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Biogen, Inc. Second Quarter 2014 Revenues Increase 40% To $2.4 Billion; Company Raises Financial Guidance For The Year



7/23/2014 8:42:08 AM

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Biogen Idec Second Quarter 2014 Revenues Increase 40% To $2.4 Billion; Company Raises Financial Guidance For The Year

Growth Bolstered by Increased Adoption of TECFIDERA(R) in New Markets Worldwide

Quarter Highlights include Approval of ELOCTATE(TM) for Hemophilia A;

Positive Phase 3 Read Out for Multiple Sclerosis candidate Daclizumab HYP

CAMBRIDGE, Mass.--(BUSINESS WIRE)--July 23, 2014-- 

Biogen Idec Inc. (NASDAQ: BIIB) today reported second quarter 2014 results, including revenue of $2.4 billion, a 40% increase compared to the second quarter of 2013. Second quarter 2014 non-GAAP diluted earnings per share (EPS) were $3.49, an increase of 52% over the second quarter of 2013. Non-GAAP net income attributable to Biogen Idec for the second quarter was $829 million, an increase of 51% over the second quarter of 2013.

On a reported basis, GAAP diluted EPS for the second quarter of 2014 were $3.01, an increase of 46% over the second quarter of 2013. GAAP net income attributable to Biogen Idec for the second quarter of 2014 was $715 million, an increase of 46% versus the same period in the prior year. (A reconciliation of GAAP to Non-GAAP quarterly financial results and 2014 full year guidance can be found in Table 3 at the end of this release).

Non-GAAP and GAAP diluted EPS benefited by approximately $0.15 and $0.13, respectively, following the approval of an agreement with the Italian National Medicines Agency (AIFA) relating to TYSABRI(R) sales in Italy from February 2013 through March 31, 2014.

"This past quarter highlighted significant accomplishments across our business, from the approval of ELOCTATE for hemophilia A, to the continued patient uptake of TECFIDERA in the U.S. and new markets worldwide, to strong clinical results for important emerging MS treatments," said Chief Executive Officer George A. Scangos, Ph.D. "During this time we also announced our intent with Swedish Orphan Biovitrum AB to donate up to one billion international units of clotting factor to humanitarian organizations, which we hope will have a significant impact on the lives of patients in developing countries who may otherwise not have access to these therapies."

"We remain focused on additional potential approvals and pivotal read-outs, and continue to look to increase investment in early-stage research to broaden and advance our neurology, immunology and hematology pipelines," Dr. Scangos added.

Second Quarter 2014 Performance Highlights

   -- TECFIDERA revenues were $700 million, consisting of $585 million in U.S. 
      sales and $115 million in sales outside the U.S. 
 
   -- AVONEX(R) revenues were $774 million in the second quarter of 2014. The 
      total was composed of $498 million in U.S. sales and $276 million in 
      sales outside the U.S. 
 
   -- TYSABRI revenues were $533 million, consisting of $250 million in U.S. 
      sales and $284 million in sales outside the U.S. 
 
          -- TYSABRI sales outside the U.S. included $54 million of previously 
             deferred revenue from February 2013 through March 31, 2014, which 
             was recognized during the quarter following an agreement with 
             AIFA. Beginning in the second quarter of 2014, sales of TYSABRI in 
             Italy were recorded at the full reimbursed price. The Company 
             continues to be in discussions with AIFA to resolve its dispute 
             for the periods February 2009 through January 2013. 
 
   -- Net revenues relating to RITUXAN(R) and GAZYVA(R) from our unconsolidated 
      joint business arrangement were $303 million in the second quarter of 
      2014, compared to $289 million in the second quarter of 2013. 
 
   -- ALPROLIXTM revenues were $10 million in the second quarter of 2014. 

Other Financial Results

   -- Revenues for FAMPYRA(R) and FUMADERMTM were $38 million in the second 
      quarter of 2014, compared to $33 million in the second quarter of 2013. 
 
