Good morning, and welcome to Biogen's second quarter 2022 earnings call. Before we begin, I encourage everyone to go to the Investors section of biogen.com to find the earnings release and related financial tables, including our GAAP financial measures and a reconciliation of the GAAP to non-GAAP financial measures that we will discuss today.

Financials are provided in Tables 1 and 2, and Table 4 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 the risk factors discussed in our SEC filings for additional detail.

On today's call, I’m joined by our Chief Executive Officer, Michel Vounatsos; Dr. Priya Singhal, Interim Head of Research and Development; and our CFO, Mike McDonnell.

As a reminder, during the Q&A portion of the call, we kindly ask that you limit yourself to one question. I will now turn the call over to Michel.

Good morning, everyone, and thank you for joining us. Biogen continued to execute well in the second quarter, and we are pleased to be raising our full year financial guidance.

We believe our achievements are critical steps on our path to drive renewed value creation for both patients and shareholders over time. First, together with Eisai, we're granted Priority Review for lecanemab, under the accelerated approval pathway in the U.S.

for early Alzheimer's disease. We expect an FDA decision by January 6 of next year.

And in parallel, we look forward to the upcoming Phase 3 readout expected in the fall. Additionally, together with Sage, we reported positive data in postpartum depression.

The SKYLARK Study is now the second positive Phase 3 study supporting the potential of zuranolone in PPD with four additional positive randomized controlled trials in major depressive disorders. We believe there is a substantial body of evidence supports a significant opportunity for zuranolone.

Pursuit of innovation, however, does not come without setbacks, and we were disappointed to learn that the BIIB104 Phase 2 study in schizophrenia was not positive. I will now focus on the near-term operational priorities we outlined in our last call, while Priya will review our recent progress in R&D, and Mike will discuss our second quarter performance.

First, we are continuing to focus our R&D sources on programs where we see the greatest potential while also aiming to rebalance the risk profile across our pipeline. For example, we intend to accelerate the regulatory filing of zuranolone in postpartum depression following the positive SKYLARK Study.

In addition, we have terminated some R&D programs that we believe lower positive success such as BIIB076, an anti-tau antibody in Alzheimer's disease and BIIB100, a small molecule XPO1 inhibitor in ALS. Second, we are on track to implement the cost reduction and productivity measures outlined on our last call in order to further align our costs with our revenue base while maintaining our focus on execution.

Third, we are pursuing additional global growth opportunities with a focus on key emerging markets. This includes China, where we are encouraged by the launch of SPINRAZA.

Fourth, we are focused on driving renewed growth in our biosimilars business. We just recently launched BYOOVIZ, the first biosimilar referencing LUCENTIS in the U.S.

Biogen's first entry into the U.S. biosimilars market, we also expect to begin launching BYOOVIZ outside the U.S.

early next year. With the completion of the sales of our joint venture interest in Samsung Bioepis in the second quarter, we now have an expanded ability to pursue the biosimilars business on our own as we aim to bring more biosimilars products to more patients, geographies.

We continue to advance our biosimilars pipeline, which includes two Phase 3 programs referencing EYLEA and ACTEMRA. Fifth, we remain focused on capital allocation during the quarter.

We entered into new collaborations with MedRhythms in MS and Alectos in Parkinson's disease, and we continue to evaluate both internal and external value creation opportunities. We also returned approximately $500 million to shareholders during the quarter through share repurchases.

We are also pleased with the progress in our collaboration with Genentech for mosunetuzumab, a CD20xCD3 bispecific antibody which recently approved in the EU for patients with relapsed or refractory follicular lymphoma. The BLA of mosunetuzumab for medication was recently granted Priority Review by the FDA, and we look forward to a potential approval in the U.S.

Our progress across these areas in addition to the recent advancements we have made in R&D have potential to help drive growth over time. Of course, not all our programs will deliver the results, we hope, which is why we are continuing to advance and build a diversified and appropriately balanced pipeline as we work to create and sustain a multi-franchise portfolio over time.

This includes near-term opportunities in Alzheimer's disease and depression followed by other areas such as Parkinson's disease, lupus and stroke in the mid- to late 2020s. We remain committed to taking advantage of all the strengths of the company.

Our talent, our portfolio, our manufacturing capabilities, our pipeline, which includes 10 programs in Phase 3 or filed and our strong balance sheet to deliver results for both the patients we serve and our shareholders. I will now turn the call over to Priya for an update on our recent progress in R&D.

Thank you, Michel, and good morning, everyone. I would like to start by thanking the Biogen team for their focus and dedication as we continued to advance a robust and diversified R&D pipeline.

As Michel mentioned, we had several exciting R&D achievements this past quarter that I believe are key steps toward advancing our pursuit of meaningful new therapies for patients. Starting with Alzheimer's disease, as Michel mentioned, the FDA has accepted and granted Priority Review for the BLA for lecanemab in early Alzheimer's disease under the accelerated approval pathway.

Eisai is also continuing to progress lecanemab Phase 3 Clarity study with an expected readout this fall. The Clarity AD study was designed to build upon the results of the prior Phase 2 study and utilizes clinically balanced assessments designed to evaluate various aspects of cognition and function.

