Biogen : Reports Second Quarter 2023 Results

Press Release

Cambridge, Mass. - July 25, 2023

Biogen reports second quarter 2023 results and reaffirms full year 2023 guidance;

LEQEMBI launched in the U.S.

Second quarter revenue $2,456 million; GAAP diluted EPS $4.07; Non-GAAP diluted EPS $4.02

Poised for leadership in Alzheimer's disease with launch of LEQEMBI in the U.S.

New "Fit for Growth" program expected to generate approximately $1 billion in gross operating expense savings, approximately $300 million of which will be reinvested into product launches and R&D programs, resulting in approximately $700 million in net operating expense savings by 2025 - program includes net headcount reduction of approximately 1,000

TECFIDERA regulatory market protection in E.U. extended until February 2, 2025

New data highlight potential benefit of SPINRAZA for the treatment of spinal muscular atrophy in infants and toddlers with unmet clinical needs after gene therapy

R&D pipeline prioritization substantially complete, enabling a sharper focus on high potential opportunities

Commenting on Biogen Inc.(Nasdaq: BIIB) results, President and Chief Executive Officer Christopher A. Viehbacher said:

"In the second quarter, Biogen continued to advance groundbreaking science with the FDA approval of two first-in-class therapies for Alzheimer's disease and ALS, while also delivering on our base business expectations. Biogen's business is in transition. Accordingly, we have taken a bottom-up view to shift our resources to the areas of greatest value creation. While we will be making significant investments in our newly prioritized pipeline and new product launches, we will also need to invest less in other areas which are no longer growing. With these changes, I believe that Biogen will be better positioned to maximize its growth opportunities going forward."

Financial Highlights

		Q2 '23		Q2 '22		△		 (CC#)
Total Revenue (in millions)	$2,456	$2,589	(5)%	(3)%
GAAP diluted EPS	$4.07	$7.24	(44)%		-%
Non-GAAP diluted EPS	$4.02	$5.25	(23)%		-%

Note: Percent changes represented as favorable/(unfavorable) versus the prior year period.

• Percentage changes in revenue growth at constant currency (CC) are presented excluding the impact of changes in foreign currency exchange rates and hedging gains or losses. The current period's foreign currency revenue values are converted into U.S. dollars using the average exchange rates from the prior period.

A reconciliation of GAAP to Non-GAAP financial measures can be found in Table 4 at the end of this news release.

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Revenue Summary

(in millions)		Q2 '23		Q2 '22		△		 (CC#)
Multiple sclerosis (MS) product revenue(1)	$1,209	$1,427	(15)%	(14)%
Spinal muscular atrophy revenue(2)	$437	$431	1%	5%
Alzheimer's disease revenue(3)	$(20)		$-		NMF		NMF
Biosimilars revenue	$195	$194		-%	4%
Other product revenue(4)	$4	$3	35%	32%
Revenue from anti-CD20 therapeutic programs	$433	$436	(1)%	(1)%
Contract manufacturing, royalty and other revenue(5)	$198	$98	102%	102%
Total revenue	$2,456	$2,589	(5)%	(3)%

Note: Percent changes represented as favorable/(unfavorable) versus the prior year period. Numbers may not foot or recalculate due to rounding.

NMF = No Meaningful Figure

1. MS includes TECFIDERA®, VUMERITY®, AVONEX®, PLEGRIDY®, TYSABRI® and FAMPYRATM.
2. Spinal muscular atrophy includes SPINRAZA®.
3. Alzheimer's disease includes ADUHELM® product revenue and revenue from LEQEMBI® collaboration. Upon commercialization of LEQEMBI, we began recognizing our portion of the profit share on a net basis as a separate component of total revenue within revenue from LEQEMBI collaboration in our condensed consolidated income statements, as we are not the principal.
4. Other includes FUMADERMTM and QALSODYTM.
5. Includes revenue from manufacturing of LEQEMBI beginning in the first quarter of 2023.

