Biogen Inc. (BIIB) Earnings Call Transcript & Summary

Before we begin, 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, including those related to our future business, ADUHELM and Medicare reimbursement, and our actual results may differ materially. I encourage you to consult the slides posted on our website and the risk factors discussed in our SEC filings for additional detail. Today, we will be discussing ADUHELM. ADUHELM is indicated for the treatment of Alzheimer's disease. Treatment with ADUHELM should be initiated in patients with mild cognitive impairment or mild dementia stage of disease, the population in which treatment was initiated in clinical trials. There are no safety or effectiveness data on initiating treatment at earlier or later stages of the disease that were studied. This indication is approved under accelerated approval based on reduction in amyloid beta plaques observed in patients treated with ADUHELM. Continued approval for this indication may be contingent upon verification of clinical benefit in a confirmatory trial or trials. ADUHELM can cause serious side effects, including amyloid-related imaging abnormalities, or ARIA. ARIA is a common side effect that does not usually cause any symptoms but can be serious. ADUHELM can cause serious allergic reactions. The most common side effects include ARIA, headache and fall. Please see full prescribing information and patient medication guide at aduhelm.com. On today's call, I am joined by our Chief Executive Officer, Michel Vounatsos; our CFO, Mike McDonnell; Priya Singhal, Interim Head of Research and Development; Alisha Alaimo, President of our U.S. Organization; and Rachid Izzar, Executive Vice President, Alzheimer's Disease and Dementia business unit. I'll now turn it over to Michel for some opening comments.

Thank you, Mike, and thank you all for joining us today. I want to first begin by expressing our strong disagreement with CMS' draft National Coverage Determination for antibodies directed against amyloids. If finalized in its current form, we believe this NCD will deny nearly all Medicare beneficiaries the right to access ADUHELM, the first FDA-approved treatment for Alzheimer's disease since 2003. As proposed, this NCD will not only block access to ADUHELM but it will also block access to future amyloid therapies for the indefinite future. Providing coverage only for participants in a randomized clinical trial will mean that only patients in the active trial arm will receive therapy, with the likely results that the number of patients on therapy for the foreseeable future will only be in hundreds, when we know Alzheimer's disease affects millions of patients. This proposal would likely promote inequality as only individuals who live close to, or can travel to, participating medical centers will be able to enroll even if they meet clinical trial criteria. CMS' requirement for the study to be performed in the hospital outpatient setting will undermine efforts to obtain a representative epidemiological sample, including from underrepresented populations. And given the anticipated time required for start-up activities, which can take many months or years to operationalize, NCD will further delay patient access even for the small number of patients able to participate in an approved trial. Thousands of patients progress each day from mild to moderate disease stages where treatment may potentially no longer be an option. For these patients, each day matters. Unfortunately, this decision appears to be based on an incomplete and, in some case, inaccurate assessment of the body of evidence for this class of antibodies and the evidence of ADUHELM. In particular for example, the analysis of the primary and secondary endpoints for the positive EMERGE study were prespecified, not post hoc. The draft NCD overlooks the data and rigorous analysis of ADUHELM conducted over a 2 years' period by the U.S. FDA, the regulator mandated and best qualified to assess the benefit/risk profile of new potential therapies. The FDA's accelerated approval was supported by clinical data showing that ADUHELM impacted the underlying pathology of Alzheimer's disease by reducing amyloid plaque. In approving ADUHELM, the FDA concluded that the reduction in amyloid plaque is reasonably likely to predict clinical benefit, in this case, a reduction in clinical decline. The FDA examined data from 6 different anti-amyloid antibodies, which when viewed together, show that there is an association between amyloid plaque reduction and a reduction in clinical decline, and that greater degrees of amyloid plaque reduction are needed for a reduction in clinical decline. We believe this NCD will also set a dangerous precedent as a matter of policy and discourage investment in future innovation for the treatment of Alzheimer's disease. It is important for innovators to know that they can rely on the FDA's evaluation determination of patients' benefit/risk. Since 1995, the industry has spent approximately $40 billion on clinical-stage R&D for this disease, with the expectation that this risk-taking will ultimately be rewarded if a therapy is approved by the FDA. ADUHELM's approval resulted in a renewed investment and innovation in Alzheimer's disease. Finalization of this wrong decision could have a chilling effect on future innovation in this space. It is imperative to change this draft decision to one that is aligned with the reimbursement for other therapies for progressive diseases where patients have immediate and equal access to medicines approved by the FDA. As questioned by us against Alzheimer, why should Alzheimer's disease patients be treated differently than those suffering from cancer, HIV or other illnesses? We believe it is more fair and appropriate for Medicare to align coverage for the class of anti-amyloid-directed therapies to be consistent with the criteria used in the respective clinical trials and to be guided by recently published expert recommendation for appropriate use. As we enter the 30-day open comment period, during which Biogen will make a formal comment to the draft NCD, we encourage others to make their voice heard so that the final decision expected in April will allow for a broader and more equitable access. We will now open up for Q&A.

Thank you, Michel. [Operator Instructions] So we'll start with Brian Abrahams from RBC.

I guess I'm wondering, if the NCD final decision in April looks similarly restrictive to the draft, would you consider pulling ADUHELM from the market or significantly modifying your commercial strategy? And if you could maybe just remind us the degree of commercial and R&D spend allocated to the program, and what could potentially be pared back, where your margin goal would be there.

