Good morning. My name is Cian, and I will be your conference operator today. At this time, I would like to welcome everyone to the Biogen Second 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 Thank you.
I would now like to turn the conference over to Mr. Mike Henke, Director, Investor Relations. Mr. Henke, you may begin your conference.
Good morning, and welcome to Biogen's Q2 2021 earnings call. Before we begin, I would encourage everyone to go to the Investors section of biogen.com to find the earnings release and related financial tables, including our GAAP financial measures and a reconciliation of the GAAP to non GAAP financial measures that we will discuss today. Our GAAP financials are provided in Tables 12 and Table 4 includes a reconciliation of our GAAP to non GAAP financial results. We believe non GAAP financial results better represent the ongoing economics of our business and reflect how we manage the business internally. We have also posted slides on our website that follow the discussions related to this call.
I would like to point out that we will be making forward looking statements, which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. I encourage you to consult the risk factors discussed in our SEC filings for additional detail. On today's call, I am joined by our Chief Executive Officer, Michelle Vounatsos Doctor. Al Sandrock, Head of Research and Development and our CFO, Mike McDonnell.
We will also be joined for the Q and A portion of our call by Sherfi Guindo, Head of Global Product Strategy and Commercialization and Alicia Alaimo, President of our U. S. Organization. As a reminder,
I will now turn the call over to Michel. Good morning, everyone, and thank you for joining us. We have completed the first half of a transformative year for Biogen Jen with progress across our neuroscience portfolio. However, I would like to start by addressing the confusion And criticism surrounding the recent approval of Aduhelm. We are cognizant of the key issues raised by the community And I'm working to provide additional clarity through the following goals: exploring all options to maximize patient access, including for the underserved population and those more at risk due to ethnicity, educating on the updated label language, Which I will discuss publishing our Phase III results in a peer reviewed journal and disseminating additional data To inform clinical practice including the management of ARIA, expediting the execution of the Phase 4 confirmatory study And leveraging the unique data generation opportunity we have with EMBARK, the longest and most comprehensive Longitude in our study for Alzheimer's disease therapy.
Biogen stands behind our clinical data From 8 studies with more than 3,000 patients that supported accelerated approval. As the FDA's current Chief stated publicly earlier this month, AG Helm was approved appropriately on very solid grounds And represented the right thing to do for the patients. I want to be clear That Biogen stands behind the integrity of the review process. Respectful dialogue between the industry and regulators is standout And essential to advance the understanding of the therapeutic data driving innovation as demonstrated more recently by the COVID-nineteen vaccines development programs of last year. We believe the accelerated approval pathway Has transformed the treatment of oncology and now has the potential to transform the treatment of Alzheimer's disease.
We appreciate the concerns about the price and are committed to ensure sustainability of And maximizing access for patients. Without access, every day that passes, we estimate That approximately 1,000 Americans move from the early stage of Alzheimer's to moderate or severe Dementia and therefore may no longer be appropriate for any session of treatment with Aduhelm. This is why we are working with a sense of urgency to engage with the community, with payers, with CMS And with policymakers to discuss potential innovative approaches with the goal of ensuring the price does not represent access With that said, I would like to focus on the fundamentals. Another quarter with solid underlying financial performance that exceeded our expectation. The accelerated approval of Adulene for people from Alzheimer's disease and key readouts across our diversified portfolio.
First, the accelerated approval of Adjuelm represents the first new therapy for Alzheimer's disease in almost 20 years. Biogen has a deep history of building new markets and delivering innovative and impactful therapies to patients in need. We pioneered and currently maintain the market leading portfolio of therapies for MS. We delivered the 1st approved and market leading therapy for SMA. Now with Aduhelm, On our long term leadership strategy, I am pleased to announce that Rashid Izzar will be Head of our newly created Alzheimer's Disease and Dementia Business Unit and will join the Executive Committee of Biogen.
Rashid is currently in charge of Biogen's Intercontinental region and our biosimilars business unit. His experience across multiple geographies And global position will serve us well as he works to maximize our potential impact on the lives of people living with this devastating disease. We have seen strong indications of very high initial patient interest in Aduhelm as well As increased referrals from PCPs to specialists, however, it will take some time for sites to get up and running, While some large centers have said they will refrain for now for administering Agilent to patients, many other sites are moving forward With internal processes such as pharmacy and therapeutics or P and T committee review with some accelerating faster Than we had originally planned. Of the 900 sites approximately, which we expected to be ready shortly after approval, We estimate that approximately 325% or 35% have completed a P and T review With a positive outcome or indicated that they won't retry a P and T review. We have also seen some sites leverage external infusion centers if they face internal resistance All are waiting clarity on their facilities internal process.
We continue to believe that consistent with our clinical Trials, most specialists will require confirmation of amyloid beta pathology either via PET or CSF, Which is also taking time to schedule and coordinate. In terms of reimbursement, it is still the early days. And I'm pleased to say that we have seen the first examples of Medicare Advantage Plans approving pre authorization. We welcome the recent opening of a national coverage determination analysis by CMS for monoclonal antibodies We expect that regional Medicare administrative contractors And Medicare Advantage Plans will provide coverage for Adrihelm while the NCD analysis is underway. We believe that CMS' swift decision to initiate the NCD analysis is a testament to the large unmet need in Alzheimer's disease And the urgency to clarify access for patients.
We obtained new label language for Aduhelm in July To clarify that treatment should be initiated in patients with mild cognitive impairment due to Alzheimer's disease For mild Alzheimer's dementia. This is the population studied in our clinical trials And where we generated clinical evidence as stated in Section 14 of the Aduhelm label. This updated language aligns with our consistent expectation that Aduhelm will be prescribed mainly by specialists For patients in the early stage of Alzheimer's disease and this update has been well received by the community including prescribers, Payers and policymakers. Outside the U. S, we continue to engage with regulators regarding the ongoing review in Europe, Japan and other markets, while also continuing to submit new regulatory filing around the world.
