`
`Biogen Reports Quarterly Reve...
`
`174.47.33.18
`
`Biogen Reports Quarterly Revenues of $3.1 Billion
`
`Total revenues grew 11% or 15% excluding hemophilia revenues*
`GAAP diluted EPS increased 60%; Non-GAAP EPS increased 16%
`Company adds new Phase 2 program in neuropsychiatry
`Company invests in industry leading central nervous system antisense oligonucleotide platform with Ionis
`Pharmaceuticals
`
`April 24, 2018 06:59 AM Eastern Daylight Time
`
`CAMBRIDGE, Mass.--(BUSINESS WIRE)--Biogen Inc. (Nasdaq: BIIB) today reported first quarter 2018 financial results, including:
`
`• Total revenues of $3.1 billion, an 11% increase versus the prior year or a 15% increase excluding hemophilia
`revenues .
`*
`◦ Multiple sclerosis (MS) revenues were $2.1 billion, including approximately $77 million in royalties on the sales
`of OCREVUS .
`®
`◦ Revenue growth was principally driven by SPINRAZA , which contributed $364 million in global revenues,
`®
`biosimilars, which contributed $128 million, and Other Revenues of $164 million.
`• GAAP net income and diluted earnings per share (EPS) attributable to Biogen Inc. of $1.2 billion and $5.54,
`respectively, compared to $748 million and $3.46 in the first quarter of 2017, respectively.
`◦ In the first quarter of last year GAAP net income and diluted EPS were negatively impacted by $243 million
`and $1.14, net of tax, respectively, related to the U.S. Patent and Trademark Office ruling in favor of Biogen in
`the Company's interference proceeding with Forward Pharma A/S.
`• Non-GAAP net income and diluted EPS attributable to Biogen Inc. of $1.3 billion and $6.05, respectively,
`compared to $1.1 billion and $5.20 in the first quarter of 2017, respectively.
`
`* In Q1 2017 Biogen completed the spin-off of its global hemophilia business. The 15% increase in total revenues excludes all hemophilia
`revenues in January 2017. Hemophilia revenues include ELOCTATE and ALPROLIX product revenues as well as royalty and contract
`®
`®
`manufacturing revenue related to Sobi.
`
`(In millions, except per share amounts)
`Total revenues
`*
`
`Q1 '18
`$ 3,131
`
`Q1 '17
`$ 2,811
`
`Q4 '17
`$ 3,307
`
`GAAP net income#
`GAAP diluted EPS
`
`$ 1,173
`$ 5.54
`
`$ 748
`$ 3.46
`
`$ (297 )
`$ (1.40 )
`
`Non-GAAP net income#
`Non-GAAP diluted EPS
`# Net income attributable to Biogen Inc.
`Note: Percent changes represented as favorable/(unfavorable)
`
`$ 1,282
`$ 6.05
`
`$ 1,123
`$ 5.20
`
`$ 1,116
`$ 5.26
`
`Q1 '18 v.
`Q1 '17
`
`Q1 '18 v.
`Q4 '17
`
`11%*
`
`(5%)
`
`57%
`60%
`
`14%
`16%
`
`NMF
`NMF
`
`15%
`15%
`
`https://www.businesswire.com/news/home/20180424005550/en/
`
`Page 1 of 10
`
`Page 1 of 10
`
`Biogen Exhibit 2010
`Mylan v. Biogen
`IPR2018-01403
`
`
`
`11/7/2018
`
`Biogen Reports Quarterly Reve...
`
`• In the fourth quarter of 2017 GAAP net income and EPS were negatively impacted by $1.2 billion and $5.51,
`respectively, due to the transition toll tax and re-measurement of the Company’s net deferred tax assets related to
`the Tax Cuts and Jobs Act of 2017.
`
`A reconciliation of GAAP to Non-GAAP quarterly financial results can be found in Table 3 at the end of this press release.
`
`“We started 2018 well with our first quarter revenues growing 11% versus the prior year, or 15% excluding hemophilia revenues. This is in line with our
`expectations,” said Michel Vounatsos, Biogen’s Chief Executive Officer. “The fundamentals and resilience of our multiple sclerosis business remained
`strong, while we experienced anticipated seasonality at the beginning of the year. I believe there is significant opportunity for the future growth of SPINRAZA
`worldwide as we position Biogen for long-term leadership in spinal muscular atrophy.”
