Good morning. My name is Chris, and I will be your conference operator today. At this time, I would like to welcome everyone to the Biogen second quarter 2015 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. Carlo Tanzi, Director of Investor Relations, you may begin your conference.

Thank you and welcome to Biogen's second quarter 2015 earnings conference call. Before we begin, I encourage everyone to go to the Investors section of biogen.com to find the press release and related financial tables, including a reconciliation of the non-GAAP financial measures that we'll discuss today. Our GAAP financials are provided on Tables 1 and 2. Table 3 includes a reconciliation of our GAAP to non-GAAP financial results. We believe non-GAAP financial results better represent the ongoing economics of our business and reflect how we manage the business internally. We have also posted slides on our website that follow the discussions related to this call. I would like to point out that we will be making forward-looking statements which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. I encourage you to consult our SEC filings for additional detail. On today's call, I'm joined by our Chief Executive Officer, Dr. George Scangos; Dr. Doug Williams, EVP of Research and Development; Tony Kingsley, EVP of Global Commercial Operations; and our CFO, Paul Clancy. We'll also be joined for the Q&A portion of the call by our Chief Medical Officer, Dr. Al Sandrock. Now, I'll turn the call over to George. George A. Scangos, Ph.D. - Chief Executive Officer & Director: Thank you, Carlo. Good morning, everyone, and thanks for joining us today. There are two sets of data on which most of you have been focused, so let me lead with those issues. First is the commercial trajectory. So versus prior year, we achieved 7% revenue growth and 21% non-GAAP EPS growth, good numbers but certainly lower than we had anticipated a few months ago. We had expected to see a reacceleration of TECFIDERA this…

Thanks, Doug. Our basic strategy in MS remains the same, to position TECFIDERA as the standard of care in the marketplace, to establish PLEGRIDY at the interferon of choice, and to leverage TYSABRI as the leading high-efficacy agent. In light of continued headwinds affecting TECFIDERA, we saw moderated patient growth for our MS portfolio as a whole this quarter. Our 2015 business plan for TECFIDERA made two important assumptions: first, that TECFIDERA would continue to stimulate higher than historical market growth in switch rates as it drives the market from injectables to orals; and second, that TECFIDERA, with what we believe is a strong all-in profile, would continue to capture a high rate of both new starts and switches. Through the second quarter, both of these were weaker than planned, particularly in the more mature and larger markets of the U.S. and Germany. In the U.S., total market growth and switch rates remained lower than our original expectations and appear to have returned to historical averages typically seen in the market before the launch of TECFIDERA. We believe the safety event reported in late 2014 is creating greater caution on the part of both physicians and patients about switching to orals. Our U.S. market research indicates a moderation in physician intent to prescribe, though in Q2 TECFIDERA continued to gain patients in the U.S. We believe our promotional and educational efforts are strong and well resourced. In the U.S., we remain focused on emphasizing TECFIDERA's strong efficacy profile while ensuring physicians and patients are educated on proper monitoring requirements for lymphopenia, and we believe we are making progress. We have recently increased our share of voice across print and digital media to increase patient awareness and have also ramped up TECFIDERA sales calls by our field teams. In more mature…

Your first question is from Geoffrey Porges with Sanford Bernstein. Your line is open. Geoffrey Craig Porges - Sanford C. Bernstein & Co. LLC: Thanks very much, and I'm sure there will be lots of questions on the TECFIDERA and the rest of the MS portfolio outlook. Paul, I wanted to ask you a question first about margins and on a related basis about capital allocation. As you've had a chance now to look at this revised guidance and the outlook for the core business and then the various clinical trials that you're planning, what confidence do you have that the 48% to 49% operating margin you have today can be maintained over the next two years to three years? And related to that, you have a very strong balance sheet. You mentioned the $4.5 billion in cash and marketable securities, next to no debt. Some of your competitors have used their balance sheet quite effectively, and we're wondering, are you contemplating that? Would you take on leverage? If so, how much, and what are your capital allocation priorities now? Thanks. Paul J. Clancy - Chief Financial Officer & Executive Vice President: Thanks, Geoff, thanks for the question, pretty expansive, so let me try to tackle it. On the margin front, certainly I'd point to what the guidance now assumes. I think from a multi-year perspective, we certainly would continue to still want to drive towards margin improvement. The dynamics of our margin improvements obviously over the next couple of years are going to be a little bit different. As the revenue growth has attenuated, we're going to have to work harder to control costs, and I think that we came into this year starting to do that with our SG&A. We are certainly doing that with the balance-of-year forecast,…

The next question is from Michael Yee with RBC Capital Markets. Your line is open.

