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Press Release
Cambridge, Mass. - Feb. 15, 2023
Biogen advances significant potential growth drivers; Company reports full year 2022 results and
provides full year 2023 guidance
Full year 2022 revenue and Non-GAAP EPS exceed guidance
Fourth quarter revenue $2,544 million; GAAP diluted EPS $3.79; Non-GAAP diluted EPS $4.05
Full year revenue $10,173 million; GAAP diluted EPS $20.87; Non-GAAP diluted EPS $17.67
Positioned to lead in Alzheimer's Disease with LEQEMBI accelerated approval, pipeline advancements
LEQEMBI (lecanemab-irmb) FDA Accelerated Approval; submitted for traditional approval in U.S.
Regulatory filing for traditional approval accepted in E.U.; granted Priority Review in Japan; initiated submission of data for biologics license application (BLA) in China
Together with Eisai, advancing clinical studies to enhance patient experience and potential outcomes; investigating pre-symptomatic patients, maintenance dosing, subcutaneous formulation
Phase 2 initiated for Biogen's potential first-in-class therapy targeting tau
Advancing launch plans with Sage Therapeutics for zuranolone, a new mechanism of action for potential treatment of depression
Zuranolone New Drug Application for major depressive disorder (MDD) and postpartum depression (PPD) accepted in the U.S. and granted Priority Review; PDUFA August 5, 2023
Filing supported by data demonstrating rapid onset of action with a consistent safety and tolerability profile from 14-day,once-daily treatment with the potential to offer an important new treatment option for patients suffering from MDD and PPD
Working to improve risk profile and productivity of R&D pipeline
Appointed Head of Development; Recruiting Head of Research
Prioritizing programs believed to have the most attractive risk-reward profile
Potential to further diversify in specialized immunology, neuropsychiatry, and rare disease
Capitalizing on opportunities in existing product portfolio
Driving potential revenue growth for SPINRAZA
Working to improve profitability of multiple sclerosis (MS) business
Considering strategic options for biosimilars business
Aligning Biogen's cost base with revenue
Prioritizing near-term potential launches while optimizing cost structure
On track to achieve previously announced cost savings
Full Year 2023 Financial Guidance
Expect mid-single digit revenue decline versus 2022 and Non-GAAPEPS of $15.00 to $16.00
Commenting on Biogen Inc.(Nasdaq: BIIB) results, President and Chief Executive Officer Christopher A. Viehbacher said:
"Strategically, we are working to put Biogen on a sustainable growth trajectory as we execute on two important near-term opportunities with LEQEMBI in Alzheimer's disease and zuranolone in depression, further diversify our product portfolio, and seek expansion through organic and external opportunities, including new partnerships. I believe we have a solid foundation on which to build Biogen's future, including strong internal talent with a passion for making a difference for patients."
Financial Highlights
Q4 '22
Q4 '21
Δ
Δ (CC#)
FY '22
FY '21
Δ
Δ (CC#)
Total Revenue (in millions)
$
2,544
$
2,734
(7%)
(4%)
$
10,173
$
10,982
(7%)
(5%)
GAAP diluted EPS
$
3.79
$
2.50
52%
-
$
20.87
$
10.40
101%
-
Non-GAAP diluted EPS
$
4.05
$
3.39
19%
-
$
17.67
$
19.13
(8%)
-
Note: Percent changes represented as favorable/(unfavorable) versus the prior year period
Percentage changes in revenue growth at constant currency (CC) are presented excluding the impact of changes in foreign currency exchange
rates and hedging gains or losses. The current period's foreign currency revenue values are converted into U.S. dollars using the average exchange rates from the prior period.
A reconciliation of GAAP to Non-GAAP financial measures can be found in Table 4 at the end of this news release.