   -- Royalty revenues were $40 million in the second quarter of 2014, compared 
      to $38 million in the second quarter of 2013. 
 
   -- Corporate partner revenues were $22 million in the second quarter of 
      2014, compared to $11 million in the second quarter of 2013. 
 
   -- As of June 30, 2014, Biogen Idec had cash, cash equivalents and 
      marketable securities totaling approximately $2.6 billion. 

Updated 2014 Financial Guidance

Biogen Idec increased its full year 2014 financial guidance. This change represents a meaningful increase from prior guidance owing primarily to the growth of TECFIDERA in the U.S. and the E.U., the strength of our other MS therapies, and clarity on the AIFA pricing matter.

This guidance consists of the following components:

   -- Revenue growth is expected to be approximately 38% to 41%. 
 
   -- R&D expense is expected to be approximately 20% to 21% of total revenue. 
 
          -- For the balance of the year, full year guidance for R&D expense 
             includes greater than $150 million intended for new early and 
             mid-stage business development opportunities. 
 
   -- SG&A expense is expected to be approximately 22% to 23% of total revenue. 
 
   -- GAAP diluted EPS is expected to be between $11.26 and $11.46. 
 
   -- Non-GAAP diluted EPS is expected to be between $12.90 and $13.10. 

Biogen Idec may incur charges, realize gains or experience other events in 2014 that could cause actual results to vary from this guidance.

Multiple Sclerosis (MS) Events

   -- In May 2014, Biogen Idec received a positive recommendation from the 
      Committee for Medicinal Products for Human Use of the European Medicines 
      Agency for the marketing authorization of PLEGRIDY(TM) (Peginterferon 
      Beta-1a), a pegylated interferon administered subcutaneously for adults 
      with relapsing-remitting multiple sclerosis. 
 
   -- In June 2014, Biogen Idec and AbbVie announced positive top-line results 
      from the Phase 3 DECIDE clinical trial investigating Daclizumab High 
      Yield Process (HYP) in MS, with Daclizumab HYP demonstrating superiority 
      over interferon beta-1a in annual relapse rate. 
 
   -- At the 66th American Academy of Neurology (AAN) annual meeting in April 
      and May 2014, Biogen Idec presented new data on several of its MS 
      programs, including: 
 
          -- Two-year data from its Phase 3 ADVANCE clinical trial for PLEGRIDY 
             in people with relapsing MS. 
 
          -- Data that reinforces the efficacy of TECFIDERA (dimethyl fumarate) 
             in a wide range of patients with relapsing MS, as well as support 
             for its favorable safety and tolerability profile in the 
             real-world setting. 
 
          -- Post hoc analysis of data from the AFFIRM study demonstrating 
             improvement in walking speed for TYSABRI (natalizumab) relative to 
             placebo at two years. 
 
          -- Additional data from observational registry studies showing the 
             benefit of switching to TYSABRI after experiencing an MS relapse 
             while taking interferon beta or glatiramer acetate. 

Hemophilia Events

   -- In June 2014, the U.S. Food and Drug Administration approved ELOCTATE 
      [Antihemophilic Factor (Recombinant), Fc Fusion Protein] for the control 
      and prevention of bleeding episodes, surgical management and routine 
      prophylaxis in adults and children with hemophilia A. 
 
   -- In July 2014, ALPROLIX [Coagulation Factor IX (Recombinant), Fc Fusion 
      Protein] for hemophilia B obtained marketing approval from Japan's 
      Ministry of Health, Labor and Welfare, while ELOCTATE for hemophilia A 
      was approved by Australia's Therapeutic Goods Administration. 
 
   -- At the World Federation of Hemophilia 2014 World Congress in May 2014, 
      Biogen Idec and Swedish Orphan Biovitrum AB announced their intent to 
      donate up to one billion international units of clotting factor therapy 
      for humanitarian aid programs in the developing world. 

