Reported Earnings Per Share of $0.28; Operating Earnings Per Share of $0.37
AVONEX(R) (Interferon beta-1a) Revenues Increase Five Percent Worldwide
Company Preparing to Launch AMEVIVE(R) (alefacept) in the US & Europe in
Early 2003
Orally Active LFA-1 Antagonist Advances into Phase 2 Psoriasis Trial
Biogen to Receive $45 - $50 Million for Royalty Payment Settlement with
Schering-Plough in the Fourth Quarter
CAMBRIDGE, Mass., Oct. 18 /PRNewswire-FirstCall/ --
Biogen, Inc. (Nasdaq: BGEN) today announced financial results for the third
quarter of 2002. For the three months ended September 30, 2002:
-- Worldwide product sales were $262 million, an increase of five percent
over third quarter 2001.
* U.S. sales of $186 million increased two percent year over year.
* International sales were $75 million, an increase of 15 percent year
over year; in local currency, sales grew 11 percent year over year.
-- Reported net income was $42 million, or $0.28 per share. This compares
to reported net income of $70 million, or $0.46 per share in the third
quarter of 2001.
-- Operating net income was $55 million, or $0.37 per share. Operating net
income excludes a charge of $18 million to other income (expense)
related to a reserve for a loan and a write-down of certain publicly
traded securities that were determined to be impaired on an other than
temporary basis. On a net of tax basis, this charge was $13 million,
or $0.09 per share.
James C. Mullen, Biogen's Chairman and CEO, said, "AVONEX revenues
continue to grow -- a testament to the ability of our sales team to
successfully post strong results in an increasingly competitive market. I
have every confidence our team will go on to perform well in the face of new
challenges."
(Photo: http://www.newscom.com/cgi-bin/prnh/19990824/BIOLOGO )
Biogen recently announced that it has settled its arbitrations with
Schering-Plough over royalties on U.S. sales of alpha interferon products. As
part of the settlement, Biogen expects to receive in the fourth quarter of
2002 a one-time payment in the range of $45 - $50 million, which represents a
portion of the amount that was in dispute between the parties. The actual
amount of the payment is subject to final calculation and review by the
parties. In addition, Schering-Plough has agreed, effective October 1, 2002,
to commence royalty payments to Biogen on United States sales of alpha
interferon products based on a 1998 agreement between the two companies.
PIPELINE HIGHLIGHTS
AMEVIVE
In September, the Company announced that the Food and Drug Administration
(FDA), after reviewing the information Biogen submitted to reply to FDA's
Complete Response Letter, determined the AMEVIVE application was a class 2
resubmission. Under FDA guidelines, this commits the Agency to complete the
review within six months. No new clinical trials were requested prior to
approval.
The Company is preparing to launch AMEVIVE early next year in the US and
Europe.
CDP 571
In July, Biogen and Celltech Group plc announced that two Phase 3 studies
of CDP 571 did not meet the primary endpoints for patients with moderate-to-
severe Crohn's disease. The companies will review the scope of their
collaboration following additional analysis of the Phase 3 data and
discussions with regulatory authorities.
ANTEGREN(R) (natalizumab)
Biogen and Elan Corporation plc are collaborating on a number of Phase 3
trials for ANTEGREN in the treatment of multiple sclerosis (MS) and Crohn's
disease. Patient enrollment for all Phase 3 trials, with a total of
approximately 3,000 patients, is expected to be completed by year end.
The AFFIRM study is a Phase 3 trial designed to determine whether ANTEGREN
is effective in slowing the rate of disability in MS and reducing the rate of
clinical relapses. AFFIRM completed accrual earlier this year with over 900
patients.
SENTINEL, with over 1,000 patients, is one of the largest trials ever
conducted in MS and is designed to determine whether the treatment of MS with
ANTEGREN in combination with AVONEX is more effective than AVONEX treatment
alone in slowing the rate of disability in MS and in reducing the rate of
clinical relapses.
Biogen and Elan are also conducting the largest Phase 3 trial in Crohn's
disease with approximately 850 patients.
LFA-1 Antagonist
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.
LFA-1 is leukocyte function-associated antigen 1, a cell adhesion molecule
that promotes T-cell migration and activation that can lead to inflammatory
diseases like MS, psoriasis, rheumatoid arthritis and organ transplant
rejection. LFA-1 antagonists block the molecule's action.
2002 FINANCIAL GUIDANCE
For the full year 2002, Biogen reaffirmed its previous June 7th guidance
which indicated:
-- Total revenue growth of 6-10%
-- Operating earnings per share of $1.50 - $1.60
Additionally, based on the recent announcement of a settlement with
Schering-Plough, the resumption of U.S. royalties from Schering-Plough is
expected to drive full year royalties to just over $100 million. As a result,
operating EPS will likely reach the upper end of the $1.50 - $1.60 range.
