Biogen Inc. (NASDAQ:BIIB) 41st Annual J.P. Morgan Healthcare Conference Call January 9, 2023 2:15 PM ET
Company Participants
Chris Viehbacher – CEO
Conference Call Participants
Chris Schott – J.P. Morgan
Chris Schott
Good morning, everybody. I’m Chris Schott at J.P. Morgan. And it’s my pleasure to be hosting a fireside chat with Chris Viehbacher, who joined Biogen Inc. a little bit less than two months ago as CEO. So, Chris, happy New Year, and thanks for joining us today.
Chris Viehbacher
Thanks, Chris. Happy New Year to you, too.
Chris Schott
Thank you.
Question-and-Answer Session
Q – Chris Schott
So, maybe just to kick off, it seems like you’re joining a company that’s kind of at crossroads. So, we’ve got, obviously, a very exciting new launch in the Alzheimer’s side. We’ve got a large pipeline, but one I think is viewed as kind of high-risk, high-reward. And we’ve got a base business that’s got some LOE pressures. So, can you talk about the key challenges that you see facing Biogen right now? And how your kind of plan to prioritize these as you think about your tenure as CEO?
Chris Viehbacher
Yes. I mean — so, Biogen was founded over 40 years ago. I’m guessing they were at the very first of this J.P. Morgan conferences 41 times ago, right, because I think it’s probably more than 41 years ago.
Chris Schott
Yeah.
Chris Viehbacher
And it’s been a very narrowly-focused company on multiple sclerosis and very successful, but of course, that is now something we’re calling, basically, a melting iceberg. It’s not a patent cliff, but it’s not got growth perspectives. And my job, as I see it, is to restore the company to sustainable growth. So, there are a number of levers for that. First, we look inside the company, and the two biggest opportunities, I mean, quite honestly, having two blockbuster products to launch almost simultaneously. I never had that privilege actually at Sanofi, I have to say, or you [would’ve seen] (ph) for that matter.
Chris Schott
That’s a good start. Yeah.
Chris Viehbacher
So, it is a huge opportunity. Now, they’re not simple launches, and we can go into that. But lecanemab, clearly, is a breakthrough, and so is actually zuranolone. I mean, most people don’t realize, it’s probably the first new mode of action in mental health in 20 years, certainly, for depression.
So, after that, we have our existing business. The MS franchise, actually, it’s quite interesting is there’s still a lot of people love TYSABRI, love even AVONEX. I think, we have to look at, are we really spending the right amount of money on that, and we’ll have to look at our cost base. But SPINRAZA, I think, actually has opportunity as well, particularly in the adult population. Obviously, in small children, babies, they’re being screened now for SMA, but there’s an awful lot of undiagnosed or misdiagnosed cases in the adult population.
Third opportunity is really the cost base. We still — we have $5 billion less of profit than we did in 2019. I have to say that hasn’t completely percolated through the company so far.
And then, the fourth is we’re in a very healthy financial position and we’ll start to look at some external growth.
Chris Schott
Yes. So, I guess maybe one of the things I think about is you’ve had, obviously, some prior experiences at very large companies. How has that prepared you for kind of taking a company like Biogen and taking kind of a fresh look at a business like that?
Chris Viehbacher
I’d say there’s — I’ve got two different experiences. I’ve got — I’ve grown up in the large company model, where — certainly, there’s always an element to leading complex organizations being global. But I actually really enjoyed the last seven years in an entrepreneurial environment.
And one of the things I learned was — one of the reasons I think the biotech sector has become so strong is because of weak decision making in large pharma — in large biopharma. This need to have validation at every milestone before you can raise money, I think, is a healthy thing. And I’d like to bring some of that actually into the company, particularly on earlier-stage projects.
Obviously, Sanofi needed turning around as well and rebuilding. So, there’s an opportunity to bring some of the, I think, potential to look at value creating, either acquisitions or business development. So, I’d say those things, too, have helped.
But, of course, we’re a much smaller organization. I actually like the nimbleness of Biogen. I think we had 110,000 people at Sanofi. And we got 8,500 — now, 8,500 is a whole lot more than I’ve dealt with the last seven years I have to say.
