Analyst Conference Call Summary

Biogen Idec Corporation

conference date: January 31, 2012 @ 5:00 AM Pacific Time
for quarter ending: December 31, 2011 (fourth quarter, Q4 2011)

Forward-looking statements

Overview: Revenue up 9% y/y, non-GAAP EPS up 6% y/y.

Basic data (GAAP):

Revenues were $1.327 billion, up 1% sequentially from $1.310 billion and up 9% from $1.219 billion in the year-earlier quarter.

Net income was $300.2 million, down 15% sequentially from $351.8 million but up 25% from $240.3 million year-earlier.

EPS (earnings per share) were $1.22, down 15% sequentially from $1.43, but up 23% from $0.99 year-earlier.


For the full year 2012, revenue is expected to grow "low to mid-single digits" from 2011. Non-GAAP diluted EPS is expected between $6.10 and $6.20, while GAAP EPS of $5.46 yo $5.56 is expected. Capital expenditures expected between $230 and $250 million.

Q1 2012 will be unfavorably impacted by items including lowering of one royalty payment rate and payouts to partners.

Expenses are expected to increase due to research and development expansion and preparations for new product launches in 2013.

Conference Highlights:

"In 2012 we will focus on the continued growth and leadership of our marketed products and the advancement of our strong pipeline."

Non-GAAP numbers: net income $370 million, up 7% y/y. EPS $1.51, up 6% y/y.

Avonex (interferon beta-1a) revenue was $703 million, up 8% y/y. Avonex PEN should launch in US (it is already on sale in Europe) in 2012.

Tysabri (natalizumab) revenue was $269 million, up 11% y/y. Risk stratification, including testing for JVC, should increase sales. Estimated number of Tysabri patients is 64,400. In January the FDA changed the label for Tysabri to identify "anti-JCV antibody status as a risk factor for ... progressive multifocal leukoencephalopathy (PML)." The vast majority of Tysabri patients now know their antibody status, and most new patients learn it before initiating therapy. There was some discontinuation from patients learning they did have JCV.

Rituxan for NHL and RA (rheumatoid arthritis) revenue was $258 million, flat y/y.

Fampyra revenue was $10.5 million, up sequentially from $3 million. Sales in Germany were particularly strong. Still available in just a few European countries.

Fumaderm revenue was $13.5 million, down 3% y/y . Royalties were $53 million, up 16% y/y.

Cash and marketable securities balance was $3.1 billion.

"We are working to file BG-12 [for FDA approval] as quickly as possible." Long-acting factor VIII and factor IZ for hemophilia and dexpramipexole for ALS should produce Phase III data later in 2012. PEGylated Interferon for multiple sclerosis trial enrollment completed, with results due in 2013. A Phase III trial for Tysabri for secondary progressive multiple sclerosis has been initiated. See also Biogen-Idec product pipeline.

In December Samsung and Biogen Idec established a joint venture "to develop, manufacture and market biosimilars."

Since the end of the quarter Biogen entered into an agreement with Isis Pharmaceuticals to develop and commercialize ISIS-SMNRx for spinal muscular atrophy.

Cost of sales was $139.6 million. Research and development expense was $338.9 million; selling, general and administrative expense $283.9 million; collaboration profit sharing $73.5 million; amortization $50.9 million; restructuring $0.6 million; adjustment of contingent consideration $30.2 million. Income taxes were $104.9 million.


You had less Tysabri adds in 2011 less than '09 or '10? We did see increased discontinuations in U.S. in Q1 as patients got JCV tests, but then bounced back. Second half of year started that process country by country in Europe, and process is not complete.

70% of JCV positive patients remaining on Tysabri? Trend remains about the same.

ALS trials, how many needed for FDA approval? It is possible, if the data is compelling, to get approval on a single trial. We can't speculate until we see the data. Potential patients in U.S. is 20,000 to 30,000. Eligibility could be high if the results are compelling. There is only one other drug for ALS.

We are likely at the maximum point for overall late stage trial enrollment. That is why our R&D dollars are high and will continue high in 2012. Failure reduces trial costs; success increases them. Preparing for new product launches are expensive too, but it is foolish to try to save money by not spending appropriately. In the end, a good thing.

Powering of ALS study? The data will be available the second half of this year. Data is well powered. Phase II had about 100 patients and achieved significance. This study is over 900 patients, so is better setup to achieve significance.

Cash has largely been used to build the early pipeline. If we decide to return cash to shareholders we would provide an update.

Challenges of getting BG-12 approved as a single capsule as opposed to the 2 capsules used in Phase III trial? The single capsule simply has twice the dose, but it does require the bioequivalence data we are submitting.

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Copyright 2012 William P. Meyers