Executive Summary / Key Takeaways

• Biogen is undergoing a significant transformation, shifting from a legacy Multiple Sclerosis (MS) focus to a "new Biogen" driven by innovative product launches and a high-conviction pipeline in neurology, rare diseases, and specialized immunology.
• New product launches, including LEQEMBI, SKYCLARYS, ZURZUVAE, and QALSODY, are demonstrating strong growth, with cumulative year-to-date 2025 revenue from these products offsetting the decline in the legacy MS portfolio.
• The company is leveraging advanced technologies like Antisense Oligonucleotides (ASOs), anti-amyloid antibodies, and RNAi therapies, coupled with strategic manufacturing investments and drug delivery solutions like ThecaFlex DRx, to enhance efficacy, patient convenience, and market reach.
• Financial discipline through the "Fit for Growth" program is on track to deliver $1 billion in gross savings by the end of 2025, enabling strategic reinvestment in R&D and commercialization while maintaining stable operating expenses.
• Despite facing intense competition, drug pricing pressures, and pipeline risks, Biogen's diversified portfolio, strategic collaborations, and focus on unmet medical needs position it for sustainable long-term growth, with several key pipeline readouts and regulatory decisions anticipated through 2026 and beyond.

The Dawn of a New Biogen: A Strategic Pivot for Sustainable Growth

Biogen Inc., founded in 1978, has historically been synonymous with pioneering therapies in neurology, particularly Multiple Sclerosis (MS). However, facing increased competition and a gradual decline in its legacy MS franchise, the company is undergoing a profound strategic metamorphosis. This transformation aims to establish a "new Biogen" centered on innovative product launches and a reprioritized, high-conviction pipeline across neurology, rare diseases, and specialized immunology. This strategic pivot is critical for driving sustainable long-term growth and reshaping Biogen's competitive standing in the dynamic biopharmaceutical landscape.

The industry itself is intensely competitive, characterized by rapid technological advancements, stringent regulatory pathways, and increasing scrutiny over drug pricing, notably influenced by the U.S. Inflation Reduction Act (IRA) and the One Big Beautiful Bill Act (OBBBA). Companies like Novartis AG (NVS), Roche Holding AG (RHHBY), Pfizer Inc. (PFE), and Merck & Co., Inc. (MRK) represent formidable competitors, often boasting broader portfolios, greater financial scale, and extensive global reach. While these larger players offer diversified revenue streams and often superior operational efficiencies, Biogen distinguishes itself through deep expertise in neurodegenerative and rare diseases, a commitment to "first-in-class" therapies, and a strategic focus on targeted innovation. The company's ability to create new markets, as demonstrated by its recent launches, underscores its commercial strength, even as it contends with the scale advantages and established presence of its larger rivals.

Technological Edge and Innovation Engine

Biogen's core competitive advantage is deeply rooted in its differentiated technological platforms and a robust innovation engine. The company is actively advancing several modalities, including Antisense Oligonucleotides (ASOs), anti-amyloid antibodies, anti-CD38 antibodies, and RNAi therapies, each designed to address complex disease pathologies with high unmet needs.

A prime example of this technological differentiation is LEQEMBI (lecanemab), the first disease-modifying anti-amyloid antibody approved for Alzheimer's disease. Its efficacy is notable, with real-world data showing that 76% of early AD patients with no or low tau pathology remained stable, and 60% showed clinical improvement at 18 months. Crucially, continued treatment demonstrated a doubling of clinical benefit at three years compared to a matched natural history cohort. To enhance patient convenience and overcome logistical hurdles associated with intravenous administration, Biogen and Eisai (ESALY) have secured FDA approval for LEQEMBI's monthly IV maintenance dosing in January 2025 and, significantly, the subcutaneous autoinjector (IQLIK) for weekly maintenance dosing in August 2025. The IQLIK offers at-home administration, a tangible benefit that reduces the need for infusion center visits and streamlines the overall treatment pathway. Further, a subcutaneous formulation for initiation is anticipated in the first half of 2026, which is expected to dramatically reduce the demand for infusion bed capacity. The ongoing AHEAD 3-45 study, expected to read out in 2028, aims to evaluate LEQEMBI in presymptomatic AD, potentially expanding its utility to disease prevention.