Thanks for the question. I will get started and then Mike will add. I can't believe that the final NCD position will be similar than the draft. This will be discriminating. This will be a full duplication vis-a-vis the FDA-requested PMR. This will be delayed, and I say, denied in access for the entire class. I cannot believe that this will be the case. Having said so, as I communicated 2 days ago in my remarks, we will remain dynamic and flexible. And obviously, we have already communicated $0.5 billion cost-cutting measures starting now. Should we be in such a position in April, there will be additional ways. We have to protect the company's EPS and bottom line, and we will take additional measure. But I do not believe that this would be the case in terms of similar outcome than this dramatic draft. Mike?

Yes. So the SG&A spend in 2021 that we've talked about publicly for the ADUHELM infrastructure is about a $500 million gross number, $350 million net of reimbursement from Eisai. And the ongoing R&D efforts are some amount north of $100 million a year.

Thank you. Why don't we go next to Matthew Harrison.

Can you maybe just comment on -- given this outcome and given what we've seen, I mean, I know there haven't been that many other drug NCDs. But given maybe what you saw with CAR-T, which had a similar draft NCD and then ended up with a more registry-type outcome, like what do you think is the best outcome you can achieve in the final NCD versus sort of where you've started here?

I think that the best outcome, Matt, is that we have an open access based on our label. This will be a fair treatment, a nondiscriminatory approach vis-a-vis other therapies. Why on earth demented seniors will be discriminated versus other patients in this country? So this will be the best outcome. Now realistically, from where we start, of course, there are gradients of restriction and control. Alisha, do you want to add some comments based on other benchmarks?

Yes. Thank you, Michel. When you look at the CAR-T CED, it was really listed as a registry, and I think, for about 2 years. So it wasn't nearly as restrictive as what you see in the one that's been posted for us just days ago. And their final outcome was technically a coverage with restrictions, which is that's exactly what we would like to have as well, which basically means it aligns to our clinical trial. Because as you know, our label is less restrictive than our clinical trials were. So we would love to have that outcome. You've also seen that in others as well. If you look at next-generation sequencing, which I know is not a drug, they also came out, the CED for off-label usage, they ended up not doing that CED either. Some of these things are seen as duplicative. Obviously, the way they've set up the CED, it's exactly how we see it, especially when you look at our PMR. So we believe it should be coverage with restrictions.

We have demonstrated, in the few communications we've had, including at the latest CTAD event, that adu basically not only addresses amyloid plaque, but also the downstream p-tau, the 2 hallmarks of the disease. So what's next? How many years those patients have to wait for the next bright hypothesis? And we need to encourage innovation. We have so much to do, and eventually to invest in, so that we can best inform clinicians. Think about our ASO, BIIB080, anti-tau. Think about potential combination therapies. It's not solely a monotherapy that will address this disease. For that, we need to be incentivized and rewarded for the risk we take in investing in R&D.

Let's go next to Mike Yee from Jefferies.

How much interaction and dialogue do you have with CMS? What is the process from here to engage with them and get a dialogue to change things?

So far, Michael, top-to-top, none. I hope that this will change in the near future. We are just waiting for that. We give our hands. We communicated, day 1, flexibility, innovative price approaches in order to remove the price equation from the table while we think about the patients. Basically, there was no receptions, there was no dialogue. I don't know why. So I hope that in the near future, I will be able to meet those people, and my team, too. At the lower level of the organization. Of course, there were some engagement. Alisha?

Yes. Thank you, Michel. Michael, this will be very similar to what we saw after they announced the NCD analysis. So there's this 30-day open comment period. As you can hear from Michel's opening statements, this period is really, really important to see all of the different individuals coming out and commenting, really posting their beliefs during this time. When that happens, that 30-day comment period then closes. You then go into 30 days of basically potential meetings that CMS has set up with all manufacturers. Maybe anyone who's posted comments, could be patient advocacy groups. There then, they gather any kind of information they need. They have questions that they will ask. We will provide and are committed to providing any sort of information and data that we need to. That happens for about 30 days. Then they go into their deliberation. They analyze everything that's been posted, all the additional information they've had. And then the expected date for the final is April 12, as you know.

So while we are sorry to see this extreme position at the outset, which is basically a noncoverage type of position, we want to be constructive with CMS. We want just to have a dialogue and expose on the risks that this generates for patients, for precedents, for investment in R&D. So it's really engaging positively on making it the best for the system in terms of sustainability but, more importantly, in terms of access for the patients with the right monitoring of the effects, including safety aspects, of course.

Okay. Let's go to Evan Seigerman with BMO.

So I want to pivot to lecanemab. So if that data set is positive, do you pivot your AD strategy to this asset and really move away from investing in ADUHELM? Can you also talk about how you would work to change the NCD to open up access if lecanemab is positive and you're granted a full approval at some point?

Thanks for the question, Evan. We are obviously delighted, together with Eisai, to have the 2 assets and to have a portfolio of compounds that provides a lot of flexibility based on the benefit/risk. We need to wait for the Phase III on leca in order to best assess what will be the product positioning versus adu. And obviously, we will be unemotional about the opportunity to prioritize one versus the other. But we stand by the data on ADUHELM. We stand by the data. We have the EMBARK redosing. We have ICARE AD. We have the PMR. And we have a long patent life, so we didn't say the last word. But obviously, if shorter term, the patients have better chance to have access with leca and that the data supports so in terms of erosion of the plaque, in terms of the safety profile which looks very good, in terms of going directly to the target dose, we will certainly be agile, together with Eisai. We are very close. We talk every second day with my opposite number. We will benefit from relative strengths of both companies in order to synergize in terms of go-to-market model. So we need to be a bit patient. But the clock is ticking. We should have the results of this Phase III during the second half of this year. And lecanemab has potentially the opportunity to be the first product with a full approval. So we'll be very agile and unemotional. But we don't want unfair treatment for the pioneer.