Hi, thanks. I guess a question for Al or Doug. I guess to start with Alzheimer's, which is, maybe you could give some more specific comments about your interpretation of the recent data, specifically six milligrams, and how we should interpret the clinical meaningfulness of this. I think people are looking at MMSE and then CDR and not confident on that clinical meaningfulness. So maybe you can give some more perspective on that data and why I guess you're confident now that you've disclosed also the doses. Thanks. Douglas E. Williams - Executive Vice President-Research & Development: Hi, Michael, this is Doug. I'll start. Al will jump in as well. Look, I will simply say that when Al and I looked at the data from the 6 mg cohort, I think we were both very happy to see that it lined up very nicely with our expectations for what we thought should have happened. I think the fact that for CDR, it's slotted right in between the 3 mg/kg and 10 mg/kg dose cohorts. You couldn't ask for a better outcome, frankly, in terms of how that data shook out. As I mentioned in the call earlier, that's the primary endpoint for the Phase 3 study, so I think we're increasingly confident that the data is continuing to be very, very consistent across multiple parameters. We believe that this data is increasingly strong, and we're very confident setting up and starting the Phase 3 study based on the results we've seen. I will go back in history and say that the last time that I personally was associated with a study at this stage where the results were this consistent across multiple parameters was back in my ENBREL days. So again, I believe that we have a really firm basis on which to go forward into Phase 3. The MMSE data, a little bit of wobble in that. That's the only data point that I can think of across the entire spectrum that didn't just line up almost perfectly. So we're strong believers in this product and feel very confident moving it forward.

I completely agree with Doug and I have nothing to add.

The next question is from Mark Schoenebaum with Evercore ISI. Your line is open.

Hey, guys. I apologize, I have the flu, if I sound a little down. First, I'd just like to just say congratulations to Al. As you know, Wall Street loves him, as do I. George A. Scangos, Ph.D. - Chief Executive Officer & Director: We do too. Paul J. Clancy - Chief Financial Officer & Executive Vice President: We do, too.

In a friendly non-romantic type of way. So I just wanted just a couple points. Hey, Paul, I just want to be really clear. You're basically telling us that from a volume perspective, TECFIDERA is basically going to stay flat this year. I just want to make sure. That seems like a core – I just want to make – there are all these numbers flying around. I just want to make sure that that is the message here in the U.S. And then I wanted to ask you – I wanted to push you guys a little bit on M&A, now with the unexpected slowing of the core business and a very interesting pipeline. But several years before it's going to contribute to the P&L, it would seem just obvious that plugging in some new products here, like Celgene perhaps has been doing, could make a lot of sense. You guys haven't really been very active on the M&A front. I think the last thing you did was the Elan transaction, which is just buying something you really knew. So can you talk about that? I think the Street would love to see you get more aggressive. Stocks go up every time acquirers buy a company. And I'll leave it at that and I'll get back in the queue. Thanks a lot. Paul J. Clancy - Chief Financial Officer & Executive Vice President: Mark, I'll take the first part. Your interpretation is exactly accurate. There's some very modest patient growth, but it's essentially what we're assuming. And I know there will be an assessment of whether or not we're being conservative or not. But essentially, what we're assuming is extremely limited patient growth on a sequential basis for the balance of the year in the United States. Our aspirations are obviously – commercially we're aspiring for much more than that, but that is the assumption that we have in the balance-of-year forecast. George A. Scangos, Ph.D. - Chief Executive Officer & Director: Look, Mark, on M&A, I think what you see, your observation is certainly is right. Every time there's some M&A event, stocks go up. We are certainly not engaged in M&A for any short-term stock performance. But we certainly are, I would say, increasingly aggressive about wanting to add additional compounds to our portfolio and to our pipeline. And we will be aggressive when we see good opportunities that are consistent with our strategy. So I think you can count on that.

