Good morning. My name is Lisa, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Biogen First quarter 2020 financial results and business update. After the speakers' remarks, there will be Thank you. I would now like to turn the conference over to Mr.
Jill Mara, Vice President, Investor Relations, you may begin your conference.
Good morning, and welcome to Biogen's first 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. We believe non GAAP financial results better represent the ongoing economics of our business and reflect how we manage the business internally.
We've also posted slides on our website that follow the discussion related to this call. I'd 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, Michelle Vanatsos, Doctor.
Al Sandrock, EVP Research And Development, and our CFO, Jeff Capello. Now, I will turn the call over to Michel.
Good morning, everyone, and thank you for joining us. I want first to acknowledge the challenging situation, the global COVID-nineteen pandemic has created for so many people. Our hearts go out to everyone who has been impacted. We applaud the way our employees and everyone across the entire health care system is breaking down barriers and working together to address this pandemic. And we are committed to doing our part to support communities worldwide.
At the same time, we are also such as accelerating our digital capabilities, which we believe will better position Biogen for the future. During this challenging and unprecedented times, Biogen's mission and purpose remain the same. Over half a1000000 patients around the world rely on us today to supply important medicines for serious diseases, and there still remains an urgent need to develop innovative therapies for the millions of patients suffering from devastating diseases of the nervous system. Let me now provide you with an update on how we are operating our business throughout the pandemic. First, I would like to recognize the resilience and adaptability of the Biogen team.
Biogen personally felt the painful impact of this global crisis, as many of our employees became sick early on and others have since been affected. We have been fortunate that as of today, all of our employees have recorded or are recovering. Most of our affected employees have continued to work and fulfill the duties. We are grateful to the public health authorities for all they have done. And we are also thankful for the courage and compassion We took a number of actions early on to support our stakeholders and society at large, including committing $10,000,000 from the Biogen Foundation to support global response efforts, launching a consortium term with the Broad Institute of MIT Harvard And Partners Healthcare to build and share a Biobank and giving Biogen employees who have recovered as well as the close contacts the opportunity to donate samples and medical data.
Pursuing a process development and manufacturing collaboration with Vere Biotech, which is developing potential antibody therapies for COVID-nineteen. Providing medical equipment and supplies to partners' healthcare in Massachusetts and developing and donating 3 d printed personal protective equipment in Massachusetts and North Carolina. Engaging with investigators who may want to evaluate the potential of our interferon therapies or our anti TNF biosimilars to treat COVID-nineteen, facilitating volunteers efforts by our medically trained employees to serve as healthcare workers on the front lines and by other employees to serve the community and implementing policies and practices to safeguard our employees and communities including asking almost all the employees to work from home at this stage. These are our initial commitments and we will continue to look focus on operating our business to serve the needs of all our patients and stakeholders I am proud to see the Biogen team demonstrate agility by quickly defining innovative approaches to both mitigate risks and identify new opportunities across R&D, Manufacturing, Medical And Commercial Operations. Let me provide you with an update on several key areas We continue to operate our manufacturing facilities and are working with organization across our supply chain to maintain continuity and we continue to closely monitor the evolving situation.
We are carefully considering recent regulatory guidance on conducting clinical trials during the pandemic, and the safety of participants in our clinical programs is our top priority. To help mitigate the impact to our clinical trials, we are pursuing innovative approaches such as remote monitoring, remote patient visits, and supporting home infusions. While we expect there may be some impact to time lines for some of our clinical programs Importantly, we still expect the vast majority before the end of 2021. We have continued to have frequent interactions with regulatory authorities, including for aducanumab. We have adjusted our commercial and medical affairs operations and accelerated our digital engagement with customers.
We are working with regulators To date, our business and financials have remained strong. Science based on the strengths in our core business areas, a healthy balance sheet and financial position and a robust pipeline across several important disease areas. We continue to believe we have multiple opportunities for significant near term value creation as we aim to build limited franchise portfolio in ARIA such Alzheimer's ALS, stroke ophthalmology and lupus. Now let me turn the highlights of the first quarter, starting with our financials. 1st quarter revenues grew 1 percent to $3,500,000,000, 1st quarter GAAP earnings per share grew 13% to $8.08 and non GAAP EPS grew 31% to $9.14.
Turning to our progress across our strategic priorities. First, We have made good progress towards the regulatory filing in the US for aducanumab. We have continued and we have started to submit modules using mechanisms such as Type C meetings, and we are preparing for a pre BLA meeting currently scheduled for this summer. Following that meeting, we expect to complete the filing in Q3. I'd like to thank the FDA and the aducanumab team at Biogen who have adjusted to working under the current circumstances with COVID-nineteen in particular, as some members of the Biogen team were directly impacted.
Outside the U. S, we have had initial aducanumab discussions with regulators in Europe and Japan Although these interactions are still in the early stages. In March, the first patient was dosed in the Ambac redosing study, which aims to provide access to aducanumab for eligible patients previously enrolled in our aducanumab clinical studies. While we collect important data in this study, we do not believe it is required for the filing. From a manufacturing standpoint, we currently expect to have adequate supply to meet anticipated demand for aducanumab, initially using our facility in Artiep, North Carolina, which will later be complemented by the large Neck generation state of the art facility, we are building in Sullivan, Switzerland.