Other Events

   -- In April 2014, Biogen Idec and Quintiles entered into a five-year 
      strategic clinical development agreement to help optimize Biogen Idec's 
      clinical development processes. 
 
   -- In May 2014, Biogen Idec announced that Richard A. Rudick, M.D., has 
      joined the Company as Vice President, Development Sciences, Value-Based 
      Medicine. Dr. Rudick will lead Biogen Idec's newly created Value-Based 
      Medicine Group, which will focus on using advanced technologies to 
      develop innovative programs and tools to better understand, measure and 
      manage the treatment of multiple sclerosis. 
 
   -- During the second quarter of 2014, the Company made a $35 million 
      donation to the Biogen Idec Foundation to support the Foundation's 
      mission of providing grants to STEM (Science, Technology, Engineering, 
      Math) education programs. 

Conference Call and Webcast

The Company's earnings conference call for the second quarter will be broadcast via the internet at 9:00 a.m. EDT on July 23, 2014, and will be accessible through the Investors section of Biogen Idec's homepage, www.biogenidec.com. Supplemental information in the form of a slide presentation will also be accessible at the same location on the internet at the time of the conference call and will be subsequently available on the website for at least one month.

About Biogen Idec

Through cutting-edge science and medicine, Biogen Idec discovers, develops and delivers to patients worldwide innovative therapies for the treatment of neurodegenerative diseases, hematologic conditions and autoimmune disorders. Founded in 1978, Biogen Idec is the world's oldest independent biotechnology company and patients worldwide benefit from its leading multiple sclerosis and innovative hemophilia therapies. For product labeling, press releases and additional information about the Company, please visit www.biogenidec.com.

Safe Harbor

This press release contains forward-looking statements, including statements about 2014 financial guidance. These forward-looking statements may be accompanied by such words as "anticipate," "believe," "could," "estimate," "expect," "forecast," "intend," "may," "plan," "potential," "project," "target," "will" and other words and terms of similar meaning. You should not place undue reliance on these statements.

These statements involve risks and uncertainties that could cause actual results to differ materially from those reflected in such statements, including: our dependence on sales from our principal products; uncertainty of success in execution of our commercialization of new products; failure to protect and enforce our data, intellectual property and other proprietary rights and the diminution of our ability to derive anticipated benefits from our products; difficulties in obtaining or changes in the availability of reimbursement for our products; uncertainty of success in developing other product candidates, including our ability to obtain product approvals in a timely manner or at all for new or current products; the occurrence of adverse safety events with our products; failure to compete effectively due to significant product competition in the markets for our products; dependence on collaborators and other third parties for the development and commercialization of products; problems with our manufacturing processes; failure to manage our growth and execute our growth initiatives; failure to comply with legal and regulatory requirements; the risks of doing business internationally; charges and other costs relating to our properties; risks and uncertainties relating to the timing, outcome and impact of legal, administrative and other proceedings and disputes; fluctuations in our effective tax rate; our ability to attract and retain qualified personnel; uncertainty and potential liabilities relating to product liability and intellectual property claims; the market, interest and credit risks associated with our portfolio of marketable securities; environmental risks; and the other risks and uncertainties that are described in the Risk Factors section of our most recent annual or quarterly report and in other reports we have filed with the SEC.

These statements are based on our current beliefs and expectations and speak only as of the date of this press release. We do not undertake any obligation to publicly update any forward-looking statements.