In addition, we are pursuing early access mechanisms wherever possible, including an early access program and A Charge Managed Access Program. We recognize that building a new market for Alzheimer's disease is an unprecedented And that this is just the beginning of our journey as we aim to make Aduhelm and potentially lecanumab Accessible to patients around the world. We believe our teams are well equipped to successfully execute on a well defined strategy aimed at long term leadership for Biogen in Alzheimer's disease. 2nd, this quarter, our pipeline delivered meaningful mid to late stage results in key areas including depression, stroke The positive waterfall Phase 3 trial of zuranolone in major depressive disorder is a significant milestone Towards bringing a differentiated potential treatment option to the 17,000,000 patients suffering from depression in the U. S.
Alone. The observed rapid onset of benefit in as soon as 3 days in addition to a differentiated tolerability I believe that if approved zuranolone would be a multibillion dollar product. We were also excited to see positive data from the Phase IIa trial of TMA-seven in acute ischemic stroke. Stroke is a second leading cause of death worldwide and those who survive may suffer irreversible damage of the brain. We are highly encouraged by the results of the trial and we immediately moved forward with executing the option to acquire TMS-seven.
Should both zuranolone and TMS-seven be approved, Biogen will In a leadership position in offering novel therapies for Alzheimer's disease, the number one neurodegenerative disease depression, One of the most common mental health disorder and stroke, a leading cause of neurologic disability. In addition to these readouts, we had a positive Phase 3 readout for our biosimilar referencing Actemra. With these positive results in hand, we begin to As with any company engaging in breakthrough science, we also had setbacks In some programs, including our anti tau antibody in Alzheimer disease and our gene therapy programs in ophthalmology. 3rd, we reported a solid quarter as we continue to execute well across our core business of MS, SMA And biosimilars and we are pleased to be raising our revenue guidance for the year, which Mike will discuss. Q2 overall MS revenue including OCREVUS royalties was $1,800,000,000 Putting aside the entry of TECFIDERA generics in the U.
S, Our broader MS business continued to demonstrate resilience with a 5% increase in patients worldwide. This performance underscore our ability to execute well. We were very pleased to see continued revenue growth for VUMERITY, Which remains the number one oral MS product in terms of new prescriptions in the U. S. We believe this performance is a testament To VUMERITY's strong product profile, given the progress of the VUMERITY's launch to date in addition to plan ex U.
S. Launches, We believe VUMERITY can reach over $1,000,000,000 in annual sales over time. We also continue to invest in new potential treatment To address the remaining unmet medical needs in for MS patients, last week we announced a license and collaboration agreement with Innocare For oralabrutinib, an innovative CNS penetrant Phase 2 BTK inhibitor for the potential treatment of all forms of MS. This transaction is subject to customary closing conditions. Next, Spinraza Generated Q2 global revenues of $500,000,000 while SPINRAZA is facing competition in the U.
S. Continue to decrease versus Q1 of this year. Total revenue in the U. S. Was flat versus the prior quarter And SPINRAZA continued to perform very well outside the U.
S. With 23% revenue growth versus Q2 of last year. SPINRAZA remains the market leading treatment for SMA and we stand behind SPINRAZA's proven efficacy And well established safety profiles across all types of SMA. In fact, Our market research indicates that SPINRAZA's perceived efficacy among adult has improved over the past year And exceeds the efficacy perception for therapeutic alternatives including risdiplam. Although we face near term competitive pressure in SMA, we believe SPINRAZA can continue to grow Over the medium to long term both in the U.
S. And globally driven by overall market growth, the efficacy and safety profile in all Age groups continued data generation particularly in older patients and further geographic expansion. Our biosimilars business delivered revenue of $2,000,000 or $2,000,000 this quarter. While we remain focused on With BioThera and the positive CHMP opinion for our biosimilars referencing Lucentis. 4th, we still have 2 key Phase 3 without anticipated in the remainder of 2021.
This includes the Phase 3 study for tofersen potentially the first genetically targeted therapy for ALS as well as an additional Phase 3 for zuranolone in major depressive disorder. Given the incredible unmet medical need in ALS and encouraging results from Prior to first and trial, we recently initiated an individual compassionate use program to provide to first and to the most rapidly progressing patients Taken together, these developments represent a significant step forward In our goal of transforming Biogen from what was once an MS company to one that is Build upon a multi franchise portfolio across a broad spectrum of neuroscience therapeutic areas. I would like now to turn the call over to Al for a more detailed update on our progress in R and D.
Thank you, Michel. I'd like to start by saying a few words about aducanumab. The accelerated approval of aducanumab has generated discussions reflecting a broad range of opinions, including about its efficacy, the FDA selection of the accelerated approval path and the regulatory process in general. Since June 7, The FDA has made several clarifying statements on these topics. As always, we defer to the FDA as the lead voice on such matters.
They are the independent regulatory body charged with weighing the data expertly and dispassionately in order to make critical decisions that have the potential to impact millions of people. But I thought it would be helpful to add our perspective about several of these topics, including our interactions with the agency. We are proud of the work our dedicated team has done to develop aducanumab and the hope it brings to patients with Alzheimer's disease. We are equally proud of the professionalism both our team and the FDA demonstrated during a very lengthy process. We therefore welcome a formal review into the interactions between FDA and Biogen On the path to the approval of aducanumab, a better understanding of the facts is good for everyone involved to assure confidence in both the therapy and the process by which it was approved.
We will cooperate fully with the review even as we prioritize the issues that affect patients. I want to underscore that it is normal and appropriate for scientists and clinicians to discuss the data from experiments and clinical trials To debate and to disagree on the interpretation of the data, that is how science advances and we welcome these discussions. However, I would like to correct some of the misinformation we have seen recently. First, Several people have stated that all anti amyloid antibodies clear amyloid from the brain. This is factually incorrect.
