Reported Full Year Earnings Per Share of $1.57; Operating Earnings
Per Share of $1.59
Highlights:
* 2002 Revenues increase ten percent year over year.
- AVONEX(R) (Interferon beta-1a) sales exceed $1 billion.
- Resolution of royalty payment arbitration with Schering-Plough in the
fourth quarter drives a 59 percent year over year increase in 2002
royalties.
* Reported fourth quarter 2002 net income increases 38 percent year over
year.
- Reported fourth quarter 2002 earnings per share of $0.53; operating
earnings per share of $0.43.
- Biogen accelerated its preparation for a first quarter 2003 launch of
AMEVIVE(R) (alefacept) in the U.S.
- ANTEGREN(R) (natalizumab) Phase 3 trials fully accrued in Multiple
Sclerosis (MS) and Crohn's disease.
* 2003 guidance for accelerating revenues to mid-teen growth.
CAMBRIDGE, Mass., Jan. 28 /PRNewswire-FirstCall/ --
Biogen, Inc. (Nasdaq: BGEN) today reported that revenues for the year ended
December 31, 2002 increased ten percent, to $1,148 million from $1,042 million
in 2001. Net income for 2002 was $239 million, or $1.57 per share, which
included $0.02 per share of net non-operating or unusual charges. Excluding
these charges, 2002 operating earnings were $242 million, or $1.59 operating
earnings per share. See attached tables for a reconciliation of reported
(GAAP) to operating earnings (Non-GAAP).
(Logo: http://www.newscom.com/cgi-bin/prnh/19990824/BIOLOGO )
James C. Mullen, Biogen's Chairman and CEO, said, "In 2002, we laid the
foundation for accelerated revenue and earnings growth for the future. AVONEX
became the first product in MS to achieve $1 billion in worldwide sales and
maintained its market share above 50 percent in a highly competitive US
market. AMEVIVE FDA approval is impending and we are prepared to launch within
days of approval. ANTEGREN Phase 3 trials in both MS and Crohn's are well
underway. Our patent licensing base for generating royalties was fortified.
And our pioneering research engine delivered with more new molecules into our
development pipeline. "
Results for the Fourth Quarter Ended December 31, 2002
Revenues for the fourth quarter ended December 31, 2002 grew eight percent
to $302 million compared to $281 million for the same quarter last year.
Contributing to this increase in revenues was a 117 percent increase in
royalties, primarily driven by the resumption of royalty payments from
Schering-Plough on sales of U.S. alpha interferon products. Net income
increased to $81 million, or $0.53 per share, and included a net non-operating
gain of $22 million, or $0.11 per share. This net gain included the
following:
-- A $37 million net gain, or $0.18 per share (net of tax), classified as
"Other Income and Expense" as part of an arbitration settlement with
Schering-Plough for past due royalties in the fourth quarter.
-- Also in the fourth quarter, Biogen recorded a $15 million charge, or
$0.07 per share, (net of tax) classified as "Other Income and Expense"
to reflect the establishment of the Biogen Foundation, a non-profit
foundation to support philanthropic activities in the community.
Excluding these items, fourth quarter operating earnings were $65 million,
or $0.43 per share compared to $0.48 per share for the same period last year.
In the fourth quarter of 2001, the Company reported net income of $59
million, or $0.39 per share, which included $20 million, or $0.09 per share
(net of tax) of net non-operating charges. Excluding these charges, fourth
quarter 2001 operating earnings were $73 million, or $0.48 operating earnings
per share.
The fourth quarter included a significant investment to prepare for the
commercialization of AMEVIVE. Mr. Mullen noted, "Since early January, we have
been ready to launch AMEVIVE pending FDA approval. In our key franchises of
neurology and dermatology, we've had a number of great accomplishments during
the last few months that are representative of Biogen's operational excellence
throughout the year."
Neurology Franchise
-- The U.S. Food and Drug Administration (FDA) approved a label change for
AVONEX, lowering the rate of occurrence of neutralizing antibodies to
five percent from the original label rate of 24 percent. (November)
-- Biogen and Elan Corporation plc are collaborating on a number of Phase
3 trials for ANTEGREN in the treatment of MS and Crohn's disease.
Patient enrollment for all Phase 3 trials, with a total of
approximately 3,000 patients, was completed by year-end.
-- ANTEGREN Phase 2 trials in Multiple Sclerosis and Crohn's disease were
published in the New England Journal of Medicine on January 2, 2003.
