B iogen 2 0 1 9 A nnual R eport ANNUAL REPORT 2019 Concept, design and realization PETRANIX Corporate and Financial Communications AG Adliswil, Zurich – Switzerland www.petranix.com Printing Donnelley...

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Sustainable growth ratioso ROE * (1 - Dividend payout ratio)
o Dividend payout ratio = Cash dividends paid
Net income
→ Do cash flow analyses and provide your comments on all key issues relating cash flow;Assets Management
o Long term asset turnover
o PP&E turnover
o Total asset turnover



B iogen 2 0 1 9 A nnual R eport ANNUAL REPORT 2019 Concept, design and realization PETRANIX Corporate and Financial Communications AG Adliswil, Zurich – Switzerland www.petranix.com Printing Donnelley Financial Solutions, dfinsolutions.com PERFORMANCE HIGHLIGHTS Free Cash Flow 1,3 ($ in millions) Total Revenues ($ in millions) GAAP Diluted EPS/Non-GAAP Diluted EPS 1 Product Revenues ($ in millions and % of total product revenues) Product Revenues by Region (% of total product revenues) U.S. Rest of the world TECFIDERA $4,433 $4,274 38.95% 39.3% VUMERITY5 $6 – 0.05% – Other4 $851 $662 7.5% 6.1% Interferon6 $2,102 $2,363 18.5% 21.7% TYSABRI $1,892 $1,864 16.6% 17.1% SPINRAZA $2,097 $1,724 18.4% 15.8% 2019 2018 59% 2019 41% 100% total renewal electricity purchased by Biogen 46% of manager-level and above positions held by women +4.5% increase in total product revenues year over year 2017 68% 32% 2018 63% 37% 2015 2016 2017 2018 2019 $10,764 $11,449 $12,274 $14,378 $13,453 2015 2016 2017 2018 2019 $17.01 $20.22 $15.34 $16.93 $11.922 $21.582 $21.81 $26.20 $31.42 $33.57 2015 2016 2017 2018 2019 $2,223 $2,706 $2,484 $3,917 $6,264 1 Non-GAAP diluted earnings per share (EPS) and Free Cash Flow are Non-GAAP financial measures. A reconciliation of GAAP to Non-GAAP diluted EPS and Free Cash Flow amounts is set forth on pages 9–13 of this Annual Report. 2 GAAP diluted EPS for 2018 and 2017 includes charges of $125 million and $1,176 million, respectively, related to the impact of the Tax Cuts and Jobs Act of 2017. 3 Free Cash Flow for 2016 through 2019 reflects an increase in capital expenditures related to the construction of our large-scale biologics manufacturing facility in Solothurn, Switzerland. 4 For 2019 and 2018 Other includes product revenues from FAMPYRA, FUMADERM, BENEPALI, FLIXABI and IMRALDI. For 2018 Other also includes product revenues from ZINBRYTA, which was voluntary withdrawn from the market in March 2018. 5 VUMERITY was approved by the U.S. Food and Drug Administration in October 2019 and became available in the U.S. in November 2019. 6 Interferon includes AVONEX and PLEGRIDY. Biogen 2019 Annual Report 1 My fellow stockholders, 2019 was a remarkable year for Biogen as we delivered strong operating performance across all of our core business areas, double-digit earnings growth versus a year ago and strong execution of our strategy. We strengthened our pipeline by adding seven new clinical programs, which we believe will help us further expand our multi-franchise portfolio and drive mid- and long-term growth. 2019 was also marked by changing developments for aducanumab, an investigational treatment for early Alzheimer’s disease. In October 2019, together with our collaboration partner Eisai Co., Ltd. (Eisai), we announced plans to pursue regulato- ry approval for aducanumab in the U.S. This decision was based on a new analysis, conducted in consul- tation with the U.S. Food and Drug Administration (FDA), of a larger dataset from the Phase 3 EMERGE and ENGAGE studies of aducanumab that had been discontinued in March 2019 following a pre-specified futility analysis. The extraordinary events surrounding aducanumab and the progress across our portfolio is a testa - ment to Biogen’s commitment to follow the science – one that was made possible by fearless, dedicat- ed colleagues. Before turning to 2019 in more detail, we want to acknowledge the health and economic challenges facing all of us as a result of the current COVID-19 pandemic. Many of our communities as well as a number of our colleagues have been directly affected by COVID-19. We are committed to doing all we can to ensure the health and safety of all our employees and to provide an uninterrupted supply of our medicines to patients around the world. We are grateful to everyone at Biogen who has helped us maintain our manufacturing and business operations so that patients can continue to receive our therapies. We are closely monitoring the ongoing and ever-changing developments and the impact it may have on our business operations, including our sales, manufacturing and clinical trials. CEO LETTER Our purpose At Biogen we pioneer science with the goal of better understanding and preserving the underlying qualities of our essential human nature. We strongly believe that neuroscience is the next frontier that will see real scientific progress and breakthrough, and we believe that our diverse, talented workforce, with more than 7,700 employees worldwide, is uniquely positioned to take on some of the most challenging healthcare needs and to move Biogen forward. As we work to improve patients’ lives, we also care deeply about making a difference in our society as a whole through science that may have the potential to, among other things, improve