Is complete and its validation remains on track. We expect it to be operating by theendofthisyear and to be producing some of Together with our collaboration partner Esai, we remain optimistic about the prospect of bringing aducanumab to market as the first therapy to reduce clinical decline in Alzheimer's disease. And we continue to progress in our market preparation,
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and launch Readiness with an initial focus on the U. S. We hope that aducanumab marks the beginning of an era of new potential treatments for Alzheimer's disease, and we aim to build a broad franchise across multiple targets and modalities. This includes BAN2401 which we are collaborating on with SI, multiple programmes targeting tau, our collaboration with Camp-four to identify new druggable targets, our acquisition of a CK1 inhibitor from Pfizer as a potential symptomatic therapy and our new collaboration with Sangamo to develop a gene regulation therapies for a range of neurological indication including Alzheimer's disease. 2nd, Q1 MS Revenues including OCREVUS royalties were $2,300,000,000, an increase of 9% versus the prior year.
The number of patients on our MS products globally increased 3% versus the prior year, and our business continued to demonstrate resilience. We continue to launch VUMERITY in the U. S. We have been able to secure unrestricted access for VUMERITY faster than other recent competitive launches. We have also been pleased to see that a large proportion of VUMERITY patients have come from therapies older than TECFIDERA and approximately 30% of VUMERITY patients are naive to treatment.
We also made progress with our 1st ex U. S. Regulatory filing of VUMERITY in Israel, and plans to pursue approval in all the major markets worldwide. We were pleased that the claims of our tecfidera patent were upheld by the U. S.
Patent Office in a positive decision on the IPR challenge. This decision has been appealed and is pending. We expect decision from the Federal District Courts in the Delaware And West Virginia and the actions later this year. 3rd, SPINRAZA generated 1st quarter global revenues of $565,000,000, a 9% increase versus the prior year and a 4% increase versus the prior quarter. Including the expanded access program and clinical trials over 10,000 patients have been treated with SPINRAZA.
This quarter, important new data were published, showing the clinically meaningful benefits SPINRAZA can deliver for teens and adults. With SMA. And we initiated a new study to evaluate the potential for even greater efficacy with the higher dose of SPINRAZA. 4th, 1st quarter biosimilars revenue was $219,000,000, which represent 25% growth year over year. We estimate that our biosimilars generated approximately 1,000,000,000 of savings to the European Healthcare Systems in 2019 which we expect will continue to increase in 2020.
This is critical as we work and contribute to the long term sustainability Beyond Alzheimer's disease, we continue to develop and expand our pipeline. In particular, this quarter, we submitted regulatory filing for an intramuscular formulation of PLEGRITY in the U. S. And in Europe, which may be another important option for MS patients. 6, our cash flow generation remains strong and continue to provide us with significant optionality and flexibility to allocate capital.
In Q1, we generated approximately $1,500,000,000 in cash flow from operation We continue to have the financial flexibility and capacity to evaluate potential external business development and M and A opportunities and remain active on the BD front. As we have demonstrated in the past, we have committed to maximizing returns for our shareholders, while continuing to bring innovative therapies to patients, something that demands a thoughtful approach towards all our investment over both the short and the long term. In summary, despite the challenges due to the COVID 19 pandemic, Biogen has continued to execute well on our strategy. I will now turn
Thank you, Michelle, and good morning, everyone. Before I begin, let me first take a moment to say how proud I am the way the R and D organization has stepped up in response to the COVID-nineteen pandemic. I'm inspired by their resilience and their unwavering commitment In line with recent global regulatory guidance, we have developed a set of principles to guide our clinical trial conduct under these exceptional circumstances. First, the safety of all of our clinical trial participants and their health care providers, as well as the integrity of the data we collect will remain paramount. 2nd, given the importance of our clinical trials to patients with serious diseases we aim to continue our ongoing trials as long as the risk to patient and healthcare provider safety as well as data integrity can be sufficiently mitigated 3rd, we are generally allowing the enrollment of new patients sites and countries into ongoing clinical trials.
However, this may be stopped on a study by study basis if such enrollment compromises our ability to mitigate risk to patient and healthcare provider safety and data integrity. 4th, we may allow for to safety and data integrity can be sufficiently mitigated. However, we are implementing a limited pause on the initiation of new clinical trials evaluating molecules which suppress the immune system or specifically modulate antiviral responses with a reassessment in the coming months. This includes pausing the initiation of the planned Phase 3 study of the PEGlated anti CD40 ligand fab in systemic lupus erythematosus in collaboration with UCB. And 5th, we are reviewing informed consent forms from all studies to ensure that potential risk associated with travel to study sites and where applicable, product specific risks of viral infection are appropriately highlighted.
At the same time, While the situation remains fluid, we continue to expect the vast majority of the 10 remaining mid to late stage data readouts that we recently highlighted to occur by theendof2021. However, we do anticipate that a portion of these ten readouts will be delayed, including the phase 3 study of BIIB93 or IV glabanklamide for large hemispheric infarction as this study involves administration of BIIB093 in an acute hospital setting. As we move forward, we will continue to prioritize both patient safety and data integrity, but we are not able to provide further details on the timing of readouts at this stage. To our ongoing clinical studies. These include remote monitoring, remote data verification, supporting patient and staff travel to study sites, launching a direct to patient delivery service for our investigational therapies, supporting at home infusions, and providing telemedicine options to minimize the number of missed study visits and study withdrawals.
Finally, each study in our portfolio will undergo a COVID 19 specific risk assessment to highlight study specific risks to operational or scientific aspects identify appropriate mitigation strategies and ensure compliance with evolving regulatory guidelines. We recently rolled out remote site monitoring, and we are working to implement the remainder of these initiatives as soon as possible. In parallel with these efforts to mitigate help to elucidate the mechanisms underlying COVID-nineteen pathogenesis and advance the development of potential therapeutic solutions. To this end, this month, we announced that we are launching a consortium that will build and MIT And Harvard And Partners Healthcare, which includes Massachusetts General Hospital And Reagan And Women's Hospital. This bio bank aims to centralize and facilitate study of a large collection of de identified samples and medical data with the aim of unraveling the biology of COVID-nineteen linking molecular signatures with clinical presentation and accelerating the search for potential treatments.