Chris Schott
Bring those two together. I guess, are you envisioning any strategic shifts for Biogen? You touched on this a little bit. Moving forward, I guess, as you think about whether it’s the focus of the pipeline, whether it’s the kind of mix of internal versus external, like just how are you thinking about that?
Chris Viehbacher
No radical left turns, I would say some redefinition of what we’re about. I think Biogen has typically presented itself as a neuroscience company. And I would argue we’re already broader than that. Multiple sclerosis is really an autoimmune disease, and I think that gives us some legitimacy to go towards immunology. With zuranolone, we’re getting into psychiatry. And with SPINRAZA, yes, it’s a neurodegenerative disease, but it’s also a rare disease. And so, I think we could legitimately expand into the rare disease space. So, I don’t see us getting into oncology tomorrow. There’s enough other people in that space, or into cardiology. But I do think we’ll widen our aperture a little bit.
One of the terrific things about Biogen is it has had the courage and the persistence to go after some areas of real unmet need. But the issue in neurology is that these conditions evolve so slowly that the trials have to be long and they’re expensive. And so, you get this high-risk, high-reward type situation, and I think we need to balance that a little bit.
Chris Schott
Okay. So, when I think about your ability to do that, does that — is that something you can do internally? Because you mentioned you’ve got some strengths in markets that are maybe outside of traditional neurology. Or is that going to be maybe more a push on the external side of things?
Chris Viehbacher
I think there’s — on the near-term side, I think it’s going to come externally. We’re in psychiatry with our partner Sage, but we really don’t have another product in that area, and I think it would be nice to flesh that out.
I see actually Alzheimer’s is becoming a franchise for us. So, with our partners, Eisai, this isn’t just about the launch of lecanemab. Important as that is, we have two other assets in development. There’s an awful lot of studies that can be done as well to build out that franchise, but, yes, it will be a little bit of growth.
But one of the other areas is research. And I split the role of R&D into development and research. Development is really there for the next three to five years of growth. Research is there for the five to 15 year timeframe. And I wanted research to be a little disconnected almost or unencumbered by, here’s where our business is today, and be able to pursue science in a little broader way. Not again dramatically differently, but through research, I think, over time, we can actually build out a pipeline that’s a little broader than just pure neurology.
Chris Schott
Does that broadening of the pipeline inherently assume that there’s some culling back of the more traditional neurology kind of opportunities, or can this be just additive to what you’re already doing?
Chris Viehbacher
At this stage, I think, it’s going to be more additive. I think there is an interesting pipeline in there. I think one of the assets I’m particularly interested in is the Ionis-partnered asset for anti-tau. Obviously, major breakthrough data. Alois Alzheimer discovered these plaques and tau tangles in patients that autopsied 100 years ago, and it’s taken us a century to actually have the first definitive data that says, if you remove plaque, you can have a cognitive function. But I think we’d all agree that there’s still more to be done. And so, tau is promising.
We also have two compounds in for lupus, SLE and CLE, and I think that’s actually a promising area. Got a project in stroke, but that’s another one of these high-risk, high-rewards, and you’ll find out at the last chapter whether it works or not.
Chris Schott
Yes, exactly. And if I think about just Biogen, traditionally, I think, has done business development through a series, maybe smaller partnerships. Is that — would you envision that, that you’re going to stay the course there? Or could we see the company look at larger, say, like multibillion-dollar acquisitions as you look to broaden out the focus of the organization?
Chris Viehbacher
Well, I’m going to focus on getting really the things right within the company sort of the first half of this year. I do think we’ll have to turn our attention to some external growth in the second half. And then, it’s just — you can have a strategy, but after 35 years, I’ve discovered you got to be still pretty opportunistic. You can go fishing, but you don’t know whether you’re going to eat bass tonight or anything for that matter.
And so, I think the — I wouldn’t shy away from an acquisition, but obviously, that gets you into a different risk profile. I would say, within Biogen, there’s a lot that’s already good. So, I don’t feel a pressure that we have to go do something quickly. But equally, we’ve got the financial wherewithal and it is an opportunity to shape the company.