1st generation anti amyloid antibodies such as bapinezumab and solanezumab are not specific for aggregated forms of A beta We're target soluble monomeric A beta and crenezumab being an IgG4 is deficient in the effector function. As a result, these antibodies do not clear amyloid from the brain. This slide shows the amyloid PET imaging results From the peer reviewed literature of these 1st generation antibodies. Crenizumab and solanezumab had no significant difference from placebo On amyloid plaque burden, bafanezumab did show a significant difference from placebo in the Phase 3 trials, But this was largely driven by an unexplained increase in amyloid plaque burden in these placebo treated patients In the mild to moderate stage of Alzheimer's disease, we believe this increase in amyloid plaque in placebo patients Must have been a spurious result as we now know the plaque buildup reaches a maximum by the time the patients have mild cognitive impairment. In short, there is no evidence that the 1st generation antibodies against Abeta actually removed amyloid plaque.
There is no basis for using the failure of these antibodies as a reason not to approve aducanumab. We have also seen statements That all of aducanumab's results are post hoc. That is also factually incorrect. The primary and secondary endpoints had been pre specified in the Phase 3 trial protocols and statistical analysis plans Before the first patient was enrolled into the trials, the aducanumab label shows the results on these pre specified endpoints based on data that had already been collected at the sites by the time the trials were prematurely terminated on March 21, 2019. Separately, some have contended that ARIA led to unblinding.
We took great care to ensure that the neurologists who assess the clinical outcome measures did not know about the occurrence of ARIA. One way in which we assured ourselves that unblinding did not affect the results was to examine the clinical outcomes after ARIA was seen. If ARIA had affected blinding, the results after ARIA might be expected to change. This slide shows That the results excluding data that have been obtained after ARIA events were the same as the overall results. Thus, we are confident that unblinding due to ARIA did not affect the results of the Phase III trials of aducanumab.
And finally, some people have opined that the approval of aducanumab would inhibit the development of other drugs for Alzheimer's disease. This statement is contradicted by precedent. Prime example are the history of drug approvals for HIV AIDS, non Hodgkin's lymphoma And multiple sclerosis to name just a few. In neurology, the first medicine ever approved for MS was in 1993 When beta interferon received accelerated approval in the United States, within the next several years, Two other types of beta interferon were approved after controlled clinical trials showed that they slowed the progression of disability. Today, there are more than 20 drugs approved for the treatment of MS, all of which reduce the risk of relapse or slow the progression of disability or both.
All new molecular entities were approved based on randomized controlled clinical trials That continued to be conducted to this day, nearly 30 years after the accelerated approval of beta interferon. We believe a similar situation is just starting to unfold with Alzheimer's disease. Over the coming years, Data will become available from Phase 3 trials of several second generation anti amyloid antibodies, which are capable of effectively removing amyloid plaque. And we also have will have the results of the post marketing trial of aducanumab. These data should address any residual uncertainty surrounding the efficacy of this class.
In the meantime, the main serious risk associated with aducanumab is ARIA. Based on data from the Phase III trials, ARIA, which is an amyloid related imaging abnormality, occurred in 41 percent of patients who took aducanumab 10 milligrams per kilogram and 10% of patients who took placebo. Of the patients taking aducanumab that experienced ARIA, 24% experienced clinical symptoms. In other words, about 10% of patients treated with the approved dose of aducanumab experienced symptomatic ARIA. Serious symptoms we reported in 0.3% of patients.
Alzheimer's disease is 100% fatal And before death, it robs people of themselves. Should these additional clinical studies confirm that this class of drugs is effective In slowing clinical decline, as Michelle mentioned, patients who lack access to aducanumab We have been discussing the aducanumab data for many months now. Aducanumab was approved for use in the United States on June 7 and the data are summarized clearly in the label. Our hope is for doctors to discuss the benefits and risks of taking aducanumab with their patients and caregivers Based on rational analysis and accurate information, we are doing what we can to provide that information to the prescribing community in a number of ways. First, we will continue to present at scientific forums and publish analyses from our Phase III trials of aducanumab with a focus on publishing the primary manuscript and disseminating additional data to inform clinical practice, including the management of ARIA.
This includes 4 presentations planned for the AAIC conference next week. 2nd, we are moving with a sense of urgency To finalize the design of the aducanumab post marketing confirmatory Phase 4 controlled study intended to verify the clinical We are still working through the details and are actively engaged with regulators. Our goal is to execute this study as expeditiously as possible and well ahead of the post marketing commitment of approximately 9 years. 3rd, we have a unique data generation opportunity with the EMBARK long term extension study. Just this month, we enrolled our last patient in the trial, bringing the total enrollment in the study up to roughly 1700 Alzheimer's disease patients.
The 2 year EMBARK study will include patients previously treated with aducanumab for up to approximately 6.5 years, thereby generating important long term safety and efficacy data for aducanumab. We plan to present the EMBARK baseline data at an upcoming medical meeting, which should yield important insights on the effects of treatment interruption, the longer term impact of reducing amyloid plaques and the potential benefits of continued treatment. Lastly, we plan to initiate a real world observational study an Alzheimer's disease called EyeCare ADUS in order to collect real world long term effectiveness and safety data on aducanumab. We are also evaluating additional formulations of aducanumab with the goal of increasing patient confidence. Last month, we initiated a Phase 1 study to evaluate bioavailability of a subcutaneous formulation of aducanumab and continue to engage with regulators on the appropriate development strategy.
