BIOGEN ANNOUNCES SECOND QUARTER 2002 EARNINGS PER SHARE OF $0.29

 

 

    • FDA Advisory Committee Recommendation and Complete Response Letter Advance AMEVIVE® (alefacept) Towards Approval

 

    • AFFIRM, the First Phase 3 Trial for ANTEGREN® (natalizumab) in Multiple Sclerosis (MS), Fully Accrued; Other Trials Progressing On Schedule

 

    • James C. Mullen Elected Chairman of Biogen following James L. Vincent’s Retirement

 

    • Management Reaffirms 2005 Goal of $2 Billion in Revenues

 

Biogen, Inc. (NASDAQ: BGEN) today announced financial results for the second quarter of 2002. For the three months ended June 30, 2002:

    • Worldwide product sales were $251 million, an increase of three percent over second quarter 2001.

 

      • U.S. sales of $176 million increased two percent year over year. The lower growth was primarily due to an inventory reduction by some wholesalers of approximately one week, an impact of roughly $14-16 million.

 

      • International sales were $75 million, an increase of seven percent year over year; in local currency, sales grew 11 percent year over year.

 

    • Reported net income was $43 million, or $0.29 per share. This compares to reported net income of $72 million, or $0.47 per share in the second quarter of 2001.

 

  • Operating net income was $48 million, or $0.31 per share. Operating net income excludes a charge for severance and other benefits of $5.8 million related to Mr. Vincent’s retirement which are included in selling, general and administrative expenses.

James C. Mullen, Biogen’s Chairman and CEO, said, “Based on prescription data and wholesaler shipments, AVONEX® (Interferon beta-1a) demand has remained constant. However, reported sales were soft due, in large part, to inventory reductions in the wholesaler channels. This trend ended in mid-June and we expect that at approximately 1.5 weeks of inventory in the system, there will be no further corrections.

“More importantly, Biogen continued progress on its key late-stage programs, staying on course for our goal of $2 billion in revenue and 3 to 4 commercial products by 2005. With AMEVIVE, we have successfully worked with the FDA to keep the approval process on track. We look forward to making this new treatment for psoriasis available to patients in the near future.”

LATE-STAGE PIPELINE UPDATE

AMEVIVE

On May 23rd, the Dermatologic & Ophthalmic Advisory Committee convened by U.S. Food and Drug Administration (FDA) voted to recommend AMEVIVE for market approval.

In June, Biogen received a Complete Response Letter from the FDA on its application for approval to market AMEVIVE in the U.S. as a treatment for moderate-to-severe chronic plaque psoriasis. No new clinical trials were requested prior to approval. The Agency proposed post-marketing clinical studies to further profile the safety and effectiveness of AMEVIVE. The Company is working closely with FDA to address the questions raised and move forward rapidly in the approval process.

Biogen has responded to all questions regarding AMEVIVE from the European regulatory agency. The Company continues to expect that the commercial launch of AMEVIVE is on track for late 2002 / early 2003 in both the U.S. and Europe.

CDP 571

In April, Biogen and Celltech announced a collaboration for the research, development, manufacturing and commercialization of CDP-571, Celltech’s humanized anti-TNFá antibody product. CDP-571 is completing Phase 3 development as a treatment for Crohn’s disease.

Phase 3 results are expected in the third quarter of 2002.

ANTEGREN

Biogen and Elan are collaborating on two Phase 3 trials for ANTEGREN in the treatment of MS.

The AFFIRM study is a Phase 3 trial designed to determine whether ANTEGREN is effective in slowing the rate of disability in MS and reducing the rate of clinical relapses. AFFIRM completed accrual this quarter with over 900 patients.

The SENTINEL Phase 3 trial, which will be one of the largest trials conducted in MS, is designed to determine whether the treatment of MS with ANTEGREN in combination with AVONEX is more effective than AVONEX treatment alone in slowing the rate of disability in MS and in reducing the rate of clinical relapses.

Biogen and Elan are also conducting the largest Phase 3 trial in Crohn’s disease with approximately 850 patients.

The SENTINEL and Crohn’s disease trials are progressing to complete enrollment by year end.

2002 FINANCIAL GUIDANCE

For the full year 2002, Biogen reaffirmed guidance (originally announced on June 7, 2002) as follows:

    • Total revenue growth of 6-10%

 

  • Operating earnings per share of $1.50 – $1.60

For the third quarter of 2002, operating earnings per share are expected in the range of $0.32 – $0.38.

INVESTOR CALENDAR

    • Third quarter results Friday, October 18, 2002, 8:30 a.m. EST

 

    • Fourth quarter results Thursday, January 23, 2003, 8:30 a.m. EST

 

  • First quarter results Friday, April 18, 2003, 8:30 a.m. EST

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. EST on July 18, 2002, and will be accessible through the investor relations section of Biogen’s homepage, http://www.biogen.com.

FORWARD LOOKING STATEMENTS/ SAFE HARBOR

This press release contains forward-looking statements regarding expected future financial results, anticipated regulatory approval and commercial launch of AMEVIVE, goals for future commercial products and expected milestones in the development of the Company’s late-stage pipeline products.

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 and earnings per share, may be affected by the impact of competitive products on AVONEX sales, any slowing of growth of the multiple sclerosis market, any change in market acceptance of AVONEX in key markets worldwide, any unanticipated increase in expenses including in the areas of research and development and sales and marketing, the impact of litigation and patent-related events and in-licensing and product opportunities. Approval and commercial launch of AMEVIVE is subject to the Company’s ability to work with FDA to adequately address questions and provide the clarification and information requested in the Complete Response Letter. Approval of AMEVIVE and the Company’s expectations regarding its late stage pipeline and future commercial products are also subject to the other risks inherent in drug development, including the risk of unexpected new data or information, unexpected technical or manufacturing issues and intellectual property disputes. Drug development involves a high degree of risk. Only a small number of research and development programs result in the commercialization of a product. Success in early stage clinical trials does not ensure that later stage or larger scale clinical trials will be successful.

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.

ABOUT BIOGEN

Biogen, Inc., winner of the U.S. National Medal of Technology, is a biotechnology 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, (Please see full prescribing information at http://www.avonex.com.), and from the worldwide sales by licensees of a number of products, including alpha interferon and hepatitis B vaccines and diagnostic products. 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.

Financial Results for the Second Quarter of 2002
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)