I really like these collaborations. When I was at Sanofi, we had a very prolific one with Regeneron. I think Biogen is a really good partner. We’re partnered with Ionis. We’re partnered with UCB. We’re partnered with Denali. We’re partnered with Eisai. And that’s a cultural, I think, strength of the company that they can do that, and that is capital sparing in a lot of ways.
Chris Schott
Okay. So, when I think about that, it seems like that kind of evolves over time, you’ve got the firepower to do it, but it maybe is…
Chris Viehbacher
But you don’t want to do an acquisition unless you’ve really got your own house in order. I don’t think we’re quite there yet.
Chris Schott
Okay, that’s helpful. Biogen has made some significant cost cuts, I guess, over the last year or so. I think it’s about $1 billion of expense been pulled from the budget. Would you envision those additional cuts to come as we think about that cost base? Or at this point, you’re in a pretty good place?
Chris Viehbacher
No, we definitely can look at the cost base. If you strip out the collaboration revenue and the royalties, and start doing ratio analysis, I think everybody here knows that we probably got — we have ratios that are not competitive with our sector. So, we’re certainly looking short term at things like G&A. I think we can look at return on investment in multiple sclerosis. Remember, this has been the bread and butter of the company. And so, getting that company to reduce the investment on that is — you really want to make sure that you know what you’re doing with that.
There are some costs that are inherent in what we’re doing. I mean, we built a factory to produce lecanemab. That is not currently occupied. So, we have a number of idle costs. We are continuing to spend money on ADUHELM. And to be honest, that’s a question that we’ll have to figure out. We have to do a confirmatory study by the terms of the NDA. So, if we don’t do it, we lose the NDA. But if you lose the NDA, maybe this is an asset that has value to others and we have to evaluate that.
And I think we can be bringing a lot more of a return-on-investment-type culture. It’s a very gung-ho culture at Biogen and I don’t want to lose that. It’s entrepreneurial. It really goes after things. But somewhere along the line, we also have to have some capital discipline.
Chris Schott
The timelines around this? Is this — I think, you mentioned kind of getting the house in order. Is that — is this like kind of a first half ’23, or is it…
Chris Viehbacher
Yes.
Chris Schott
Okay. So, we’ll kind of get some clarity as the year goes along how that goes.
Chris Viehbacher
Yes.
Chris Schott
Okay. Perfect. Maybe kind of pivoting into some individual products. Alzheimer’s, obviously, very exciting opportunity here. I guess, what are you seeing as the biggest challenges on the lecanemab launch? And as we maybe just kind of couple that with what lessons you learned from ADUHELM?
Chris Viehbacher
So, lecanemab is actually a really interesting product. You think after 35 years in this business you’ve seen it all, and yet you have something like this come along that’s completely new. It’s — it has all the hallmarks of a specialty pharma drug. We’re the specialist, biologic, a lot of medical services wrapped around this, but we have the volume of a primary care product. And so that actually creates its own unique challenges.
To get diagnosed, you’re going to need either a PET scan or lumbar puncture. There’s going to be three MRIs over the first six months. It’s a biweekly, every two week infusion. And you’re talking about huge numbers, specialty pharma, you’re thinking about tens of thousands, maybe hundreds of thousands of patients here. One day, you could be thinking about millions. And of course — so there’s a whole element of how the healthcare infrastructure has to evolve for this. And of course, then we’re also dealing with Medicare in a lot of cases. And so, there’s going to be budget issues that we have to all be cognizant of.
So, we have to — we’ll have to work carefully with the system. I think as you’ve heard from Eisai, we’re thinking about maybe 100,000 patients after the first three years. But I — this launch is not really a reach and frequency model, thinking about just sending out reps, it’s really around working with the system to make sure that we can expand it and make this new treatment available.
We’re also doing other studies around this. It seems like the earlier you treat, the more benefit you can have. So, we have a study called AHEAD that is ongoing in pre-symptomatic patients. And as I say, we also have two other assets in this space that we wanted to develop.
Chris Schott
So, well, portfolio kind of builds that over time. Reimbursement, obviously, kind of big controversy around this. How do you see reimbursement evolving over the next year or so?
Chris Viehbacher
Well, CMS has obviously confirmed that if you get — if we get full approval, we will reimburse on the basis that there’s a registry. Exactly what the timing is? We first have to see how long it’s going to take to get full approval. Full approval was just submitted on Friday evening, late in the evening. It’s just going to be a six-month, nine-month, 12-month review, we don’t know yet.