In the fourth quarter of 2002, a one-time sum of $45 - $50 million, which
represents a portion of the disputed past due royalties, will be paid to
Biogen. This amount is excluded from the above guidance.
INVESTOR CALENDAR
-- Fourth quarter results Thursday, January 23, 2003, 8:30 a.m. EST
CONFERENCE CALL AND WEBCAST
The Company's earnings conference call for the third quarter will be
broadcast via the Internet at 8:30 a.m. ET on October 18, 2002, and will be
accessible through the investor relations section of Biogen's homepage,
http://www.biogen.com.
FORWARD LOOKING STATEMENTS/ SAFE HARBOR
This press release contains forward-looking statements regarding expected
future financial results, anticipated regulatory approval and commercial
launch of AMEVIVE, goals for future commercial products and expected
milestones in the development of the Company's pipeline products.
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, any unanticipated increase in expenses including in the areas of
research and development and sales and marketing, the impact of litigation and
patent-related events, and in-licensing and product opportunities. Approval
and commercial launch of AMEVIVE is subject to the Company's ability to work
with FDA to adequately address questions and provide the clarification and
information requested by the FDA during its review of AMEVIVE. Approval of
AMEVIVE and the Company's expectations regarding its pipeline and future
commercial products are also subject to the other risks inherent in drug
development, including the risk of unexpected new data or information,
unexpected technical or manufacturing issues and intellectual property
disputes. Drug development involves a high degree of risk. Only a small
number of research and development programs result in the commercialization of
a product. Success in early stage clinical trials does not ensure that later
stage or larger scale clinical trials will be successful.
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, Inc., winner of the U.S. National Medal of Technology, is a
biotechnology company principally engaged in discovering and developing drugs
for human healthcare through genetic engineering. Headquartered in Cambridge,
MA, the Company's revenues are generated from worldwide sales of AVONEX(R)
(interferon beta-1a) for treatment of relapsing forms of multiple sclerosis,
(Please see full prescribing information at http://www.avonex.com.), and from
the worldwide sales by licensees of a number of products. Biogen's research
and development activities are focused on novel products to treat inflammatory
and autoimmune diseases, neurological diseases, cancer, fibrosis and
congestive heart failure. The Company maintains active clinical research
programs in protein therapeutics, small molecules, genomics and gene therapy.
For copies of press releases and additional information about the Company,
please consult Biogen's homepage on the World Wide Web at
http://www.biogen.com.
Financial Results For The Third Quarter of 2002
Condensed Consolidated Statements Of Income
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
REVENUES
Product $261,563 $248,107 $778,090 $711,244
Royalties 26,765 15,990 67,844 50,485
Total Revenues 288,328 264,097 845,934 761,729
COST AND EXPENSES
Cost of revenues 42,050 36,458 117,577 100,806
Research and development 104,551 78,895 276,366 230,783
Selling, general and
administrative 72,646 59,157 237,603 162,906
Total Cost and Expenses 219,247 174,510 631,546 494,495
Income from Operations 69,081 89,587 214,388 267,234
Other income (expense), net (10,459) 10,147 4,673 38,143
INCOME BEFORE INCOME TAXES 58,622 99,734 219,061 305,377
Income Taxes 16,414 29,911 61,337 91,579
NET INCOME $42,208 $69,823 $157,724 $213,798
BASIC EARNINGS PER SHARE $0.28 $0.47 $1.06 $1.44
DILUTED EARNINGS PER SHARE $0.28 $0.46 $1.04 $1.40
SHARES USED IN CALCULATING:
BASIC EARNINGS PER SHARE 149,521 148,412 149,137 148,401
DILUTED EARNINGS PER SHARE 151,397 152,636 151,878 153,155
Condensed Consolidated Balance Sheets
(in thousands)
Sept. 30, 2002 Dec. 31, 2001
ASSETS
Current Assets
Cash and marketable securities $828,397 $798,107
Accounts receivable, net 158,177 177,582
Other current assets 160,343 122,038
Total current assets 1,146,917 1,097,727
Property and equipment, net 690,829 555,998
Other assets 47,226 67,321
$1,884,972 $1,721,046
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $274,000 $294,942
Long term debt & liabilities 67,853 77,272
Shareholders' equity 1,543,119 1,348,832
$1,884,972 $1,721,046
SOURCE Biogen, Inc.
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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:
Tim Hunt, Director, Public Affairs,
+1-617-914-6524, or Elizabeth Woo, Director, Investor Relations,
+1-617-679-2812, both of Biogen, Inc.
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