`
`“As pioneers in neuroscience, we continued to advance and expand our portfolio of potential breakthrough treatments for areas of high unmet need. We
`have added a new Phase 2 asset in our emerging growth area of neuropsychiatry, and we meaningfully enhanced our collaboration with Ionis to develop a
`new pipeline of gene-based therapies for neurological diseases.”
`
`Revenue Highlights
`
`(In millions)
`Multiple Sclerosis:
`TECFIDERA
`®
`Total Interferon
`AVONEX
`®
`PLEGRIDY
`®
`TYSABRI
`®
`FAMPYRA
`TM
`ZINBRYTA
`®
`
`Spinal Muscular Atrophy
`SPINRAZA
`
`Hemophilia*:
`ELOCTATE
`ALPROLIX
`
`Other Product Revenues:
`Biosimilars
`FUMADERM
`TM
`
`Q1 '18
`
`Q1 '17
`
`Q4 '17
`
`Q1 '18 v.
`Q1 '17
`
`Q1 '18 v.
`Q4 '17
`
`$ 987
`$ 550
`$ 451
`$ 100
`$ 462
`$ 24
`$
`1
`
`$ 958
`$ 648
`$ 537
`$ 112
`$ 545
`$ 20
`$ 11
`
`$ 1,076
`$ 645
`$ 520
`$ 125
`$ 463
`$ 24
`$ 12
`
`3%
`(15%)
`(16%)
`(11%)
`(15%)
`19%
`(87%)
`
`(8%)
`(15%)
`(13%)
`(20%)
`(0%)
`1%
`(88%)
`
`$ 364
`
`$ 47
`
`$ 363
`
`NMF
`
`0%
`
`$ —
`$ —
`
`$ 48
`$ 26
`
`$ —
`$ —
`
`NMF
`NMF
`
`NMF
`NMF
`
`$ 128
`$
`7
`
`$ 66
`$ 10
`
`$ 122
`$
`9
`
`93%
`(28%)
`
`5%
`(21%)
`
`Total Product Revenues:
`
`$2,523
`
`$2,380
`
`$2,712
`
`6%
`
`(7%)
`
`OCREVUS Royalties
`RITUXAN /GAZYVA Revenues
`®
`®
`Other Revenues
`
`$ 77
`$ 366
`$ 164
`
`$ —
`$ 341
`$ 90
`
`$ 77
`$ 338
`$ 180
`
`NMF
`7%
`83%
`
`(0%)
`8%
`(8%)
`
`Total Revenues
`*
`
`$3,131
`
`$2,811
`
`$3,307
`
`11%*
`
`(5%)
`
`(4%)
`$2,296
`$2,183
`$2,101
`MS Product Revenues + OCREVUS Royalties
`Note: Numbers may not foot due to rounding; percent changes represented as favorable/(unfavorable)
`
`(8%)
`
`• U.S. MS revenues in the first quarter of 2018 were negatively impacted by approximately $180 million due to the
`difference between the channel inventory level changes during the first quarter of 2018 and the fourth quarter of
`2017 for TECFIDERA, AVONEX and PLEGRIDY.
`
`https://www.businesswire.com/news/home/20180424005550/en/
`
`Page 2 of 10
`
`Page 2 of 10
`
`
`
`11/7/2018
`
`Biogen Reports Quarterly Reve...
`
`• In the first quarter of 2017 TYSABRI revenues outside the U.S. benefitted by approximately $45 million due to
`reaching an agreement with the Price and Reimbursement Committee of the Italian National Medicines Agency
`(AIFA) related to TYSABRI sales in prior periods.
`• In the first quarter of 2018 SPINRAZA revenues comprised $188 million in sales in the U.S. and $176 million in
`sales outside the U.S. The number of patients receiving SPINRAZA grew 16% in the U.S. and 56% outside the
`U.S. versus the fourth quarter of 2017. Outside the U.S., SPINRAZA revenues were primarily from Germany,
`Japan, Italy and France.
`• Total revenues benefitted by approximately $54 million versus the prior year due to changes in foreign exchange
`rates, offset by hedging losses.
`
`Expense Highlights
`
`(In millions)
`GAAP cost of sales
`Non-GAAP cost of sales
`
`Q1 '18 Q1 '17 Q4 '17
`$ 446
`$ 385
`$ 509
`$ 446
`$ 385
`$ 509
`
`GAAP R&D
`Non-GAAP R&D
`
`$ 497
`$ 497
`
`$ 423
`$ 421
`
`$ 588
`$ 588
`
`GAAP SG&A
`Non-GAAP SG&A
`
`$ 501
`$ 497
`
`$ 499
`$ 482
`
`$ 572
`$ 554
`
`Q1 '18 v.