Finally, we continue to advance our innovative pipeline of potential Alzheimer's disease treatments. This includes lecanumab, Our other anti amyloid antibody that we are collaborating on with Eisai, lekanamab was recently awarded breakthrough therapy designation by the FDA And we are working with Eisai to engage with the FDA and pursue the optimum regulatory pathway. We also look to the readout of the CLARITY Phase 3 study of leucanumab expected next year. In addition to our anti amyloid approaches, We are also targeting tau, the primary component of neurofibrillary tangles, another pathological hallmark of Alzheimer's disease. Although we were disappointed to learn that the Phase 2 study of Gosiranumab in early Alzheimer's disease did not meet the primary or secondary endpoints, We do not believe these results diminish the relevance of tau as a potential therapeutic target in Alzheimer's disease.
Whereas we have discontinued the BIIB092 program, we are continuing the development of BIIB080, our antisense oligonucleotide, which aims to reduce the production of all forms of tau both intra and extracellular. Results of the Phase 1 trial We'll be presented at AAIC next week. In addition to Alzheimer's disease, this quarter we continue to progress A broad neuroscience pipeline with positive data readouts in depression and stroke, both areas in need of innovation. First, in neuropsychiatry, in collaboration with Sage, we were excited to learn that the Phase 3 waterfall study Evaluating a 50 milligram dose of ziranolone in major depressive disorder achieved its primary endpoint, Despite the pronounced placebo effect observed in the waterfall study, 2 weeks of zuranolone treatment resulted In a statistically significant reduction in depressive symptoms at day 15 as measured by the HAM D17 scale Zoranolone treatment also resulted in a rapid onset of action showing treatment effects at day 3, 8 and 12. The safety profile was similar to that seen previously in that most treatment emergent adverse events were mild to moderate in severity and we observed no signal of increased suicidal ideation or behavior or withdrawal symptoms.
We continue to believe that zuranolone with its rapid treatment Durable treatment effects after a 2 week dosing period and differentiated tolerability has the potential to transform treatment for We are now working with Sage to determine the optimum filing path. The waterfall study is also It's part of the robust development program for zuranolone, which also includes the ongoing SHORELINE, CORAL and SKYLARC studies. We expect to report top line data from CORAL and SHORELINE in 2021. We are working with Sage to evaluate enrollment for the SKYLARC study and we'll provide updates when that work is completed. We also obtained Positive data from the Phase 2a study of TMS007 in acute ischemic stroke.
Current standard of care The treatment of ischemic stroke calls for the use of thrombolytic agents within 3 to 4.5 hours of symptom onset. The approved agents also carry the risk of intracranial hemorrhage or ICH, which increases with time. During the Phase 2a study of TMS-seven, now referred to as BIVV-1 hundred and thirty one, The patients were dosed 4.5 to 12 hours after the onset of stroke symptoms with an average of 9.5 hours. There was no symptomatic ICH in the BIIB131 group. When compared to placebo, BIIB131 increased the rate of of occluded intracranial arteries as visualized by MR angiography in patients with large vessel strokes.
Moreover, more patients regain the ability to function independently as measured by the modified Rankine scale at day 90 compared to placebo. We are encouraged by the results of this study and are hopeful that BIVV-1 hundred and thirty one could have the potential to be a next generation thrombolytic drug safely extend the treatment window after stroke onset. We plan to advance BIVV-1 hundred and thirty one into the late stages of development as soon as possible. We also bolstered our MS pipeline through a proposed license and collaboration agreement with Innocare for a Phase 2 oral TK inhibitor with high selectivity and demonstrated CNS penetrance is currently being studied in a global placebo controlled Phase 2 study The ability of oralabrutinib to cross the blood brain barrier combined with its high kinase selectivity differentiates it from other BTK inhibitors currently in development for MS. Looking toward the remainder of the year, We also have 2 pivotal readouts remaining in ALS and depression.
Earlier this month, we completed the 1 year placebo controlled period of the Phase 3 study of tofersen in SOD1 ALS and we expect the readout by this fall. We also recently enrolled the 1st participant in ATLAS, a Phase 3 trial of tifersen initiated in clinically Our hope is that treating people earlier in the disease In addition to the accelerated approval of aducanumab, we completed 5 mid to late stage readouts in several key therapeutic areas characterized by high unmet need, including depression and stroke. The field of neuroscience is rapidly advancing And with the investments we have made in prioritizing genetically validated targets, deploying biomarkers in early stage clinical programs In building our human and technological capabilities, we believe we are well positioned to take advantage of the many opportunities offered by this exciting area of science for the benefit of patients. I will now pass the call over to Mike. Thank you, Al.
As Michel noted, we were very pleased with our Q2 results as we continue to execute well. We continue to face competition from TECFIDERA generics in the U. S, which impacted our year over year financial performance. However, as we move forward, we remain fully focused on our core business as well as the launch of Aduhelm in the United States. Total revenue for the Q2 of $2,800,000,000 declined 25% versus the prior year at actual currency and 26% at constant currency.
This decline reflects the impact of TECFIDERA generics in addition to approximately $330,000,000 in revenue That was recorded in Q2 2020 related to the one time license of certain manufacturing related intellectual property. We were, however, encouraged to see total revenue increase by 3% versus Q1 of 2021, primarily driven by the MS franchise and OCREVUS royalties. Total Aduhelm revenue for the Q2 was $2,000,000 I would refer you to our slides and commentary that we gave on our June 8 call for details on the accounting with Eisai and Neuroimmune. Total MS revenue for the Q2 was $1,800,000,000 inclusive of OCREVUS royalties. Looking now at some of the individual products within MS.
Global TECFIDERA revenue for the Q2 was $488,000,000 In the U. S, 2nd quarter revenue of $178,000,000 increased versus the prior quarter due to seasonality and dynamics, and we expect TECFIDERA in the U. S. To continue to decline throughout the year. Outside of the U.
S, 2nd quarter TECFIDERA FODERA revenue of $309,000,000 increased 15% versus the prior year with 6% underlying patient growth. We were pleased with the continued ramp in VUMERITY revenue from $74,000,000 in the first quarter to $91,000,000 in the 2nd quarter. And as Michel mentioned, we believe that FUMERITY can become a $1,000,000,000 annual revenue product over time. Tysabri's 2nd quarter global revenue of 524,000,000 Our increased 21% versus the prior year, benefiting from shipping dynamics in both the U. S.