Given the robust trial design, we believe that the totality of the Clarity AD results should allow us to further understand the effect of amyloid removal on different clinical domains of Alzheimer's disease. The FDA has agreed that Clarity AD when completed can serve as a confirmatory study to verify the clinical benefit of lecanemab, pending the results of Clarity AD study, Eisai plans to file for traditional approval of lecanemab in the U.S., EU and Japan by the end of Q1 2023.

This timing may allow for lecanemab, if approved, to become the first anti-amyloid antibody for Alzheimer's disease with traditional approval. Last quarter, simulation modeling based on lecanemab Phase 2 results, Eisai also published an analysis estimating potential long-term outcomes of treatment with lecanemab.

The results of this analysis suggest that compared to standard of care alone, individuals treated with lecanemab, in addition to standard of care, may potentially experience slower disease progression to mild, moderate and severe Alzheimer's disease from baseline by 2.51, 3.13 and 2.34 years on average, respectively. These preliminary results could possibly translate into additional quality-adjusted life years and reduction in formal and informal cost of this disease.

Beyond lecanemab, we continue to advance biosimilars pipeline that is diversified across molecular targets and modalities. This includes BIIB080, our ASO targeting tau, where we expect to initiate a Phase 2 study later this year.

Moving to neuropsychiatry, together with Sage, we were very excited to announce positive results from the SKYLARK Phase 3 Study of zuranolone in postpartum depression. The SKYLARK Study met its primary endpoint and all key secondary endpoints with a 2-week course of 50 milligrams zuranolone, demonstrating a statistically significant improvement in symptoms at day 15 as compared to placebo, the primary endpoint and at day 3, day 28 and 45.

This is the second positive Phase 3 study of zuranolone in postpartum depression further reinforces the clinical profile of zuranolone that has been observed to date. Postpartum depression is 1 of the most common medical complications occurring during and after pregnancy, affecting an estimated 1 in 8 mothers or approximately 500,000 women in the United States each year.

Depression, sadness, anxiety, thoughts of hurting oneself or one's infant and thoughts of suicide are common signs associated with PPD. This is an area of significant unmet need where new treatment options are desperately needed.

With the SKYLARK Study results now in hand, we are working with Sage to advance a single regulatory filing for zuranolone in MDD and PPD in the U.S., which we expect to complete in the second half of this year. Last quarter, Sage also presented the results of the zuranolone Human Abuse Liability potential study at the College on Problems of Drug Dependence annual meeting.

The results of this study showed that 30 and 60 milligrams of zuranolone demonstrated lower abuse potential as compared with alprazolam 1.5 milligrams and 3 milligrams in recreational users of CNS depressants. 90 milligrams of zuranolone was comparable to alprazolam, 1.5 milligrams and 3 milligrams.

As a reminder, the zuranolone doses studied in the MDD and PPD trials were between 20 to 50 milligrams. Also in neuropsychiatry, we were disappointed that the TALLY Phase 2 study of BIIB104 in cognitive impairment associated with schizophrenia or CIAS, did not meet its primary or secondary efficacy endpoints.

Most adverse events in the BIIB104 treatment arms were mild to moderate in severity. Given the consistent lack of efficacy observed across the primary and secondary measures of cognition and functioning, while demonstrating expected drug exposure levels during the entire 12-week evaluation period, we have decided to discontinue the BIIB104 program in CIAS.

We are continuing to analyze the data and plan to present detailed results at an upcoming scientific forum. Moving to our neuromuscular portfolio.

Last month, we presented new 12-month data from the VALOR Phase 3 study and its open-label extension of tofersen in SOD1-ALS, a progressive and rare genetic form of ALS. This analysis was designed to evaluate participants who initiated tofersen during 6 months placebo controlled period in VALOR versus in participants originally on placebo, who had a delayed start of tofersen treatment during the study of open-label extension.

The results of the new 12-month analysis showed that initial -- earlier initiation of tofersen slowed decline across measures of clinical and respiratory function, strength and quality of life. Furthermore, tofersen led to robust and sustained reductions in neurofilament, a marker of axonal injury and neurodegeneration.

We believe that these results build upon the encouraging trends in reduced disease progression originally observed in the VALOR 6-month randomized study and further support the potential for tofersen to slow disease progression in SOD1-ALS. We continue to engage global regulators with these data, and we will provide updates when appropriate.

In movement disorders, we initiated the Phase 2b LUMA Study in Parkinson's disease for BIIB122, a small molecule LRRK2 inhibitor that we are developing in collaboration with Denali Therapeutics. LRRK2 mutations result in hyperactivation of the kinase and are estimated to account for roughly 5% of familial and 2% of sporadic Parkinson's disease.

By inhibiting LRRK2, BIIB122 is designed to target an underlying biological pathway implicated in Parkinson's disease, lysosomal function. For this reason, we believe BIIB122 may have therapeutic potential in Parkinson's disease more broadly, both in people with and without pathogenic LRRK2 mutation.

