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`Transcripts | Healthcare
`Biogen Idec Management Discusses Q1 2013 Results - Earnings
`Call Transcript
`Apr. 25, 2013 12:20 PM ET
`by: SA Transcripts
`
`Q1: 04-25-13 Earnings Summary
`
`EPS of $1.97 beats by $0.34 | Revenue of $1.42B (9.53% Y/Y) misses by $-0.06M
`
`Biogen Idec (NASDAQ:BIIB) Q1 2013 Earnings Call April 25, 2013 8:00 AM ET
`
`Executives
`
`Claudine Prowse
`
`George A. Scangos - Chief Executive Officer and Director
`
`Tony Kingsley - Executive Vice President of Global Commercial Operations
`
`Douglas Edward Williams - Executive Vice President of Research and Development
`
`Paul J. Clancy - Chief Financial Officer and Executive Vice President of Finance
`
`Analysts
`
`Geoffrey C. Porges - Sanford C. Bernstein & Co., LLC., Research Division
`
`Mark J. Schoenebaum - ISI Group Inc., Research Division
`
`Ravi Mehrotra - Crédit Suisse AG, Research Division
`
`Robyn Karnauskas - Deutsche Bank AG, Research Division
`
`Matthew Roden - UBS Investment Bank, Research Division
`
`Eric Schmidt - Cowen and Company, LLC, Research Division
`
`Michael J. Yee - RBC Capital Markets, LLC, Research Division
`
`Geoffrey C. Meacham - JP Morgan Chase & Co, Research Division
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`Thomas Wei - Jefferies & Company, Inc., Research Division
`
`Matthew J. Andrews - Wells Fargo Securities, LLC, Research Division
`
`Terence C. Flynn - Goldman Sachs Group Inc., Research Division
`
`Marshall Urist - Morgan Stanley, Research Division
`
`John S. Sonnier - William Blair & Company L.L.C., Research Division
`
`Joel D. Sendek - Stifel, Nicolaus & Co., Inc., Research Division
`
`Operator
`
`Good morning. My name is Sean, and I will be your conference operator today. At this
`time, I would like to welcome everyone to the Biogen Idec Q1 2013 Earnings Conference
`Call. [Operator Instructions] Thank you.
`
`I'd now like to turn the call over to Ms. Claudine Prowse, Vice President of Investor
`Relations. Please go ahead.
`
`Claudine Prowse
`
`Thank you, and welcome to Biogen Idec's First Quarter 2013 Earnings Conference Call.
`Before we begin, I encourage everyone to go to the investors section of biogenidec.com to
`find the press release and related financial tables, including a reconciliation of the non-
`GAAP financial measures that we'll discuss today. Our GAAP financials are provided in
`Tables 1 and 2. Table 3 includes a reconciliation of our GAAP to non-GAAP results which
`we believe better represents 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. These statements are subject to certain risks and
`uncertainties, and actual results may differ materially from our expectations. I encourage
`everyone to consult our SEC filings for additional detail.
`
`On today's call, I'm joined by our Chief Executive Officer, Dr. George Scangos; Tony
`Kingsley, EVP of Global Commercial Operations; Dr. Doug Williams, EVP of Research
`and Development; and our EVP of Finance and CFO, Paul Clancy.
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`I'll now turn the call over to George.
`
`George A. Scangos
`
`Okay, thanks, Claudine. And thanks to all of you for joining us today.
`
`Before I start, I do want to make a few comments on the case reports that appeared in the
`New England Journal of Medicine today. Frankly, it's hard for me to understand why these
`old reports were deemed worthy of publication at all. And certainly the timing, coming
`shortly after approval, is interesting. These are old news, right? The cases described in
`the New England Journal are 2 of the 4 cases of PML that have occurred in over 19 years
`and over 180,000 patient years of exposure to FUMADERM. All 4 cases were discussed
`at the JPMorgan conference in January, and all 4 cases were seen by the FDA, European
`regulatory authorities and all regulatory authorities months in advance of approval. And I
`think the TECFIDERA label speaks for itself.
