CAMBRIDGE, Mass., April 27 /PRNewswire-FirstCall/ -- Biogen Idec Inc.
(Nasdaq: BIIB), a global biotechnology leader with leading products and
capabilities in oncology and immunology, today reported its first quarter 2005
results.
(Logo: http://www.newscom.com/cgi-bin/prnh/20031112/LAW121LOGO )
First Quarter 2005 Highlights
-- Total revenues for the first quarter were $588 million vs. prior year
$542 million (an increase of 9%), driven primarily by AVONEX(R)
(Interferon beta-1a) worldwide sales up 5% to $374 million and
RITUXAN(R) (rituximab) co-promotion profits up 20% to $160 million.
-- On a reported basis, calculated in accordance with U.S. generally
accepted accounting principles (GAAP), first quarter earnings per share
(EPS) were $0.12; excluding merger-related accounting impacts and
certain other charges (described below), adjusted non-GAAP EPS were
$0.30.
-- Q1 earnings results were impacted by charges of approximately $36
million, or EPS of $0.07, primarily related to the suspension of
marketing and commercial distribution of TYSABRI(R) (natalizumab) on
February 28, 2005, which were partially offset by lower operating
expenses as marketing and clinical activities for TYSABRI were put on
hold. An additional $34 million of charges, or EPS of $0.07, were taken
during the quarter for other impairments and write-downs.
-- In the second half of this year, Biogen Idec and Genentech, Inc. expect
to submit a supplemental filing for approval of RITUXAN in the U.S. for
patients with active rheumatoid arthritis (RA) who are inadequate
responders to anti-TNF therapies. The filing will be largely based on
a Phase III clinical study of RITUXAN that met its primary endpoint of
a greater proportion of RITUXAN-treated patients achieving an American
College of Rheumatology (ACR) 20 response at week 24, compared to
placebo.
James Mullen, Biogen Idec's Chief Executive Officer, commented, "While we
are disappointed with the events surrounding our voluntary suspension of
TYSABRI, we are working diligently through a comprehensive evaluation to
determine the appropriate next steps. Even as we focus on this critical,
ongoing analysis, our core business remains healthy and growing as evidenced
by the underlying strength of our top line revenues."
Financial Performance
Financial performance in the quarter was affected by the impact of four
events, totaling approximately $70 million before tax, or EPS of $0.14 (which
are reflected both in our adjusted non-GAAP and GAAP results):
1. Total charges related to the voluntary suspension of TYSABRI in the
first quarter were approximately $36 million before tax, or EPS of
$0.07. These charges were comprised of:
-- $23 million for TYSABRI that was manufactured in the first quarter,
-- $6 million for the determination that the Company would no longer
proceed with the fill-finish component of its large-scale
manufacturing facility in Denmark, and
-- $7 million of accelerated amortization of issuance costs and write-
downs of marketable securities related to the expected repurchase of
senior notes due in 2032 on April 29, 2005, due to the TYSABRI-
related significant reduction in Biogen Idec stock price. The
repurchase of all of the notes would result in the reduction of
current liabilities on the balance sheet and a cash outflow of
approximately $809 million.
2. In March 2005, the FDA approved a new component for the pre-filled
syringe of AVONEX. As a result of the FDA approval, charges of
approximately $11 million in write-downs and production cancellation
fees were taken related to earlier forms of finished product that will
no longer be needed given the recent approval.
3. Write-downs of approximately $12 million for loan impairments and
investments in certain publicly traded securities that were determined
to be impaired on an other-than-temporary basis due to events in the
first quarter.
4. Royalty revenues from sales of RITUXAN outside the U.S. were offset by
an $11 million royalty credit claimed by collaboration partners for
prior periods. This offset is under discussion at this time.
On an adjusted non-GAAP basis, Biogen Idec reported net income of $106
million in the first quarter of 2005 (Q1 2004 adjusted non-GAAP: $143
million). Adjusted non-GAAP EPS was $0.30 for the first quarter of 2005 (Q1
2004 adjusted non-GAAP: $0.40).
On a reported basis, calculated in accordance with GAAP, Biogen Idec
reported net income of $43 million (or EPS of $0.12) in the first quarter of
2005 (Q1 2004: net loss of $41 million, or loss per share of $0.12). The
difference between adjusted non-GAAP net income and EPS and GAAP net income
and EPS in the first quarter were primarily due to pre-tax charges of $86
million of non-cash merger-related accounting impacts, primarily amortization
of intangibles, inventory step-up, and other merger-related charges. These
adjustments are itemized on the attached reconciliation tables.
Revenue Performance
Revenues for the first quarter of 2005 were up 20% to $160 million (Q1
2004: $134 million) from Biogen Idec's joint business arrangement with
Genentech related to RITUXAN, a treatment for certain B-cell non-Hodgkin's
lymphomas 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 on a quarterly basis. U.S. net sales
of RITUXAN were $441 million in the first quarter of 2005 (Q1 2004: $362
million), as reported by Genentech.
