- - -
Total Revenues Up 21 Percent over Second Quarter 2002
- - -
Regulatory Filings on IDEC Merger Proceeding on Schedule
- - -
Analysis of ANTEGREN(R) (natalizumab) Phase III Induction Clinical Trial
in Crohn's Disease Completed
- - -
Biogen Reconfirms Full Year 2003 Operating EPS Guidance of $1.72 to $1.85
- - -
CAMBRIDGE, Mass., July 24 /PRNewswire-FirstCall/ --
Biogen, Inc. (Nasdaq: BGEN) today announced financial results for the second
quarter of 2003.
(LOGO: http://www.newscom.com/cgi-bin/prnh/19990824/BIOLOGO )
For the three months ended June 30, 2003, total revenues were $326
million, an increase of 21 percent over the second quarter of 2002.
* AVONEX(R) (Interferon beta-1a) worldwide sales were $286 million, an
increase of 14 percent over second quarter 2002. U.S. sales were $196
million, and international sales were $90 million.
* AMEVIVE(R) (alefacept) sales were $7 million.
* Royalties were $31 million, an increase of 63 percent over the second
quarter 2002.
Reported net income was $58 million in the second quarter of 2003 versus
$43 million in the second quarter of 2002, a 33 percent increase. Reported
earnings per share were $0.38 in the second quarter of 2003 versus $0.29 in
the same period of 2002, an increase of 31 percent.
Operating results in the second quarter of 2003 exclude charges of $3.8
million related to the pending merger with IDEC Pharmaceuticals Corporation,
partially offset by $1.4 million in gains from sales of certain non-current
marketable securities reflected in other income, net. On an after-tax basis,
the net charge was $1.7 million, or $0.01 per share. Operating earnings per
share was $0.39 in the second quarter of 2003 versus $0.31 in the same period
of 2002, an increase of 26 percent. See attached "Operating Condensed
Consolidated Statements of Income" table for a reconciliation of reported
results (GAAP) to operating results (Non-GAAP).
Jim Mullen, Biogen's Chairman and Chief Executive Officer, said, "Our
operations are solid. Biogen grew AVONEX sales in both the U.S. and Europe.
AMEVIVE's launch is progressing in the U.S., and we continue to make headway
with payers.
"Strategically, our merger with IDEC to create one of the world's largest
biotechnology companies will be a significant step forward. We expect the
planned merger to capitalize on the momentum of both companies in the near
term, and create a new, even stronger company characterized by sustainable
long-term growth, a richer, more balanced product portfolio in autoimmune
diseases and oncology, significant R&D resources to develop the pipeline,
higher cash flow and improved return on assets. Our integration planning team
has already begun work on transition planning, including the identification of
growth opportunities and potential cost synergies."
Financial Discussion
During the second quarter of 2003, Biogen's Royalties were negatively
impacted by a $7.7 million due to Schering-Plough's announced first quarter
INTRON(R) A (interferon alpha-2b) sales decline, which they indicated was
driven by a channel inventory reduction and a competitive environment.
Cost of Product and Royalty Revenues in the second quarter included a $6
million charge for writedowns of inventory that did not meet quality
specifications. Additionally, during the quarter, as a result of the
Company's assessment of Columbia University's "'275 patent", the Company is no
longer accruing expenses related to this patent and has eliminated prior
accruals of $8 million in Cost of Product and Royalty Revenues. On July 15,
2003, Biogen, Genzyme Corporation and Abbott Bioresearch Center, Inc.
initiated a lawsuit against Columbia claiming this patent is invalid and
unenforceable.
Finally, in the second quarter, Research and Development included a $5.5
million milestone expense in the form of a loan forgiveness to ICOS, increased
production costs for AMEVIVE, and increased development costs related to the
four Phase 3 ANTEGREN trials.
AVONEX
In May, the U.S. Food and Drug Administration approved a new prefilled
syringe for AVONEX, designed to make treatment even more convenient for people
with MS. Biogen expects the prefilled syringe to be available in the U.S. in
August. The European Agency for the Evaluation of Medicinal Products (EMEA)
approved the new prefilled syringe in July, and Biogen will make it available
on a country-by-country basis in the EU beginning this month.