Many of my Biogen colleagues have been eager to find ways to help during this pandemic, and we are proud to be a founding member of this consortium. The BioBank will include samples and medical data from volunteer Biogen employee who have recovered from COVID-nineteen, as well as our close contacts. And last month, we signed a letter of intent and began collaborating with beer biotechnology to accelerate process development and manufacturing of human monoclonal antibodies that may neutralize SARS Co V2, virus responsible for COVID-nineteen. We are proud to leverage our extensive expertise and capabilities in advanced biologics manufacturing to collaborate with fear and potentially accelerate the development of therapies to combat this epidemic. Finally, given the effect of that type 1 interferon show in the antiviral response in vitro, We are engaging with investigators who may be interested in evaluating the potential of our beta interferon products in the treatment of COVID-nineteen.
In some, the R and D organization at Biogen has taken significant steps to respond to the unprecedented challenge posed by 19. We aim to continue advancing our innovative neuroscience pipeline, while contributing to the shared understanding of COVID-nineteen biology and the advancement of potential treatments. Let me now turn to the advances we made across our pipeline in the first quarter, starting with Alzheimer's disease and dementia. As Michelle Point mentioned, We continue to make us to complete the We held a non core presentation of the aducanumab Phase III top line results. The data in this presentation were previously presented at the CCAD annual Congress last December.
And last month, we dosed the 1st patient in the INBARK redosing study. In this study, eligible patients previously enrolled in our clinical trials, including patients previously treated with either aducanumab or placebo, be titrated to 10 milligrams per kilogram aducanumab infusions every 4 weeks. Beyond aducanumab, we continue to advance a broad Alzheimer's disease portfolio, including the Phase III study of BAN2401, BIIB080 a tau targeted antisense oligonucleotide in phase 1 and BIIB076 and anti tau antibody in phase 1. And Gosuranumab, a distinct anti tau antibody in phase 2. Turning to neuromuscular disorders, Last month, an independent observational cohort study evaluating the safety and efficacy of SPINRAZA in 139 teens and adults with SMA was published in Lancet Neurology, representing the largest study of SPINRAZA in teens and adults to date.
In contrast to the natural history of SMA, this real world study found the treatment in SPINRAZA was associated with statistically significant increases in total Hammersmith scores compared to baseline at 6 10 14 months of treatment. Of note, a clinically meaningful improvement defined as an increase of at least three points in the Hammersment score was observed in 40% of patients at the 14 month assessment. No new safety concerns were identified and no serious adverse events and well established longer term safety profile of SPINRAZA across a broad range of SMA patients, including adults. Last month, we dosed the 1st patient and devote a phase twothree study evaluating whether higher doses of SPINRAZA can provide even greater efficacy than the currently approved dose. This study was motivated by SPINRAZA's well characterized safety profile as well as our PKPD data suggesting that individuals with higher CSF concentrations of SPINRAZA achieve greater improvements in CHOP INTEND scores and motor milestones.
Also, last month, we submitted an IND for BID-one hundred and five, an antisense oligonucleotide targeting ATAX and 2 for sporadic ALS. The FDA has since reviewed the IND and deemed it to be safe to proceed. For the 90% of ALS patients who have sporadic disease. Tri nuclear tied repeat expansions in the ATAX and Toujeans have been associated not only with an increased risk of developing ALS, but also with an increased rate of disease progression in those patients. Importantly, ATAXM-two was originally identified as a modifier of PDP-forty three toxicity a pathology common to more than 90% of the ALS population suggesting that reduction of ATAX into could be therapeutic in the sporadic ALS population.
Moving to our progress in MS and neuroimmunology, for patients with relapsing forms of MS. Plegacy remains a convenient treatment option with a well established safety and efficacy profile. However, tolerability, including injection site reactions, has been the leading cause of discontinuation. At the Actrims meeting held in February, we presented data investigating whether intramuscular administration of might reduce injection site reactions compared to subcutaneous dosing, while maintaining bioequivalence. On the primary endpoint, there was bioequivalence between the 2 roots of administration on plasma exposures.
We also found that the compared to subcutaneous dosing. We have submitted regulatory filings for an intramuscular formulation of PLEGRITY in both the United States and the EU. In March, the FDA updated the labels of AVANEX and PLEGRITY to include data to healthcare providers when considering use during pregnancy. This follows label updates in Europe last year that remove the contraindication for use. During pregnancies.
These changes to the label are significant given that women are diagnosed with MS at least 2 to 3 times more frequently than men. And women are often affected during their childbearing years. We recently received top line data from OPUS a randomized phase 2 study, exploring the efficacy, safety and tolerability of natalizumab as an adjunctive therapy in patients with drug in focal epilepsy. However, the primary endpoint was not met and thus we have decided to discontinue development of Natolizumab in drug resistant focal epilepsy. Last month, data from the phase 1two dose escalation study of BIV-one hundred and twelve, our AAV based gene therapy targeting excellent retinitis pigmentosa or XLRP.
We're published in Nature Medicine. Overall, results from this study indicated an acceptable safety profile and dose responsive gains in visual function with 7 of 18 patients experiencing early increases and central retinal sensitivity that were sustained at month 6, a follow-up. And in business development, re we recently announced a broad collaboration with Sangamo Therapeutics to leverage their proprietary zinc finger protein platform. This technology enables the generation of designer DNA binding proteins that can be easily packaged into an AAV vector and serve as specific potent and tunable regulators of gene expression. Through this collaboration, we have all We also have access to Sangamo's capsid engineering platform, which has the potential to potentially which has the potential to identify novel capsids to allow more efficient disease, Parkinson's disease, and a 3rd neuromuscular disease target with exclusive access to up to 9 additional neurological targets.