In general, I think though, I believe that CMS — my personal view is that CMS will approve and reimburse us. Unlike ADUHELM, we’ve got very clear data with the Clarity study. I mean, statistical significance everywhere, not only on the CDR- Sum of Boxes, but also ADAS-Cog, and also the activities of daily life. I think the safety issues have been — are understood and you have to obviously be careful on that front. So, I don’t really see why this wouldn’t be made available.
I think what we have as a job to do is really to explain the real benefit of this to patients. So, people say, “Oh, well, you know, you had a 27% increase or whatever,” that doesn’t really tell the story. Maybe what I look at from more of a commercial point of view is the activities of daily life, with a 37% improvement in that.
And that’s not — I think people have this view sometimes in the — not in this type of audience, but in the more general public that Alzheimer’s is a little bit of memory loss. People don’t, I think, fully understand that this is a fatal disease. And this is a progressive disease that puts a massive burden on the caregivers. People have to quit their jobs to go and take care of loved ones. You progressively lose your ability to look after yourself. So, this activities of daily care is not only memory loss, but it’s orientation, it’s personal care, it’s ability to continue with hobbies to be active in the social environment. And that is, I think, quite significant.
There’s something like 16 million people who today are actively involved with — taken care of someone with Alzheimer’s, many of those family members. So, there’s a massive societal burden that is only going to grow. And I think we have to really do a good job of explaining that, because that sort of comes up in just about every conversation, what’s the clinical benefit. This Sum of Boxes is not actually used by physicians when they see patients. So, I think as we get this in the hands of physicians, we’ll see who actually is really responding. We’re going to do an awful data analysis to try to predict who is a responder, but also can we start to predict who might have more moderate to severe ARIA. So — but I do think this is really an opportunity to provide hope for so many people.
Chris Schott
Just kind of back to the reimbursement, just comment whether it’s yourselves or Eisai, has there been much engagement with CMS at this point in terms of their willingness to kind of consider a different outcome in terms of the reimbursement?
Chris Viehbacher
So, I only know that from what — this is in the hands of Eisai. We’ve been working for eight years together, and Biogen had the lead on a number of things for ADUHELM, and Eisai has the lead for LEQEMBI. So, they’re the ones who are actually engaging with CMS and I haven’t been privy to the actual detailed conversation.
Chris Schott
Speaking of just how the commercialization will work, can you just talk about individual responsibilities of the companies and how that’s going to split up?
Chris Viehbacher
So, I’s say, it’s not really a reach and frequency model. To start, usually you launch, it’s a real education campaign and just getting out there and educating physician here. There is an awful lot to think about in terms of this whole healthcare infrastructure build. So, at least in the U.S., Eisai will take on the lead with getting a first initial wave of field force out there, and we are working then with them collaboratively on marketing, on thinking about additional clinical study that we may want to do, and how do we build up in Alzheimer’s business together over the longer term?
Chris Schott
And then, as we think about kind of geographies outside the U.S., how do you envision that working?
Chris Viehbacher
We’re going to do that country by country. So, I think we have a very strong presence in Europe, for example, so we’ll be looking at that. There are some parts of the world like Latin America, where we have a greater presence. They have a much greater presence in Asia.
Remember, this is a 50-50 deal. So, we have an inherent interest in making this efficient as well. And the reality is that co-promotion and co-marketing, on the one hand, you leverage the abilities of two companies, but on the other hand, you can create some duplication. So, what we want to do is make this as both effective and also as cost efficient as possible.
Chris Schott
In your time in the CEO role, have you had much in your kind of engagement with your counterpart at Eisai in terms of how is that really — how has that generally been?
Chris Viehbacher
So, Haruo Naito and I have known each other for many years. My first trip as CEO of Biogen was to Japan. We spent most of the Sunday together, thinking about how we wanted to work together. I talked to him at least three this week. So, we have an awful lot of interaction. And I would say, because we’ve known each other, there is actually a tremendous amount of mutual respect. Most importantly, and this is what you really need in the partnership, we have shared values, and a shared vision of what we want to build.