The LUMA study is designed to evaluate whether once daily oral BIIB122 administration can slow clinical worsening versus placebo in Parkinson's disease patients without a pathogenic LRRK2 variant. We also anticipate initiating the Phase 3 LIGHTHOUSE Study later this year designed to evaluate the safety and efficacy of BIIB122 in Parkinson's disease patients with a confirmed LRRK2 pathogenic variant.

There are roughly 10 million people suffering from Parkinson's disease worldwide and no approved treatment sets slowed disease progression. By inhibiting LRRK2, we have the potential to deliver a first-in-class therapy that may significantly alter the course of disease.

In conclusion, we executed well against our R&D objectives in the quarter and continue to prioritize our efforts across both therapeutic areas and programs. As Michel mentioned, we have already made several decisions resulting from this prioritization effort.

And this is an ongoing process that will be driven by both scientific insights and internal inflection points. Moving towards the remainder of 2022, we anticipate several exciting milestones.

These include zuranolone regulatory filings for both MDD and PPD in the U.S., the Phase 3 readout of lecanemab in Alzheimer's disease and the initiation of mid- to late-stage studies in Alzheimer's, Parkinson's and lupus. These are therapeutic areas characterized by significant unmet need and where Biogen has opportunity to deliver first-in-class, best-in-class therapies to patients.

I will now pass the call over to Mike.

Thank you, Priya, and good morning, everyone. I will provide some highlights of our financial performance for the second quarter and update to our full year 2022 guidance.

Please note that all financial comparisons are versus the second quarter of 2021, unless otherwise noted. Total revenue for the second quarter was $2.6 billion, which was a decrease of 7% at actual currency and 5% at constant currency.

Non-GAAP diluted earnings per share in the second quarter was $5.25, a decrease of 6%. Total MS revenue inclusive of OCREVUS royalties was $1.7 billion, a decrease of 4% at actual currency and 3% at constant currency.

Global TECFIDERA revenue of $398 million decreased 18% at actual currency and 17% at constant currency. TECFIDERA revenue in the U.S.

increased versus the prior quarter. However, this was primarily due to channel dynamics and we do expect TECFIDERA in the U.S.

to decline throughout the year of 2022. Outside the U.S., TECFIDERA was modestly impacted by generic competition in markets such as Canada and Germany.

At this point, we are aware of several generic applications that have approved in Europe, and we will be monitoring the situation closely. Importantly, we were pleased to be granted a new patent in the EU and reserve all rights to assert the patent against infringing but it's possible that it may still be at risk.

Global VUMERITY revenue of $137 million increased 51% at actual currency and 52% at constant currency. VUMERITY continued to grow in the U.S.

We are pleased with the trajectory. Outside the U.S., VUMERITY is now launched in 14 markets.

We are currently working with our contract manufacturing suppliers potential supply constraints and have therefore delayed any additional country launches. Global TYSABRI revenue of $516 million decreased 2% at actual currency and was flat at constant currency.

In the United States, TYSABRI revenue was negatively impacted by modest volume declines, partially offset by favorable pricing. Outside the U.S., we were pleased to see continued patient growth.

We are aware that regulatory filings for a biosimilar referencing TYSABRI have been submitted to both the FDA and the EMA. We will continue to enforce our IP, but a biosimilar could launch upon approval in the U.S.

and EU, which could occur next year. Global Interferon revenue of $350 million decreased 13% at actual currency and 11% at constant and was impacted by the continued shift from the injectable platform to oral or high efficacy therapies.

Versus the prior quarter, Interferon revenue increased 13% at actual currency and 14% at constant currency, primarily due to seasonality in channel dynamics in the U.S. Moving to SMA.

Global SPINRAZA revenue of $431 million, declined 14% at actual currency and 11% at constant currency. In the U.S., we're encouraged to see fewer SPINRAZA discontinuations during the quarter.

Outside the U.S., the revenue decline was primarily driven by competition and with the timing of shipments in certain markets, pricing dynamics and negative currency impacts. Global SPINRAZA revenue decreased 9% versus the first quarter of 2022 at actual currency and 8% at constant currency, driven by competition and negative currency impacts outside the U.S.

as well as some seasonality dynamics in the U.S. Moving to our biosimilars business.

Revenue of $194 million declined 4% at actual currency, increased 3% at constant currency. Biosimilars volume increases were more than offset by negative currency impact and pricing pressure.

We continue to expect full year biosimilars revenue to decrease versus 2021. We are pleased to have launched BYOOVIZ this quarter in the U.S., and we recorded some modest initial revenue due to channel stocking.

As a reminder, we expect a gradual launch of BYOOVIZ with more meaningful revenue contribution starting in 2023. Total anti-CD20 revenue of $436 million decreased 1%.

Revenue from OCREVUS royalties increased 14%, which was more than offset by continued RITUXAN declines due to biosimilar competition. Now moving on to expenses and the balance sheet.

Second quarter non-GAAP R&D expense was $529 million, including $18 million in upfront payments related to operations with MedRhythms and Alectos Therapeutics. This is compared to $585 million in the second quarter of 2021, which included approximately $50 million in upfront payments.

Non-GAAP SG&A was $570 million, including approximately $29 million related to ADUHELM. This is compared to $635 million in the second quarter of 2021.

