenue, but we've had now for some time more patients outside the U.S. on drug than inside. Just as I say, they haven't been fully reimbursed. That is progressive.

You know, we're now seeing really the rollout and potential reimbursement in Latin America, for example.

Let's go to the next question, please.

Your next question comes from the line of Alexandria Hammond with Wolfe Research.

Thanks for taking the question. Another on BIIB080. What's the potential in other tauopathies? As a follow-up, what will be the most important biomarker from the upcoming phase II results in terms of informing next steps but beyond Alzheimer's? Thank you.

Yes. Thank you. This is an area that we are discussing quite deeply. We know the high unmet need in primary tau, tauopathies. What we've seen in terms of tau reduction with BIIB080, at least in our phase Ib trial, was very encouraging. I think we would be looking for tau reduction, we would be looking for other details, I mean, regions of the brain, and such. That would inform our strategy on whether we would continue to think about doing more work in primary tauopathies. Yes, it remains high on our list of evaluations and potential possibilities.

Thanks, Priya. Let's go to the next question, please.

Your next question comes from the line of Terence Flynn with Morgan Stanley.

Great. Thanks for taking the question. Just one on felza for me and AMR. Obviously, you called out the acquisition of the China rights for $100 million and then some pretty significant, back-end loaded milestones. Just thinking through what this means for the broader commercial opportunity, maybe both, not just in China, but also on the global basis and how you're thinking about that relative to consensus. Thank you.

Yeah. You know, again, I think, as you look at kidney disease, a lot of this there have not been treatments for it. There's a whole alphabet soup of these things, right? You've got IC-MPGN, you've got AMR, you've got PMN, you've got C3G. I think it's hard actually even to come up with sometimes the epidemiology. I can tell you on the MPGN, for EMPAVELI, you know, it's actually not very clear exactly what the actual underlying epidemiology is. It's hard for, I think, investors to really assess some of these. What we do know, for instance, on AMR, is we just take that there are about probably 11,000 patients.

If you actually look at the price of IgAN, and certainly even more if you, if you look at it with the latest Otsuka price in IgAN of about $350,000 a year, you know you're looking at a total addressable market of, you know, north of $2 billion, somewhere between $2 billion and $3 billion, in fact, right? There hasn't been any treatment there in the past. Certainly the phase II data, although small numbers, you know, showed remarkable 80% resolution of AMR. Then you've got MDI, which is sort of a cousin of AMR, that adds another 5,000 or 6,000 patients, and we've just initiated a trial in MDI.

IgAN, you know, is obviously gonna be a significant market, particularly in Asia. You know, I think there's two things where we see competitiveness. When you start looking at any autoimmune disease, and Priya can speak more to this, but you really wanna think about where are you in the whole immune cascade. You know, in most cases, if you're treating an autoimmune disease, you're trying to suppress the immune system. You don't really wanna do that any more than you have to. Having something that is as close to the actual disease cause I think is gonna be relevant, and that's where we think CD38 has a huge advantage of really acting on the plasma cells and the NK cells. The other is really the durability of treatment.

In IgAN, you know, we showed in a phase II that after nine infusions, that we still had durability of treatment after 18 months. You know, that says that, you know, maybe we're doing something here that looks more disease modifying than other agents. Priya, you should probably weigh in here, you, since you're much more expert than I am on this.

I think you covered it well, Chris. We're really excited about the first readout for felzartamab. We expect this in 2027. Really it's stepping back. It's a seed. It's targeting the CD38 positive plasma cells, which we believe are a key source of the pathogenic autoantibodies. The readout is really a biopsy readout, which is also very objective. We're excited about this.

Great. I think we've got time for one last question. Maybe go to the last one, please.

Your next question comes from the line of Jay Olson with Oppenheimer.

Oh, hey. Congrats on the quarter, and thanks for the update. Can you talk about the real-world treatment persistence of LEQEMBI that was presented at ADPD with regards to how you expect the subQ version to further impact treatment persistence? Thank you.

Yes. Thanks, Jay. I think overall, you know, there's a question, there has been a question lingering out there whether after reduction and clearance of plaques, you continue to keep patients on an anti-amyloid therapy, specifically one like LEQEMBI, which has a dual target of the soluble toxic species as well as plaque reduction. We've shown extensive data in prior meetings on the benefits of keeping patients on therapy. This again is a progressive disease. Once neurons die, you cannot recover them. We've shown that fluid biomarkers actually come back within less than six months, and then, you know, although the plaque comes back much slower. That's one piece. I think the real-world evidence data is compelling because it shows that patients and neurologists actually want to continue to stay on therapy.

That I think is the powerful reflection of that data, and this continues to be really, really important for us. Now, we are waiting. We already have subcutaneous maintenance, which again makes it simpler and offers patients optionality on staying on therapy. With subcutaneous initiation, where we'll get an outcome from the FDA next month, you know, we continue to remain very optimistic about how this could inflect in terms of the patient journey. Finally, I'll just add a point about our pre-symptomatic trial, AHEAD 3-45, which is still to read out in 2028. You know, we'll see about that readout. We think it's going to be an important landmark trial in the field.

What becomes important with subcutaneous getting accepted is that there could be an interchangeability, which could be very relevant in the pre-symptomatic population. Again, we believe that this is gonna be a very important inflection point.

Thanks, Priya. Thanks everybody for joining the call today. If you've got more questions, reach out to me or Daniel or Steve. Thank you.

This concludes today's call. Thank you for your participation. You may now disconnect.