Dermatology Franchise
-- After review of the information Biogen submitted to reply to the
Complete Response Letter, FDA determined that the AMEVIVE filing was a
class 2 resubmission. Biogen is working closely with the FDA to move
forward in the approval process. (September)
-- Biogen and ICOS Corporation are collaborating on the development of
orally active, small molecule LFA-1 antagonists for the treatment of
psoriasis and other autoimmune diseases. A Phase 2 trial in moderate-
severe psoriasis to assess the safety, tolerability and
pharmacokinetics of IC747, the lead molecule of the LFA-1 antagonist
program, was initiated in the third quarter.
Other Notable Accomplishments
-- Biogen has pioneered new research for the treatment of inflammatory
bowel diseases (IBD). This research confirms the key role that the
innate arm of the immune system plays in the development of these
diseases. Biogen researchers are targeting the expression of a protein
known as alpha1 integrin. These discoveries were reported in the
December 2002 issues of the journal Immunity and in The Journal of
Clinical Investigation. There are more than one million cases of IBD
in the United States alone, about equally divided between ulcerative
colitis and Crohn's disease.
2003 FINANCIAL GUIDANCE
Biogen provided full year 2003 guidance of expected mid-teen total revenue
growth. The Company indicated that this growth was anticipated to be softer
in the first half, due to the planned launch of AMEVIVE, and then stronger in
the second half of 2003. As a result, the Company expected a range of
operating earnings per share for 2003 of $1.63 to $1.78. Specifics are
provided in the attached table.
For the first quarter of 2003, diluted earnings per share are expected in
the range of $0.31 - $0.38.
Mr. Mullen reiterated, "Our goal is to grow revenues over the next three
years to $2 billion. We expect Biogen's net income will increase from 21
percent of revenue in 2002 to a range of 22 to 25 percent by 2005 as a result
of improved operating margins. When you combine these two factors, they drive
Biogen to expect an earnings growth rate averaging about 20 percent over the
next few years."
CONFERENCE CALL AND WEBCAST
The Company's earnings conference call for the fourth quarter will be
broadcast via the Internet at 8:30 a.m. EST on January 28, 2003, and will be
accessible through the investor relations section of Biogen's homepage,
http://www.biogen.com.
INVESTOR CALENDAR
-- First quarter results Thursday, April 17, 2003, 8:30 a.m. EST
FORWARD LOOKING STATEMENTS / SAFE HARBOR
This press release contains forward-looking statements regarding expected
future financial results and the anticipated regulatory approval and
commercial launch of AMEVIVE.
These statements are based on the Company's current beliefs and
expectations. A number of risks and uncertainties could cause actual results
to differ materially. For example, financial results, including future
revenues, revenue growth and earnings per share, may be affected by the impact
of competitive products on AVONEX sales, any slowing of growth of the multiple
sclerosis market, any change in market acceptance of AVONEX in key markets
worldwide, approval and success in the launch of AMEVIVE, the impact of
litigation, any unanticipated increase in expenses including in the areas of
research and development and sales and marketing, and in-licensing and product
opportunities. Approval and commercial launch of AMEVIVE is subject to
completion of the regulatory approval process. The potential for AMEVIVE, as
with other products in the Company's pipeline, is also subject to the risks
inherent in drug development, including the risk of unexpected new data or
information, unexpected technical or manufacturing issues, intellectual
property disputes and the ability to enter into agreements with third parties
on acceptable terms. With respect to patents related to AMEVIVE, the Company
believes it has broad patent protection covering AMEVIVE, including
composition of matter, method and use claims. The Company is aware of certain
patents relating to immunoadheson technology, has had discussions with
Genentech regarding licensing, and is evaluating the patents to determine next
steps.
For more detailed information on the risks and uncertainties associated
with these forward looking statements and the Company's other activities see
the Outlook section in MD&A of the Company's Annual Report on Form 10-K and
quarterly reports on Form 10-Q filed with the Securities and Exchange
Commission. The Company does not undertake any obligation to publicly update
any forward-looking statements.
ABOUT BIOGEN
Biogen is the world's oldest independent biotechnology company and a
leader in biologics research, development and manufacturing. A pioneer in
leading edge research in immunology, neurobiology and oncology, Biogen brings
novel therapies to improve patients' lives around the world through its global
marketing capabilities. For press releases and additional information about
the company, please visit http://www.biogen.com.
