Page 1 of 26
`
`Transcripts | Healthcare
`Biogen (BIIB) George A. Scangos on Q4 2015 Results - Earnings
`Call Transcript
`Jan. 27, 2016 2:53 PM ET
`by: SA Transcripts
`
`Q4: 01-27-16 Earnings Summary
`
`10-K
`
`EPS of $4.5 beats by $0.42 | Revenue of $2.84B (7.52% Y/Y) beats by $123.27M
`
`Biogen, Inc. (NASDAQ:BIIB) Q4 2015 Earnings Call January 27, 2016 8:30 AM ET
`
`Executives
`
`Matthew Calistri - Senior Director of Investor Relations
`
`George A. Scangos - Chief Executive Officer
`
`Alfred W. Sandrock, Jr. - Executive Vice President, Neurology Discovery & Development
`Center, Neurodegeneration Therapeutic Area and Chief Medical Officer
`
`Paul J. Clancy - Chief Financial Officer & Executive Vice President
`
`Analysts
`
`Geoffrey Meacham - Barclays Capital, Inc.
`
`Eric Schmidt - Cowen & Co. LLC
`
`Brian Abrahams - Jefferies LLC
`
`Mark J. Schoenebaum - Evercore ISI
`
`Michael J. Yee - RBC Capital Markets LLC
`
`Matthew K. Harrison - Morgan Stanley & Co. LLC
`
`Christopher Raymond - Raymond James & Associates, Inc.
`
`https://seekingalpha.com/article/3839646-biogen-biib-george-scangos-q4-2015-results-earnings-call-transcript?part=single
`
`MYLAN PHARMS. INC. EXHIBIT 1087 PAGE 1
`
`

`

`Page 2 of 26
`
`Cameron Bradshaw - Goldman Sachs & Co.
`
`Matt M. Roden - UBS Securities LLC
`
`Ying Huang - Bank of America Merrill Lynch
`
`Cory W. Kasimov - JPMorgan Securities LLC
`
`Nick Abbott - Wells Fargo Securities LLC
`
`Operator
`
`Good morning. My name is Dan, and I will be your conference operator today. At this time,
`I would like to welcome everyone to the Biogen fourth quarter and year-end 2015 financial
`results and business update. Thank you. I would now like to turn the call over to Mr. Matt
`Calistri, Senior Director of Investor Relations. You may begin your conference.
`
`Matthew Calistri - Senior Director of Investor Relations
`
`Thank you, and welcome to Biogen's fourth quarter and full-year 2015 earnings
`conference call. Before we begin, I encourage everyone to go to the Investors section of
`Biogen.com to find the press release and related financial tables, including a reconciliation
`of the GAAP to 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 financial results. We believe non-GAAP financial results better
`represent the ongoing economics of our business and reflect 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 and beliefs. These statements are subject to certain
`risks and uncertainties, and our actual results may differ materially. I encourage you to
`consult our SEC filings for additional detail.
`
`On today's call, I'm joined by our Chief Executive Officer, Dr. George Scangos; Dr. Al
`Sandrock, our Chief Medical Officer; and our CFO, Paul Clancy. Now I'll turn the call over
`to George.
`
`George A. Scangos - Chief Executive Officer
`
`https://seekingalpha.com/article/3839646-biogen-biib-george-scangos-q4-2015-results-earnings-call-transcript?part=single
`
`MYLAN PHARMS. INC. EXHIBIT 1087 PAGE 2
`
`

