Reported Earnings Per Share of $0.28; Operating Earnings Per Share of $0.37
- Reported Earnings Per Share of $0.28; Operating Earnings Per Share of $0.37
- AVONEX® (Interferon beta-1a) Revenues Increase Five Percent Worldwide
- Company Preparing to Launch AMEVIVE® (alefacept) in the US & Europe in Early 2003
- Orally Active LFA-1 Antagonist Advances into Phase 2 Psoriasis Trial
- Biogen to Receive $45 – $50 Million for Royalty Payment Settlement with Schering-Plough in the Fourth Quarter
Biogen, Inc. (NASDAQ: BGEN) today announced financial results for the third quarter of 2002. For the three months ended September 30, 2002:
- Worldwide product sales were $262 million, an increase of five percent over third quarter 2001.
- U.S. sales of $186 million increased two percent year over year.
- International sales were $75 million, an increase of 15 percent year over year; in local currency, sales grew 11 percent year over year.
- Reported net income was $42 million, or $0.28 per share. This compares to reported net income of $70 million, or $0.46 per share in the third quarter of 2001.
- Operating net income was $55 million, or $0.37 per share. Operating net income excludes a charge of $18 million to other income (expense) related to a reserve for a loan and a write-down of certain publicly traded securities that were determined to be impaired on an other than temporary basis. On a net of tax basis, this charge was $13 million, or $0.09 per share.
James C. Mullen, Biogen´s Chairman and CEO, said, “AVONEX revenues continue to grow — a testament to the ability of our sales team to successfully post strong results in an increasingly competitive market. I have every confidence our team will go on to perform well in the face of new challenges. ”
Biogen recently announced that it has settled its arbitrations with Schering-Plough over royalties on U.S. sales of alpha interferon products. As part of the settlement, Biogen expects to receive in the fourth quarter of 2002 a one-time payment in the range of $45 – $50 million, which represents a portion of the amount that was in dispute between the parties. The actual amount of the payment is subject to final calculation and review by the parties. In addition, Schering-Plough has agreed, effective October 1, 2002, to commence royalty payments to Biogen on United States sales of alpha interferon products based on a 1998 agreement between the two companies.
In September, the Company announced that the Food and Drug Administration (FDA), after reviewing the information Biogen submitted to reply to FDA´s Complete Response Letter, determined the AMEVIVE application was a class 2 resubmission. Under FDA guidelines, this commits the Agency to complete the review within six months. No new clinical trials were requested prior to approval.
The Company is preparing to launch AMEVIVE early next year in the US and Europe.
In July, Biogen and Celltech Group plc announced that two Phase 3 studies of CDP 571 did not meet the primary endpoints for patients with moderate-to-severe Crohn´s disease. The companies will review the scope of their collaboration following additional analysis of the Phase 3 data and discussions with regulatory authorities.
Biogen and Elan Corporation plc are collaborating on a number of Phase 3 trials for ANTEGREN in the treatment of multiple sclerosis (MS) and Crohn´s disease. Patient enrollment for all Phase 3 trials, with a total of approximately 3,000 patients, is expected to be completed by year end.
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 earlier this year with over 900 patients.
SENTINEL, with over 1,000 patients, is one of the largest trials ever conducted in MS and 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.
Biogen and ICOS Corporation are collaborating on the development of orally active, small molecule LFA-1 antagonists for the treatment of psoriasis and other autoimmune diseases. A Phase 2 trial in moderate-severe psoriasis to assess the safety, tolerability and pharmacokinetics of IC747, the lead molecule of the LFA-1 antagonist program, was initiated in the third quarter.
LFA-1 is leukocyte function-associated antigen 1, a cell adhesion molecule that promotes T-cell migration and activation that can lead to inflammatory diseases like MS, psoriasis, rheumatoid arthritis and organ transplant rejection. LFA-1 antagonists block the molecule’s action.
2002 FINANCIAL GUIDANCE
For the full year 2002, Biogen reaffirmed its previous June 7th guidance which indicated:
- Total revenue growth of 6-10%
- Operating earnings per share of $1.50 – $1.60
Additionally, based on the recent announcement of a settlement with Schering-Plough, the resumption of U.S. royalties from Schering-Plough is expected to drive full year royalties to just over $100 million. As a result, operating EPS will likely reach the upper end of the $1.50 – $1.60 range.
In the fourth quarter of 2002, a one-time sum of $45 – $50 million, which represents a portion of the disputed past due royalties, will be paid to Biogen. This amount is excluded from the above guidance.
- Fourth quarter results Thursday, January 23, 2003, 8:30 a.m. EST
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 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 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 by the FDA during its review of AMEVIVE. Approval of AMEVIVE and the Company´s expectations regarding its 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.
Financial Results for the Third Quarter of 2002
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)