`Q1 '17
`
`Q1 '18 v.
`Q4 '17
`
`(16%)
`(16%)
`
`(17%)
`(18%)
`
`(1%)
`(3%)
`
`12%
`12%
`
`15%
`15%
`
`12%
`10%
`
`Other Financial Highlights
`
`• For the first quarter of 2018 the Company’s effective GAAP tax rate was 22%, and the Company’s effective non-
`GAAP tax rate was 21%.
`• In the first quarter of 2018 Biogen repurchased approximately 0.9 million shares of the Company’s common stock
`for a total value of $250 million.
`• As of March 31, 2018, Biogen had cash, cash equivalents and marketable securities totaling approximately $7.1
`billion, and approximately $5.9 billion in notes payable. During the first quarter of 2018 Biogen repatriated $3.5
`billion of cash, resulting in 85% of cash, cash equivalents and marketable securities being held in the U.S. at the
`end of the quarter.
`• For the first quarter of 2018 the Company’s weighted average diluted shares were 212 million.
`
`Business Development Updates
`
`• In April 2018 Biogen and Ionis Pharmaceuticals Inc. (Ionis) announced a new ten-year exclusive collaboration
`agreement that leverages Biogen’s leadership in neuroscience research and drug development with Ionis’
`leadership in antisense oligonucleotide (ASO) drug discovery to develop novel gene-based drug candidates for a
`broad range of neurological diseases. Under the terms of the collaboration, Biogen will make an upfront payment
`of $375 million and purchase $500 million of Ionis equity at a 25% cash premium, for a total expected payment of
`$1 billion. Biogen will have the option to license therapies arising out of this collaboration and will be responsible
`for their development and commercialization. Biogen may pay development milestones to Ionis of up to $125
`million or $270 million, depending on the indication, and royalties on net sales. The transaction is subject to
`customary closing conditions, including the expiration of the applicable waiting period under the Hart Scott Rodino
`Antitrust Improvements Act of 1976 in the United States and is expected to close in the second quarter of 2018.
`• In March 2018 Biogen announced an agreement to acquire from Pfizer Inc. BIIB104 (formerly known as PF-
`04958242), and the transaction closed today. BIIB104 is a first-in-class, Phase 2b ready AMPA receptor
`potentiator for cognitive impairment associated with schizophrenia (CIAS), representing the Company’s first
`program in neuropsychiatry. AMPA receptors mediate fast excitatory synaptic transmission in the central nervous
`
`https://www.businesswire.com/news/home/20180424005550/en/
`
`Page 3 of 10
`
`Page 3 of 10
`
`
`
`11/7/2018
`
`Biogen Reports Quarterly Reve...
`
`cognitive domains in Phase 1b clinical studies. The purchase included an upfront payment of $75 million with up
`to $515 million in additional development and commercialization milestone payments, as well as tiered royalties in
`the low to mid-teen percentages.
`
`Recent Events
`
`• This week, Biogen is presenting data from its portfolio of marketed treatments and clinical development programs
`for neurodegenerative diseases at the 70 annual meeting of the American Academy of Neurology (AAN) in Los
`th
`Angeles, California. Platform and poster presentations are highlighting the benefits SPINRAZA provides for
`individuals with spinal muscular atrophy (SMA) across the age and disease spectrum, the Company’s MS
`therapies and non-therapeutic research collaborations designed to elevate the care of MS and the Company’s
`investigational therapies for Alzheimer’s disease, Parkinson’s disease and progressive supranuclear palsy.
`• In April 2018 Biogen’s collaboration partner Applied Genetic Technologies Corporation announced that it has
`dosed the first patient in the Phase 1/2 clinical trial evaluating the safety and efficacy of an investigational AAV-
`based gene therapy for the treatment of x-linked retinitis pigmentosa.
`• In April 2018 Biogen and Samsung Bioepis announced an agreement with AbbVie Inc. for the commercialization
`of IMRALDI
`, a biosimilar referencing HUMIRA (adalimumab). Under terms of the agreement, AbbVie will grant
`TM
`®
`patent licenses for the use and sale of IMRALDI in Europe, on a country-by-country basis. The companies have
`agreed to dismiss all pending patent litigation. Biogen expects to launch IMRALDI in Europe in October 2018.
`• In March 2018 Biogen initiated a Phase 1 study of BIIB095, a Nav 1.7 inhibitor for neuropathic pain.