 
 
                                 TABLE 1 
                    Biogen Idec Inc. and Subsidiaries 
               Condensed Consolidated Statements of Income 
           (unaudited, in thousands, except per share amounts) 
 
 
                        For the Three Months        For the Six Months 
                           Ended June 30,             Ended June 30, 
                       -----------------------  -------------------------- 
                          2014        2013         2014         2013 
                        ---------   ---------    ---------    --------- 
Revenues: 
 
  Product, net         $2,056,292  $1,385,918   $3,799,057   $2,481,697 
 
  Unconsolidated 
   joint business         303,296     288,785      600,181      553,391 
 
  Royalty                  40,344      38,111       78,200       70,931 
 
  Corporate 
   partner                 21,520      10,659       73,765       32,550 
                        ---------   ---------    ---------    --------- 
 
    Total revenues      2,421,452   1,723,473    4,551,203    3,138,569 
                        ---------   ---------    ---------    --------- 
 
Cost and expenses: 
 
  Cost of sales, 
   excluding 
   amortization of 
   acquired 
   intangible 
   assets                 291,887     230,728      571,132      364,477 
 
  Research and 
   development            447,273     327,463      976,157      611,803 
 
  Selling, general 
   and 
   administrative         576,622     431,012    1,088,296      783,610 
 
  Amortization of 
   acquired 
   intangible 
   assets                 116,826      82,225      260,084      133,526 
 
  Collaboration 
   profit sharing               -           -            -       85,357 
 
  (Gain) loss on 
   fair value 
   remeasurement 
   of contingent 
   consideration            4,019      (5,163)       3,220       (2,886) 
                        ---------   ---------    ---------    --------- 
 
    Total cost and 
     expenses           1,436,627   1,066,265    2,898,889    1,975,887 
                        ---------   ---------    ---------    --------- 
 
Gain on sale of 
 rights                     3,900       5,319        7,759       10,370 
                        ---------   ---------    ---------    --------- 
 
Income from 
 operations               988,725     662,527    1,660,073    1,173,052 
 
Other income 
 (expense), net             4,861     (10,428)        (740)     (24,885) 
                        ---------   ---------    ---------    --------- 
 
Income before 
 income tax 
 expense and 
 equity in loss of 
 investee, net of 
 tax                      993,586     652,099    1,659,333    1,148,167 
 
Income tax expense        268,521     159,140      446,935      224,648 
 
Equity in loss of 
 investee, net of 
 tax                        1,933       2,289        9,538        6,100 
                        ---------   ---------    ---------    --------- 
 
Net income                723,132     490,670    1,202,860      917,419 
 
Net income (loss) 
 attributable to 
 noncontrolling 
 interests, net of 
 tax                        8,626           -        8,398            - 
                        ---------   ---------    ---------    --------- 
 
Net income 
 attributable to 
 Biogen Idec Inc.      $  714,506  $  490,670   $1,194,462   $  917,419 
                        =========   =========    =========    ========= 
 
 
Net income per 
 share: 
  Basic earnings 
   per share 
   attributable to 
   Biogen Idec 
   Inc.                $     3.02  $     2.07   $     5.05   $     3.87 
                        =========   =========    =========    ========= 
 
  Diluted earnings 
   per share 
   attributable to 
   Biogen Idec 
   Inc.                $     3.01  $     2.06   $     5.03   $     3.85 
                        =========   =========    =========    ========= 
 
 
Weighted-average 
 shares used in 
 calculating: 
  Basic earnings 
   per share 
   attributable to 
   Biogen Idec 
   Inc.                   236,661     237,484      236,729      237,162 
                        =========   =========    =========    ========= 
 
  Diluted earnings 
   per share 
   attributable to 
   Biogen Idec 
   Inc.                   237,401     238,743      237,634      238,543 
                        =========   =========    =========    ========= 
 
 
 
 
 
 
 
                          TABLE 2 
             Biogen Idec Inc. and Subsidiaries 
           Condensed Consolidated Balance Sheets 
                 (unaudited, in thousands) 
 
                                    As of         As of 
                                  June 30,     December 31, 
                                    2014           2013 
                                 -----------  -------------- 
ASSETS 
 
 
Cash, cash equivalents and 
 marketable securities           $ 1,573,066   $   1,222,729 
 
Accounts receivable, net           1,002,328         824,406 
 
Inventory                            715,935         659,003 
 
Other current assets                 633,684         478,796 
                                  ----------      ---------- 
 
