Biogen Idec Reports Second Quarter 2009 Results

Double Digit Revenue Growth; TYSABRI® Reaches $1 Billion Sales Run Rate

CAMBRIDGE, Mass.--(BUSINESS WIRE)--Jul 16, 2009 - Biogen Idec Inc. (NASDAQ: BIIB), a global biotechnology leader in the discovery, development, manufacturing, and commercialization of innovative therapies, today reported its second quarter 2009 results.

Second Quarter 2009 Highlights:

 

  • Total revenues were $1.1 billion, an increase of 10% from $1.0 billion in the second quarter of 2008. The increase was driven primarily by the continued growth of TYSABRI (natalizumab) revenues, which were up 27% over the prior year to $188 million for the quarter, and AVONEX® (interferon beta-1a) sales, which increased 12% over the prior year to $591 million for the quarter.
  • TYSABRI global in-market net sales reached a $1 billion run rate. Global in-market net sales of TYSABRI in the second quarter of 2009 were $254 million, of which $125 million was in the U.S. and $129 million was in rest of world markets.
  • The financial results for the second quarter included a payment of $110 million related to our recently announced collaboration and license agreement with Acorda Therapeutics, Inc.
  • On a reported basis, calculated in accordance with accounting principles generally accepted in the U.S. (GAAP), second quarter 2009 diluted earnings per share (EPS) was $0.49. GAAP net income attributable to Biogen Idec for the second quarter of 2009 was $143 million.
  • Non-GAAP diluted EPS for the second quarter of 2009 was $0.75. Non-GAAP net income attributable to Biogen Idec for the second quarter was $219 million. These totals include the impact of the collaboration payment to Acorda. A reconciliation of our GAAP to non-GAAP results is included on Table 3 within this press release.

“During the second quarter we drove a clear acceleration of TYSABRI patient growth that puts the drug on a blockbuster run-rate,” said Biogen Idec CEO James C. Mullen, “Going forward, we continue to focus on products, pipeline and performance as the drivers of long-term shareholder value."

Revenue Performance

Revenues from AVONEX, one of Biogen Idec's therapies for patients with relapsing forms of multiple sclerosis (MS), increased 12% in the second quarter to $591 million as compared to the second quarter of 2008. U.S. sales of AVONEX increased 20% to $366 million and international sales increased 2% to $225 million year over year.

Revenues for the second quarter of 2009 included $276 million from Biogen Idec's joint business arrangement related to RITUXAN®, a treatment for certain B-cell non-Hodgkin's lymphomas (NHL) and rheumatoid arthritis (RA) that Biogen Idec co-promotes in the U.S. with Genentech. All U.S. sales of RITUXAN are recognized by Genentech, and Biogen Idec records its share of the pretax co-promotion profits. U.S. net sales of RITUXAN were $696 million in the second quarter 2009, as compared to $651 million in the second quarter of 2008, an increase of 7%.

During the second quarter of 2009, Biogen Idec recognized revenue of $188 million related to TYSABRI. This amount is comprised of:

 

  • $57 million related to product sold through Elan in the U.S. (based on $125 million of in-market sales) and milestone amortization; and
  • $130 million related to product sold in rest of world markets and milestone amortization.

As of the end of June 2009, approximately 43,300 patients were on commercial and clinical TYSABRI therapy worldwide. According to data available as of the end of June 2009:

 

  • In the U.S., approximately 22,000 patients were on TYSABRI therapy commercially;
  • In the rest of world, approximately 20,700 patients were on TYSABRI therapy commercially; and,
  • In global clinical trials, approximately 600 patients were on TYSABRI therapy.

Cumulatively, in the post-marketing setting:

 

  • Approximately 56,500 patients have been treated with TYSABRI; and
  • Of those patients, approximately 30,600 have received at least one year of TYSABRI therapy, approximately 18,400 patients have received at least 18 months of TYSABRI therapy, and approximately 10,000 patients have received at least 24 months of TYSABRI therapy.

Revenues from other products in the second quarter of 2009 were $12 million, as compared to $10 million in the second quarter of 2008.

Table 4 provides individual product revenues.

Royalties were $25 million in the second quarter of 2009 compared to $28 million in the second quarter of 2008.