`• In March 2018 Biogen presented data from its portfolio of investigational therapies for people with
`neurodegenerative diseases at the Advances in Alzheimer’s and Parkinson’s Therapies (AAT-AD/PD) Focus
`Meeting in Torino, Italy. Data presented included an analysis from the Phase 1b PRIME study of aducanumab for
`early Alzheimer’s disease demonstrating a 69% reduction from baseline in amyloid plaque as observed on the
`Centiloid Conversion scale for the 10 mg/kg treatment group at 54 weeks (P<0.001 versus placebo).
`• In March 2018 Biogen presented new data for SPINRAZA for the treatment of SMA at the Muscular Dystrophy
`Association (MDA) Clinical Conference in Arlington, Virginia. Data included new interim Phase 2 results from
`NURTURE, the ongoing open-label, single-arm study evaluating the efficacy and safety of SPINRAZA among pre-
`symptomatic infants with SMA. In NURTURE, all infants treated with SPINRAZA were alive, did not require
`permanent ventilation and showed improvement in motor function and motor milestone achievements as of July 5,
`2017, compared to the disease’s natural history. Biogen also presented a case series demonstrating SPINRAZA’s
`effectiveness among teens and young adults.
`• In March 2018 Biogen and AbbVie announced the voluntary worldwide withdrawal of ZINBRYTA for relapsing MS.
`The companies believe that characterizing the complex and evolving benefit/risk profile of ZINBRYTA will not be
`possible going forward given the limited number of patients being treated.
`• In February 2018 the end of study results from CHERISH, the Phase 3 study evaluating SPINRAZA for the
`treatment of individuals with later-onset SMA, were published in The New England Journal of Medicine. Results
`from CHERISH demonstrated meaningful motor function and upper limb improvements in individuals with later-
`onset SMA rarely seen in the natural course of the disease, which is typically a continued decline in motor function
`over time.
`• In February 2018 Biogen announced that in the Phase 2b dose-ranging ACTION 2 study in individuals with acute
`ischemic stroke (AIS), natalizumab did not demonstrate improvement in clinical outcomes compared to placebo.
`Both doses of natalizumab were generally well-tolerated and no new or important safety signals were observed.
`The results of the Phase 2b ACTION 2 study do not impact the benefit-risk profile of natalizumab in approved
`indications, including MS. Further development of natalizumab in AIS will not be pursued.
`
`Conference Call and Webcast
`The Company’s earnings conference call for the first quarter will be broadcast via the internet at 8:30 a.m. ET on April 24, 2018, and will be accessible
`through the Investors section of Biogen’s website, www.biogen.com. Supplemental information in the form of a slide presentation is also accessible at the
`same location on the internet and will be subsequently available on the website for at least one month.
`
`https://www.businesswire.com/news/home/20180424005550/en/
`
`Page 4 of 10
`
`Page 4 of 10
`
`
`
`11/7/2018
`
`Biogen Reports Quarterly Reve...
`
`Note about Future Earnings Releases and Calls
`Starting with the second quarter 2018 earnings release, Biogen intends to cease publishing press releases relating to future earnings calls, earnings
`releases and investor events via newswire services. The Company will post these materials on the Investors section of Biogen’s website, www.biogen.com,
`and issue a statement on Twitter (@biogen) when they become available.
`
`About Biogen
`At Biogen, our mission is clear: we are pioneers in neuroscience. Biogen discovers, develops and delivers worldwide innovative therapies for people living
`with serious neurological and neurodegenerative diseases. One of the world’s first global biotechnology companies, Biogen was founded in 1978 by Charles
`Weissmann, Heinz Schaller, Kenneth Murray and Nobel Prize winners Walter Gilbert and Phillip Sharp, and today has the leading portfolio of medicines to
`treat multiple sclerosis; has introduced the first and only approved treatment for spinal muscular atrophy; and is focused on advancing neuroscience
`research programs in Alzheimer’s disease and dementia, MS and neuroimmunology, movement disorders, neuromuscular disorders, pain, ophthalmology,
`neuropsychiatry and acute neurology. Biogen also manufactures and commercializes biosimilars of advanced biologics.
`
`We routinely post information that may be important to investors on our website at www.biogen.com. Follow us on social media - Twitter, LinkedIn,
`Facebook, YouTube.
