Biogen's Third Quarter 2003 Reported EPS of $0.36 Increased 30 Percent Year-
Over-Year; Operating EPS of $0.51 Increased 39 Percent Year-Over-Year
Shareholder Meeting to Vote on Merger with IDEC Pharmaceuticals Scheduled for
November 12, 2003
Oral Psoriasis Therapy Licensed from Fumapharm AG
CAMBRIDGE, Mass., Oct. 28 /PRNewswire-FirstCall/ -- Biogen, Inc. (Nasdaq:
BGEN) today announced financial results for the third quarter of 2003.
(Logo: http://www.newscom.com/cgi-bin/prnh/19990824/BIOLOGO )
For the three months ended September 30, 2003, total revenues were $342
million, an increase of 19 percent over the third quarter of 2002.
* AVONEX(R) (Interferon beta-1a) worldwide sales were $298 million, an
increase of 14 percent over third quarter 2002. U.S. sales were $204
million, and international sales were $94 million.
* AMEVIVE(R) (alefacept) sales were $12 million.
* Royalties were $29 million, an increase of seven percent over the third
quarter 2002.
Reported net income increased 31 percent to $55 million, or $0.36 earnings
per share, in the third quarter of 2003, from $42 million, or $0.28 earnings
per share, in the third quarter of 2002. Operating earnings per share was
$0.51 in the third quarter of 2003 versus $0.37 in the same period of 2002, an
increase of 39 percent. Operating results in the third quarter of 2003
exclude an upfront payment related to the licensing of a second-generation
fumarate derivative from Fumapharm AG, merger-related expenses, gains on the
sales of securities, and an equity writedown. On an after-tax basis, these
charges were $22 million, or $0.14 per share. See attached "Operating
Condensed Consolidated Statements of Income" tables for a reconciliation of
reported results (GAAP) to operating results (Non-GAAP).
"We are eager to move forward as Biogen Idec and to capitalize on our
momentum. We are advancing toward completion of our proposed merger with IDEC
in mid-November. Both companies are experiencing strong revenue growth and
the merger integration planning is proceeding quickly and efficiently," said
Jim Mullen, Biogen's Chairman and Chief Executive Officer. "In addition, our
combined late-stage pipeline is progressing ahead: ANTEGREN(R) (natalizumab)
is in Phase 3 trials in MS and Crohn's disease; RITUXAN(R) (rituximab) is in
Phase 3 trials for Rheumatoid Arthritis; our partner, Fumapharm AG, has
initiated a Phase 3 trial in Europe in psoriasis for the second-generation
oral fumarate, and IDEC's anti-CD23 antibody will soon enter Phase 2 trials."
NEUROLOGY
AVONEX
In August, the new pre-filled syringe for AVONEX, designed to make
treatment even more convenient for people with MS, became available in the
U.S. In Europe, the new prefilled syringe is being made available on a
country-by-country basis. With more than 120,000 patients on therapy, AVONEX
is the number one selling MS treatment worldwide.
In the October 11th issue of The Lancet, researchers who conducted a five-
year Danish study of 541 patients with relapsing-remitting multiple sclerosis
concluded that patients who developed antibodies had a yearly relapse rate
more than 50 percent higher than those who didn't produce antibodies.
Throughout the study, AVONEX had a low rate of conversion from antibody
negative to antibody positive. These new data provide additional insight into
the potential relevance of neutralizing antibodies for MS patients.
ANTEGREN
Two Phase 3 studies of ANTEGREN in MS are 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 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.
The full trial results of ENACT-1 (Evaluation of Natalizumab in Active
Crohn's disease Therapy-1) were presented on October 15th at the American
College of Gastroenterology. In this Phase 3 induction trial, the primary
endpoint of "response", as defined by a 70-point decrease in the Crohn's
Disease Activity Index ("CDAI") at week 10, was not met. 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.