    Total current assets           3,925,013       3,184,934 
 
Marketable securities              1,010,837         625,772 
 
Property, plant and equipment, 
 net                               1,756,164       1,750,710 
 
Intangible assets, net             4,249,378       4,474,653 
 
Goodwill                           1,364,815       1,232,916 
 
Investments and other assets         611,791         594,350 
                                  ----------      ---------- 
 
TOTAL ASSETS                     $12,917,998   $  11,863,335 
                                  ==========      ========== 
 
 
LIABILITIES AND EQUITY 
 
Current portion of notes 
 payable and line of credit      $     3,386   $       3,494 
 
Other current liabilities          1,913,238       1,754,785 
 
Notes payable                        586,091         592,433 
 
Long-term deferred tax 
 liability                           139,092         232,554 
 
Other long-term liabilities          710,965         659,231 
 
Equity                             9,565,226       8,620,838 
                                  ----------      ---------- 
 
TOTAL LIABILITIES AND EQUITY     $12,917,998   $  11,863,335 
                                  ==========      ========== 
 
 
 
 
 
 
                              TABLE 3 
                 Biogen Idec Inc. and Subsidiaries 
GAAP to Non-GAAP Reconciliation: Net Income and Net Income Per Share 
         (unaudited, in millions, except per share amounts) 
 
 
                             For the Three 
                                 Months         For the Six Months 
                             Ended June 30,       Ended June 30, 
                            ----------------  ---------------------- 
EARNINGS PER SHARE           2014     2013      2014       2013 
                             -----    -----    -------    ------- 
 
GAAP earnings per 
 share - Diluted            $ 3.01   $ 2.06   $   5.03   $   3.85 
Adjustments to net 
 income attributable 
 to Biogen Idec Inc. 
 (as detailed below)          0.48     0.24       0.93       0.42 
                             -----    -----    -------    ------- 
Non-GAAP earnings per 
 share - Diluted            $ 3.49   $ 2.30   $   5.96   $   4.27 
                             =====    =====    =======    ======= 
 
An itemized reconciliation between net income attributable to Biogen 
Idec Inc. on a GAAP basis and net income attributable to Biogen Idec 
Inc. on a non-GAAP basis is as follows: 
 
GAAP net income 
 attributable to 
 Biogen Idec Inc.           $714.5   $490.7   $1,194.5   $  917.4 
  Adjustments: 
    Amortization of 
     acquired intangible 
     assets                  113.0     79.5      252.8      128.1 
    (Gain) loss on fair 
     value remeasurement 
     of contingent 
     consideration             4.0     (5.2)       3.2       (2.9) 
    SG&A: Stock option 
     expense                   1.5      1.0        4.0        2.9 
    R&D: Stock option 
     expense                   1.2      0.8        3.5        2.4 
    Donation to Biogen 
     Idec Foundation          35.0        -       35.0          - 
    Income tax effect 
     related to 
     reconciling items       (40.1)   (18.0)     (77.1)     (29.7) 
                             -----    -----    -------    ------- 
Non-GAAP net income 
 attributable to 
 Biogen Idec Inc.           $829.1   $548.8   $1,415.9   $1,018.2 
                             =====    =====    =======    ======= 
 
 
2014 Full Year Guidance: GAAP to Non-GAAP Adjustments 
An itemized reconciliation between projected EPS on a GAAP basis and 
on a non-GAAP basis is as follows: 
 
                                               Diluted 
                               $     Shares      EPS 
                             -----   -------  --------- 
Projected GAAP net 
 income attributable 
 to Biogen Idec Inc.         2,697      237   $  11.36 
  Adjustments: 
    Amortization of 
     acquired intangible 
     assets                    463 
    (Gain) loss on fair 
     value remeasurement 
     of contingent 
     consideration               8 
    Stock option expense        13 
    Donation to Biogen 
     Idec Foundation            35 
    Income tax effect 
     related to 
     reconciling items        (131) 
                             -----   -------  --------- 
Projected Non-GAAP 
 net income 
 attributable to 
 Biogen Idec Inc.            3,085      237   $  13.00 
                             =====    =====    ======= 
 
Numbers may not foot due 
 to rounding. 
 