The next question is from Ying Huang with Bank of America. Your line is open.

Hi, good morning, guys. Thanks for taking the questions. I want to probe you a little bit further on TECFIDERA. So we now have a second confirmed case on PML, even though it's off-label. And then we will see ocrelizumab data in RMS in Phase 3. So if you take a longer-term look at TECFIDERA, what do you think those could affect the growth trajectory for TECFIDERA? And then also second question I have on the SPMS trial, I know you have a special product agreement with the FDA on the Phase 3 trial for TYSABRI in SPMS. Can you elaborate a little more? What do you need to see in order to be able to file for approval here? Thank you.

Thanks, Ying. It's Tony. So on the second PML case, let me talk about that and then talk about ocrelizumab. I guess it's still early days but it's certainly been several weeks that the information is out in the market. So we think the market has had some chance to absorb it. Look, the first PML case was a pretty significant change statement for the profile of TECFIDERA, given its very pristine safety profile at the time. Our sense is that the second one is a much less significant change statement. The cases within the expected profile, still exceptionally rare. So in discussions that we've had with physicians, with thought leaders, they seem to be – the appearance is that they are processing that much more straightforwardly. We've also monitored media pickup, social media pickup, other things like that, and to date have seen very significantly less reaction on that front. So this feels like a significantly different and more muted reaction to date than the first case. Ocrelizumab, look, I think consistent with what we've said before, we have seen increasing excitement in the market about ocrelizumab, particularly among specialists. We don't know the full data. It looks like a product that will play in the high-efficacy space. It's likely to appeal to the specialists, particularly the TYSABRI user, the RITUXAN user. That we think is more of an issue, frankly, for TYSABRI as it competes in the high-efficacy space and probably in a narrower customer, more specialized customer base over time. So we think of that as probably less relevant to TECFIDERA. Look, in terms of TECFIDERA's long-term profile, which is where you had asked that, I'll say this. To date, when we look at our market research, the indicators and the leading indicators of brand health we believe continue to be pretty favorable. Our market research says the benefit/risk profile has changed, but we believe it's still overall very positive. It's the most requested product by patients based on our research. Physicians state that they intend to use more, again, from market research, and they see it as appropriate for a broad set of patient types. So in the current environment, that's essentially why we're doubling down in what's been a slow market. The market has been more cautious and we think a lot of it is on the margin more cautious. But for a big brand like TECFIDERA, on the margin matters. So reach and frequency, patient outreach, and emphasizing the benefits of the product continue to be where we'll put our efforts.

Hi, Ying, this is Al Sandrock. I'm still blushing from Mark's comments, but I'll try to answer this question on SPMS. As you pointed out, it was important to get a SPA approval prior to starting because this is the first time the drug would be approved using a new composite measure of disability progression, and so that's why it was important to get a SPA agreement. This composite measure, I think that whether or not the drug gets approved is going to rest almost entirely on whether or not the drug is statistically significant on this measure, which by the way, this measure has the EDSS standard, EDSS one-point change that we've been using for a long time in relapsing MS, but also in addition has two other pieces, a nine-hole peg test, a certain percentage change in the nine-hole peg test, as well as the timed 25-foot walk. So we believe that increases the sensitivity to change, so we will see disability progression better and therefore increased chances that TYSABRI will show a treatment effect.

The next question is from Matt Roden with UBS. Your line is open.

Great, thanks very much for taking the question. While I share the love for Al and say congrats to your promotion, I also want to say congrats to Doug on a great run at Biogen and good luck on your next venture. Douglas E. Williams - Executive Vice President-Research & Development: Thank you.