DERMATOLOGY
AMEVIVE
As of October, nearly 3,500 patients in the U.S. have initiated AMEVIVE
treatment. More than 1,800 physicians in the U.S. are pursuing AMEVIVE
therapy for their patients. The continued growth in referring physicians
indicates expanding interest in the use of biologics for the treatment of
psoriasis. Overall, the reimbursement environment for AMEVIVE continues to
improve due to increased payor acceptance of AMEVIVE as well as the Company's
efforts to broaden access options through specialty pharmacies. These factors
are expected to improve physician and patient access to AMEVIVE.
BG-12 (oral fumarate)
Biogen has licensed from Fumapharm AG exclusive rights to develop and
market a potential new oral therapy for psoriasis entering Phase 3 clinical
trials in Europe. The product is a second-generation fumarate derivative with
an immunomodulatory mechanism of action. A first-generation product is
currently marketed as FUMADERM(R) in Germany, where it is the most prescribed
oral systemic treatment of moderate-to-severe psoriasis.
Fumapharm has completed a Phase 2 clinical trial of the second-generation
product in psoriasis. Results of this double blind, multi-center study will
be announced at an upcoming dermatology conference. Biogen plans to
collaborate with Fumapharm to accelerate the Phase 3 clinical development and
registration program worldwide.
2003 FINANCIAL GUIDANCE
The Company confirmed that there is no change to its full year 2003
operating earnings per share guidance. Guidance for full year 2003 reported
earnings per share (GAAP-based financial measure) is not currently assessable
as the Company cannot predict with any certainty the nature or the amount of
non-operating or unusual charges in the fourth quarter.
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 28, 2003, and will be
accessible through the investor relations section of Biogen's homepage,
http://www.biogen.com.
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.
ABOUT AVONEX
AVONEX (Interferon beta-1a) is used to treat relapsing forms of MS to slow
the accumulation of physical disability and decrease the frequency of clinical
exacerbations.
The most common side effects associated with AVONEX treatment are flu-like
symptoms including myalgia, fever, fatigue, headache, chills nausea, vomiting,
pain and asthenia.
AVONEX should be used with caution in patients with depression or other
mood disorders and in patients with seizure disorders. AVONEX should not be
used by pregnant women. Patients with cardiac disease should be closely
monitored. Patients should also be monitored for signs of hepatic injury.
Routine periodic blood chemistry and hematology tests are recommended during
treatment with AVONEX. Rare cases of anaphylaxis have been reported.
FORWARD LOOKING STATEMENTS / SAFE HARBOR
This press release contains forward-looking statements regarding expected
future financial results, improving access and the reimbursement environment
for AMEVIVE, the proposed merger with IDEC and the timing of initiation of
later stage clinical trials for products under development by Biogen and IDEC.
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, 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 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 approval required for the merger.
Unanticipated difficulties encountered in either company's business or with
its products or pipeline may have an impact on closing of the merger or the
results anticipated 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. The Company's expectations regarding the timing of initiation of
later-stage clinical trials for products under development by Biogen and IDEC
are subject to the risks inherent in drug development, including that there
may be safety issues or other problems or delays that arise during earlier
stage clinical trials, unexpected technical or manufacturing hurdles, or
intellectual property disputes.
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.
Additional Information and Where to Find It
IDEC Pharmaceuticals Corporation has filed a Registration Statement on
Form S-4 (No. 333-107098), a joint proxy statement/prospectus of Biogen, Inc.
and IDEC and other relevant materials regarding the proposed merger
transaction with the SEC. Investors and security holders of Biogen and IDEC
are urged to read the joint proxy statement/prospectus filed with the SEC on
October 6, 2003 and the other relevant materials filed by Biogen or IDEC with
the SEC, because they contain important information about IDEC, Biogen and the
proposed transaction. The joint proxy statement/prospectus has been 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 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. In
addition, investors and security holders may access copies of the joint proxy
statement/prospectus and 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 security holders are urged to read the joint
proxy statement/prospectus and the other relevant materials relating to the
proposed transaction before voting or making any investment decision with
respect to the proposed transaction.
Media Contact:
Tim Hunt
Director, Public Affairs
Biogen, Inc.
