CAMBRIDGE, Mass., July 26 /PRNewswire-FirstCall/ -- Biogen Idec Inc.
(Nasdaq: BIIB), a global biotechnology leader with leading products and
capabilities in oncology, neurology and immunology, today reported its second
quarter 2005 results.
(Logo: http://www.newscom.com/cgi-bin/prnh/20031112/LAW121LOGO )
Second Quarter Highlights
* Total revenues grew 12% to $606 million vs. prior year $539 million,
driven primarily by AVONEX(R) (Interferon beta-1a) worldwide sales up
10% to $382 million and RITUXAN(R) (rituximab) revenues from the joint
business arrangement up 22% to $185 million.
* On a reported basis, calculated in accordance with U.S. generally
accepted accounting principles (GAAP), second quarter earnings per share
(EPS) were $0.10. Excluding merger-related accounting impacts of $86
million and charges of $78 million related to the sale of the NIMO
manufacturing facility, adjusted non-GAAP EPS were $0.43, representing a
26% increase.
* $20 million of charges, or EPS of $0.04, were included in both the GAAP
and adjusted non-GAAP results related to TYSABRI(R) (natalizumab)
inventories that were written off during the quarter.
"Impressive results from AVONEX and RITUXAN, coupled with operational
discipline and effective cost management, drove an increase of more than 20%
in earnings," said James Mullen, Biogen Idec's Chief Executive Officer. "We
have also maintained our strong commitment to the MS community by conducting
an extensive safety evaluation of TYSABRI which is ongoing. We look forward
to the expected completion of the evaluation by the end of the summer and to
further discussions with the regulatory authorities regarding the path forward
for TYSABRI."
Financial Performance
On an adjusted non-GAAP basis, Biogen Idec's net income grew 22% to $149
million in the second quarter of 2005 (Q2 2004 adjusted non-GAAP: $122
million). Adjusted non-GAAP EPS were $0.43 for the second quarter of 2005 (Q2
2004 adjusted non-GAAP: $0.34).
On a reported basis, calculated in accordance with GAAP, Biogen Idec
reported net income of $35 million (or EPS of $0.10) in the second quarter of
2005 (Q2 2004: net income of $0.8 million, or EPS of $0.00). The difference
between adjusted non-GAAP net income and EPS and GAAP net income and EPS in
the second 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, and
* charges totaling approximately $78 million related to the sale of the
NIMO manufacturing facility.
These adjustments are itemized on Table 3.
Revenue Performance
Revenues for the second quarter of 2005 were up 22% to $185 million (Q2
2004: $151 million) from Biogen Idec's joint business arrangement with
Genentech related to RITUXAN, a treatment for certain B-cell non-Hodgkin's
lymphomas (NHL) 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 $450 million in the second quarter of 2005 (Q2 2004: $390
million), as reported by Genentech.
Revenues from AVONEX, Biogen Idec's therapy for patients with relapsing
forms of multiple sclerosis (MS), increased 10% in the second quarter to $382
million (Q2 2004: $347 million). AVONEX, the leading therapy for MS in the
U.S. as measured by revenues, patients, and total prescriptions, recorded
sales of $230 million in U.S. sales for the quarter (Q2 2004: $227 million).
International sales increased 27% to $152 million in the second quarter of
2005 (Q2 2004: $120 million).
Table 4 provides individual product revenues.
Royalties were $22 million in the second quarter of 2005 (Q2 2004: $24
million).
Second Quarter Events
* On April 6, 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 American
College of Rheumatology (ACR) 20 response at week 24, compared to
placebo. In the second half of this year, Biogen Idec and Genentech
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 the results of the Phase III study.
* On April 12, 2005, at the 57th annual American Academy of Neurology
(AAN) meeting in Miami Beach, FL, the two-year data from the AFFIRM
Phase III monotherapy trial was presented. AFFIRM met all primary and
secondary endpoints, including disability progression and relapse rate.
TYSABRI treatment led to a 42 percent reduction in the risk of
disability progression compared to placebo. TYSABRI also reduced the
rate of clinical relapses by 67 percent compared to placebo, which was
sustained and consistent with the previously reported one-year results.
* On May 17, 2005, Biogen Idec announced that its scientists have
identified a molecule in the central nervous system (CNS) that may play
a pivotal role in CNS repair and regeneration. The research, published
in the June 2005 edition of Nature Neuroscience, is the first to suggest
a role for LINGO-1 in nerve repair and could lead to potential pathways
for treating MS and other demyelinating diseases.
* On June 9, 2005, Biogen Idec, Genentech, and Roche announced preliminary
positive results from a large randomized clinical trial (DANCER) of
RITUXAN in RA showing that a greater proportion of patients treated with
a single course of RITUXAN, with a stable dose of methotrexate, achieved
ACR 20, 50 and 70 response rates compared to placebo.
* On June 14, 2005, Biogen Idec announced that a Phase II clinical study
showed that galiximab (anti-CD80 mAb) may be used in combination with
RITUXAN, and the combination may prolong event-free survival in patients
with relapsed or refractory, follicular NHL when compared to previous
results with RITUXAN monotherapy. Side effects of the combination were
similar to treatment with RITUXAN alone.
* On June 30, 2005, Biogen Idec and Elan announced that ENCORE, the second
Phase III induction trial of TYSABRI for the treatment of moderately to
severely active Crohn's disease in patients with evidence of active
inflammation, met the primary endpoint of clinical response as defined
by a 70 point decrease in baseline Crohn's Disease Activity Index (CDAI)
score at both weeks 8 and 12.
