Analyst Conference Summary

conference date: April 23, 2008 @ 5:30 AM Pacific Time
for quarter ending: March 31, 2008 (1st quarter)

At least at the time this summary was written.
Forward-looking statements

Overview: Rapid revenue growth continues, but GAAP net income was down sequentially due to acquisition expenses. Increased guidance for 2008.

Basic data:

Revenues were $942 million, up 5% sequentially from $893 million and up 32% from $716 million year-earlier.

Net income was $163 million, down 19% sequentially from $201.2 million, but up 23% from $132 million year-earlier.

EPS (earnings per share) were $0.54, down 19% sequentially from $0.67, but up 42% from $0.38 year-earlier.

Guidance:

Raising guidance for full 2008, revenue growth of about 20% over 2007. Non-GAAP operating expenses near $2 billion. Tax rate 28% to 30% assuming research tax credit legislation renewal. Non-GAAP EPS $3.25 to $3.45. GAAP EPS $2.28 to $2.48.

Conference Highlights:

Revenue growth was driven by AVONEX, TYSABRI, and RITUXAN sales. "Given the strong momentum underway and the key data readouts expected this year, the prospects for the company have never been better." Continue global lead in MS (multiple sclerosis) market. TYSABRI is now the most switched-to MS drug.

Non-GAAP numbers given as: EPS $0.83, up 41% y/y. Net income $250 million, up 24% y/y. Non-GAAP numbers exclude charges of $75 million for amortization of intangible acquired assets; $25 million R&D charge related to Conforma acquisition; share based compensation expense; tax effect of $18 million from these charges.

Global sales of TYSABRI were $160 million, including sales by Elan in the U.S.; Biogen recognized $115 million of revenue from that.

Revenues by therapy:

AVONEX $536 million, up 19% y/y
TYSABRI $115 million, up 283% y/y
RITUXAN $247 million, up 19%.
FUMADERM & ZEVALIN $14 million.

Royalty revenue was $24 million, up from $23 million year-earlier.

4 million shares were repurchased in the quarter. 5 million shares have been bought back since the close of the quarter.

In March an offering of $1.0 billion of senior unsecured notes was completed. This was used, with cash, to pay off the $1.5 billion bridge loan.

In February a Phase III study of lixivaptan for congestive heart failure patients who suffer from hyponatremia was initiated.

No cases of progressive multifocal leukoencephalopathy (PML) have been reported since re-launch of TYSABRI.

TYSABRI was approved to treat Crohn's disease in January and treatments have begun.

Rituxan did not meet its primary endpoint in a Phase II/III trial for primary progressive multiple sclerosis (PPMS) (see April 14, 2008 Press Release).

Other progress in the pipeline was made in the quarter. Continued expansion of pipeline was responsible for increased R&D expense in the quarter.

Cost of sales was $101 million. R&D expense $258 million. SG&A $216 million. Amortization $75 million. Collaboration profit-sharing expense $21 million. Acquired R&D expense $25 million. Income from operations was $246 million. Income taxes $83 million.

Cash and equivalents ended at $845 million. But long-term debt is now $1.06 billion.

Q&A:

Rituxan for Lupus market? Depends on how compelling the data is. Lupus has subgroups, so need to see real world relevance. Genetech has been running the trial, at first all we will get only the top line results on meeting the primary endpoint or not.

Unit trends in MS? Inside U.S. seeing slowing growth, but globally expanding.

Tysabri patient increases in U.S. and outside? Internationally the main growth effect is new countries coming on board. In U.S. see continued growth. In Europe we see more switches from competitors than in the U.S. 26,000 patients on Tysabri at end of March.

Believes any potent immune suppressor agent may increase the risk of PML, so physicians are becoming more confident in the use of Tysabri. For now we have a black box warning on PML so we have to say we can expect to see some cases of PML.

Tysabri for Crohn's disease? In EU the issue was the risk-benefit profile. It is premature to say what the results of current discussions will be. In U.S. launch there is a big educational phase and need to qualify physicians. Elan is leading the effort.

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