Second quarter collaboration profit sharing was a net expense of $29 million, which includes $58 million of profit sharing expense related to the collaboration with Samsung Bioepis, partially offset by reimbursement of $29 million from Eisai related to commercialization of ADUHELM in the U.S. Non-GAAP other expense was $79 million, primarily driven by interest expense.

GAAP other income was $429 million, which included two items of note. First, we recorded an approximately $1.5 billion gain on the sale of our equity stake in the Samsung Bioepis joint venture.

In addition, we recorded $900 million, plus estimated fees and expenses, related to an agreement in principle to resolve a previously disclosed qui tam litigation relating to conduct prior to 2015. This agreement in principle does not include any admission of liability and is subject to the negotiation of final settlement agreements and documents.

We expect to make the payment shortly after the agreements are finalized, which we expect to be as soon as possible and within the next 12 months. In the second quarter, we generated $737 million in cash flow from operations.

Capital expenditures were $37 million. Free cash flow was $700 million.

We repurchased 2.4 million shares of the company's common stock during the quarter for $500 million. As of June 30, we ended the quarter with $7.3 billion in debt, $5.9 billion in cash and marketable securities and $1.4 billion in net debt.

In July, we repaid our senior notes due September 2022, with an aggregate principal amount of $1 billion. Of note, as of June 30, we utilized approximately $71 million of work in-process inventory related to lecanemab.

We plan to continue building inventory over the coming months and we are also procuring raw materials associated with this production. If the lecanemab Phase 3 study is negative or lecanemab does not receive regulatory approval, we would expect to expense inventory on hand at that time as research and development expense subject to cost sharing with Eisai.

Overall, we remain in a very strong financial position with significant cash and financial capacity, including a $1 billion undrawn revolving credit facility to invest in growing the business over the long term. Let me now turn to our updated full year 2022 guidance.

We are increasing our full year revenue guidance from our previous range of $9.7 billion to $10 billion to a range of $9.9 billion to $10.1 billion and increasing our full year non-GAAP diluted EPS guidance from our previous range of $14.25 to $16 to a new range of $15.25 to $16.75. This guidance increase is primarily a result of better-than-expected topline performance and continued cost management.

This guidance assumes that foreign exchange rates, as of July 15, will remain in effect for the remainder of the year, net of hedging activities. Importantly, we are raising our revenue and EPS guidance ranges despite some meaningful currency headwinds which were not included in our guidance at the beginning of the year.

Specifically, subsequent to issuing our most recent guidance on May 3, we have experienced a headwind of approximately $55 million to revenue and $0.20 to EPS due to currency fluctuations from April 29 through July 15. This is in addition to a headwind of approximately $120 million to revenue and $0.35 to EPS due to currency fluctuations between January 1 and April 29.

These currency headwinds are primarily due to strengthening of the U.S. dollar relative to other currencies in which we transact.

This financial guidance assumes continued declines in RITUXAN revenue due to biosimilar competition as well as continued erosion of TECFIDERA revenue in the U.S. due to generic entry.

Further, this guidance reflects a range of scenarios for the impact of TECFIDERA generics in the EU, which is difficult to predict. We are aware of a small number of generics that have launched to date, and we are monitoring the situation.

We assume we will utilize a portion of the remaining share repurchase authorization of $2.3 billion throughout the remainder of the year. Please see our press release for important guidance assumptions.

In summary, we continue to execute well across our core business and are pleased to be raising our financial guidance for the year. We remain focused on delivering results and are optimistic about the potential opportunities ahead of us that we believe can create long-term value for shareholders.

We will now open the call for questions.

So we noticed that -- and you discussed this a bit that you have been discontinuing pipeline programs, maybe a little bit earlier on, including 104, 100 and 076. Just wondering if you could maybe comment on that, whether this reflects any change in your philosophy on risk assumption and go no-go decision with respect to pipeline prioritization and maybe how -- if that might imply anything for your bar to pursue approval of lecanemab if the Phase 3 study misses on its primary endpoint?

Priya will give some color.

Thank you, Brian, for that question. So as we've mentioned last quarter, we've embarked upon a very focused and disciplined prioritization of the R&D portfolio.

But it is dependent on internal inflection points as well as external scientific insights. So I want to specifically pick up on the points that you made about BIIB104.

We just shared that we will be discontinuing development of BIIB104, which is an amp up potentiator in CIAS, which is cognitive impairment with -- associated with schizophrenia. And that is because we had a readout from TALLY where we saw expected pharmacological exposure, but we did not meet the primary or secondary endpoints.

So we believe that we have tested the hypothesis really well here and that it's time to reconsider the data, look at it very carefully, think about other applications, but ensure that we allocate resources to the programs with higher probability of success. So that addresses that question.

With BIIB076 that you also mentioned, it's an anti-tau antibody with our partnership with Neurimmune. And we did announce that we are closing down development at Biogen for it.

So I would ask that you direct further questions of next steps on BIIB076 to new immune. But from our perspective, we are focusing, for example, on BIIB080, which is our antisense oligonucleotide that affects all post-translational forms of tau.

And we will be starting a Phase 2 late-stage, mid-stage trial later this year. So that's how we're thinking about our prioritization.

