Ladies and gentlemen, good morning. My name is Abby, and I will be your conference operator today. At this time, I would like to welcome everyone 3rd Quarter Earnings Call and Financial Update. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session time for Thank you.
And I would now like to turn the conference over to Mr. Joe Mara, Vice President, Investor Relations. Mr. Mara, you may begin your conference.
Thank you, and good morning, and welcome to Biogen's 3rd quarter 2020 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 a reconciliation of the GAAP to non GAAP financial measures that we will discuss today. Our GAAP financials are provided in Tables 12 and Table 3 includes a reconciliation of our GAAP to non GAAP financial results and our GAAP to non GAAP financial guidance. 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 am joined by our chief executive officer, Michelle Bonatsos, Doctor Al Sandrock, EVP Research And Development, and our CFO, Mike McDonald. Now, I will turn the call over to Michel.
Good morning, everyone, and thank you for joining us.
As you all know, the aducanumab Advisory Committee meeting is scheduled for November 6. This is our highest priority and we are very focused on preparing for this meeting. At the same time, the TECFIDERA situation in the US is clearly a near term challenge which we will discuss. Before I continue, I'd like to welcome Mike McDonnell, our new CFO. Mike's background and track record of accomplishment make him well prepared to be a very strong contributor to Biogen.
And I know he looks forward to getting to know many of you. Now let me review some key recent developments. First, we are very pleased that the FDA has accepted our BLA for aducanumab with priority review and has stated that if possible, they plan to act early. As I mentioned, the visory committees, of course, an important event on the path to potential approval, and we are actively preparing to participate and share our perspective on our clinical data. Outside the U.
S. Early this month, we submitted a marketing authorization application in Europe and we are preparing for regulatory submission in Japan following a recent formal meeting with the PMDA. We have progressed in our U. S. Launch readiness as we remain focused on appropriate engagement with scientific leaders.
Treatment sites, defining aducanumab's value proposition and establishing collaboration multiple stakeholders to help prepare for the potential introduction of the first therapy to meaningfully change the course of Alzheimer's disease. Outside the US, we are continuing to ramp up our launch readiness, particularly in Europe and Japan. Beyond aducanumab, we continue to advance our broader Alzheimer's disease portfolio, including BAN2401 in phase 3 and multiple targeting programs targeting tau. Also in Novo Designation, we are proud to be collaborating with Denali, a premiere in Nova neuroscience company pioneering novel approaches for treating brain diseases. This collaboration provides us a mid stage small molecule LAC2 inhibitor program, which expands our pipeline of potential therapies in Parkinson's disease across multiple modalities.
We also received exclusive options rights to 2 programs for neurodegenerative diseases using Denali's innovative transport vehicle platform including for amyloid beta antibodies. With a deep pipeline, aducanumab now under review and our recent collaboration with Denali, we believe we are well positioned to lead in the fight against both Alzheimer's disease and Parkinson's disease, the number 1 and number 2 most common neurodegenerative diseases with an urgent need for novel treatments. More broadly, we have continued to develop and expand our deep pipeline, which now includes 30 clinical assets with 8 in phase III program for dipyrrolizumab Pegal in lupus with UCB. As we have demonstrated in the past, we are committed to maximizing returns for our shoulders as we aim to bring innovative therapies to patients, something that demands a thoughtful approach towards all our investments over both the short and the long term. Let me now discuss where we see Biogen strategically as we believe we are in a transitional period with several upcoming inflection points.
As we manage through the erosion of TECFIDERA in the U. S, Biogen remains focused on strong execution against our strategy. We are the leader in neuroscience with differentiated core capabilities as we aim to leverage breaking science to address the tremendous unmet medical need in this space. We are leveraging better understanding of disease biology, including the underlying genetics as well as advances in biomarkers such as novel imaging of the brain to help reduce the risk in developing therapies for many previously intractable diseases. We are bidding on a strong financial track record with the core business in MS, SMA, and biosimilars and we believe we are entering a new phase of important clinical readouts and value creation opportunities we will continue to work to maximize the potential of our broad MS portfolio, including the launch of VUMERITY and life cycle management for Tysabri and the interference.
Despite increased competition, we believe SPINRAZA can continue to grow and serve as a foundation efficacy and safety profile in SMA. SPINRAZA has demonstrated sustained clinically meaningful benefit from presymptomatic infants to adults and its safety profile has enabled us to begin assessing a higher dose for potentially even greater efficacy. We see biosimilars as another potential growth driver, while providing headroom for innovation. We are working to spend into the U. S.
And China with the potential to commercialize 2 new $11,000,000,000. Importantly, Samsung BioAPs recently announced that the Marketing Authorization Application was accepted by the EMA for SB11, a potential biosimilar, referencing Lucentis. We remain optimistic about the prospect of launching aducanumab as the first therapy to meaningfully change the course of Alzheimer's disease And this would be an important short term and long term growth driver for the company. In addition to aducanumab, we believe our pipeline could enable a second wave of growth in the mid-2020s, driven by areas such as ophthalmology, stroke, lupus and ALS. Importantly, we expect 6 mid to late stage data readouts by the end of 2021.