`

`Page 3 of 26
`
`Thanks, Matt, and good morning, everyone, and thanks for joining us today. In 2015
`Biogen generated revenues of $10.8 billion, an 11% increase over 2014, and non-GAAP
`EPS of $17.01, a 23% increase over 2014. Although the revenues were less than we'd
`anticipated at the beginning of last year, I'm pleased that we were able to take appropriate
`action in the second half of the year to maintain healthy earnings growth while we
`continue to advance the potentially transformative therapies in our pipeline.
`
`TECFIDERA's demand has been stable in the U.S., and combined with growth in Europe
`we expect TECFIDERA to continue to drive our global leadership in multiple sclerosis.
`TECFIDERA is now not only the most prescribed oral MS therapy worldwide; it is also the
`most prescribed of all MS therapies in Germany, France, and the U.K. Overall, more than
`170,000 patients have been treated with TECFIDERA. Our hemophilia products,
`ELOCTATE and ALPROLIX, generated over $0.5 billion of revenue in their first full year
`on the market in the U.S. In November, the European Commission approved ELOCTA for
`the treatment of hemophilia A in the EU, which we believe will help to contribute growth in
`hemophilia this year as our collaboration partner Sobi commercializes ELOCTA in
`additional markets.
`
`We also made progress in business development. We acquired Convergence
`Pharmaceuticals and raxatrigine, their lead compound. Raxatrigine is an oral small-
`molecule Nav1.7 blocker with promising Phase 2 data that will move into Phase 3 this
`year. We licensed amiselimod, or MT-1303, from Mitsubishi Tanabe Pharma, a late-stage
`S1P1 inhibitor for ulcerative colitis and Crohn's disease. We entered into a collaboration
`agreement with AGTC to develop gene-based therapies for multiple ophthalmic diseases.
`And this month BENEPALI was approved in the EU. BENEPALI, the first etanercept
`biosimilar approved in the EU, is the first of three potential anti-TNFs to advance under
`our Samsung Bioepis joint venture with Samsung Biologics. Under our agreements with
`Samsung Bioepis, we will manufacture and commercialize BENEPALI in the EU.
`
`Meanwhile, we continued investing in 2015. We purchased land in Solothurn, Switzerland,
`and this Friday, January 29, will break ground on an advanced, next-generation Biologics
`manufacturing facility there. And we purchased Eisai's drug product manufacturing facility
`and supporting infrastructure in Research Triangle Park, North Carolina. We also took
`actions to return capital and change the capital structure of the business. We fully
`implemented our $5 billion share-repurchase program, and a portion of that repurchase
`was funded through the $6 billion debt offering that we completed in September.
`
`https://seekingalpha.com/article/3839646-biogen-biib-george-scangos-q4-2015-results-earnings-call-transcript?part=single
`
`MYLAN PHARMS. INC. EXHIBIT 1087 PAGE 3
`
`

`

`Page 4 of 26
`
`In R&D, we moved forward several exciting mid- and late-stage assets in our pipeline. It
`may seem like a long time ago now, but it was Q1 2015 that we presented the
`aducanumab data showing a statistically significant removal of plaque and slowing of
`cognitive decline in Alzheimer's patients. We presented data suggesting that our anti-
`LINGO antibody is biologically active in remyelination. And the Phase 2 data for
`nusinersen generated by our partner Ionis, looks increasingly encouraging as a potential
`therapy for spinal muscular atrophy. We also initiated Phase 1 trials in ALS and
`Parkinson's disease. Al will discuss the many advances we made in our pipeline in more
`detail, but I think this progress is a testament to our commitment to patients and our world-
`class capabilities across the breadth of R&D.
`
`We also continued to strengthen our early-stage clinical and research capabilities. We
`bolstered research talent in our neuroscience group and established collaborations with
`first-rate academic centers around the world. As a result, I believe we're now in a better
`position than ever to both discover novel therapies and accelerate drug development while
`minimizing risk.
`
`Lastly, summarizing 2015 would not be complete without commenting on the restructuring
`we implemented in October. Although it was a difficult decision, we've already seen
`positive results from the steps that we took. With the majority of the restructuring now
`completed, there's a palpable reinvigorated focus on our key commercial initiatives and
`high-potential pipeline candidates, and our operating expenses are trending at a rate that
`we believe can continue to provide healthy earnings leverage going forward.
`
`So all in all it was a busy and eventful year, and we believe that the progress we made
`and actions we took positioned us well for a potentially transformative 2016 and beyond.
`And with that, I'll pass the call along to Al for an update on R&D.
`
`Alfred W. Sandrock, Jr. - Executive Vice President, Neurology Discovery &
`Development Center, Neurodegeneration Therapeutic Area and Chief Medical
`Officer
`
`Thanks, George. 2015 was a productive year for the R&D organization. We advanced the
`next wave of potential medicines through the pipeline, added important assets through
`business department and acquisitions, and expanded our research leadership by hiring
`world-class scientists. I believe our pipeline and our organization are stronger than they
`have ever been.
`
`https://seekingalpha.com/article/3839646-biogen-biib-george-scangos-q4-2015-results-earnings-call-transcript?part=single
`
`MYLAN PHARMS. INC. EXHIBIT 1087 PAGE 4
`
`

