Successes in 2001 trigger strategic investments in 2002 for AMEVIVE (alefacept), ANTEGREN (natalizumab) and robust pipeline Management forecasts modest growth for 2002, accelerated earnings growth to 20 percent for 2003 and beyond
Biogen, Inc. (NASDAQ: BGEN) today reviewed with members of the investment community its strategic and operational plans for continued revenue growth through 2005. Management projects earnings growth in the low single digits for 2002 followed by 20 percent for 2003 and beyond.
2001 – A Year of Strong AVONEX (Interferon beta-1a) Growth, Pipeline Progress
Meeting today with the investment community, Jim Mullen, President and Chief Executive Officer, said, “During 2001 we’ve had tremendous successes in advancing our pipeline. On the basis of those results, we are investing now – for the launch of AMEVIVE in psoriasis, and for the advancement of numerous other pipeline opportunities. We firmly believe our pipeline investments will generate accelerated earnings growth rates of more than 20 percent for 2003 and beyond.”
Mullen cited continued robust momentum for AVONEX, with year-to-date AVONEX sales up 28% for 2001. Biogen expects 2002 AVONEX growth in the upper teens; 2003 AVONEX growth projections are in the high single digit range.
The Company reiterated confidence in the First Call consensus for projected operating earnings of $1.90 diluted earnings per share for the full year 2001, excluding the $8 million upfront fee paid upon initiation of its collaboration with ICOS.
2002 – Preparing to Capitalize on Opportunities
At today’s meeting, Biogen highlighted the substantial progress in its late-stage pipeline and the strategic investments that are flowing from these pipeline successes:
- AMEVIVEis in registration in both the US and Europe for its first indication – moderate-severe psoriasis. On August 6, 2001, regulatory filings for AMEVIVE were submitted in the US and Europe and have been formally accepted for review by the FDA and EMEA.
Since AMEVIVE may be the first biologic to be approved for the treatment of psoriasis, Biogen will initiate the build out of necessary infrastructure, including sales force and customer service, to maximize this potential first-mover advantage. AMEVIVE’s therapeutic profile may potentially address patient needs not addressed by current therapies. The global moderate-severe psoriasis market exceeds $2 billion.
- ANTEGRENis planned to start Phase III trials in MS and Crohn’s Disease this quarter. The Phase III trials for mono and combination therapy in MS will be the largest trials ever conducted in MS. The worldwide MS market today is about $2 billion, but Biogen estimates the ultimate scale of the global MS market to be greater than $4 billion. ANTEGREN has the potential to fulfill patient needs not addressed by current therapies. In September, Biogen and Elan Corporation, plc (NYSE: ELN) presented promising Phase II data for ANTEGREN at the ECTRIMS Conference in Dublin.
“We are on the cusp of an exceptional new growth scenario driven by AVONEX, AMEVIVE and ANTEGREN,” said Mullen. “Biogen is poised to become a two-product company — and our evolution into a three-product organization is soon to follow.
For the full year 2002, Biogen expects that:
- Operating earnings per share will be $1.90 – $2.00 for the full year.
- AVONEX revenues will increase by 15% to 18%.
- Royalty revenue will be in the range of $70 – 85 million. The low end of this range reflects a scenario with non-resumption of royalties from Schering Plough in 2002. The high-end figure reflects a scenario where these revenues do resume in 2002.
- Cost of Sales will be in the range of 13% to 14% of total revenues.
- Research and Development expense, excluding any upfront payments for in-licensing agreements, will be 30% to 32% of total revenues.
- Selling, general and administrative expenses will be approximately 23-25% of total revenues.
- The effective tax rate will be approximately 28%.
2003 and Beyond – Significantly Higher Growth
Biogen cited its goal of surpassing $2 billion in revenues in 2005. Supporting this goal, Biogen projects a revenue growth rate in the high teens, and earnings growth of 20 percent in 2003, 2004, 2005, and beyond.
Also at today’s investment meeting, Biogen reviewed the balance of its clinical pipeline:
- ADENTRI – This highly selective A1 Adenosine Antagonist blocks clinically relevant receptors for the treatment of Congestive Heart Failure. A small molecule compound, ADENTRI, is being developed as both oral and intravenous formulations. This program is currently in Phase I and is planned to enter Phase II trials by year end 2001.
- LTBR – Lymphotoxin Beta Receptor is currently in Phase I trials. The compound may offer a novel approach to autoimmune diseases by disrupting an early event in the autoimmune cascade.
