TO: Clark Hansen, CEO, AMDP

FROM: Michelle Zhao, R&D, AMDP

DATE: October 16, 2016

SUBJECT: Recommendation to Invest in Biogen, Inc.

 

My job as part of the Research and Development team here at AMDP is to find companies for AMDP to invest in. These companies should not only be financially profitable, but also socially and environmentally responsible. After extensive research, I highly recommend investing in Biogen, Inc. As a multinational biotechnology company and a leader in multiple sclerosis therapies, Biogen actively invests in its patients, employees, and sustainable practices.

 

AMDP Standards

Before I discuss Biogen, Inc., I want to reiterate the standards of AMDP when considering possible investments.

 

• Triple Bottom Line: Companies are evaluated by three bottom lines: profit, people and planet. “Profit” is the traditional measure comparing revenues and costs. “People” takes into account the social responsibilities of the company – how it treats its employees, customers, and community. “Planet” measures the company’s environmental awareness and what it does to protect the planet.

• Corporate Social Responsibility: While there are social and environmental regulations, companies should take initiative in benefitting the environment and communities around them. These actions may have short-term costs, but promote positive long-term results.

• Social Enterprise: Social enterprises are profitable companies that prioritize social responsibilities. For example, they may focus on operating ethically or reinvesting in their communities.

• Carbon Footprint: A carbon footprint is the total greenhouse gas emissions caused by a corporation or individual. It is calculated in carbon dioxide equivalents (CO2e) by measuring the amount of carbon dioxide (CO2) and methane (CH4) that the company emits when producing goods or services. Reducing our carbon footprints is very important because greenhouse gas emissions directly contribute to climate change and damage to the planet.

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Pioneer of the Biotech Industry

As one of the oldest biotechnology companies, Biogen, Inc. was founded in 1978 in Geneva by several prominent figures in the biological sciences. (Biogen, A Biotech Pioneer) In 2003, it merged with IDEC Pharmaceuticals and became Biogen Idec, based out of Cambridge, MA. This merger put it as the third largest biotechnology company in the world. (Pollack) Biogen Idec acquired Syntonix Pharmaceuticals in 2007 and Stromedix in 2012. These acquisitions allowed the company to expand research into hemophilia and organ failure therapies. In 2015, it shortened its name back to Biogen. Today, Biogen is seen as a leader in multiple sclerosis research and the most environmentally sustainable biotech company in the world. (Biogen, A Biotech Pioneer)

 

Growing Revenues

Biogen’s products originated with autoimmune disorders, primarily multiple sclerosis. Its focus has expanded to include the fields of blood-based cancers and neurology. (Biogen, A Biotech Pioneer) Currently, three therapies for relapsing forms of multiple sclerosis are the company’s top selling drugs: Avonex, Tecfidera, and Tysabri. (Vault) These three drugs brought in over $8.5 billion USD in revenues in the 2015 fiscal year. (U.S. Securities and Exchange Commission)

 

Total revenues from 2015 – primarily from product sales – added to about $10.7 billion USD, and total cost to about $5.8 billion USD. Total assets doubled between 2012 and 2015, to nearly $20 billion USD. (U.S. Securities and Exchange Commission)

 

Currently, Biogen has several drugs undergoing clinical trials. These drugs target neurodegenerative diseases, such as Alzheimer’s disease, and immunological disorders, such as lupus and spinal muscular atrophy. These products will further expand the company’s focus and profit potentials. (Biogen, Clinical Trials)

 

Patient Accessibility

As a pharmaceutical company, Biogen translates its social responsibility into terms of patient accessibility. Biogen’s community consists of the people it more closely interacts with: the employees that build up the company and the patients that benefit from the therapies. According to the official website, the company believes that it is “increasingly important that patients gain the most value from these advancements [in health plans, services, and treatments]”. (Biogen, Public Policy)

 

Following this ideology, Biogen’s patient assistance program provides financial aid and free drugs to help remove barriers to access to therapies. The company also reinvests revenue into research to help individuals with serious medical conditions that currently have limited treatment options available. (Biogen, Pricing Principles)

 

Safe and Diverse Workplace

Biogen claims that it is “committed to advancing [its] global culture by harnessing the power of difference to achieve business success”. (Biogen, Employees) In 2015, Biogen publicly supported the “Freedom MA” bill in the Massachusetts Senate to protect transgender people in public services. (Biogen, Public Policy)

 

These goals were recognized by the Corporate Equality Index in both 2015 and 2016, which rates companies on LGBT equality. For both years, Biogen was given a full rating of 100 and recognized as “Best Places to Work for LGBT Equality”. (Corporate Equality Index 2016)

 

Carbon Neutrality

In June of 2015, Biogen announced that it achieved carbon neutrality through two compatible actions. The first was through reducing greenhouse gas emissions by using sustainable technology and recycling. The second was through investing in environmental projects that fund hydroelectric power in several countries to offset the remaining carbon emissions. (Business Wire) In addition, Biogen claims to use 100% renewable electricity in their U.S. facilities and 47% of suppliers who are also committed to carbon reduction. (Biogen, Corporate Citizenship Report)

 

Biogen has followed through with these claims and is praised as one of the most environmentally sustainable companies in the nation. In 2015, the Global 100 Shortlist recognized Biogen as the most sustainable corporation in the world. (Staff) I would take this achievement with some reservation, as my research has only revealed the Global 100 list acknowledging Biogen. However, many well-known news sources, such as Forbes and Newsweek, treat the international organization that determines the Global 100 list with high regard.

 

Well-Rounded and Responsible Company

As Big Pharma is receiving more and more criticism on their practices and drug pricing, Biogen, Inc. may not seem like the most environmentally and socially responsible company for AMDP to invest in. In order to counter these stereotypes, the company claims that it invests in its patients, employees, and sustainable practices. Through my research, I’ve found that Biogen has stayed true to their claims and has been praised for the success of their initiatives. I believe that Biogen, Inc. is a sound investment opportunity – both financially and socially – and is leading the way for pharmaceutical companies to make a change.

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Works Cited

 

"About Biogen." About Biogen. Biogen, 2016. Web. 5 Oct. 2016.

 

"Biogen Achieves Carbon Neutrality." Business Wire. 23 June 2015. Web. 5 Oct. 2016.

 

"Biogen." Vault. 2016. Web. 9 Oct. 2016.

 

"A Biotech Pioneer." About Biogen. Biogen, 2016. Web. 8 Oct. 2016.

 

"Clinical Trials." Research & Pipeline. Biogen, 2016. Web. 8 Oct. 2016.

 

Corporate Equality Index 2016. Rep. Human Rights Campaign Foundation, 2016. Web. 8 Oct. 2016.

 

“Employees.” About Biogen. Biogen, 2016. Web. 9 Oct. 2016.

 

Pollack, Andrew. "Idec to Merge With Biogen in $6.8 Billion Deal." The New York Times. 24 June 2003. Web. 8 Oct. 2016.

 

"Public Policy." About Biogen. Biogen, 2016. Web. 9 Oct. 2016.

 

Staff, CK. "2015 Global 100 Results." Corporate Knights. 21 Jan. 2015. Web. 5 Oct. 2016.

 

United States. Securities and Exchange Commission. Form 10-K: Biogen. File 0-19311. Washington, D.C.: 2016. Web.

 

2015 Corporate Citizenship Report. Rep. Biogen, 28 June 2016. Web. 9 Oct. 2016.