We plan to continue pursuing external business development opportunities to further expand our pipeline. In just under 4 years, we have committed nearly $5,000,000,000 to business development and executed 20 transactions. Going forward, we will continue to prioritize the stability of our organization to support our current portfolio We'll be focused on diligent execution, capturing every opportunity for efficiency and cost savings. In summary, we have continued to execute well serve our current and future patients as we build a multi franchise portfolio, leveraging the interconnectivity of our deep neuroscience pipeline. We have a very strong balance sheet and we will remain focused on maximizing long term shareholder value creation.
I will now turn the call over
Thank you, Michelle, and good morning, everyone. I'd like to begin by thanking the Biogen team for their hard work in making significant progress advancing our R and D programs. This includes milestones across key areas such as the regulatory filings of aducanumab, pipeline progression and business development. Starting with Alzheimer's disease. As Michelle mentioned, we are working through the regulatory procedures for aducanumab around the world.
We are also diligently preparing for the FDA advisory committee meeting on November 6th. Also in Alzheimer's disease, our collaboration partner, Eisai, dosed the 1st patient in the AHEAD-three forty five clinical program which is designed to evaluate BAN2401 in individuals with preclinical Alzheimer's disease. Through the results of this and reduced cognitive decline citing collaboration with Denali Therapeutics to co develop and co commercialize Denali small molecule Lort 2 inhibitor VNL151 in Parkinson's disease, the 2nd most common neurodegenerative disease. Lork 2 is a negative regulator of lysosomal function and certain mutations in the Lork 2 gene increased the risk of Parkinson's disease. We will examine the therapeutic potential of LERC-two kinase inhibition in patients with and without known genetic risks for Parkinson's disease.
Our hope is that 151 could be a 1st in class oral therapy that slows the progression of the disease. This collaboration also provides us with the exclusive option to license 2 preclinical programs utilizing Denali's transport vehicle platform. This platform is designed to enhance the brain uptake of large therapeutic molecules by leveraging the transferrin receptor which is highly expressed at the blood brain barrier. 1 of these 2 programs seeks to enhance the delivery of an anti beta amyloid antibody across the blood brain barrier. We are pleased to be collaborating on this platform with Denali, a pioneer in enhancing the delivery of large molecules into the central month, we presented new data from the Evolve MS2 trial that further reinforced the clinically meaningful improvement in gastrointestinal tolerability associated with VUMERITY as compared to TECFIDERA.
Specifically, Patients taking VUMERITY reported a lower likelihood of experiencing GI symptoms that interfered with daily activities or were associated with missed work and use less concomitant medication to treat GI symptoms. Also at Etrims, an analysis of real world data in patients receiving Tysabri extended interval dosing showed no significant differences in the rates of new T2 lesions, T2 lesion volumes or brain atrophy on brain MRI scans when compared to patients receiving the currently approved every 4 week dosing regimen. These data contribute to a growing body of evidence that suggest that Tysabri extended interval dosing has similar efficacy to that of standard dosing, while reducing the risk of PML. The efficacy of extended interval dosing as compared to the standard dosing regimen is being assessed prospectively in the ongoing Nova study, which is expected to readout was associated with significant improvement in 9 of 12 patient reported neuro quality of life domains, whereas in patients treated with OCREVUS, there were improvements in 4 of 12 domains. Moving to our MS pipeline.
We were disappointed to learn that affinity, the phase 2b study of opicinumab did not meet its primary endpoint or secondary endpoints. As a result, we have decided to discontinue development of opicinumab. Nevertheless, we remain committed to the therapeutic approach of repairing the central nervous system and still believe that remyelination has the potential to provide a therapeutic benefit for MS patients. We are continuing to analyze a significant data set from this study to further inform our MS research in this area, including for BIIB61. Turning to neuromuscular disorders.
Following productive engagement with the FDA, we are advancing plans for a study to evaluate the benefit of Ferson when initiated in presymptomatic carriers of SOD1 mutations that have been linked to ALS. Akin to the NURTURE study of SPINRAZA in SMA, this study is designed to evaluate the ability of Zofirsten to delay clinical onset or slow disease progression of ALS when initiated prior to clinical symptom onset. We plan to initiate this study next year. Also, in ALS, I'm happy to report that we dosed the first patient in our phase 1 study of BIIB 105 and antisense oligonucleotide targeting ATAXN2. ATAXN2 was originally identified as a modifier of TDP 43 toxicity.
A pathology comment to more than 90% of the ALS population suggesting that reduction in ATAXN2 could be therapeutic across most ALS populations other than that due to SOD1. Additionally, I would like to provide an update on our SMA gene therapy asset BIIB89. The FDA had previously placed a clinical hold on BIIB89 due to dorsal root ganglion toxicity, a pathology commonly observed in preclinical studies, in which may also occur following use of the currently available AAV mediated SMA gene therapy. Thus, we made the decision to discontinue BIIB89 and will instead on the pursuit of next generation SMA gene therapy technology that we believe will address the DRG toxicity. Lastly, we are happy to in patients with systemic luposarathymatosis with active disease despite being on standard of care therapies.
