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Biogen Idec First Quarter 2014 Revenues Reach $2.1 Billion Driven by Continued Strength of MS Franchise

April 23, 2014 News Release

Quarter Highlighted by EU Approval of TECFIDERA® and US and Canadian Approval of New Hemophilia B Therapy ALPROLIXTM

Neurology Pipeline Expands through Alzheimer’s Disease Collaboration with Eisai

 

CAMBRIDGE, Mass.--(BUSINESS WIRE)--Biogen Idec Inc. (NASDAQ: BIIB) today reported first quarter 2014 results, including revenue of $2.1 billion, a 51% increase compared to the first quarter of 2013. The revenue growth year-over-year was driven by strong TECFIDERA performance and from recording 100% of TYSABRI® revenues following our acquisition of complete rights for the asset in the second quarter of 2013. First quarter 2014 non-GAAP diluted earnings per share (EPS) were $2.47, an increase of 25% over the first quarter of 2013. Non-GAAP net income attributable to Biogen Idec for the year was $587 million, an increase of 25% over the first quarter of 2013.

On a reported basis, GAAP diluted EPS for the first quarter of 2014 were $2.02, an increase of 13% over the first quarter of 2013. GAAP net income attributable to Biogen Idec for the first quarter of 2014 was $480 million, an increase of 12% versus the same period in the prior year. (A reconciliation of GAAP to Non-GAAP quarterly financial results and 2014 guidance can be found in Table 3 at the end of this release).

Diluted GAAP and non-GAAP EPS were reduced by approximately 35 cents as a result of a $118 million R&D expense related our new Alzheimer’s disease collaboration agreement with Eisai.

“Biogen Idec started 2014 on a strong note with the approval of TECFIDERA for MS patients in Europe and ALPROLIX for hemophilia B patients in the United States and Canada,” said Chief Executive Officer George A. Scangos, Ph.D. “Following an excellent first year of sales in the U.S., TECFIDERA is off to a solid start in Germany, with plans to launch in additional countries in the coming months. Through the remainder of 2014 we anticipate regulatory decisions on new products for hemophilia and MS, and several important early-stage proof-of-concept and clinical study read-outs – and through our collaboration with Eisai we are building one of the broadest research portfolios targeting Alzheimer’s disease.”

First Quarter 2014 Performance Highlights

  • AVONEX® revenues increased 2% compared to the first quarter of 2013 to $761 million. The total was primarily comprised of $476 million in U.S. sales and approximately $285 million in sales outside the U.S.
  • TYSABRI revenues increased by 41% to $441 million as a result of recording 100% of TYSABRI revenues following our acquisition of complete rights to the asset in the second quarter of 2013. Global in-market sales for TYSABRI for the first quarter of 2014 decreased 3% compared to the first quarter of 2013.
  • TECFIDERA revenues were $506 million. The total was comprised of $460 million in U.S. sales and approximately $46 million in sales outside the U.S.
  • RITUXAN® and GAZYVATM net revenues from our unconsolidated joint business arrangement were $297 million.

Other Financial Results

  • Revenues for FAMPYRA® and FUMADERMTM totaled $35 million in the first quarter of 2014, compared to $38 million in the first quarter of 2013.
  • Royalty revenues totaled $38 million in the first quarter of 2014, compared to $33 million in the first quarter of 2013.
  • Corporate partner revenues totaled $52 million in the first quarter of 2014 compared to $22 million in the first quarter of 2013.
  • As of March 31, 2014, Biogen Idec had cash, cash equivalents and marketable securities totaling approximately $2.0 billion.

Updated 2014 Financial Guidance

Biogen Idec also increased its full year 2014 financial guidance. This guidance consists of the following components:

  • Revenue growth is expected to be approximately 26% to 28%.
  • R&D expense is expected to be approximately 20% to 22% of total revenue.
    • Our full year guidance for R&D expense continues to earmark approximately $200 million for new early stage business development opportunities, of which the Eisai transaction is included in this amount.
  • SG&A expense is expected to be approximately 22% to 23% of total revenue.
  • Non-GAAP diluted EPS is expected to be between $11.35 and $11.45.
  • GAAP diluted EPS is expected to be between $9.85 and $9.95.

Biogen Idec may incur charges, realize gains or experience other events in 2014 that could cause actual results to vary from this guidance.

Multiple Sclerosis (MS) Events

  • On February 3, 2014, TECFIDERA (dimethyl fumarate) was approved by the European Commission as a first-line oral treatment for people with relapsing-remitting multiple sclerosis, the most common form of multiple sclerosis.
  • In March 2014, the U.S. Food and Drug Administration (FDA) extended the initial Prescription Drug User Fee Act date for its review of the Biologics License Application (BLA) for marketing approval of PLEGRIDY™, a subcutaneous peginterferon beta-1a candidate for relapsing forms of multiple sclerosis. The company now anticipates a U.S. launch of PLEGRIDY in the second half of 2014.

