Analyst Conference Call Summary

Biogen Idec Corporation

conference date: April 21, 2011 @ 4:00 AM Pacific Time
for quarter ending: March 31, 2011 (first quarter, Q1)

Forward-looking statements

Overview: Profits jump on lowered costs.

Basic data (GAAP):

Revenues were $1.203 billion, down 1% sequentially from $1.219 billion, but up 9% from $1.108 billion in the year-earlier quarter.

Net income was $294.3 million, up 22% sequentially from $240.3 million, and up 35% from $217.4 million year-earlier.

EPS (earnings per share) were $1.20, up 21% sequentially from $0.99 and up 50% from $0.80 year-earlier.


Maintained 2011 guidance. EPS above $3.82 GAAP, $5.70 non-GAAP. Capital expenditures of $200 to $220 million. Revenue flat to low-single digit growth over 2010.

Conference Highlights:

Non-GAAP net income was $349 million, up 18% y/y. Non-GAAP EPS was $1.43. New focus allowed shedding of some costs. "The reinvigoration of R&D is underway," with R&D investment reallocated to highest-value programs.

Phase III data for BG-12, an oral MS (multiple sclerosis) drug was positive, statistically significant for primary and secondary endpoint. Relapse reduction was 49% better than placebo. Progression reduction was 38%. Safety and tolerability were similar to Phase II results. Second Phase III trial results will be out later this year. Milestone payments will be due if approved by FDA or EMA (Europe). Detailed data will be released at a medical meeting later this year.

Avonex (interferon beta-1a) revenues were $642.5 million, up 8% from $592.5 million year-earlier. CHMP (Committee for Medicinal Products for Human Use, Europe) in April recommended approval for the PEN delivery system for patients with relapsing multiple sclerosis or with a single demylinating event. Price erosion outside the U.S. was about 2% y/y. Market growth was strong in Asia.

Tysabri (natalizumab) revenues were $251.4 million, up 15% from $218.6 million year-earlier. Total global sales with Elan were $349 million. In April the CHMP (Committee for Medicinal Products for Human Use, Europe) gave a positive opinion for including anti-JC virus antibody status as a risk factor (for PML) on the label. Estimated number of patients grew to 58,400. Weekly patient add rate grew. Launch in India going as planned.

Fumaderm and other product revenues were $12.5 million, down 4% from $13.0 million year-earlier. Royalty revenues were $26 million, flat y/y. Corporate partner revenue was $14.5 million.

Rituxan for NHL and RA (rheumatoid arthritis) produced $256 million, slightly above flat from year-earlier (listed as unconsolidated joint business revenues on income statement). New FDA approval for Wegener's Granulomatois and Microscropic Polyangilitis, forms of vasculitis, in April.

Cash and equivalents balance ended at $2.1 billion. $195 million was used for stock repurchases in the quarter, but that was about equal to stock-based equity compensation.

First patient was enrolled for Phase III EMPOWER trial for dexpramipexole for ALS (Amyotrophic Lateral Sclerosis).

Fampyra received a negative EMA opinion in January, which is being appealed.

Cost of sales was $103.1 million. R&D cost $293.6 million (down from $307.0 million year-earlier). Selling, general and administrative expense $244.5 million. Collaboration profit sharing $74.8 million. Amortization $53.2 million. Restructuring charge $16.6 million. Leaving income from operations of $416.3 million. Other income $9.9 milion. Income taxes $117.5 million. Net income attributable to noncontrolling interest $14.4 million.


Tysabri enrolled patients, % tested already for JC virus? Trying to keep STRATIFY2 trial data in place. 20,000 patients in U.S. enrolled to be tested so far. Outside U.S. a relatively small number have been tested.

BG-12 tolerability? Phase II published data showed 10% discontinuation due to adverse events. Phase III similar. Combination study also continues, so will evaluate stand-alone versus combinations when all the data is available.

BG-12 compared to competitors? Look at the Phase II data published in the Lancet. We still are in the analysis process with the safety data, but so far it is in line with Phase II.

Filing timeline for BG-12? After the second trial readout, if the data are consistent, we will file as quickly as possible, likely early in 2012.

Formulation to reduce number of BG-12 pills? We continue to work on formulation, not ready to talk about it.

Tysabri discontinuation rates? In U.S. we saw an increase in discontinuation due to doctors getting JC virus antibody results for their patients. We had an increase, however, in Tysabri starts.

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Copyright 2011 William P. Meyers