CAMBRIDGE, Mass., July 28 /PRNewswire-FirstCall/ -- Biogen Idec Inc.
(Nasdaq: BIIB), the world's third largest biotech company with leading
products and capabilities in oncology and immunology, today reported its
second quarter 2004 results.
(Logo: http://www.newscom.com/cgi-bin/prnh/20031112/LAW121LOGO )
Second Quarter Highlights
-- Revenues were $539 million vs. prior year $124 million (adjusted pro
forma of $447 million, an increase of 20%), driven primarily by
AVONEX(R) (Interferon beta-1a) sales up 21% (adjusted pro forma) to
$347 million and RITUXAN(R) (rituximab) co-promotion profits up 28% to
$151 million.
-- On a GAAP basis, earnings per share (EPS) were $0.00; excluding merger-
related accounting impacts and other non-operating charges, adjusted
pro forma (non-GAAP) EPS were $0.34.
-- Biologics License Application (BLA) for ANTEGREN(R) (natalizumab)
accepted and designated for Priority Review and Accelerated Approval
by the U.S. Food and Drug Administration (FDA) for the treatment of
multiple sclerosis (MS); European Union (EU) filing for ANTEGREN for
MS submitted and validated in June.
-- Collaboration with Vernalis plc for its small molecule, Phase I
adenosine A2A receptor antagonist program, which targets Parkinson's
disease and other central nervous system disorders. Biogen Idec paid
an initial license fee of $10 million to Vernalis.
"With the timeline of ANTEGREN accelerated by more than a year in MS, much
of the energy of the organization is focused on preparing for launches in the
U.S. and Europe. Together with our partner, Elan, we have made significant
strides this quarter in the regulatory arena, as well as manufacturing and
commercial preparation," said James Mullen, Biogen Idec's Chief Executive
Officer. "We're also excited to pursue additional business development deals,
such as the recent Vernalis collaboration, that leverage our development and
commercial infrastructure."
Financial Performance
In the second quarter of 2004, revenues grew 20% to $539 million (adjusted
pro forma Q2 2003: $447 million), with:
-- AVONEX sales up 21% to $347 million, RITUXAN co-promotion profits up
28% to $151 million, ZEVALIN(R) (ibritumomab tiuxetan) sales at $5
million, and AMEVIVE(R) (alefacept) sales at $12 million.
-- Royalty income was $24 million primarily due to lower sales of alpha
interferon products by Schering-Plough in the U.S. (adjusted pro forma
Q2 2003: $31 million)
On an adjusted non-GAAP basis, Biogen Idec reported net income was up 20%
to $122 million in the second quarter of 2004 (Q2 2003: $102 million).
Adjusted non-GAAP earnings per share increased 16% to $0.34 for the second
quarter of 2004 (Q2 2003: $0.29).
Adjusted non-GAAP earnings per share and net income for the second quarter
of 2004 excludes merger-related accounting impacts, such as amortization of
intangibles, inventory step up, and other merger-related charges, and other
non-operating charges. Adjusted pro forma non-GAAP earnings per share and net
income for the second quarter of 2003 include revenue and expenses from the
former Biogen, Inc. from April 1 to June 30, 2003 but excludes other non-
operating charges of former Biogen, Inc. and IDEC Pharmaceuticals Corporation.
These adjustments, expenses, and non-operating charges are itemized on the
attached reconciliation tables.
On a reported basis, calculated in accordance with U.S. generally accepted
accounting principles (GAAP), Biogen Idec reported net income of $0.8 million
(or earnings per share of $0.00) in the second quarter of 2004. The
difference between adjusted non-GAAP net income and GAAP net income in the
second quarter was primarily due to $173 million of non-cash merger-related
accounting impacts.
Product Sales Performance
Second quarter revenues of AVONEX, Biogen Idec's therapy for patients with
relapsing forms of multiple sclerosis, increased 21% to $347 million (Q2 2003:
$286 million). U.S. sales of $227 million increased 15% (Q2 2003: $196
million). International sales were $120 million, an increase of 33% (Q2 2003:
$90 million); in local currency, sales grew 22%.