In summary, we continue to build and advance a deep neuroscience pipeline that seeks to to address patients' needs by leveraging both organic growth and also scribe therapeutics, where we are pursuing cutting edge CRISPR technology to potentially develop gene therapies for ALS. We believe this mix of internal development and external collaboration allows us to maximize the value of our and provides a source of sustained innovation to help drive long term growth
Thank you, Al. Good morning, everyone. I'm excited to join Biogen and look forward to getting to know many of you. Biogen had another solid quarter despite the recent entrance of generic TECFIDERA and the continued impacts of COVID-nineteen as we continued to execute well. We remain in a very strong financial position with significant cash and financial capacity to continue to grow the business over the long term.
I will now review Total revenue for Q3 was $3,400,000,000, a decline of 6% versus the prior year. This decline was mostly driven by TECFIDERA generic entry and is inclusive of a 1% unfavorable currency impact. Total MS revenue, including OCREVUS royalties, was $2,300,000,000, a decrease of 4% versus the prior year. MS revenue during the third quarter began to experience the impact of the entrance of multiple generics of TECFIDERA in the US, while Q3 TECFIDERA revenue outside the US was $283,000,000, representing an increase of 1% versus the prior year with continued patient growth. We believe VUMERITY can be an important product given its differentiated GI tolerability profile, as Al mentioned.
Tysabri had a strong quarter with Q3 global revenue of $516,000,000, growing 7% versus the prior year. We were pleased to see continued global patient growth We believe Tysabri is well positioned to play an increasingly important role in the treatment of MS, and we are working on several important initiatives, including subcutaneous administration, an option for home infusion, and an option for extended interval dosing. Moving now to SMA. Global Third quarter SPINRAZA revenue was $495,000,000, a decrease of 10% versus the prior year and stable versus the prior quarter. In the on both new starts and maintenance doses as well as additional competition.
Outside the U S, SPINRAZA revenue was stable versus the prior and We see the potential for global growth given a very strong efficacy and safety profile and the significant number of untreated patients across many established and emerging Moving to our biosimilars business. Revenue was $208,000,000 this quarter, an increase 13% versus to be negatively impacted by a slowdown in new treatments and reduced clinic capacity for immunology patients as a result of COVID 19. Dennepali, our 1st and largest biosimilar, became the number 1 prescribed etanercept product across Europe. We estimate there are now approximately 220,000 opportunity to continue to grow in Europe as well as potentially within the U S and other geographies. Total anti CD20 revenue in Q3 was $560,000,000, a decrease of 6% versus the prior year, with increased OCREVUS royalties offset by decreased revenue from Rituxan due to COVID-nineteen and continued erosion from biosimilars.
A trend we expect to continue to impact Rituxan. Total other revenue in the 3rd quarter increased 15% versus Q3 2019 to approximately $126,000,000. Turning now to expenses. Q3 GAAP R and D expense was $1,100,000,000 or 34 percent of revenue. Non GAAP R and D expense, which excludes $601,000,000 related to our collaboration with Denali, was $540,000,000 16% of revenue.
Beginning in Q3, material upfront payments associated with significant collaboration and licensing arrangements are excluded from non GAAP R and D expense in order to better reflect change as the $125,000,000 upfront payment related to the collaboration with Sangamo in the second quarter of 2020. Has also now been excluded from non GAAP R and D expense. Q3 GAAP SG and A expense of $573,000,000 and non GAAP SG and Within the US, we are reallocating some TECFIDERA resources to support the launch of VUMERITY as well as aducanumab. Although we will continue to fully support our broader MS portfolio. In addition, we are ramping up our commercial preparations for aducanumab which will create some upward pressure on SG to ensure we remain efficient 25%, an increase from approximately 12% in the third quarter of 2019.
This increase is primarily due to prior year favorability from Swiss tax reform, as well as current year unfavorability, primarily driven by non cash deferred tax adjustments related to TECFIDERA. For the third quarter of 2020, our effective non GAAP tax rate was approximately 18% an increase from approximately 16% in third quarter of 2019. 3rd quarter GAAP net income was $702,000,000 and non GAAP net income was $1,400,000,000. GAAP diluted earnings per share in the 3rd quarter and non GAAP diluted EPS was $8.84, a decrease We repurchased approximately 4,500,000 shares in Q3 for a total value of approximately $1,300,000,000. The share repurchase program authorized in December of 2019 was completed as of September 30, 2020, and our board of directors has authorized a new $5,000,000,000 share repurchase program.