Overall, we remain undeterred in our mission to develop novel therapies for devastating neurological diseases and I am proud of our team's agility in responding to this pandemic. I am optimistic that we will work through these challenges mitigate potential impacts to our
Thanks, Al. Good morning, everyone. Prior to starting my comments in the financial performance, I want to highlight that we believe the fundamentals of our business strong and we are well positioned. Our products are important therapies for patients living with serious diseases. We have strong operating process, enabling us to operate effectively through these challenging times.
We also pride ourselves in our ability to execute well commercially. In addition, we are well capitalized financially. These are however unprecedented times that will have an impact on our business. I will now review our financial performance, highlighting the various factors to give you a sense of our performance and then wrap up with commentary on our outlook. I'll start with our revenues.
Total revenues for the first quarter grew 1% year over It is important to note that we believe Q1 benefited from approximately $100,000,000 attributed to accelerated sales due to COVID-nineteen pandemic. Primarily in Europe. As a reminder, Overall, we executed well in our MS business, delivering revenues of approximately $2,300,000,000 in the first quarter of this year, including OCREVUS royalties of approximately $162,000,000, growing 9% versus the prior year. Global MS revenues in Q1 2020 increased seven percent versus the prior year without OCREVUS royalties. US MS revenues, excluding OCREVUS, increased 4 percent or $58,000,000 versus the prior year.
US MS revenues in Q1, twenty twenty were impacted by a decrease in channel inventory of approximately 115,000,000 compared to a decrease of approximately 170 $54,000,000 in additional sales due to a greater number of shipping days in the quarter, roughly half of which impacted the inventory quarterly change. In addition, we believe we benefited from a net $15,000,000 sales impact due to COVID-nineteen, primarily impacting TEC Vedera. Outside the U. S, our MS revenues grew 11 percent or $77,000,000 on higher volumes with minimal price impact, and an estimated COVID-nineteen beneficial impact of $59,000,000, primarily split between TECFIDERA and interferon. Global 1st quarter fumeet revenues, including TECFIDERA and VUMERITY increased 10% versus the prior year, driven by revenue growth, both in the U.
S. And outside the U. S. In the U. S, fumarate revenue grew 8% or $60,000,000 versus the prior year.
U. S. Fumarate revenues were impacted by a decrease in channel inventory of approximately $85,000,000 in the first quarter of 2020 compared to a decrease of approximately $110,000,000 in Q1 2019. Versus the prior year, we saw favorable demand for TECFIDERA which we believe is primarily due to the extra shipping days in COVID-nineteen impact with roughly stable underlying performance without those impacts. After an initial channel load in Q4, with Merity had sales of $2,000,000 in the U.
S. In the first quarter of 2020, and we are making good progress securing access and reimbursement. Within the U. S, we were pleased to see strong execution with continued stability in our share of total prescriptions for the Furements versus the prior quarter in light of increased competition. Important to note that the vast majority of Tecvidere and GUMERITY prescriptions in the U.
S. Are delivered via mail order. And as a result, we do not expect a significant impact to TECFIDERA due to COVID-nineteen. Outside the U. S, TECFIDERA again performed very well.
With Q1 twenty twenty revenues growing 15 percent or $42,000,000, including an estimated benefit of approximately $28,000,000 due to inventory dynamics related to COVID-nineteen. Importantly, the number of TECFIDER patients outside the US grew by approximately 13% versus the prior year. Driven by positive patient growth in the large European markets and approximately 40% patient growth in Latin American Asia Pacific combined. In total, we were Q1 global interference revenues, including both Avinex and PLEGRIDY decreased 7% versus Q1 2019, due to continued shift from the injectable platforms to oral or high efficacy therapies. In the U.
S, Interferon revenues decreased 11 percent or $35,000,000 versus the prior year. Within the U. S, Avonix and Plegruti were impacted by the continued transition to oral and high efficacy therapies and by a decrease in channel inventory of approximately $35,000,000 compared to a decrease of approximately $15,000,000 in Q1 2019, partially impacted by the extra shipping days. Similar to Teck Vadera, the vast majority of interferon prescriptions in U. S.
Are delivered via mail order. Outside the U. S, interference revenues were stable versus the prior year, with an estimated benefit of approximately 21,000,000 due to increased channel inventory related to COVID-nineteen. Given their safety profile and potential antiviral property we are seeing an increased interest in our interference products, which may present an opportunity for less erosion in this franchise going forward. This is the dynamic that we'll watch carefully as time progresses.
Tysabri worldwide revenues increased 13% or $22,000,000 versus the first quarter of 2019. In the U. S, Tysabrio revenues increased 13% versus the prior year or $33,000,000. U. S.
Discovery revenues were impacted by an increase in channel inventory of approximately $5,000,000 compared to a decrease of approximately $10,000,000 in Q1 2019. Within the U. S, we were pleased to see roughly stable adjusted volumes and share Sabri versus the prior quarter. Outside the U. S, Tysabri revenues increased 14% or $29,000,000 versus the prior year.
With an estimated benefit of approximately $7,000,000 due to increased channel inventory $20,000,000 due to a pricing adjustment in Italy related to prior periods. Outside the U. S, we were pleased to see continued patient growth of 4% for Tysabri versus the prior year. Given that Tysabri is administrating the physician's office or hospital setting, We do expect an impact from COVID-nineteen on Tysabri sales. As we attempt to mitigate this risk, we are working to enable Tysabri home infusions within the U.