Okay. We'll go next to Robyn Karnauskas.

Just two follow-ups from a couple of things that you guys have said. So first of all, on the NCD process, I know, Michel, you didn't have a conversation with CMS. But can you just give a little more granularity, what kind of conversations you were having with them at the lower level within the company? Or was it really actually none? And then the second question. I think you were asked by Matthew, like what's the best outcome? Like what do you think realistically is most likely outcome? I know it may not be what you want, but what do you think internally is your base case expectation for the NCD, the final NCD?

Thanks for the question, Robyn. And I had a call at the very beginning, at the outset of the call -- with the process, with the commissioner, but not with HHS Secretary. So then it was -- we respected the process and we pulled out and there was no communication. Alisha can take it from here, at the lower level, what type of discussions. And what we can expect is difficult for us to speculate because, obviously, we want fair treatment versus the others. Anything less will be a disappointment, why, vis-a-vis others we will not have a similar type of access for those patients. Alisha?

Yes. Thank you, Michel. The teams -- it was a very rigorous process with CMS, and we followed that process to a tee. And typically, what happens is CMS requests a meeting. At that meeting, our teams and their teams come together. They have questions that they ask. And then we have time to go away and answer a lot of their questions. Those questions all have to do with efficacy and safety of the product. Keep in mind, price, according to statute, is not taken into consideration for the NCD. However, when you look at the outcomes, of course, we would love it to be coverage with restrictions as would every manufacturer, and also the PAG-group, as you've probably heard from their strong statements. But even if a CED outcome is a registry or if it's even claims-based, I just want to remind you that there is a patient cap on that, and those patient caps are not very large. So it's still extremely restrictive. It may be easier to do. It may provide easier access and not as great of a lift from physicians in order to get a registry up and running or for us to collate the data through claims, but the patient numbers will be limited. And that's the problem of doing a CED in this way.

Okay. We'll go next to Mohit Bansal from Wells Fargo.

So maybe just to follow up on that. I mean, I think part of the CMS issue could be that if there is an access similar to the label, it could be a huge cost burden for them, especially in a scenario where CMS does not see the data as compelling as you are or FDAs. So in that backdrop, could you talk a little bit more about the middle ground? I mean, registry, you said that it would still be restrictive. Is there anything that you could do to convince CMS that there is a win-win scenario for both of you guys? Where there is access, but not as much as the label until the [ RCD ] reads out. Is there a scenario on what could -- and what could it look like?

Obviously, we'll be very constructive and respectful of the process and any -- and we understand some of the limitations of our data due to past events and futility analysis, and obviously, we are accountable for that. So obviously, the generation, additional data from EMBARK, the PMR have to be taken into consideration. So we'll put that on the table, discussing with CMS, to see what will be a fair approach so that the patients have access. Don't forget that we have the best-documented product in terms of database, in terms of experience, in terms of number of years of clinical experience since prime data. And I met a clinician a few days back, he was telling me that he was following some patients in 6 years and he was seeing how they are doing. And ARIA, we know how to manage now much better, even if we are still working on that. So we will be constructive with CMS, and we give our hand. But the patients cannot be denied. This will be bad.

Okay. We'll go next to Jay Olson with Oppenheimer.

Since Biogen pioneered the advent of anti-amyloid antibodies for Alzheimer's, what are some of the most important lessons that you've learned from the ADUHELM experience? And how will you leverage your leadership and learnings for lecanemab?

Thanks for the great question. And I'm sure that Priya will add to what I have to say. Being a pioneer is not easy, in life, in so many fields. And we receive many arrows and often stones, and we will see that. And there is -- there are always learning when you look back. We have to be humbled about what we have done. But when you research in this space, which is CNS for which the pathophysiology is so complex, you're a bit in a black box and you learn about the futility analysis, and eventually the mistake that we've made. We learned about so many aspects, including the price that generated this reaction, while the assumptions were not understood. People were talking about 6 million patients. And so we need to be humble, and we are. And at the same time, we acknowledge the strength of our pipeline. This science around AD is breaking. And we have an entire portfolio. We have the opportunity to leverage different modalities that we have. And I'm thinking here about the ASO anti-tau, for example. There will be combination therapies, most probably. Who's best positioned in this world than the company that pioneered? We have the team, we have the expertise. And beyond the compounds, we have the capabilities on neurogenetics, biomarkers, imaging. And we are reinforcing that. But society has to reward. Otherwise, they will have -- we need to arbitrate vis-a-vis the responsibility we have to you to provide a reward to the shareholders. Priya?

