Christopher A. Viehbacher
President and Chief Executive Officer at Biogen
Thank you, Tim. Good morning, everybody. Perhaps before we get started, I'd just like to note that this is Mike McDonnell's last quarterly presentation as CFO of Biogen. Mike, I believe this is your 97th quarter as a publicly quoted CFO. So congratulations on that amazing career and I'll just take the opportunity to thank you. You've been a terrific partner and team member, and it's been great working with you, and we will miss you. And we, of course, are joined here also by Robin Kramer.
I'm also proud to say that we've been able to promote from within, and it's a great source of pride that we have that level of talent within the organization. So let's turn to Q4. As you all know, we have been faced with increased competition for our multiple sclerosis franchise. And really, all of our priorities are thinking about how do we now build a new Biogen, how do we build a new phase of growth.
And we are focused really around three core priorities. The first are clearly the four products that we launched last year in Alzheimer's, Friedreich's ataxia, depression and ALS. Each of those products is not only first-in-class, but first disease-modifying agent in each of these diseases. Now that's a source of pride in the level of innovation that Biogen is capable of. But equally, from a commercial point of view, this is a significant challenge since the level of education when you're a pioneer in an area is so much greater, and we'll come back and talk a little bit more about that.
The next is we have really reprioritized the pipeline. It's certainly been my experience over the years that focusing on a number of key projects is core to business success. And I'm pretty grateful to both Priya Singhal and Jane Grogan because they have both really, I think, cleaned out the pipeline for development in Priya's cases, in research in Jane's case, and we're actually excited now by the products that are in there. We've got a number of key developments that will start reading out in 2026.
We think this is a multibillion-dollar portfolio. And we're probably one of the few companies that can look at a pipeline that could be more than -- it could be more than our current biopharmaceutical business when it gets to peak sales if it all, obviously, comes to market. So if we can go to the -- and the third point, of course, is we have redesigned the company with a reduction of operating expenses, not just saving costs for the sake of cost but the ability to release resources for investing in growth, and that's what we're continuing to do.
We're excited about our pipeline, but we've also freed up an awful lot of cash flow, as you'll see later. And that cash flow, we're investing for more substrate in growth. So yes, now, Dan, please next slide. So the race really that we are faced with is seeing the erosion of our multiple sclerosis product revenue, but I'm particularly happy to see in 2024 that the revenue from our launch products really offset the -- more than offset the decline in our multiple sclerosis product revenue.
And indeed, when you actually look at total revenue declined by $160 million, and you note that contract manufacturing declined by $247 million, it meant that really our core pharma business actually grew, and that's for the first time in four years. And that's really what we're all about in the near term is trying to make sure that the revenue can exceed the multiple sclerosis product decline. Multiple sclerosis product decline is obviously driven by a number of factors going forward, including the timing of it Tysabri, biosimilar in the U.S. and timing of TECFIDERA generics in Europe.
So as I said, we've got actually four very innovative pioneering products. LEQEMBI, we'll come on and talk about it in some detail. SKYCLARYS in Friedreich's ataxia, again, very first treatment for Friedreich's ataxia. We have been able to determine from basically medical claims data that there are approximately 4,800 patients in the U.S. That's about what we thought. One of the complexities is that it's harder to find these patients because you could have a primary care physician in a rural setting that has one single patient and you have to go find them.
And we're talking to primary care physicians, talking to cardiologists, talking to pediatricians. So it's quite a large prescriber base for a very narrow patient population. But that, of course, is the core of what rare diseases does. I remember years ago, when we acquired Genzyme when I was at Sanofi and the marketing folks are saying, our marketing strategy is looking for needles in haystacks.
And that is exactly what rare disease is all about, and it's what Biogen is also very good at. And of course, today, we've got a lot more technology. We can use tools such as AI and genetic testing to help find those patients, but by its very nature, it is unfortunately not going to be the nice smooth progression quarter-on-quarter.
That said, we are particularly proud to say that we have been able to double the number of patients on treatment in the past year. Not all of those are yet being reimbursed. We are able to get a lot of patients on drug and then negotiate with governments, particularly in Europe to get the reimbursement and once we do that, the patients flip from being free goods patients to actually revenue-generating treatments.
There's always a bit of a -- in each country, a number of patients who are diagnosed who have been waiting for treatment and you can get those quite easily. There are a number of older patients who actually have lived with this disease for 30, 40 years. And they are the ones we actually have to go hunt for.
We will see another growth driver this year and that we expect to get approval for SKYCLARYS in Latin America. I was in Brazil last year and there are quite a number of patients in Latin America. So as we started with the U.S., we moved to Europe and then we're moving to South America and indeed areas of the Middle East. We expect to see continued steady growth out of SKYCLARYS. But again, I of appreciate that it's going to be hard for some of you to model on a quarterly basis.
ZURZUVAE was a very nice launch last year and certainly exceeded our expectations. One of the things that was different from our expectations was that the main prescribers actually OBG and OB/GYN. We had actually been targeting originally high-prescribing psychiatrists. We still see some of those, but as you can see, 80% of the prescriptions are driven by OB/GYNs. This is also an area where you could have potentially more people who have ever prescribed for PPD than you actually have patients.
And again, targeting and thinking about multichannel marketing and commercial approaches are extremely important. We have filed in Europe and would hope to see an approval sometime later this year. QALSODY is not necessarily a big revenue generator, but this is really a breakthrough treatment in ALS. This is the first time we've been able to demonstrate that neurofilament can really help predict drugs early in development as to whether or not they are likely to work or not.