brain health, mobility and vision. We focus on science that seeks to solve societal problems and create access to innovation. We work with purpose to advance science to address the urgent and long-term challenges facing humanity. "We work with purpose to advance science to address the urgent and long-term challenges facing humanity." Michel Vounatsos, Chief Executive Officer 2 Biogen 2019 Annual Report Delivering sustainable performance In 2019 we generated $14.4 billion in full-year total revenues, a 7% increase versus the prior year, and we generated net cash flows from operations of approximately $7.1 billion. GAAP diluted earnings per share for 2019 were $31.42, an increase of 46% over 2018, and Non-GAAP diluted earnings per share increased 28% over the prior year to $33.57. Our business and cash generation remained strong and provided us with the flexibility to allocate capital to create long-term stockholder value. In 2019 we spent approximately $2.3 billion in research and development and repurchased approximately 24 million shares of our common stock for a total value of approximately $5.9 billion. In addition, we spent approximately $515 million in 2019 on capital expenditures, including a significant investment in the large scale biologics manufacturing facility we are building in Solothurn, Switzerland. These results reflect the resilience of our multiple sclerosis (MS) business as well as the continued growth of both SPINRAZA and our biosimilars business. Capturing the neuroscience opportunity To review Biogen’s strong 2019 performance – as well as Biogen’s future – let’s consider some key statistics. It is estimated that approximately 50 million people worldwide suffer from dementia and approximately 10 million suffer from Parkinson’s disease. Neurological disease is the leading cause of disability and the second largest cause of death globally. 1,2 Aging populations will almost certainly increase these numbers significantly. It is estimated that the global population over the age of 60 will be nearly 1.5 billion by 2030, and by 2050 those over 60 will be nearly 2 billion, with 1.5 billion over the age of 65. 3,4 These numbers are only part of the story. There are important inflection points in medical history when a breakthrough in knowledge or technology generates new ideas and treatments. Consider, for example, the advancements that followed the discoveries of anesthesia, medical imaging, penicil- lin, organ transplants, HIV treatment and immuno- therapy. For Biogen, we believe our expertise and capabilities could lead to the next major inflection point in neuroscience. Our view is that neurological diseases are deeply con- nected. As the pathways of disease are interrelated, so are the potential approaches to treating them. Our experience in MS gives our scientists and researchers deeper insights into remyelination and repair, neuro- protection and axonal health, with potential appli- cations in Alzheimer’s disease, Parkinson disease, amyotrophic lateral sclerosis (ALS) and stroke. Leading in Alzheimer’s disease The announcement in October 2019 of our plan to pursue regulatory filing for aducanumab in the U.S. was one of the highlights of our year. In March 2019 we announced the discontinuation of EMERGE and ENGAGE, our two Phase 3 studies, based on the results of a pre-specified futility anal- ysis that predicted that both studies were unlikely to meet their primary endpoint upon completion. In retrospect, we now know that the result of the futility analysis, based on a smaller and earlier dataset, was incorrect. Following the discontinuation of the studies, additional data from a greater number of patients became available. A new analysis of this larger dataset, conducted in consultation with the FDA, showed that the Phase 3 EMERGE study met its pre-specified primary and secondary endpoints by showing a significant reduc- tion in clinical decline. And, we believe that results from a subset of patients in the Phase 3 ENGAGE study who received sufficient exposure to high dose aducanumab support the findings from EMERGE, though ENGAGE did not meet its primary endpoint. Over the past months, we have been actively engaging with the FDA and are working diligently to complete the regulatory filing in the U.S. as soon as possible. We are also actively engaging with regulators in Europe and in Japan based on the positive results of the new findings. CEO LETTER 2019 total revenues +7% Biogen 2019 Annual Report 3 One of our first priorities was to offer eligible patients who had been enrolled in the discontinued aducanumab studies the possibility of restarting the investigational treatment. The first patient in the U.S. returned to dosing in March 2020, and we are also actively working in Europe and Japan to re-open sites. If approved, aducanumab would become the first therapy to reduce clinical decline in patients at early stages of the disease. While this brings tremendous hope, there remain significant challenges as patients are usually diagnosed late in the progres- sion of the disease. Consequently, we have started working collaboratively with healthcare stakeholders to help support efforts that could enable the system to diagnose patients early enough so they might benefit from potential treatment
Answered Same DaySep 22, 2021