Revenues for the second quarter of 2004 included $151 million from Biogen
Idec's joint business arrangement with Genentech, Inc. related to RITUXAN, a
treatment for certain B-cell non-Hodgkin's lymphomas that Biogen Idec co-
promotes in the U.S. with Genentech (Q2 2003: $118 million). 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 in the second quarter of 2004, as recorded by Genentech, were $390
million (Q2 2003: $328 million).
Revenues of ZEVALIN, Biogen Idec's radioimmunotherapeutic agent, were $5
million in the second quarter of 2004 (Q2 2003: $5 million).
Revenues of AMEVIVE, Biogen Idec's treatment for moderate-to-severe
psoriasis, were $12 million in the second quarter of 2004 (Q2 2003: $7
million)
Recent Highlights
-- On July 26, 2004, Biogen Idec and Elan Corporation, plc announced that
the BLA for ANTEGREN for the treatment of MS was accepted by the FDA.
On June 28, the companies announced that the BLA for ANTEGREN was
designated for Priority Review and Accelerated Approval by the FDA.
The submission of the BLA was announced on May 25. The FDA review
will be based on one-year data from two ongoing Phase III trials. The
companies are committed to completing these two-year trials.
-- On June 4, 2004, Biogen Idec and Elan announced that they submitted a
Marketing Authorisation Application (MAA) to the European Medicines
Agency for approval of ANTEGREN as a treatment for MS.
-- On June 24, 2004, Vernalis and Biogen Idec announced that they entered
into an agreement to advance research into Vernalis' adenosine A2A
receptor antagonist program, which targets Parkinson's disease and
other central nervous system disorders. Initially, the collaboration
will focus on completing the Phase I program for the lead compound,
V2006, with the goal of beginning Phase II proof of concept studies of
V2006 in Parkinson's disease patients in 2005. Biogen Idec paid
Vernalis an initial license fee of $10 million, and will also pay a
series of additional payments if program milestones are met as well as
royalties on commercial sales of collaboration products.
-- During the quarter, Biogen Idec announced that AMEVIVE was approved for
sale in Australia and Israel. In both countries, AMEVIVE will be
marketed for treatment of adult patients with moderate-to-severe
chronic plaque psoriasis who are candidates for phototherapy or
systemic therapy.
-- Genentech, Biogen Idec and Roche AG announced in June that the New
England Journal of Medicine published the results of a Phase IIa study
showing that two doses of RITUXAN, administered two weeks apart,
improved symptoms in patients with moderate-to-severe rheumatoid
arthritis (RA) for up to 48 weeks when combined with methotrexate
(MTX), compared to MTX alone.
-- At the American Society of Clinical Oncology (ASCO) meeting in June,
Genentech, Biogen Idec and Roche announced positive data from a large,
randomized, Phase III cooperative group trial (E1496) evaluating
RITUXAN as maintenance therapy for newly diagnosed patients with
indolent non-Hodgkin's lymphoma (NHL) following initial (induction)
treatment with chemotherapy. The study authors concluded that there
was a significant improvement in progression free survival (PFS), the
primary endpoint of the study. Also presented were data from the
MabThera International Trial (MinT) study of R-CHOP (RITUXAN,
cyclophosphamide, doxorubicin, vincristine and prednisone) versus CHOP
(cyclophosphamide, doxorubicin, vincristine and prednisone) in younger
patients with newly diagnosed, aggressive NHL. The study authors
concluded that there was a significant improvement in time to treatment
failure (TTF), the primary endpoint of the study.
-- Also at ASCO, Biogen Idec announced that new data shows that the
ZEVALIN therapeutic regimen may produce high complete remission rates
in previously untreated patients with low-grade follicular lymphoma
when used following RITUXAN and a short course of CHOP chemotherapy.
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 28, 2004, 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 and plans for our development programs, including
ANTEGREN.
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, effective tax rate, and capital expenditures, may be affected by a
number of factors, including any slowing of growth of the markets for AVONEX
and RITUXAN, any change in market acceptance of these products in key markets
worldwide, the extent to which the Company achieves market acceptance of its
other products, 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, any unanticipated
increase in expenses, in-licensing and product opportunities, increase in
costs related to development and commercialization of new products, including
ANTEGREN, 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 such as ANTEGREN. Drug development involves
a high degree of risk. For example, our plans to launch ANTEGREN as a
treatment for MS 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.