TABLE#1
Financial Results For The Fourth Quarter and Full Year of 2002
Condensed Consolidated Statements Of Income
(in thousands, except per share amounts)
Three Months Ended Full Year Ended
December 31, December 31,
2002 2001 2002 2001
REVENUES
Product $256,267 $259,302 $1,034,357 $970,546
Royalties 46,163 21,281 114,007 71,766
Total Revenues 302,430 280,583 1,148,364 1,042,312
COST AND EXPENSES
Cost of revenues 42,582 35,704 160,159 136,510
Research and development 91,201 83,773 367,567 314,556
Selling, general and
administrative 86,398 68,142 324,001 231,048
Total Cost and Expenses 220,181 187,619 851,727 682,114
Income from Operations 82,249 92,964 296,637 360,198
Other income (expense), net 30,285 (8,844) 34,958 29,299
INCOME BEFORE INCOME TAXES 112,534 84,120 331,595 389,497
Income Taxes 31,510 25,235 92,847 116,814
NET INCOME $81,024 $58,885 $238,748 $272,683
BASIC EARNINGS PER SHARE $0.54 $0.40 $1.60 $1.84
DILUTED EARNINGS PER SHARE $0.53 $0.39 $1.57 $1.78
SHARES USED IN CALCULATING:
BASIC EARNINGS PER SHARE 149,937 148,218 149,337 148,355
DILUTED EARNINGS PER SHARE 152,089 152,198 151,930 152,916
TABLE#2
Condensed Consolidated Balance Sheets
(in thousands)
Dec. 31, 2002 Dec. 31, 2001
ASSETS
Current Assets
Cash and marketable securities $867,109 $798,107
Accounts receivable, net 171,067 177,582
Other current assets 156,541 122,038
Total current assets 1,194,717 1,097,727
Property and equipment, net 738,059 555,998
Other assets 52,905 67,321
$1,985,681 $1,721,046
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $265,426 $294,942
Long term debt & liabilities 85,234 77,272
Shareholders' equity 1,635,021 1,348,832
$1,985,681 $1,721,046
TABLE#3
Financial Results for the Fourth Quarter and Full Year of 2002
Operating Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
The non-GAAP financial measure presented below is utilized by Biogen
management to gain an understanding of the comparative operating
performance of the Company. This non-GAAP financial measure may be useful
in excluding those non-operational or unusual activities or transactions
that are not necessarily relevant to obtaining an understanding of the
trends of the Company or the prospects of future performance.
Three Months Ended December 31,
2002 (a)
Operating
Reported Adjustments Results
REVENUES
Product $256,267 $256,267
Royalties 46,163 46,163
Total Revenues 302,430 302,430
COST AND EXPENSES
Cost of revenues 42,582 42,582
Research and development 91,201 91,201
Selling, general and administrative 86,398 86,398
Total Cost and Expenses 220,181 220,181
Income from Operations 82,249 82,249
Other income (expense), net 30,285 (22,246) 8,039
INCOME BEFORE INCOME TAXES 112,534 (22,246) 90,288
Income Taxes 31,510 6,229 25,281
NET INCOME $81,024 $(16,017) $65,007
BASIC EARNINGS PER SHARE $0.54 $(0.11) $0.43
DILUTED EARNINGS PER SHARE $0.53 $(0.11) $0.43
SHARES USED IN CALCULATING:
BASIC EARNINGS PER SHARE 149,937 149,937 149,937
DILUTED EARNINGS PER SHARE 152,089 152,089 152,089
Three Months Ended December 31,
2001 (b)
Operating
Reported Adjustments Results
REVENUES
Product $259,302 $259,302
Royalties 21,281 21,281
Total Revenues 280,583 280,583
COST AND EXPENSES
Cost of revenues 35,704 35,704
Research and development 83,773 83,773
Selling, general and administrative 68,142 68,142
Total Cost and Expenses 187,619 187,619
Income from Operations 92,964 92,964
Other income (expense), net (8,844) 20,100 11,256
INCOME BEFORE INCOME TAXES 84,120 20,100 104,220
Income Taxes 25,235 6,030 31,265
NET INCOME $58,885 $14,070 $72,955
BASIC EARNINGS PER SHARE $0.40 $0.09 $0.49
DILUTED EARNINGS PER SHARE $0.39 $0.09 $0.48
SHARES USED IN CALCULATING:
BASIC EARNINGS PER SHARE 148,218 148,218 148,218
DILUTED EARNINGS PER SHARE 152,198 152,198 152,198
(a) Non-operating adjustments for the fourth quarter of 2002 includes a
net gain of $ 37.2 million from settlement of arbitration with
Schering-Plough and a $15 million charitable contribution expense for
the establishment of the Biogen Foundation.
(b) Non-operating adjustments for the fourth quarter of 2001 includes net
gains of $ 27.8 million from the sale of marketable securities and
$27.9 million of expense for the write-down of certain marketable
securities and a $20 million charge for the settlement of litigation
with Berlex.