Revenues from AVONEX, Biogen Idec's therapy for patients with relapsing
forms of multiple sclerosis (MS), increased 5% in the first quarter to $374
million (Q1 2004: $355 million). In the first quarter of 2005, U.S. sales
were $233 million and international sales were $141 million.
Revenues from TYSABRI, a therapy for patients with relapsing forms of MS
that Biogen Idec co-developed with Elan Corporation, plc, were $6 million in
the first quarter, net of estimated returns associated with the voluntary
suspension of the marketing of this product.
Revenues from other products were $18 million in the first quarter (Q1
2004: $18 million). Specifics are provided in Table 4.
Royalties were $27 million in the first quarter of 2005 (Q1 2004: $25
million).
Financial Guidance
The Company anticipates that the charges in the first quarter as well as
other expected charges for the balance of the year to adversely impact EPS by
$0.25.
The Company anticipates capital expenditures in 2005 to be reduced
slightly, to the range of $350 - $425 million.
Recent 2005 Events
-- On February 28, 2005, Biogen Idec and Elan voluntarily suspended
TYSABRI from the U.S. market and all ongoing clinical trials. This
decision was based on reports of progressive multifocal
leukoencephalopathy (PML), a rare and frequently fatal, demyelinating
disease of the central nervous system. Biogen Idec and Elan's
comprehensive safety evaluation concerning TYSABRI and any possible
link to PML is ongoing. The results of this safety evaluation will be
discussed with regulatory agencies to determine possible re-initiation
of dosing in clinical trials and future commercial availability.
-- On April 5, 2005, Biogen Idec, Genentech and Roche announced that a
Phase III clinical study of RITUXAN met its primary endpoint of a
greater proportion of RITUXAN-treated patients achieving an ACR 20
response at week 24, compared to placebo. The study included patients
with active RA who have had an inadequate response or were intolerant
to prior treatment with one or more anti-TNF therapies.
-- On April 7, 2005, Biogen Idec and Fumapharm AG announced results from a
Phase III study designed to evaluate the efficacy and safety of BG-12,
an oral fumarate, in the treatment of moderate-to-severe psoriasis.
The trial met the primary endpoint and patients receiving BG-12
demonstrated a statistically significant clinical improvement as
measured by a lower median psoriasis severity score after 16 weeks of
treatment than patients receiving placebo. These data will be used to
support a filing for market authorization in Germany this year.
Additional Phase III studies would need to be conducted for an
application in the U.S.
Conference Call and Webcast
The Company's earnings conference call for the first quarter will be
broadcast via the Internet at 5:00 p.m. ET on April 27, 2005, and will be
accessible through the investor relations section of Biogen Idec's homepage,
http://www.biogenidec.com.
About Biogen Idec
Biogen Idec creates new standards of care in oncology and immunology. As a
global leader in the development, manufacturing, and commercialization of
novel therapies, Biogen Idec transforms scientific discoveries into advances
in human healthcare. For product labeling, press releases and additional
information about the company, please visit http://www.biogenidec.com.
Safe Harbor
This press release contains forward-looking statements regarding expected
future financial results, plans for our development programs and the potential
for TYSABRI.
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
revenue and EPS growth, anticipated levels of expenses, other statements
regarding future financial performance, and overall prospects for the
Company's products may be affected by a number of factors, including any
unexpected slowing of growth of the markets for AVONEX and RITUXAN, any change
in market acceptance of AVONEX and RITUXAN in key markets worldwide, the
impact of reimbursement and pricing decisions related to the Company's
products, the impact of competitive products on the Company's products, any
material decreases in sales by licensees of products on which the Company
receives royalties, the impact of litigation, the impact of costs related to
the suspension of TYSABRI, any unanticipated increase in expenses related to
in-licensing and product opportunities, increases in costs related to
development of new products and existing products in new indications, and any
material issues, delays or failures related to the manufacturing or supply of
the Company's products.
Our long-term growth will depend on the successful development and
commercialization of new products. Drug development involves a high degree of
risk. For example, the plans for our development programs could be negatively
affected if unexpected concerns arise from additional data or analysis, if
regulatory authorities require additional information or further studies, or
if we were to encounter other unexpected hurdles.
The potential for TYSABRI is subject to a number of risks and
uncertainties. There is no assurance, for example, that we will be able to
gain sufficient information to fully understand the risks associated with the
product. There is also no assurance that the Company and Elan will be able to
resume marketing and sales of TYSABRI.
For more detailed information on the risks and uncertainties associated
with these forward looking statements and the Company's other activities, see
the periodic reports filed by the Company with the Securities and Exchange
Commission. The Company does not undertake any obligation to publicly update
any forward-looking statements, whether as a result of new information, future
events, or otherwise.
