Biogen Idec Inc. managed to beat analysts' earnings forecasts for the first quarter, but officials warned that the quarter's 40-cent earnings per share probably is the "high-water mark for the year," because of efforts to accelerate development of the potential blockbuster drug for multiple sclerosis.
"Clearly, the Antegren update will cause some changes," said Peter Kellogg, chief financial officer for the Cambridge, Mass.-based company, noting that the sped-up timeline for the MS compound will cost the firm $50 million to $60 million more than expected - including as much as $14 million in milestone payments due Dublin, Ireland-based Elan Corp. plc., the partner for Antegren.
Biogen Idec's stock (NASDAQ:BIIB) closed Friday at $59, up $1.99.
First-quarter earnings per share of 40 cents were due to net income of $143 million, both on an adjusted non-GAAP basis, which excludes non-operating charges, as well as those related to the merger completed last year of Biogen Inc. with IDEC Pharmaceutical Corp., of San Diego. Analysts had forecast 34 cents per share.
In accordance with GAAP, the merged firm reported a loss of $41 million, or 12 cents per share, mainly due to $275 million of non-cash accounting impacts related to the buyout.
Revenues jumped 24 percent to $542 million, as compared to adjusted pro-forma revenues of $437 million in the first quarter of 2003. Sales of Avonex (interferon beta-1a) for relapsed multiple sclerosis rose 29 percent to $355 million, compared to the same period last year. In the U.S., sales were $240 million.
Amevive (alefacept) for moderate to severe psoriasis, approved in late January 2003, sold $13 million in the first quarter of this year. The radioimmunotherapy Zevalin (ibritumomab tiuxetan) dipped somewhat, selling $4.8 million, compared to $5.7 million for the same period last year.
The company's joint deal with South San Francisco-based Genentech Inc. for Rituxan (rituximab) for B-cell non-Hodgkin's lymphoma yielded $134 million in revenues, compared to $111 million for the period last year. U.S. sales of Rituxan, Genentech said, totaled $363 million, compared to $310 million in the quarter last year.
Guidance from the company called for 15 percent revenue growth and 20 percent earnings-per-share growth through 2007. In the meantime, research and development spending likely will peak in the second quarter, which will be the "softest" of the year in terms of earnings per share, Kellogg said.
Biogen Idec is gearing up for submission in the second quarter of the U.S. filing for Antegren (natalizumab), in a move Kellogg characterized during a conference call as "shifting gears to ensure that we capitalize on this very unique opportunity."
William Rohn, chief operating officer for Biogen Idec, noted it has been "several years since the last meaningful therapy in MS was introduced and untreated patients are ready for a new product."
Could the new drug cannibalize Avonex?
"The answer is not a simple yes or no," Rohn said, predicting physicians will use a decision-tree algorithm, based on how the patient presents. Doctors will be "eager to prescribe" Antegren for patients who have failed other therapies, he said. For patients with breakthrough disease, the decision will involve whether to switch to Antegren or add it to the current therapy, he said.
Rohn said the potential MS market is expected to grow to about $6 billion "over the next few years."
Antegren also is being developed for Crohn's disease and joins two other compounds in Phase III studies: Rituxan, for rheumatoid arthritis, and BG-12, being studied in Europe for psoriasis.
Last week, Biogen Idec and Fumapharm AG, of Lucerne, Switzerland, reported favorable results at the spring symposium of the European Academy of Dermatology and Venerology in Budapest, Hungary, from a Phase II study of BG-12, an oral fumarate.