Financial Guidance

As a result of its strong second quarter performance, Biogen Idec updated its 2009 full year guidance as follows:

 

  • Revenue growth is expected to be in the high single digits on a year over year basis.
  • Operating expenses, excluding collaboration profit share, are expected to be between $2.1 and $2.2 billion. This now includes the payment of $110 million to Acorda.
  • R&D is expected to be approximately 28% to 30% of total revenue.
  • SG&A is expected to be between 19% and 20% of total revenue.
  • Our Non-GAAP tax rate is expected to be between 29% and 31%. Our GAAP tax rate is expected to be between 30% and 32%.
  • Non-GAAP diluted EPS is expected to be above $3.85. GAAP diluted EPS is expected to be above $2.75. This includes the impact of the Acorda payment of approximately $0.38 per share.
  • The difference between the GAAP and non-GAAP EPS is the result of the full year effects of the reconciling items detailed in Table 3 within our press release.
  • Capital Expenditures are expected to be in the range of $180-$200 million.

This guidance excludes any significant business development activities.

Recent Events

 

  • On July 8, 2009, Biogen Idec announced the U.S. Food and Drug Administration (FDA) had granted PEGylated interferon beta-1a (BIIB017) Fast Track designation for relapsing multiple sclerosis (RMS). The FDA's Fast Track program is designed to expedite the review of new drugs that are intended to treat serious or life-threatening conditions and demonstrate the potential to address unmet medical needs.
  • On July 1, 2009, Biogen Idec and Acorda Therapeutics, Inc. announced an exclusive collaboration and license agreement to develop and commercialize Fampridine-SR, an MS therapy, in markets outside the United States. Fampridine-SR is a novel, oral sustained-release compound being developed to improve walking ability in people with MS.

    Acorda previously announced that the European Medicines Agency notified Acorda that Fampridine-SR is eligible to be submitted for a Marketing Authorization Application via the agency's centralized procedure as a new active substance.
  • On June 22, 2009, Biogen Idec announced enrollment of the first patient in a global Phase III, randomized, double-blind, placebo-controlled trial designed to evaluate the efficacy and safety of PEGylated interferon beta-1a (BIIB017) in patients with RMS. The trial, called ADVANCE, will determine the efficacy of PEGylated interferon beta-1a in reducing relapse rates in patients with RMS.
  • On May 19, 2009, Biogen Idec and Genentech, Inc. announced that the companies submitted two supplemental Biologics License Applications to the FDA for RITUXAN plus standard chemotherapy for people with previously untreated or treated chronic lymphocytic leukemia.
  • On April 30, 2009, Biogen Idec announced data results from the CHAMPIONS (Controlled High-Risk AVONEX Multiple Sclerosis Prevention Study In Ongoing Neurologic Surveillance) study, an open label follow-up to CHAMPS (Controlled High Risk Subjects AVONEX Multiple Sclerosis Prevention Study). Based on the CHAMPS study, AVONEX was granted approval for use in patients who experienced their first clinical MS episode with MRI findings. The CHAMPIONS ten-year follow up showed that patients treated immediately after their first episode had significantly less chance of experiencing a second attack versus those patients with delayed treatment. These results at ten years also indicate that 80 percent of patients taking AVONEX were below an expanded disability status scale score of three. These data were presented as a poster at the 61st Annual American Academy of Neurology (AAN) meeting.
  • On April 28, 2009, Biogen Idec and Elan Corporation, plc presented results of a study demonstrating that TYSABRI promoted regeneration and stabilization of damage done to the myelin sheath as measured by advanced MRI technology at the annual AAN meeting. Damage to the myelin sheath causes the symptoms of MS. Additional posters were also presented during the meeting highlighting the ability of TYSABRI, in some patients, to improve physical function and patient reported outcomes on cognition, quality of life, and fatigue. TYSABRI is the first approved MS therapy with reported data suggesting that some of the signs of disease progression can be stopped. The strong efficacy profile demonstrated in clinical trials is enhanced further from these data and may help redefine success in MS.

Conference Call and Webcast

The company's earnings conference call for the second quarter will be broadcast via the internet at 8:30 a.m. ET on July 16, 2009, and will be accessible through the investor relations section of Biogen Idec's homepage, www.biogenidec.com. Supplemental information in the form of a slide presentation will also be accessible at the same location on the internet at the time of the earnings conference call and will be available on our web site subsequently through August 21, 2009.