And outside the U. S. We were pleased to see 7% growth in global Tysabri patients and we believe Tysabri remains well positioned to play an increasingly important role in Moving now to SMA. Global 2nd quarter SPINRAZA revenue of $500,000,000 increased 1% versus the prior year at actual currency and decreased 3% at constant currency. In the U.
S, BEN RASA revenue of 149 dollars decreased by 29% versus the prior year as we see continued impact from competition. Outside the U. S, SPINRAZA revenue grew 23% versus the prior year, although some of this growth was attributable to accelerated shipments. Moving now to our biosimilars business. 2nd quarter revenue of $202,000,000 increased 18% versus the prior year at actual currency and 9% at constant currency.
This growth occurred despite our biosimilars business continuing to be negatively impacted by pricing pressure as well as a slowdown in new treatments and reduced clinic capacity due to the COVID-nineteen pandemic. Despite the continued impact of COVID-nineteen, we are now the leading anti TNF provider in Europe. Total anti CD20 revenue in the Q2 of $440,000,000 decreased 8% versus the prior year. RITUXAN revenue decreased approximately 32% versus the prior year, partially offset by a 23% increase in OCREVUS royalties. 2nd quarter gross margin was 83 percent of revenue, up slightly from 82% in the prior quarter and down from 89% in Q2 2020.
The reduction in gross margin versus the prior year was primarily due to the declines in TECFIDERA and RITUXAN, both of which are high margin products. In addition, Q2 2020 includes approximately $330,000,000 in revenue related to the one time license of certain manufacturing related intellectual property, which was at 100 percent gross margin. Moving now to expenses and the balance sheet. 2nd Non GAAP R and D expense was $585,000,000 which included approximately $50,000,000 of upfront payments related to Three business development deals, one with BioThera for biosimilars, a second with Capsugin and gene therapy And a third with Ginkgo to develop a novel gene therapy manufacturing platform. 2nd quarter non GAAP SG and A was 6 Eisai's reimbursement of U.
S. SG and A cost is reflected in the collaboration profit sharing line. 2nd quarter collaboration profit sharing reduced our net operating expenses by $15,000,000 which includes a reimbursement of $85,000,000 from Eisai related to the commercialization of Ajehelm in the U. S. In the Q2 of this year, Our effective non GAAP tax rate was approximately 16% versus approximately 19% in the Q2 of last year.
2nd quarter non GAAP income attributable to non controlling interest of $84,000,000 includes a milestone payment of $100,000,000 to Neuroimmune During the Q2, we repurchased 1,600,000 shares of the company's common stock for 4 $50,000,000 As of June 30, 2021, there was $3,600,000,000 remaining under the share repurchase program authorized in October of 2020. Our weighted average diluted share count was approximately 150,000,000 shares for the 2nd quarter. Non GAAP diluted EPS in the Q1 was $5.68 which increased from $5.34 in Q1 of 2021. In the Q2, we generated approximately $1,200,000,000 in cash flow from operations. Capital expenditures were $72,000,000 and free cash flow was approximately $1,200,000,000 We ended the quarter With $7,300,000,000 in debt, dollars 4,000,000,000 in cash and marketable securities and as a result 3.3 Overall, we remain in a very strong financial position with significant cash and financial capacity to grow the business over the long term.
Let me now turn to our updated full year guidance for 2021. We are increasing our full year 2021 revenue guidance from our previous range of 10,450,000,000 to a new range of $10,650,000,000 to $10,850,000,000 Primarily as a result of stronger performance in our MS franchise and higher OCREVUS royalties. We are maintaining our Non GAAP diluted EPS guidance of $17.50 to $19 notwithstanding the inclusion Of the $125,000,000 upfront payment related to our recently announced collaboration with Innocare, which we expect to incur in Q3, This payment was not included in our previous guidance. Our CapEx guidance is unchanged at 3 $5,000,000 to $425,000,000 Our guidance continues to assume modest Aduhelm revenue in 2021 due to dosing titration, The need for sites to prepare to diagnose and treat patients and the time that it will take to secure payer coverage, we continue to expect revenue to start ramping in 2020 We expect continued erosion of both TECFIDERA and RITUXAN in the U. S.
And that the percent of revenue, which reflects this dynamic. Full year non GAAP R and D expenses are expected to between $2,450,000,000 $2,550,000,000 This updated R and D guidance range includes the expected 125,000,000 upfront payment in the Q3 of 2021, which as I mentioned was not included in our prior guidance. Full year non GAAP SG expenses are expected to be between $2,600,000,000 $2,700,000,000 This range is consistent with our previous guidance and continues to include $600,000,000 Aduhelm investment. Of this amount, approximately $200,000,000 would be reimbursable by Eisai and is reflected as collaboration profit sharing effective April 1 and not part of SG and A. Of course, as the launch We will actively manage the pace of the spend.
This guidance continues to reflect our expectation that both R and D and SG and A will be higher in The second half of the year than they were in the first half due to collaborations such as Innocare, program readouts and investments in Aduhelm. We expect we will utilize a portion of the remaining share repurchase authorization of $3,600,000,000 throughout the year, although this will depend on a variety of factors, including our business development activities. We assume that Foreign exchange rates as of June 30, 2021, will remain in effect for the remainder of the year, net of hedging activities. We have not included any impact from potential tax So in closing, we were very pleased with our financial performance in the quarter. We remain in a very strong financial position with significant cash, Modest leverage and a business that generates significant free cash flow.
We believe these dynamics position us well to continue to grow the business over the long term. And now I'll turn the call back over to Michel for his closing comments.