`
`Safe Harbor
`This press release contains forward-looking statements, including statements relating to: our strategy and plans; potential of our commercial business and
`pipeline programs; capital allocation and investment strategy; clinical trials and data readouts and presentations; regulatory filings and the timing thereof;
`anticipated benefits and potential of investments, collaborations and business development activities; and the anticipated timing to complete certain
`transactions. These forward-looking statements may be accompanied by such words as “aim,” “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,”
`“intend,” “may,” “plan,” “potential,” “possible,” “will” and other words and terms of similar meaning. Drug development and commercialization involve a high
`degree of risk, and only a small number of research and development programs result in commercialization of a product. Results in early stage clinical trials
`may not be indicative of full results or results from later stage or larger scale clinical trials and do not ensure regulatory approval. You should not place undue
`reliance on these statements or the scientific data presented.
`
`These statements involve risks and uncertainties that could cause actual results to differ materially from those reflected in such statements, including: our
`dependence on sales from our principal products; failure to compete effectively due to significant product competition in the markets for our products;
`difficulties in obtaining and maintaining adequate coverage, pricing and reimbursement for our products; the occurrence of adverse safety events, restrictions
`on use with our products or product liability claims; failure to protect and enforce our data, intellectual property and other proprietary rights and the risks and
`uncertainties relating to intellectual property claims and challenges; uncertainty of long-term success in developing, licensing or acquiring other product
`candidates or additional indications for existing products; the risk that positive results in a clinical trial may not be replicated in subsequent or confirmatory
`trials or success in early stage clinical trials may not be predictive of results in later stage or large scale clinical trials or trials in other potential indications;
`risks associated with clinical trials, including our ability to adequately manage clinical activities, unexpected concerns that may arise from additional data or
`analysis obtained during clinical trials, regulatory authorities may require additional information or further studies or may fail to approve or may delay
`approval of our drug candidates; risks associated with current and potential future healthcare reforms; problems with our manufacturing processes; risks
`relating to technology failures or breaches; our dependence on collaborators and other third parties for the development, regulatory approval and
`commercialization of products and other aspects of our business, which are outside of our control; failure to successfully execute on our growth initiatives;
`risks relating to management and key personnel changes, including attracting and retaining key personnel; risks relating to investment in and expansion of
`manufacturing capacity for future clinical and commercial requirements; failure to comply with legal and regulatory requirements; fluctuations in our effective
`tax rate; the risks of doing business internationally, including currency exchange rate fluctuations; risks related to commercialization of biosimilars; risks
`related to investment in properties; the market, interest and credit risks associated with our portfolio of marketable securities; risks relating to stock
`repurchase programs; risks relating to access to capital and credit markets; risks related to indebtedness; environmental risks; risks relating to the sale and
`distribution by third parties of counterfeit versions of our products; risks relating to the use of social media for our business; change in control provisions in
`certain of our collaboration agreements; risks relating to the spin-off of our hemophilia business, including risks of operational difficulties and exposure to
`claims and liabilities; and the other risks and uncertainties that are described in the Risk Factors section of our most recent annual or quarterly report and in
`other reports we have filed with the Securities and Exchange Commission.
`
`These statements are based on our current beliefs and expectations and speak only as of the date of this press release. We do not undertake any obligation
`to publicly update any forward-looking statements.
`
`https://www.businesswire.com/news/home/20180424005550/en/
`
`Page 5 of 10
`
`Page 5 of 10
`
`
`
`11/7/2018
`
`Biogen Reports Quarterly Reve...
`
`TABLE 1
`BIOGEN INC. AND SUBSIDIARIES
`CONDENSED CONSOLIDATED STATEMENT OF INCOME
`(unaudited, in millions, except per share amounts)
`
`Revenues:
`Product, net
`Revenues from anti-CD20 therapeutic programs
`Other
`Total revenues
`Cost and expenses:
`Cost of sales, excluding amortization of acquired intangible assets
`Research and development
`Selling, general and administrative
`Amortization of acquired intangible assets
`Collaboration profit (loss) sharing
`Acquired in-process research and development
`Loss (gain) on fair value remeasurement of contingent consideration
`Restructuring charges
`Total cost and expenses
`Income from operations
`Other income (expense), net
`Income before income tax expense and equity in loss of investee, net of tax
`Income tax expense
`Equity in loss of investee, net of tax
`Net income
`Net income (loss) attributable to noncontrolling interests, net of tax
`Net income attributable to Biogen Inc.
`
`Net income per share:
`Basic earnings per share attributable to Biogen Inc.
`Diluted earnings per share attributable to Biogen Inc.
`
`Weighted-average shares used in calculating:
`Basic earnings per share attributable to Biogen Inc.