`

`Page 5 of 26
`
`Starting with Alzheimer's disease, last year we presented compelling interim Phase 1b
`data for aducanumab, the first investigational drug for Alzheimer's disease to demonstrate
`both a significantly reduction of amyloid plaque, as well as slowing of cognitive decline. In
`August, we began enrolling patients into two pivotal Phase 3 trials of aducanumab in early
`Alzheimer's disease. We are pleased with the progress of these studies but recognize the
`inherent challenges in recruiting patients with early Alzheimer's disease and the limited
`availability of PET scanners. Fortunately, owing to the strong results from our clinical trials
`to date, there has been substantial interest in the program, which we believe has helped
`with recruitment. That said, we continue to anticipate that the Phase 3 enrollment duration
`will be similar to other large clinical trials in Alzheimer's disease. Looking ahead, in the
`second half of 2016, we expect to share additional safety data from the ongoing titration
`arms of the Phase 1b PRIME study for aducanumab.
`
`Our other two midstage clinical candidates for AD that are partnered with Eisai continue to
`advance. Eisai has indicated that they anticipate releasing interim safety data this year for
`E2609, a small-molecule BACE1 inhibitor, and we're also expecting to see top-line
`efficacy and safety data for BAN2401, a monoclonal antibody targeting beta amyloid.
`
`Moving to anti-LINGO, you may recall that last year we presented Phase 2 data in acute
`optic neuritis. To our knowledge, this was the first clinical trial to show evidence of
`remyelination following an acute inflammatory demyelinating injury in humans, and we
`believe that these results support our ongoing development efforts. Our Phase 2
`SYNERGY study in MS is a 418-patient double-blind multicenter study assessing four
`doses of anti-LINGO versus placebo when added to interferon beta therapy. It utilizes a
`composite endpoint comprising outcome measures of disability, cognition, and physical
`function. We believe that a separation from placebo on any of these measures could be
`clinically meaningful. We're also looking at imaging endpoints that reflect the integrity of
`myelinated nerve fibers. Any differences in treatment effect between pre-existing and
`newly acquired lesions will also be of interest. We believe that the robust design of this
`clinical trial will enable a better understanding of the therapy's potential in MS. And if the
`results are positive, the trial should provide valuable insight into the design of our Phase 3
`program. Results for SYNERGY are anticipated in mid-2016.
`
`Now turning to nusinersen. Our partner Ionis recently completed target enrollment of the
`Phase 3 CHERISH study in children with childhood-onset SMA. And by the first half of this
`year, we hope to complete enrollment in ENDEAR, the Phase 3 study evaluating
`
`https://seekingalpha.com/article/3839646-biogen-biib-george-scangos-q4-2015-results-earnings-call-transcript?part=single
`
`MYLAN PHARMS. INC. EXHIBIT 1087 PAGE 5
`
`

