Christopher Viehbacher: From a management point of view, you have to think about what is your — what’s your team good at? And what’s interesting about Biogen is it’s been a very narrowly focused company. They’ve been very good on what has been done in multiple sclerosis, for example, but you have to think carefully about how broadly you go because we are extremely good at selling high-value, low-volume products. And even as we contemplate the zuranolone launch, we are going to be going to a much broader population. We’re probably going to have a lot more patient outreach. I think Biogen has done exactly on television commercial in its history. And that’s something we’re going to have to get good at. So, as you think about business development, you have to think about, okay, you can potentially look at things on paper, but can you execute well on them?
Now when I look at it, I say, I’d like to be a little bit broader than the traditional neurodegenerative diseases because I don’t want to abandon them by any means, but if your only business is that, you are really destined to do these long-term studies that are highly costly and often the Phase III becomes the proof of concept because you can’t really test these things adequately in Phase II. And so, if I sort of say, “Well, where could we legitimately go? Where do we have some experience?” Well, we can certainly be because I would argue that things like lupus, where we already are, even multiple sclerosis is really an autoimmune disease. So, I can see us branching out more into immunology. Psychiatry will have one product in the bag with zuranolone.
Would it make sense to expand more into psychiatry? And obviously, with SPINRAZA, when we look at how do we get more out of SPINRAZA? When you’re in the rare disease business, it’s different than most other businesses. Most other therapeutic areas, you go see a physician because the patients go to the physician. In rare diseases, you have to go find the patient. I remember at Genzyme, someone the marketing teaching me very early on that the marketing strategy is looking for needles in haystack. And that actually becomes a core competency. And that’s one of the areas that we have to go after. We’ve done an awful lot of easier-to-find patients who are more serious and are naturally visiting physicians. But there are, for instance, adult patients who are difficult to diagnose.
And so, looking at increasing the patient numbers means that we’re going to have to be good at rare diseases. And once you have that core competency in my view, you can be in rare disease and you can be therapy or indication-agnostic in that area. So that’s where we’re starting because I think we can execute in those areas. Could that be acquisition, could be late stage in licensing. We could look at all of the above. And I — look, Biogen hasn’t necessarily looked at acquisitions as part of its growth strategy. Equally, I tell people, there wasn’t a lot of point hiring me if you don’t want to go do deals. So not to say we are, but I think there is now an openness within the company to at least look at it. Now as we all know; M&A is hard to execute on and get something that is truly accretive and generates a return on investment.
And that’s why we are really focused, first and foremost, on driving the most that we can out of organic growth. But I would say that we are open to anything in those four areas that I mentioned before.
Michael McDonnell: And I’ll just quickly add, Evan, to your question on size of deals, without commenting on how large a deal we might do or a series of deals just in terms of aggregate capacity. As we mentioned up front, we ended year with $5.6 billion in cash, we have more coming in from Samsung in the early second quarter of this year, and we have a modest amount of debt. So, you can pretty quickly get to a close to better part of $10 billion of capacity number that we can utilize in a variety of ways.
Christopher Viehbacher: point out the amount of money we’re getting still from Samsung on the yet to come in?
Michael McDonnell : Yes, $800 million that’s coming in April and then another $400 million-plus that will come in next year.
Christopher Viehbacher: Firepower is not necessarily the main constraint finding something that’s worthwhile doing is the really hard part of this.
Operator: We will now move to Tim Anderson of Wolfe Research.
Tim Anderson: Thank you. A couple of questions on LEQEMBI and the subcu. Can you just confirm what the minimum regulatory requirements are for approval of a subcu in terms of what you need to show in the data you’re currently capturing? And do you think there’s any meaningful risk in gathering that necessary data? To me, the long-term commercial future of the brand really hinges on having a subcu, and I’m trying to gauge whether there’s any meaningful risk that we should be cognizant of? Thank you.
Priya Singhal : I can take that. Thanks for that question. I think overall, I just want to reiterate that Eisai is starting subcutaneous in the Phase III open-label extension. And actually, details of that sub study are public. You can take a look at that. Eisai has also communicated that they believe that they have had the regulatory discussions to EMBARK upon this pathway. But beyond that, it would be speculative to say what are the minimum requirements. I think we do have regulatory discussions ongoing and a lot, as you know, is always dependent on the data as it gets generated. Overall, Eisai has communicated that they will — they expect to file by Q1 2024. And then stepping back to what is the true potential. We — I’ll just draw us back to the data that we saw from the Clarity AD study, which was, of course, utilizing the intravenous bimonthly dosing regimen.
I think the most important part there was that we saw the amyloid reduction at six months expanding over the 18-month period, we had a positive primary endpoint with a highly statistically significant p-value as well as all the secondary end points. So, we believe that really Clarity AD is quite clear in its outcome, and we believe that the data are meaningful and can have an impact on the patient population. The subcutaneous formulation is really our approach to kind of thinking about this more comprehensively. So, we believe as is it has a lot of potential and then, of course, we’ll continue to build on what is the dosing, maintenance dosing as well as subcutaneous. And as Chris mentioned, what is the application of an anti-amyloid therapy in presymptomatic or preclinical Alzheimer’s disease.