The question is on the Alzheimer's program. So the new information for us today is the dosing in the Phase 3 program. If you look at the numbers you have on CDR, sum of the boxes at 3 milligrams and 6 milligrams, would you get stat-sig, statistical significance if the sample size were 1,350 patients, which is what you're using in ENGAGE and EMERGE? And I guess related, just to better understand the strategy of using the multiple doses here, is it meant to enable patients in the real world to move up and down dose, or is it meant to just take people all the way up to 78 weeks in a particular dose and then reassess? I'm just trying to understand whether or not the clinical trial is capturing what you mean to do in the real world. Thanks. Douglas E. Williams - Executive Vice President-Research & Development: Again, Al and I will tag-team this. I think the intent here, obviously, we've analyzed the data very carefully, and it's a very small sample size coming out of the current Phase 1b study. But what we've seen in terms of consistency of response across the doses I think has allowed us to do some very nice statistical modeling and make some assumptions about sample size that obviously we think will allow us to achieve statistical significance with the sample size, with the increased duration of dosing because as you recall from the previous look at the data, the longer you dose, the more amyloid you remove. And what we've shown in the most recent presentation is that there is a very nice correlation between amyloid removal and improvement in cognition. So I think all of these factors have come into play to both size the study and to pick the dose. And I would say what we're trying to do is to actually push the dose and to push it as high and as hard as we can to remove as much amyloid as possible because we know that that seems to be an important parameter for efficacy with our drug. So all of this has been factored into the sample size, and I think we've designed a study now that allows us to take into account the fact that increasing doses work better, increasing durations seem to work better. And stratifying, based on APOE4 status is an important parameter for allowing us to both push the dose but at the same time try to minimize ARIA. And I think the up-titration is another element to the study that will improve our chances of maximizing the benefit/risk.

I think anytime we go from Phase 2 to Phase 3, we do a discounting, if you will. We assume that the variability will increase. We assume that – and we look at 95% confidence intervals of what the actual treatment effect is, and that's what Doug was saying about the modeling. And so I think we're pretty confident using this sample size that we will achieve a statistical significance. In terms of how we view this drug to be used once it's approved, I do think that people will get genotyped and the dose will be based on genotype, not (45:37) on whether or not they're APOE4 carriers. And then we'll have to look at the data to see which dose is superior in each of the subgroups, the carriers and non-carriers, and that will probably be the recommended dose. And then the other complication is if there's some ARIA whether or not people would dose-reduce because that's what was typically done in the Phase 1b trial. People dose-reduced, then most people were able to continue dosing with the dose reduction. So that's how I see it playing out.

The next question is from Terence Flynn with Goldman Sachs. Your line is open. Terence C. Flynn - Goldman Sachs & Co.: Hi, thanks for taking my question, maybe just two quick ones for me. First is just TECFIDERA, as you think about the out-year trajectory in the U.S., I know your outlook for this year is flat, but just help us think about the dynamics in terms of what really drives the trajectory change there. And then just on Alzheimer's, I was wondering if you can remind us of any similarities or differences between BIIB037 and the Eisai antibody and the endpoint they're using in that ongoing Phase 2 trial. Thanks.

Thanks, Terrence. This is Tony, just maybe some qualitative comments on the outlook. We believe that the market continues to move to orals. We continue to believe that we have the best oral. So those are the two core things. And as I said, based on what we see in the market today, we continue to believe that we have a very good product profile. We think that we can continue to add patients. It's harder work at this point given where it is in the product life cycle.

In terms of the BAN versus BIIB037, the BAN trial is using a composite measure that includes some of the measures that we've looked at in the BIIB037 study. So it's a different kind of measure that is rather unique actually. I think it was developed by the scientists and clinicians at Eisai. In terms of the differences in the antibodies, BAN binds to a different epitope than BIIB037. BAN is a humanized mouse antibody, whereas BIIB037 is a fully human antibody derived from human B-cells. And also BAN tends to bind to protofibrils. And so exactly which species of A-beta in terms of the aggregation status and fibrillar status, there are probably going to be some differences, although I would say that BIIB037 also binds to the ligamers as well as the fibrillary beta. So those are the differences.

The next question is from Matthew Harrison with Morgan Stanley. Your line is open. Matthew K. Harrison - Morgan Stanley & Co. LLC: Great, thanks for taking the question. I want to ask just on stroke. Can you clarify exactly what you saw on those functional endpoints, how similar or different they might have been from TPA, and then when we should think about some sort of Phase 3 design or plan for that, and when we might see that data. Thanks.

