B
iogen
2
0
1
9
A
nnual R
eport
ANNUAL
REPORT
2019
Concept, design and realization
PETRANIX Corporate and Financial Communications AG
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PERFORMANCE HIGHLIGHTS
Free Cash Flow 1,3
($ in millions)
Total Revenues
($ in millions)
GAAP Diluted EPS/Non-GAAP Diluted EPS 1
Product Revenues
($ in millions and % of total product revenues)
Product Revenues by Region (% of total product revenues)
U.S. Rest of the world
TECFIDERA
$4,433 $4,274
38.95% 39.3%
VUMERITY5
$6 –
0.05% –
Other4
$851 $662
7.5% 6.1%
Interferon6
$2,102 $2,363
18.5% 21.7%
TYSABRI
$1,892 $1,864
16.6% 17.1%
SPINRAZA
$2,097 $1,724
18.4% 15.8%
XXXXXXXXXX
59%
2019
41%
100%
total renewal
electricity purchased
y Biogen
46%
of manager-level
and above positions
held by women
+4.5%
increase in total
product revenues
year over yea
2017
68%
32%
2018
63%
37%
2015
2016
2017
2018
2019
$10,764
$11,449
$12,274
$14,378
$13,453
2015
2016
2017
2018
2019
$17.01
$20.22
$15.34
$16.93
$11.922
$21.582
$21.81
$26.20
$31.42 $33.57
2015
2016
2017
2018
2019
$2,223
$2,706
$2,484
$3,917
$6,264
1 Non-GAAP diluted earnings per share (EPS) and Free Cash Flow are Non-GAAP
financial measures. A reconciliation of GAAP to Non-GAAP diluted EPS and
Free Cash Flow amounts is set forth on pages 9–13 of this Annual Report.
2 GAAP diluted EPS for 2018 and 2017 includes charges of $125 million and
$1,176 million, respectively, related to the impact of the Tax Cuts and Jobs Act of 2017.
3 Free Cash Flow for 2016 through 2019 reflects an increase in capital expenditures
elated to the construction of our large-scale biologics manufacturing facility in
Solothurn, Switzerland.
4 For 2019 and 2018 Other includes product revenues from FAMPYRA, FUMADERM,
BENEPALI, FLIXABI and IMRALDI. For 2018 Other also includes product revenues from
ZINBRYTA, which was voluntary withdrawn from the market in March 2018.
5 VUMERITY was approved by the U.S. Food and Drug Administration in
October 2019 and became available in the U.S. in November 2019.
6 Interferon includes AVONEX and PLEGRIDY.
Biogen 2019 Annual Report 1
My fellow stockholders,
2019 was a remarkable year for Biogen as we
delivered strong operating performance across
all of our core business areas, double-digit
earnings growth versus a year ago and strong
execution of our strategy. We strengthened our
pipeline by adding seven new clinical programs,
which we believe will help us further expand
our multi-franchise portfolio and drive mid- and
long-term growth.
2019 was also marked by changing developments
for aducanumab, an investigational treatment
for early Alzheimer’s disease. In October 2019,
together with our collaboration partner Eisai Co.,
Ltd. (Eisai), we announced plans to pursue regulato-
y approval for aducanumab in the U.S. This decision
was based on a new analysis, conducted in consul-
tation with the U.S. Food and Drug Administration
(FDA), of a larger dataset from the Phase 3 EMERGE
and ENGAGE studies of aducanumab that had
een discontinued in March 2019 following a
pre-specified futility analysis.
The extraordinary events su
ounding aducanumab
and the progress across our portfolio is a testa -
ment to Biogen’s commitment to follow the science
– one that was made possible by fearless, dedicat-
ed colleagues.
Before turning to 2019 in more detail, we want to
acknowledge the health and economic challenges
facing all of us as a result of the cu
ent COVID-19
pandemic. Many of our communities as well as
a number of our colleagues have been directly
affected by COVID-19. We are committed to doing
all we can to ensure the health and safety of all our
employees and to provide an uninte
upted supply
of our medicines to patients around the world. We
are grateful to everyone at Biogen who has helped
us maintain our manufacturing and business
operations so that patients can continue to receive
our therapies. We are closely monitoring the ongoing
and ever-changing developments and the impact it
may have on our business operations, including our
sales, manufacturing and clinical trials.
CEO LETTER
Our purpose
At Biogen we pioneer science with the goal of
etter understanding and preserving the underlying
qualities of our essential human nature. We strongly
elieve that neuroscience is the next frontier that
will see real scientific progress and
eakthrough,
and we believe that our diverse, talented workforce,
with more than 7,700 employees worldwide, is
uniquely positioned to take on some of the most
challenging healthcare needs and to move Biogen
forward. As we work to improve patients’ lives, we
also care deeply about making a difference in our
society as a whole through science that may have
the potential to, among other things, improve
ain
health, mobility and vision. We focus on science that
seeks to solve societal problems and create access
to innovation. We work with purpose to advance
science to address the urgent and long-term
challenges facing humanity.
