Biogen Idec’s (BIIB) CEO George Scangos on Q2 2014 Results – Earnings Call Transcript

Source: Seeking Alpha


Biogen Idec Inc. (NASDAQ:BIIB)

Q2 2014 Earnings Conference Call

July 23, 2014 09:00 ET


George Scangos – Chief Executive Officer

Doug Williams – Executive Vice President, Research and Development

Tony Kingsley – Executive Vice President, Global Commercial Operations

Paul Clancy – Chief Financial Officer

Al Sandrock – Chief Medical Officer


Michael Yee – RBC Capital Markets

Ravi Mehrotra – Credit Suisse

Mark Schoenebaum – ISI Group

Geoffrey Porges – Bernstein

Eric Schmidt – Cowen and Company

Yaron Weber – Citi

Matthew Harrison – Morgan Stanley

Terence Flynn – Goldman Sachs

Matt Roden – UBS

Robyn Karnauskas – Deutsche Bank

Geoff Meacham – JPMorgan


Good morning. My name is Tiffany and I will be your conference operator today. At this time, I would like to welcome everyone to the Biogen Idec Q2 2014 Earnings Conference Call. 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. (Operator Instructions) Thank you. Claudine Prowse, Vice President, Investor Relations, you may begin your conference.

Claudine Prowse – Vice President, Investor Relations

Thank you. And welcome to Biogen Idec’s second quarter 2014 earnings conference call. Before we begin, I encourage everyone to go to the Investors section of to find the press release and related financial tables, including a reconciliation of the non-GAAP financial measures that we will discuss today. Our GAAP financials are provided in tables one and two. Table three includes a reconciliation of our GAAP to non-GAAP financial results. We believe non-GAAP results better represent the ongoing economics of our business and reflects how we manage the business internally. We have also posted slides on our website that follow the discussions related to this call.

I would like to point out that we will be making forward-looking statements, which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties and our actual results may differ materially. I encourage you to consult our SEC filings for additional detail.

On today’s call, I am joined by our Chief Executive Officer, Dr. George Scangos; Dr. Doug Williams, EVP of Research and Development; Tony Kingsley, EVP of Global Commercial Operations; and our CFO, Paul Clancy. We will also be joined for the Q&A portion of the call by our Chief Medical Officer, Dr. Al Sandrock.

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Now, I will turn the call over to George.

George Scangos – Chief Executive Officer

Well, thanks Claudine and good morning everybody and thanks for joining us today. Biogen Idec had a great second quarter, strong financial performance and several key pipeline accomplishments. So, as we recap these achievements today, we believe that our continued progress reflects the strength of our underlying business and good execution towards our 2014 goals.

Our core multiple sclerosis franchise performed remarkably well and we continue to see an increase in number of patients using our therapies. TECFIDERA continues to gain market share and we believe it’s on track to become the leading MS therapy in the U.S. The early months of our European launch reinforce our belief that TECFIDERA will continue to be a major value contributor to the company. AVONEX and TYSABRI also performed well as physicians and patients continued to look to them as the injectable and high efficacy therapies. These important medicines available to patients, we believe that we have a product portfolio that makes us the global leader in the treatment of MS.

In our late-stage pipeline, we move forward two new potential therapeutic options for relapsing MS patients this quarter. PLEGRIDY received the positive CHMP opinion in Europe and at this point, I will diverge from my prepared statements to say that just this morning as we are sitting in the room preparing for the call, we received the letter from the EU saying that PLEGRIDY have been approved. We haven’t had a chance to look at the label or any details yet, which we will do. And when we are through that, we will issue a press release, but since we are sitting here, PLEGRIDY has now been approved in the EU. We also reported positive top line results from the Phase 3 trial of Daclizumab and should all these products complete registration, we will have six important medicines that offer MS patients with different needs.

Moving beyond the MS franchise, we launched ALPROLIX, the long-lasting therapy for hemophilia B and received FDA approval of ELOCTATE, our therapy for hemophilia A. These products mark our entry into a major new therapeutic area. ALPROLIX and ELOCTATE represent the first meaningful innovations in the treatment of hemophilia in many years and reflect our mission to help renewed therapies to patients who are underserved. We believe that these therapies have the potential to meaningfully reduce treatment burden and significantly improve patients’ lives. These accomplishments are reflected in our strong quarterly financial performance with a 40% growth in revenues and a 52% growth in non-GAAP EPS year-over-year.

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And as Paul will discuss this quarter’s financial performance also benefited from the approval of an agreement with AIFA relating to TYSABRI sales in Italy. We have also made excellent progress in Japan which is an important strategic priority for us as we expand our global presence. We have recently obtained Japanese approval for TYSABRI and ALPROLIX and filed a marketing application for ELOCTATE earlier this year. The expansion of our products into Japan allows us the opportunity to introduce new treatment options to patients and physicians in new regions around the world. We believe that Japan represents an attractive long-term growth opportunity for our company. So we had an eventful and productive quarter with a lot of exciting developments.

And I will now pass the call over to Doug.

Doug Williams – Executive Vice President, Research and Development

Thanks George and good morning everyone. We and our collaborator AbbVie recently announced positive top line Phase 3 data for Daclizumab HYP in relapsing-remitting multiple sclerosis. Based on this study and previous clinical data we are working expeditiously to file an application for regulatory approval of Daclizumab. We believe that if approved, Daclizumab could be an additional effective therapeutic option to treat this heterogeneous disease. A number of our other clinical programs continue to advance.


In the coming 12 to 18 months we anticipate Phase 3 data from TYSABRI in SPMS as well as data from earlier stage programs including BIIB037 in Alzheimer’s disease, neublastin in neuropathic pain, STX-100 in idiopathic pulmonary fibrosis, anti-CD40 ligand in general lupus and anti-LINGO in both acute optic neuritis and multiple sclerosis. We would like to take the opportunity to review our ongoing anti-LINGO clinical studies and clarify the timing of anticipated data readouts.

The Phase 2 program remains on track and includes two studies, one in MS and the other in acute optic neuritis. We believe the totality of data from these studies would provide us with a clearer understanding of anti-LINGO’s potential in both clinical settings. The goal of the acute optic neuritis study is to demonstrate proof of mechanism in humans. We will examine whether anti-LINGO is able to protect and repair the optic nerve when given shortly after the acute damage caused by demyelinating lesion of the optic nerve or optic neuritis.

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The study will examine various end points including novel end points developed by Biogen Idec. The primary end point visual evoked potential will measure effects on optic nerve signal conduction. We will also use optical coherence tomography imaging to determine if anti-LINGO treatment impacts the viability of axons in the optic nerve and retinal ganglion cells. As an exploratory end point this study includes objective and patient reported outcome measures to examine any potential benefit on visual function. The study is fully enrolled and we expect to disclose top line results in January 2015 and full data disclosure at a 2015 medical meeting.

In the second study we are evaluating whether anti-LINGO can facilitate remyelination and functional improvement in patients with active relapsing MS. Primary end point is a clinical composite measure testing various aspects of both physical and cognitive improvement. As exploratory end points we will also examine various advanced brain imaging techniques to detect potential remyelination and axon preservation as well as numerous blood and CSF biomarkers.

The MS study is designed treat patients for approximately 18 months with the primary efficacy end points being evaluated at the end of that period. There will be a preliminary look at data after all patients have reached 12 months of treatment duration to inform future study planning. Based on current enrollment rates which are ahead of projections, we expect the interim look to occur in the second half of 2015. Investigators, patients and the study management team will remain blinded in order to preserve the integrity of the ongoing study. We expect MS study results to be presented at a scientific meeting in 2016.

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