Total Revenues Up 19 Percent Year-Over-Year 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
CAMBRIDGE, Mass., Oct. 28 /PRNewswire-FirstCall/ -- Biogen, Inc.
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 http://www.newscom.com/cgi-bin/prnh/19990824/BIOLOGO
http://photoarchive.ap.org/ DATASOURCE: Biogen, Inc. 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. Web site: http://www.biogen.com/ Company News On-Call:
http://www.prnewswire.com/comp/101550.html
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