Hemophilia Events

  • On March 21, 2014, Health Canada approved ALPROLIX™ [Coagulation Factor IX (Recombinant), Fc Fusion Protein], for the control and prevention of bleeding episodes and routine prophylaxis in adults and children aged 12 and older, with hemophilia B. In Canada, ALPROLIX is the first approved long-acting hemophilia B therapy and is indicated to prevent or reduce the frequency of bleeding episodes with prophylactic infusions starting at once weekly or once every 10-14 days.
  • On March 28, 2014, the FDA approved ALPROLIX. In the U.S., ALPROLIX is indicated for the control and prevention of bleeding episodes, perioperative management and routine prophylaxis in adults and children with hemophilia B. The therapy is shown to reduce bleeding episodes with prophylactic infusions starting at least a week apart or up to every 10 days.
  • On April 10, 2014, Biogen Idec and Swedish Orphan Biovitrum AB released positive top-line results of the Kids A-LONG Phase 3 clinical study that evaluated the safety and efficacy of ELOCTATE™, an investigational recombinant factor VIII Fc fusion protein product candidate, in children with severe hemophilia A. ELOCTATE was generally well-tolerated and no inhibitors (neutralizing antibodies that may interfere with the activity of the therapy) were detected. Efficacy analyses showed twice-weekly prophylactic dosing with ELOCTATE maintained low bleeding rates in children.

Pipeline Development Highlights

  • In January 2014, Biogen Idec entered into an exclusive worldwide collaboration and license agreement with Sangamo BioSciences focused on the development of therapeutics for hemoglobinopathies, inherited conditions that result from the abnormal structure or underproduction of hemoglobin.
  • In March 2014, Biogen Idec and Eisai Co., Ltd. entered into a collaboration to develop and commercialize two of Eisai’s clinical candidates for Alzheimer’s disease, E2609 and BAN2401. The agreement also provides Eisai with an option to jointly develop and commercialize two of Biogen Idec’s candidates for AD, the anti-amyloid beta antibody BIIB037 and an anti-tau monoclonal antibody.

Corporate and Commercial Activities

  • In January 2014, Biogen Idec and UCB announced that they have signed exclusive agreements granting UCB the right to commercialize Biogen Idec products in South Korea, Hong Kong, Thailand, Singapore, Malaysia and Taiwan, and to develop and commercialize Biogen Idec products in China.
  • In February 2014, Biogen Idec announced that Chairman of the Board William D. (Bill) Young will retire from the Company’s Board of Directors, effective at the Company’s 2014 annual meeting of stockholders. Mr. Young has been a member of Biogen Idec’s Board of Directors since 1997 and has served as Chairman of the Board since 2010. Stelios Papadopoulos, Ph.D., a member of Biogen Idec’s Board of Directors since 2008, has been appointed to assume the role of Chairman of the Board following the end of Mr. Young’s term.
  • On April 10, 2014, Biogen Idec announced the appointment of Adam M. Koppel, M.D., Ph.D., as senior vice president and chief strategy officer, effective May 15, 2014. Dr. Koppel will be responsible for leading corporate strategy and portfolio management. He will report to George Scangos, Ph.D., CEO, and will be a member of the Biogen Idec management team.

Conference Call and Webcast

The Company's earnings conference call for the first quarter will be broadcast via the internet at 8:00 a.m. EDT on April 23, 2014, and will be accessible through the Investors section of Biogen Idec's homepage, www.biogenidec.com. Supplemental information in the form of a slide presentation will also be accessible at the same location on the internet at the time of the conference call and will be subsequently available on the website for one month.

About Biogen Idec

Through cutting-edge science and medicine, Biogen Idec discovers, develops and delivers to patients worldwide innovative therapies for the treatment of neurodegenerative diseases, hemophilia and autoimmune disorders. Founded in 1978, Biogen Idec is the world’s oldest independent biotechnology company. Patients worldwide benefit from its leading multiple sclerosis therapies. For product labeling, press releases and additional information about the Company, please visit www.biogenidec.com.

Safe Harbor

This press release contains forward-looking statements, including statements about 2014 financial guidance, anticipated regulatory decisions and data read-outs, and potential product launches and timing thereof. These forward-looking statements may be accompanied by such words as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “potential,” “project,” “target,” “will” and other words and terms of similar meaning. You should not place undue reliance on these statements.