This is Al Sandrock. The primary endpoint was the volume of the stroke basically based on MRI at day five. And as Doug said, that was not statistically significant, so we missed on the primary endpoint. What was surprising to us is then when we looked at the other clinical outcome measures at day 30 and day 90, we saw some interesting trends. And in some cases at certain times with certain measures there were statistical significance. And the other measures that were looked at were the Modified Rankin Scale, the Barthel Index, and the NIH stroke scale. Those are the typical stroke scales. And in fact, people often combine them into the global scales. When we look at those, we see some interesting trends, as I said. With odds ratios – so then the other way to look at it is the odds ratios of reaching a favorable outcome on these endpoints individually and as a composite global score. And when you look at that, it's actually in the range of what was seen with TPA, which makes us interested in what we saw. And so you mentioned going to Phase 3. I'm not sure we'll jump right into Phase 3, but we're still mulling over the data. We're looking at it in every which way that we can. We're discussing it with stroke experts. And we'll let you know what we're going to do next, but I think it bears further study.

The next question is from Eric Schmidt with Cowen & Co. Your line is open. Eric Thomas Schmidt - Cowen & Co. LLC: Thanks for the question. Maybe, Paul, I think we've touched on TECFIDERA's growth trajectory, but it sounds like your guidance for the second half of the year essentially on the top line implies no growth in revenue over the first half of the year. And I guess if there's no growth H2 over H1, maybe why should we be optimistic for growth in the future as well? So perhaps you could just talk about the overall top line growth trajectories that you're expecting over the next six to 12 months. Paul J. Clancy - Chief Financial Officer & Executive Vice President: We've got to still sort that out as we move into 2016. I think that's what you're getting at, Eric. The guidance assumes that TECFIDERA patients in the United States are relatively limited growth, and that is clearly what we have to get motoring along. So that's the homework assignment. Outside the United States, we are growing in terms of patients. We had a hiccup this quarter versus Q1, as noted from the German pricing. That's a dynamic that will now settle out. But certainly, we've got some work to do on the commercial front.

The next question is from Robyn Karnauskas of Deutsche Bank. Your line is open.

Hi, guys. So just to take a step back and just help me feel more comfortable around the rest of the year, two things. Again, it's early, but have you seen any impact from generic COPAXONE as push-back on price or utilization? Second, when you thought about TECFIDERA and flat sales, to what extent do you think there will be people stopping the drug versus just minimal growth, and how are you thinking about that? And then third, given the lack of growth in one of these core products, you talked about share buybacks. I guess this is going to a point that was made earlier. Has that changed your interest in bringing in something that will be a growthy driver, an M&A potential candidate that might help the company grow during the time in which you're developing your pipeline and you're facing such headwinds? Thanks.

Okay, Robyn, it's Tony. First on GLATOPA, generic COPAXONE, absolutely to date within our expectations, which I think we've talked about for a while now is we think that product largely has an impact within the COPAXONE molecule category. Last I looked, which was probably a couple weeks back to early July, there were 400 or 500 Rxs, 90%-plus of them were switches. 97% of those switches were from COPAXONE QD, so to date absolutely where we expected it to be. You've seen probably the WAC, which is $63,000 – $64,000. I don't have clarity on what their contracting strategy will be, but absolutely within the expectations that we had. Douglas E. Williams - Executive Vice President-Research & Development: And then good point, Robyn, what you're bringing up with respect to TECFIDERA. Certainly one of the dynamics that we've seen that we didn't expect was a modest but not trivial increase in discontinuations in TECFIDERA in the United States in particular. That probably we think traces back to the monitoring to some extent. It traces back to efficacy breakthroughs, which is typical for most of the disease modifying the majority in it traces to some of the GIs. So both dynamics are actually happening. We're hopeful that we can actually bring that back to a bit normal state, but TBD as we move forward. George A. Scangos, Ph.D. - Chief Executive Officer & Director: Okay, and this is George, Robyn. Look, on the M&A question, I think as we've said before, we have a good balance sheet. We have debt capacity. We will not be shy about using it when we see opportunities that are interesting and consistent with what we want to do. I don't think we're in any panic situation to go out and be desperate. But there as we see good opportunities, we will be aggressive about bringing them in.