`Diluted earnings per share attributable to Biogen Inc.
`
`For the Three Months
`Ended March 31,
`2018
`2017
`
`$ 2,523.5
`443.2
`164.4
`3,131.1
`
`$ 2,380.1
`340.6
`90.0
`2,810.7
`
`446.0
`496.7
`501.3
`103.9
`42.5
`10.0
`(5.6 )
`1.6
`1,596.4
`1,534.7
`(41.0 )
`1,493.7
`322.5
`—
`1,171.2
`(1.7 )
`$ 1,172.9
`
`384.6
`423.4
`498.7
`448.5
`20.8
`—
`10.0
`—
`1,786.0
`1,024.7
`(38.0 )
`986.7
`239.2
`—
`747.5
`(0.1 )
`$ 747.6
`
`$ 5.55
`$ 5.54
`
`$ 3.47
`$ 3.46
`
`211.4
`211.7
`
`215.6
`215.9
`
`https://www.businesswire.com/news/home/20180424005550/en/
`
`Page 6 of 10
`
`Page 6 of 10
`
`
`
`11/7/2018
`
`Biogen Reports Quarterly Reve...
`
`TABLE 2
`BIOGEN INC. AND SUBSIDIARIES
`CONDENSED CONSOLIDATED BALANCE SHEETS
`(unaudited, in millions)
`
`ASSETS
`Cash, cash equivalents and marketable securities
`Accounts receivable, net
`Inventory
`Other current assets
`Total current assets
`Marketable securities
`Property, plant and equipment, net
`Intangible assets, net
`Goodwill
`Investments and other assets
`TOTAL ASSETS
`
`LIABILITIES AND EQUITY
`Current liabilities
`Notes payable
`Other long-term liabilities
`Equity
`TOTAL LIABILITIES AND EQUITY
`
`As of March 31,
`2018
`
`As of December 31,
`2017
`
`$
`
`$
`
`$
`
`$
`
`5,916.0
`1,939.2
`890.8
`1,449.4
`10,195.4
`1,200.2
`3,334.7
`3,794.5
`4,907.8
`2,657.5
`26,090.1
`
`3,152.1
`5,929.4
`2,971.1
`14,037.5
`26,090.1
`
`$
`
`$
`
`$
`
`$
`
`3,689.0
`1,787.0
`902.7
`1,494.6
`7,873.3
`3,057.3
`3,182.4
`3,879.6
`4,632.5
`1,027.5
`23,652.6
`
`3,368.2
`5,935.0
`1,751.3
`12,598.1
`23,652.6
`
`TABLE 3
`BIOGEN INC. AND SUBSIDIARIES
`GAAP TO NON-GAAP RECONCILIATION:
`NET INCOME ATTRIBUTABLE TO BIOGEN INC. AND DILUTED EARNINGS PER SHARE
`(unaudited, in millions, except per share amounts)
`
`An itemized reconciliation between diluted earnings per share on a GAAP and Non-GAAP basis is as follows:
`
`For the Three Months Ended
`March 31,
`March 31,
`December 31,
`2018
`2017
`2017
`5.54
`3.46
`(1.40 )
`
`$
`
`$
`
`$
`
`GAAP earnings per share - Diluted
`Adjustments to GAAP net income attributable to Biogen Inc. (as detailed
`below)
`Non-GAAP earnings per share - Diluted
`
`0.51
`6.05
`
`$
`
`1.74
`5.20
`
`$
`
`$
`
`6.66
`5.26
`
`https://www.businesswire.com/news/home/20180424005550/en/
`
`Page 7 of 10
`
`Page 7 of 10
`
`
`
`11/7/2018
`
`Biogen Reports Quarterly Reve...
`
`An itemized reconciliation between net income attributable to Biogen Inc. on a GAAP and Non-GAAP basis is as follows:
`
`A
`
`GAAP net income attributable to Biogen Inc.
`Adjustments:
`Amortization of acquired intangible assets
`Acquired in-process research and development
`Loss (gain) on fair value remeasurement of contingent consideration
`Net distribution to noncontrolling interests
`B
`Hemophilia business separation costs
`Restructuring, business transformation and other cost saving
`initiatives:
`2017 corporate strategy implementation
`Restructuring charges
`C
`Loss (gain) on equity security investments
`Income tax effect related to reconciling items
`Tax reform
`D
`Non-GAAP net income attributable to Biogen Inc.