Chris Schott
Yes. Great. Then there’s been lot — I think you mentioned before focus on subcu. Can you just talk about what you believe you and Eisai have to do to get a subcu formulation to market?
Chris Viehbacher
That’s in progress. There’s a multipronged approach on that. And we haven’t talked about timing, but that is well in hand.
Chris Schott
Okay. What does that do, I think, as you think about kind of what this could mean for the market as a whole of getting this away from an infusion into something so easier to manage?
Chris Viehbacher
So, the interesting thing is in market research, the biweekly infusion is not necessarily the burden you might think it is, because actually — well, to be honest, what we’ve seen is sometimes this is a way of getting out of the house and getting some outside contact for patients. But obviously, a subcu would be better.
One of the most interesting things is we don’t really understand how when the plaque builds up, that, that leads directly to neuronal death, but it does in some sort of cascade, which is why the studies that have worked have been in earlier stage patients. So, we have a study ongoing called AHEAD or A 3-45 that is looking in pre-symptomatic patients. So, if you go earlier, are you going to get an even bigger benefit? And I think if you start to — if you did get success there, then I think actually subcu would be particularly important.
But we’re also looking at different dosing regimens. Clearly, we have to make sure that we can make this as convenient for the patient as possible.
Chris Schott
Okay. And then just one last one on, I guess, Alzheimer’s side is how do you just think about the competitive landscape? Do you just kind of think of this as a split market or more of a winner-take-all kind of approach, as I guess, we’re thinking about donanemab kind of readouts as we go for this year?
Chris Viehbacher
For most — this is a brand-new market that never really existed before, and that doesn’t happen that much. I had a lot of experience at the start of my career in the HIV, and actually more entrants really actually helped develop the market. So, I actually — I’m not too concerned. I think actually, if Lilly is successful, that they’ll come in now. They’re completely different products.
And I think actually, we’re pretty confident that we could take a bigger share, largely because we don’t know how long patients are really going to be on the product. I mean, we studied this for 18 months, but we’ll have extended data. What happens if you’re treating longer? And we haven’t seen any data from Lilly, so it’s hard to comment on it. But I actually think having several entrants could actually be beneficial to everybody.
Chris Schott
Just given all the infrastructure and education and everything else that goes into that. Excellent.
Turning to the base business, I think you mentioned earlier, Biogen is a clear leader in the MS space, in fact, clearly some impact to the franchise with generics. How do you think about the kind of goals for that MS franchise at this point?
Chris Viehbacher
Well, first is to make sure the iceberg melts slowly, if I can put it that way. It’s interesting. I mean, TYSABRI is actually — I actually was visiting a neurologist in New York. And if you actually said what do you think is the best drug out there, for them, it’s TYSABRI. Now, Ocrevus has clearly come in and had a lot of success, largely on the convenience. But people are saying, well, beta cell depletion, how long do you really want to do that? And if you have COVID? And actually, what would have been good is to probably do a lot more outreach to patients to give them the balance view of that. But at this stage of the life cycle, I’m not sure that, that makes sense. We are still busy doing research, and we have not given up, and would like to also bring more new products to patients in this space.
Chris Schott
So, is the goal here to kind of more manage the profitability of this franchise? Is that fair to say versus trying to grow it, I guess?
Chris Viehbacher
Again, you’re going to find with marketers, they love their products. And typically, you get to — for instance, if you get to — in the old small molecule business, you generally stop doing promotions somewhere 18 to 12 months before patent expiry. You have no idea how hard that is. I remember one time with [indiscernible] we had to give an order that you’re [inspired] (ph) if people are starting to promote that. And it’s hard for people to give up. And this has been the history of the company for 40 years. So, we do have to do a better job, I think, of really understanding the promotions. There is a lot of competition out there, and a lot of people are tied to these products, but I think we can do a better job on the profitability.
Chris Schott
Great. How do you — moving to SPINRAZA, how do you see that franchise evolving over time?
Chris Viehbacher
So, you’ve got, obviously, an oral, but the oral really only goes to 25 kilograms in length, so that’s really for children at this point in time. There seems to be some sort of evidence that the gene therapy may not be as durable as one might think, which is interesting. And we actually have a study going on looking at what happens with gene therapy, because if that is the case, then that is an opportunity for SPINRAZA to come.