TABLE#4
Financial Results for the Fourth Quarter and Full Year of 2002
Operating Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
The non-GAAP financial measure presented below is utilized by Biogen
management to gain an understanding of the comparative operating
performance of the Company. This non-GAAP financial measure may be useful
in excluding those non-operational or unusual activities or transactions
that are not necessarily relevant to obtaining an understanding of the
trends of the Company or the prospects of future performance.
Full Year Ended December 31,
2002 (c)
Operating
Reported Adjustments Results
REVENUES
Product $1,034,357 $1,034,357
Royalties 114,007 114,007
Total Revenues 1,148,364 1,148,364
COST AND EXPENSES
Cost of revenues 160,159 160,159
Research and development 367,567 367,567
Selling, general and administrative 324,001 (5,800) 318,201
Total Cost and Expenses 851,727 (5,800) 845,927
Income from Operations 296,637 5,800 302,437
Other income (expense), net 34,958 (1,653) 33,305
INCOME BEFORE INCOME TAXES 331,595 4,147 335,742
Income Taxes 92,847 1,161 94,008
NET INCOME $238,748 $2,986 $241,734
BASIC EARNINGS PER SHARE $1.60 $0.02 $1.62
DILUTED EARNINGS PER SHARE $1.57 $0.02 $1.59
SHARES USED IN CALCULATING:
BASIC EARNINGS PER SHARE 149,337 149,337 149,337
DILUTED EARNINGS PER SHARE 151,930 151,930 151,930
Full Year Ended December 31,
2001 (d)
Operating
Reported Adjustments Results
REVENUES
Product $970,546 $970,546
Royalties 71,766 71,766
Total Revenues 1,042,312 1,042,312
COST AND EXPENSES
Cost of revenues 136,510 136,510
Research and development 314,556 (8,000) 306,556
Selling, general and administrative 231,048 231,048
Total Cost and Expenses 682,114 (8,000) 674,114
Income from Operations 360,198 8,000 368,198
Other income (expense), net 29,299 17,600 46,899
INCOME BEFORE INCOME TAXES 389,497 25,600 415,097
Income Taxes 116,814 7,680 124,494
NET INCOME $272,683 $17,920 $290,603
BASIC EARNINGS PER SHARE $1.84 $0.12 $1.96
DILUTED EARNINGS PER SHARE $1.78 $0.12 $1.90
SHARES USED IN CALCULATING:
BASIC EARNINGS PER SHARE 148,355 148,355 148,355
DILUTED EARNINGS PER SHARE 152,916 152,916 152,916
(c) Non-operating or unusual adjustments for the year ended 2002 includes
a net gain of $ 37.2 million from the settlement of arbitration with
Schering-Plough and a $15 million charitable contribution expense for
the establishment of the Biogen Foundation, a $10.1 million charge
for the write-down of marketable securities, a $10.5 million reserve
for loan and $5.8 million for severance and post retirement benefits
for the former Chairman.
(d) Non-operating or unusual adjustments for the year ended 2001 include
net gains of $ 30.3 million from the sale of marketable securities
and $27.9 million of expense for the write-down of certain marketable
securities and a $20 million charge for the settlement of litigation
with Berlex and an $8 million upfront fee on the Icos collaboration.
2003 Guidance for Biogen
January 28, 2003
2003 Guidance
REVENUES
Product
AVONEX Low single-digit growth
US 0 - 2% growth
Rest of World 8 - 12% growth
AMEVIVE Over $85 MM
Royalities $ 145 -160 MM
Total Revenues Mid-teen growth
COSTS, EXPENSES, & TAX RATE as % of Total Revenues
Cost of Sales 14 - 15 %
Research and development 30 - 32 %
Selling, general and administrative 28 - 30 %
Other income and expense $ 35 - 45 MM
Tax rate Approximately 28 %
DILUTED EARNINGS PER SHARE $ 1.63 - 1.78
DILUTED SHARES OUTSTANDING 152 - 154 MM
CAPITAL EXPENDITURES $ 150 -175 MM
This financial guidance, which is provided as part of a press release
dated January 28, 2003, is subject to all of the qualifications and
limitations described therein. Actual results may differ from these
forward-looking statements due to the numerous factors described in the
press release.
Media Contact:
Tim Hunt
Director, Public Affairs
Biogen, Inc.
Tel: (617) 914-6524
Investment Community Contact:
Elizabeth Woo
Senior Director, Investor Relations
Biogen, Inc.
Tel: (617) 679-2812
SOURCE Biogen, Inc.
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http://www.biogen.com
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PRN Photo Desk, 888-776-6555 or 212-782-2840
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CONTACT:
Tim Hunt, Director, Public Affairs,
+1-617-914-6524, or Elizabeth Woo, Senior Director, Investor
Relations, both of Biogen, Inc.
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