`

`Page 6 of 26
`
`nusinersen in infants with infantile-onset SMA. This progress sets the stage for data from
`both of these trials to be available in the first half of 2017. Whereas the data from the
`early-stage open-label clinical trials are encouraging when compared to data from natural
`history studies, the well-controlled Phase 3 studies are designed to definitively assess the
`safety and efficacy of nusinersen. We are meeting frequently with regulators from Europe,
`Japan, and the United States with the goal of making the drug available to SMA patients
`as rapidly as possible.
`
`Moving on to our hemophilia therapies, last month at the 57th American Society of
`Hematology Annual Meeting, we presented new data demonstrating that ELOCTATE and
`ALPROLIX effectively managed bleeding into joints and maintained low annualized
`bleeding rates in people with severe hemophilia A and B, reaffirming the benefits of these
`two therapies. In addition, teams from the University of Pittsburgh, the Hemophilia Center
`of Western Pennsylvania, and the University of Texas Southwestern Medical Center
`presented data showing that immune tolerance induction using ELOCTATE was
`successful in three children with inhibitors, including a child previously failing recombinant
`factor VIII immune tolerance induction. The time to achieving tolerance in the study was
`four to 12 weeks, which appears to be significantly shorter than with the standard of
`practice, which can take several months to several years.
`
`During the quarter we, in collaboration with Ionis, also announced the initiation of a Phase
`1/2 clinical study of an antisense drug against superoxide dismutase, or SOD1, in patients
`with amyotrophic lateral sclerosis. I am pleased to announce that last week we dosed our
`first patient in the trial. Mutations in the SOD1 gene result in the second most common
`form of familial ALS, affecting approximately 2% of all ALS patients.
`
`We also continued to make excellent progress toward initiating multiple late-stage clinical
`trials in 2016. Next month we anticipate sharing additional Phase 2 study results for
`TYSABRI in acute ischemic stroke at the International Stroke Conference in Los Angeles.
`While a single dose of natalizumab administered up to nine hours after stroke onset did
`not reduce focal infarct volume, treatment was associated with meaningful improvements
`in clinical outcomes over the course of 90 days. The clinical profile and treatment window
`supports further investigation of natalizumab as a potential novel approach for treating
`acute ischemic stroke, and we intend to conduct a Phase 2b trial.
`
`https://seekingalpha.com/article/3839646-biogen-biib-george-scangos-q4-2015-results-earnings-call-transcript?part=single
`
`MYLAN PHARMS. INC. EXHIBIT 1087 PAGE 6
`
`

`

`Page 7 of 26
`
`Amiselimod, or MT-1303, an S1P1 inhibitor for inflammatory bowel disease, is anticipated
`to advance to Phase 3 trials this year. In the second half of the year, we plan to initiate
`Phase 3 studies for both ulcerative colitis and Crohn's disease. We currently have no
`plans for the asset in MS but expect to continue to evaluate other options for the molecule
`in collaboration with our partner Mitsubishi Tanabe. Raxatrigine, a small-molecule inhibitor
`of the Nav1.7 sodium channel, is in development for several pain indications. In the
`second half of the year, we anticipate initiating a Phase 3 trial to confirm the efficacy of
`raxatrigine in patients with trigeminal neuralgia. We also plan to initiate a Phase 2 trial in
`patients with sciatica later this year.
`
`I'll now pass the call over to Paul.
`
`Paul J. Clancy - Chief Financial Officer & Executive Vice President
`
`Thanks, Al. Our GAAP diluted earnings per share were $3.77 in the fourth quarter and
`$15.34 for the full year. Our non-GAAP diluted earnings per share were $4.50 in the fourth
`quarter and $17.01 for the full year. Total revenue for Q4 grew 8% year over year to
`approximately $2.8 billion and grew 11% for the full year to $10.8 billion. Foreign
`exchange, offset by hedging, weakened fourth quarter revenue by approximately $35
`million versus prior year and by approximately $227 million for the full year versus prior
`year.
`
`Global Q4 TECFIDERA revenue was $993 million. We recorded revenues of $785 million
`in the U.S. and $208 million outside the U.S. TECFIDERA U.S. revenue benefited from an
`increase in wholesaler inventory by approximately $30 million versus prior quarter. At this
`point, we believe TECFIDERA's safety perceptions and physician intent to prescribe have
`largely stabilized in the U.S. We're seeing positive leading indicators for the recently
`launched marketing campaign for TECFIDERA, including increased visits to our website
`and higher call volume into our patient services organization. In Europe TECFIDERA
`continued its trend of solid patient growth this quarter, especially in more recently
`launched markets such as the U.K., Italy, and Spain. The European label for TECFIDERA
`was updated in December, and we're actively educating physicians on appropriate patient
`monitoring. For the full year, worldwide TECFIDERA revenues were $3.6 billion,
`consisting of $2.9 billion in the U.S. and $730 million in sales outside the U.S. Foreign
`exchange impact, offset by hedging, weakened full-year TECFIDERA revenue by
`approximately $27 million versus prior year.
`
`https://seekingalpha.com/article/3839646-biogen-biib-george-scangos-q4-2015-results-earnings-call-transcript?part=single
`
`MYLAN PHARMS. INC. EXHIBIT 1087 PAGE 7
`
`

