Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
Date of Report (Date of earliest event reported): July 28, 2004
Biogen Idec Inc.
| Delaware | 0-19311 | 33-0112644 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
14 Cambridge Center, Cambridge, Massachusetts 02142
(Address of principal executive offices) (zip code)
Registrant’s telephone number, including area code: (617) 679-2000
Not Applicable
(Former name or former address, if changed since last report)
| Item 12. Disclosure of Results of Operations and Financial Condition | ||||||||
| SIGNATURES | ||||||||
| EXHIBIT INDEX | ||||||||
| EX-99.1 PRESS RELEASE | ||||||||
Table of Contents
Item 12. Disclosure of Results of Operations and Financial Condition.
The press release attached as Exhibit 99.1 includes information with respect to the following: (a) the Registrant’s adjusted non-GAAP earnings per share and net income for the second quarter and the first six months of 2004, and (b) the Registrant’s adjusted pro forma non-GAAP earnings per share, net income and revenues for the second quarter and the first six months of 2003. These are non-GAAP financial measures.
The non-GAAP financial measures for the second quarter and the first six months of 2004 exclude non-operational and unusual activities and transactions. The non-GAAP financial measures for the second quarter and the first six months of 2003 include revenue and expenses from the former Biogen, Inc. and exclude non-operational and unusual activities and transactions of former Biogen, Inc. and IDEC Pharmaceuticals Corporation.
Management believes that the non-GAAP financial measures provide useful information to investors. In particular, management believes that they allow investors to monitor and evaluate the Registrant’s ongoing operating results and trends and gain a better understanding of the Registrant’s business, period-to-period performance, and prospects for future performance.
This press release is being furnished pursuant to Item 12 of this Current Report on Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that Section, nor shall such documents be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.
2
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Biogen Idec Inc. (Registrant) |
||
Date: July 28, 2004
|
/s/ Thomas J. Bucknum
Thomas J. Bucknum Executive Vice President, General Counsel |
3
Table of Contents
Page 1 Biogen Idec Reports Second Quarter 2004 Earnings
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
FOR IMMEDIATE RELEASE
Biogen Idec Reports Second Quarter 2004 Results
Cambridge, MA, July 28, 2004 — 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.
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® (Interferon beta-1a) sales up 21% (adjusted pro forma) to $347 million and RITUXAN® (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® (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 | |||
Page 2 Biogen Idec Reports Second Quarter 2004 Earnings
| 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® (ibritumomab tiuxetan) sales at $5 million, and AMEVIVE® (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
Page 3 Biogen Idec Reports Second Quarter 2004 Earnings
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. | |||
Page 4 Biogen Idec Reports Second Quarter 2004 Earnings
| • | 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 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
Page 5 Biogen Idec Reports Second Quarter 2004 Earnings
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.
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 |
Adjustments |
Non-GAAP |
GAAP |
Adjustments |
Non-GAAP |
|||||||||||||||||||
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 | (E), (F), (G) | 137.4 | ||||||||||||||||
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 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.
2
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 |
Adjustments |
Non-GAAP |
GAAP |
Adjustments |
Non-GAAP |
|||||||||||||||||||
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 | (E), (F), (G) | 247.5 | ||||||||||||||||
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 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 - $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. GAAP | U.S. GAAP | Biogen Revenue | Pro Forma | |||||||||||||
| Revenue |
Revenue |
Pre-merger (A) |
Combined Revenue |
|||||||||||||
PRODUCT REVENUES |
||||||||||||||||
Avonex® |
$ | 346,516 | $ | — | $ | 286,276 | $ | 286,276 | ||||||||
Amevive® |
12,116 | — | 6,873 | 6,873 | ||||||||||||
Zevalin® |
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. GAAP | U.S. GAAP | Biogen Revenue | Pro Forma | |||||||||||||
| Revenue |
Revenue |
Pre-merger (A) |
Combined Revenue |
|||||||||||||
PRODUCT REVENUES |
||||||||||||||||
Avonex® |
$ | 701,234 | $ | — | $ | 560,633 | $ | 560,633 | ||||||||
Amevive® |
25,103 | — | 10,693 | 10,693 | ||||||||||||
Zevalin® |
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.