Biogen Inc. Common Stock 2026 Q3 Earnings Call

Thanks, Cynthia, and good morning, everybody. Welcome to Biogen's third quarter 2026 earnings call. During this call, we'll make forward-looking statements which involve risks and uncertainties that may cause actual results to differ materially from our forward-looking statements. We provide you a comprehensive list of risk factors in our SEC filings, which I 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 investor section of biogen.com. We've also posted the slides to our website that we'll use 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; Robyn Kramer, our Chief Financial Officer. Alisha Alaimo, President North America, is also available for the Q&A section of the call.

We'll make some opening comments and we'll move to the Q&A session. To allow us to get through as many questions as possible, we'll ask you to kindly limit yourself to just one question. I'll now hand the call over to Chris.

Right. Thank you, Tim. Good morning, everybody. Very strong quarter this morning. It's actually one of those quarters where the numbers almost just speak for themselves. Total revenue grew 11% year-over-year. Of course, that's not all organic. That was significantly benefited from the acquisition of Apellis. I'd also say that I think the acquisition of, and the integration of Apellis has gone even better than expected. The integration team has, I think, been able to identify and eliminate cost synergies faster than we thought. Alisha's here, and I have to give Alisha a lot of credit for her leadership in really ensuring that the Apellis team has felt welcome within Biogen.

I think really the most credit goes to the people from Apellis who have joined Biogen, placed their faith in Biogen, and have been able to look past the inevitable distraction that comes with an integration and really focus on our customers, the healthcare professionals and patients that we serve. As I look at it, obviously Apellis has certainly helped us. Our industry has embraced bolt-on acquisitions over the years, but one of the things I have learned is if you are going to do a bolt-on, you have to bolt onto something solid. One of the things that we have been working on at Biogen over the last several years is really to improve our cost base, but also to really launch our growth products and get those performing on a top level. That is important because when you do an acquisition, there is an inevitable amount of distraction.

If you have got a team that is already performing well, then it can not only find the time to embrace a new team joining the company, but the new team joining also finds a culture of energy, of positive spirit that becomes infectious in some ways. I think we have really realized a synergy between the folks from Apellis who have joined the Biogen teams. They have come together and when I look at SYFOVRE and EMPAVELI, you can see 37% year-over-year growth of $243 million. That is already on a run rate of $1 billion. We are on track to realize $250 million of run rate synergies by the end of 2027. In fact, you will see from the guidance that we put out, and Robyn Kramer will detail this more, but we have reduced our estimate of what the dilution will be in this first year of acquisition.

In fact, most of the dilution will be really from the financing. At an operating level, the dilution is already pretty much negligible. If I look at Biogen's own growth portfolio, $1.26 billion, that is 50% year-over-year growth. That is now almost getting to two-thirds of our core pharmaceutical revenue in Q3. This is where the story has been that we have obviously had a legacy portfolio that continues to be resilient, but the future is really with the growth products. If I go to the next slide, we have really got three key priorities here. One is to continue to grow that commercial portfolio. As I say, the 50% growth is extremely strong. We expect to return to top-line growth in 2026. I will say that the resilience of the legacy MS portfolio, I have said this in the past, it is not by accident.

Biogen has a unique patient services team. I think we have built strong relationships with key physicians and have earned the trust of a lot of patients. I think that is a capability that is going to be extremely important as we turn to the next priority, which is Multi-year registrational data flow. The first point I would make on that is, given the Apellis acquisition, we now think that the company can grow even without the pipeline. As the pipeline starts to read out, and I think the first readout will be now just weeks away, we think we can be launching products, assuming that clinical trial results are positive. We will be able to launch products on top of a growing base. The other I would say is, there are going to be a number of areas where we are still in breakthrough.

AMR is a market, for instance, that doesn't exist. MVI is a market that doesn't exist. In fact, a lot of education is needed. But we're already seeing high levels of awareness on those. We do know how to create and build markets. We're not a company that is just used to going in and finding an existing market and just taking market share. That will also be important in lupus. Alicia Alaimo can provide a lot more insight here. But when you look at the lupus market, it is at a fraction of what the MS market is, and there's no real good reason for that. We have found some insights into that. One is that patients will be expected to be on treatment for many years, and with only two approved biologics, physicians tend to conserve those biologics until a patient progresses.

We're certainly seeing an awful lot of feedback from the market that if another biologic does get approved, there would be an enhanced willingness to actually use biologics at an earlier stage. I go back to how Biogen has built its MS business and have been able to retain it in the face of some pretty fierce competition. I think a lot of those capabilities and skills will really enable us to think about how we can actually develop the lupus market way beyond where it is today. Just really in the next 18 months, we've got phase III readouts expected, not only in SLE, but we've got cutaneous lupus, we've got AMR, and our partners at Stoke, we expect to be reporting on zorevunersen in Dravet syndrome.

The third priority I think is one of the most important and often most neglected areas of our industry. This is an area where we at top leadership at Biogen are spending a lot of our time. Because it's in research and early development that you are building the future of your company. We were not necessarily very good with that. We had gone 3 years without a single IND. Under the leadership of Jane Grogan and in partnership with Priya Singhal, they have done a radical overhaul of the whole research and early development area. We now have six new programs expected with the three NMEs. We've already had five INDs this year. As Priya Singhal will tell you, Biogen, in its 48 years of history, has never had five INDs in a single year.

Our ambition is, over the next few years, to have at least 20 programs in early-stage development. This is a big shift in how we operate because Biogen historically has looked at things on an asset-by-asset basis. We are now really thinking about portfolios of opportunities. How do we balance the risk? How do we balance that with franchise development and breakthrough medicines along with best-in-class and not always just first-in-class medicines? So this is an area where we're already planning for the future. In this business, the day you launch a new product is the day you should be thinking about what product is going to succeed it. So those are the three areas. I think it's exciting. The future of Biogen is before us.

And with that, I'll turn it over to Priya who can give us a little bit more insight to the excitement awaiting us.

Thank you, Chris, and good morning, everyone. Over the past few years, you have heard us talk about the pipeline transformation, as Chris just mentioned. I'd like to take a few minutes to remind you of where we are today. Our new Biogen strategy remains centered around delivering a path to sustainable growth over the long term, and we are pleased by the progress we've made in delivering on that goal. This is an exciting time for Biogen, and today, as a result of this strategy, we have built one of the strongest and most diversified late-stage pipelines in Biogen's history, with the potential to address significant unmet need across neurology, immunology, and kidney disease.