And finally, to address what it does for our bar on Alzheimer's, I'll just say that we look forward to the results of Clarity AD for lecanemab. It is a well-powered, well-designed trial.

It has, we believe, the right primary endpoint in CDR Sum of Boxes, and we think that a statistically significant difference versus placebo would be clinically meaningful because of the instrument that's being utilized as a primary endpoint and also all the secondary endpoints. And in addition, we have a whole comprehensive program around lecanemab, which addresses presymptomatic patients as well as we're looking at maintenance along with Eisai and Phase 2 open-label extension and subcutaneous.

So I think we will just wait for the data. As we have said, we expect to complete the filing along with Clarity AD, should it be positive by Q1 2023.

So I hope that answers the question.

And if I may add, we are delighted to be progressing with the filing of zuranolone and leca and waiting more data also for ADUHELM. For the earlier pipeline, we have expanded materially our pipeline.

It's natural that -- first of all, there is inherent risk with neuroscience, and it's natural that we always try to increase probability of success and select based on trigger point and science inside. And this is what Priya is doing.

I just wanted to follow up on lecanemab. So I guess the key question that I've been getting a lot is, in the discussions with the FDA around using a single confirmatory study here, do you have explicit feedback from the regulators on the p-value necessary here?

Or is that going to be a review issue?

Priya?

Thank you, Matthew. So just to step back, lecanemab has completed -- is in the filing for accelerated approval pathway using the Phase 2 study, which is the 201 study, and we are expecting results for Clarity AD, which is the Phase 3 study.

This is a study with 1,795 subjects. It's a global study.

We believe it's well powered. There is no interim or futility analysis.

It will be just a primary readout sometime in the fall of this year, 2022. And currently, this has an underrepresented population also, quite similar to the CMS population of about 25% included.

Now with regards to whether it can be a confirmatory study for traditional approval? Yes.

We do believe we have this agreement that should it read out positive, it can be the confirmatory study. So I do believe that, that is exactly what we believe.

In addition, I'll just remind us that in the aducanumab briefing document, the FDA had stated that they would accept a statistically significant change on an inherently meaningful instrument such as the CDR Sum of Boxes as evidence of a clinically meaningful effect. So this is really important.

And we feel quite confident that CDR Sum of Boxes is the right primary endpoint. It is clinically validated, and it combines both cognition and function and is widely accepted as a registrational endpoint.

So we are at that point, we feel quite good about the fact that it's well powered. Of course, we have to wait to see the results.

I hope that answers the question.

Congrats on the quarter. So just on the CEO search, could you give us an update on where you are in this process?

And if you're able to now provide a time line? And just within that question, given how important lecanemab is to the company and the trajectory, is it reasonable to expect that a new CEO would not be in place until after the outcome of the trial is known?

Thanks for the question. From my discussion earlier this week with the Board members and our Chairman, I hear that the search is progressing as planned.

But at this stage, there is nothing yet to be reported. And obviously, we'll not speculate on lecanemab, but it's a very important event.

But at this stage, nothing more to report.

I had a question around -- thoughts around investment into SG&A and how that works for lecanemab, and whether there is a decision point as to your commitment to have to reimburse 50-50 and how that works if the drug actually gets to market? And then secondly, as that relates to zuranolone, same thing.

Is that a proposed net investment spend for 2023? How do we think about that?

Yes. So both of those arrangements are 50-50.

So you would expect that we certainly will be building infrastructure to support, hopefully, the successful launch of both of those products, and we share costs in both cases, 50-50. So we're very focused on managing our OpEx.

Currently, the 2022 guidance implies a midpoint of about $4.6 billion versus $5.2 billion last year, progressing well on the cost measures that we've committed to. And then, of course, the commercial infrastructure around those two products are key items that we're working very closely with both Sage and Eisai on, particularly as it relates to planning for 2023 and beyond.

How do you intend to approach the lecanemab Phase 3 data set if the primary endpoint does not work, but a secondary like ADCOMS or ADAS-Cog or perhaps a subgroup like APOE ɛ4 carriers is active? And how would that impact your FDA submission?

Thank you, Umer. So maybe I can step back to say that we -- obviously, there are several scenarios of the data readout.

And I think at one end, we have potentially a positive primary endpoint outcome with secondary endpoints as well. And we believe that the totality of the data will be really important.

And as I said already, we do have -- we have discussed this, and we have agreement with the FDA that a positive readout could serve for a confirmatory study. And on the other end of the spectrum, it's possible that the study is negative.

And in that scenario, we would be looking at also the other readouts because there are two -- these are, obviously, Biogen Eisai readout, but I will also draw attention to that that we have two other anti-amyloid agents readout in the near term. One is gantenerumab and the other is donanemab, as everyone knows.

So really, this is a bigger question about these readouts and what they mean for the anti-amyloid hypothesis in Alzheimer's -- early Alzheimer's disease. There could be several mixed scenarios, some like you mentioned, and I think it will be very difficult to speculate exactly how that might be perceived.

So I would say that the mix scenario, there could be several permutation combinations, but I think that the totality of the data is going to be important. So at this point, it would be tough for me to speculate on what mix scenario and what outcome it could lead to.