`

`Page 8 of 26
`
`Interferon revenues including both AVONEX and PLEGRIDY were $740 million during the
`fourth quarter, which includes $506 million in the U.S. and $233 million in sales outside
`the U.S. For the full year, worldwide interferon revenues were $3 billion, consisting of $2
`billion in the U.S. and $951 million in sales outside the U.S. Foreign exchange impact,
`offset by hedging, weakened full-year interferon revenues by approximately $88 million
`versus prior year.
`
`TYSABRI continued to add patients this quarter, with worldwide revenues of $481 million.
`These results were comprised of $278 million in the U.S. and $203 million internationally.
`For the full year, worldwide TYSABRI revenues were approximately $1.9 billion. We
`recorded U.S. revenue of $1.1 billion and $783 million internationally. Foreign exchange
`impact, offset by hedging, weakened full-year revenue for TYSABRI by approximately $90
`million versus prior year. Physicians continue to choose TYSABRI for patients requiring
`high efficacy, and nearly 10 years after approval we believe its well-understood safety
`profile positions TYSABRI well.
`
`Turning to hemophilia business, ELOCTATE revenue for the quarter was $101 million and
`$320 million for the full year. ALPROLIX revenue in Q4 was $71 million and $234 million
`for the full year.
`
`Turning to our anti-CD20 unconsolidated joint business, which includes our profit share for
`RITUXAN and GAZYVA in the U.S., as well as our profit sharing royalties on sales of
`rituximab outside the U.S. We recorded $334 million for Q4 and $1.3 billion for the full
`year. While there was a slight inventory drawdown for RITUXAN in the fourth quarter, we
`ended the year with a higher inventory level than we had anticipated. We also benefited
`from a $6 million payment from Roche in exchange for access to data supporting the
`development of ocrelizumab.
`
`Corporate partner revenues were $69 million for the fourth quarter, compared to $40
`million in the prior quarter. The increase was related to contract manufacturing for
`Samsung Bioepis and another strategic partner. For the full year, corporate partner
`revenues were $189 million. During the quarter, we booked a total GAAP charge of
`approximately $93 million related to the restructuring announced in October.
`
`Now turning to the non-GAAP expense lines on the P&L. Q4 cost of goods sold were $332
`million or 12% of revenue. For the full year, COGS were $1.2 billion or 12% of revenue.
`Q4 non-GAAP R&D expense was $542 million or 19% of revenue, which includes a $60
`
`https://seekingalpha.com/article/3839646-biogen-biib-george-scangos-q4-2015-results-earnings-call-transcript?part=single
`
`MYLAN PHARMS. INC. EXHIBIT 1087 PAGE 8
`
`