These statements involve risks and uncertainties that could cause actual results to differ materially from those reflected in such statements, including: our dependence on sales from our principal products; uncertainty of success in executing our commercial launch of TECFIDERA; failure to protect and enforce our data, intellectual property and other proprietary rights and the diminution of our ability to derive anticipated benefits from our products; difficulties in obtaining or changes in the availability of reimbursement for our products; uncertainty of success in commercializing and developing other products, including our ability to obtain product approvals in a timely manner or at all for new or current products; the occurrence of adverse safety events with our products; failure to compete effectively due to significant product competition in the markets for our products; adverse market and economic conditions, which may cause continued pressure on product pricing or otherwise impact the extent of reimbursement for our products or the timing of payments to us; dependence on collaborators and other third parties for the development and commercialization of products; problems with our manufacturing processes; failure to manage our growth and execute our growth initiatives; failure to comply with government regulation; the risks of doing business internationally; charges and other costs relating to our properties; risks and uncertainties relating to the timing, outcome and impact of legal, administrative and other proceedings and disputes; fluctuations in our effective tax rate; our ability to attract and retain qualified personnel; uncertainty and potential liabilities relating to product liability and intellectual property claims; the market, interest and credit risks associated with our portfolio of marketable securities; environmental risks; and the other risks and uncertainties that are described in the Risk Factors section of our most recent annual or quarterly report and in other reports we have filed with the SEC.

These statements are based on our current beliefs and expectations and speak only as of the date of this press release. We do not undertake any obligation to publicly update any forward-looking statements.

 

TABLE 1

Biogen Idec Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(unaudited, in thousands, except per share amounts)
               
               
       

For the Three Months

        Ended March 31,
        2014     2013
Revenues:              
               
Product, net       $ 1,742,765       $ 1,095,779  
               
Unconsolidated joint business         296,885         264,606  
               
Royalty         37,856         32,820  
               
Corporate partner         52,245         21,891  
               
Total revenues         2,129,751         1,415,096  
               
Cost and expenses:              
               
Cost of sales, excluding amortization of acquired intangible assets         279,245         133,749  
               
Research and development         528,884         284,340  
               
Selling, general and administrative         511,674         352,598  
               
Amortization of acquired intangible assets         143,258         51,301  
               
Collaboration profit sharing         -         85,357  
               
(Gain) loss on fair value remeasurement of contingent consideration         (799 )       2,277  
               
Total cost and expenses         1,462,262         909,622  
               
Gain on sale of rights         3,859         5,051  
               
Income from operations         671,348         510,525  
               
Other income (expense), net         (5,601 )       (14,457 )
               
Income before income tax expense and equity in loss of investee, net of tax         665,747         496,068  
               
Income tax expense         178,414         65,508  
               
Equity in loss of investee, net of tax         7,605         3,811  
               
Net income         479,728         426,749  
               
Net income (loss) attributable to noncontrolling interests, net of tax         (228 )       -  
               
Net income attributable to Biogen Idec Inc.       $ 479,956       $ 426,749  
               
               
Net income per share:              
Basic earnings per share attributable to Biogen Idec Inc.       $ 2.03       $ 1.80  
               
Diluted earnings per share attributable to Biogen Idec Inc.       $ 2.02       $ 1.79  
               
               
Weighted-average shares used in calculating:              
Basic earnings per share attributable to Biogen Idec Inc.         236,786         236,837  
               
Diluted earnings per share attributable to Biogen Idec Inc.         237,849         238,304  
                       
 
TABLE 2
Biogen Idec Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(unaudited, in thousands)
               
        As of     As of
        March 31,     December 31,
        2014     2013
ASSETS              
               
               
Cash, cash equivalents and marketable securities       $ 1,260,211     $ 1,222,729
               
Accounts receivable, net         1,018,487       824,406
               
Inventory         672,750       659,003
               
Other current assets         573,576       478,796
               
Total current assets         3,525,024       3,184,934
               
Marketable securities         724,272       625,772
               
Property, plant and equipment, net         1,744,266       1,750,710
               
Intangible assets, net         4,364,384       4,474,653
               
Goodwill         1,232,916       1,232,916
               
Investments and other assets         639,269       594,350
               
TOTAL ASSETS       $ 12,230,131     $ 11,863,335
               
               
LIABILITIES AND EQUITY              
               
Current portion of notes payable and line of credit       $ 3,550     $ 3,494
               
Other current liabilities         1,590,697       1,754,785
               
Notes payable         591,012       592,433
               
Long-term deferred tax liability         200,901       232,554
               
Other long-term liabilities         702,908       659,231
               
Equity         9,141,063       8,620,838
               
TOTAL LIABILITIES AND EQUITY       $ 12,230,131     $ 11,863,335
                   
 
TABLE 3
Biogen Idec Inc. and Subsidiaries
GAAP to Non-GAAP Reconciliation: Net Income and Net Income Per Share
(unaudited, in millions, except per share amounts)
                     