But we are considering all of this. And I think currently, our focus is on ensuring that we collect the data, close the study, have a very clear readout and then we will be engaging, of course, with the FDA because this product also has breakthrough and fast track designation, which allows us to consult the FDA for the guidance.

So we will be in close contact, and that's what I can tell you. Thank you.

You keep referring to the growth opportunity in emerging markets. Can you just help us size how big is the business?

How has it been growing? What are the key products that are growing there?

What are some products that have yet to launch there that's in the pipeline that can we look forward to growth there? Just give us a sense of where this business is going to be in 3, 4 years?

So before Mike gives -- provides more color, the important element is that the epidemiology is pretty similar in this in the West, in emerging mature markets. So our portfolio is very relevant to this part of the world.

The second point is that we see a very strongly emerging middle class that is able to afford, able to co-pay and is willing to access best education and health care. And the experience we have so far, with our expanded footprint since a few years in Latin America, in Asia Pac, in the Middle East, is that we see a very good uptake of our MS portfolio even if we thought at the outset that in Asia Pac, it was a bit lower incident.

But based on the number of the population, these are very feasible opportunities. We see a very good uptake and also for SPINRAZA.

So a good opportunity. We have a professional team.

Compliance is very important everywhere, but also in this part of the world. So we secure that we have a very good balance between where Biogen is directly and where Biogen is partnered, but we have a very good performance to date with a strong double-digit momentum.

Mike?

Yes, not a lot to add, Marc. I would say that we're pleased with a couple of markets that I would call out, one being China, the other being Brazil.

In particular, China, we're seeing excellent uptake on SPINRAZA is not a huge revenue contributor due to pricing dynamics there. But I think, overall, the majority of our international growth has been around SMA.

But as Michael said, there's opportunity MS as well. And that's something that's gone from a very small revenue base to a respectable number as we sit here in 2022 and growing in the years beyond.

So we're hopeful that we can continue to grow it meaningfully for the next several years.

Could you provide us any updates on how you're thinking about pricing and branding of zuranolone and thoughts here on how a potential Schedule IV could impact utilization?

So first, we are very encouraged by the data. I'm delighted to see the second study in postpartum, fourth study in major depressive disorders.

We had opportunities to meet many constituency and this disease is affecting so many people. So it's so relevant.

If I'm not mistaken, in the U.S., more than 19 million, as Priya said, an incident for PPD close to 0.5 million every year. So extremely relevant.

We are making a lot of progress on the positioning and understanding the patient journey and the different segments of the market between the naive and the failure to treatment the way we know in this massive market due to side effects or lack of efficacy. I hope that in the near future, we'll be -- we'll have an opportunity together with Sage to have a dedicated session with you to update you on where we stand, and we'll come back to that as soon as we can.

Concerning the price, we are not yet there. We are making some -- our homework, but nothing to add yet at this stage.

I can address the scheduling question. Thank you, Salveen.

So I just wanted to say that if you step back, the DEA process is quite robust, and they will -- this typically takes about 3 months at the end of the approval process, and they will designate a schedule. Now Sage has already completed their human abuse liability potential study, as I mentioned in my opening comments.

And there could potentially be 5 schedules that you could get. At present, what we do know is the data that we have, and we also have the background of ZULRESSO, which is a Schedule IV drug.

So at this point, we do believe that it is possible for zuranolone to get a Schedule IV. And Schedule IV is typically -- what it means is low potential for abuse and low risk for dependence.

The other drugs in this category are Ativan, XANAX, Darvocet and others. And we believe that this is currently the expected scheduling.

Of course, we have to wait to go through the process to see what the outcome will be, but that's what we expect at the moment with the data we have. I hope that addresses it.

Sorry, I'm losing my voice. So I know you've talked a lot about staying within the current pillars of neurology and maybe also immunology.

I was just wondering, if you think about derisking the portfolio and maybe going outside those pillars, what are your current thoughts about that now given you've had 3 months to think about it? And then I guess the question that goes along with that, would you make that decision after you hire the final Head of R&D and CEO?

I can get started. Thank you for the question.

So just stepping back, we have -- at Biogen, we've got a vision towards a multi-franchise portfolio. And R&D, our pipeline, I believe, is quite strong and diversified and robust.

We have programs in the clinic, many more in our discovery and exploratory portfolio, where we look at the diseases that we want to be leaders in and we think about the targets and biological pathways that we may want to address with our platform actually of multiple modalities. So that's the other strength we have.

We could be agnostic to modality because we have access to biologics, small molecules, antisense oligonucleotides as well as gene therapy. So that's sort of at a high level.

That's how we think about our R&D portfolio. Now within that, you spoke about neuroscience.

This is an absolute core strength that we have. It's a very hard space I would acknowledge.

I think we would all acknowledge it, but we've had a lot of success in this space both with multiple sclerosis as well as with spinal muscular atrophy. And potentially, we could have success with Alzheimer's.

And certainly, we have zuranolone in depression. So we are thinking about this as neuroscience potentially increasing our focus in neuropsychiatry where we've got now a product that is in filing for both MDD and PPD with a large high unmet need, and we are looking at other potential indications for the GABAA pathway that zuranolone addresses.