S. Where appropriate. Overall, we were pleased with the execution of our MS franchise and the continued strong performance of our MS business in the first quarter. While there is some uncertainty in our MS trajectory given COVID-nineteen, particularly for savory, There are also opportunities, and we remain encouraged by the resilience of our market leading franchise. Let me now move on to SPINRAZA, excuse me, Global 1st quarter SPINRAZA revenues increased 9% versus the prior year to $565,000,000.
In the U. S, revenues increased 5% versus Q1 2019 and decreased 3% versus Q4 2019. The number of patients on therapy in the U. S. Increased 1% as compared to the end of fourth quarter of 2019, driven primarily by growth in the number of adults.
We believe U. S. SPINRAZA revenues benefited by approximately $6,000,000 due to COVID 19. In addition, leading indicator gests that we may be seeing a decrease in new patient starts, particularly among adults, as well as a decrease in compliance, both related to COVID-nineteen. We are aware that some physicians and hospitals are delaying SPINRAZA doses as they make difficult prioritization decisions while confronting COVID-nineteen.
Although we continue to work to ensure patients receive this critical treatment and have seen more centers come back online. Outside the U. S, SPINRAZA revenues increased 12% versus Q1 2019 10% versus Q4 2019. Driven primarily by increased penetration across all major geographies with an estimated benefit of approximately $5,000,000 due to increased channel inventory related to COVID-nineteen. Outside the U.
S, we have also seen a moderate impact on demand for SPINRAZA due to COVID-nineteen, which we expect may continue. As a reminder, the first quarter of last year benefited from a positive pricing adjustment of 14,000,000 in France, negatively impacting the year over year comparison. In total, outside the U S, the number of commercial SPINRAZA patients increased approximately 10% versus the prior quarter. Broad growth occurred again across all major regions with an increased number of countries contributing as we continued this very successful product launch. Overall, we were pleased with SPINRAZA's performance in the first quarter.
While we recognized there is some uncertainty in its trajectory given COVID-nineteen pandemic, still believe there are continued opportunities for growth given the significant number of untreated patients, including in many established and emerging markets. Let me now move on to our biosimilars business, which generated $219,000,000 in this quarter, growing 25% versus the prior year or 44,000,000 We estimate that there are now approximately 215,000 patients using our biosimilars in Europe. Venapali remains the number 1 prescribed Enbrel biosimilar across the major EU5 markets. Luxabi volume grew 90% for to prior year. In Emeralty, volumes grew 28% versus 4th quarter.
Despite our biosimilar business benefiting by approximately $15,000,000 due to COVID-nineteen in the quarter, This business again performed well and has the opportunity to continue to grow both in Europe as well as potentially within the U. S. And other geographies with our additional assets. Total NCCD20 revenues in Q1 increased 1% versus the prior year, with increased OCREVUS royalties offsetting decreased revenues from Rituxan due to recent introduction of biosimilars. Total other revenues in the first quarter decreased 63% versus the prior year, due primarily to the prior period sale of approximately $200,000,000 of hemophilia inventory to bioverativ in the first quarter of 2019.
Let me now turn to gross margins. Q11 2020 gross margin was 87% an improvement versus 83% in the prior year due to lower contract manufacturing revenue and was relatively stable versus the prior quarter. Q1 GAAP and non GAAP R and D expense were both 13% of revenue. As a reminder, R and D expense in the first quarter of 2019 included approximately $39,000,000 related to our agreement with Skyhawk, and approximately $45,000,000 in net closeout costs for the Phase III studies of aducanumab. R and D expense in Q1 2020 was lower in part due to timing of milestones, which are difficult to predict.
Note, in the second quarter of 2020, we expect to record a GAAP and non GAAP R and D expense of 125,000,000 for the license fee related to our collaboration with Sangamo. Q1 GAAP and non GAAP SG and A were both 16% of revenue. We still expect SG and A to increase throughout the year as we ramp up our commercial preparations for aducanumab. Q1 GAAP other expense was 120,000,000 which included $61,000,000 in unrealized losses on investments, primarily driven by decrease in the fair value of our equity investment in IONIS. Q1 non GAAP other expense was $60,000,000.
In Q1 of this year, our GAAP and non GAAP tax rates were both approximately 17%. In the first quarter of 2019, our GAAP FX tax rate included a one time charge related to the planned divestiture of our Hillawatt Denmark manufacturing operations, as well as $303 for a total value of approximately $2,200,000,000. The share repurchase program authorized in March 2019 has now been completed. As of the end of the first quarter, approximately $4,100,000,000 was remaining under the share repurchase program authorized in December. That now brings us to our diluted earnings per share.
In the first quarter, we booked GAAP EPS of $8.08, an increase of 13% versus the prior year and non GAAP earnings of $9.14 per share, a 31% increase versus the prior year. We generated approximately $1,500,000,000 in net cash flows from operations in Q1. We ended the quarter with approximately As we think about the balance of the year, we acknowledge that these are unprecedented times and there's significant uncertainty. Let me now outline what we do know. We again performed well operationally in the first quarter and saw some benefit from accelerated sales that occurred relative to COVID-nineteen.
We expect some volatility in revenues between the quarters. We have seen some disruptions start to materialize, particularly for Tysabri and SPINRAZA due to physician administration and facility capacity as we have seen some delays in dosing. We believe our therapies are essential for patients and we are actively working to help patients maintain their dosing schedules. We are also mindful of the potential macro risks from the economic environment and the impact on the healthcare systems in including the potential impact on payer mix. At the same time, as demonstrated in the past, we remain focused on strong commercial execution which we believe may in part help mitigate these risks.