Thank you, Mike. It is an exciting time at Biogen And it is all about execution for the coming period. Our base MS, SMA, biosimilars business is performing well, Demonstrating resilience despite competition, we have an incredible opportunity together with SI And we are completely focused on operational execution for the global launch of Aduhelm and hopefully soon lekanimab. We have positive Phase 3 data for urothelony depression and we are anxiously awaiting data for topeersen in SOD1 ALS. We believe we have a significant value creation opportunity ahead of us.
We stand behind the clinical data for HADUHELLM including the integrity of the Again, today our top priority is patient access, including for the underserved population And those more at risk due to ethnicity and we are open to innovative approaches to ensure budget sustainability. In closing, I would like to thank our employees around the world who have demonstrated their dedication to making Positive impact on patients' lives and all of the physicians, caregivers and participants in our clinical development programs, Our ability to deliver medicines to patients could not be realized without their passion and commitment. We will now open the call for questions.
Your first question comes from the line of Jay Olson from Oppenheimer.
Thank you for taking the question. It's really been a rough ride for Aduhelm and we appreciate you hanging in there. It seems like Ever since March of 2019, Biogen has been the target of constant assault from the media and other groups, which obviously intensified On June 7 when Adiharm was approved, what do you suppose it is about Alzheimer's disease that causes the media to react so negatively
Thank you, Jay for the great questions. I will get started and I guess Al will add. So again, it's and you're absolutely right in your question and your description of what we are exposed to. But we are not the one suffering the most. It's still the early day in the launch.
It's still the beginning. And whatever the motives of the controversy are, the one who are potentially misled, confused, Denied help are the patients. If we look at the past experience, progress has to be made with the first step And we can look at HIV, oncology or MS as Al said. And let me bring you back to early 1990s and HIV. The EDEA approved a first product based on CD4 counts and there were tremendous controversy.
Then there were progress on Veralod and then survival and then 29 products or so were approved Until today. And today, it's managed HIV as a chronic disease. This came with tremendous investment in the And the importance of the biomarker is that it's often present prior to the clinical symptoms. And this situation, this scenario could very well be the same for AD. Where are those today who are fighting At that time, the biomarker based approval for HIV therapies a few years back.
The same applies to oncology.
Hi, Jay.
Thanks for the question. I do believe that the amyloid hypothesis, even before we got started With aducanumab, it was a controversial topic, and there were people lined up on both sides of the hypothesis, whether or not it's true. And people dug in their heels, even before the aducanumab data were approved. And it's kind of unfortunate. And many of these drugs probably didn't even engage target in the brain and yet we consider those negative results as meaningful.
But the main thing Jay is that somewhere along the way the patients got lost. And we'd like to bring the conversation back to the patients. And I highlighted the risks associated with the drug, but also the risks associated with not starting Aducanumab in a timely fashion in the appropriate patients.
Next question.
We can now take the next question from the line of Michael
Thank you. Good morning and appreciate the comments and also the open letter from Al. Appreciate that. We had a question on early launch dynamics for Aduhelm. Maybe you can comment about the 325 sites, how those are going?
Are they ready to Patients, but more importantly reimbursement access, specifically whether there's anything you can do with CMS to strike a deal Or anything like that because I think those are the 2 bottlenecks or dynamics that people are trying to get through. Thank you.
Thanks for the question, Mike. I will start and then Alicia will give you much more granularity because she's closer to the operation. The background noise and the controversy are unfortunate and not helpful mostly for the patients and they're confusing. Nevertheless, the team Making a lot of progress and I'm very proud about the hard work. Overall, it's a bit slower than what we assumed, But we are making tremendous progress with some positives and some headwinds.
Alicia?
Yes. Thank you, Michelle and thank you, Michael, for the question. And though it is very early in our launch, I am happy to share with you a few critical areas that we've been monitoring that will provide some insights into how the I do have quite a bit to share, however, so I would ask that you please bear with me as I think, I need to make it through some of these key topics So let me first start with the patients. Physicians have definitely shared that since launch, there has been a significant amount of physicians, which is also excellent. On the last call that we held, I did share that the primary focus of our team is to provide access to patients By supporting sites as they build the capability and infrastructure to treat patients.
So sites are just now taking that first step in their internal process, which is to complete their process, which is to complete their P and T committee reviews. The majority of the Alzheimer's specialists that we I've been talking to have been really extremely highly engaged with both our commercial and our medical teams as they operationalize their sites. We have seen several sites move faster than anticipated, which is also very good news for us. And as Michel mentioned in his opening, we estimate that 35 of the Ready sites have completed a P and T review with a positive outcome or they've indicated that they're not requiring the step. As I'm sure you've also seen, a few centers have indicated that they will not provide access to Aduhelm for now.
This is not only disappointing for patients, but also for the AD specialists at these centers who would actually plan to treat their patients with Aduhelm. So our teams are making every attempt to get in front of the decision makers in order to help them better understand the science and data. The AD specialists and the champions at these sites are also urging their sites to reconsider these decisions. Now remember though, many of these physicians can still prescribe the drug and they have asked for support to find alternative sites where they can infuse their patients. We've also experienced during this time that patients and their families are not giving up And they will seek new sites if necessary and we are also seeing them in the field.
Our field teams share the sense of urgency of course And as we've also said in a public statement, if any patient is denied access to care, we encourage them to contact our Biogen support services for And we will support them. Now for the sites that have completed a positive P and T committee review or don't require one, There are still several steps to operationalize the complex patient journey. You might have seen recently published several AD specialists recently said, Building this infrastructure for the appropriate use of AgiHome will require time, resources and some creative planning. In fact, I recently just visited several sites and what I saw is consistent with what we're seeing across the entire country. Sites are currently Right now developing their protocols, they are reengaging with their patients, they are considering or Amyloid beta confirmation, they also are ordering baseline MRIs, then they are discussing these results of the test and We created with LabCorp and Mayo Clinic Labs to help physicians and patients access CSF diagnostic laboratory testing.
