Biogen Idec Reports Second Quarter 2010 Results

Double-Digit Revenue Growth of 11% Year Over Year

WESTON, Mass.--(BUSINESS WIRE)--Jul 20, 2010 - Biogen Idec Inc. (NASDAQ: BIIB), a global biotechnology leader in the discovery, development, manufacturing, and commercialization of innovative therapies, today announced its second quarter 2010 results.

Second Quarter 2010 Highlights:

 

  • Second quarter revenues were $1.2 billion, an increase of 11% over the second quarter of 2009, driven primarily by the continued growth of TYSABRI® (natalizumab) revenues, which increased 17% to $219 million in the quarter, AVONEX® (interferon beta-1a) revenues, which increased 6% to $628 million and RITUXAN® (rituximab) revenues, which increased 11% to $306 million.
  • Global in-market net sales of TYSABRI in the second quarter of 2010 were $298 million, an increase of 17% over the second quarter of 2009, of which $145 million were in the U.S. and $153 million were in rest of world markets.
  • Second quarter 2010 GAAP diluted EPS were $1.12, an increase of 129% over the second quarter of 2009. GAAP net income attributable to Biogen Idec for the quarter was $293 million, an increase of 105% over the second quarter of 2009.
  • Second quarter 2010 non-GAAP diluted EPS were $1.31, an increase of 75% over the second quarter of 2009. Non-GAAP net income attributable to Biogen Idec for the quarter was $343 million, an increase of 57% over the second quarter of 2009. A reconciliation of Biogen Idec's GAAP to non-GAAP results is included on Table 3 within this press release.
  • Year over year comparisons are impacted by the $110 million upfront payment that was due Acorda Therapeutics during the second quarter of 2009, which reduced Biogen Idec's GAAP and non-GAAP EPS in that period by 32 cents.

As of June 30, 2010, Biogen Idec had cash, cash equivalents and marketable securities of approximately $1.5 billion.

Biogen Idec's newly appointed Chief Executive Officer, George A. Scangos, Ph.D. said, “Biogen Idec had a solid second quarter. Our charge now is to build on the quarter, aggressively execute our marketing plans for AVONEX, complete the patient and risk stratification strategy for TYSABRI, move the late-stage pipeline forward rapidly, and rationalize the R&D portfolio. We have the potential to launch five new products in the next three years. I'm excited about the opportunities ahead and eager to address our challenges head-on and work with the management team and Board to drive Biogen Idec to achieve its full potential.”

TYSABRI Patient Growth

Based upon data available to Biogen Idec through the TOUCH® prescribing program and other third-party sources, Biogen Idec estimates that as of the end of June 2010 approximately 52,700 patients were on commercial and clinical TYSABRI therapy worldwide, and that cumulatively approximately 71,400 patients have ever been treated with TYSABRI in the post-marketing setting.

Other Products and Royalties

Revenues from other products in the second quarter of 2010 were $12 million, the same as in the second quarter of 2009.

Table 4 provides individual product revenues.

Royalty revenues were $30 million in the second quarter of 2010 compared to $25 million in the second quarter of 2009.

Corporate partner revenues were $17 million in the second quarter of 2010, versus $2 million in the second quarter of 2009.

Share Repurchase Programs

In April 2010, the Board approved a $1.5 billion share repurchase program. During the second quarter of 2010, Biogen Idec repurchased and retired 20.8 million shares at a total cost of $1 billion. Subsequent to quarter end through July 16, Biogen Idec repurchased an additional 4.7 million shares at a cost of $233 million. In total, since the beginning of the year, Biogen Idec has purchased 36.0 million shares for a total cost of $1.8 billion. Biogen Idec's fully-diluted weighted average shares outstanding were approximately 262 million for the second quarter.