`
`C
`
`$
`
`$
`
`For the Three Months Ended
`March 31,
`December 31,
`2017
`2017
`747.6
`(297.4 )
`
`March 31,
`2018
`1,172.9
`
`$
`
`$
`
`103.9
`10.0
`(5.6 )
`—
`—
`
`3.8
`1.6
`6.4
`(11.3 )
`—
`1,281.7
`
`448.5
`—
`10.0
`—
`19.2
`
`—
`—
`—
`(102.4 )
`—
`1,122.9
`
`$
`
`$
`
`139.8
`—
`1.5
`109.7
`—
`
`18.5
`0.9
`—
`(30.5 )
`1,173.6
`1,116.1
`
`Amortization of acquired intangible assets includes impairment and amortization charges related to the intangible asset associated with our
`U.S. and rest of world licenses to Forward Pharma A/S' (Forward Pharma) intellectual property, including Forward Pharma's intellectual
`property related to TECFIDERA. In exchange for these licenses, we paid Forward Pharma $1.25 billion in cash.
`We have two intellectual property disputes with Forward Pharma, one in the U.S. and one in the European Union, concerning intellectual
`property related to TECFIDERA. In March 2017 the U.S. intellectual property dispute was decided in our favor. We evaluated the
`recoverability of the U.S. asset acquired from Forward Pharma and recorded an impairment charge in the first quarter of 2017 to adjust the
`carrying value of the acquired U.S. asset to fair value reflecting the impact of the developments in the U.S. legal dispute. In March 2018 the
`European Patent Office issued its decision revoking Forward Pharma’s European Patent No. 2 801 355. Based upon our assessment of
`these rulings, we continue to amortize the remaining net book value of the U.S. and rest of world intangible assets in our condensed
`consolidated statements of income utilizing an economic consumption model.
`Net distribution to noncontrolling interests for the three months ended December 31, 2017, reflects the after-tax $150.0 million upfront
`B
`payment made to Neurimmune SubOne AG (Neurimmune) in exchange for a 15% reduction in royalty rates payable on potential commercial
`sales of aducanumab. This upfront payment is in relation to the amendment of terms of our collaboration agreement with Neurimmune.
`2017 corporate strategy and restructuring charges are related to our efforts to create a leaner and simpler operating model.
`On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the 2017 Tax Act) was signed into law and has resulted in significant changes
`to the U.S. corporate income tax system. The 2017 Tax Act includes a federal statutory rate reduction from 35 percent to 21 percent, the
`elimination or reduction of certain domestic deductions and credits, the transition of U.S. international taxation from a worldwide tax system
`towards a territorial tax system, limitations on the deductibility of interest expense and executive compensation and base-erosion prevention
`measures on future non-U.S. earnings of U.S. entities, which has the effect of subjecting certain of our earnings of foreign subsidiaries to
`U.S. taxation. These changes became effective beginning in 2018.
`The 2017 Tax Act also required a one-time mandatory deemed repatriation tax on accumulated foreign subsidiaries’ previously untaxed
`foreign earnings (the Transition Toll Tax). Changes in tax rates and tax laws are accounted for in the period of enactment. Therefore, during
`the three months ended December 31, 2017, we recorded a charge totaling $1,173.6 million related to our current estimate of the provisions
`of the 2017 Tax Act, including a $989.6 million expense under the Transition Toll Tax. The Transition Toll Tax must be paid over an eight-
`year period, starting in 2018, and will not accrue interest.
`
`C D
`
`A
`
`Use of Non-GAAP Financial Measures
`We supplement our consolidated financial statements presented on a GAAP basis by providing additional measures which may be considered “Non-GAAP”
`financial measures under applicable SEC rules. We believe that the disclosure of these Non-GAAP financial measures provides additional insight into the
`ongoing economics of our business and reflects how we manage our business internally, set operational goals and forms the basis of our management
`
`https://www.businesswire.com/news/home/20180424005550/en/
`
`Page 8 of 10
`
`Page 8 of 10
`
`
`
`11/7/2018
`
`Biogen Reports Quarterly Reve...
`
`Our “Non-GAAP net income attributable to Biogen Inc.” and “Non-GAAP earnings per share - Diluted” financial measures exclude the following items from
`"GAAP net income attributable to Biogen Inc." and "GAAP earnings per share - Diluted":
`
`1. Purchase accounting and merger-related adjustments
`We exclude certain purchase accounting related items associated with the acquisition of businesses, assets and amounts in relation to the consolidation or
`deconsolidation of variable interest entities for which we are the primary beneficiary. These adjustments include, but are not limited to, charges for in-process
`research and development, the amortization of certain acquired intangible assets, and charges or credits from the fair value remeasurement of our
`contingent consideration obligations.