We are also seeing a very strong In fact, we have already seen the first orders come in for both of our lab partners. Sites are also trying to gain As you said on the reimbursement pathway, the decision by CMS to open an NCD analysis will help provide additional clarity to sites And healthcare providers. Now while this analysis is underway, coverage decisions will be made by regional Medicare administrative Contractors, as you know, is the MAX and the Medicare Advantage plans. Based on precedent, we expect the MAX and drug NCD analysis, which was CAR T, both MAX and Medicare Advantage plans continued to cover this product during the NCA process. We can also confirm that some Medicare Advantage plans have already approved prior authorizations for Aduhelm.
For the MACs, due to the miscellaneous coding, it does take them a little bit of time to process the claims, But we are also aware that MACs have received claims already. So during the NCD analysis, we're actively working with sites to Support patient access and reimbursement. Keep in mind and as I witnessed across the various sites that I visited, each site will operationalize at different rates, which is why patient infusions will build gradually over the year as we've referenced. Though this process will take time, it was absolutely Humbling to see how much effort and passion these physicians are putting into building the infrastructure to treat their patients. And I am really proud of how hard our Teams are working to support these sites as they break new ground.
Our teams are staying focused though, Michael. We have a job On behalf of the AD community and we will not be distracted from that mission no matter what we see. Thank you.
We can now take the next question from the line of Umer Raffa from Evercore.
Hi, guys. Thanks for taking my question. I just wanted to focus on Alzheimer's in 2 parts. First, I know there's a lot of discussion on denanimab early filing And I'm a bit puzzled why there's lack of any commentary on a potential early filing for BAN2401. And I As Eisai's lead on regulatory matters, but I also understand you guys are on the steering committee.
So should we expect a band 2,401 filing in 2021? And secondly, Alicia, just to clarify, for the $1,600,000 sales for aducanumab in the 2nd quarter, how much of that was inventory? Because the sales number implies about 3,000 Patients are on drug in June. Is that right?
Yes. I mean, I'll take the second part of that. It's Mike speaking. Umer, thanks for the question. And Al will take the second one.
I mean, we typically don't get a lot into kind of the channel dynamics, but it's early days. We don't have Really clear visibility into patient metrics for a drug like Aduhelm. It's very early And obviously, we're pleased to see that we accomplished some shipments and we got the $1,600,000 in sales done. But as those roll out the sites and translate into patient treatment, we'll have more to say about how much is in Channel and how much is actually in going into patient treatment.
So more to come on that, but you I assume that since we had only 2 weeks, a big chunk of it is basically a channel. Al?
Yes. Umer, as you know, we generally don't comment on the content of our regulatory interactions. We do think it's a very positive sign that The lekanamab was awarded breakthrough therapy designation and I know my colleagues at Eisai and Biogen will do everything we can to Expedite the regulatory pathway.
And I would like to add that it's good to see followers with the same mechanism of action And a type of class effect that is so challenged. And as Biogen, we welcome new players And some of them being competition and some being partners. That's good for the clinician. That's good for the patient by definition.
We can now take the next question from the line of Mark Goodman from SVB Leerink.
Thanks. Good morning. Can you help us understand this NCD process? What are the scenarios of outcomes? And help explain to us what happens if there is a negative scenario?
What would be a negative scenario and what can you do about a negative scenario? Thank you.
All right. Thank you, Mark, for the question. I'll go ahead and answer that. So while it's too In the process to speculate the outcome of this NCD analysis, I will provide some inputs so people can understand that there are 5 So first, there is a no coverage decision. While this is theoretically an In the last 15 years, there are no examples of FDA approved drugs not being covered.
So I think that that's important to know. 2nd, There is coverage to indication or basically label. And third, you can have coverage with restrictions. So they can Maybe give you a restriction around specific population of patients or they can limit prescribing potentially the specialists and then they'll define who those specialists are. 4th, you can have coverage with evidence development.
And lastly, it can be left to the MAX discretion. So importantly, once a national coverage decision is made, all of the MACs and Med Advantage plans must abide by the NCD, meaning the NCD We will overrule any local or Medicare Advantage plan that is in place. That's why we believe the NCD will drive some consistency of access and clear reimbursement expectations, which is actually very good for everyone since you know one of the questions that people Have our is this going to be reimbursed? So with that being said, if there were to be a negative outcome, Though we can't speculate on it, of course, in Biogen's true form, we would want to obviously have a conversation on that and see what other outcome potentially could Depending on additional data they might need.
Thank you, Alicia.
We can now take the next question from Matthew Harrison from Morgan Stanley.
Great. Good morning. Thanks for taking the question. I was hoping you could comment a little bit more about the current reimbursement And maybe specifically if you could comment on whether or not you're aware of anyone that's been infused Early in June with commercial drug, if they've actually been paid by a MAC or not. Thanks very much.
Yes. So thank you, Matthew, for the question. And unfortunately, I would love to give you an answer to that. But because it's early days and because processing claims takes Unfortunately, I can't give you feedback on that yet, because they are in the process. So as I said before, I know That the Medicare Advantage plans have approved the prior authorizations, which actually is a good thing that those are in place because it does It cites some reassurance that they will get reimbursed.
But as for the MAX, we know that they do have claims, but because it's under miscellaneous It does take some time. So, I would love to give you that answer, but we just don't have it right now.
We can now take the next question from Phil Nadeau from Cowen and Company.
Good morning. Thanks for taking my question. Alicia, during your remarks, your answer to Michael's question, you mentioned that a lot of the centers or setting up confirmation of beta amyloid presence in the patients. I'm curious Why are they doing that? Are they taking that upon themselves to identify the patients or confirm the patients?