Expense Summary

(in millions)		Q2 '23		Q2 '22		△
GAAP and Non-GAAP cost of sales*	$593	$484	(22)%
% of Total Revenue	24%	19%		-
GAAP and Non-GAAP R&D expense	$584	$529	(11)%
GAAP SG&A expense	$548	$573	4%
Non-GAAP SG&A expense	$534	$570	6%

Note: Percent changes represented as favorable/(unfavorable) versus the prior year period *Excluding amortization and impairment of acquired intangible assets

• Second quarter 2023 GAAP and Non-GAAP cost of sales includes approximately $34 million of idle capacity charges. Second quarter 2022 GAAP and Non-GAAP cost of sales includes approximately $27 million of idle capacity charges. The increase in second quarter 2023 GAAP and Non-GAAP cost of sales as a percentage of total revenue was driven primarily by product mix, particularly the year-over-year increase in contract manufacturing revenue.
• Second quarter 2023 GAAP and Non-GAAP R&D expense includes approximately $13 million in estimated study close out costs related to BIIB093 (glibenclamide IV) for large hemispheric infarction and brain contusion.
• The decrease in second quarter 2023 GAAP and Non-GAAP SG&A expense was driven primarily by cost savings initiatives, partially offset by investments to support new product launches. Beginning in the first quarter of 2023 the reimbursement to Eisai for Biogen's share of U.S. LEQEMBI SG&A expense is reflected as a component of revenue rather than SG&A.
• Second quarter 2023 GAAP restructuring expense was $34 million.

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Other Financial Highlights

• Second quarter 2023 GAAP and Non-GAAP collaboration profit sharing was a net expense of $57 million, related to Biogen's collaboration with Samsung Bioepis.
• Second quarter 2023 GAAP other income was $121 million, primarily driven by net unrealized gains on strategic equity investments of $107 million. Second quarter 2023 Non-GAAP other income was
  $15 million, primarily driven by net interest income.
• Second quarter 2023 GAAP and Non-GAAP effective tax rates were 16.2% and 15.7%, respectively, as compared to 17.1% and 15.2% in the second quarter of 2022.

Financial Position

• Second quarter 2023 net cash flow from operations was $487 million. Capital expenditures were
  $71 million, and free cash flow, defined as net cash flow from operations less capital expenditures, was $416 million.
• As of June 30, 2023, Biogen had cash, cash equivalents, and marketable securities totaling $7,286 million and $6,285 million in total debt, resulting in net cash of $1,002 million.
• No shares of the Company's common stock were repurchased in the second quarter of 2023. As of June 30, 2023, there was $2,050 million remaining under the share repurchase program authorized in October 2020.
• For the second quarter of 2023 the Company's weighted average diluted shares were 146 million.

Full Year 2023 Financial Guidance

For the full year 2023, Biogen is reaffirming its guidance ranges as follows:

	Full Year 2023 Guidance
Total revenue	Mid-single digit percentage decline
	versus reported full year 2022
Non-GAAP diluted EPS	$15.00 to $16.00

This guidance assumes that foreign exchange rates as of June 30, 2023, will remain in effect for the remainder of the year, net of hedging activities.

This financial guidance does not include any impact from potential acquisitions or large business development transactions or pending and future litigation, as all are hard to predict, or any impact of potential tax or healthcare reform. Biogen may incur charges, realize gains or losses, or experience other events or circumstances in 2023 that could cause any of these assumptions to change and/or actual results to vary from this financial guidance.

Biogen does not provide guidance for GAAP reported financial measures (other than revenue) or a reconciliation of forward-lookingNon-GAAP financial measures to the most directly comparable GAAP reported financial measures because the Company is unable to predict with reasonable certainty the financial impact of items such as the transaction, integration, and certain other costs related to acquisitions or large business development transactions; unusual gains and losses; potential future asset impairments; gains and losses from our equity security investments; and the ultimate outcome of pending or future significant litigation

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without unreasonable effort. These items are uncertain, depend on various factors, and could have a material impact on GAAP reported results for the guidance period. For the same reasons, the Company is unable to address the significance of the unavailable information, which could be material to future results.

Recent Developments

• In June, the last patient was enrolled in the Phase 3 study of dapirolizumab pegol in systemic lupus erythematous (SLE). Top line results of the study are expected mid-year 2024. If this study is positive, Biogen and UCB anticipate that a second Phase 3 study would be needed to support a regulatory filing in SLE.

Conference Call and Webcast

The Company's earnings conference call for the second quarter will be broadcast via the internet at 8:00 a.m. ET on July 25, 2023 and will be accessible through the Investors section of Biogen's website, www.biogen.com. Supplemental information in the form of a slide presentation is also accessible at the same location on the internet and will be subsequently available on the website for at least 90 days.