So zuranolone could really be much more than just MDD and PPD, and we're looking at that as well in our portfolio prioritization. Shifting over to specialized immunology, we have three Phase 3 trials, and this is really important with two products.

So we have our home grown BIIB059, which where we understand the biology and the pathway really well. We think it could be first-in-class, best-in-class for CLE cutaneous lupus erythematosus, but also for SLE.

And then we have Dapi with our collaboration with UCB, also in Phase 3. So this is a comprehensive sort of portfolio just in SLE and CLE.

There, again, we are thinking about where else do we understand the Type 1 Interferon signature, where else could we have potential indications with BIIB059, for example, in other specialized immunology indications? That's our core focus currently.

And then finally, I'll say that within neuroscience, we think we can be leaders in Alzheimer's, depression and retain our leadership in MS and SPINRAZA. SMA, we have already discussed externally are opted for BIIB115, which is a follow-on ASO with potentially a once-a-year dosing.

So that could really be very, very important. We are accelerating that as much as we can.

And we have MS, where we continue to think of BTK inhibitors. So we have a peripheral BTK inhibitor.

We also have a central BTK inhibitor, and we will continue to look at the emerging data and make decisions. Beyond this core R&D portfolio, as Michel mentioned, we also have our biosimilars and our digital therapeutics.

We've just made a foray with MedRhythms. And I think that this altogether is a very diversified portfolio.

The area that we've increased a lot of focus is as soon as we have -- for example, we had the BIIB104 readout, we're now thinking of what else we would do with that [glutamergic] pathway and the data that we will gather from there. Similarly, with BIIB059 and zuranolone, as I mentioned, how would we allocate resources to that?

What would we prioritize? So we are doing this in a very systematic fashion, and it's a call out to the R&D and the entire one Biogen team to really be doing this very well.

I hope that gives you a flavor of how we are approaching it.

Thank you, Priya. And to bring that together, what is very important for us to set the strategic direction is to clearly understand the key capabilities that we have within the company throughout the value chain, from the early research, clinical development throughout to commercialization and customer engagement.

And as Priya said, today, we believe that we are pretty well diversified compared where we were 6 years ago in neuroscience, in specialized immuno, in biosimilars and emerging digital therapeutics capability. We have now 29 programs and 10 in Phase 3 of file products.

The question is how do we derisk in addition? And this is what Priya started to work on.

Obviously, a new CEO and a permanent Head of R&D will have an opportunity to revisit the strategy together with the Board.

Going back to Alzheimer's for a minute. So in the face of the recent NCD and with the CLARITY study, obviously, pending, how do you think about the relative importance of the January PDUFA for lecanemab for accelerated approval that's based primarily on Phase 2 data?

And has the FDA given any indication if they convene an ADCOM for this initial application?

Thank you, Cory. So first -- firstly, I think that just to step back, we have filed according to the accelerated approval pathway with the Phase 2 data, as you mentioned, Cory, and the PDUFA date for that is January 6, 2023.

Now Clarity AD will readout in the fall of this year. And should it be positive it will be -- the filing for traditional approval will be completed by what Eisai has communicated by the end of the first quarter of 2023.

In addition, I think that the totality of the information and the data will matter for the outcome. At the moment, we have -- we do not have an indication that there will be an advisory committee at this moment.

We do not have that indication. So that's what I can tell you on -- about that.

I hope I addressed all the aspects of your question.

Can you talk about why BIIB104 did not meet the primary or secondary endpoints in the Phase 2 TALLY trial? And would you consider BIIB104 for a study in other indications?

Thank you, Jay. Great question.

So yes, we are very disappointed with the negative readout for BIIB104. And just to step back, the hypothesis that we were testing was that AMPA potentiation can impact NMDA hypofunction -- NMDA receptor hypofunction and thereby, increase synaptic connectivity and increase the working memory domain -- impact the working memory domain positively in cognitive impairment that's associated with schizophrenia.

So that was the hypothesis. And we were looking forward to the results.

Of course, it has not met primary or secondary endpoints. Now in neuropsychiatry trials, sometimes you don't have the right adherence and compliance during the trial.

So we have looked very carefully at the PK exposures and such. And this was a 12-week readout.

So we have looked at that, and we have quite -- we feel quite confident that this was a very high -- highly compliant trial where we have expected exposures for BIIB104 through the -- throughout the 12-week duration. So we believe that we have tested the hypothesis of AMPA potentiation leading to NMDA potentiation as well.

Having said that, we think that this was an extremely well-run trial, and we have collected a very rich data set that can give us leads on how we might want to pursue the [glutamergic] pathway in other neuropsychiatry indications. So yes, that is something that we are looking at very carefully, and we will be evaluating this very carefully.

We did have early Phase I trials, but that data was, unfortunately, not replicated. Now these are very small trials.

One was in healthy volunteers and the other 1 was in schizophrenia patients, but there was shorter duration and the subject numbers were 39 and 29, respectively. So very small trials.

