'Under Pressure to Deal, Biogen Executives Deflect Urgency at JPM25'

 

While investors and analysts push for a deal, Biogen CEO Chris Viehbacher and Head of Development Priya Singhal refuse to make one out of desperation.

Biogen’s Head of Development Priya Singhal, and CEO Chris Viehbacher for that matter, are well aware of the pressure from investors. The company’s shares have fallen to a five-year low of $143. Investors are repeatedly asking when they might strike another deal.

“The stock price is down, but we are trying to focus on, how do we continue to show the momentum and the growth? Because I think people didn’t believe us on a lot of the things, but we were able to kind of bring the proof forward,” Singhal told BioSpace in an interview on the sidelines of the J.P. Morgan Healthcare Conference. “Hopefully the stock price will follow. We’re trying to focus on what we can control, which is growth and scientific conviction in the pipeline.”

Investors have always underestimated Biogen’s ability to follow through on lofty goals, from getting an Alzheimer’s drug approved to now filing a request to clear a subcutaneous version in an attempt to ease the administration burden, Singhal said. But they did that on Monday, proving again that they can execute.

“I can understand it, because in the past, there were [proof of concept] failures, but now I think the proof’s in the pudding,” Singhal said. “And in 2024 I think we’ve been able to show the proof, and we have set it up for successive positive readouts potentially.”

A major milestone in 2024 was the positive readout for dapirolizumab pegol (dapi), which had previously failed a Phase II test in 2018. The Phase III PHOENYCS GO trial met its primary endpoint with a 49.5% response rate among patients with systemic lupus erythematosus, clearing a path for a regulatory filing. This compared to 34.6% in those who received just standard of care.

“I can tell you that before dapi read out positive, there wasn’t a lot of excitement about dapi. But now the equation’s changed,” Singhal said. Other milestones were data for high-dose Spinraza in spinal muscular atrophy, global approvals for Friedreich’s ataxia treatment Skyclaris and enrollment for the tau-targeting Alzheimer’s treatment BIIB080 in a Phase II trial.

Biogen also bought Human Immunology Biosciences last year for $1.15 billion upfront, at least momentarily silencing the constant drum beat of analysts and investors asking for a deal.

But of course heading into J.P. Morgan that call had picked up again. Biogen did announce a potential deal, an unsolicited bid for partner Sage Therapeutics. Singhal could not talk about the deal, only saying that they were required to disclose the offer under SEC rules.

In his J.P. Morgan presentation, Viehbacher stressed that Biogen is not desperate for deals.

“I see some proposals that we should be prepared to overpay. We’re never going to do that, not knowingly anyway. So I think that’s where the discipline of capital is,” he said during the Tuesday fireside chat.

Biogen is facing some tough changes with the multiple sclerosis franchise declining, which was pointed out in a note from BMO Capital Markets.

“While we agree with Mr. Viehbacher’s strategy, we expect limited acquisition opportunities will make it increasingly challenging to patch the hole that continues to widen with MS franchise erosion,” BMO’s Evan Seigerman wrote. “Business development continues to be needed, but limited revenue-generating opportunities at a reasonable price continue to box Biogen in to investing in early-stage assets.”

Singhal agreed that the MS business is declining, but said it’s taking “more of a glide.”

Viehbacher said another company like Reata Pharmaceuticals, which brought with it Skyclarys, would be a perfect match. Singhal underscored an all of the above approach that spans early science to early stage revenue-generating assets. She said Biogen has outlined most importantly what it won’t do, which includes oncology and “big immunology” diseases like rheumatoid arthritis or psoriasis. Instead, the company will stick to specialty immunology, rare diseasesand of course neuroscience.

“The Reatas and HiBios of the world are hard to find, so we’re being very purposeful about how we’re looking,” Singhal said.

Singhal too, deflected the urgency to conduct a deal.

“There’s the sentiment that we have to do a deal, and I think what I want to clarify is that that’s just our everyday business. We’re always looking at internal and external innovation. But do we believe that a deal at any cost is critical to drive Biogen growth? That’s not the case, because we believe that we are really positioned very well.”

https://www.biospace.com/business/under-pressure-to-deal-biogen-executives-deflect-urgency-at-jpm25