Tel: (617) 914-6524
Investment Community Contact:
Elizabeth Woo
Senior Director, Investor Relations
Biogen, Inc.
Tel: (617) 679-2812
Financial Results For The Third Quarter of 2003
Condensed Consolidated Statements Of Income
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
REVENUES
Product $310,109 $261,563 $881,435 $778,090
Royalties 28,556 26,765 100,439 67,844
Contract 3,117 - 6,253 -
Total Revenues 341,782 288,328 988,127 845,934
COST AND EXPENSES
Cost of product and royalty
revenues 54,264 42,050 146,176 117,577
Research and development 124,434 104,551 325,623 276,366
Selling, general and
administrative 89,379 72,646 276,949 237,603
Merger related expenses 2,839 - 6,643 -
Total Cost and Expenses 270,916 219,247 755,391 631,546
Income from Operations 70,866 69,081 232,736 214,388
Other income (expense), net 5,809 (10,459) 12,556 4,673
INCOME BEFORE INCOME TAXES 76,675 58,622 245,292 219,061
Income Taxes 21,469 16,414 68,682 61,337
NET INCOME $55,206 $42,208 $176,610 $157,724
BASIC EARNINGS PER SHARE $0.37 $0.28 $1.18 $1.06
DILUTED EARNINGS PER SHARE $0.36 $0.28 $1.17 $1.04
SHARES USED IN CALCULATING:
BASIC EARNINGS PER SHARE 150,134 149,521 149,746 149,137
DILUTED EARNINGS PER SHARE 151,823 151,397 151,586 151,878
Financial Results For The Third 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 understanding of the trends of the
Company or the prospects of future performance.
Three Months Ended
September 30,
2003 (a)
Operating
Reported Adjustments Results
REVENUES
Product $310,109 $310,109
Royalties 28,556 28,556
Contract 3,117 3,117
Total Revenues 341,782 - 341,782
COST AND EXPENSES
Cost of product and royalty revenues 54,264 54,264
Research and development 124,434 (26,681) 97,753
Selling, general and administrative 89,379 89,379
Merger related expenses 2,839 (2,839) -
Total Cost and Expenses 270,916 (29,520) 241,396
Income from Operations 70,866 29,520 100,386
Other income (expense), net 5,809 1,049 6,858
INCOME BEFORE INCOME TAXES 76,675 30,569 107,244
Income Taxes 21,469 8,559 30,028
NET INCOME $55,206 $22,010 $77,216
BASIC EARNINGS PER SHARE $0.37 $0.15 $0.51
DILUTED EARNINGS PER SHARE $0.36 $0.14 $0.51
SHARES USED IN CALCULATING:
BASIC EARNINGS PER SHARE 150,134 150,134 150,134
DILUTED EARNINGS PER SHARE 151,823 151,823 151,823
Three Months Ended
September 30,
2002 (b)
Operating
Reported Adjustments Results
REVENUES
Product $261,563 $261,563
Royalties 26,765 26,765
Contract - -
Total Revenues 288,328 - 288,328
COST AND EXPENSES
Cost of product and royalty revenues 42,050 42,050
Research and development 104,551 104,551
Selling, general and administrative 72,646 72,646
Merger related expenses - -
Total Cost and Expenses 219,247 - 219,247
Income from Operations 69,081 - 69,081
Other income (expense), net (10,459) 18,413 7,954
INCOME BEFORE INCOME TAXES 58,622 18,413 77,035
Income Taxes 16,414 5,156 21,570
NET INCOME $42,208 $13,257 $55,465
BASIC EARNINGS PER SHARE $0.28 $0.09 $0.37
DILUTED EARNINGS PER SHARE $0.28 $0.09 $0.37
SHARES USED IN CALCULATING:
BASIC EARNINGS PER SHARE 149,521 149,521 149,521
DILUTED EARNINGS PER SHARE 151,397 151,397 151,397
(a) Non-operational adjustments for the third quarter of 2003 include
charges of $26.7 million for a non-refundable license fee, $2.8
million related to the pending merger with IDEC, $1.8 million for the
writedown of certain investments, and $0.7 million of gains from
sales of certain non-current marketable securities.