Thank you, Michel, you covered that well. And thank you for the question. I'll go back to the point that one of the biggest lessons learned from the aducanumab experience is the futility analysis. Because, really, the futility analysis is the gap, the data gap, that has resulted in a lot of the controversy, despite a positive trial that is very, very unlikely to occur by chance alone. 1 in 10,000 chance that this, the EMERGE data, could be positive on the primary and secondary endpoints by chance alone. So that's number one. Number two, I think that's really important, is that we have worked with Eisai. And Eisai has led, obviously, the lecanemab development. And I'm very pleased that they have CDR-Sum of Boxes as their primary endpoint. This is important because it is a high, high bar, but it's also the standard for both cognition and function. And it's very important that we ensure that we keep CDR-Sum of Boxes. So I think that's very good. We'll see that. They had a very positive trend in their Phase II data. We hope cautiously -- I am cautiously optimistic that it will continue to show a positive outcome in the Clarity trial that will read out later this year. Other than that, I think that Michel covered it really well. We have, behind lecanemab and aducanumab, which is obviously a very privileged position to have 2 of the anti-amyloid beta therapies in our portfolio. We have deep expertise, but we also have several modalities that we're looking at. And I'll speak a little bit about BIIB080 because it is very, very exciting. We've shared the Phase Ib data already. This is in the public domain. It's an antisense oligonucleotide. And what's really critical is that we have our own data from BIIB092, but we also have data from other competitors that extracellular tau is really not the target. And the beauty of BIIB080 is that it targets all post-translational forms of tau, all 6 human translation forms of tau. So I'm very excited about that. It showed in the Phase Ib trial dose- and time-dependent reduction in both phospho-tau and total tau. So we are very busy trying to design the next phase of development. And behind BIIB080, we have several undisclosed modalities and collaborations that can yield a lot more on the Alzheimer's space. But again, I think it's important for us, as pioneers and being at the forefront of science, that we can progress with the anti-amyloid therapies. I'll also say that the CTAD data that Michel referenced is really critical, because what we do know is that once you impact the amyloid plaques, you have the downstream effects of tau and the tangles. And this is really important because we demonstrated that from the ENGAGE, EMERGE data set in 1,800 patients with 7,000 samples, really a very large, robust data set. Finally, I'll just say that both lecanemab and aducanumab have one point in common, and that is that they both engage not only with the plaque, which is insoluble, as you probably know, but also with the soluble toxic oligomers. This is a key important point because it can help prevent and improve disease progression. So this is really important because it's not really possible to see the impact on soluble toxic oligomers on the amyloid PET, but it is possible to see it in terms of clinical benefit. So I'm very optimistic as we stand at the threshold of really seeing more data from lecanemab this year, and we look forward to that. Thank you.

The question of cost was raised earlier by one of the colleagues. Today, the society is spending close to $0.5 trillion on direct and indirect cost to AD. Isn't it time to shift some of this investment or cost to investment on the good for the patients, for those to gain independence a bit longer, and quality of life? Is society going to realize that? Or do we stay within the silos of the budgets within the overall government? Or do we look at really the benefit for the patients? I think this is what is at stake, and we should not forget the $0.5 trillion today that is going to increase, that is increasing day after day. And I'm thinking about the more than 1,000 patients, 1,000 to 1,800, moving to moderate every day. And we know it's a lethal disease. We know it's a matter of time. And the day they leave home for institution, unfortunately, there is no return. Are we going to bring numbers always first? Or are we really going to have a public health approach first?

And we'll go next to Colin Bristow from UBS.

So I think 2 key areas of speculation or confusion from the document that we had and we've been getting questions on, and working with the assumption that CD is the final outcome, is what is the size and duration of trial you'd expect to run for aducanumab? And then for lecanemab, for the ongoing Phase III trial, would you be able to -- would you expect to be able to use this to satisfy the RCT requirement from CMS?

Priya.

Yes. I think that it's very early in this process. Obviously, this draft has just been released. It's -- we still have to disentangle the parts of what are the ongoing trials that could satisfy the requirements. I would hope so, but I think that, that would be very speculative on my part and I really can't comment on whether it would or would not be acceptable. I think I would turn it to Alisha at this point to talk about how this is set up from an NCD perspective. Alisha?

Yes. Thank you, Priya. So you're right, there are some interesting details in the CED draft. The first is that it does apply to Part B and C drugs. Secondly, there is no language in the draft NCD that would allow for an approved product to circumvent the CED requirements. So even if there is a fully approved lecanemab, they would also be limited to coverage only for patients in CMS-approved trials. So the requirement for RCT is indefinite in the current language. This language would need to change in order to allow for any provisions. So we would recommend not to comment on these scenarios and just to stick to the current proposed language obviously because we think the draft will change by the time we reach April.

What you put your finger on is on the potential duplication of efforts. And behind that is duplication of potential costs that we will be seriously questioning. So these are issues. I think that our data is our data. We continue to communicate on progress we are making. We see clinician adopting more and more the product. And Alisha can give an update, Alisha, on how we are doing in the field and what is the reaction so far.

Yes. Thank you, Michel. I think, first of all, I can give you a reaction of the CED because I think that there's a couple of buckets. First, physicians are either very confused as to what the NCD draft means. So obviously, there's heavy education going on as of now as to what this means. And as Michel said, we are encouraging individuals to post their comments and to raise their voice with CMS. Secondly, there are those who absolutely disagree with it, and you do see many of those comments now going on, on the CMS website. It's only been a day. But even from some of those larger accounts, you do see physicians from, for example, Cleveland Clinic, Mayo, UCLA. They've all come online to support moving the CED to basically a coverage with restrictions or coverage to label so that there will be coverage for patients. However, one of the questions that you asked earlier, what are some lessons learned? And I can say on the commercial side, as you know, you've been on this journey with all of us, we've learned a lot of lessons. But 2 of the ones that I would say moving forward are the most critical for success of any product that launches in this space is going to be education of the physicians and education of the patients on what monoclonal antibody therapies and removing amyloid really means to this disease. And what you see now, because we started putting a lot of effort into that around the September, October time period, you're now seeing since the end of August, if I look at the last couple of weeks of December, Michel obviously reported that we now have 220 accounts who are utilizing ADUHELM. In these last couple of weeks of December, we saw an increased rate of new patient starts by fourfold, and we also saw a fourfold increase in the number of doctors actively infusing ADUHELM, which is a really large ramp-up from where we were before. And last but not least, our weekly shipments have increased by over eightfold. So we do believe that once you educate those physicians, they start moving. And in fact, there's a very large amount of physicians. I know we hear mostly from the negative ones in the media, but the majority of physicians are still undecided. And once they get closer to the data and once they understand the mechanism better and how that can link to an outcome, you definitely see them start calling back in patients and start working closely to prescribe for them.