Financial Guidance

Biogen Idec also revised its 2010 financial guidance. This guidance consists of the following components:

 

  • Revenue growth in 2010 is expected to be in the mid single digits, unchanged from previous guidance.
  • Core operating expense growth is expected to be in the low single digits, unchanged from previous guidance.
  • R&D expense is expected to be approximately 24% to 27% of total revenue, unchanged from previous guidance.
  • SG&A expense is expected to be at the upper end of Biogen Idec's previous guidance of 20% to 22% of total revenue.
  • GAAP diluted EPS is expected to be above $3.82, an increase over prior guidance.
  • Non-GAAP diluted EPS is expected to be above $4.70, an increase over prior guidance.

Biogen Idec may incur charges, realize gains or experience other events in 2010 that could cause actual results to vary from this guidance. This guidance excludes any significant business development activities.

Recent Events

 

  • On July 15, 2010, George A. Scangos, Ph.D. began his service as Biogen Idec's Chief Executive Officer and member of its Board of Directors.
  • On July 12, 2010, Biogen Idec and Swedish Orphan Biovitrum AB announced results from a Phase 1/2a open-label, dose-escalation, safety and pharmacokinetic study of the companies' long-lasting, fully-recombinant factor IX Fc fusion protein (rFIXFc) in hemophilia B patients. The data, which were presented at the World Federation of Hemophilia Congress in Buenos Aires, Argentina on July 11, 2010, showed that rFIXFc was well tolerated and demonstrated an approximately three-fold increase in half-life compared to historical data for BeneFIX®.
  • On July 9, 2010, Biogen Idec and Swedish Orphan Biovitrum AB announced that they plan to advance the companies' long-lasting, fully-recombinant factor VIII Fc fusion protein (rFVIIIFc) into a registrational clinical trial in people with hemophilia A.
  • In July 2010, Biogen Idec updated the TYSABRI label in the U.S. to reflect that the risk of progressive multifocal leukoencephalopathy (PML) increases in patients with prior immunosuppressant use and that such increased risk appears to be independent of TYSABRI treatment duration.
  • On June 15, 2010, Biogen Idec announced enrollment of the first patient in a multicenter Phase 2 clinical trial designed to evaluate its investigational oral therapy BG-12 (dimethyl fumarate) in combination with commonly used first-line treatments in patients with relapsing-remitting multiple sclerosis (RRMS).
  • On June 9, 2010, Biogen Idec held its annual meeting of stockholders. Biogen Idec's stockholders elected Nancy L. Leaming, Brian S. Posner, Eric K. Rowinsky and Stephen A. Sherwin as directors to serve a three-year term extending until the 2013 annual meeting of stockholders and until their successors are duly elected and qualified.
  • On May 24, 2010, Biogen Idec and Abbott Laboratories announced enrollment of the first patient in a global Phase 3 study evaluating the efficacy and safety of daclizumab compared to interferon beta-1a (AVONEX) in patients with RRMS.
  • On May 20, 2010, Biogen Idec and Genentech, Inc., a wholly owned member of the Roche Group, announced data from the Phase 3 PRIMA study showed that continuing RITUXAN for two years in patients who responded to initial treatment with RITUXAN plus chemotherapy doubled the likelihood of them living without their disease worsening (progression-free survival) compared to those who stopped treatment. No new safety signals were observed in this study and the safety profile was consistent with previous experience with RITUXAN.
  • On May 19, 2010, the Roche Group and Biogen Idec announced their decision to discontinue the ocrelizumab clinical development program in patients with rheumatoid arthritis (RA). Following a detailed analysis of the efficacy and safety results from the RA program, the companies concluded that the overall benefit to risk profile of ocrelizumab was not favorable in RA taking into account the currently available treatment options.
  • In May 2010, Biogen Idec updated the TYSABRI label in the E.U. consistent with the recommendations of the European Medicines Agency. The label now states that the risk of PML increases after two years of therapy, with limited experience beyond three years. The label also states there is a risk for the occurrence of immune reconstitution inflammatory syndrome in patients with PML following discontinuation or removal of TYSABRI by plasma exchange.