About Biogen

Founded in 1978, Biogen is a leading global biotechnology company that has pioneered multiple breakthrough innovations including a broad portfolio of medicines to treat multiple sclerosis, the first approved treatment for spinal muscular atrophy, and two co-developed treatments to address a defining pathology of Alzheimer's disease. Biogen is advancing a pipeline of potential novel therapies across neurology, neuropsychiatry, specialized immunology and rare diseases and remains acutely focused on its purpose of serving humanity through science while advancing a healthier, more sustainable and equitable world.

We routinely post information that may be important to investors on our website at www.biogen.com. Follow us on social media - Twitter,LinkedIn,Facebook,YouTube.

Biogen Safe Harbor

This press release contains forward-looking statements, relating to: our strategy and plans; potential of, and expectations for, our commercial business and pipeline programs; capital allocation and investment strategy; clinical development programs, clinical trials, and data readouts and presentations; regulatory discussions, submissions, filings, and approvals; the potential benefits, safety, and efficacy of our and our collaboration partners' products and investigational therapies; the anticipated benefits and potential of investments, optimization of the cost structure including our "Fit for Growth" program, actions to improve risk profile and productivity of R&D pipeline, collaborations, and business development activities; our future financial and operating results; 2023 financial guidance. These forward-looking statements may be accompanied by such words as "aim," "anticipate," "believe," "could," "estimate," "expect," "forecast," "goal," "intend," "may," "plan," "potential," "possible," "prospect," "will," "would," and other words and terms of similar meaning. Drug development and commercialization involve a high degree of risk, and only a small number of research and development programs result in commercialization of a product. Results in early-stage clinical trials may not be indicative of full results or results from later stage or larger scale clinical trials and do not ensure regulatory approval. You should not place undue reliance on these statements.

These statements involve risks and uncertainties that could cause actual results to differ materially from those reflected in such statements, including: our dependence on sales from our products; uncertainty of long-term success in developing, licensing, or acquiring other product candidates or additional indications for existing

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products; failure to compete effectively due to significant product competition in the markets for our products; failure to successfully execute or realize the anticipated benefits of our strategic and growth initiatives; difficulties in obtaining and maintaining adequate coverage, pricing, and reimbursement for our products; our dependence on collaborators and other third parties for the development, regulatory approval, and commercialization of products and other aspects of our business, which are outside of our full control; risks associated with current and potential future healthcare reforms; risks related to commercialization of biosimilars; failure to obtain, protect, and enforce our data, intellectual property, and other proprietary rights and the risks and uncertainties relating to intellectual property claims and challenges; the risk that positive results in a clinical trial may not be replicated in subsequent or confirmatory trials or success in early stage clinical trials may not be predictive of results in later stage or large scale clinical trials or trials in other potential indications; risks associated with clinical trials, including our ability to adequately manage clinical activities, unexpected concerns that may arise from additional data or analysis obtained during clinical trials, regulatory authorities may require additional information or further studies, or may fail to approve or may delay approval of our drug candidates; the occurrence of adverse safety events, restrictions on use with our products, or product liability claims; risks relating to technology failures or breaches; problems with our manufacturing processes; risks relating to management and personnel changes, including attracting and retaining personnel; failure to comply with legal and regulatory requirements; the risks of doing business internationally, including currency exchange rate fluctuations; risks relating to investment in our manufacturing capacity; the direct and indirect impacts of the COVID-19 pandemic on our business; risks relating to the distribution and sale by third parties of counterfeit or unfit versions of our products; risks relating to the use of social media for our business; results of operations, and financial condition; fluctuations in our operating results; risks related to investment in properties; the market, interest, and credit risks associated with our investment portfolio; risks relating to share repurchase programs; risks relating to access to capital and credit markets; risks related to indebtedness; change in control provisions in certain of our collaboration agreements; fluctuations in our effective tax rate; environmental risks; and any other risks and uncertainties that are described in other reports we have filed with the U.S. Securities and Exchange Commission.

These statements speak only as of the date of this press release. We do not undertake any obligation to publicly update any forward-looking statements.

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MEDIA CONTACT:	INVESTOR CONTACT:
Biogen	Biogen
Jack Cox	Chuck Triano
Tel: [phone]	Tel: [phone]
[e-mail]	[e-mail]

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