And that allows just the whole research and development in ALS to be accelerated. So we're particularly proud of that. The impact on patients is absolutely extraordinary. And so -- while we may not be making a big impact on revenue, we're certainly making a big impact on patients' lives. Go to the next slide, please. Dan?
Now I showed this slide at JPMorgan. And there were several investors who looked at that chart and said, this is not the chart of a small product. And we've all been in this business and looked at a lot of launch curves, and we all know that we like to see an acceleration in the curve.
But any curve that goes from bottom left to upper right is in my books good unless we talk about operating expenses. And this is good, steady quarter-on-quarter progress. We have seen some questions on the ex U.S. launch. Clearly, the ex U.S. launch is contributing more than we have seen in prior launches in other areas. I think part of that is -- first, I think Eisai is extremely strong in Asia and they are leading that launch there.
But second, I think the single-payer system removes a lot of the obstacles that we're dealing with in the U.S. When you have a single payer, you're not having to negotiate quite so much in terms of PET scans and MRIs and infusion beds, and that has facilitated the progress. And it's as strong in China as it is in Japan, not necessarily patient numbers, but we're seeing very strong growth in China, and that is that is a cash pay market.
And it goes to really a demonstration of how people value the importance of LEQEMBI. So we'll go to the next chart, please. Now, I talked about some of those obstacles and we certainly see that making this easier for both patients and physicians is going to accelerate the launch. And we have a number of these catalysts. The first one has already been achieved. So we have the LEQEMBI IV maintenance, that's now FDA-approved.
We now have the first patients who are hitting that 18-month mark. They've cleared their plaque. But as the data have demonstrated, you've got to stay on treatment, otherwise, some forms of the plaque actually come back. And we have demonstrated 3-year data to show that actually staying on treatment, patients do better than those who stop treatment. And that's an important message because our competition is actually not able to say that. And so this is also important for the education of the disease. It's not just about plaque clearance, it's about maintaining that clearance.
The second is really the introduction of blood-based diagnostics. Certainly, LabCorp and Quest continue to see rising sales of these diagnostics. What I think will really make a difference is getting FDA approval for some of these diagnostics with an evidence base that will give physicians the confidence to be able to confirm diagnosis without the need for a PET scan or a lumbar puncture. And so again, this is something that could not only facilitate the work of the neurologist, but we might also be able to see this being used increasingly to triage patients.
Something like 50% of patients who actually managed to get into a neurologist are actually not eligible for treatment because they're too far advanced in their disease. So if we could actually triage some of these patients, particularly at the primary care level, then we can actually get a higher quotient of patients who visit neurologists actually being eligible for treatment.
The subcutaneous form for maintenance, we would expect now. We have a PDUFA date on August 31. That, again, will really facilitate the journey, both for the patient as well as for the physician, no longer needing the infusion beds and patients can actually take the drug from the comfort of their own home.
A major game changer we see as the subcutaneous for initiation, which we expect to have in the first half of next year. And that obviously would also facilitate that for the same reasons of not having to deal with infusion beds and patients can have that in the comfort of their own home. The AHEAD 345 study is fully recruited. We expect to read out in 2028. This is a landmark study because this is where we could see the promise of potentially prevention of Alzheimer's.
We know that before patients actually exhibit symptoms, they've been accumulating plaques in their brains for many, many years. And unfortunately, a lot of damage is done already by the time patients actually exhibit symptoms. So if we can get patients earlier, we think that we can actually have even better efficacy. And in fact, Priya is going to show shortly, again, the low tau patients, which is a marker for earlier-stage patients.
And there, we see dramatically improved efficacy versus just the 27% on the CDR sum of box that was demonstrated in the CLARITY study. So next slide, please. So those are the four products. Clearly, we're also looking at our pipeline. And I think there are three key areas in this to look at. The first is continued investment and commitment to Alzheimer's.
We gather some of the top leading experts in Alzheimer's from around the world. They're the ones who are telling us, one, that nobody is really doing so much research in a broad area of modalities as Biogen, but the other is they are extremely excited about the opportunity to reduce tau and the impact that, that could have on Alzheimer's.
So Alzheimer's is going to be a core franchise for Biogen for decades to come. We had very positive data on dapirolizumab back in September. And we've already initiated the second Phase III. But we also have litifilimab in both CLE and SLE so we got a nice lupus portfolio of assets coming along. I'd remind everybody, yes, people are looking at a lot of potential competitors in Phase I, Phase II, but out of the dozens and dozens and dozens of molecules that entered the clinic, only three molecules have ever demonstrated a positive Phase III result, two are already in the market and the dapirolizumab is the third.
So we know that you can get excited about a lot of things, but it's not until you actually see Phase III results that you can really have conviction. But that's a potentially significant market and fits nicely with Biogen because we can take a lot of the learnings from MS and apply that to lupus. And of course, the third area are really these auto antibodies.
We have our anti-CD38. We are expected to enter into three Phase III trials in three separate indications with auto antibody-mediated resistance, IgAN, the PMN. And we have very compelling Phase II results here. There are no guarantees any time in research and development, but I think we feel particularly excited about felzartamab and the potential this could have in rare kidney disease.
And of course, then we have a whole phase of readouts coming along and I think that will become the story of Biogen as we get increasingly more data and people can gain increasing confidence and excitement -- share our excitement in our pipeline. And so with that, I think I'm going to -- let's continue the story on R&D.
Priya, I'll turn it over to you.