`

`Page 9 of 26
`
`million payment to Mitsubishi Tanabe. For the full year, non-GAAP R&D expense was $2
`billion or 19% of revenue. Q4 non-GAAP SG&A expense was $583 million or 21% of
`revenue. For the full year, non-GAAP SG&A expense was $2.1 billion or 20% of revenue.
`Other net expense was approximately $82 million in the fourth quarter, which includes $67
`million in interest expense, primarily related to our recent bond offering. Full-year other net
`expense was $124 million, including approximately $96 million in interest expense. Our
`Q4 non-GAAP tax rate was approximately 23% for the fourth quarter, as we benefited
`from the reinstated R&D tax credit. Our full-year tax rate was approximately 24%.
`
`During the year, we repurchased approximately 16.8 million shares of our common stock,
`completing our previously authorized $5 billion share repurchase program. Our weighted
`average diluted share count was approximately 221 million for Q4, 231 million for the full
`year, and we ended the year with approximately 219 million basic shares outstanding.
`This brings us to our non-GAAP diluted earnings per share, which were $4.50 for the
`fourth quarter and $17.01 for the full year, representing a 23% increase for the full year.
`
`We ended the year with approximately $6.2 billion in cash and marketable securities, split
`approximately 40/60 between the U.S. and ex-U.S. So overall, we had a strong quarter
`benefiting from favorable inventory dynamics for TECFIDERA, stronger-than-anticipated
`contract manufacturing in RITUXAN revenue, and the reinstatement of the R&D tax credit.
`
`Let me turn to our full-year 2016 guidance. We expect revenues of approximately $11.1
`billion to $11.3 billion.
`
`Starting with multiple sclerosis. Our plan assumes relatively stable demand for
`TECFIDERA in 2016 in the United States. While we're hopeful our recently launched
`marketing campaign can reaccelerate growth, we remain cautious, as we believe we will
`not ascertain the impact until the second quarter of this year. In Europe, we anticipate
`constant pricing for the rest of the year and continued patient growth, particularly in
`recently launched markets.
`
`For TYSABRI, we believe the therapy will remain on a stable trajectory. We believe the
`number of patients using AVONEX and PLEGRIDY combined will continue to decline as
`patients move toward orals, though we remain well-positioned within this segment of the
`market. Our financial guidance assumes no U.S. price increases for AVONEX,
`PLEGRIDY, and TECFIDERA for the remainder of the year.
`
`https://seekingalpha.com/article/3839646-biogen-biib-george-scangos-q4-2015-results-earnings-call-transcript?part=single
`
`MYLAN PHARMS. INC. EXHIBIT 1087 PAGE 9
`
`