About Biogen Idec

Biogen Idec creates new standards of care in therapeutic areas with high unmet medical needs. Biogen Idec is a global leader in the discovery, development, manufacturing, and commercialization of innovative therapies. Patients in more than 90 countries benefit from Biogen Idec's significant products that address diseases such as lymphoma, multiple sclerosis, and rheumatoid arthritis. For product labeling, press releases and additional information about the company, please visit www.biogenidec.com.

Safe Harbor

In addition to historical information, this press release contains forward-looking statements that are based on our current beliefs and expectations. These statements involve risks and uncertainties that could cause actual results to differ materially from those which we expect. Important factors which could cause actual results to differ from our expectations and which could negatively impact our financial condition and results of operations include our dependence on our three principal products, AVONEX, RITUXAN and TYSABRI, the importance of market acceptance and successful sales growth of TYSABRI, uncertainty of success in commercializing other products, the occurrence of adverse safety events with our products, competitive pressures, changes in the availability of reimbursement for our products, our dependence on collaborations over which we may not always have full control, failure to execute our growth initiatives, failure to comply with government regulation and possible adverse impact of changes in such regulation, problems with our manufacturing processes and our reliance on third parties, the impact of the global credit crisis, fluctuations in our effective tax rate, our significant investment in a new manufacturing facility in Denmark, our ability to attract and retain qualified personnel, the risks of doing business internationally, the election of two directors nominated by an activist shareholder, fluctuations in our operating results, our ability to protect our intellectual property rights and the cost of doing so, product liability claims, the market, interest and credit risks associated with our portfolio of marketable securities, our level of indebtedness, environmental risks, aspects of our corporate governance and collaborations and the other risks and uncertainties that are described in Item 1.A. Risk Factors in our annual report on Form 10-K and in other reports we file with the SEC. Forward-looking statements, like all statements in this press release, speak only as of the date of this press release (unless another date is indicated). Unless required by law, we do not undertake any obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise.

TABLE 1
Biogen Idec Inc.
June 30, 2009
Consolidated Statements of Income
(in thousands, except per share amounts)
(unaudited)
                               
          Three Months Ended       Six Months Ended
          June 30,       June 30,
          2009     2008       2009     2008
REVENUES                            
                               
Product       $ 790,970     $ 684,486         $ 1,524,378     $ 1,349,556  
                               
Unconsolidated joint business         275,570       278,822           554,388       526,045  
                               
Royalties         25,009       28,115           49,093       52,096  
                               
Corporate partner         1,740       2,021           1,915       7,933  
                               
Total revenues         1,093,289       993,444           2,129,774       1,935,630  
                               
COST AND EXPENSES                            
                               
Cost of sales         90,721       92,401           188,918       193,335  
                               
Research and development         416,453       252,259           695,931       510,491  
                               
Selling, general and administrative         220,829       245,689           442,660       461,518  
                               
Amortization of acquired intangible assets         93,234       72,869           182,482       147,650  
                               
Collaboration profit (loss) sharing         49,138       33,429           91,911       54,835  
                               
In-process research and development         -       -           -       25,000  
                               
Total cost and expenses         870,375       696,647           1,601,902       1,392,829  
                               
Income from operations         222,914       296,797           527,872       542,801  
                               
Other income (expense), net         14,680       (4,018 )         21,526       (938 )
                               
INCOME BEFORE INCOME TAXES         237,594       292,779           549,398       541,863  
                               
Income taxes         92,709       84,706           157,934       167,983  
                               
NET INCOME       $ 144,885     $ 208,073         $ 391,464     $ 373,880  
                               
Less: Net income attributable to noncontrolling interests         2,040       1,445           4,632       4,155  
                               
NET INCOME ATTRIBUTABLE TO BIOGEN IDEC INC.       $ 142,845     $ 206,628         $ 386,832     $ 369,725  
                               
                               
BASIC EARNINGS PER SHARE       $ 0.49     $ 0.71         $ 1.34     $ 1.26  
                               
DILUTED EARNINGS PER SHARE       $ 0.49     $ 0.70         $

Posted: July 2009


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