AMEVIVE
As of mid-July, almost 1,500 physicians are pursuing AMEVIVE therapy for
more than 5,500 patients in the U.S., most of whom are awaiting insurance
verification. More than 90 percent of patients who have completed the
insurance verification process have received coverage for AMEVIVE. Biogen
expects acceleration of sales in the second half of 2003 as more patients
start therapy, the reimbursement process develops, and physicians and patients
become more familiar with AMEVIVE.
ANTEGREN
Elan Corporation, plc and Biogen announced today that the Phase III
induction trial of ANTEGREN(R) known as ENACT-1 (Evaluation of Natalizumab in
Active Crohn's disease Therapy-1) did not meet the primary endpoint of
"response" as defined by a 70-point decrease in the Crohn's Disease Activity
Index ("CDAI") at week 10. There were no notable differences in the overall
rates of side effects between natalizumab and placebo treatment groups through
week 12. The most common adverse events seen in the trial were headache,
nausea, and abdominal pain across both groups.
The natalizumab "maintenance" trial in Crohn's disease - ENACT-2
(Evaluation of Natalizumab as Continuous Therapy-2) is ongoing.
Concurrently, two Phase III studies in MS are also underway. AFFIRM
(natalizumab safety and efficacy in relapsing-remitting MS) will evaluate the
ability of natalizumab to slow the rate of disability in MS and to reduce the
rate of clinical relapses; SENTINEL (safety and efficacy of natalizumab in
combination with AVONEX(R) in patients with relapsing-remitting MS) will
determine if the combination of natalizumab and AVONEX is more effective than
treatment with AVONEX alone in slowing the rate of disability and reducing the
rate of clinical relapses.
For more information on the ENACT-1 results, please refer to the joint
Biogen and Elan Corporation, plc press release issued on July 24, 2003
entitled ANALYSIS OF ANTEGREN PHASE III INDUCTION CLINICAL TRIAL IN CROHN'S
DISEASE COMPLETED.
2003 FINANCIAL GUIDANCE
The Company reiterated that it expects its full year 2003 operating
earnings per share to be in the range of $1.72 - $1.85 as announced on April
2, 2003. Specifics are provided in the attached table. Guidance for full
year 2003 reported earnings per share (GAAP-based financial measure) is not
currently assessible as the Company cannot predict with any certainty the
nature or the amount of non-operating or unusual charges for subsequent
quarters. The Company does, however, anticipate that it may have to take such
charges in subsequent quarters and that such charges, if material, would cause
reported earnings per share to differ from operating earnings per share.
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 24, 2003, and will be
accessible through the investor relations section of Biogen's homepage,
http://www.biogen.com.
In addition, Biogen and Elan Corporation plc are conducting a joint
conference call to discuss ANTEGREN results in Crohn's disease at 7:30 am ET
on July 24, 2003, and the playback information can be accessed through Elan's
homepage, http://www.elan.com and Biogen's homepage, http://www.biogen.com.
INVESTOR CALENDAR
Third quarter results Tuesday, October 28, 2003, 8:30 a.m. ET
ABOUT BIOGEN
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.
FORWARD LOOKING STATEMENTS / SAFE HARBOR
This press release contains forward-looking statements regarding expected
future financial results, the availability of the pre-filled syringe
formulation of AVONEX, and the proposed merger with IDEC, including
integration plans and expected synergies.
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, earnings per share, product sales, royalties,
expenses, income tax rate and capital expenditures, may be affected by any
slowing of growth of the multiple sclerosis market, any change in market
acceptance of AVONEX in key markets worldwide, the Company's ability to
achieve market acceptance of AMEVIVE and to successfully launch AMEVIVE in the
U.S., the impact of reimbursement and pricing decisions related to the
Company's products, the impact of competitive products on AVONEX and AMEVIVE
sales, any material decreases in sales by licensees of products on which the
Company receives royalties, 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. The
Company's expectations regarding the availability of the pre-filled syringe
formulation of AVONEX is subject to the risk of unexpected technical or
manufacturing issues. The Company's current view related to the merger with
IDEC are subject to a number of risks and uncertainties. For example, the
Company may be unable to obtain shareholder or regulatory approvals required
for the merger. Unanticipated difficulties encountered in its business or
with its products or pipeline may have an impact on its ability to close the
merger or to achieve anticipated results as a combined company. Problems may
arise in successfully integrating the two companies businesses. The merger may
involve unexpected costs. The combined company may be unable to achieve cost-
cutting synergies. The Company's business may suffer as a result of
uncertainty surrounding the merger.