Revenue Summary
(in millions)
Q4 '22
Q4 '21
Δ
MS product revenue+
$
1,269
$
1,528 (17%)
Spinal muscular atrophy
(SMA) product revenue
$
459
$
441
4%
Biosimilars product revenue
$
175
$
221
(21%)
Other product revenue^
$
2
$
4
(42%)
Total product revenue*
$
1,905
$
2,194 (13%)
Revenue from anti-CD20
therapeutic programs
$
448
$
414
8%
Contract manufacturing and
royalty revenue
$
192
$
126
52%
Δ (CC#)
FY '22
FY '21
Δ
Δ (CC#)
(14%)
$
5,430
$
6,097
(11%)
(9%)
10%
$
1,794
$
1,905
(6%)
(2%)
(15%)
$
751
$
831
(10%)
(4%)
(36%)
$
13
$
14
(7%)
(0%)
(10%)
$
7,988
$
8,847
(10%)
(7%)
8%
$
1,701
$
1,659
3%
3%
52%
$
485
$
476
2%
2%
Total Revenue*
$ 2,544
$ 2,734 (7%) (4%)
$ 10,173
$ 10,982 (7%) (5%)
Note: Percent changes represented as favorable/(unfavorable) versus the prior year period
Numbers may not foot or recalculate due to rounding
+ Multiple sclerosis includes TECFIDERA®, VUMERITY®, AVONEX®, PLEGRIDY®, TYSABRI®, and FAMPYRATM ^ includes ADUHELM® and FUMADERMTM
* Net of hedge
Expense Summary
(in millions)
Q4 '22
Q4 '21
Δ
FY '22
FY '21
Δ
GAAP and Non-GAAP cost of sales*
$
571
$
660
14%
$
2,278
$ 2,110
(8%)
% of Total Revenue
22%
24%
-
22%
19%
-
GAAP and Non-GAAP R&D
$
602
$
700
14%
$
2,231
$ 2,501
11%
GAAP SG&A
$
633
$
788
20%
$
2,404
$ 2,674
10%
Non-GAAP SG&A
$
632
$
785
19%
$
2,399
$ 2,666
10%
Note: Percent changes represented as favorable/(unfavorable) versus the prior year period *Excluding amortization and impairment of acquired intangible assets
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Fourth quarter 2022 GAAP and Non-GAAP cost of sales includes approximately $36 million of idle capacity charges. Eisai Co., Ltd.'s (Eisai) share of these charges (approximately $18 million) is reflected in collaboration profit sharing. Full year 2022 GAAP and Non-GAAP cost of sales includes approximately $119 million of idle capacity charges. Eisai's share of these charges (approximately $55 million) is reflected in collaboration profit sharing.
Full year 2022 GAAP and Non-GAAP cost of sales includes approximately $286 million in charges associated with the write-off of inventory and purchase commitments in excess of forecasted demand related to ADUHELM. Eisai's share of these charges (approximately $142 million) is reflected in collaboration profit sharing. Fourth quarter and full year 2021 GAAP and Non-GAAP cost of sales includes approximately $165 million and $170 million, respectively, in charges associated with the write-off of inventory and purchase commitments in excess of forecasted demand related to
ADUHELM. Eisai's share of these charges (approximately $82 million and $84 million, respectively) is reflected in collaboration profit sharing.
Fourth quarter 2021 GAAP and Non-GAAP R&D expense includes a $60 million opt-in payment to Ionis Pharmaceuticals, Inc. to obtain exclusive rights to develop and commercialize BIIB115, a preclinical investigational antisense oligonucleotide (ASO) for the treatment of spinal muscular atrophy (SMA), and approximately $50 million related to the exercise of our option to participate in a profit-sharing arrangement with Genentech, Inc. for the development and commercialization of mosunetuzumab (now approved in the U.S. as LUNSUMIOTM), a late-stage bispecific antibody in development for B-cellnon-Hodgkin's lymphoma and other therapeutic areas.
Full year 2021 GAAP and Non-GAAP R&D expense includes a total of $285 million in payments related to our collaborations with InnoCare Pharma Limited, Ionis, Bio-Thera Solutions, Ltd., Genentech, Capsigen Inc., and Ginkgo Bioworks, as well as $39 million of estimated clinical trial close-out costs and manufacturing commitments due to suspended development of BIIB111 in choroideremia and BIIB112 in X-linked retinitis pigmentosa.
The decrease in fourth quarter and full year 2022 GAAP and Non-GAAP SG&A expense was driven primarily by cost savings initiatives.
Other Financial Highlights
In the fourth quarter of 2022, Biogen discontinued further development of vixotrigine (BIIB074) for the treatment of neuropathic pain, resulting in a GAAP impairment charge of approximately $120 million. In addition, this decision resulted in a GAAP pre-tax gain of approximately $195 million due to an adjustment to the value of contingent consideration obligations related to vixotrigine.
Fourth quarter 2022 GAAP and Non-GAAP collaboration profit sharing was a net expense of $35 million, which includes $46 million of net profit sharing expense related to Biogen's collaboration with
Samsung Bioepis, partially offset by reimbursement of $11 million from Eisai related to ADUHELM in the U.S. Full year 2022 GAAP and Non-GAAP collaboration profit sharing reduced our net operating expense by $7 million, which includes reimbursement of $225 million from Eisai related to ADUHELM in the U.S., partially offset by $217 million of net profit sharing expense related to Biogen's collaboration with Samsung Bioepis.