In the realm of ASO technology, Biogen is making significant strides. Salanersen, a next-generation SMA product, leverages the same mechanism as SPINRAZA but is designed for greater potency, aiming for high efficacy with once-yearly dosing. Positive interim Phase 1b data revealed significant neurofilament reduction and meaningful motor function improvements in gene therapy-treated children; for instance, a child unable to sit at five years could sit independently by the 90-day visit after a single dose. This demonstrates a quantifiable improvement in patient outcomes. Similarly, zorevunersen for Dravet syndrome, an ASO designed to increase NaV1.1 protein production, showed an 87% seizure reduction on top of standard care in Phase 1/2a data, durable to 76% at six months. It also demonstrated improvements in cognition and behavior, with Vineland-3 scores increasing by 4.3 to 9.7 raw score points across eight key subdomains over three years. The acquisition of Alcyone Therapeutics in September 2025, bringing in ThecaFlex DRx, an implantable subcutaneous port and catheter device, further strengthens Biogen's ASO delivery capabilities by offering an alternative to repeat lumbar punctures, thereby easing patient experience and accessibility.

Biogen's immunology pipeline is also a key differentiator. Felzartamab, an anti-CD38 antibody acquired through HI-Bio, is advancing into three Phase 3 studies for Antibody-Mediated Rejection (AMR), IgA Nephropathy (IgAN), and Primary Membranous Nephropathy (PMN). Phase 2 data for AMR showed an 80% resolution rate, while IgAN data suggested a disease-modifying effect with sustained benefits two years post-treatment. The company is also exploring felzartamab for late microvascular inflammation (MVI), a newly classified kidney transplant rejection phenotype, targeting a patient population of 5,000 to 6,000. Additionally, dapirolizumab pegol for Systemic Lupus Erythematosus (SLE) has shown efficacy across multiple endpoints, including flare reduction, fatigue, and joint pain, with preclinical data indicating minimal placental transfer, supporting its potential for women of childbearing age.

These technological advancements and the strategic investments in R&D, including collaborations like the RNAi therapy arrangement with City Therapeutics and the C5aR1 antagonist license from Vanqua Bio, are crucial for building Biogen's competitive moat. They aim to deliver superior patient outcomes, potentially command premium pricing, and secure market leadership in specialized therapeutic areas, thereby driving long-term revenue growth and improving profitability. The company's $2 billion additional investment in its North Carolina Research Triangle Park (RTP) manufacturing footprint, focusing on ASO infrastructure and multi-platform fill-finish capabilities, further underscores its commitment to leveraging technology for resilient patient supply and pipeline advancement.

Commercial Momentum: The New Growth Drivers

Biogen's strategic pivot is yielding tangible commercial results, with its "launch products"—LEQEMBI, SKYCLARYS, ZURZUVAE, and QALSODY—emerging as significant growth drivers. These four products, all first-in-class or first disease-modifying agents, collectively generated $257 million in revenue in Q3 2025, marking a robust 67% year-over-year growth. Crucially, the cumulative revenue from these launch products has more than offset the year-to-date decline in the legacy MS portfolio, signaling a successful shift in the company's revenue mix.

LEQEMBI continues to demonstrate strong, sustained sequential global demand growth, with global sales reaching $121 million in Q3 2025. The prescriber base expanded by 14% quarter-over-quarter, and LEQEMBI maintains a majority share as the leading prescribed anti-amyloid treatment. The anti-amyloid market itself grew by approximately 15% in Q3 2025, indicating broader acceptance and increasing awareness. The approval of the subcutaneous autoinjector (IQLIK) for maintenance dosing in the U.S. in August 2025 is expected to enhance patient adherence and convenience, acting as a "great bridge" to potential subcutaneous initiation. The rapid advancement of blood-based biomarker testing, with up to 350,000 Alzheimer's blood tests anticipated this year, is further simplifying diagnostic pathways and increasing the efficiency of patient identification.

SKYCLARYS for Friedreich's Ataxia achieved 30% year-over-year revenue growth in Q3 2025, driven by continued launches in Europe and the Middle East. While U.S. revenue in Q3 2025 was impacted by a $6 million adjustment related to Medicare IRA changes, sequential patient growth continues. Biogen's commercial strategy involves innovative patient identification efforts, including leveraging AI and genetic testing, to reach community-based patients and educate physicians about this rare genetic disorder. The initiation of the Phase 3 BRAVE study in June 2025 for children aged 2 to <16 years underscores the commitment to expanding the patient population.

