BGEN Biogen (MM)

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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