Answer To: B iogen 2 0 1 9 A nnual R eport ANNUAL REPORT 2019 Concept, design and realization PETRANIX...

Tanmoy answered on Sep 25 2021
134 Votes
BIOGEN Analysis
    Ratio
    As Reported
    
    Biogen
    Bristol Myers Squibb
    Industry Average
    
    2017
    2018
    2019
    2019
    Latest
    Sustainable Growth Ratio
    18.67
    34.33
    44.14
    6.66
    0.088
    Dividend Payout Ratio
    11.92%
    0%
    0%
    49.64%
    29
.58%
    Net Income (In Million $)
    2539.1
    4430.7
    5888.5
    3439
    2200
     Growth Rate in NI
     
    74%
    33%
    
     
    Long Term Asset Turnover
    0.78
    0.70
    0.65
    0.26
    -
    PP&E Turnover
    3.78
    3.74
    4.52
    4.18
    -
    Total Asset Turnover
    0.53
    0.55
    0.55
    0.20
    0.41
Analysis
Based on the observation and the findings it can be stated that Biogen has performed much better in 2019 compared to its competitor Bristol Myers Squibb and also in terms of the industry average. But, after 2017 it is observed that Biogen has not paid any dividend to its shareholders. Thus, as a result of this the sustainable growth ratio of Biogen have increased for years 2018 and 2019 compared to the year 2017 in which the dividend was last paid by Biogen. Sustainable growth rate is one of the factors which illustrate the corporate social activities of Biogen towards the community in which it operates. Thus investment of Biogen in Sustainable developmental programs includes maintain workplace safety and health among the employees, providing education to the employees children and the poor children of the community in which it operates, providing customers with superior quality valued products, conservation of natural resources like water and energy, adherence to the UN sustainability developmental goals, reporting of the various activities undertaken by the organization towards the sustainability developmental programs and its progress and how much it is aligned with the Sustainability Accounting Standard Board, Task Force for Climate related to Financial Disclosures and Global Reporting initiatives and conducting business with integrity and ethical standards. Hence, all these programs have been initiated after discussing with all the stakeholders of Biogen like the Shareholders, Community, Suppliers, Government, Customers and the employees of the organization. This not only helps Biogen to spread awareness of the various programs they have initiated towards the community development and the safety of the people but also to enhance their brand image, sales and profitability in return.
Ratio Analysis
Sustainability growth rate is the maximum amount of growth a company can sustain without having to finance the growth with the support of equity or debt. It...
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