The controversy that we faced since launch has generated an anomaly in the dynamic of the launch. We should have the large institutional centers first, with the better technology, the more experienced physician, the better diagnosis and monitoring capabilities which are lagging behind. And now it's a second tier of centers and physicians that have -- that are dosing the product. So we'll turn the corner, hopefully, once we have a major institutional center on board, like the Cleveland, like Mayo, or MGH. This is what we are working on. It's a matter of time.

I know we still have a number of questions left. [Operator Instructions] So next, we'll go to Phil Nadeau at Cowen.

Michel, I was wondering if you could go into a bit more detail as to exactly what Biogen's strategy is over the next 90 days. I think we've heard you say you're going to submit a comment but then be respectful of the process. Thus far, the process hasn't actually landed you a conversation with CMS. So what else do you plan to do? Can you demand a meeting with the Secretary of HHS? Can you -- because there's [ somewhat a force ], a MEDCAC review? Can you talk a bit more about what proactively Biogen is going to do to change the decision other than simply submitting a comment?

I appreciate the question, Phil, I obviously cannot go in all details. What I can tell you is that we have a plan prepared because we prepared for all the different type of situations, but we are refining this approach. And first, we sit, we listen, we consult, we get advice before we coordinate an action plan in order to optimize the window of 30 days. And this is under work. And the refinement, we get great input and we received a lot of calls from people who want to support and want to add. But I don't want this to be a chaos activities where we go over the place. This has to be extremely well orchestrated in a constructive, respectful manner, really, the Biogen way. I don't want this to be with the wrong tone while we believe that everybody wants to do the best for the patients. So in the meantime, we continue to keep the organization focused on the base business. We continue to progress and we are expecting the CORAL readout in the coming weeks. We are progressing well with zuranolone. In the meantime, we're engaged with Eisai on lecanemab. In the meantime, we are preparing the launch of the LUCENTIS biosimilars in the U.S. midyear. We are preparing for 20 launches in Europe of VUMERITY, that we anticipate the VUMERITY will be above $1 billion. So our plate is full of activity to manage the short, the mid and prepare for the value generation for the mid to long term. On the OpEx side, we already communicated that we tightened the belt, okay? There is no panic on board. We have a runway of $3 billion plus operating income, but we need to take the measures in terms of OpEx, okay? Mostly ex U.S. for adu and much more, okay, across the company. And we have optionality to go beyond should the situation don't lead to the right outcome in the coming days. That's why I said in my remarks, we'll remain agile and flexible while we turn those cards. We have to. But the organization is in front of 2 large disease areas and hopefully we'll make some progress there. But the base business is important. We generate a lot of cash flow. And we have to be very, very disciplined on OpEx while the revenue are not what we expected, unfortunately. And we are sorry about that. But you know the story.

We will go next to Geoff Meacham with Bank of America.

Thanks for hosting this event. Is there a fast track for generating any new data, even if it's an interim analysis, that can get you beyond the CED? I'm just thinking, if imaging data would be persuasive to CMS in you guys view versus showing a cognitive benefit and taking several years?

Priya?

Yes. I'll speak to the data that, as you know, we have the largest redosing study that's ongoing, which is called EMBARK. And we have close to 1,700 patients in there. So that is data that we presented the baseline data from EMBARK at CTAD. I think it remains a very, very fantastic opportunity to continue on our data-generation journey. Whether that data generation is going to satisfy the requirements of the CED, that is the area that I think I would not be able to speculate on given how it is structured in the draft. But it remains a treasure trove of exceptionally important data, not just for aducanumab, but for the entire field of Alzheimer's, to continue to look at and to understand very carefully. And we have the full plans of continuing to look at that data and presenting that data at congresses and other venues as applicable. So that is definitely something that is part of our bigger strategy of informing really on the scientific aspects of treating with an amyloid beta therapy. So there's no question about that. I will turn to Alisha again on commenting on the intersection. And I think she already did, but in case you want to reiterate or bring up other points, Alisha.

Priya, I think it was covered in my prior answer. The way that the CED is written today, it wouldn't allow for that scenario, which is why I think the primary thing we need to do as an organization and for everyone is to ensure that the final outcome is very different from this draft.

Okay. We'll now go next to Carter Gould with Barclays.

Great. Michel, your opinion on the April decision is very clear, but -- and you've talked about, if that draft decision is recapitulated, your agility. Have you taken off the table pulling the drug from the market in that situation? Or is that even on the table?

We'll follow the data and we'll follow the science. And we'll be driven by the best interest to the patients, the patients, not only in one market, but all around the world. Having said that, everything is on the table in terms of evaluating the next actions. But we'll follow the science and the benefit to the patients, which is our #1 driver.

We'll go next to Umer Raffat with Evercore ISI.

I guess, Michel, if there's no change to NCD, you will protect the EPS with additional measures. [ But that alone will actually not generate enough ] shareholder value. And I wonder, [ are you ] looking to be more aggressive in considering the strategic options as well, whatever that might include? And also just to follow up on [ a count that ] you shared earlier, Michel, [ the materiality of whether or not ] an interim is obviously important, and this was true [indiscernible] as well. [indiscernible]?

Umer, I cannot hear you. Your line is cut. So Mike, did you hear? Can you repeat the question also...