Christopher Viehbacher: Tim, the way I look at this is, I think what we’re going to see over time is that you’re going to have a plaque removal phase of treatment and then a maintenance. And in the short term, we can talk about potential for subcu, but really, I would say for the next two to three years, the demand for the product is probably more limited by capacity of the system to actually diagnose and treat patients. So, an IV will be a port for the convenience of patients, but I’m not sure that short-term, it’s really going to have that much impact on demand. One game-changer, I think, to me is blood biomarkers. If we can eliminate the PET scans and in particular or the lumbar puncture, this will make it a whole lot easier for the whole medical community to at least get the diagnosis, and we can probably reduce the overall treatment cost of a patient.
Those blood biomarkers have been around for some time, but until there was a treatment, there wasn’t a commercial market for those diagnostics. So, to me, the biggest game-changer that could occur is if we can get some of these blood diagnostics to market sooner. It’s — they’re probably still a couple of years away. But there is important, in my mind, commercially as a subcu.
Operator: We will now take your question from Brian Abrahams of RBC Capital Markets.
Brian Abrahams: Good morning. Thanks for taking my question. On LEQEMBI, as you consider the maintenance therapy, what’s the right way we should be thinking about the potential balance of annual per patient price declines versus the potential for market expansion and greater durability for chronic use? Thanks.
Christopher Viehbacher: You mean the price decline related to maintenance, is that what you’re saying?
Brian Abrahams : Like, I guess, how are you thinking about pricing strategically for a maintenance therapy on an annualized basis relative to every two weeks, and how should we think about the overall balance?
Christopher Viehbacher: Again, I think as — obviously, we have to wait now and see the data and get approval for these things. But I think you’re probably going to be in this plaque removal process, and that’s every two weeks. As you get into maintenance, as Priya said, the dosing regimen could change. And obviously, if you were to go from two weeks to one month, that has an overall per patient cost on an annualized basis that would be lower. So, I think you’ll see potentially a lower patient cost just because of the different dosing regimen over time. Shorter term, again, I think we probably have more patients out there than the system can manage. And so, I don’t think there’s going to be that much price pressure. Once the system adapts, there may be over time, but I don’t really see prices being the main aspect of this.
And remember, when you look at this — I mean, we’re talking about $26,500 for the drug cost. But there’s a lot more cost to the system for the treatment of the patients. A PET scan, for instance, costs around $7,000 as an example, and you have the MRIs and you have the treatment. And that’s why, to me, blood diagnostics could play a bigger role in actually reducing the overall cost. And I think those types of things, and as we move into maintenance dosing regimen, we may find that the average annual cost of a patient goes down, although we’re not necessarily touching the price of the drug.
Operator: We will now take a question from Michael Yee of Jefferies. Please go ahead.
Michael Yee: Hi. Thanks for the question. You mentioned in the slides that you would like to improve the risk profile and productivity, R&D pipeline, particularly profile. And I recall, in January, you talked about lower-risk-type projects and perhaps Biogen is too high risk, high reward, particularly for this market cap? And then going back to your prior days, you did, I think, the Genzyme on the Regeneron deal. So, can you just comment about the philosophy of bringing in products that are perhaps lower risk, more derisked and how you think about bringing those in and acting on those accordingly and with the speed? Thank you.
Christopher Viehbacher : Sure. To me, risk management is something that is part of the day job in a pharma company. You obviously, can’t do anything unless you take risk. We develop products in early stage. If you’re talking about Phase I, you’ve got 10% probability of success. I think there’s a couple of areas that we would look at. The first thing is, obviously, if you can do a Phase II study where you get a lot of confidence out of safety and efficacy before you go into a Phase III study, you have essentially, at every stage of development, from Phase I to Phase II, Phase II to Phase III derisk that. We sometimes can’t do it. If you look at Alzheimer’s and the development of either lecanemab or ADUHELM, you can start to see, for instance, that you’re reducing plaque, but one of the problems we — a lot of companies had is that they didn’t reduce the plaque enough, and you’re not going to know whether you have reduced the plaque enough until you see a benefit in cognitive function.
But you really can’t do that until you go into large studies and take a long time because these diseases progress so slowly. So, to me, one of the areas is that we can — if you go into autoimmune diseases or you’re into psychiatry, you can have a more classical drug development where you can derisk more in Phase II, you can get a proof of concept. As I said earlier, we are sometimes doing proof of concept in Phase III, which is an expensive way to do proof of concept. So just even thinking about moving into some of these other areas allows us to do more classical drug development. The other is, of course, that we can start to license in products and that are a lot closer to market, and you’re not taking quite as much risk on those. But it’s really a function of when you look at it, how much are precedented versus unprecedented mechanism of action?
How much are small molecules versus large molecules? Can we do more collaborative-type approaches? But this notion of always doing proof of concept in Phase III is a highly expensive, highly risky approach. And I think having a few of those projects in our pipeline is good, having 100% of our pipeline and projects like that is challenging. And if you look at it, we don’t really have an approval coming in our pipeline for several years yet here because we’re waiting on these long-term studies. So, having things that read out on a little bit more frequent basis would be helpful to looking at sustainable growth of the company.
Mike Hencke : Operator, I think we have time for one final question.
Operator: Our next question comes from Chris Schott of JPMorgan.