`
`So just to reiterate, there have been no cases of PML or other opportunistic infections with
`TECFIDERA. The clinical program has involved over 2,600 patients treated for up to 4
`years and with a median time of approximately 2 years. So there's been substantial
`patient exposure with TECFIDERA. The New England Journal of Medicine cases occurred
`with different drugs; but even if one does assume their optimum rates are the same, which
`I do not believe to be true, then the rate is extraordinarily low: 4 cases out of 180,000
`patient years. Now we've gone through these cases before, we've described the
`characteristics of these patients before, I'm not going to reiterate all of that stuff now. And
`fortunately, I believe that the no -- misinformation being spread is transient and will fade.
`And in a perverse way, it's somewhat complimentary. Importantly, I can assure you that
`we're well prepared to make sure that physicians and patients have a balanced picture of
`TECFIDERA.
`
`So with that, we'll move on to the prepared remarks.
`
`Okay, it's been a remarkable quarter for Biogen Idec, our shareholders, for patients, as a
`result of several major accomplishments over the quarter. First, our core business
`performed very well. Tony and Paul will go into more detail, but the bottom line is that
`revenues were up 10% to $1.4 billion and non-GAAP earnings were up 41% to $1.97 per
`share compared to the first quarter of 2012.
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`Both AVONEX and TYSABRI had strong growth, driven by AVONEX's life cycle
`improvement and TYSABRI's powerful efficacy. AVONEX continued to gain market share
`within the ABCRE class, and global units grew by 4%. So the core business is off to a
`great start.
`
`Of course, a key event during the quarter was the approval and launch of TECFIDERA in
`the U.S. as a first-line treatment for relapsing forms of multiple sclerosis. This is a
`watershed event for our company and for MS patients. We're moving full speed ahead
`with a great label that allows our commercial team to discuss TECFIDERA in a balanced
`and broad way to describe the benefits of TECFIDERA, not only on relapse rate, but also
`on disability progression and MRI end points, both of which are becoming increasingly
`important for patients living with this debilitating chronic disease.
`
`Also during the quarter, we were able to substantially improve the intellectual property
`protection for TECFIDERA. The U.S. patent for the 480 milligrams per-day dose that the
`FDA approved has been issued. The patent provides protection for the 480-milligram
`dose, which is the only approved dose, until 2028. The European Patent Office also
`determined that claims to the 480 milligrams per-day dose are allowable. And we expect
`the European patent to issue sometime in the next few months. The patent also will not
`expire until 2028. We believe our patent protection for the approved dosing regimen,
`coupled with existing patents, will provide a solid intellectual property portfolio to support
`our commercialization of TECFIDERA for many years to come.
`
`Our recent transaction with Elan in which we gained full control of TYSABRI cleared
`regulatory hurdles and closed shortly after the quarter on April 2. This transaction provides
`us with full ownership rights and control of TYSABRI and eliminates the change of control
`provisions that were in the original contract. The operational simplicity should allow us to
`be more nimble and focused, which we believe will not only help TYSABRI but the overall
`business in the longer term. As Paul will outline, it is a deal that will give us an increased
`share of TYSABRI economics going forward. The transaction is immediately and, we
`believe, sustainably accretive as we move into the future. It's another landmark
`accomplishment for Biogen Idec and our shareholders.
`
`We also continued to advance our late-stage programs through the registration process,
`and preparations have begun for 3 more anticipated approvals and launches over the next
`18 months. Our 2 product candidates for hemophilia, long-lasting factor VIII Fc and factor
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`IX Fc, are hopefully our next products to reach the market. These products represent the
`first major treatment advances in hemophilia since recombinant clotting factors were
`introduced 2 decades ago. If approved, we believe these products will provide meaningful
`benefit by addressing a compelling need that these patients have, which is to require
`fewer injections. Hemophilia is roughly a $6 billion market worldwide. There are
`entrenched competitors in this market and patients tend to stick with their current
`therapies, but we believe that, for the first time in a long time, we'll be able to offer patients
`products that actually give them compelling reasons to change. We have a team with
`deep experience and relationships in the hemophilia community, and we believe that we
`have the potential to create a significant hemophilia franchise over time.