The next question is from Geoff Meacham with Barclays. Your line is open.

Good morning, guys. Thanks for taking the question, one for Tony and one for Doug or Al. So for Tony, you guys have talked about Europe being as big as the U.S. in terms of peak potential for TECFIDERA. I was just wondering if that was still the case and how you think about how quickly you could reaccelerate growth OUS. And then for Doug or Al on aducanumab, maybe help us with the criteria for beta amyloid elevations and PET scans. I know you guys had a correlation between beta amyloid levels and cognition. But is there a threshold that you're looking for that you feel like you'd have maximal efficacy, or does it matter? Over an 18-month period, do you feel like just clearance of the plaque, even a marginal clearance, would have some sort of effect on cognition? Thank you.

Good, thanks. It's Tony. On Europe, the short answer is basically mathematically impossible for Europe to be as big as the U.S. given the differential in pricing and therefore net revenue per patient across. You have a big patient population in Europe. As I said, more mature markets like Germany, we believe we've seen dynamics that are a little bit more like the U.S. But launch markets we're seeing really nice uptake, and we believe it's very consistent with what we saw in the other launches. So the total dynamic is we have seen good patient growth in Europe. We have had both net price and also FX working against us this year. We are basically through all the major reimbursement decisions at this point. And when all the dust has settled, the net prices we were able to achieve over there were certainly lower than our aspiration and what I think our plan was. We always cautioned that given how broadly TECFIDERA would be used, you'd have a gravitational pull-down to the platform therapies. The argument for us with the pricing authorities obviously was superior efficacy, better profiles than the platforms. That has been a very tough row to hoe. It was made tougher by AUBAGIO, which went ahead of us and took what was a pretty low price strategy that increased the pressure over there. So I think Paul referenced it, and I talked a little in my comments. The net revenue per patient in Europe is just structurally substantially lower than the U.S. and for TECFIDERA specifically has come out lower than we would certainly have aspired to given those market dynamics. Douglas E. Williams - Executive Vice President-Research & Development: And on the question about the lowering of amyloid, what we did there was to look to see whether there was a PK/PD relationship essentially. And it was a scientific question. Does the effect on cognition need to go through the effect on amyloid lowering? And in a way it's asking is the amyloid hypothesis correct? And what we saw was that it's consistent with the amyloid hypothesis being correct. Your question goes to another thing, which is are we going to be using this as a biomarker in the clinic when it's approved, and will there be some sort of threshold effect being used in clinic? And I think it's far too early to speculate on that. I think it might go to that part, but I would not say that this one standard deviation unit that we chose to look at would be that threshold. I think there's a lot more work that has to be done before we get to that stage.

The final question is from Cory Kasimov with JPMorgan. Your line is open.

Hey, good morning. Thanks for squeezing me in. I wanted to go back to aducanumab and see if you could provide a little more clarity on the titration there. I'm just not clear. Can anyone go up to 10 mg/kg if they're tolerating the drug? And what's the trigger to up-titrate? And then also, how much would the planned titration schedule informed by the titration cohort you added to the Phase 1b trial? Thanks. Douglas E. Williams - Executive Vice President-Research & Development: We haven't actually released the specific details on how the up-titration is going to work except to say that all of the patients will undergo that process as they get to their final dose in the study. Again, I think we'll have more clarity on that once we actually begin enrolling patients. But for the moment, I think we'll simply say that that is based on a variety of parameters, primarily that there are two things we know correlate with the incidence of ARIA. One is obviously dose, so a lower dose has a lower incidence of ARIA. And the second is time. Most of the ARIA occurs during the first five doses of administration. So the hypothesis that's being tested right now with this cohort you mentioned is whether or not at a lower dose for a period of time you can get through this period of risk, I'll call it, for developing ARIA and end up with a lower overall incidence on your way up to the final dose.

Okay. With that, we'll bring the call to an end. Thank you all for calling in today. Thanks for all the questions, and we can all get back to work now. Thank you.

Ladies and gentlemen, this concludes today's conference call. You may now disconnect.