Biogen Inc. Common Stock Morgan Stanley 24th Annual Global Healthcare Conference

Well, good morning, everybody. Thanks for the invitation, Terence. Great to be here. Internally, we talk about new Biogen, and that is really what's driven our capital allocation strategy to date. Old Biogen was really very much focused on neuroscience, really moonshot-type projects, extremely expensive, long phase III programs, very little diversification, and actually quite a narrow pipeline. In fact, when I first arrived at Biogen, the only physicians we actually called on were neurologists. Today, we're building out a commercial team that's not only seeing neurologists, but also nephrologists, transplant nephrologists, rheumatologists, dermatologists, epileptologists, retina specialists. So there has been a significant shift in the therapeutic areas of focus for the company. A lot of that has been driven by the BD, and that was very intentional. We did not want to abandon our roots in neuroscience.

We continue to work in ALS and Alzheimer's, a little bit in Huntington's. Having been so long in MS, we looked at MS as a neuroscience business, but the reality is you treat the immune system with MS, so immunology felt like a logical place for us to go. There you can do much shorter and more defining phase II clinical trials. So we were trying to, on the one hand, broaden our commercial areas of focus, but also have areas where we weren't taking quite so much risk and deploying so much capital. We did that with the Human Immunology Biosciences acquisition, which gave us felzartamab, Apellis, although we're talking about kidney disease and eye disease, these are complement inhibitors, and so also in immunology. Immunology is obviously a vast area. Today we're pretty much focused on the rare and smaller indications in immunology.

But I would say today, in terms of allocation, I think we've got an extremely good setup at Biogen right now. We've got 10 phase III clinical trials that will start to read out as soon as next quarter. That could lead to 8 product launches, 8 indications with 5 molecules. And I think with Apellis, we have the potential to really have an inflection in our revenue growth. So as I look at capital allocation, we're collectively more focused on our early-stage development. We think we can grow this business with what we have. But the nature of this business is the day you launch a product, you should be starting to develop the successor product, and that's what we're really doing. So it's going to be preclinical phase I, phase II assets.

Yeah. Okay, great. Which is also the most capital-effective time to do acquisitions.

Yes, it is, because you're getting a number of assets, particularly immunology, where the underlying disease biology is pretty well defined, so there are some areas of this that are highly competitive. At the same time, we have China coming in, so the supply, if you like, of early-stage assets has expanded significantly.

There's a bit of a paradox with Alzheimer's. On the one hand, we have a huge population with an unmet need, and yet the uptake has been slower than many would have expected. Part of that is really just the enormous change that has had to take place within a neurology practice. This is really requiring a team approach, which neurologists haven't really had to do. They have to organize PET scans and MRIs and infusion beds, do the cognitive assessment. They've had to expand the staff, and before they expanded the staff, was there really going to be enough reimbursement for that? Then with the infusions, what we have seen is a number of physicians are carefully choosing which patients will go on treatment. Are they robust enough themselves to get themselves to an infusion center every 2 or 4 weeks?

Or do they have a caregiver that can take time off work regularly to do that? So one of the things that we have been really focusing on is how do we simplify that care pathway. I think we made a lot of progress on that, and I think we could potentially see an inflection now in LEQEMBI sales, both in terms of market share as well as in overall market growth. That's really because we've first of all tried to eliminate the PET scan, because there's now blood-based diagnostics. Neurologists love scans because it's the only time you can really try to figure out what's going on inside the brain. But a PET scan costs $5,000. The blood-based diagnostic is less than $130. Then the next thing we're doing is really using those blood-based diagnostics to get a better triage of the patients coming in.

It's very hard to get an appointment with a neurologist, and at the start, too many people just weren't eligible. Their disease was too far advanced. Now what we're seeing is a lot of use of blood-based diagnostics in a primary care setting. So the yield, if you like, of eligible patients getting in went from 50% to 70%. Now the last stage has really been the approval of a subcutaneous form. We had that for the maintenance indication last year, and now this year we've had it for induction. That's important not only for the care pathway, but also from a competitiveness profile. I think Lilly's really main argument has been once-monthly infusions instead of every 2 weeks. When you have a subcutaneous, that goes away, and Lilly does not have a subcutaneous for donanemab.

I think, obviously now moving to the subcutaneous means moving from Part B to Part D. So the negotiations with the plans are underway and any reimbursement would be eligible from 1st of January. So we're not going to really see the uptake of subcutaneous in any meaningful way until we get that Part D reimbursement.