`
`Our PEGylated interferon for MS, PLEGRIDY, finished the first year of the ADVANCE
`Phase III trial successfully. We plan to file for regulatory approval by midyear for an
`approval decision next year. We hope to be able to offer patients a therapy that's
`administered once every 2 weeks subcutaneously, with efficacy that appears to be at least
`comparable to other products in the injectable class. We believe that, with this profile,
`patients and physicians will view PLEGRIDY as a preferred frontline option. And behind
`those is a pipeline of compounds on track to reach development milestones in the next
`few years, including the SMNrx compound for SMA, anti-LINGO for remyelination MS,
`anti-TWEAK for treatment of lupus nephritis and STX-100 for the treatment of IPF. We
`believe that each of them has the potential to be a major improvement in therapy for their
`target patient population.
`
`So in summary, this has been a very productive quarter and year-to-date for Biogen Idec.
`
`So I'll now hand the call over to Tony to discuss in more detail the commercial results.
`
`Tony Kingsley
`
`Thank you, George.
`
`We were pleased with the continued execution of our commercial strategy in Q1. We
`remained focused on growing our leadership in the MS market, with a goal of maximizing
`our total patient share across our therapies. The launch in the U.S. of TECFIDERA
`represents, obviously, a very exciting addition to our MS franchise.
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`During the quarter, we experienced continued strength across our products, with AVONEX
`and TYSABRI showing -- both showing solid revenue growth. AVONEX unit and revenue
`growth were strong as this important product remains a leading first-line therapy for MS
`patients. First quarter global AVONEX revenues increased 13% versus prior year, and we
`continue to see competitive share gains for AVONEX within the ABCRE segment across
`multiple markets. The AVONEX performance continues to be driven by strong commercial
`execution; maintaining strong share of voice in this highly competitive and promotionally
`sensitive segment of the market; as well as the benefits of the AVONEX PEN which offers
`improved patient convenience, which we believe is an increasingly important differentiator
`within the injectable segment.
`
`TYSABRI first quarter global revenues increased 9% versus the prior year. In an
`increasingly crowded MS market with more options available to patients, we believe
`TYSABRI's powerful efficacy profile continues to resonate with neurologists. We are
`continuing to educate the market about TYSABRI risk stratification and believe this is
`supporting earlier use of TYSABRI in appropriate patients who need high efficacy. The
`majority of patients starting TYSABRI are JCV antibody negative, and we expect favorable
`longer-term retention rates for these patients.
`
`Moving on to TECFIDERA. We're still in the initial days of the U.S. launch and it's
`premature for us at this point to comment on specific launch metrics. However, we have
`been encouraged by the early signs of physician and patient interest in this product. For
`TECFIDERA, we are focused on 2 immediate objectives: first, to create broad promotion
`and education to physicians; and second, to facilitate access to patients starting on
`TECFIDERA. Our prelaunch planning was comprehensive, and I'm very pleased with the
`speed and quality of execution by the U.S. commercial organization over the last several
`weeks.
`
`Regarding our promotional efforts, while data indicates U.S. physician awareness of
`TECFIDERA is high and perceptions of the product are strong, we believe a successful
`launch will require broad and repeated promotional and educational efforts. And we
`believe we are well prepared to accomplish this in the coming weeks and months. Our
`sales force is fully trained with approved promotional materials and call plans, with broad
`reach to target neurologists. We have also completed training of physician speakers and
`have a robust schedule of educational programs.