We also may benefit from a potential decrease in competitive pressures across several business areas, and potentially renewed interest in our interference therapies. As a reminder, we have a policy to update our guidance once a year and in July, and we should hopefully know more by then. Let me now turn the call back over to Michelle for his closing comments.
Thank you, Jeff. I am incredibly proud of how the Biogen team has responded to the current situation. Our employees all around the world have demonstrated the resilience and dedication to advancing our mission as well as their compassion and empathy in wanting to be part of the to this terrible disease. Our business has remained strong. We delivered solid financial results in the first quarter, and we have demonstrated agility in adapting many aspects of our operations, including the conduct of most of our clinical trials.
While we do anticipate some risks to our business as a result of the pandemic, we believe our opportunities for value creation remains compelling given the significant unmet medical need in the diseases we are pursuing. With a strong core business in MS, SMA and biosimilars, we believe we have the foundation to continue building a multi franchise portfolio. We believe the vast majority of our 10 data readouts remains on track to complete before the end of 2021. Importantly, we have made good progress as we are getting ready to lead the fight in Alzheimer's disease. Finally, I want to reiterate our commitment to maximizing returns to our shoulders and bringing innovative therapies to patients over the long term.
These demands that we continue to allocate capital efficiently, effectively and appropriately. 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 the investment to make. Our response to this current situation exemplifies our broader purpose as an organization as we aim for pioneer science for the betterment of Humanity. This includes doing the right thing for patients, employees, the environment and the community all of which we believe contribute to long term sustainable shareholder value. I am proud of what Biogen stands for, and I believe this approach positions us well to be a sustainable organization over the long run as we remain focused on being the leader in neuroscience to address the tremendous societal needs in this space.
Now more than ever, I would like to thank our employees around the world give impact on patient's life. And all of the health care workers who are on the front line battling COVID-nineteen, I have been truly impressed how the entire Healthcare community has stood up in the face of these parenting times. With that, we will open the call for questions.
Thank
And our first question comes from the line of Goodman from SVB Leerink. Your line is open.
On the ADU filing, it just seems like there's been a change in the language a little bit with regards to, the filing. I guess everybody was kind of assuming that you had filed or were about to file. And now it just seems like there was a delay. Can you give us a little more color on what's going on behind the scenes. Is it COVID related?
Is it a change in the language of what you're hearing from FDA? And then just secondarily, can you just give us a little more on color on what you were talking about with the interactions in Europe and Japan as well?
So thank you for the question. That is the focus of the attentions of everyone and the priority within the organization. Again, we are on track and we are receiving input from the FDA and we are engaging very well. I would say there are two main reasons while it's taking a little bit more time. And at the company, we are prioritizing the quality of the submission versus the timing.
We don't want to rush and then face challenges. So the quality is important, and we have to keep in mind that there is an unprecedented data set. Plus COVID, okay? The database lock was in November and is very complex with more than 3000,32100 patients, multiple biomarkers and multiple endpoints. And if you couple that with CVO1, it makes a complex and unprecedented data set.
So I just want to put that up front before I'll build on that. Alan?
Yes. So, can you hear me? So, I just want to have to say that it's, look, timing is not easy to predict We were trying to do that, since the initial announcement in October. And this is an unusual process. But I, I wanna emphasize that we now have an open BLA.
We've started to submit modules. We have continued constructive engagement with FDA. And we believe we're on track in terms of the potential for approval There's I didn't read too much else into this. And in terms of your second part of your question, which I believe was Japan and Europe, we have started engagement. It's still kind of early relative to the process with FDA, but we have started.
Our next question comes from the line of Terence Flynn from Goldman Sachs. Your line is open.
Hi. Thanks for taking the question. Maybe just a follow-up there. I was just wondering if you can tell us if the FDA has asked for any additional analyses of the aducanumab data. And then, Michelle and now would just be curious if your level of confidence in the data set is the same now as when it was when you announced your intention to file for approval last year?
Thank you.
So the level of confidence remains the same. I will take the rest of the question.
Yes. Our, I would say that we are constantly doing analyses, but nothing really has change in terms of nothing has come up in the data that changes our interpretation of the data. Our view of the fundamentals hasn't changed. And, and I emphasize that we remain constructively engaged. These additional Type C meetings are really to further engage with FDA as we have been since the very beginning, actually starting last June when we had our first Type C meeting.
And our next question comes from the line of Omar Raffat from Evercore ISI. Your line is open.
Michelle, a quick one for you and one for Al. Michelle, you keep mentioning the word good progress, on describing as you can imagine even though it seems like you now probably need a pre BLA meeting, which didn't sound like was the case previously. So can you elaborate on that? And Al, it seems like I'm just reading the tea leaves on what just said. And it seems like you're having to run additional analyses and those might be the reason why additional meetings are happening with FDA.
And I guess my question is, has FDA previously shared feedback with you on the way you guys did imputations for non completers? Because you might recall, the reason IMerge hit on the high dose was because the effect size on completers was assumed to be the same as non completers. And also the whole question around whether FDA would want you to pull the data has FDA shared feedback? We're not asking what the feedback is, but has FDA shared feedback with you on that?
So, Umer, last time, we had the opportunity to dialogue. We didn't have an open BLA. We didn't have to the FDA. So there is good progress. We had additional type c meetings and you have to read here high interest from the FDA.
So this is what we continue to qualify as being positive progress Pardon?
I would just say that we had always planned to have a pre BLA meeting with FDA. That hasn't changed. That was always in the planning. And, look, some members of the team did get COVID. And I can tell you it's hard to work.