* In June, Biogen Idec agreed to sell the NIMO Oceanside, California
biologics manufacturing facility to Genentech for $408 million. The
approximately 430 employees at the facility were offered employment at
Genentech or retained by Biogen Idec. Biogen Idec incurred charges
totaling approximately $78 million related to the sale.
Conference Call and Webcast
The Company's earnings conference call for the second quarter will be
broadcast via the internet at 5:00 p.m. ET on July 26, 2005, and will be
accessible through the investor relations section of Biogen Idec's homepage,
http://www.biogenidec.com.
About Biogen Idec
Biogen Idec (Nasdaq: BIIB) creates new standards of care in oncology,
neurology 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, the potential
for TYSABRI and the completion of the TYSABRI safety evaluation.
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, and 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, increases in costs 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. The completion of the TYSABRI safety
evaluation is also subject to a number of risks and uncertainties, including
the difficulty of analyzing complex data and results, and unanticipated
logistical hurdles.
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 Second Quarter of 2005
Condensed Consolidated Statements Of Income - GAAP Basis
(in thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
REVENUES
Product $398,822 $363,186 $796,406 $735,723
Unconsolidated joint business 184,934 151,157 345,387 285,112
Royalties 21,734 24,297 48,483 49,510
Corporate partner 144 123 3,160 10,160
Total revenues 605,634 538,763 1,193,436 1,080,505
COST AND EXPENSES
Cost of product and royalty
revenues 71,093 151,729 170,701 406,496
Research and development 179,843 169,782 358,611 328,702
Selling, general and
administrative 155,754 139,414 314,227 270,474
Amortization of acquired
intangible assets 77,078 79,308 152,756 160,168
Loss on Sale of Plant 75,565 - 75,565 -
Total cost and expenses 559,333 540,233 1,071,860 1,165,840
Income (loss) from operations 46,301 (1,470) 121,576 (85,335)
Other income/ (expense), net 6,051 6,413 (2,874) 18,139
INCOME (LOSS) BEFORE INCOME
TAXES 52,352 4,943 118,702 (67,196)
Income taxes (benefit) 17,848 4,116 40,738 (26,825)
NET INCOME $34,504 $827 $77,964 $(40,371)
BASIC EARNINGS (LOSS) PER SHARE $0.10 $0.00 $0.23 (0.12)
DILUTED EARNINGS (LOSS) PER
SHARE $0.10 $0.00 $0.23 (0.12)
SHARES USED IN CALCULATING:
BASIC EARNINGS PER SHARE 332,629 337,018 333,946 336,084
DILUTED EARNINGS PER SHARE 344,735 350,279 348,086 336,084
TABLE 2
Condensed Consolidated Balance Sheets
(dollars in thousands)
Jun. 30, 2005 Dec. 31, 2004
Assets:
Current assets
Cash, cash equivalents and
securities available-for-sale $927,453 $1,057,942
Accounts receivable, net 254,014 278,637
Inventory 243,538 251,016
Other current assets 371,297 343,449
Total current assets 1,796,302 1,931,044
Long-term securities available-
for-sale 873,182 1,109,624
Property and equipment, net 1,150,420 1,525,225
Intangible assets, net 3,139,315 3,292,827
Goodwill 1,151,105 1,151,105
Other 157,828 155,933
Total assets $8,268,152 $9,165,758
Liabilities and shareholders'
equity
Current liabilities $540,653 $1,260,748
Long-term deferred tax liability 882,021 921,771
Non-current liabilities 99,664 156,838
Shareholders' equity 6,745,814 6,826,401
Total liabilities and
shareholders' equity $8,268,152 $9,165,758
TABLE 3
Financial Results For The Second 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 Six Months Ended
June 30, June 30,
2005 2004 2005 2004
Earnings per share - Diluted:
GAAP $0.10 $0.00 $0.23 ($0.12)
Adjusted Pro Forma (Non-GAAP) $0.43 $0.34 $0.73 $0.73
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) $34.5 $0.8 $78.0 ($40.4)
COGS: Fair value step up of
inventory acquired from former
Biogen, Inc 9.0 93.4 18.3 287.8
R&D: Costs associated with Sale
of Oceanside Manufacturing
Facility 1.9 - 1.9 -
R&D: Merger related and purchase
accounting costs - 0.7 - 2.9
SG&A: Merger related and
purchase accounting costs - 0.6 0.4 5.0
Purchase accounting:
Amortization of acquired
intangible assets
related to the merger with
former Biogen, Inc. 77.1 79.3 152.8 160.2
Loss on Sale of Oceanside
Manufacturing Facility 75.6 - 75.6 -
Income taxes: Income tax effect
of reconciling items (49.0) (53.2) (72.1) (151.2)
Non-GAAP Net Income $149.0 $121.7 $254.8 $264.3
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 Second Quarter 2005
(in thousands)
Three Months Ended
June 30,
2005 2004
PRODUCT REVENUES
Avonex(R) $381,789 $346,516
Amevive(R) 12,456 12,116
Tysabri(R) (897) -
Zevalin(R) 5,474 4,554
Total Product Revenues $398,822 $363,186
Six Months Ended
June 30,
2005 2004
PRODUCT REVENUES
Avonex(R) $755,374 $701,234
Amevive(R) 24,473 25,103
Tysabri(R) 5,049 -
Zevalin(R) 11,510 9,386
Total Product Revenues $796,406 $735,723
SOURCE Biogen Idec Inc.
 back to top
Related links:
http://www.biogenidec.com
Company News On-Call:
http://www.prnewswire.com/comp/101550.html
Photo Notes:http://www.newscom.com/cgi-bin/prnh/20031112/LAW121LOGO
AP Archive: http://photoarchive.ap.org PRN Photo Desk;
photodesk@prnewswire.com
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
|