In Q3, we generated approximately $1,200,000,000 in net cash flows from operations Capital expenditures in Q3 were $84,000,000 and free cash flow was approximately 1 $100,000,000. We ended the quarter with $4,600,000,000 in Additionally, our $1,000,000,000 revolving credit facility was undrawn as of the end of the quarter. Let me now provide an update to our full year guidance for 2020. During the third quarter, we began to experience the impact of generic entrants with more than 10 tech fedara generics approved and at least 6 now in the market. And discounted prices of approximately 90%.
Our guidance assumes significant erosion of TECFIDERA in the fourth quarter of 2020 the pace from $13,200,000,000 to $13,400,000,000. We expect full year 2020 GAAP diluted EPS to be between $25.50 and $26.50 and non GAAP diluted EPS to be between $32.50 $33.50. Of note, this range excludes the upfront payments associated with the Sangamo and Denali collaborations during the Second And Third Quarters of 2020, respectively. The upfront payment associated with the q 2 Sangamo transaction equates to roughly $0.65 per share. It's important to note that this guidance does not include potential impacts from new acquisitions or large business development transactions as both have elements that are hard to predict.
This financial guidance also assumes that foreign exchange rates as of September 30, 2020 remain in effect for the remainder of the year. I'll now turn the call back over to Michelle for his closing comments.
Thank you, sorry. Thank you, Mike. Biogen has remained focused on strong execution across our core business in MS, SMA and biosimilars while continuing to advance our strategy of building a multi franchise portfolio. I want to reiterate our commitment to maximizing returns to our shareholders and bringing innovative therapies to patients now and over the long term. Kietley.
As we have demonstrated in the past, we will always strive to have an optimal capital structure as well as aim for superior returns from investment we make. Again, we are actively preparing for the aducanumab Advisory Committee and A potential launch. The unmet medical need and cost to society for Alzheimer's are tremendous and mounting. Sorry, Alzheimer's creates a cost burden of approximately $550,000,000,000 per year in the U. S.
And the cost for caring for an Alzheimer's patient can be over $500,000. Alzheimer's deprives many patients of the independence. By the age of eighty, approximately 75% of people with Alzheimer's disease live in a nursing home at a per patient cost of approximately $100,000 per year. The approval of aducanumab would be an unprecedented milestone patients, their families and society at large, and will represent an important short term and long term growth driver for the company. Finally, we are focused on advancing our broader purpose as an organization as we aim to pioneer science for the betterment of humanity.
This includes doing the right thing for patients, our employees, the environment and the community, while accelerating our efforts in diversity and inclusion, all of which we believe contribute to long term sustainable shareholder value. These issues are all interrelated. For example, environmental issues are central to human health. To that end, I am incredibly proud of our recently launched 20 year $250,000,000 healthy climate, healthy lives initiative. This includes a goal to eliminate our fossil fuel emission by 2040 and to be a catalyst for positive change by advancing the science around how fossil fuel impacts human health and decade action to promote climate and health equity.
Finally, I would like to thank our employees around the world who are dedicated to making a positive impact on patient's life including ensuring access to our therapies during these challenging times. With that we will open the call for questions.
Thank Your first question comes from Terence Flynn with Goldman Sachs.
Hi, good morning. Thanks for taking taking my questions. As you've prepared for the ADCOM, any notable new analyses or data points that we should expect, to hear about as you try to frame the risk benefit for the drug here. And then, congratulations on the European filing. Discussions with the FDA.
We've done lots of analysis. We've been doing that for more than a year in collaboration with FDA. We, we're working exceptionally hard and the team is working exceptionally hard to prepare for the AdCom. And we're very excited about sharing our perspective on that day.
And on the EU difference differences in the EU?
The EU, we just filed after some formal meetings, and we expect to hear back and start the engagement process. And in, in Japan, we are just had our formal interactions and we'll be filing soon.
We will take our next question from Mark Goodman with SVB Leerink.
Good morning. Question is really about expenses. You're about to lose $3,000,000,000 at TECFIDERIS sales. And I was just curious How come you're not announcing some type of restructuring plan or just significant cost cutting to help offset that. I mean, I understand that VUMERITY is still there, but clearly there's a disconnect between the sales of those 2 and big sales of those 2.
And then just secondarily, can you talk about any tax rate implications because of TECFIDERA sales going away?
So thanks for the good question. We are always obviously looking at savings opportunity and how to be an even more efficient operation mostly when we face the potential launch of tech in the U. S, which is certainly a material impact We did extract approximately CHF400 million from our infrastructure in order to be a leaner and simpler organization and we have an array of measures in place in order to simplify the back office and try to save additional resources You need, you need obviously to understand that, we still have a 6+1000000000 business with MS. In a highly competitive environment where we need to absolutely resource in order to defend our leadership position VUMERITY is immaterial for now, but his signing is demonstrating some good signs and we'll come back to it So we need to stay on and continue to resource the launch of Emerity. And obviously, there is aducanumab.
We use the learning from COVID and digitalization also to gain, efficiency But again, we need to continue to resource the base business. We need to prepare for the launch of aducanumab because we are optimistic And at the same time, we try really to save what we can.