Use of Non-GAAP Financial Measures

We supplement our consolidated financial statements presented on a GAAP basis by providing additional measures which may be considered "non-GAAP" financial measures under applicable SEC rules. We believe that the disclosure of these non-GAAP financial measures provides additional insight into the ongoing economics of our business and reflects how we manage our business internally, set operational goals and forms the basis of our management incentive programs. These non-GAAP financial measures are not in accordance with generally accepted accounting principles in the United States and should not be viewed in isolation or as a substitute for reported, or GAAP, net income attributable to Biogen Idec Inc. and diluted earnings per share.

Our "Non-GAAP net income attributable to Biogen Idec Inc." and "Non-GAAP earnings per share - Diluted" financial measures exclude the following items from GAAP net income attributable to Biogen Idec Inc. and diluted earnings per share:

1. Purchase accounting and merger-related adjustments.

We exclude certain purchase accounting related items associated with the acquisition of businesses, assets and amounts in relation to the consolidation of variable interest entities for which we are the primary beneficiary. These adjustments include charges for in-process research and development, the amortization of certain acquired intangible assets and fair value remeasurements of our contingent consideration obligations. The exclusion of these charges provides management and investors with a supplemental measure of performance which the Company believes better reflects the underlying economics of the business.

2. Stock option expense recorded in accordance with the accounting standard for share-based payments.

We believe that excluding the impact of expensing stock options better reflects the recurring economic characteristics of our business.

3. Other items.

We evaluate other items on an individual basis, and consider both the quantitative and qualitative aspects of the item, including (i) its size and nature, (ii) whether or not it relates to our ongoing business operations, and (iii) whether or not we expect it to occur as part of our normal business on a regular basis. We also include an adjustment to reflect the related tax effect of all reconciling items within our reconciliation of our GAAP to Non-GAAP net income attributable to Biogen Idec Inc.

 
 
 
                        TABLE 4 
           Biogen Idec Inc. and Subsidiaries 
                    Product Revenues 
               (unaudited, in thousands) 
 
 
                                   For the Three Months 
                                      Ended June 30, 
                                  ---------------------- 
                                     2014        2013 
                                  ----------  ---------- 
PRODUCT REVENUES 
 
   AVONEX                         $  773,772  $  774,416 
 
   TYSABRI                           533,440     386,741 
 
   TECFIDERA                         700,380     192,134 
 
   FAMPYRA                            22,316      16,811 
 
   FUMADERM                           15,987      15,816 
 
   ALPROLIX                           10,397           - 
 
Total product revenues, net       $2,056,292  $1,385,918 
                                   =========   ========= 
 
 
                                    For the Six Months 
                                      Ended June 30, 
                                  ---------------------- 
                                     2014        2013 
                                   ---------   --------- 
PRODUCT REVENUES 
 
   AVONEX                         $1,535,246  $1,520,514 
 
   TYSABRI                           974,485     698,911 
 
   TECFIDERA                       1,206,090     192,134 
 
   FAMPYRA                            41,277      40,014 
 
   FUMADERM                           31,562      30,124 
 
   ALPROLIX                           10,397           - 
 
Total product revenues, net       $3,799,057  $2,481,697 
                                   =========   ========= 
 
 
 
 
    CONTACT: Biogen Idec Media Contact: 

Biogen Idec

Jason Glashow, (781) 464-3260

Senior Director, Public Affairs

or

Biogen Idec Investor Contacts:

Biogen Idec

Claudine Prowse, Ph.D., (781) 464-2442

Vice President, Investor Relations

or

Biogen Idec

Ben Strain, (781) 464-2442

Associate Director, Investor Relations

 
    SOURCE: Biogen Idec Inc. 
Copyright Business Wire 2014 
 

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