ZURZUVAE for postpartum depression (PPD) delivered an impressive 150% year-over-year revenue growth in Q3 2025. The breadth of prescribers grew by 19% quarter-over-quarter, with repeat prescribers accounting for nearly 70% of scripts. Notably, 80% of prescriptions were written as first-line therapy, highlighting healthcare providers' confidence in its rapid relief. The approval of ZURZUVAE in the EU and UK in September 2025 further expands its market potential, addressing a significant unmet need for approximately 500,000 mothers suffering from PPD in the U.S. alone.

QALSODY for SOD1 ALS, while not a large revenue generator, is a breakthrough treatment that has accelerated R&D in ALS by demonstrating the role of neurofilament in predicting drug efficacy. Its approval in the UK and Canada in 2025 further extends its reach to patients with this devastating genetic disease.

Resilience in Legacy and Biosimilars

While the focus is on new growth drivers, Biogen's legacy MS portfolio continues to generate substantial revenue, providing critical resources for pipeline investment. In Q3 2025, total MS revenue saw a modest 0.70% year-over-year increase to $1,061.50 million, primarily driven by strong performance in the U.S. This U.S. resilience was fueled by VUMERITY, which grew 35.70% year-over-year to $214.60 million, benefiting from higher demand, favorable pricing, and positive gross-to-net adjustments. VUMERITY is a key asset with market exclusivity extending beyond the current decade. TYSABRI also saw a 6.30% year-over-year increase in Q3 2025 revenue, driven by higher net pricing in the U.S. and favorable changes in estimates.

However, the MS franchise faces significant headwinds. Global TECFIDERA revenue declined 27.70% year-over-year in Q3 2025 to $168.20 million, primarily due to accelerating generic erosion in Europe, particularly in Germany. The impact of a TYSABRI IV biosimilar in Europe is also affecting sales, though this has been partially offset by growing demand for Biogen's subcutaneous TYSABRI formulation, which now accounts for over 50% of all natalizumab patients in Europe. The company anticipates continued overall MS revenue decline in 2025 due to these competitive pressures, including the potential entry of a TYSABRI biosimilar in the U.S. in Q4 2025.

Biogen's biosimilars portfolio, including BENEPALI, IMRALDI, and FLIXABI, generated $196.80 million in Q3 2025, a slight 0.10% increase year-over-year. This was primarily due to a one-time VAT refund, offsetting decreased sales volumes for IMRALDI. The company is actively managing supply constraints for IMRALDI and BENEPALI and mitigating risks from a contract manufacturer acquisition. In 2025, Biogen completed the sale of its rights to TOFIDENCE and BYOOVIZ, further streamlining its portfolio.

Financial Discipline and Capital Allocation

Biogen's financial performance in 2025 reflects a disciplined approach to cost management and strategic capital allocation. For the nine months ended September 30, 2025, total revenue increased to $7,611.20 million, up 5.4% from $7,221.20 million in the prior year period. Net income attributable to Biogen Inc. was $1,341.80 million, translating to diluted earnings per share of $9.14. In Q3 2025 alone, total revenue reached $2,534.70 million, a 2.8% increase year-over-year, with diluted EPS growing 19.20% to $3.17.

The "Fit for Growth" program, initiated in 2023, is a cornerstone of Biogen's financial strategy, aiming to generate $1 billion in gross operating expense savings by the end of 2025, with $800 million in net savings. This program has enabled a reduction in Research and Development (R&D) expense, which decreased by 15.50% in Q3 2025 and 13.50% for the nine months ended September 30, 2025, despite increased spending on clinical trials for litifilimab and felzartamab. This efficiency was further bolstered by $150 million in R&D funding received from Royalty Pharma in 2025. Selling, General, and Administrative (SG&A) expenses saw a slight increase due to intensified sales and marketing efforts for LEQEMBI and SKYCLARYS launches. Overall, non-GAAP core operating expense (R&D + SG&A) remained flat year-over-year in Q3 2025, demonstrating effective cost absorption amidst growth investments.

