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Biogen Idec Excels on Tecfidera Launch

earnings_bwt07262013

By Catherine Shaffer
Staff Writer

Biogen Idec Inc., of Weston, Mass., blasted consensus sales estimates for multiple sclerosis (MS) drug Tecfidera (dimethyl fumarate) out of the water, turning in $192 million in its second quarter earnings, compared to the $75 million expected by the street. The company's total revenues were $1.7 billion for the second quarter, up 21 percent over the second quarter of 2012.

Avonex (interferon beta-1a) brought in $774 million, a 21 percent increase over the second quarter of 2012, and Tysabri (natalizumab) rang up $387 million, a 38 percent increase. The company reported $289 million for Rituxan (rituximab), a gain of 1 percent over the second quarter of 2012.

"The launch of Tecfidera in the U.S. has gone very well," said Biogen Idec CEO George Scangos in an investor conference Thursday morning. "We overcame some early logistical challenges that came from unexpected demand."

A large portion – about $82 million of the $192 million in Tecfidera sales – was attributable to inventory build, while end-user sales were above consensus. Biogen Idec said that more than 3,500 physicians have prescribed Tecfidera, with favorable receptivity among physicians and patients.

Seventy-five percent of Tecfidera starts were from patients on other MS therapies. Consequently, Tysabri seemed to take a hit, with end-user sales of $387 million vs. a consensus of $462 million to $467 million. Biogen Idec said it believes Tysabri to Tecfidera switching has slowed.

Robyn Karnauskas, an analyst with Deutsche Bank, wrote that "based on early uptake, we see Tecfidera becoming treatment of choice in first-line markets." Deutsche Bank updated its model to 2020 sales of $5 billion vs. $4 billion reviously.

Biogen's non-GAAP diluted earnings per share (EPS) for the second quarter of 2013 were $2.30, 26 percent more than the second quarter of 2012. Non-GAAP net income for the second quarter was $549 million, a gain of 25 percent over the second quarter of 2012.

GAAP diluted EPS were $2.06 and GAAP net income was $491 million. Those were 28 and 27 percent greater than the same period in 2012, respectively.

It recorded a reduction to Tysabri revenues outside the U.S. of about $20 million for a portion of a settlement with the pricing committee of the Italian National Medicines Agency. The remainder will be recorded as an increase to Tysabri revenue on approval by Italian authorities.

Mark Schoenebaum, an analyst with ISI Group, noted, "We need to add $40 [million-plus] to the Tysabri print due to special non-demand related items." Those include the Italian liability and first quarter U.S. stocking.

Biogen issued full year 2013 financial guidance calling for revenue growth of 22 percent to 23 percent, with non-GAAP diluted EPS between $8.25 and $8.50.

Shares of Biogen (NASDAQ:BIIB) gained 87 cents to close Thursday at $227.48.

Revlimid Leads Celgene Sales

Celgene Corp., of Summit, N.J., had net product sales of $1.56 billion for the second quarter of 2013, 17 percent greater than the second quarter of 2012. Sales were led by multiple myeloma drug Revlimid (lenalidomide), with $1.05 billion, a gain of 13 percent over the same period last year. Abraxane (nap-paclitaxel) sales were $155 million, up 41 percent, Vidaza (azacitidine) sales gained 5 percent for a total of $211 million, Pomalyst (pomalidomide) had sales of $66 million and Thalomid (thalidomide) also had $66 million in sales, down 13 percent year over year.

The company's adjusted net income for the second quarter of 2013 was $653 million, compared to $545 million in the second quarter of 2012. Adjusted diluted EPS increased 25 percent to $1.52, well above consensus estimates of $1.43. Its GAAP net income was $478 million, or $1.11 per share.

Brian Abrahams, an analyst with Wells Fargo, noted that U.S. Revlimid sales were strong at $625 million, but that European sales of $427 million were lower than the company's estimate of $448 million.

Other than Revlimid European sales, the drug had "a strong quarter all around, confirming the continued growth opportunities across the portfolio," Abrahams wrote.

Celgene had cash, cash equivalents and marketable securities of $4.08 billion as of June 30.

Its shares (NASDAQ:CELG) gained $4.66 Thursday to close at $140.65

In other earnings news:

• Alexion Pharmaceuticals Inc., of Cheshire, Conn., reported net product sales of Soliris (eculizumab) of $370 million for the second quarter of 2013, a gain of 35 percent over the same period in 2012. That revenue slightly beat the consensus estimate of $365 million. Its GAAP net income was $95.9 million, or 48 cents per share, an increase of 164 percent over the same period last year. Non-GAAP net income was $147.2 million, or 73 cents per share. Shares of Alexion (NASDAQ:ALXN) closed Thursday at $107.56, down $2.20.

• Alkermes plc, of Dublin, had total revenues of $138.6 million for the second quarter, compared to $152.2 million for the same period in 2012, which included $20 million in intellectual property license revenue. That revenue beat consensus estimates of $131.5 million. Revenues for antipsychotics Risperdal Consta (risperidone) and Invega Sustenna/Xeplion (palperidone palmitate) were $56.2 million, compared to $48.6 million for the second quarter of 2012. Multiple sclerosis drug Ampyra/Fampyra (dalfampridine) sales were $19.9 million, Vivitrol (naltrexone extended release) earned $17.4 million and Bydureon (exenatide) brought in $5.4 million in royalty revenue. The company's non-GAAP net income was $42.9 million, with non-GAAP diluted EPS of 30 cents. Its GAAP net income was $7.3 million, with a GAAP EPS of 5 cents. Alkermes closed the second quarter with $325 million in cash. Shares (NASDAQ:ALKS) closed Thursday at $30.77, up $1.60.

• Dyax Corp., of Burlington, Mass., turned in net second quarter sales of $8.6 million for Kalbitor (ecallantide), a treatment for hereditary angioedema. Its total revenues were $11.3 million, compared to $14 million for the same quarter in 2012. Dyax also received $2.8 million in development and license fee revenue in the second quarter. It ended the quarter with cash, cash equivalents and investments of $46.9 million. Its shares (NASDAQ:DYAX) gained 13 cents Thursday to close at $4.13.

• Intermune Inc., of Brisbane, Calif., said pulmonary fibrosis drug Esbriet (pirfenidone) brought in $14.4 million in revenue for second quarter, compared to $5.5 million for the second quarter of 2012. Its net loss was $62.9 million, or 77 cents per share, compared with a net loss of $9.3 million, or 14 cents per share, in the second quarter of 2012. It ended the quarter with cash, cash equivalents and securities of $386.7 million. Shares of Intermune (NASDAQ:ITMN) closed Thursday at $14.76, up $1.95, or 15.2 percent.

• United Therapeutics Corp., of Silver Spring, Md., reported total revenue of $280.6 million, compared to $225.6 million for the same period in 2012. Net income was $79.9 million, or $1.60 per share, compared to $72.3 million, or $1.37 per share for the second quarter of 2012. Sales of Remodulin (treprostinil sodium), for pulmonary hypertension, were $124 million, a gain of 12.6 percent. Tyvaso (inhaled treprostinil) made $109 million in sales, up 34.8 percent year over year, and Adcirca (tadalafil) had sales of $43 million, up 44.7 percent. The compay had $895 million in cash at the end of the quarter. Shares of United Therapeutics (NASDAQ:UTHR) gained $1.22 Thursday to close at $71.83.