Yes, I'll do my best. Umer, sorry, we weren't able to hear you well. But I think your first question was, in the event of a negative final decision in April, we've been clear about potential cost discipline. And his question was would we consider something more strategic as well in that scenario? And then the second question, I believe, was on potential for an interim analysis for lecanemab.

So Priya, can you take the second one?

Sorry. Mike, can you repeat that?

Interim analysis for leca.

So essentially, we don't comment on interim analysis, but I can say that we have obviously incorporated all our learnings from aducanumab futility. So that's what I can comment on.

So Umer, concerning the first part of your question. We are engaging very closely. First of all, we are working with the EC since a long while on all options. And we are engaging very closely with our Board on tactical, short-term measures, but also strategic options. I cannot go further.

Okay. We'll go next to Ronny Gal with Bernstein.

Michel, I was wondering if you can comment kind of like on the counterpoint that we are hearing, which is, sure, this is -- this decision is not great for ADUHELM. But for both leca and gantenerumab are going to have randomized controlled trials reading out in the second half of this year. And why should CMS not simply wait until it has kind of like a full-blown nonstop trial and make a decision based on the traditional criteria?

Yes. Your competitor is your best friend, Aaron, and I cannot agree more. And when there is this dogma on the hypothesis, that preceded the futility analysis actually, some people made a religion on different concepts for this complex disease. Obviously, having important readout during the second half of '22 for 2 compounds, and then in '23, will be most welcomed in order potentially to reinforce the case. So this is an obvious point here that will be brought to CMS, probably by us, but probably also by others. And based on the Phase II, we like the profile that lecanemab has. We love it, actually. So yes, this is a valid point.

So why shouldn't CMS just wait and allow more patients to use those compounds? Only then as opposed to doing it now on that -- on this specific coverage decision that is due in April?

Yes, this is a good question for them to answer. I agree. And they will be exposed to that.

We'll go next to Paul Matteis with Stifel.

Great. So the CMS process is supposed to be price-agnostic. But I assume when you lowered the price late last year, that you thought it might increase the probability of coverage. So could you talk a little bit about the decision to do that and whether or not you could again try to use price as a lever? And if you think it's even a meaningful lever at this point?

Thanks for the question, Paul. Price is an important element of the mix. And the price at the outset was evidence-based. We worked for a very long while with pharmaco economists. And we used the quali for AD, which is $250,000 a year, in order to come to the $56,000. Having said that, we saw the reaction from all stakeholders, many stakeholders. We saw reactions from P&T committees, we see reactions from all sites, and we knew that it was a matter of time that we had to adjust. And when we saw that the Medicare fees were increasing with the wrong numbers, wrong assumptions, we decided that this was the good window to be proactive, and this is what we have done. And this is a preliminary NCD. I am sure -- and you heard the HHS Secretary Becerra take back the premium increase if confirmed. But we are confident that this will play a role in the future outlook, yes. And we believe this was the window to be proactive and while all this process is ongoing.

2 We'll go next to Ami Fadia with Needham.

So between now and April, short of trying to convince the CMS for coverage with restrictions, can you describe what might be the other next-best alternative in light of the fact that there is a lot of additional data that's expected in the second half of this year from various products in development? What could that type -- what could a scenario look like where CMS waits for that data? And what would that look like?

So Rachid and Priya, do you want to comment on that?

Thank you, Michel. So again, as Alisha mentioned earlier, so for us, is the first access solution for patients is coverage with the restriction or coverage to the study population. So should -- then we need to remember as well that we committed to a PMR study, a post-marketing study. There is a word in which they provide coverage restricted to the study population, but then they asked to see, as the FDA is doing the data, from the post-marketing study later on. And I have to remind us as well that there is absolutely no option, no situation in which the required CED, CMS CED study, will be actually finished prior to our PMR. That's why we made the commitment back in December that the PMR study, the post-marketing study, where the first patient screening will be in May, and it should be and will be finished in 4 years. If there is a CED trial which hasn't started, 0 discussion, so you will give it 9 to 12 months before you get any study started, it is now where CED trial actually will finish prior to the PMR. And that's the reason why we believe that it should be coverage with restriction, referencing the PMR that will come later and sooner than any CMS CED study.

That's why you question the motive.

We'll go next to Brian Skorney with Baird.

I hear you -- you said that you would hope that CMS would consider lecanemab's Phase III, should it be positive, to reassess their decision. You'll be surprised here, I can't agree more. I guess my question would be in the opposite direction. What would you feel about the FDA decision on aducanumab should lecanemab fail in Phase III? Do you -- would you also [ take that ] to be a consideration that sort of the plaque hypothesis is then weakened by a failure to demonstrate clinical effect?

Priya?

Yes. It's a very good point. And I think that, based on our data from EMERGE, we are very confident about the amyloid beta hypothesis. So I think, first of all, we're starting from a very high confidence place. We feel even more confident because we've demonstrated the downstream impact on tau pathology. And this is also true from the donanemab data, which is a much smaller subset, but also pointing in the same direction. And true from the data that we have from lecanemab. Now trials have many considerations and many reasons why they could -- may not achieve primary endpoint, statistical significance and may have all kinds of other permutation combinations in their outcomes. So I think it would be very premature for us to sort of discard the amyloid hypothesis if 1 or 2, if any of these products fail. And we also have to define what failure is. So I think there's a lot of details here and a lot of nuances that would have to be very carefully considered before we can say that the amyloid hypothesis does not stand. We have a lot of clinical validation, postmortem data, genetic validation. There's just simply an overwhelming evidence. It's a matter of sort of how are the trials being conducted and are they asking the right questions. That's probably more of what we might need to focus on if we see sort of a very gray zone ahead. Thank you.