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`Concerning our efforts to facilitate access for patients starting on TECFIDERA, we are
`executing to plan. Within days of approval, the product was shipped to our specialty
`pharmacy partners and was ready for patient starts. Our Advantage [ph] Care teams are
`beginning to engage with payers to secure formulary access and reimbursement, a
`process that we expect will take 6 to 12 months, as is typical for products of this type.
`
`Prior to inclusion on payer formularies, we believe that many payers will, again as is
`typical for products of this type, require prior approvals and step edits, to place some
`additional burden on physician offices and patients. These hurdles can cause the start of
`therapy to be delayed in some patients by 1 to 2 months. At steady state, we think it will
`take weeks for patients to get on-drug. We believe our internal patient services group,
`working in conjunction with pharmacy partners, is well resourced to provide assistance to
`physician offices to get patients started on therapy.
`
`For patients, we have comprehensive financial assistance programs in place, including co-
`pay assistance and a free drug program for those who are uninsured.
`
`We continue to prepare for broad commercialization of TECFIDERA outside the U.S. Our
`plan assumes that the initial European launch will occur in Germany after the anticipated
`European Commission approval. Additional European country launches are expected to
`occur throughout 2014, as other EU countries generally require approximately 6 to 12
`months to go through the reimbursement process. In these x U.S. launch countries, we
`already have key marketing and market access resources in place, and we plan to add
`field resources in anticipation of each country's launch. We continue to be very excited
`about the long-term potential for TECFIDERA. We believe this product will be appealing to
`a broad segment of patients and physicians and that, in the future, TECFIDERA will
`become the leading oral in the MS market.
`
`We also recognize that we are competing against an increasing number of therapy options
`and that MS is a conservative market where many patients will persist on their therapies
`for extended periods. Patients typically see a neurologist every 6 to 12 months, with
`treatment decisions primarily driven by patients who relapse, at a rate of 10% to 15% a
`year. Given these factors, success for TECFIDERA will require sustained execution. We
`believe that we are well resourced and well prepared to do just that. I'm very pleased with
`the execution by our commercial team bringing this important innovation to patients who
`need it.
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`With that, I will hand the call over to Doug.
`
`Douglas Edward Williams
`
`Thanks, Tony, and good morning, everyone.
`
`The first quarter has been busy, with progress on the clinical and regulatory front and
`further progress building out our research capabilities.
`
`Starting with important advances on the regulatory front. We received notification of a
`positive opinion from CHMP for approval of TECFIDERA, and both FDA and Health
`Canada approved TECFIDERA with first-line indications for broad spectrum of patients
`with relapsing forms of MS. As expected, the U.S. TECFIDERA label reflected the strong
`efficacy, favorable safety profile and limited monitoring requirements for a broad
`population of patients with relapsing forms of MS. Beyond the initial CBC, which should be
`taken within 6 months prior to starting therapy, and blood tests annually or as clinically
`indicated, there's no additional required monitoring for patients.
`
`Our warnings and precautions section have 2 items of note: lymphopenia, which can be
`monitored through a simple blood test, this testing should fit into the typical cycle of MS
`patient management; and flushing, which is usually mild to moderate and, we believe,
`usually improves or resolves over time. Taking it with food may help mitigate flushing as
`well.
`
`Switching gears to our hemophilia franchise. The BLA submission for our long-lasting
`factor IX has been accepted by the FDA with a standard review timeline. We also
`submitted our regulatory package for our long-lasting factor VIII to the FDA and for factor
`IX to Health Canada. We're working on our factor IX submission to the Therapeutic Goods
`Administration of Australia and factor VIII to Health Canada.
`
`During the quarter, important data on our diverse neurological portfolio were presented at
`the American Academy of Neurology Annual Meeting with 50 company-sponsored
`platform and poster presentations. We also presented for the first time the detailed results
`of our pivotal trials for long-lasting factors VIII and IX at the European Association for
`Haemophilia and Allied Disorders conference, also referred to as EAHAD.