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:
Amy Ryan
Associate Director, Public Affairs
Biogen Idec
Tel: (617) 914-6524
Investment Community Contact:
Elizabeth Woo
Senior Director, Investor Relations
Biogen Idec
Tel: (617) 679-2812
TABLE 1
Financial Results For The Second Quarter of 2004
Condensed Consolidated Statements Of Income - GAAP Basis
(in thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
REVENUES
Product $363,186 $4,980 $735,723 $10,642
Revenue from unconsolidated joint
business 151,157 118,365 285,112 229,276
Royalties 24,297 - 49,510 -
Corporate partner 123 217 10,160 890
Total Revenues 538,763 123,562 1,080,505 240,808
COST AND EXPENSES
Cost of product and royalty
revenues 151,729 3,791 406,496 4,643
Research and development 170,180 50,141 329,330 82,051
Selling, general and administrative 139,016 26,486 269,846 47,828
Amortization of acquired intangible
assets 79,308 - 160,168 -
Total Cost and Expenses 540,233 80,418 1,165,840 134,522
Income (loss) from Operations (1,470) 43,144 (85,335) 106,286
Other income, net 6,413 3,253 18,139 6,563
INCOME (LOSS) BEFORE INCOME TAXES 4,943 46,397 (67,196) 112,849
Income taxes (benefit) 4,116 17,631 (26,825) 42,883
NET INCOME (LOSS) $827 $28,766 $(40,371) $69,966
BASIC EARNINGS (LOSS) PER SHARE $0.00 $0.18 $(0.12) $0.45
DILUTED EARNINGS (LOSS) PER SHARE $0.00 $0.17 $(0.12) $0.41
SHARES USED IN CALCULATING:
BASIC EARNINGS (LOSS) PER SHARE 337,018 155,171 336,084 154,924
DILUTED EARNINGS (LOSS) PER SHARE 350,279 176,135 336,084 175,893
TABLE 2
Condensed Consolidated Balance Sheets
(dollars in thousands)
Jun. 30, 2004 Dec. 31, 2003
Assets:
Current assets
Cash, cash equivalents and
securities available-for-sale $741,375 $835,959
Accounts receivable, net 209,280 198,524
Inventory 232,765 496,349
Other current assets 324,180 307,832
Total current assets 1,507,600 1,838,664
Long-term securities available-
for-sale 1,595,580 1,502,327
Property and equipment, net 1,354,016 1,252,783
Intangible assets, net 3,478,000 3,638,812
Goodwill 1,151,105 1,151,066
Other 141,041 120,293
Total assets $9,227,342 $9,503,945
Liabilities and shareholders'
equity
Current liabilities $396,636 $404,825
Long-term deferred tax liability 978,100 1,108,318
Non-current liabilities 918,439 937,474
Shareholders' equity 6,934,167 7,053,328
Total liabilities and
shareholders' equity $9,227,342 $9,503,945
TABLE 3
Condensed Consolidated Statements of Operations and Reconciliation of
GAAP Earnings to Adjusted Pro-Forma Non-GAAP Earnings
(In millions, except per share data)
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 or unusual activities or
transactions that are not necessarily relevant to understanding the trends of
the Company or the prospects of future performance. Numbers may not foot due
to rounding.
