BIOGEN DELIVERS ON OPERATING EARNINGS GUIDANCE OF $1.90 PER SHARE AFTER ONE-TIME CHARGES

2001 REVENUES EXCEED $1 BILLION

Biogen, Inc. (NASDAQ: BGEN) today reported that revenues for the year ended December 31, 2001 increased 13 percent, to $1,043 million from $926 million in 2000. Net income for 2001 was $273 million, or $1.78 per share, which includes $0.12 per share of net one-time charges. This resulted in full year 2001 operating earnings per share of $1.90. On an operating basis, earnings per share increased eight percent over 2000 earnings per share of $1.75.

For the three months ending December 31, 2001, the Company reported total revenues, including royalties, of $280 million compared to $245 million for the same quarter last year. Net income for the fourth quarter of 2001 was $59 million, or $0.39 per share, and included one-time charges of $20 million, or $0.09 per share. Excluding these one-time charges, fourth quarter earnings per share were $0.48 compared to $0.47 for the same period last year.

The one-time charges in 2001 are:

 

    • A $2.5 million, or $0.01 per share gain, as a result of gains on the sale of marketable securities in the first quarter.

 

    • An $8 million, or $0.04 per share, upfront fee paid upon initiation of the ICOS collaboration which began in the third quarter.

 

    • A $20 million, or $0.09 per share charge, in the fourth quarter as part of a settlement of the ongoing patent infringement dispute with Berlex. (NOTE: Please see Biogen’s statement, released today – January 24.)

 

    • Also in the fourth quarter, Biogen marked to market certain publicly traded securities that were determined to be impaired on an other than temporary basis. This created a loss of $27.9 million, largely offset by gains of $27.8 million on the sale of other marketable securities.

 

In 2000, the Company reported net income of $334 million, or $2.16 per share, which included gains on the sale of marketable securities of $101 million, or $0.41 per share. Excluding these gains, full year 2000 operating earnings were $271 million, or $1.75 operating earnings per share.

“Biogen wrapped up a successful year with four quarters of solid results. Our AVONEX® business continued its strong growth. We completed the filing for market approval of AMEVIVE® in both the U.S. and Europe in record time. Our pipeline made major advances. We expanded our global commercial presence and restructured the management team. And our
revenues exceeded $1 billion – a milestone in this Company’s history,” said James C. Mullen, Biogen’s President and CEO.

For the fourth quarter and full year 2001, AVONEX growth accelerated to 28 percent year-over-year. For the quarter ended December 31, 2001, sales reached a record $259 million. AVONEX sales in 2001 were $972 million versus $761 million in 2000. At the end of 2001, more than 118,000 patients were on AVONEX, which remains the number one therapy worldwide for patients with multiple sclerosis (MS).

2001 also was a watershed year for Biogen’s pipeline, which has increased its momentum entering 2002:

 

    • AMEVIVE successfully completed Phase 3 trials in psoriasis, and now is more than five months into the review process with U.S. and European regulators.

 

    • Biogen and its partner Elan Corporation, plc successfully completed ANTEGREN® (natalizumab) Phase 2 trials. The companies are now enrolling patients in Phase 3 trials in MS and Crohn’s disease.

 

    • ADENTRI™ (Adenosine receptor antagonist), a compound for acute and chronic congestive heart failure, entered Phase 2 trials.

 

    • Lymphotoxin Beta Receptor, a biologic for various autoimmune diseases, began Phase 1 safety trials and is expected to enter Phase 2 trials in the second half of 2002.

 

    • Initial trials in beta interferon gene therapy are actively recruiting glioma patients.

 

    • Three compounds entered the clinic in 2001 — and Biogen added another with its collaboration with ICOS Corporation on small molecule LFA-1 antagonists, an exciting opportunity for an oral product with potential applications in autoimmune diseases such as psoriasis and MS.

 

Biogen’s R&D; expenditures in 2001 were 30 percent of total revenue — one of the highest rates in the industry. Currently, Biogen has more than 20 project areas in its research pipeline, each of which is designed to focus on a large, underserved yet focused market.

For the full year 2002, the Company reaffirmed guidance (originally announced on November 1, 2001) of $1.90 – $2.00 for operating earnings per share. Operating earnings per share for the first quarter of 2002 are expected to fall within the $0.45 – $0.48 range.

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 statements regarding future financial results, including the anticipated ranges of revenues and earnings per share and the Company’s expectations regarding the completion or commencement of clinical trials for the Company’s pipeline products.

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, the timing of the approval of Rebif in the United States, 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, the impact of litigation and patent-related events, 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.

Factors which could cause actual results regarding clinical trials to differ from the Company’s current expectations include, without limitation, 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.

About Biogen

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 U.S. and European sales of AVONEX® (Interferon beta-1a) 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. The Company maintains active clinical research programs in protein therapeutics, small molecules, genomics and gene therapy. 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. ADENTRI™ is a trademark of Biogen, Inc.

NOTE: The Company’s earnings conference call for the fourth quarter will be broadcast via the Internet at 8:30 a.m. EST on Thursday, January 24, 2002, and will be accessible through the investor relations section of Biogen’s homepage, http://www.biogen.com .

Financial Results For The Fourth Quarter and Full Year of 2001
Condensed Consolidated Statements Of Income
(in thousands, except per share amounts)



Three Months EndedFull Year Ended
December 31,December 31,
2001 2000 2001 2000
REVENUES

Product $259,177 $203,232 $971,594 $761,079

Royalties 21,281 42,104 71,766 165,373

Total Revenues 280,458 245,336 1,043,360 926,452

COST AND EXPENSES

Cost of revenues 35,704 32,753 136,510 125,198

Research and development 83,773 73,635 314,556 302,840

Selling, general and
administrative 68,017 46,209 232,096 170,058

Total Cost and Expenses 187,494 152,597 683,162 598,096

Income from Operations 92,964 92,739 360,198 328,356

Other income (expense), net (8,844) 9,784 29,299 158,749

INCOME BEFORE INCOME TAXES 84,120 102,523 389,497 487,105

Income Taxes 25,235 30,753 116,814 153,528

NET INCOME $58,885 $71,770 $272,683 $333,577

BASIC EARNINGS PER SHARE $0.40 $0.49 $1.84 $2.24

DILUTED EARNINGS PER SHARE $0.39 $0.47 $1.78 $2.16


SHARES USED IN CALCULATING:

BASIC EARNINGS PER SHARE 148,218 147,894 148,355 148,743

DILUTED EARNINGS PER SHARE 152,198 152,846 152,916 154,602

 

 

Condensed Consolidated Balance Sheets (in thousands)


Dec. 31, 2001 Dec. 31, 2000

ASSETS
Current Assets

Cash and marketable securities $798,107 $682,412

Accounts receivable, net 177,582 143,178

Other current assets 122,038 102,681

Total current assets 1,097,727 928,271

Property and equipment, net 555,998 400,429

Other assets 67,321 103,156

$1,721,046 $1,431,856


LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities $294,942 $221,021

Long term debt & liabilities 77,272 104,433

Shareholders' equity 1,348,832 1,106,402

$1,721,046 $1,431,856