Conference Call and Webcast

Biogen Idec's earnings conference call for the second quarter will be broadcast via the Internet at 8:30 a.m. ET on July 20, 2010, and will be accessible through the Investors section of 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 through August 20, 2010.

About Biogen Idec

Biogen Idec creates new standards of care in therapeutic areas with high unmet medical needs. Founded in 1978, Biogen Idec is a global leader in the discovery, development, manufacturing, and commercialization of innovative therapies. Patients worldwide 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 forward-looking statements may be accompanied by such words as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “will” and other words and terms of similar meaning. You should not place undue reliance on these statements. These statements involve risks and uncertainties that could cause actual results to differ materially from those reflected in such statements, including our dependence on our three principal products, AVONEX, RITUXAN and TYSABRI, the importance of TYSABRI's sales growth, competitive pressures, uncertainty of success in commercializing other products, the occurrence of adverse safety events with our products, 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, charges and other costs relating to our properties, fluctuations in our effective tax rate, our ability to attract and retain qualified personnel, market and economic conditions, the risks of doing business internationally, our ability to protect our intellectual property rights and the cost of doing so, proxy contests and representation of activist shareholders on our board of directors, product liability claims, fluctuations in our operating results, 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 the Risk Factors section of our most recent annual or quarterly report and in other reports we have filed 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, 2010
Consolidated Statements of Income
(in thousands, except per share amounts)
(unaudited)
               
  Three Months Ended   Six Months Ended
  June 30,   June 30,
    2010     2009     2010       2009
REVENUES              
               
Product $ 859,235   $ 790,970   $ 1,683,455     $ 1,524,378
               
Unconsolidated joint business   306,371     275,570     561,300       554,388
               
Royalties   30,098     25,009     56,120       49,093
               
Corporate partner   16,998     1,740     20,687       1,915
               
Total revenues   1,212,702     1,093,289     2,321,562       2,129,774
               
COST AND EXPENSES              
               
Cost of sales, excluding amortization of acquired intangibles   106,985     90,721     204,040       188,918
               
Research and development   331,675     416,453     638,705       695,931
               
Selling, general and administrative   262,322     220,829     510,987       442,660
               
Collaboration profit sharing   62,692     49,138     126,249       91,911
               
Amortization of acquired intangible assets   53,148     93,234     102,037       182,482
               
Acquired in-process research and development   -     -     39,976       -
               
Total cost and expenses   816,822     870,375     1,621,994       1,601,902
               
Income from operations   395,880     222,914     699,568       527,872
               
Other income (expense), net   1,012     14,680     (7,373 )     21,526
               
INCOME BEFORE INCOME TAX EXPENSE   396,892     237,594     692,195       549,398
               
Income tax expense   102,243     92,709     177,553       157,934
               
NET INCOME $ 294,649   $ 144,885   $ 514,642     $ 391,464
               
Net income attributable to noncontrolling interest, net of tax   1,211     2,040     3,762       4,632
               
NET INCOME ATTRIBUTABLE TO BIOGEN IDEC INC. $ 293,438   $ 142,845   $ 510,880     $ 386,832
               
               
BASIC EARNINGS PER SHARE $ 1.13   $ 0.49   $ 1.92     $ 1.34
               
DILUTED EARNINGS PER SHARE $ 1.12   $ 0.49   $ 1.91     $ 1.33
               
               
WEIGHTED-AVERAGE SHARES USED IN CALCULATING:              
BASIC EARNINGS PER SHARE   259,938     288,615     265,018       288,162
               
DILUTED EARNINGS PER SHARE   261,658     290,359     267,272       290,014
TABLE 2
Biogen Idec Inc.
June 30, 2010
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
         
         
    June 30,   December 31,
    2010   2009
ASSETS        
         
Cash, cash equivalents and marketable securities   $ 969,672   $ 1,263,724
         
Accounts receivable, net     548,893     551,208
         
Inventory     267,878     293,950
         
Other current assets     468,788     371,713
         
Total current assets     2,255,231     2,480,595
        &

Posted: July 2010


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