Yes. So I'll just quickly add to that, Mark. Thanks very much for the question. Mike speaking. I think just to add to what Michelle was saying a little bit of color, you know, running at about 17% of revenue SG and A, we feel like it runs pretty efficiently.
As Michelle said, we are reallocating some, some cost and resources to the aducanumab launch and to the support of VUMERITY. And obviously, we do need to continue to support the MS franchise. But, I would just point out that any cost savings that we have, we've guided for fourth quarter. We're not guiding for 'twenty one at this time, but obviously, you wouldn't see cost impacts around this until 2021, which we'll talk more about when we get to 2021. On your question around the tax rate, I think you were reacting to a comment in the prepared remarks Given the change in the cash flow profile and the profitability profile for Teck Fadera, there was a deferred tax adjustment that was required to be booked relating to evaluation allowance, which had a modest impact on the effective tax rate for the quarter.
So hopefully that's helpful.
To what Mike said, tuxedo is still above a 1,000,000,000 ex US if we remove completely the US market. And is growing. And there are some countries where we are launching the Fiera. So we still continue to resource the overall 6,000,000,000 plus MS franchise and also TECFIDERA X US.
We will take our next question from Matthew Harrison with Morgan Stanley.
I guess as you guys think about the advisory committee and you think about potential path to approval, what do you think is the risk that the FDA may think about approving aducanumab in a certain subgroup of patients where they think the risk benefit is is better compared to the overall patient population. If you could comment on that, that would be helpful. And then, Mike, can you just comment on inventory trends in the quarter? Thanks.
Hi, Matthew. This is Al. We, look, the FDA has all the data we, we continue to believe that aducanumab has substantial evidence of efficacy If we didn't believe that, we wouldn't have filed. And we look forward to sharing all the data at the FDA advisory committee, including potential subgroups and it's in the FDA's hands at this point.
Yes, and this is Joe. In terms of your question on inventory, I would just say, it wasn't significant impact in the quarter and not something that we called out.
We will take our next question from Omer Raffat with Evercore ISI.
Michelle, I know you were super excited the day you guys decided to file with FDA. I don't know if it's just the virtual nature of this call today, but I'm not quite hearing that. At least on the call for the EU filing. Is there something EU is raising, which is different than FTL? I'd be curious what you say on that, Michelle.
And Al, I know when the data was presented, there were several very important aspects of the data that weren't one. And I think the assumption was they're probably consistent with the overall analysis. But can you speak to whether you're expecting FDA to focus on the APO Eport carriers versus non carriers And can you remind us of the efficacy is consistent in those 2 groups as well as if we only looked at patients without Aria, if you expect, is the efficacy delta consistent with the overall conclusion?
So let me take the first part of your question, Omar. So we are equally excited about all the interactions with regulators all around the world. Having said that, the U. S. FDA will certainly influence as a cascade or the regulators.
We had actually to refocus our team on the U. S. NDA because we were pulled by other agencies who wanted to meet and wanted us to share the data. So I will not speak about China and all the markets, Australia, Canada, Switzerland, etcetera. So, certainly the focus is on the U.
S. FDA, the November 6, we are excited and we are optimistic. And then the others will unfold naturally, hopefully.
Hi, Umar, on your question about carriers versus non carriers. Look, I don't want to speculate as to what the FDA will ask the advisors at the advisory committee. But if they go there, we're prepared. We're is, we haven't shown our subgroup data yet. We will at some point.
And for all I know, it may come up at the advisory committee. But we're eager to share our perspective on the data, whatever comes up.
We will take our next question from Evan Sigerman with Credit Suisse.
Hi, there. Thank you so much taking the questions. So one for Michael, nice to meet you on the phone. So with the erosion of TECFIDERA, why did you opt to authorize an additional share repurchase program versus say allocating your capital elsewhere to maybe help grow revenues. Aside from aducanumab, how do you plan on addressing this decline in revenue and earnings that we're now seeing?
Thank you. Sure. No, Evan. Nice to meet you. And, thanks very much for the question.
Look, you know, Biogen for a period of time now has been very active in allocating capital. As Michelle mentioned in the prepared remarks, just in the last 4 years, 20 transactions, approaching $5,000,000,000. And obviously, the company has returned significant capital to shareholders in the form of share buybacks. And we expect both of those activities are going to continue. Obviously, we're going to continue to be active on the BD front as the company has been before.
And, you know, notwithstanding the situation with TECFIDERA, you know, we've got $4,600,000,000 of cash on hand as of the end of September. A modest amount of debt, net debt, I think $2,800,000,000. We've got, still very significant cash flow. And a very pristine balance sheet. And we intend to utilize that, for both BD and share repurchases and, the logic of the share repurchase just completely aligns with that.
Live on BD. And the organization can continue to do both return shoulder to the capital to the shareholder and also add to the business momentum. And we are prepared for both. Working very hard on that.
Great. Thank you.
We will take our next question from Phil Nadeau with Cowen and Company.