When you have COVID. The fatigue, mental and physical fatigue, was such that there were some people who were affected by the disease. So So, so I think that, that's part of it. But I would say that most of it is that I would say the main point is that Nothing has come up with the data that has changed our interpretation. We believe IMerge is a positive study It was positive on the prespecified primary and all three secondary endpoints.
You know, I mean, we have done analyses on Engage to try to figure out why that result was different. But we believe that the fundamentals are the same and that the potential for approval remains the same as Michelle said from the very beginning.
And if something will have changed, we will communicate so.
Our next question comes from the line of Ronny Gau from Bernstein. Your line is open.
Hi. Unfortunately, Bobby, you have to take the question. We'll stay with the kind of theme. I guess the question is, twofold. First one, have there been new questions that were raised by the data?
I mean, we all are familiar with some of the issues you've raised before and how you addressed them. But essentially, as you kind of look on this and as the FDA now has an open B and A might have access to the data, have new questions that have not been raised before raised by this? And second, should we expect you to present any more data from that kind of during this year, any new analysis that you expect to present before we actually get to see the FDA review?
Ronnie, this is Al. There were really no new questions. They, you know, as I said earlier, the data, we haven't come up with nothing that really changes our interpretation of the data. And so I would say that fundamentally, there are no big changes and no new questions. And I would also say that We're not planning on presenting anything more publicly, at this time until hopefully until approval.
But that's our plan.
Our next question comes from the line of Phil Naveau from Cowen And Company.
Good morning. Thanks for taking my question. Again, sticking with the aducanumab theme, I guess, a 2 part question. One is, just coming back again to what has changed on the Q4 call, it sounded like you had said at that time, all that need to happen was some submission of documents And there was no mention of additional Type C meetings or approved BLA meetings. So I guess, were we all mistaken that you still need to have those meetings and that was always part of the plan?
Or did something come up again, kind of the same question, that prompted the need for those meetings. And then second, I think what we're all trying to debate here is the FDA's interest adacitumab. I know you said that there's a high level of interest, but could you maybe give us some better sense of the FDA's current appreciation for the data and whether you can determine if there's controversy within the FDA about the quality of the results?
Phil, this is, I just want to say that this is an unusual process. This is unlike anything I've ever been involved with before my 22 years at Biogen. So and the nature of this process has been collaboration. From the very beginning, from the type 1st type C meeting. So, so it's been a highly collaborative process.
I would say. And then, yes, submission of documents is easy to say, but the, the BLA is pretty complex there are multiple sections, multiple modules. And so I know it sounds easy to pull pull together submission, but let me tell you It's not. And, I think that, and it's been difficult to predict the timing, partly because it's been an unusual process right from the beginning. And we've always Quite frankly, we bought we've been having Type C meetings since last June and this that hasn't changed actually.
The fact that we're doing Type meetings has been the same since the very beginning. So, so those are the main points.
Our next question comes from the line of Michael Yee from Jefferies.
If it hasn't been said before, I hope you guys are very safe. We all know how hard it's been hit and everyone in the financial community appreciate it. I guess my question is for Al mentioning the pre BLA meeting. I know this is coming up. Can you just maybe talk about what type of topics or key questions would be addressed there.
And is it safe to say that additional subgroup analysis like APE positive versus negative and geographical differences those type of analyses have been done and are all part of all of this package? Thanks so much.
Well, I would say that geographic issues, subgroup analysis. That standard practice for every single BLA I've ever been involved in. In fact, there are sections within the call for looking at data from various geographies. So that's not That's not different from any other BLA I've ever been involved in. At a typical pre BLA meeting, you go through, it's more like an operation meeting.
You have various sections of the FDA that they're going to be involved in the review of the BLA you sit down and you talk about how it's going to be submitted, what's going to be submitted exactly. And there's some agreement on the operational aspects of the actual submission. That's the typical pre BLA meeting.
Our next question comes from the line of Jay Olson from Oppenheimer.
Hi, thanks for taking my question. It's great to hear you all well. And I want to commend you for the work that you're doing to fight COVID-nineteen. I had a question, maybe a little longer term question about aducanumab. And as you begin to contemplate home infusion of Tysabri.
Does that set the stage for the potential, delivery of aducanumab by home infusions? And will that be done by Biogen employees or are you going to engage a third party to do that? Thank you.
Well, home infusion of intravenous drugs has been in place for decades. I used to prescribe some drugs by home infusion myself back when I system. So it's not uncommon. Whether or not it'll be done with aducanumab, we haven't disclosed yet, but it would not be something that would be difficult to imagine. It's a very well infusions themselves are very well tolerated.
So, it would not be difficult to imagine that after approval.
Having said that, I think that the launching a product in the post COVID environment will be very interesting to assess beyond, I would say, the normality of what we are preparing. On many aspects, the ability to meet beyond digital channels, face to face, how to engage, but also infusion and much more. And this, we are getting ready. There are 2 dynamic going on. One is managing the lifecycle of well established product.
This is what we are doing. We're doing very well. And the launching a new product in a COVID environment is a challenge, in a post COVID is still yet to be assessed.
Our next question comes from the line of Evan Sigerman from Credit Suisse. Your line is open.
Hi, all. Thank you for taking the question. I'm actually not going to ask one on aducanumab. I want to ask one. So yesterday, there was an appellate court ruling on the 1 patent for TECFIDERA, highlighting a potential launch of a banner monomethyl fumarate, kind of how should we interpret this ruling And if you were to lose 1 or both of the upcoming district court cases on TECFIDERA, how would you have to protect the franchise?