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, whether as a result of new information, future
events, or otherwise.
For more detailed information on the risks and uncertainties associated
with IDEC's business activities see IDEC's reports filed with the SEC. IDEC
does not undertake any obligation to publicly update its forward-looking
statements, whether as a result of new information, future events, or
otherwise.
Additional Information and Where to Find It
On July 16, 2003, IDEC Pharmaceuticals Corporation filed a registration
statement with the SEC on Form S-4 that includes a preliminary joint proxy
statement/prospectus of Biogen, Inc. and IDEC and other relevant materials
regarding the proposed merger transaction. Investors and security holders of
Biogen and IDEC are urged to read the preliminary joint proxy
statement/prospectus filed with the SEC on July 16, 2003, the definitive joint
proxy statement/prospectus when it becomes available and any other relevant
materials filed by Biogen or IDEC with the SEC when they become available,
because they contain, or will contain, important information about IDEC,
Biogen and the proposed transaction. The definitive joint proxy
statement/prospectus will be sent to the security holders of Biogen and IDEC
seeking their approval of the proposed transaction. Investors and security
holders may obtain a free copy of these materials and other documents filed by
Biogen or IDEC with the SEC at the SEC's website at http://www.sec.gov. A free copy
of the definitive joint proxy statement/prospectus may also be obtained from
Biogen, Inc., Fourteen Cambridge Center, Cambridge, MA 02142, Attn. Investor
Relations or IDEC Pharmaceuticals Corporation, 3030 Callan Road, San Diego, CA
92121 when it becomes available. In addition, investors and security holders
may access copies of the documents filed with the SEC by Biogen on Biogen's
website at http://www.biogen.com and investors and security holders may access copies
of the documents filed with the SEC by IDEC on IDEC's website at
http://www.idecpharm.com. Investors and securityholders are urged to read the
definitive joint proxy statement/prospectus and the other relevant materials
relating to the proposed transaction when they become available before voting
or making any investment decision with respect to the proposed transaction.
Biogen, IDEC and their respective executive officers and directors may be
deemed to be participants in the solicitation of proxies from their respective
stockholders with respect to the proposed transaction. Information about the
executive officers and directors of Biogen and their ownership of Biogen
common stock is set forth in the proxy statement for Biogen's 2003 annual
meeting of stockholders, which was filed with the SEC on April 17, 2003.
Information about the executive officers and directors of IDEC and their
ownership of IDEC common stock is set forth in the proxy statement for IDEC's
2003 annual meeting of stockholders, which was filed with the SEC on April 11,
2003. Information regarding the interests of the officers and directors of
Biogen and IDEC in the proposed transaction may be obtained by reading the
preliminary joint proxy statement/prospectus of IDEC and Biogen filed with the
SEC on July 16, 2003 and the definitive joint proxy statement/prospectus when
it becomes available.
Financial Results For The Second Quarter of 2003
Condensed Consolidated Statements Of Income
(in thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
REVENUES
Product $293,149 $250,542 $571,326 $516,527
Royalties 30,510 18,721 71,883 41,079
Contract 1,987 - 3,136 -
Total Revenues 325,646 269,263 646,345 557,606
COST AND EXPENSES
Cost of product and royalty
revenues 45,646 36,209 91,912 75,527
Research and development 116,083 89,348 201,189 171,815
Selling, general and
administrative 92,147 91,567 187,570 164,957
Merger related expenses 3,804 - 3,804 -
Total Cost and Expenses 257,680 217,124 484,475 412,299
Income from Operations 67,966 52,139 161,870 145,307
Other income, net 12,411 8,104 6,747 15,132
INCOME BEFORE INCOME TAXES 80,377 60,243 168,617 160,439
Income Taxes 22,506 16,868 47,213 44,923
NET INCOME $57,871 $43,375 $121,404 $115,516
BASIC EARNINGS PER SHARE $0.39 $0.29 $0.81 $0.78
DILUTED EARNINGS PER SHARE $0.38 $0.29 $0.80 $0.76
SHARES USED IN CALCULATING:
BASIC EARNINGS PER SHARE 149,493 149,231 149,552 148,945
DILUTED EARNINGS PER SHARE 151,440 152,033 151,467 152,118
Financial Results For The Second Quarter of 2003
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 understand of the trends
of the Company or the prospects of future performance.