Again, there’s a quite a large adult population. And I think the low-hanging fruit in that market, if I can, or the easy to diagnose patients, if I can put it in a better way, have been done. The adult population is not quite so easy to diagnose and has been misdiagnosed. And the whole secret to rare diseases is really hunting for new patients.
And I remember when we acquired Genzyme years ago and the Head of Marketing, saying, “Marketing strategy is looking for needles in haystacks.” And that is amazing what can be done. I mean you follow family trees and go out there and hunt for patients. So, I actually think there’s a reservoir of growth there.
Chris Schott
Okay. And is that growth dependent on, I guess, some of these ongoing studies you’re running? Or is there some element of this is just kind of a different commercial approach?
Chris Viehbacher
I think a lot of this is [blocking and packing] (ph). And we’re going to have a company-wide day in the first quarter, really just to share best practices and think about where we go. Because I’m not so sure that we’ve really gone the full mile on really understanding how to go build rare diseases within the company.
Chris Schott
Okay. Great. Continuing along, as we look another launches here, how big of an opportunity are you seeing with zuranolone?
Chris Viehbacher
So, I think zuranolone is the biggest undervalued potential of Biogen. There’s an awful lot of people say, “Well, it’s every two weeks. You know, how is this going to work?” I’ve done years of market research. And one of the things that you learn over the years is that, as long as you are taking a medicine, you are sick. And if you’re not taking a medicine, you are well. That is how patients think about things. It’s why people — you have to have television ad saying take your antibiotics until the end of the therapy.
Here, you’ve got an opportunity. I had in my previous life, we had a company that operated clinics at Microsoft and Facebook, the demand for mental health treatment is enormous. And SSRIs have been helpful, but they’re not really solving all of the problem. So, you’ve got, on the one hand, an unmet need. And the second is I like this idea of, okay, two weeks of therapy, and then, you don’t have to take anything. And there’s always a stigma associated with mental health. Do you really go and talk to your friends about, “I’m taking this from my depression? What about you?” I mean that doesn’t happen at barbecues.
So here, you have an opportunity to say, I’m treated, and I’m well, and I don’t have to take anything. Now, you may have to have another treatment later in the year, and we have a trial called SHORELINE that is looking at exactly when that is. I think this will be a little bit trickier for payers, because you now have to price kind of a year’s therapy in blocks of two weeks. So that’s not going to be simple. And it is a change in the way physicians look at this, because they’re used to just putting some an antidepressant. But I do think that from a patient perspective, I can see an awful lot that they would like in this.
And as I say, this is — there’s something like over 20 million people who have had a depressive episode. And I think also the ability for potentially fast-acting is important. I mean, I have a — I know a number of friends who are concerned their children are often at college, and one friend just a couple of weeks ago, had to fly down because they are really worried for the safety of their child. Now, if you say we have the therapy for that, you just have to wait six weeks, that doesn’t necessarily correspond to the sense of urgency that you have in that circumstance.
So, I do think that there is — there are a number of things that I certainly learned — I mean, I was at GlaxoSmithKline when we had Paxil and Wellbutrin, I know this market, I know those products. I think this is a product that really does add an awful lot of value that isn’t there in the marketplace today. And I think the — when I look at forecast for the product, I think it’s tremendously undervalued.
Chris Schott
When I think about the market…
Chris Viehbacher
Personal view.
Chris Schott
Yes. The — there is a lot of generics here. So, I guess the question is you, from a payer perspective, do you think the payers get the differentiation of something like this?
Chris Viehbacher
That’s where we’ll have a lot of work to do. And we’re also looking at these value-based agreements. I will say that the demand for mental health is pretty well established. And I think the payers are interested in making sure that treatments are available. It doesn’t mean it’s going to be a walk in the park, but I actually think we will get there with the payers.
Chris Schott
And as this ramps, I guess, I think you made a comment earlier on this, is there a broader push at Biogen to move more into psychiatry as a vertical?