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Fourth quarter 2022 GAAP other expense was $113 million, primarily driven by net unrealized losses on strategic equity investments of $107 million. Fourth quarter 2022 Non-GAAP other expense was $7 million, primarily driven by net interest expense. Full year 2022 GAAP other income was $108 million, driven by a realized gain of $1,505 million related to the sale of equity interest in Samsung Bioepis, partially offset by net unrealized losses on strategic equity investments of $265 million, net interest expense of $157 million, and an expense of $917 million related to the previously disclosed litigation settlement. Full year 2022 Non-GAAP other expense was $213 million, primarily driven by net interest expense.
Fourth quarter 2022 GAAP and Non-GAAP effective tax rates were 9% and 15%, respectively. The fourth quarter 2022 effective GAAP tax rate benefited from the decision to discontinue development of vixotrigine and the resulting impairment and adjustment to contingent consideration as well as mark-to-market losses on our marketable equity securities portfolio. Full year 2022 GAAP and Non- GAAP effective tax rates were 18% and 15%, respectively. The full year 2022 GAAP effective tax rate was unfavorably impacted by a valuation allowance recorded on Neurimmune's tax basis in ADUHELM as well as the non-deductible portion of the previously disclosed litigation settlement, partially offset by the deferred tax benefits of an international restructuring.
Financial Position
Fourth quarter 2022 net cash outflow from operations was $175 million, which includes a payment of approximately $917 million related to the previously disclosed litigation settlement. Capital expenditures were $86 million, and free cash flow, defined as cash flow from operations less capital expenditures, was a net cash outflow of $261 million.
Full year 2022 cash flow from operations was $1,384 million, which also includes the payment of approximately $917 million related to the previously disclosed litigation settlement. Capital expenditures were $240 million, and free cash flow, defined as cash flow from operations less capital expenditures, was $1,144 million.
As of December 31, 2022, Biogen had cash, cash equivalents, and marketable securities totaling $5,598 million and $6,281 million in total debt, resulting in net debt of $683 million.
Throughout 2022 Biogen repurchased approximately 3.6 million shares of the Company's common stock for a total value of $750 million. No shares were repurchased in the fourth quarter of 2022. As of December 31, 2022, there was $2,050 million remaining under the share repurchase program authorized in October 2020.
For the fourth quarter of 2022 the Company's weighted average diluted shares were 145 million. For 2022 the Company's full year weighted average diluted shares were 146 million.
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Full Year 2023 Financial Guidance
For the full year 2023, Biogen expects revenue and Non-GAAP diluted EPS guidance ranges as follows:
Full Year 2023
Total revenue
Mid-single digit percentage decline versus
reported full year 2022
Non-GAAP diluted EPS
$15.00 to $16.00
This guidance assumes a favorable decision by the Court of Justice of the European Union relating to regulatory data protection for TECFIDERA, which is currently expected on March 16, 2023, although Biogen cannot predict the outcome.
Biogen expects modest in-market revenue for LEQEMBITM in 2023 with commercialization expenses exceeding revenue. Biogen will record its share of net commercial profits and losses for LEQEMBI in the U.S. as a component of total revenue, which is expected to be a headwind to revenue in 2023.
This guidance assumes that foreign exchange rates as of December 31, 2022, will remain in effect for the remainder of the year, net of hedging activities.
This financial guidance does not include any impact from potential acquisitions or large business development transactions or pending and future litigation, as all are hard to predict, or any impact of potential tax or healthcare reform. Biogen may incur charges, realize gains or losses, or experience other events or circumstances in 2023 that could cause any of these assumptions to change and/or actual results to vary from this financial guidance.
Biogen does not provide guidance for GAAP reported financial measures (other than revenue) or a reconciliation of forward-lookingNon-GAAP financial measures to the most directly comparable GAAP reported financial measures because the Company is unable to predict with reasonable certainty the financial impact of items such as the transaction, integration, and certain other costs related to acquisitions or large business development transactions; unusual gains and losses; potential future asset impairments; gains and losses from our equity security investments; and the ultimate outcome of pending significant litigation without unreasonable effort. These items are uncertain, depend on various factors, and could have a material impact on GAAP reported results for the guidance period. For the same reasons, the Company is unable to address the significance of the unavailable information, which could be material to future results.
Recent Developments
In the fourth quarter of 2022 Biogen initiated a Phase 2 Study of BIIB080 (anti-tau ASO) in early
Alzheimer's disease.
In the fourth quarter of 2022 Biogen initiated the Phase 1 Study of BIIB115, an ASO in development for SMA that may have the potential to help address additional unmet needs of patients as well as to be administered at extended dosing intervals.
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Biogen Inc. published this content on 15 February 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 February 2023 12:06:02 UTC.
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