Three Months Ended Three Months Ended
June 30, 2004 June 30, 2003
Adjusted
Adjusted Pro Forma
GAAP Adjust- Non-GAAP GAAP Adjust- Non-GAAP
ments ments
Revenues
Product $363.2 - $363.2 $5.0 $293.1 $298.1
Revenue from
unconsolidated
joint business 151.2 - 151.2 118.4 - 118.4
Royalties 24.3 - 24.3 - 30.5 30.5
Corporate partner 0.1 - 0.1 0.2 - 0.2
Total revenues 538.8 - 538.8 123.6 323.7 447.2
Cost and Expenses
Cost of product
and royalty
revenues 151.7 (93.4)(A) 58.3 3.8 45.6 49.4
Research and
development 170.2 (0.7)(B) 169.5 50.1 87.3 137.4
(E),(F),(G)
Selling, general
and administrative 139.0 (0.6)(B) 138.4 26.5 98.9(F) 125.4
Amortization of
acquired
intangibles
assets 79.3 (79.3)(C) - - - -
Total costs
and expenses 540.2 (174.0) 366.2 80.4 231.8 312.3
Income (loss)
from operations (1.5) 174.0 172.5 43.1 91.9 135.0
Other income, net 6.4 - 6.4 3.3 11.0 14.3
Income before
income taxes 4.9 174.0 178.9 46.4 102.9 149.3
Provision for
income taxes 4.1 53.2(D) 57.3 17.6 30.2 47.8
Net income $0.8 $120.9 $121.7 $28.8 $72.7 $101.5
Numerator:
Net Income $0.8 $121.7 $28.8 $101.5
Net Income
allocable to
participating
securities (I) - ($0.2) ($0.4) ($0.7)
Net Income used
in calculating
basic eps $0.8 $121.5 $28.4 $100.8
Net adjustment
for interest
expense -(H) $2.3 $1.3 $3.0
Net income used
in calculating
diluted eps $0.8 $123.8 $29.7 $103.8
Shares used
in calculation
of earnings per share:
Denominator
Weighted average
number of common
shares
outstanding 337.0 337.0 155.2 328.1
Effect of dilutive
securities: stock
options, convertible
preferred stock,
convertible
promissory
notes 13.3(H) 32.5 20.9 30.6
Dilutive potential
common shares 350.3 369.5 176.1 358.7
Earnings per share:
Basic $0.00 $0.36 $0.18 $0.31
Diluted $0.00 $0.34 $0.17 $0.29
column 1 column 2 column 3= column 4 column 5 column 6=
columns 1+2 columns 4+5
(A) Represents the non-cash expense related to valuing the inventory
acquired from former Biogen, Inc. at fair value.
(B) Represents external, incremental consulting, integration costs,
severance, and restructuring charges related to the merger.
(C) Represents the on-going, non-cash amortization of acquired intangible
assets related to the merger with former Biogen, Inc.
(D) Represents the tax effect of the above adjustments.
(E) Represents the elimination of Biogen Idec contract revenue and expense
- $2M.
(F) Represents former Biogen, Inc. operating revenue and expenses for the
period Apr-Jun of 2003 prior to the merger, net of intercompany
transactions.
(G) Represents former IDEC one-time adjustment of $20M related to a
signing payment for the Genentech new anti-CD20 antibody development
collaboration.
(H) Adjustment for interest expense and convertible securities were not
(I) Due to adoption of EITF 03-06 which requires allocation of income to
certain holders of equity & debt instruments.
TABLE 4
Condensed Consolidated Statements of Operations and Reconciliation of
GAAP Earnings to Adjusted Pro-Forma Non-GAAP Earnings
(In millions, except per share data)
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 or unusual activities or
transactions that are not necessarily relevant to understanding the trends of
the Company or the prospects of future performance. Numbers may not foot due
to rounding.