Biogen's balance sheet remains robust, providing ample liquidity for strategic initiatives. Cash, cash equivalents, and marketable securities totaled $4 billion as of September 30, 2025, up from $2.40 billion at year-end 2024. The company generated $1.2 billion in free cash flow in Q3 2025, contributing to a net cash flow from operating activities of $1,692.70 million for the nine months ended September 30, 2025. With $6.3 billion in gross debt and $3.9 billion in net debt, the company maintains a modest leverage profile, with a debt-to-equity ratio of 0.36 (TTM). This financial strength supports ongoing internal and external growth opportunities. The issuance of $1.75 billion in 2025 Senior Notes in May 2025, used to redeem maturing debt, reflects prudent debt management without significantly altering the overall debt profile.

Outlook and Catalysts for Future Growth

Biogen's outlook for 2025 reflects a stronger underlying business performance, with total revenue expected to be roughly flat to up 1% at constant currency, an improvement from previous guidance. Full-year 2025 non-GAAP diluted EPS guidance has been updated to account for this stronger outlook, while also incorporating an approximately $1.25 per share impact from business development transactions expected to close in Q4 2025, including the Vanqua Bio license and Alcyone Therapeutics acquisition.

Several key catalysts are anticipated to drive future growth:

• LEQEMBI Expansion: The full impact of the subcutaneous autoinjector (IQLIK) for maintenance dosing, approved in August 2025, and the expected approval of subcutaneous initiation dosing in the first half of 2026, are poised to significantly expand patient access and simplify administration. The increasing adoption of blood-based biomarkers for diagnosis will further streamline the patient journey.
• Pipeline Readouts: Critical data readouts are expected from the high-conviction late-stage pipeline. The two Phase 3 TOPAZ studies for litifilimab in SLE are now fully enrolled, with results anticipated in the second half of 2026. Phase 2 data for BIIB080 (tau ASO for Alzheimer's) is expected next year. The registrational study for salanersen (next-generation SMA) is set to initiate in early 2026.
• Regulatory Decisions: The FDA's PDUFA date for a higher dose regimen of nusinersen (SPINRAZA) is set for April 2026, following a Complete Response Letter in September 2025 that requested CMC updates.
• Geographic Expansion: Continued global launches of SKYCLARYS, ZURZUVAE, and QALSODY in new international markets will contribute to revenue growth.

Risks and Competitive Dynamics

Despite the positive momentum, Biogen faces a complex array of risks and competitive challenges. The decline in the legacy MS business, particularly TECFIDERA due to generic erosion in Europe and the potential TYSABRI biosimilar entry in the U.S., remains a significant headwind. The IRA's Medicare Part D redesign is expected to have a modest unfavorable impact of $50 million to $100 million on 2025 revenue, concentrated in SKYCLARYS and the MS portfolio.

New product launches, while promising, carry inherent risks related to reimbursement, market acceptance, and healthcare infrastructure capacity. While Biogen has made strides in simplifying the LEQEMBI care pathway, the workload for treating physicians remains a challenge. The competitive landscape in Alzheimer's is intensifying with other anti-amyloid therapies like Eli Lilly (LLY)'s Kisunla, and potential new mechanisms of action such as GLP-1s (e.g., Novo Nordisk (NVO)'s EVOKE trial) could further fragment the market. In immunology, while Biogen's multi-mechanistic approach to lupus (dapirolizumab pegol, litifilimab, felzartamab) is differentiated, it will compete with oral agents and other biologics from rivals.

Intellectual property challenges, ongoing litigations (such as the $88.30 million Genentech TYSABRI royalties judgment), and the inherent uncertainties of drug development pose continuous risks. The increasing reliance on AI-based software also introduces new risks related to algorithm flaws, data quality, and cybersecurity. Geopolitical tensions and supply chain disruptions could further impact operations and sales.

Conclusion

Biogen is actively executing a strategic transformation, successfully pivoting towards a future defined by innovative product launches and a robust, diversified pipeline. The company's deep scientific expertise, particularly in neurodegenerative and rare diseases, coupled with its expanding footprint in specialized immunology, underpins its ability to develop first-in-class therapies. Through disciplined financial management and strategic investments in advanced technologies and manufacturing, Biogen is building a resilient foundation for sustainable growth. While significant competitive pressures and inherent risks in drug development persist, the strong commercial momentum of its new products and a promising pipeline with multiple near-term catalysts position Biogen for a compelling long-term investment trajectory, as it continues to deliver breakthrough medicines to patients with high unmet needs.