Three Months Ended
June 30,
2003 (a)
Operating
Reported Adjustments Results
REVENUES
Product $293,149 $293,149
Royalties 30,510 30,510
Contract 1,987 1,987
Total Revenues 325,646 - 325,646
COST AND EXPENSES
Cost of product and royalty revenues 45,646 45,646
Research and development 116,083 116,083
Selling, general and administrative 92,147 92,147
Merger related expenses 3,804 (3,804) -
Total Cost and Expenses 257,680 (3,804) 253,876
Income from Operations 67,966 3,804 71,770
Other income, net 12,411 (1,431) 10,980
INCOME BEFORE INCOME TAXES 80,377 2,373 82,750
Income Taxes 22,506 664 23,170
NET INCOME $57,871 $1,709 $59,580
BASIC EARNINGS PER SHARE $0.39 $0.01 $0.40
DILUTED EARNINGS PER SHARE $0.38 $0.01 $0.39
SHARES USED IN CALCULATING:
BASIC EARNINGS PER SHARE 149,493 149,493 149,493
DILUTED EARNINGS PER SHARE 151,440 151,440 151,440
(a) Non-operational adjustments for the second quarter of 2003include
charges of $3.8 million related to the pending merger with IDEC
and $1.4 million of gains on the sales of certain non-current
marketable securities.
(b) Non-operational adjustments for the second quarter of 2002
includes a $5.8 million charge related to severance and post
retirement benefits for the former chairman.
Financial Results For The Second Quarter of 2003
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 understand of the trends
of the Company or the prospects of future performance.
Three Months Ended
June 30,
2002 (b)
Operating
Reported Adjustments Results
REVENUES
Product $250,542 $250,542
Royalties 18,721 18,721
Contract - -
Total Revenues 269,263 - 269,263
COST AND EXPENSES
Cost of product and royalty revenues 36,209 36,209
Research and development 89,348 89,348
Selling, general and administrative 91,567 (5,800) 85,767
Merger related expenses - -
Total Cost and Expenses 217,124 (5,800) 211,324
Income from Operations 52,139 5,800 57,939
Other income, net 8,104 8,104
INCOME BEFORE INCOME TAXES 60,243 5,800 66,043
Income Taxes 16,868 1,624 18,492
NET INCOME $43,375 $4,176 $47,551
BASIC EARNINGS PER SHARE $0.29 $0.03 $0.32
DILUTED EARNINGS PER SHARE $0.29 $0.03 $0.31
SHARES USED IN CALCULATING:
BASIC EARNINGS PER SHARE 149,231 149,231 149,231
DILUTED EARNINGS PER SHARE 152,033 152,033 152,033
(a) Non-operational adjustments for the second quarter of 2003 include
charges of $3.8 million related to the pending merger with IDEC
and $1.4 million of gains on the sales of certain non-current
marketable securities.
(b) Non-operational adjustments for the second quarter of 2002
includes a $5.8 million charge related to severance and post
retirement benefits for the former chairman.
Financial Results For The Second Quarter of 2003
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 understand of the trends
of the Company or the prospects of future performance.
Six Months Ended
June 30,
2003 (a)
Operating
Reported Adjustments Results
REVENUES
Product $571,326 $571,326
Royalties 71,883 71,883
Contract 3,136 3,136
Total Revenues 646,345 - 646,345
COST AND EXPENSES
Cost of product and royalty revenues 91,912 91,912
Research and development 201,189 201,189
Selling, general and administrative 187,570 187,570
Merger related expenses 3,804 (3,804) -
Total Cost and Expenses 484,475 (3,804) 480,671
Income from Operations 161,870 3,804 165,674
Other income, net 6,747 14,558 21,305
INCOME BEFORE INCOME TAXES 168,617 18,362 186,979
Income Taxes 47,213 5,141 52,354
NET INCOME $121,404 $13,221 $134,625
BASIC EARNINGS PER SHARE $0.81 $0.09 $0.90
DILUTED EARNINGS PER SHARE $0.80 $0.09 $0.89
SHARES USED IN CALCULATING:
BASIC EARNINGS PER SHARE 149,552 149,552 149,552
DILUTED EARNINGS PER SHARE 151,467 151,467 151,467
(a) Non-operational adjustments for the six months ended June 30, 2003
include charges of $12.9 million related to the settlement of
litigation, $3.1 million for the write-down of certain
investments, $3.8 million related to the pending merger with IDEC,
and $1.4 million of gains from sales of certain non-current
marketable securities.
