A year and a half after unveiling a strategic review of its biosimilars franchise as part of a reprioritization, Biogen has decided to keep the business as the company continues to navigate a business turnaround.
“After a comprehensive review of potential externalization options compared to retaining the business, we believe that the best value for shareholders going forward is to retain the business within our portfolio and to optimize the business with an aim to maximize profitability,” Biogen Chief Financial Officer Mike McDonnell said on an investor call Thursday.
Biogen announced the decision Thursday as the company reported a 1% revenue increase at constant currency in the second quarter. Biosimilars, which have been a steady revenue source, contributed $198 million, up 1.5% year over year.
The biosimilar field has undergone some consolidation in recent years, including Biogen selling its previous biosimilar joint venture stake in Samsung Bioepis to Samsung Biologics for up to $2.3 billion in early 2022.
A lot has changed since Biogen said in February 2023 that it was considering strategic options for biosimilars. The appetite for biosimilar dealmaking is probably not at its prime day today. About a month ago, Coherus BioSciences sold its Humira biosimilar for just $40 million.
While Biogen had originally considered divesting biosimilars from a cost perspective, it may need the additional revenues for now. The Eisai-partnered Alzheimer’s drug has proven slow to ramp up, with second-quarter U.S. sales at $30 million a year into its traditional FDA approval. A recent rejection by drug reviewers at the European Medicines Agency is also delaying—if not completely throwing off track—Leqembi’s expansion in the EU.
Sage Therapeutics-partnered Zurzuvae only secured a small FDA approval for postpartum depression but not in the much larger indication of major depressive disorder.
Still, Biogen CEO Chris Viehbacher, mastermind of the business overhaul, said the company is “in a much different place” than it was 18 months ago. The biotech reported second-quarter revenues of almost $2.5 billion, exceeding the consensus estimates of nearly $2.4 billion. And its adjusted earnings per share of $5.28 was also above the consensus of $4.02, William Blair analysts noted Thursday.
The EPS beat enjoyed a $0.52 boost from the sale of one of Biogen’s two priority review vouchers for $89 million, which appears to be a discount, considering Day One Biopharmaceuticals sold one in May for $108 million and Valneva sold one in February for $103 million.
During an investor call Thursday, Viehbacher called Leqembi’s $40 million second-quarter haul “very strong,” highlighting “a very successful launch in Japan” and that “the early data from China are also extremely promising.”
“I think now for the first time since the launch, that we can look forward to the growth of this market, not just because of the prescriptions, but I look at the evidence base that we are building with our partners at Eisai on Leqembi,” Viehbacher said.
Leqembi continues to attract new patients. About 40% of all commercial patients currently on the anti-amyloid drug started treatment during the second quarter, and the number of physicians prescribing Leqembi also grew by 50%, Alisha Alaimo, Biogen’s head of North America, said on the call.
Hospital systems are expanding their treatment capacities by treating patients outside their flagship sites, and the trend is reaching beyond the 100 priority networks that Biogen and Eisai are targeting, Alaimo said.
Biogen last month deployed an expanded field force, which improves its frequency in engaging those high-priority sites and expands its reach to 30% more healthcare providers, Alaimo added. As a result, Biogen expects to continue to ramp up overall launch spending in the second half 2024. Besides the 30% increase in the Leqembi field force, it’s also adding some targeted, direct-to-consumer campaigns groupwide, McDonnell said.
The increased marketing investments come as Leqembi is starting to compete with Eli Lilly’s Kisunla, which got its FDA nod July 2. Kisunla could threaten Leqembi with its ability to let patients stop treatment once their amyloid plaques are gone. But Alaimo on Thursday’s call highlighted Leqembi’s rate of the brain swelling or bleeding side effect, ARIA, was lower in phase 3 trials.
Viehbacher, pointing to Leqembi’s latest three-year data, argued that “it probably is not going to be enough to just remove the plaque.” Rather than hurting Leqembi, he suggested that the entry of Lilly “will only accelerate the development of this marketplace.”
However, a Piper Sandler analyst pointed to its recent survey work among neurologists and Alzheimer’s specialists, which indicated a less favorable view of the risk-benefit and cost-benefit profile for Leqembi as well as doubts about the amyloid hypothesis as a whole.
“I tend to pay more attention to what physicians do versus what they say,” Viehbacher said.
The CEO pointed to the investments many physicians have put into building the infrastructure for treatment patients with anti-amyloid antibodies, including PET scans, lumbar punctures and MRIs.
“To me, you don’t do that if you don’t have a strong conviction in the importance of this treatment to patients,” he said.
“This market is going to grow, and the evidence base is going to grow,” Viehbacher added. “It is market building that we’re doing, and that certainly takes time and patience.”