`

`Page 10 of 26
`
`With respect to foreign exchange, our plan is based on the current spot rates. Of note, we
`had an approximately $170 million in hedge gains in 2015. Given our hedges are usually
`placed 12 months forward, we expect limited hedge gains in 2016, so the year-over-year
`comparison is less favorable.
`
`Moving to our hemophilia therapies. We anticipate continued growth with ELOCTATE, as
`we believe there remains a significant portion of the patient population that can benefit
`from long-acting therapies. We're assuming moderating patient adds for ALPROLIX, given
`the rapid uptake and penetration so far.
`
`In 2016 we're assuming our profit share for RITUXAN and GAZYVA will decrease to 39%
`from 40% upon FDA approval of GAZYVA in RITUXAN-refectory indolent non-Hodgkin's
`lymphoma. Our plan assumes ocrelizumab will launch in 2017.
`
`Moving to an expense perspective, we anticipate slight upward pressure on cost of goods
`sold rate, largely due to increases in contract manufacturing, biosimilars, and increased
`hemophilia royalties. We anticipate R&D expense between 19% and 20% of sales, which
`includes approximately $100 million earmarked for business development activity. We
`plan to invest in a number of R&D programs across our late-stage pipeline, including
`aducanumab, nusinersen, raxatrigine, and amiselimod for inflammatory bowel disease.
`SG&A expense is expected to be approximately 17% to 18% of revenue.
`
`The head count reduction and restructuring announced in October is expected to benefit
`operating expenses by approximately $250 million. We've also planned to reduce targeted
`fees and services expenses, which are largely reflected in SG&A.
`
`From a tax perspective, we anticipate upward pressure on our 2016 tax rate, as our
`profitability mix shifts toward the U.S. We anticipate non-GAAP earnings per share results
`between $18.30 and $18.60 and GAAP EPS to be between $16.85 and $17.15. Our plan
`assumes share stabilization with a weighted average diluted share count of approximately
`219 million.
`
`From a cash perspective, we expect to pay $1.2 billion in CVR payments to Fumapharm in
`2016 related to the sales of TECFIDERA, and we anticipate capital expenditures of
`approximately $800 million to $850 million, an increase over 2015, primarily driven by the
`investment in the Swiss manufacturing plants.
`
`https://seekingalpha.com/article/3839646-biogen-biib-george-scangos-q4-2015-results-earnings-call-transcript?part=single
`
`MYLAN PHARMS. INC. EXHIBIT 1087 PAGE 10
`
`

`

`Page 11 of 26
`
`So the business plan is designed to provide investment to support TECFIDERA, surgically
`look to control spending, and ensure we're utterly focused on investing in and progressing
`the pipeline.
`
`I'll turn the call over to George.
`
`George A. Scangos - Chief Executive Officer
`
`Okay, thank you, Paul. Clearly the commercial trajectory of TECFIDERA was not what we
`thought it would be at the beginning of last year, and as a result our revenues fell short of
`our initial projections. While obviously not happy with that, I'm very pleased with the way
`the company responded. We put additional marketing muscle behind TECFIDERA, we
`reduced costs and focused the company, and we accelerated our stock repurchase
`program. As a result, we maintained healthy earnings growth at the same time as we
`continued our investments in aducanumab, LINGO, and the other exciting programs in our
`pipeline.
`
`We also continued to invest in additions to our pipeline. We acquired Convergence and its
`lead compound raxatrigine; we licensed amiselimod from Mitsubishi Tanabe; we
`completed the gene therapy relationship with AGTC; and we brought additional
`compounds into the clinic from our own and our partners' research efforts.
`
`Our commercial portfolio continued to expand globally, as we extended our position as the
`worldwide leader in multiple sclerosis and significantly grew our hemophilia business. In
`2016, we plan to remain focused on commercial execution and advancing our pipeline,
`which we expect to be the primary source of value creation over the long term. We're
`looking forward to many updates over the next year, including insight into the potential
`impact of TECFIDERA's recently launched marketing campaign by the second quarter;
`Phase 2 top line results for anti-LINGO in MS in the middle of the year; Phase 2 data for
`BAN2401 and E2609; continued Phase 2 data for nusinersen from Ionis, followed by
`Phase 3 data next year; and Phase 1b titration data for aducanumab in the second half of
`the year. We expect to launch up to three compounds this year: BENEPALI in Europe
`following approval from the European Commission earlier this month, ZINBRYTA pending
`approval in the first half of the year, and potentially an infliximab biosimilar also in Europe.
`
`https://seekingalpha.com/article/3839646-biogen-biib-george-scangos-q4-2015-results-earnings-call-transcript?part=single
`
`MYLAN PHARMS. INC. EXHIBIT 1087 PAGE 11
`
`