Or are the diagnostic requirements
Okay. Thank you for that question as well. And since PDUFA, we have Continue to hear a high level of interest in our ABC program, which I talked about prior, which is the CSF testing, which you heard me talk about in my first answer. Now the reason why there is a high interest is primarily due to three reasons. First, we're hearing a consistent message The AD experts and the clinicians that they will align their patient selection to the patient population studied in our So 100% of patients in our clinical development program were confirmed for amyloid plaques.
However, just So you also know no one's really come out with a policy yet. So I can't actually tell you, that there's been a mandate, on amyloid beta confirmation, but we would expect that Potentially those will be in the policies. 2nd, there is currently no reimbursed test to confirm the presence of amyloid and this program that we offer as a solution to provide access to patients who would otherwise lack the ability to pay for this lab test, let alone the cost of a PET scan. And as you know for PET scanning, 3rd, there are still several areas of the country, in particular the Mountain West, Hawaii and Alaska, where access to amyloid PET is Not available due to the distribution of radiopharmacies and the limited half life of the radioligand, but I also said in a prior call that we do need both PET and CSF And we have seen these orders come in for both of our lab partners and we are still working diligently with a coalition to see if we can get pet reimbursement through CMS.
We can now take the next question from Paul Matteis from Stifel.
Hey, great. Thanks for taking my question. I wanted to ask what liability does a physician expose his Herself too, if prescribing aducanumab ahead of an NCD, I guess, for example, if the drug is prescribed to a patient that ends up not being covered under an NCD Or they don't follow certain,
I guess prior auth is
not the right word, but analogous to prior auth kind of criteria for selecting patients. Is there a risk that the treatment center could owe money back to Medicare? And do you think this could have a slowing impact On uptake because of this kind of broader uncertainty surrounding financial exposure? Thanks.
So I'll go ahead and take that question. I think that this is really an insightful one because this is where a lot of the fear I think in the centers where they want to know are we going to be reimbursed. And the answer to that is you're not going Until you try. And that's why we're now starting to see centers put through their claims and see how they get processed. However, when an NCD Indeed does come out.
Obviously, at that point in time, CMS is also going to have to make a decision as to what they would do with those patients if they Did fall outside of the NCB criteria. So unfortunately, we're not going to know, until we get to the end
of that process. And if
we step back, I would say this type of confusion is something we have seen all the way. When we On Spinraza, there was the same confusion and the controversy is not adding to the clarity And he's making people being more fear, but we start to see things moving in the right direction. It's a beginning
We can now take the next question
I'm wondering if you can disclose how many P and T reviews are outstanding and maybe more so the percent that have come back Negative. And are the public comments being made by some of the large influential sites like the Cleveland Clinic having any sort of material influence on smaller community type clinics that you picked up on that may impact kind of their early prescribing habits? Thank you. Alicia?
Yes. Okay, Cory, thank you for the question. I think when it comes to the P and T committee, the stat that we gave you, the 30 5% is actually the only stat that I can provide at this point in time, and this number changes on a daily basis, right? So P and T committee reviews are happening across the We obviously are aware of the really big ones that become public, but some of the smaller ones that are in our targeted sites come in on daily basis. So I can't actually However, for the second part of your question, I can't comment on the decision making process at the However, I will say that we are disappointed that sites that have specialized in Alzheimer's disease have indicated they will not provide access to Aduhelm for now.
This This is not only disappointing for patients, but also for the AD specialists at the sites, of course. Each site will have their own specific process So there's not really a single reason. And even the reasons that you might see publicly are slightly different from what We actually hear directly, which again causes even more confusion in the marketplace. And just so you know, we're making every attempt to get in front of these decision makers to help them better Understand the science and data. And also, there have been specialists and champions at these sites to see if they can reconsider their current But do remember that many of the physicians can still prescribe the product and have asked for support to find alternative sites, So they can infuse their patients.
With that being said, there are going to be other sites that look to these accounts To see what kind of policies and procedures that they do put in place depending on their decision making. However, at the end of the day, these accounts have also said it is And there may be a potential opportunity to have them reconsider that in the very near future.
Yes. I I just want to reinforce what Alicia just said and I have the opportunity to engage with many clinicians and scientific leaders including some from some of the centers that Those that denied, it's the beginning of a process and I think that we have also the responsibility to provide more data As Al said, and we are working on that actively. Remember, we have the richest database in AD
And just to quickly add to that where we have 35% that have completed a P and T review with a positive outcome or indicated won't require you should not assume that the remaining 65% have come back negative. It's very early days, and the majority of those are still outstanding. I
We can now take the next question from Terence Flynn of Goldman Sachs.
Great. Thanks so much for taking the question. I just wondered, Alicia, if you could expand a little bit on one of the potential CD scenarios that you mentioned, the coverage with evidence development, essentially how that would work if there'd be a request for No additional clinical work. And if the drug would be covered during the time, well, that additional clinical work would be Conducted or if the drug would not have coverage in that intervening time period? I think there's a little bit of confusion around the CED process.
Thank you.
Yes. This is a great question. And obviously, we've looked into this as well. And unfortunately, an outcome of a We're going to allow 500 patients, to be reimbursed in this clinical trial to any patient can get reimbursed as long as it meets a certain Criteria for us to get evidence. So I would love to be able to answer it directly, but we are so early in the past.
We have no idea What the outcome is going to be, but a CED can take on many, many different forms.
Sherfi would like to add something.
Yes. So just to add some perspective, there was a CED for the PET process in the first study, first IDeA study, which enrolled for about 2 years. They enrolled about 16,000 patients between 2016 2018. It was sort of like a clinical trial, very difficult And one of the challenges with that as recognized by CMS is that it only have 4% representation So CED really has some challenges. And so as we continue to engage, we're going to be looking forward to Making sure that if it is a CED, that it doesn't really restrict access to diverse patient populations.
Okay. So for the first time ever, we have an FDA approval accelerated approval product for And in this case, a reduction in clinical decline. Can we now urgently turn our attention to the patients