(b) Non-operational adjustments for the third quarter of 2002 includes a
$10.5 million reserve for a loan and a $7.9 million charge for the
writedown of certain non-current marketable securities.
Financial Results For The Third 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 understanding of the trends of the
Company or the prospects of future performance
Nine Months Ended
September 30,
2003 (a)
Operating
Reported Adjustments Results
REVENUES
Product $881,435 $881,435
Royalties 100,439 100,439
Contract 6,253 6,253
Total Revenues 988,127 - 988,127
COST AND EXPENSES
Cost of product and royalty revenues 146,176 146,176
Research and development 325,623 (26,681) 298,942
Selling, general and administrative 276,949 276,949
Merger related expenses 6,643 (6,643) -
Total Cost and Expenses 755,391 (33,324) 722,067
Income from Operations 232,736 33,324 266,060
Other income, net 12,556 15,607 28,163
INCOME BEFORE INCOME TAXES 245,292 48,931 294,223
Income Taxes 68,682 13,701 82,383
NET INCOME $176,610 $35,230 $211,840
BASIC EARNINGS PER SHARE $1.18 $0.24 $1.41
DILUTED EARNINGS PER SHARE $1.17 $0.23 $1.40
SHARES USED IN CALCULATING:
BASIC EARNINGS PER SHARE 149,746 149,746 149,746
DILUTED EARNINGS PER SHARE 151,586 151,586 151,586
Nine Months Ended
September 30,
2002 (b)
Operating
Reported Adjustments Results
REVENUES
Product $778,090 $778,090
Royalties 67,844 67,844
Contract - -
Total Revenues 845,934 - 845,934
COST AND EXPENSES
Cost of product and royalty revenues 117,577 117,577
Research and development 276,366 276,366
Selling, general and administrative 237,603 (5,800) 231,803
Merger related expenses - -
Total Cost and Expenses 631,546 (5,800) 625,746
Income from Operations 214,388 5,800 220,188
Other income, net 4,673 20,595 25,268
INCOME BEFORE INCOME TAXES 219,061 26,395 245,456
Income Taxes 61,337 7,391 68,728
NET INCOME $157,724 $19,004 $176,728
BASIC EARNINGS PER SHARE $1.06 $0.13 $1.19
DILUTED EARNINGS PER SHARE $1.04 $0.13 $1.16
SHARES USED IN CALCULATING:
BASIC EARNINGS PER SHARE 149,137 149,137 149,137
DILUTED EARNINGS PER SHARE 151,878 151,878 151,878
(a) Non-operational adjustments for the nine months ended September 30,
2003 include charges of $26.7 million for a non-refundable license
fee, $12.9 million related to the settlement of litigation, $4.9
million for the writedown of certain investments, $6.6 million
related to the pending merger with IDEC, and $2.2 million of gains
from sales of certain non-current marketable securities.
(b) Non-operational adjustments for the nine months ended September 30,
2002 includes $10.1 million of charges related to the writedown of
certain non-current marketable securities, a $10.5 million reserve
for a loan, and a $5.8 million charge related to severance and post
retirement benefits for the former chairman.
Condensed Consolidated Balance Sheets
(in thousands)
Sep. 30, 2003 Dec. 31, 2002
ASSETS
Current Assets
Cash and marketable securities $925,545 $867,109
Accounts receivable, net 211,747 171,067
Other current assets 159,467 177,848
Total current assets 1,296,759 1,216,024
Property and equipment, net 779,379 738,059
Other assets 74,109 52,905
$2,150,247 $2,006,988
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $283,629 $326,333
Long term debt & liabilities 89,692 85,234
Shareholders' equity 1,776,926 1,595,421
$2,150,247 $2,006,988
SOURCE Biogen, Inc.
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CONTACT:
Tim Hunt, Director, Public Affairs,
+1-617-914-6524, or Elizabeth Woo, Senior Director, Investor
Relations, +1-617-679-2812 both of Biogen, Inc.
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