So yes, to your question, neuropsychiatry remains an area of high focus. We believe we've increased our capabilities and focus in this area, and we'll continue to look at this very high-quality data set, and we'll also be presenting it at upcoming medical meetings.

A follow up to Cory's question but directed specifically at Mike. Mike, how does Biogen feel about putting resources behind lecanemab launch?

What would be the timing of an infrastructure build and true launch of the product? Would it be after accelerated approval, after full approval or it does seem like now there's another step within NCD likely to come at some point.

So when would Biogen feel comfortable in really investing in the commercial infrastructure for this program?

So before Mike jumps in, I would like to say that we work in full and close collaboration with our partners at Eisai that we are approaching a global launch, not suddenly a U.S. launch, and we anticipate the filing in Japan and EMA to take place during the first half of 2023.

So this will be a global launch. And obviously, as we know, there is a sequential process here between an accelerated approval and a potentially full approval after that.

Mike?

Yes. I think Michel covered a lot of it in terms of the question, Phil, but I would just say that as a reminder, that we and Eisai expect the Phase III readout for lecanemab in the fall of 2022.

The PDUFA date is in early January of '23. As you know -- as currently written, the national coverage determination does significantly limit the market opportunity for antibodies with accelerated approval.

And so as Michel said, we will closely align with Eisai to resource appropriately. We'll take learnings from ADUHELM as necessary and as where we can, and we'll resource it at each phase of its commercialization very gradually as lecanemab is launched.

I'd say that, obviously, we did make the decision to take down the ADUHELM commercial infrastructure because we felt the time gap was too large to the timing of when we would need it for lecanemab. And I think that, that was the right decision.

We feel like we can rebuild the infrastructure in a more gradual fashion and fairly quickly when we're ready. And again, that's something that we'll partner very closely with Eisai on.

I think that it will very much be dependent on the quality of the data. If the data clarifies and confirms without any ambiguity that removing the plaque is correlated with the slowing down of a cognitive decline and reinforces the hypothesis, I think arrows with a line faster than what we believe.

Yes. And the other thing to remember here, this is purely from an accounting standpoint, and it ties back a little bit to the question that Mike Yee asked earlier.

Just as a reminder, all of the revenue costs, everything will be aggregated and our 50% share will be reflected as a one-line revenue item for lecanemab.

Just want to follow up on some previous questions on lecanemab. You guys have talked about the U.S.

opportunity already, but how much of a discussion have you had with EU or Japanese regulators just on the risk/benefit bar? I wasn't sure if your prior discussions from ADU were able to give you some insight there.

Thank you, Geoff. So Eisai has communicated that they will be completing the filing in both Europe as well as in Japan by the end of Q1 2023, very similar to the U.S.

time line. This is, of course, post Clarity AD readout should be positive.

And in line with that communication, all the communications with regulators around the world, they are in line -- they have been in consultation. In Japan, Eisai actually has communicated and we have communicated previously that they have been part of its prior consultation process.

Now the prior consultation process in Japan has the ability to really expedite the review process, should the data be positive. So that's also taking place.

So all the -- everything is on track to complete the submission. Benefit risk will always drive the discussions, and we believe that the trial is set up well-powered and well designed to give us an answer on a clinically validated instrument.

So we believe that it is set up well. We, of course -- the rest will depend on the data.

Just looking ahead to the Clarity AD trial, what do you think CMS needs to see from that trial to potentially revise the NCD? I know there's a lot of discussion on the call.

But I'm wondering, is that sufficient to essentially open up access in the Medicare population.

Thank you, Evan. So I think that before we kind of -- before I answer that directly, it would be important for us to kind of reiterate that the final NCD indicated that antibodies with full approval may be covered in CMS approved prospective comparative studies and -- but that this data could be collected in a registry.

Now what is left open to interpretation here is there next point that they made, which is that the degree of rigor in these study designs may depend on good part on the strength of evidence of the initial randomized controlled trial that led to FDA approval. This aspect, we feel quite good about because we think that the trial is well designed and well set up and well powered to give us a readout.

So we believe that if the trial reads out positive, that is the Clarity AD that there would be a chance that it would meet the high level of evidence bar that NCD has put forward from -- that CMS has put forward in the NCD and that they could potentially reconsider for full coverage. The other aspect to consider here is that there are two other readouts coming in the same sort of time frame, which could also influence how CMS looks at their guidance and what they designate as a high level of evidence.

So it's not clear to us at this point, but it will depend on each molecule, Phase 3 data is my personal interpretation on this. Now as Eisai has announced, Clarity has a robust design, and they believe that it could meet the high level of evidence set forth by CMS in the NCD memo.

So we do think that it could be reconsidered. And I think the high level of evidence would have to include safety, efficacy under represented population that mirrors the CMS population.

In addition, I would say that the population in the Clarity AD also has comorbidities and concomitant medications not very dissimilar from the CMS population. So I think these things set us up well and they bode well.

I think final outcome will depend on the data.

And to add to what Priya has said, beyond the solid design, there is an open-label extension that will add some information. There is also a preclinical trial ongoing for the earlier population and life cycle management opportunities with new subcutaneous formulation also underway.

And that will conclude our call today. Thank you, everyone, for joining us.