`
`2. Hemophilia business separation costs
`We have excluded costs that are directly associated with the set up and spin-off of our hemophilia business into an independent, publicly-traded company on
`February 1, 2017. These costs represent incremental third party costs attributable solely to hemophilia separation and set up activities.
`
`3. Restructuring, business transformation and other cost saving initiatives
`We exclude costs associated with the company’s execution of certain strategies and initiatives to streamline operations, achieve targeted cost reductions,
`rationalize manufacturing facilities or refocus R&D activities. These costs may include employee separation costs, retention bonuses, facility closing and exit
`costs, asset impairment charges or additional depreciation when the expected useful life of certain assets have been shortened due to changes in
`anticipated usage, and other costs or credits that management believes do not have a direct correlation to our on-going or future business operations.
`
`4. Loss (gain) on equity security investments
`Effective January 2018, we exclude unrealized and realized gains and losses and discounts or premiums on our equity security investments as we do not
`believe that these components of income or expense have a direct correlation to our on-going or future business operations.
`
`5. Other items
`We evaluate other items of income and expense on an individual basis, and consider both the quantitative and qualitative aspects of the item, including (i) its
`size and nature, (ii) whether or not it relates to our ongoing business operations, and (iii) whether or not we expect it to occur as part of our normal business
`on a regular basis. We also include an adjustment to reflect the related tax effect of all reconciling items within our reconciliation of our GAAP to Non-GAAP
`net income attributable to Biogen Inc. and diluted earnings per share.
`
`TABLE 4
`BIOGEN INC. AND SUBSIDIARIES
`PRODUCT REVENUES
`(unaudited, in millions)
`
`March 31, 2018
`Rest of
`World
`
`United
`States
`
`Total
`
`For the Three Months Ended
`March 31, 2017
`Rest of
`World
`
`United
`States
`
`Total
`
`December 31, 2017
`United
`Rest of
`States
`World
`
`Total
`
`Multiple Sclerosis
`(MS):
`TECFIDERA
`Interferon*
`TYSABRI
`FAMPYRA
`ZINBRYTA
`Spinal Muscular
`Atrophy:
`SPINRAZA
`Hemophilia:
`ELOCTATE
`ALPROLIX
`Other Product
`Revenues:
`FUMADERM
`BENEPALI
`FLIXABI
`Total product
`revenues
`
`$ 728.9
`371.4
`249.7
`—
`—
`
`$ 258.0
`178.9
`212.4
`24.4
`1.4
`
`$ 986.9
`550.3
`462.1
`24.4
`1.4
`
`$ 751.1
`464.8
`305.5
`—
`—
`
`$ 207.1
`183.5
`239.5
`20.5
`10.7
`
`$ 958.2
`648.3
`545.0
`20.5
`10.7
`
`$ 831.6
`449.3
`252.1
`—
`—
`
`$ 244.0
`195.6
`210.6
`24.2
`11.7
`
`$ 1,075.6
`644.9
`462.7
`24.2
`11.7
`
`188.0
`
`175.9
`
`363.9
`
`—
`—
`
`—
`—
`—
`
`—
`—
`
`—
`—
`
`7.0
`120.9
`6.6
`
`7.0
`120.9
`6.6
`
`46.4
`
`42.2
`21.0
`
`—
`—
`—
`
`1.0
`
`6.2
`5.0
`
`9.7
`65.3
`0.6
`
`47.4
`
`218.2
`
`144.3
`
`362.5
`
`48.4
`26.0
`
`9.7
`65.3
`0.6
`
`—
`—
`
`—
`—
`—
`
`—
`—
`
`—
`—
`
`8.9
`117.6
`4.3
`
`8.9
`117.6
`4.3
`
`$ 1,538.0
`
`$ 985.5
`
`$ 2,523.5
`
`$ 1,631.0
`
`$ 749.1
`
`$ 2,380.1
`
`$ 1,751.2
`
`$ 961.2
`
`$ 2,712.4
`
`https://www.businesswire.com/news/home/20180424005550/en/
`
`Page 9 of 10
`
`Page 9 of 10
`
`
`
`11/7/2018
`
`Biogen Reports Quarterly Reve...
`
`Contacts
`Biogen Inc.
`Media Contact:
`David Caouett, 781-464-3260
`or
`Investor Contact:
`Matt Calistr