- LFA1 – In July, Biogen and ICOS Corporation (NASDAQ: ICOS) finalized their agreement to collaborate worldwide on the development and commercialization of orally active, small molecule LFA-1 antagonists (including IC747, currently in a Phase I clinical trial) as oral therapeutics for the treatment of inflammatory conditions.
- Interferon Beta Gene Therapy – This program is planned to start Phase I/II clinical trials in glioma, an aggressive form of brain cancer. The adenovirus vector encoding the human IFNbeta gene has a multi-pronged mechanism of action.
Supplemental Financial Information
This news release is provided as a convenience to investors, and inclusion of any information herein is not a determination by Biogen that such information is material. Biogen is providing this information as of November 1, 2001 and disclaims any duty to update information contained in this summary.
The Webcast of the Biogen Analyst & Investor meeting is accessible through the Investor Relations section of Biogen’s homepage, http://www.biogen.com. The webcast will be available for replay through November 9, 2001.
Forward Looking Statements
In addition to historical facts, this press release contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. Reference is made in particular to projections regarding anticipated revenues growth, range of earnings per share, royalty amounts, expense levels and other forecasted financial results for 2002, projections for earnings growth, AVONEX growth, revenue amounts, market size, number of marketed products, and other financial results targeted for 2003-2005, and statements regarding the Company’s expectations as to the commencement of Phase III trials of ANTEGREN and commencement of earlier stage clinical trials of its other development-stage products, the therapeutic potential of the Company’s development-stage products, and the Company’s expectations regarding AMEVIVE approval and launch.
Factors which could cause actual financial results to differ from the Company’s current expectations include, without limitation, the impact of competitive products on AVONEX sales, any change in market acceptance for AVONEX in key markets worldwide, any unexpected negative results related to AVONEX, any unanticipated increase in expenses including in the areas of research and development, any unexpected costs related to commercialization activities, the impact and cost of litigation, the impact and cost of in-licensing opportunities and the other risks and uncertainties associated with drug development and commercialization described in the Company’s periodic reports filed with the Securities and Exchange Commission. In addition, financial projections for 2003 and beyond assume that there will be no significant delays in Amevive approval or launch. Factors which could cause actual results related to AMEVIVE approval and launch timelines to differ materially from the Company’s current expectations include the risk that unexpected concerns may arise from additional data analysis or from additional data or that obstacles may arise or issues be identified in connection with review of data with regulatory authorities or that regulatory authorities may disagree with the Company’s view of the data or may require additional data or information or additional studies. In addition, the Company’s expectations with respect to AMEVIVE may be affected by other risks inherent in the biotechnology industry, including other actions by the Food and Drug Administration on regulatory matters, actions by the U.S. Patent and Trademark Office, and uncertainties regarding the status of biotechnology patents and litigation. If AMEVIVE is approved by the FDA, other risks include reimbursement and pricing decisions and the introduction of competitive products, as well as the other risks and uncertainties described from time to time in the Company’s periodic reports filed with the Securities and Exchange Commission.
Factors which could cause actual results regarding clinical trials to differ from the Company’s current expectations include the risk that the Company will encounter one or more technical hurdles associated with new drug development or that problems or delays may arise during preparations for or the conduct of clinical trials, as well as the other risks and uncertainties associated with drug development described in the Company’s periodic reports filed with the Securities and Exchange Commission. Drug development involves a high degree of risk. Success in early stage clinical trials or preclinical work does not ensure that later stage or larger scale clinical trials will be successful.
Biogen, Inc., winner of the U.S. National Medal of Technology, is a biopharmaceutical company principally engaged in discovering and developing drugs for human healthcare through genetic engineering. Headquartered in Cambridge, MA, the Company’s revenues are generated from international sales of AVONEX for treatment of relapsing forms of multiple sclerosis, and from the worldwide sales by licensees of a number of products, including alpha interferon and hepatitis B vaccines and diagnostic products. (Please see full prescribing information at http://www.avonex.com) Biogen’s research and development activities are focused on novel products to treat inflammatory and autoimmune diseases, neurological diseases, cancer, fibrosis and congestive heart failure. For copies of press releases and additional information about the Company, please consult Biogen’s Homepage on the World Wide Web at http://www.biogen.com
AVONEX® (Interferon beta-1a) is a registered trademark of Biogen, Inc. AMEVIVE® (alefacept) is a registered trademark of Biogen, Inc. ANTEGREN® (natalizumab) is a registered trademark of Elan Corporation.