So, Evan, this is Jeff. So, the banner product is not a directly substitute ab product. So, I think that's first thing that's important to understand. So if and when it gets launched, we don't think there'll be a significant impact at this point in time. And then with regard to the 2 court cases, obviously, we were very pleased to get the favorable ruling from the IPR ruling.
And I think that's the 3rd time that patent has stood up. So we think we've got a pretty strong patent position. However, if we're unsuccessful with either the 2 district court case, is, we've got Boomerie is a product that we can kind of look at. There's a fumarate strategy that we're looking at. We've got growth opportunities around the world in pretty strong results outside the U.
S. We think SMA has got good growth potential BBU. And then, of course, you've got the aducanumab potential as well. So I think we've got a pretty strong franchise and we'll grow around it.
Our next question comes from the line of Cory Kasimov from JPMorgan. Your line is open.
Hey, good morning guys. Thank you for taking the question. I guess going back to aducanumab, I wanted to better understand what it means to submit modules for your BLA before having that pre BLA meeting? Was this I guess, was this always a rolling BLA submission? Was that the intent?
All I'm just trying to understand the meaning and having this pre BLA meeting, we didn't think this was going to be necessary as of the last call? The common technical document is composed of various modules and, and there, for example, quality modules related to manufacturing process. There are non clinical sections. And then there's the clinical sections, which culminates in the clinical overview, which is so there are summary documents of the actual study reports of individual clinical studies. And so those are the 3 main sections.
And as you can imagine, the nonclinical was, it was already kind of ready because not much has been done since, non clinically since the early days. It still had to put together the actual documentation and so forth. So those are the sections of the common technical doc payment. They're all submitted electronically. And, and so and look, we had, starting in around October or so, we did start to contemplate, submitting modules as they became available.
That was our plan. But a pre BLA meeting is still pretty common practice, as I said, to get both sides Biogen and FDA to be agreed to have agreement on the operational aspects of the CTV. So I would not read very much into that. As I said, we have planned to have that meeting from the very beginning.
We'll probably have time for about 2 more questions.
Our next question comes from the line of Matthew Harrison from Morgan Stanley. Your line is open.
Good morning. Thanks for taking the question. Sorry to stay on aducanumab, but I'm really struggling with the commentary that you're giving this morning. So I was hoping maybe you could just talk about one specific thing. I mean, I think your prior guidance was that you would have a filing in early 2020.
And today, you're talking about a 3Q filing, which seems like a significant delay to me yet your characterization seems like nothing has changed and sort of all of your expectations are in line. So it seems like there's a significant disconnect with the timeline versus your commentary. And I'm just hoping you can maybe take a moment to explain to us what has happened? Thanks.
So our goal, right from the very beginning, was to try to provide estimates timing of this filing since actually the announcement in October, but the timing is always not easy to predict. And in fact, as I said before, this is an unusual process. So it's even harder to predict timing when you have a process that actually pretty unusual. And in my in my experience, unique. I would just say that the constructive engagement, though, has been there since the very beginning.
That continues. These Type C meetings are formal ways to have engagement with FDA. A pre BLA meeting is another formal meeting with FDA to continue on the path to approval. We have an open BLA And, yes, there's a, we said early 2020. So now it's Q3.
We did have some impact from COVID, but I would say that overall, what we're saying is that the potential for approval, we're still on track with that.
And our next and final question for the day will come from the line of Carter Gould from Barclays. Your line is open.
Good morning, guys. Thanks for taking the question and squeezing me in. I guess, maybe a different spin on the aducanema question. Obviously, we got Gantenerumab data, DION2 data in the quarter. Al, can you maybe provide your perspective on the appropriateness of reading through from the lack of cognitive benefit in that study to aducanumab and if these data have in any way kind of changed the conversations with FDA?
Thank you
Thanks Carter. First of all, I want to congratulate Randy Bateman and all the investigators in Diane too. I think it's a a beautiful study. It's, it's very hard to do because although they are, it's a homogeneous population in terms of they all have autosomal dominant Alzheimer's disease from the genetic and biological point of view, it's pretty heterogeneous in terms of clinical. They could be 2 decades, 1 decade, a few years prior to becoming symptomatic.
So how do you pull data from that heterogeneous clinical collection. Also, it's a relatively small study, 50 patients per arm, I believe, roughly. So the Diane II looked at both solenizumab and gantenerumab. Solenizumab had no change in amyloid pet based on imaging, and there was no effect. So that's not too surprising.
Gantenerumab did have an effect on amyloid pet. However, I want to compare the magnitude of the effect between gantenerumab and aducanumab. And the only way to do that really is to use the scintilloid scale. The whole point of the Centreloid that was developed so that you can compare across studies because people use different pet ligands people have different reference regions that they use to obtain the SUVR score. In the PRIME study, 10 milligrams per kilogram of aducanumab was associated with a change in the centavoid scale of about 57.
In one year. In the Diane II study, Gantenerumab was associated with a change from baseline of about 14 Centalloyd units over 4 years. So I think that's pretty different. And that we were trying to make at the CTAD meeting is that dose matters and that the robustness of amyloid removal matters. And we saw that in the data, and I think we presented that.
So in some ways, I looked at the Diane 2 data, and I think it kind of confirms what we have been saying that you have to have high doses and robust removal of amyloid, in order to see a clinical benefit.
I'll turn it over to Michelle for some closing comments. Thanks everybody.
So, thank you all for attending the call. I would like to say that even if personally affected by this terrible pandemic. Biogen is demonstrating superb resilience. Biogen is even stronger today, and we are well positioned for the future starting with aducanumab, but also looking forward to all the important readouts in the coming period.
Thank you everybody.
Ladies and gentlemen thank you for participating. This concludes today's conference call. You may now disconnect.