"We work with purpose to advance
science to address the urgent and
long-term challenges facing humanity."
Michel Vounatsos, Chief Executive Office
2 Biogen 2019 Annual Report
Delivering sustainable performance
In 2019 we generated $14.4 billion in full-year total
evenues, a 7% increase versus the prior year, and
we generated net cash flows from operations of
approximately $7.1 billion. GAAP diluted earnings
per share for 2019 were $31.42, an increase of
46% over 2018, and Non-GAAP diluted earnings per
share increased 28% over the prior year to $33.57.
Our business and cash generation remained strong
and provided us with the flexibility to allocate capital
to create long-term stockholder value. In 2019
we spent approximately $2.3 billion in research
and development and repurchased approximately
24 million shares of our common stock for a total
value of approximately $5.9 billion. In addition, we
spent approximately $515 million in 2019 on
capital expenditures, including a significant
investment in the large scale biologics
manufacturing facility we are building in
Solothurn, Switzerland.
These results reflect the resilience of our
multiple sclerosis (MS) business as
well as the continued growth of both
SPINRAZA and our biosimilars business.
Capturing the neuroscience opportunity
To review Biogen’s strong 2019 performance –
as well as Biogen’s future – let’s consider some
key statistics.
It is estimated that approximately 50 million people
worldwide suffer from dementia and approximately
10 million suffer from Parkinson’s disease.
Neurological disease is the leading cause of disability
and the second largest cause of death globally. 1,2
Aging populations will almost certainly increase these
numbers significantly. It is estimated that the global
population over the age of 60 will be nearly 1.5 billion
y 2030, and by 2050 those over 60 will be nearly
2 billion, with 1.5 billion over the age of 65. 3,4
These numbers are only part of the story. There
are important inflection points in medical history
when a
eakthrough in knowledge or technology
generates new ideas and treatments. Consider,
for example, the advancements that followed the
discoveries of anesthesia, medical imaging, penicil-
lin, organ transplants, HIV treatment and immuno-
therapy. For Biogen, we believe our expertise and
capabilities could lead to the next major inflection
point in neuroscience.
Our view is that neurological diseases are deeply con-
nected. As the pathways of disease are inte
elated,
so are the potential approaches to treating them. Our
experience in MS gives our scientists and researchers
deeper insights into remyelination and repair, neuro-
protection and axonal health, with potential appli-
cations in Alzheimer’s disease, Parkinson disease,
amyotrophic lateral sclerosis (ALS) and stroke.
Leading in Alzheimer’s disease
The announcement in October 2019 of our plan to
pursue regulatory filing for aducanumab in the U.S.
was one of the highlights of our year.
In March 2019 we announced the discontinuation
of EMERGE and ENGAGE, our two Phase 3 studies,
ased on the results of a pre-specified futility anal-
ysis that predicted that both studies were unlikely
to meet their primary endpoint upon completion. In
etrospect, we now know that the result of the futility
analysis, based on a smaller and earlier dataset,
was inco
ect. Following the discontinuation of the
studies, additional data from a greater number of
patients became available.
A new analysis of this larger dataset, conducted in
consultation with the FDA, showed that the Phase
3 EMERGE study met its pre-specified primary and
secondary endpoints by showing a significant reduc-
tion in clinical decline. And, we believe that results
from a subset of patients in the Phase 3 ENGAGE
study who received sufficient exposure to high dose
aducanumab support the findings from EMERGE,
though ENGAGE did not meet its primary endpoint.
Over the past months, we have been actively
engaging with the FDA and are working diligently to
complete the regulatory filing in the U.S. as soon
as possible. We are also actively engaging with
egulators in Europe and in Japan based on the
positive results of the new findings.
CEO LETTER
2019
total revenues
+7%
Biogen 2019 Annual Report 3
One of our first priorities was to offer eligible
patients who had been enrolled in the discontinued
aducanumab studies the possibility of restarting the
investigational treatment. The first patient in the U.S.
eturned to dosing in March 2020, and we are also
actively working in Europe and Japan to re-open sites.
If approved, aducanumab would become the first
therapy to reduce clinical decline in patients at early
stages of the disease. While this
ings tremendous
hope, there remain significant challenges as
patients are usually diagnosed late in the progres-
sion of the disease. Consequently, we have started
working collaboratively with healthcare stakeholders
to help support efforts that could enable the system
to diagnose patients early enough so they might
enefit from potential treatment