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`One important presentation I want to highlight from AAN was data from the pivotal Phase
`III study of PLEGRIDY or peginterferon beta-1a. PLEGRIDY met all primary and
`secondary endpoints after the 1-year cutoff of the 2-year study. PLEGRIDY significantly
`reduced MS disease activity, including relapses, disability progression and brain lesions
`compared to placebo at 1 year. We believe that the safety and tolerability will be viewed
`favorably. The overall incidence of adverse events were similar among the PLEGRIDY
`and placebo groups, with the most commonly reported AEs being redness at the injection
`site and influenza-like symptoms. We plan to file for regulatory approval with the FDA and
`European Commission by midyear for an approval decision next year.
`
`At the EAHAD meeting, we reviewed the pivotal study data from our factor VIII and IX
`programs, showing that these clotting factors had extended half lives. Neither molecule
`showed any evidence of inhibitor form development. The data from both of our studies
`suggest the potential to transform the treatment of both hemophilia A and B by enabling
`patients to maintain protection from bleeding episodes with the benefits from less frequent
`injections.
`
`Turning now to our early-stage pipeline. Data with our anti-beta-amyloid antibody,
`BIIB037, from our Phase I single ascending dose study was presented at the 11th annual
`conference on Alzheimer's and Parkinson's disease and suggests that we could safely
`administer intravenous doses as high as 30 mgs per kg without evidence of vasogenic
`edema, a dose-limiting toxicity observed with other anti-beta-amyloid antibodies in
`development. The preclinical data comparing the binding and biological properties of
`BIIB037 with other beta-amyloid antibodies show that our antibody may have a unique
`phenotype, recognizing primarily the insoluble fibrillar form of beta-amyloid with little
`binding to vascular-associated forms of beta-amyloid. In transgenic animal models,
`BIIB037 showed potent and dose-dependent removal of plaques. We're currently
`conducting a multiple ascending dose study in patients with prodromal and mild
`Alzheimer's disease to assess the degree of plaque removal by imaging.
`
`I'm also pleased to report that we've made a key hire in our efforts to reinvigorate our
`discovery in cell biology programs. Dr. Spyros Artavanis-Tsakonas, who's been taking a
`sabbatical from the Department of Cell Biology at Harvard and acting as our CSO, will be
`joining us permanently. Spyros's scientific reputation, his role in the start-up of several
`biotech companies, as well as his deep network of academic colleagues will be an
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`important addition to our efforts to create a world-class discovery capability. This is a great
`addition to an already solid R&D team. Spyros will be working closely with Al Sandrock
`and the rest of the R&D team to advance our pipeline.
`
`As we move forward, I look forward to providing you key top line data readouts from our
`pivotal and early-stage program trials.
`
`With that, I'll now pass the call to Paul Clancy, our Chief Financial Officer.
`
`Paul J. Clancy
`
`Thanks, Doug.
`
`Our GAAP diluted earnings per share were $1.79 in the first quarter. The differences
`between our GAAP and non-GAAP results are outlined in the earnings presentation. They
`include $49 million related to the amortization of acquired intangibles, $2 million in fair
`value adjustments for contingent consideration and $4 million related to stock
`compensation expense. This was partially offset by the tax impact on these items. Our
`non-GAAP diluted earnings per share in the first quarter were $1.97.
`
`Included in these results was the benefit of an unusually low effective tax rate this quarter.
`This was driven by a few discrete items which added approximately $0.17 to our EPS. I'll
`talk in more detail about this shortly.
`
`Let me now walk down the P&L. Total revenue for the first quarter grew 10% to $1.4
`billion.
`
`Q1 AVONEX worldwide revenue was strong, growing 13% to $746 million. Q1 global unit
`AVONEX volume increased 4% versus prior year. In the U.S., AVONEX revenue grew
`23% in Q1 to $491 million, U.S. unit volume increasing 8% versus prior year. As we
`shared last year, units in the first quarter of 2012 were unfavorably impacted by channel
`dynamics. This allowed for a favorable comparison this year. U.S. inventory for AVONEX
`in the U.S. ended at just over 2 weeks this quarter, a modest build.