                     
        For the Three Months      
        Ended March 31,      

EARNINGS PER SHARE

      2014     2013      
                     
GAAP earnings per share - Diluted       $ 2.02       $ 1.79        
Adjustments to net income attributable to Biogen Idec Inc. (as detailed below)         0.45         0.18        
Non-GAAP earnings per share - Diluted       $ 2.47       $ 1.97        
                     

An itemized reconciliation between net income attributable to Biogen Idec Inc. on a GAAP basis and net income attributable to Biogen Idec Inc. on a non-GAAP basis is as follows:

                     
GAAP net income attributable to Biogen Idec Inc.       $ 480.0       $ 426.7        
Adjustments:                    
Amortization of acquired intangible assets         139.8         48.6        
(Gain) loss on fair value remeasurement of contingent consideration         (0.8 )       2.3        
SG&A: Stock option expense         2.6         1.9        
R&D: Stock option expense         2.3         1.6        
Income tax effect related to reconciling items         (37.0 )       (11.7 )      
Non-GAAP net income attributable to Biogen Idec Inc.       $ 586.9       $ 469.4        
                     
                     
2014 Full Year Guidance: GAAP to Non-GAAP Adjustments                    
An itemized reconciliation between projected EPS on a GAAP basis and on a non-GAAP basis is as follows:
                     
        $     Shares     Diluted EPS
Projected GAAP net income attributable to Biogen Idec Inc.         2,355         238       $ 9.91
Adjustments:                    
Stock option expense         10              
Amortization of acquired intangible assets         450              

(Gain) loss on fair value remeasurement of contingent consideration

        10              

Income tax expense: Income tax effect related to reconciling items

        (115 )            
Projected Non-GAAP net income attributable to Biogen Idec Inc.         2,710         238       $ 11.40
                     
Numbers may not foot due to rounding.                    
                     

Use of Non-GAAP Financial Measures

We supplement our consolidated financial statements presented on a GAAP basis by providing additional measures which may be considered “non-GAAP” financial measures under applicable SEC rules. We believe that the disclosure of these non-GAAP financial measures provides additional insight into the ongoing economics of our business and reflects how we manage our business internally, set operational goals and forms the basis of our management incentive programs. These non-GAAP financial measures are not in accordance with generally accepted accounting principles in the United States and should not be viewed in isolation or as a substitute for reported, or GAAP, net income attributable to Biogen Idec Inc. and diluted earnings per share.

Our “Non-GAAP net income attributable to Biogen Idec Inc.” and “Non-GAAP earnings per share - Diluted” financial measures exclude the following items from GAAP net income attributable to Biogen Idec Inc. and diluted earnings per share:

1. Purchase accounting and merger-related adjustments.

We exclude certain purchase accounting related items associated with the acquisition of businesses, assets and amounts in relation to the consolidation of variable interest entities for which we are the primary beneficiary. These adjustments include charges for in-process research and development, the amortization of certain acquired intangible assets and fair value remeasurements of our contingent consideration obligations. The exclusion of these charges provides management and investors with a supplemental measure of performance which the Company believes better reflects the underlying economics of the business.

2. Stock option expense recorded in accordance with the accounting standard for share-based payments.

We believe that excluding the impact of expensing stock options better reflects the recurring economic characteristics of our business.

3. Other items.

We evaluate other items on an individual basis, and consider both the quantitative and qualitative aspects of the item, including (i) its size and nature, (ii) whether or not it relates to our ongoing business operations, and (iii) whether or not we expect it to occur as part of our normal business on a regular basis. We also include an adjustment to reflect the related tax effect of all reconciling items within our reconciliation of our GAAP to Non-GAAP net income attributable to Biogen Idec Inc.

 
TABLE 4
Biogen Idec Inc. and Subsidiaries
Product Revenues
(unaudited, in thousands)
               
               
        For the Three Months
        Ended March 31,
        2014     2013
PRODUCT REVENUES              
               
AVONEX®       $ 761,474     $ 746,098
               
TYSABRI®         441,045       312,170
               
TECFIDERA®         505,709       -
               
FAMPYRA®         18,961       23,203
               
FUMADERM ™         15,576       14,308
               
Total product revenues, net       $ 1,742,765     $ 1,095,779
                   

 

Contact:

 

Biogen Idec
Media Contact:
Jason Glashow, 781-464-3260
Senior Director, Public Affairs
or
Investor Contacts:
Claudine Prowse, Ph.D., 781-464-2442
Vice President, Investor Relations
or
Ben Strain, 781-464-2442
Associate Director, Investor Relations

 

 

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