Good morning. Thanks for taking my question. Al, one for you. I'm curious, you've been asked a few times about the ADCOM kind of dodge the questions of what your argument is going to be. I'm curious if you maybe just give us a brief preview of what the key elements are of your argument that the aducanumab has a positive benefit risk.
What parts of the data will you highlight? And then on the risk side, how how will you do deal with the area? And then just, kind of a follow-up question to that. It is 2 weeks before we expect to see the briefing documents released publicly. Has Biogen received them yet?
So, look, our argument rests on the fact that we have a robustly positive study in IMerge positive on the pre specified primary and all secondary endpoints. We have a supportive study in the Phase 1b trial, which was published in Nature a few years ago. And then we have Engage, and we believe we understand why Engage was a negative study in and our belief is it doesn't detract from the positive study. And in terms of the risks, the main risk is aria, we believe it's manageable, that we've learned how to deal with it, with MRI monitoring, with titration. And so, we believe the benefit risk is worthy of, approval.
If we didn't think that, we wouldn't have filed. And so that's And in terms of the briefing book, we're not going to comment on on on on the briefing book. It'll as stated in the FDA register, it will be made publicly available 2 days prior to the actual advisory committee meeting.
We will take our next question from Michael Yi with Jefferies.
Thanks for the question. Just following up, can you just comment about language around how the FDA may plan to act early. What what does that mean? Is that way earlier? And and just maybe you keep you keep emphasizing that.
So just maybe add some color on that. And if you if it was early, would you actually be ready to launch literally any day if that actually happened? And if it's not, the case that it goes that way. Can you just right size which way expenses would be going? Cause I think you spent a lot of preparing for this, which is optimistic, but just would that need to be adjusted?
Just maybe some color there. Thank you so much.
I'll take the first part, Michael, In terms of acting early, the FDA has had the data since last June, our first right after our first Type C meeting, we sent them all the primary data. That could be one reason why they said that they could act early. And we see the advisory committee has been scheduled pretty early relative to the timeframe that they have until the PDUFA date of early March
concerning the launch readiness, the short answer is absolutely yes. We have continued, we have increased the medical engagement with Scientific leaders. We have engaged with payers. We are working on the value proposition and the potential price. We are making progress There is a cross functional team working on the site readiness.
They are willing to meet and to engage despite COVID we have certainly enhanced the digital capability for which the baseline was already very strong. Patient engagement and patient services has been increased because we anticipate many, many requests call advice from patients. We have a very rigorous approach to the potential launch by specializing focusing first on the most important treatment centers, a specialist and then going to the broader population. Obviously engaging with the Medicare. And again, the burden of these diseases is so high that there is a high interest from all the parties we meet, even if we are the only one building the infrastructure somehow which is a challenge, but very pleased with the progress.
We'll be ready.
You want to address the last part, which is just expenses? Yeah,
I mean, look, I think hopefully, you know, our optimism is clear and this area we're planning toward is a successful launch of aducanumab and the hopefully unlikely event that we don't have approval. Of course, we would have an obligation to look at our cost base.
Thank you guys. Very helpful.
We will
take our next question
from Corey Kasimov with JP Morgan.
Great. Good morning, guys. Thanks for taking the question. I just want to follow-up on something, Michelle, that you just mentioned around pricing. I I'll acknowledge upfronts putting a giant cart before the horse.
But if aducanumab is approved, can you just talk about your latest thoughts on how to potentially to price this to best maximize the product's potential and accessibility. And since everyone seems to be asking too, just a housekeeping for Michael with with SPINRAZA sales down 10% this quarter. I mean, you alluded to both competition as well as kind of the continued effects COVID. Is there any way to delineate that a little bit and talk about roughly speaking what's due to each one?
So we are also making progress on the potential price for aducanumab should be approved. It's still premature. But we are engaging broadly with pharmacoeconomists to ISER and other advisors as I alluded into the note earlier, the cost to society so high, we are working on certainly assessing very clearly the clinical meaningfulness and what will be the value that aducanumab will provide to the different set of customers starting by the patients, the caregivers, the payers and all aspects related to this value creation that aducanumab will bring not only the year 1, but over the entire life of the product, even beyond potentially the patent when the patent expires. So it's too early. We'll come back to that and we are taking this question with a lot of, I will say, serious focus and dedication and advice from others.
So, Corey, on the second part of your question, I'll try give you some data points that are hopefully helpful and just kind of speaking in year over year terms. So globally SPINRAZA was down 10% year over year. And you'll see in some of the charts that we put up, that patients are actually up 21% year over year. And the dynamics that factor into this are a few things. One is, product dosing dynamics.
You know, we have fewer loading doses versus maintenance doses as the product matures. Secondly, there are COVID impacts. We can't precisely tell you what that number is. It's kind of hard to tease out, but there are certainly, when we see fewer new patient adds going through loading doses and and some dosing delays. We know that, you know, part of the reason is is related to COVID and, patients not getting into to get those treatments.