Six Months Ended Six Months Ended
June 30, 2004 June 30, 2003
Adjusted
Adjusted Pro Forma
GAAP Adjust- Non-GAAP GAAP Adjust-
Non-GAAP
ments ments
Revenues
Product $735.7 - $735.7 $10.6 $571.3 $582.0
Revenues from
unconsolidated
joint business 285.1 - 285.1 229.3 - 229.3
Royalties 49.5 - 49.5 - 71.9 71.9
Corporate partner
revenues 10.2 - 10.2 0.9 -(E) 0.9
Total revenues 1,080.5 - 1,080.5 240.8 643.2 884.1
Cost and Expenses
Cost of sales 406.5 (287.8)(A) 118.7 4.6 91.9 96.6
Research and
development 329.3 (2.9)(B) 326.4 82.1 165.4 247.5
(E),(F),(G)
Selling, general
and
administrative 269.8 (5.0)(B) 264.8 47.8 200.2(F) 248.0
Amortization of
acquired
intangibles 160.2 (160.2)(C) - - - -
Total costs
and expenses 1,165.8 (455.9) 710.0 134.5 457.5 592.1
Income (loss)
from operations (85.3) 455.9 370.5 106.3 185.7 292.0
Other income, net 18.1 - 18.1 6.6 21.3 27.9
Income (loss)
before income
taxes (67.2) 455.9 388.6 112.8 207.0 319.9
Provision (benefit)
for income taxes (26.8) 151.2(D) 124.4 42.9 59.5 102.4
Net income (loss) ($40.4) $304.7 $264.3 $70.0 $147.5 $217.5
Numerator:
Net Income
(loss) ($40.4) $264.3 $70.0 $217.5
Net Income
allocable to
participating
securities (I) - ($0.4) ($1.0) ($1.4)
Net Income used
in calculating
basic eps ($40.4) $263.9 $69.0 $216.2
Net adjustment
for interest
expense -(H) $4.9 $2.6 $4.3
Net income (loss)
used in
calculating
diluted eps ($40.4) $268.8 $71.6 $220.4
Shares used
in calculation
of earnings
(loss) per share:
Denominator
Weighted average
number of
common shares
outstanding 336.1 336.1 154.9 328.1
Effect of
dilutive
securities: stock
options,
convertible
preferred stock,
convertible
promissory notes -(H) 32.8 21.0 30.6
Dilutive
potential common
shares 336.1 368.9 175.9 358.7
Earnings (loss) per share:
Basic ($0.12) $0.79 $0.45 $0.66
Diluted ($0.12) $0.73 $0.41 $0.62
column 1 column 2 column 3 = column 4 column 5column 6 =
columns 1+2 columns 4+5
(A) Represents the non-cash expense related to valuing the inventory
acquired from former Biogen, Inc. at fair value.
(B) Represents external, incremental consulting, integration costs,
severance, and restructuring charges related to the merger.
(C) Represents the on-going, non-cash amortization of acquired intangible
assets related to the merger with former Biogen, Inc.
(D) Represents the tax effect of the above adjustments.
(E) Represents the elimination of Biogen Idec contract revenue and expense
- $3.1M.
(F) Represents former Biogen, Inc. operating revenue and expenses for the
period Jan-Jun of 2003 prior to the merger, net of intercompany
transactions.
(G) Represents former IDEC one-time adjustment of $20M related to a
signing payment for the Genentech new anti-CD20 antibody development
collaboration.
(H) Adjustment for interest expense and convertible securities were not
included for the period as they were anti-dilutive.
(I) Due to adoption of EITF 03-06 which requires allocation of income to
certain holders of equity & debt instruments.
TABLE 5
Biogen Idec Inc
Product Revenues for Second Quarter 2004
(in thousands)
The non-GAAP pro forma financial measures presented below are utilized by
Biogen Idec management to gain an understanding of the comparative
revenue performance of the Company. Management believes that the non-GAAP
financial measures are useful because they exclude those non-operational
or unusual activities or transactions that are not necessarily relevant
to understanding the trends of the Company or the prospects of future
performance.
Three Months Ended
June 30,
2004 2003
U.S. Biogen Pro Forma
U.S. GAAP GAAP Revenue Revenue
Revenue Revenue Pre-merger(A) Combined
PRODUCT REVENUES
Avonex(R) $346,516 $- $286,276 $286,276
Amevive(R) 12,116 - 6,873 6,873
Zevalin(R) 4,554 4,980 - 4,980
Total Product Revenues $363,186 $4,980 $293,149 $298,129
Six Months Ended
June 30,
2004 2003
U.S. Biogen Pro Forma
U.S. GAAP GAAP Revenue Combined
Revenue Revenue Pre-merger(A) Revenue
PRODUCT REVENUES
Avonex(R) $701,234 $- $560,633 $560,633
Amevive(R) 25,103 - 10,693 10,693
Zevalin(R) 9,386 10,642 - 10,642
Total Product Revenues $735,723 $10,642 $571,326 $581,968
(A) Represents former Biogen, Inc. revenue that is not included in
GAAP revenues.
SOURCE Biogen Idec Inc.
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CONTACT:
Amy Ryan, Associate Director, Public Affairs,
+1-617-914-6524, or Investment Community Contact, Elizabeth Woo,
Senior Director, Investor Relations, +1-617-679-2812, both of
Biogen Idec
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