Analyst Conference Call Summary

conference date: May 1, 2012 @ 5:00 AM Pacific Time
for quarter ending: March 31, 2012 (first quarter, Q1 2012)

Forward-looking statements

Overview: Revenue better than profits as R&D and administrative expenses saw large increases. Next big event is BG-12 approval by FDA, or not. Raised guidance.

Basic data (GAAP):

Revenues were $1.292 billion, down 3% sequentially from $1.327 billion but up 7% from $1.203 billion year-earlier.

Net income was $302.7 million, up 1% sequentially from $300.2 million and up 3% from $294.3 million year-earlier.

EPS (earnings per share) were $1.25, up 2% sequentially from $1.22 and up 4% from $1.20 year-earlier.

Guidance:

Raised guidance for the full year 2012, revenue expected to grow in mid-single digits over 2011. Non-GAAP diluted EPS expected above $6.15. GAAP diluted EPS above $5.54. Capital expenditures of $230 to $250 million.

As a percent of revenues: cost of sales 9% to 10%; R&D expense 24% to 25%; SG&A 22% to 23%.

Conference Highlights:

EPS was below analyst's estimates, but in line with internal estimates. Avonex orders were below expectations in January. Believes fundamental demand for Avonex remains solid, and January sales were a one-time issue.

Non-GAAP numbers: net income was $338 million, down 8% sequentially from $370 million, and down 3% y/y. EPS $1.40, down 7% sequentially from $1.51, and down 2% y/y.

Avonex (interferon beta-1a) revenue was $661.6 million, up 3% from $642.5 million year-earlier. However, unit demand for Avonex was down 4% y/y on "unfavorable distribution channel dynamics." After the quarter ended the Avonex Pen became available in the U.S., which helps patients do self-injections and has helped sales in Europe. There was a $7 million loss from expiring product withdrawals.

Tysabri (natalizumab) revenue was $285.5 million, up 14% from $251.4 million year-earlier. Testing for JVC antibody status has helped stratify risk for PML (progressive multifocal leukoencephalopathy). Patient adds continued to show strength at 1900 and discontinuation rates remain stable. New data on effectiveness continues to come in.

Rituxan for NHL and RA (rheumatoid arthritis) revenue was $285 million, up 11% y/y.

Fampyra revenue was $15.0 million, and was not a revenue source year-earlier. Became available in Canada in April; available now in some European countries.

Fumaderm revenue was $13.3 million, up % from $12.5 million year-earlier.

Royalty revenue was $29 million, up 13% y/y. Corporate partner revenues dropped to $3 million from $15 million year-earlier.

Cash and marketable securities balance was $2.7 billion. $463 million spent on share repurchases, completing the share stabilization program for 2012.

BG-12, an oral therapy for multiples sclerosis, was submitted for FDA approval on February 28, 2012, followed by a submission in Europe in March. Believes the application is on track.

Acquired Stromedix with STX-100 for IPF (idiopathic pulmonary fibrosis). A Phase II trial is expected to start in 2012.

A Phase 2 anti-LINGO MS trial is now expected to be initiated in the second half of 2012.

See also Biogen-Idec product pipeline. Analyst day will be on June 12.

Cost of goods sold was $133.2 million. Research and development expense $356.0 million. Selling, general and administrative $300.1 million. Collaboration profit sharing expense $85.9 million. Amortization of acquired assets $46.0 million. Other expense $1.6 million. Income from operations 436

Q&A:

R&D spend going forward? We don't want to give exact targets, but the high R&D expense this year is due to the "very fortunate" programs we have this year. We will continue to spend on BG-12 on the extension study, but the cost will decline. Going into 2013 we don't see the kind of upward pressure on R&D expense we are seeing in 2012. We also had a $20 million payment to Isis in Q1.

Tysabri going forward? We feel good about the trajectory, could be lumpy by month or country. We see evidence of increasing physician confidence based on risk stratification.

BG-12 patent protection? Differ U.S. vs. international. U.S. patents through 2019, possible extension. Outside U.S. protected by data exclusivity by 8 years plus 2. We are continuing to work on this issue.

Avonex price increases? January units are sometimes down, but movement was exaggerated in 2012. We think inventory was built in Q4.

Celgene attributed inventory issue in January to merger of PDMs? We did not see that particular issue. The donut hole (Medicare) issue was also minor for us.

Cash use? We are doing a $500 million stock buy back. We have no major, unusual plans for cash use at present.

BG-12 launch costs? It will be a mix of reallocating our current MS force and adding sales people. So there will be some additional cost.

The expired material issue had to do with how a small number of lots were stored. We replaced the dated material with new material. This should not be an ongoing problem.

MS international demand? Demand has been in the high single digit range, and we expect to see that continue, with Europe slower but other areas bringing up the average. We believe BG-12 has the potential to expand the market broadly, though to an unknown extent.

Have most of the JCV positive patients come off the drug? Testing has generated more demand. There are no particular headwinds, it just can be lumpy. Majority of patients testing positive have stayed on the product, we might lose more over time.

Standard vs. priority review for BG-12? All indications are it will be a standard review.

The January inventory issue was less than 1 week of inventory in the channel.

Tysabri capturing share from Gilenya? It looks that way, but it too early to see it as a specific opportunity.

$360 million analyst consensus for BG-12 sales? Given the profile we are optimistic we will outperform in picking up more patients than Gilenya did in the first 12 months.

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