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`Internationally, Q1 AVONEX revenue was $255 million, a decrease of 2% compared to the
`first quarter of 2012. International AVONEX revenue was unfavorably impacted by the
`timing of shipments to Brazil, a tender market where we recorded no sales this quarter.
`Foreign exchange and hedging impact also weakened AVONEX revenue by
`approximately $5 million versus 2012.
`
`TYSABRI worldwide in-market sales were $456 million in the first quarter, up 15%. We
`recorded TYSABRI product revenue of $312 million in Q1. In the U.S., first quarter
`TYSABRI product revenue was $113 million. The first quarter benefited by approximately
`$11 million due to an increase in inventory levels at our distributor related to the asset
`purchase.
`
`Q1 international TYSABRI product revenue was $199 million. TYSABRI product revenue
`was negatively impacted by approximately $14 million of deferred revenue in our Italian
`affiliate. Similar to AVONEX, TYSABRI did not have tender sales in Brazil, impacting
`revenue by approximately $4 million this quarter. The impact of foreign exchange and
`hedging for Q1 softened revenue by approximately $2 million for TYSABRI versus the
`prior year.
`
`FAMPYRA revenue was $23 million. And in this past quarter, the final price was
`established in Germany, and we recorded a favorable adjustment of approximately $8
`million.
`
`U.S. RITUXAN sales were $865 million in the first quarter, an increase of 9%. RITUXAN
`sales benefited from a Q1 inventory buildup, in addition to continued uptake in the first-line
`maintenance lymphoma setting.
`
`In the quarter, Genentech received an arbitration ruling in its dispute with Hoechst. This
`resulted in a reduction of approximately $42 million, of which $4 million impacted our U.S.
`profit share and $38 million impacted rest-of-world royalties. As a result, our U.S. profit
`share and expense reimbursement was $282 million for the first quarter and royalties and
`profit-sharing sales of RITUXIMAB outside the U.S. were a loss of $17 million. The result
`was $265 million of revenue from unconsolidated joint business in the first quarter.
`
`Royalties were $33 million for the first quarter. And we also recorded $22 million of
`corporate partner revenue, including $13 million from our ZEVALIN supply agreement.
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`Now turning to the expense lines in the non-GAAP P&L. Q1 cost of goods sold were $134
`million or 9% of revenues. Q1 R&D expense was $283 million or 20% of revenue. The
`lower-than-typical run rate was primarily driven by the discontinuation of the
`dexpramipexole program and no business development activity during the quarter.
`
`Q1 SG&A expense was $351 million or 25% of revenues, an increase of 17% over last
`year. This was driven by costs associated with promotional planning and sales force
`development for TECFIDERA.
`
`Continuing down the P&L. Our collaboration profit sharing line totaled $85 million expense
`for the quarter. Other income and expense was a loss of $14 million in Q1.
`
`Our Q1 non-GAAP tax rate was 14%. This unusually low tax rate was driven by 3 factors.
`First, we received updated technical guidance from the IRS concerning our U.S. federal
`manufacturing deduction. This was related to our unconsolidated joint business for the
`years 2005 through 2012. Based on this guidance, we reevaluated our tax position and
`recorded a net benefit of $33 million related to these prior years.
`
`Second, we experienced favorability due to the 2012 reinstatement of the federal R&D tax
`credit. And finally, we benefited from participating in the Massachusetts 2012 Life
`Sciences Tax Incentive Program. These discrete items contributed approximately $0.17 to
`our non-GAAP diluted EPS.
`
`In the first quarter, our weighted average diluted shares were 238 million. We ended the
`quarter with $3.6 billion in cash and marketable securities, of which we deployed $3.25
`billion to fund our asset purchase of Elan's interest in TYSABRI early in the second
`quarter. This brings us to our non-GAAP diluted earnings per share, which were $1.97 in
`the first quarter.
