Biogen Idec Inc. added 1,900 Tysabri (natalizumab) patients during the first three months of 2012, increasing revenues from the multiple sclerosis drug by 14 percent year over year to $286 million, on global in-market sales of $399 million.

Tysabri's improving sales picture helped to boost the company's quarterly revenues by 7 percent, to $1.3 billion, compared to the first quarter of 2011. Still, that growth fell short of investor expectations, sending shares (NASDAQ:BIIB) down $2.18 to close Tuesday at $131.83.

However, analysts were mostly sanguine about the company's performance, with Cowen & Co.'s Eric Schmidt describing it as "a quarterly miss of fairly high quality."

Tysabri's first-quarter sales were split nearly evenly inside the U.S., at $201 million, and outside, at $198 million.

Based on prescribing data, the company estimated that approximately 66,600 patients were on commercial and clinical Tysabri therapy worldwide at the end of March, with about 99,600 patients treated with Tysabri in the postmarketing setting.

The Weston, Mass.-based biotech said revenues from Avonex (interferon beta-1a) increased just 3 percent year over year, to $662 million, while worldwide unit demand for the drug decreased 4 percent year over year, primarily due to unfavorable distribution channel dynamics.

"While Avonex orders in January were impacted by what we believe to be isolated events, sales rebounded quickly, and we believe the underlying Avonex business is solid," Biogen Idec CEO George Scangos said during a conference call to discuss the financial results.

Oppenheimer & Co. Inc. analyst Bret Holley agreed, predicting in a research note that Avonex sales likely would bounce back from a weak first quarter following a $19 million impact from soft pharmacy wholesaler purchases, a pharmacy benefit management transition for federal employee programs and a $7 million recall of expired product.

"Although we expect modest underlying Avonex demand growth in 2H12, monthly data suggest sales will recover in 2Q12," Holley wrote.

Meanwhile, Rituxan (rituximab) revenues from Biogen Idec's partnership with Genentech Inc./Roche AG came in at a record $285 million for the quarter, an increase of 11 percent year over year, placing the drug on "a solid trajectory," according to Schmidt, who credited positive channel dynamics and lower expenses.

Revenues from other products were $28 million, compared to $13 million in the first quarter of 2011, while royalties were $29 million – a 13 percent increase over the same period last year.

Biogen Idec said first-quarter 2012 GAAP diluted earnings per share (EPS) were $1.25, an increase of 4 percent over the first quarter of 2011. GAAP net income attributable to the company was $303 million for the quarter, an increase of 3 percent from the same period a year earlier.

Non-GAAP diluted EPS were $1.40, a decrease of 2 percent over the first quarter of 2011, while non-GAAP net income attributable to Biogen Idec was $338 million for the quarter, a decrease of approximately 3 percent over the same period last year.

Biogen Idec reported cash, equivalents and marketable securities of about $2.7 billion as of March 31.

Scangos also disclosed the company expects to repurchase an additional $500 million in shares over the balance of the year to retire shares and return capital to shareholders.

The company has high hopes for oral MS candidate BG-12 (dimethyl fumarate). The drug showed stellar efficacy data last fall at the Joint Triannial Congress of the European and Americas Committees for Treatment and Research in Multiple Sclerosis (ECTRIMS/ACTRIMS) conference in Amsterdam, the Netherlands. (See BioWorld Today, Oct. 21, 2011.)

Biogen Idec has filed for marketing approval for BG-12 both in the U.S. and Europe.

Analysts also seem enthused about prospects for the drug.

"Overall, we believe that BIIB has a solid base business and BG-12, the most promising of the upcoming MS compounds, will continue to drive growth," Leerink Swann analyst Steve Yoo wrote in a research report, maintaining his "outperform" rating and raising his valuation range to the high $140s from $130-$136 per share.

BMO Capital Markets analyst Jim Birchenough increased the company's price target to $127 based on improved Tysabri trends and updated BG-12 assumptions, although "we are maintaining our 'market perform' rating," he wrote in a research note. "We continue to believe that shares are fully valued on BG-12 opportunity and would look to the late-stage pipeline to support incremental upside potential."

Biogen Idec also cited "significant headway" on its research and development pipeline during the first quarter, anticipating Phase III data readouts from its long-lasting Factor VIII and long-lasting Factor IX programs for hemophilia, and dexpramipexole for amyotrophic lateral sclerosis readouts in the second half of the year.

The company said partner Isis Pharmaceuticals Inc. began dosing patients in a Phase I study of ISIS-SMNRx in spinal muscular atrophy in a potential $74 million pact inked in January, with results expected in late 2013. (See BioWorld Today, Jan. 5, 2012.)

In February, Biogen Idec also acquired Stromedix Inc., of Cambridge, Mass., in a potential $562.5 million deal that added STX-100 to its pipeline. The humanized monoclonal antibody is expected to initiate a Phase II study by midyear in idiopathic pulmonary fibrosis. (See BioWorld Today, Feb. 15, 2012.)

In other earnings news:

• ViroPharma Inc., of Exton, Pa., reported $136 million in quarterly net product sales, including $68 million in worldwide net sales of Cinryze (C1 esterase inhibitor) and $66 million in net sales of antibiotic Vancocin (vancomycin hydrochloride). By comparison, net sales were $127 million in the same period last year, a difference of 7 percent. ViroPharma achieved non-GAAP adjusted net income of $31 million and GAAP net income of $20 million for the quarter. The company said operations generated positive cash flow of $53 million during the quarter, which it finished with working capital of $532 million, including $473 million in cash, equivalents and short-term investments. For the full year, ViroPharma projected worldwide net product sales of $450 million to $500 million, including net U.S. Cinryze sales of $310 million to $330 million. The company's shares (NASDAQ:VPHM) fell 9.7 percent on Tuesday, closing at $19.64, with analysts largely blaming missed estimates. The stock skidded last month when the FDA informed the company that its supplemental new drug application for Vancocin, approved in December 2011, would not qualify for three additional years of exclusivity. (See BioWorld Today, April 11, 2012.)