Media Contact:
Jose Juves
Associate Director, Public Affairs
Biogen Idec
Tel: (617) 914-6524
Investment Community Contact:
Elizabeth Woo
Vice President, Investor Relations
Biogen Idec
Tel: (617) 679-2812
TABLE 1
Financial Results For The First Quarter of 2005
Condensed Consolidated Statements Of Income - GAAP Basis
(in thousands, except per share amounts)
Three Months Ended
March 31,
2005 2004
REVENUES
Product $397,584 $372,537
Unconsolidated joint business 160,453 133,955
Royalties 26,749 25,213
Corporate partner 3,016 10,037
Total revenues 587,802 541,742
COST AND EXPENSES
Cost of product and royalty revenues 99,609 254,767
Research and development 178,784 158,920
Selling, general and administrative 158,458 131,060
Amortization of acquired intangible
assets 75,677 80,860
Total cost and expenses 512,528 625,607
Income (loss) from operations 75,274 (83,865)
Other income (expense), net (8,926) 11,726
INCOME (LOSS) BEFORE INCOME TAXES 66,348 (72,139)
Income taxes (benefit) 22,890 (30,941)
NET INCOME (LOSS) $43,458 $(41,198)
BASIC EARNINGS (LOSS) PER SHARE $0.13 $(0.12)
DILUTED EARNINGS (LOSS) PER SHARE $0.12 $(0.12)
SHARES USED IN CALCULATING:
BASIC EARNINGS (LOSS) PER SHARE 335,279 333,699
DILUTED EARNINGS (LOSS) PER SHARE 352,173 333,699
TABLE 2
Condensed Consolidated Balance Sheets
(dollars in thousands)
Mar. 31, 2005 Dec. 31, 2004
Assets:
Current assets
Cash, cash equivalents and
securities available-for-sale $1,151,881 $1,057,942
Accounts receivable, net 275,014 278,637
Inventory 236,624 251,016
Other current assets 320,208 343,449
Total current assets 1,983,727 1,931,044
Long-term securities available-
for-sale 1,000,969 1,109,624
Property and equipment, net 1,561,918 1,525,225
Intangible assets, net 3,216,772 3,292,827
Goodwill 1,151,105 1,151,105
Other 148,203 155,933
Total assets $9,062,694 $9,165,758
Liabilities and shareholders'
equity
Current liabilities $1,228,529 $1,260,748
Long-term deferred tax liability 895,851 921,771
Non-current liabilities 157,355 156,838
Shareholders' equity 6,780,959 6,826,401
Total liabilities and
shareholders' equity $9,062,694 $9,165,758
TABLE 3
Financial Results For The First Quarter of 2005
Condensed Consolidated Statements Of Income - Operating Basis
(in millions, except per share amounts)
The non-GAAP financial measures presented below are utilized by Biogen
Idec management to gain an understanding of the comparative financial
performance of the Company. Management believes that the non-GAAP financial
measures are useful because they exclude those non-operational activities or
transactions that are not necessarily relevant to understanding the trends of
the Company or the prospects of future performance. The presentation of this
information is not meant to be considered in isolation or as a substitute for
GAAP financial measures. Numbers may not foot due to rounding.
Three Months Ended
March 31,
2005 2004
Earnings per share - Diluted:
GAAP $0.12 ($0.12)
Adjusted Pro Forma (Non-GAAP) $0.30 $0.40
AN ITEMIZED RECONCILIATION BETWEEN
NET INCOME ON A GAAP BASIS
AND NET INCOME ON A NON-GAAP BASIS IS
AS FOLLOWS:
GAAP Net Income/(loss) $43.5 ($41.2)
COGS: Fair value step up of
inventory acquired from former
Biogen, Inc 9.3 194.3
R&D: Merger related costs 2.2
SG&A: Merger related costs 0.5 4.4
Purchase accounting:
Amortization of acquired
intangible assets
related to the merger with
former Biogen, Inc. 75.7 80.9
Income taxes: Income tax effect
of reconciling items (23.1) (98.0)
Non-GAAP Net Income $105.8 $142.6
Adjustments were made to conform prior periods to current year
presentation including adoption of EITF 03-06, which requires allocation of
income to certain holders of equity and debt instruments.
TABLE 4
Biogen Idec Inc
Product Revenues for First Quarter 2005
(in thousands)
Three Months Ended
March 31,
2005 2004
PRODUCT REVENUES
AVONEX(R) $373,585 $354,718
AMEVIVE(R) 12,017 12,987
TYSABRI(R) 5,946 -
ZEVALIN(R) 6,036 4,832
Total Product Revenues $397,584 $372,537
SOURCE Biogen Idec Inc.
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http://www.biogenidec.com
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CONTACT:
Media Contact: Jose Juves, Associate
Director, Public Affairs, +1-617-914-6524, or Investment
Community Contact: Elizabeth Woo, Vice President, Investor
Relations, +1-617-679-2812, both of Biogen Idec
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