There's some country mix, in, in the, in the mix here, so to speak, and some of the patient growth that we've had is coming from, countries where prices are lower. And, lastly, there is competition from Zolgensma and Abrisdi. So those are kind of all in the mix to precisely say what the COVID piece is. It's not something that we can completely tease out. We know it is in the mix and hopefully those metrics that I gave you are somewhat helpful.
Yes, definitely. Thank you.
Thank you.
We will take our next question from Ronny Gal with Bernstein.
Congratulations. Thank you for the call. I want just a clarification. And again, Max, many of you is in your CFO on the phone. Is the message basically on the cost structure that, look, we might have to take a look at our cost structure but we will wait until we know the outcome of aducanumab before we decide how to do this.
Just clarifying that this is, this is kind of the message as we think about the cost structure in 2021. And second, just staying on the SMA side, can you guys give us a feel for your share of new start in the U. S. And internationally just so we can kind of have a model forward of how the market will split up?
Sure. So, Ronnie, it's my speaking. So on your interpretation on the cost, as we've said, we're gearing up for a launch of aducanumab that does add some some pressure to SG And A. And, that is something that we're we're very focused on on, obviously, getting right. We have reallocated some resources, as I said in the prepared remarks, from TECFIDERA to aducanumab, as well as the support Fumerity.
We are going to continue to support the MS platform. As Michelle said, we have over a $1,000,000,000 franchise outside of the U. S. In TECFIDERA, which is important to remember. And so that's kind of the state of play in terms of the fourth quarter that we've guided to today.
And, you know, we'll have more to say about all of our financial metrics as we get into 2021. And provide presumably guidance for next year at that time.
Yes, Ron, and then the second part of your question, I don't think we've gotten at that level of detail in terms of kind of shares new starts and whatnot.
But if you want, I can add a bit more color on what we see in terms of market dynamic at least in the U. S. With a risdi launch, a risdi combined with the COVID environment is certainly generating some switch. From SPINRAZA. And this is understandable because of the perceived convenience.
But the Sunfish data is showing clearly some limitation, mostly because of the of target tox potentially and the 5 milligram ceiling that may impact efficacy while the weight of the kids increases and patients and physicians start to be aware about that. But nevertheless, at the time of launch, patients attracted by your potential oral medication, but, it's not that easy. 265 times a year, which are with a challenging dosing versus three times a year only and being sure that you get the dose. So we believe that based on the data that we have and all the real world evidence from infants presymptomatic to symptomatic adults, at the end of the day, safety and efficacy profile, efficacy profile mostly will prevail should prevail. That's why we remain reasonably optimistic about SPINRAZA once this wave of enthusiasm is a bit behind us.
Great. Thank you.
We will take our next question from Jeff Meakim with Bank of America.
Hey, guys. Thanks for the question. Just had a couple of quick ones. Michelle, on the chance of panel isn't favorable or FDA doesn't approve, what do you think could be some of the changes to the strategy if it's more aggressive BD does the $5,000,000,000 buyback announced today preclude the potential for doing a larger, more transformational deal And then just a quick follow-up on SPINRAZA. Just can you speak directionally how much of the switch dynamic was in play in the U.
S. This quarter and would that be an indicator for the bigger OUS market? Thank you very much.
So just on to start on SPINRAZA, we saw approximately 2 are not mistaken. Instake being switched to the new launch of everyday But again, we are confident that over time SPINRAZA will remain the foundational therapy for the treatment of SMA. Concerning the first question on what do you think about the strategy? If, well, I would like to start by remaining we are assessing that we remain optimistic about the potential launch of ADU. And this is the underlying assumption.
But nevertheless, if ADU fails, we are still in a very strong position. We still be very profitable. We have a deep pipeline we have a strong balance sheet and we have a large portfolio in TNS and this should enable long term growth and value creation. So the prospects are not solely defined by the binary event, but they will be certainly affected in case of ADU Failing. We have a pipeline.
We have opportunity in Ofta, in stroke, in lupus, in ALS and biosimilars. We have the BD deal with Denali. We have the rest of the portfolio in AD. The leadership position in neurodegenerative disease is still here and we have overhaul 30 clinical assets, 8, filed or in Phase III. And we have the entire portfolio with lifecycle management opportunities.
And as I said, I believe that SMA, SPINRAZA will remain the foundational therapy. So the cost discipline will be there all the time as discussed by, by Mike. Yeah.
I think the other point that I would just add is, you know, you mentioned, you asked whether the the share repurchase authorization precludes BD. And the answer, as we've said before, is it, it doesn't. We will continue to do both. And I would just remind that the the authorization is very flexible. There's no timestamp on it.
So we'll continue to do both and be active and we have a balance sheet that's in a great position, which we're pleased about. Thank you.
We will take our next question from Sumant Polkarni with Canaccord.
Good morning. Thanks for taking my question. If aducanumab is approved, do you expect a formal risk evaluation and mitigation strategy program to be put in place? And we know you said you're ready to launch on day 1. But what about the infrastructure around the burden caused by a potential REMS program?