We'll go next to Sumant Kulkarni with Canaccord.

Given how important zuranolone might be for Biogen and how the product might change the treatment paradigm for depression from chronic to episodic, can you give us some detail on your preliminary thoughts on pricing for the product as MDD is a large indication with standards of care that are mostly generic today? And how you might avoid going through a pricing sort of dynamic that you faced on the Alzheimer's side of things?

Alisha?

Thank you very much for the question, and it's an excellent one. It's something that we're in discussion right now and trying to understand how we'd like to model this because it's going to be so completely different than what you've seen before with such a short span of time that you utilize the product but such a rapid onset of action and consistent durability. So we are in process right now of looking at that, and that's the only information I can provide.

We'll go next to Salim Syed with Mizuho.

Great. Thanks for the question, guys. So I appreciate all the commentary on that the outcome here that you guys would like to see is coverage with restrictions. But a large part of this debate is still about the data, and I don't know if coverage with restrictions really will answer that question. So I'm just curious to get your confidence level that you'll actually be able to change the uptake curve here post an April final decision. I mean, are you guys really all that confident? [ Since Al clearly left, ] I imagine those conversations have become more difficult. But just curious how you're thinking about that. I mean, it still seems like a very risky proposition. So if you can just opine on that.

Alisha?

So I think you heard Michel before mention or saw in one of our press releases the 50,000 patient number that was out in the public, especially post our price decrease. That 50,000 patient number was based off of a positive outcome in April, which means the coverage with restrictions, coverage to label, something that has open access. If you were to actually look at that model, you will see it's a very rapid acceleration from where we are today. And so we do believe reimbursement was one of our problems. That was one of the headwinds we faced with the delay. So therefore, if that's taken off the table, that automatically gives us relief. And remember, if it's a coverage with restriction or coverage to label, physicians can start writing right away. Where if it's a CED, keep in mind, you have to wait for that CED to open, which can take approximately 2 years for a trial and take 1 year for a registry. So acceleration would happen very quickly post April. Secondly, you are correct that the second headwind has to do with our data. And as you know, we do have a publication that we are waiting on that should be out hopefully in the very near future. That will be another thing that will support us. However, if you look at where we've been over the last couple of months, the announcement of the PMR has definitely been very well received, how quickly we are going to complete the PMR and how quickly we are going to enroll patients into it. And secondly, CTAD. The data that we released at CTAD also has been very well received and has influenced physicians in the right way, along with, of course, the price decrease. And I will say that payers, physicians, have all, again, really given positive comments about that. Along with the patient advocacy groups, they came out very strong once we decreased the price. They called on CMS to make sure there was open access. And we've actually lowered out-of-pocket expenses for patients dramatically if they are fee-for-service or if they have a maximum out-of-pocket pay. So we do believe there will be acceleration. And when you think about the example I gave you earlier of what we've seen in the last several weeks of December, that once you put that effort in, once physicians get closer to the data and once you activate patients, you're going to see it move more rapidly than what you see today.

Can you just comment on the Al piece, Alisha, real quick? Leaving in these conversations -- on the uptake. Obviously, Al's departure, I presume that's a negative for the uptake curve here.

Actually, Al had an amazing relationship clearly with some of the key opinion leaders and with the community. However, his departure has not affected anything when it comes to prescribing the product or the acceleration of the product at all.

It looks like we have 5 questions left. We'll do our best to get to all of you. We can go a few minutes over if we need to. So we'll go next to Laura Chico from Wedbush.

I guess maybe just with respect to the lecanemab readout, the Phase III readout. I don't think I quite understood the answer. But I guess asking the question a little differently, what read-through would you make to ADUHELM if the lecanemab Phase III study does not demonstrate an improvement on CDR-Sum of the Boxes.

Priya?

I think that, that would raise some questions, but I think we have to look at the totality of the data. We have to look at the fact that it's a very large Phase III, which is -- has the proportion of MCI and mild subjects. So we will have to really look at the data in that scenario. But I'm very cautiously optimistic, based on the Phase II data, that it is likely -- it has a good chance of being positive. And then I think we have to look at all the secondary endpoints. And this will also be true not just for lecanemab, but it will be true of all the Phase III readouts. So as I said, I think that in aducanumab, we feel very strongly that the data were compelling from EMERGE. So I don't think we have any doubt that, that was by chance alone. That's the first point, I think, that I need to reiterate here, that the EMERGE data were not by chance. Because we know that if it was by chance, it's a very rare occurrence. And we also saw exposure-response relationships between amyloid and response and dose across both ENGAGE and EMERGE, which is in our label. So I think we feel quite strongly that the surrogate marker is reasonably likely to predict clinical benefit. And we have seen that surrogate marker move significantly in the Phase II trial that lecanemab had. So we'll see what happens, but I don't think that we are going to be ready to say that the amyloid hypothesis doesn't work. This will be a totality of data as well as data from our competitors. So I think we have to look at a lot more than just the lecanemab or just aducanumab alone.

We will go next to Yatin with Guggenheim.

So for lecanemab, is there a plan to maybe change the accelerated approval optionality to more full approval given that the cognitive data is going to come towards the end or towards the second half of this year? Are you going to still push for a -- and then if you can also comment, like why do you think donanemab or lecanemab was not cited in this draft, they're similar to the other compounds, given that they both have positive data?

Priya.

Yes. I'll answer the first question, and that is that I think that lecanemab is -- I'm sorry, can you -- I've got the second part. Can you repeat the first part?

Will you file -- will you still file...

Yes, file. I got it, I got it. So the filing, just to reiterate what Eisai has commented, and I think we support completely, is that they have started their rolling submission. They expect to complete that submission. They are under breakthrough designation. And that's a pretty natural progression often in terms of expedited pathways to an accelerated approval. Now I think what's very encouraging and great in terms of timing is that soon after that filing is complete, we would expect to see the Phase III data readout. And that can serve as the confirmatory trial. So I think that there's no real advantage to waiting, at least as of now. It would be a natural progression to kind of complete the filing as they've initiated, get the readout and then see where they are in that review process and whether that gets folded in or that gets sort of first accelerated and then a secondary aspect of the traditional standard approval. So that remains to be seen, and a lot of that will depend on priority status or not and what is the time line, all of that. How much of the data from the Phase III will be ready ahead of FDA having to make their decision based on accelerated filing. So I think in terms of regulatory process, it will depend a little bit on how all the pieces stack up. But I think that it is optimistic to have an accelerated approval and then follow up with potentially a standard approval. So I wouldn't expect -- traditionally, I wouldn't expect any change. I don't have any information beyond that as of now. And then with regards to the second part, I am actually going to hand that to Alisha.

Thank you, Priya. First, I just want to reiterate that for the NCD draft that's under CED, this is regardless of accelerated approval or full approval, okay? So either way, you are getting the CED according to the draft as it is today. The drugs that are included in this draft are Part B and Part C drugs. That means it's ADUHELM, dona and leca. That means it has to be supervised by a physician or administered by a physician. However, what falls out of here is if you're a Part D drug, so if it's a self-administered drug, you are not under this NCD analysis, which means you can have a subcu. So if leca comes out with a subcu or ADUHELM comes out with subcu that you administer at home, you no longer have the requirement of the CED.

We'll go next to Tom Shrader with BTIG.

Great. So almost every aspect of this package has been attacked in one way or another, and a lot, you can deal with. The hardest one to deal with is the size of the clinical benefit. We heard that really starting at the panel and ever since. And the question is, how relevant do you think that is now? Is that still an issue? Or do you think you've brought physicians around? And do you need to do something in a trial to come up with some sort of more concrete definition of how much patients really benefit?

Yes, I think it's a critical point. Priya? And Alisha, the feedback from the market.

Yes. I'll say that the clinical benefit is very important. It's always an important consideration for us, but also for our prescribers. And I think that we have some excellent opportunities to continue to generate data. Number one, I already spoke to it, it's our redosing EMBARK study. Where patients have been dosed for a while, and many of these patients will get up to their full titration and we'll be able to have more data generation from the study. So I'm very optimistic that we'll be able to generate that information. And I think the second one is our ICARE AD registry, which is of course dependent on commercial uptake. But we expect and we have the infrastructure and the setup to enroll really more than 6,000 patients into our ICARE registry -- sort of registry setup. So I think we'll get a lot of meaningful data from there. And I'll turn it to Alisha. We get anecdotal reports very often. But I'll turn it to Alisha on commenting further on that.

And if I may, Priya, the study population in our Phase III were very early patients.

Absolutely right. 80% at MCI and 20% mild.

So thank you, Priya. And Tom, it's such a great question because in this launch, the one thing that we've learned is every piece of data matters, and doctors thirst for more data. And so anything that comes out seems to help. Some doctors are really close to it and understand it, others take a lot more education. So it will take time to educate everyone to the scale that they probably need to be educated to. However, what I can tell you is the reason why the accounts are coming on more quickly is due to the education. But secondarily, if you look at the accounts and you look at the ones that started early, they are the ones that are starting to get feedback from patients now, right? And the more feedback they get from the patients, which I have to say the majority of patients on this product have had a great experience, they're giving great examples to physicians. One of them called us early on in the launch, a patient had only been on their fourth dose. And a caregiver called and said, "You know what? This is the first morning my wife remembered my name." So you have to ask yourself what really matters, right? What are the things that really matter to these families? And that is what physicians are starting to hear, and they're starting to see the improvements. And that is what starts spinning more and more patients through the system because doctors actually see what the drug does.

We'll go next to Alethia Young with Cantor Fitzgerald.

I guess, Michel, just for you. You mentioned something about motives a couple of questions ago, kind of questioning motives. Can you talk a little bit more about that? And then on top of that, like who are like the stakeholders that would help make an influence change this decision? If you look back at other situations where maybe the outcome reversed.

What that question is duplication of similar type of data generation during a period of full overlap. This is what raises questions.

Okay. Are there other stakeholders that, like, once you try to figure out what to do with the next 3 months that would -- might be helpful in building a case here?

I think so. I mean, you've seen already many reactions that we had at the day 2 of this 30-day period. And we are listening and we are getting things organized from our side. But people will go on their own. They don't need us to orchestrate anything. And they will stand for what they believe, which is the best testimony of the support they have on the therapy.

And our final question from Myles Minter at William Blair.

You mentioned near-term publication expected for ENGAGE and EMERGE. That would imply that hopefully you're through the review process, you have proof on the desk of that. And throughout the review process, should we be expecting any sort of new versions of the analysis here? Or should CMS be expecting them?

Priya.

Yes, I can't comment on the details, but what I can tell you is we are under review at a top-tier journal. And I'm very cautiously optimistic that we will see this soon in publication. That's what I can comment on.

Is soon before April?

I hope so.

I want to thank you all for your engagement, listening and support to the company. We are very resilient as a team, and we have overcome many situations in the past, and I'm reasonably optimistic that we'll be in a position to do the same. We remain fundamental to our values and we are here for the long-run value generation for our shareholders. Thank you all for your attention. Have a good day.

Thank you. Bye-bye.