Chris Viehbacher
Well, once you build the field force and build the capability — remember, Biogen, if I said, where is the risk in this? To me, it’s more risk of execution. Biogen has never gone and visited primary care physicians. And that’s a different skill set. It’s a much bigger target audience than what we have visited before. We may be into television advertising. We’ve not done that before. Even just back office, things like sales ops are going to be different, because we have relatively small field forces. If you’re starting to go visit primary care, that is a different thing. And then, we also have to think about the postpartum depression, and that probably takes a slightly different team because they’re visiting a different type of physician.
So, there are some things that we have to do internally, but I do think that this is something that really is — I think, offers a huge benefit for patients and could be quite a big opportunity.
Chris Schott
And as you think building out a portfolio there, would that be kind of get this up and running and then add…
Chris Viehbacher
Yeah. Well, because then now you only have one product in the bank, right? So, it would make sense to start looking at other things in this space. But I think we want to get this thing well launched and on a good trajectory before we do that.
Chris Schott
Okay, that makes sense. Moving over to immunology. I know you’ve got a number of late-stage studies in lupus across two different programs. Is immunology an area that is a kind of area of focus for Biogen going forward?
Chris Viehbacher
Yes, I do think that. Elias Zerhouni, that I brought in as Head of R&D years ago, always like to say, we described so many diseases by their symptoms or where we happen to — where the disease manifests itself, and increasingly, we should be thinking about what are the causes of disease. And there are so many diseases that are caused by the immune system. And so, I think we actually do understand some of that have that capability. So, I think it’s a legitimate space. Now, are we going to get into RA? I’m not sure. But I think, certainly, neuroimmunology is a fair game for us.
Chris Schott
Okay. And then just a last question here. Just as you think about the pipeline, what are the major opportunities for growth that we should be paying attention to as you’ve kind of evaluated what the company has internally?
Chris Viehbacher
Well, lupus is certainly one. I mean there’s a — it’s a huge potential market as I was at GSK when we developed Benlysta, so we looked at it already back then. But we all know that Benlysta is limited efficacy. And — but in the meantime, it has also been a graveyard of a lot of difficulty. So, now AstraZeneca has been successful. I think if we can be successful at this disease, this could be massive growth drivers, both products. And I think the cutaneous lupus is actually a particularly interesting product, and I think we’ve seen some good early-stage results on that. So, I think lupus is a huge opportunity.
And as I say, I think Alzheimer’s will grow. If we can be successful, we had some very good early-stage data with the Ionis-partnered compound on the anti-tau, for example. They say there’s a stroke compound, but it’s very difficult to tell what that one will do. But it does come back to this, if it works, we’re good, right? But the question that I think a lot of investors pose is, will it work? And can we do a little bit more to de-risk our growth profile? And that’s going to be a slight shift in what we’re putting into development and also what we’re looking at in terms of external growth.
Chris Schott
Great. So, let me just sum it up. As I think about the path you’re going down here, it sounds like kind of first half of the year is some evaluation of the cost structure. You got — big launches you’ve got under your belt. How long does it take to kind of pivot the organization to get to that profile you’re envisioning where we’re going to end up with a more balanced pipeline and cost structure in the right place? Is this kind of a multiyear process? Or is this something you can…
Chris Viehbacher
Yes. I mean, I always used to say, in this business, three years is tomorrow. And I actually just ran into Dan O’Day this morning and congratulating him on how he’s doing with Gilead. But he’s been CEO for four years, and it’s the first couple of years, you had to believe as well. I think actually with Biogen, it could be a little faster because we have these two launches. We don’t have to — we’re not relying on business development and acquisitions to deliver on some of the growth story. So, from that point of view, it could go a little faster.
But the regulatory timeframes, you know well, Chris, and it just — it does take some time. And cultural change is not that easy. But I do believe that there’s an awful lot of strong fundamentals in the company. This is a company with great people. This is a company that has spawned so much talent in so many of the companies that are now at this conference around the table. So, I actually have a lot of confidence in the development organization. We have an opportunity with a new Head of Research to perhaps move ourselves in some different directions. But lecanemab and zuranolone, if we get those right, that’s going to account for an awful lot of the new Biogen.
Chris Schott
Great. I think we’re just out of time here. Really appreciate the comments, and we look forward to seeing the progress of the company over the year.
Chris Viehbacher
Thank you.
Chris Schott
Thank you.
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