This is Al. With respect to REMS program, you know, it's hard to say at this point. We're still in the review process. I would say that, that we believe that the risk of Aria is, is manageable. And the community has learned how to manage this risk over the years.
Whether that requires a REMS or not is up to the FDA. Thank you.
Maybe you can repeat that the other part of the question for us, if you don't mind.
Oh, just about the infrastructure around the burden caused by a residential REMS program. Is that ready to go in case you need to have one in place?
Well, we've done that before. We know how to do REMS programs, whatever they may be. And so we'd be ready for that. Yes, including the education piece. Which is typically one of the most important aspects of REMS programs.
We will take our next question from Jay Olson with Oppenheimer.
Oh, hi. Thank you for taking the question. I'd like to assist gears and ask about Parkinson's disease. As a leader in neurodegeneration, could you share your vision for the future treatment of Parkinson's disease where you have an alpha synuclein antibody and There's recently been signals of efficacy from Prothena and Roche. And then you also have your LRT-two program with Denali and then there are several gene therapies in development with competitors.
So, which of these approaches do you think is most promising and where does Biogen fit into the competitive landscape Thank you. Yes. Thank you very much. So we were very excited about the potential in Parkinson's disease. As you pointed out, the Prothena Roche antibody looked like there was some efficacy in the parts 23, I believe, of the UPDRS score.
With additional support from digital measures and some imaging outcome measures as presented at the Movement Disorder Society meeting about a month or so ago. And we have our own alpha synuclein antibody. It's different. In the sense that it's more specific for aggregated forms of alpha synuclein, but, and we expect to read out on that in the coming months. We also have, antisense oligonucleotide programs directed against alpha synuclein you pointed out the LURQ2 inhibitor.
We have, the lead program there is the Denali-one hundred and fifty one program. An oral small molecule LERT 2 inhibitor. And, you know, that could work not just in LERT patients with LERT 2 mutations, but also There's ample evidence of lysosomal hypofunction in other cases of PD, even patients that don't have LORC2. Mutations. And so the potential is there that it could work in a broad range of Parkinson's patients.
And then as you pointed out, another lysosomal gene arguably as GBA, patients who are homozygous for for GBA have Gaucher's disease, a lysosomal storage disease, those who are heterozygous, have an increased risk of Parkinson's disease. And so we're, we have preclinical programs directed against that as well. And as I said, we have the ability to license 2 programs with the transport vehicle program. I'd also point out that earlier this year, we did a deal with Sangamo, which includes not only opportunities, gene therapy programs in Alzheimer's but also Parkinson's disease. 1 of our lead programs there is a gene therapy program on alpha synuclein.
So So I think there's a broad range. I think there's a lot of very good validated targets validated by human genetics and by clinical pathologic data in humans. And we have multiple modalities, gene therapies, small molecules, as well as antisense oligonucleotide at our disposal.
And we will take our next question from Brian Abrahams with RBC Capital Markets.
Hey, guys. Thanks so much for taking my question. So you touched on some of the additional regulatory meetings you've held outside the U. S. And aducanumab.
I'm curious on your feedback from Japan, specifically, in particular, the role of the phase 1two study that you had conducted there and whether you see potential for ex US regulators, such as those in Japan to act early. And then I mean, just really quickly on the MS franchise, you've got several next generation agents like 091, 107, and 061, but they're all relatively early and would probably come online after additional exclusivity losses. So just wondering how you're thinking about the life cycle there, whether you have a predilection for flexing down spend long term until these come to fruition. Or thinking about augmenting the mid stage MS portfolio to leverage the commercial, infrastructure you have in place. Thanks.
So, Brian, I think with respect to ex US filings, I mean, as Michelle said, we are equally optimistic about about filings outside of the United States. We just aren't as advanced in terms of the procedure. We just filed in EMA, and we haven't even filed yet in Japan. And so we're eager to start the regulatory procedures. And as Michelle said, we're equally optimistic.
On the second part, yes, on the life cycle management of MS, we've never been that reach in terms of
clinical program and advancements in our MS portfolio and pipe, the early pipe with the BTK and all the all the opportunities we have to develop or co develop some of our products. And we have life cycle management opportunity with the EID with the subcu, Avonix, a new label, PLEGRITY, I'm. So we have plenty of opportunities to create market events And as you saw, despite the potential launch of a high frequency product that, ofatumumab that becomes the class becomes the segment, becomes very crowded, Tysabri continues to do very well because it's very well documented and well appreciated by the patients and the physicians. So we are confident in the rest of the portfolio, I would say, beyond the challenging situation we are facing with the tech in the U. S.
There is an entire franchise beyond this very specific case and the commitment of the company beyond RMS for remuneration over the long term, So Biogen continues to support MS like the day 1. So, thank you all for your attention. Exciting time at Biogen, and we are all looking forward for early November for monies from the outcome and looking forward taking the company to the next step after this event. Thank you all. Have a good day.
Ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect.