Biogen — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue increased 11% year-over-year to $2.8 billion, with constant currency growth of 10%.
• Growth Portfolio revenue reached $1.26 billion, up 49% year-over-year, representing 63% of Core Pharmaceutical revenue.
• GAAP diluted EPS was $(0.14), a decrease of 104% from $3.17 in the prior year, primarily driven by transaction-related charges.
• Non-GAAP diluted EPS was $2.62, down 46% from $4.81 in the prior year, impacted by $284 million in acquired IPR&D, upfront, and milestone expenses.
• Net cash flow from operations was approximately $641 million, with free cash flow (Non-GAAP) of approximately $600 million.
• As of September 30, 2026, the company held $1.3 billion in cash and cash equivalents and $7.7 billion in total debt, resulting in net debt of approximately $6.4 billion.
• GAAP cost of sales was $748 million (27% of revenue), while Non-GAAP cost of sales was $553 million (20% of revenue).
• GAAP R&D expense was $574 million and Non-GAAP R&D expense was $567 million.
• GAAP SG&A expense was $752 million and Non-GAAP SG&A expense was $730 million.
• Collaboration profit sharing was a net expense of approximately $78 million.
• GAAP effective tax rate was (128.5)% and Non-GAAP effective tax rate was 20.0%.

Guidance and Future Outlook:

• Biogen raised the lower end of its full year 2026 Non-GAAP diluted EPS guidance range to $12.20 to $13.00 from the previous $12.00 to $13.00.
• Full year 2026 total revenue is expected to increase by a mid-single digit percentage compared to 2025.
• Combined Non-GAAP R&D and SG&A expenses are expected to be approximately $4.95 billion for the full year 2026.
• The company expects to announce top-line data from TOPAZ-1 and TOPAZ-2 Phase 3 studies for litifilimab in SLE in the first half of December 2026.
• Additional Phase 3 readouts are expected for litifilimab in CLE and felzartamab in antibody-mediated rejection in the first half of 2027.
• A Phase 3 readout for zorevunersen in Dravet syndrome is expected in the third quarter of 2027.

Business Segments and Product Lines:

• Multiple sclerosis product revenue was $919 million, down 13% year-over-year.
• Rare disease revenue was $676 million, up 27% year-over-year.
• Specialized immunology revenue was $243 million, driven by the acquisition of Apellis products.
• Biosimilars revenue was $166 million, down 16% year-over-year.
• Other product revenue was $84 million, up 53% year-over-year.
• Alzheimer's collaboration revenue was $68 million, up 60% year-over-year.
• SPINRAZA revenue was $461 million, up 23%, with accelerated conversion to the high-dose regimen exceeding expectations.
• LEQEMBI revenue was $202 million, up 67%, with U.S. in-market sales of $107 million.
• VUMERITY revenue was $192 million, down 11%, impacted by U.S. formulary dynamics.
• SYFOVRE revenue was $191 million, up 27%, with commercial injections reaching their highest quarterly level since launch.
• SKYCLARYS revenue was $178 million, up 34%, driven by increased demand and favorable U.S. inventory dynamics.
• ZURZUVAE revenue was $84 million, up 53%, reflecting strong continued demand growth.
• EMPAVELI revenue was $52 million, up 92%, driven by strong demand growth in nephrology indications.
• QALSODY revenue was $38 million, up 42%, with strong U.S. and international demand growth.

Market and Competitive Landscape:

• The Growth Portfolio, including the first full quarter of results from Apellis products, drove double-digit revenue growth.
• The company faces formulary dynamics impacting VUMERITY sales in the U.S.
• Competition includes new originator therapies, generics, prodrugs, and biosimilars in the biopharmaceutical industry.

Risks and Challenges:

• Significant GAAP and Non-GAAP expenses related to acquired IPR&D, upfront, and milestone charges, primarily from the RayThera Inc. acquisition.
• Integration costs and transaction-related charges impacted GAAP results.
• Potential future acquired IPR&D, upfront, and milestone charges from business development transactions are uncertain.
• Risks include dependence on revenue from products and licensing agreements, clinical trial success, regulatory approvals, and intellectual property protection.
• Potential impacts from healthcare reform, tariffs, trade restrictions, and litigation are difficult to predict.

Management Commentary and Tone:

• CEO Christopher A. Viehbacher stated that results demonstrate Biogen has "returned to growth" and highlighted the strength of the Growth Portfolio.
• Management expressed confidence in the company's ability to "further strengthen its long-term growth profile" with multiple Phase 3 readouts expected over the next 12 months.
• The company noted successful ongoing integration execution of the legacy Apellis portfolio.

Other Key Points:

• The acquisition of Apellis, which closed in May 2026, contributed EMPAVELI and SYFOVRE to the portfolio.
• The acquisition of RayThera Inc. resulted in $284 million in acquired IPR&D, upfront, and milestone expense for the quarter.
• The company's weighted average diluted shares were approximately 148 million for GAAP and 149 million for Non-GAAP calculations.
• All unvested equity-based awards are antidilutive for GAAP due to the reported GAAP net loss.
• The company does not provide GAAP guidance for measures other than revenue due to the uncertainty of transaction costs, litigation outcomes, and asset impairments.