`
`Now let me turn to our full year 2013 guidance. We're updating our guidance to reflect the
`completion of the TYSABRI asset purchase, which closed on April 2, and updates to our
`core business. I'll walk you through the various components and, where applicable, break
`out the impact from changes to our core business versus changes to the TYSABRI
`economics.
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`We expect total revenue growth of approximately 16% to 18% versus prior guidance of
`10%. Our revenue assumptions on our core business remain essentially unchanged.
`Included in this guidance is an additional $425 million to $475 million from the TYSABRI
`asset purchase.
`
`Moving to the expense lines on the P&L. We anticipate cost of goods sold to be between
`13% and 15% of sales. This increase relates to the TYSABRI contingent payments owed
`to Elan, which will be recorded in cost of goods sold. We'll also now book 100% of the
`third-party TYSABRI royalties through COGS. Also note we'll no longer be using the
`collaboration profit sharing line item on the P&L.
`
`R&D expense is expected to be between 22% and 23% of sales. Our balance-of-year
`R&D forecast now includes up to $75 million earmarked for potential new early-stage
`business development opportunities. We continue to be focused on building our pipeline,
`with an emphasis of adding high-quality Phase I and Phase II assets.
`
`SG&A is expected to be approximately 24% to 26% of total revenue. We continue to see
`2013 as an investment year as we build out the commercial efforts for TECFIDERA,
`including countries outside the U.S., and prelaunch efforts for hemophilia in the U.S. We
`continue to expect SG&A leverage post 2013.
`
`Our effective tax rate in 2013 is expected to be between 22% and 23% of pretax income.
`For the balance of year, our effective tax rate is expected to be between 24% and 25%.
`
`As a result, we anticipate non-GAAP earnings per share results between $7.80 and $7.90
`and GAAP EPS to be between $6.69 and $6.79. We anticipate ending 2013 with a cash
`balance greater than $1 billion, of which the majority will be located inside the U.S.
`
`So the primary updates to our 2013 guidance are driven by 3 factors: the asset purchase
`of TYSABRI, the discrete tax benefit and solid performance of our core business
`experienced in the first quarter and the $75 million earmarked for potential new business
`development activity, as the strong results this quarter has allowed for reinvestment in the
`business. We're excited about the remainder of 2013 in setting the foundation for what we
`hope to be strong earnings growth over the next number of years.
`
`I'll turn the call over to George for his closing comments.
`
`George A. Scangos
`
`https://seekingalpha.com/article/1371061-biogen-idec-management-discusses-q1-2013-results-earnings-call-transcript?part=single
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`MYLAN PHARMS. INC. EXHIBIT 1086 PAGE 13
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`Page 14 of 27
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`Okay. Thanks, Paul.
`
`So in summary, our core business is doing remarkably well. The TECFIDERA launch is
`well underway in the U.S. And now with 3 approved MS products in the U.S.,
`TECFIDERA, TYSABRI and AVONEX, we believe we have the portfolio that makes us the
`global leader in the treatment of MS. What's important to us is to drive leadership across
`the entire franchise. We believe that, with the leading injectable, the leading high efficacy
`therapy and potentially the leading oral drug, we're well positioned to do just that. So I
`believe that, with the accomplishments that we've made since the beginning of the year,
`we're on a very promising trajectory for the remainder of this year and for years to come.
`
`We have 3 more potential new products coming forward in the next 18 months:
`PLEGRIDY and our long-lasting factors VIII and IX. We're focused and working hard to
`ensure that we complete the registration processes in a timely fashion and successfully
`launch each of these late-stage products.
`
`We're making progress with our mid-stage pipeline as well and also the important work of
`keeping the sustainability of the pipeline going. We expect data readouts for daclizumab in
`2014, TYSABRI and SPMS in 2015 and potentially SMNrx in 2016. During that time
`frame, we expect to have meaningful data readouts from our Phase