`

`Page 12 of 26
`
`Thinking even further ahead, we believe that we're entering the early years of a potentially
`transformative era in neurogeneration drug discovery and development, and we believe
`that our commitment to research has the potential to yield results that are truly meaningful
`for patients and shareholders. As I said at the recent JPMorgan conference, I believe that
`our pipeline and our approach, which has the risk inherent in all truly innovative and
`groundbreaking approaches, is measured and thoughtful. The combination of a much
`better understanding of disease biology, the focus on genetically validated targets, the use
`of biomarkers to learn early whether or not our compounds are having the desired
`biological effects, and the adoption of multiple therapeutic modalities may meaningful
`increase success rates and identify those projects likely to fail early in the process, before
`large amounts of time and money are spent. Our strategy is evident in the design of the
`aducanumab Phase 1b trial, the Phase 2 study of nusinersen, the Phase 2 studies of anti-
`LINGO, and our recently initiated Phase 1 trial for SOD1 ALS. We have additional
`examples, some of which we'll talk about as the year goes on.
`
`In closing, and as always, I'd like to thank our employees, who are dedicated to making a
`positive impact on patients' lives, and also the patients and physicians who were involved
`in our clinical development programs. The achievements we made together could not
`have been realized without their passion and commitment. So thank you all for joining us
`this morning, and the operator will now open up the call for questions.
`
`Question-and-Answer Session
`
`Operator
`
`Your first question comes from the line of Geoff Meacham from Barclays. Your line is
`open.
`
`Geoffrey Meacham - Barclays Capital, Inc.
`
`Morning, guys. Thanks for taking the question. Just have a couple of quick ones, one on
`the commercial side. I know it's early days, but are there any initial metrics on the TEC
`DTC campaign when you look at things like new starts or returning patients? And then the
`second one is on the pipeline. When you look at the ENGAGE and EMERGE studies, Al,
`are there lessons to be learned from Lilly in terms of managing PET scan facilities? And
`what do you think identification of early-stage Alzheimer's patients means to the market
`opportunity? Thank you.
`
`https://seekingalpha.com/article/3839646-biogen-biib-george-scangos-q4-2015-results-earnings-call-transcript?part=single
`
`MYLAN PHARMS. INC. EXHIBIT 1087 PAGE 12
`
`

`

`Page 13 of 26
`
`George A. Scangos - Chief Executive Officer
`
`Thanks, Geoff. Let me start with the TEC DTC question. I guess I'd reinforce what we said
`in our prepared remarks around, that really to try to discern it we're going to be looking
`kind of in Q2 time period. I mean, clearly Q2's not a light switch to determine that. We're
`seeing early data with respect to, as I had mentioned, kind of hits to the website,
`conversations into our patient services organization, which lean us to think that it's
`positive. We haven't seen a discernible, yet, change with respect to specifically your
`question, but our judgment is that this takes a little bit of time. It was really first week of
`October. Obviously script data as we come through the holiday time period, as everybody
`knows, gets a little bit noisy in Thanksgiving and December. So we are going to look really
`hard probably 60, 70, 90 days out from now.
`
`Alfred W. Sandrock, Jr. - Executive Vice President, Neurology Discovery &
`Development Center, Neurodegeneration Therapeutic Area and Chief Medical
`Officer
`
`Hi, Geoff. This is Al. Well, we have learned a lot from our predecessors, including Lilly and
`others, and we are employing actually pretty innovative ways of finding where the patients
`are and where the sites are, and which includes where the PET scans are, because the
`scanners have to be pretty close to where the ligands are made, and of course the
`patients have to get there. The other thing we're doing is to screen patients before they
`need PET scans by using a neuropsychological test battery to make sure that by the time
`they get to the PET scanner, there's a high likelihood they'll actually have amyloid.
`
`And then in terms of early AD, what we mean by early AD are prodromal and the earlier
`stages of mild Alzheimer's. And in terms of what it means for the marketplace, I do believe
`that there's going to be a change ultimately in the way the patients are diagnosed early.
`Perhaps, and certainly before there are functional deficits, but when they have mild
`cognitive impairment, I believe the healthcare system will set up ways of identifying those
`patients who need treatment early. And we're working on many of those, too, along with
`many colleagues outside who are also thinking about the