(b) Non-operational adjustments for the six months ended June 30, 2002
includes a $2.2 million charge related to the write-down of
certain non-current marketable securities, and a $5.8 million
charge related to severance and post retirement benefits for the
former chairman.
Financial Results For The Second Quarter of 2003
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 understand of the trends
of the Company or the prospects of future performance.
Six Months Ended
June 30,
2002 (b)
Operating
Reported Adjustments Results
REVENUES
Product $516,527 $516,527
Royalties 41,079 41,079
Contract - -
Total Revenues 557,606 - 557,606
COST AND EXPENSES
Cost of product and royalty revenues 75,527 75,527
Research and development 171,815 171,815
Selling, general and administrative 164,957 (5,800) 159,157
Merger related expenses - -
Total Cost and Expenses 412,299 (5,800) 406,499
Income from Operations 145,307 5,800 151,107
Other income, net 15,132 2,182 17,314
INCOME BEFORE INCOME TAXES 160,439 7,982 168,421
Income Taxes 44,923 2,235 47,158
NET INCOME $115,516 $5,747 $121,263
BASIC EARNINGS PER SHARE $0.78 $0.04 $0.81
DILUTED EARNINGS PER SHARE $0.76 $0.04 $0.80
SHARES USED IN CALCULATING:
BASIC EARNINGS PER SHARE 148,945 148,945 148,945
DILUTED EARNINGS PER SHARE 152,118 152,118 152,118
(a) Non-operational adjustments for the six months ended June 30, 2003
include charges of $12.9 million related to the settlement of
litigation, $3.1 million for the write-down of certain
investments, $3.8 million related to the pending merger with IDEC,
and $1.4 million of gains from sales of certain non-current
marketable securities.
(b) Non-operational adjustments for the six months ended June 30, 2002
includes a $2.2 million charge related to the write-down of
certain non-current marketable securities, and a $5.8 million
charge related to severance and post retirement benefits for the
former chairman.
Condensed Consolidated Balance Sheets
(in thousands)
Jun. 30, 2003 Dec. 31, 2002
ASSETS
Current Assets
Cash and marketable securities $857,895 $867,109
Accounts receivable, net 197,154 171,067
Other current assets 161,329 177,848
Total current assets 1,216,378 1,216,024
Property and equipment, net 764,598 738,059
Other assets 57,372 52,905
$2,038,348 $2,006,988
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $240,485 $326,333
Long term debt & liabilities 87,721 85,234
Shareholders' equity 1,710,142 1,595,421
$2,038,348 $2,006,988
2003 Guidance for Biogen, Inc.
July 24, 2003
2003 Guidance
REVENUES
Product
AVONEX 8 - 10% growth
US 3 - 5% growth
Rest of World 18 - 24% growth
AMEVIVE $50 - 70 MM
Royalties $ 130 -145 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 OPERATING EARNINGS PER SHARE $ 1.72 - 1.85
DILUTED SHARES OUTSTANDING 151 - 153 MM
CAPITAL EXPENDITURES $ 120 - 150 MM
This financial guidance, which is provided as part of a press release
dated July 24, 2003, is based on the Company's expectations and is subject
to all of the qualifications and limitations described in the press
release. Actual results may differ from these forward-looking statements.
See the safe harbor statement for more information.
Media Contact:
Amy McKnight-Ryan
Associate Director, Public Affairs
Biogen, Inc.
Tel: (617) 914-6524
Investment Community Contact:
Christina Dillon
Manager, Investor Relations
Biogen, Inc.
Tel: (617) 679-2812
SOURCE Biogen, Inc.
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Related links:
http://www.biogen.com
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http://www.prnewswire.com/comp/101550.html
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NewsCom:
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AP Archive: http://photoarchive.ap.org
PRN Photo Desk, 888-776-6555 or 212-782-2840
CONTACT:
Media Contact: Amy McKnight-Ryan, Associate
Director, Public Affairs, +1-617-914-6524, or Investment
Community Contact: Christina Dillon, Manager, Investor Relations,
+1-617-679-2812, both of Biogen, Inc.
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