By Jim Shrine
Special To BioWorld Today
Biogen Inc.'s Avonex sales continued to fuel earnings growth, as the company reported third-quarter net income of $37.6 million, an 83 percent increase over 1997's third quarter.
The Cambridge, Mass., company had earnings of 49 cents per diluted share, as analysts projected, compared to 27 cents in the same period last year. Revenues for the quarter were about $152.9 million, compared to $106.2 million for the third quarter last year.
Sales of the multiple sclerosis drug Avonex (interferon beta-1a) accounted for $107.5 million of the quarterly revenues, while royalties — primarily from alpha interferon and a hepatitis B vaccine — were $38.4 million, and interest income was $7 million. Avonex sales, which began in May 1996 in the U.S. and in March 1997 in Europe, were up 78 percent from the third quarter of 1997.
"We are seeing record numbers of patients on the drug," said Peter Drake, executive vice president of Vector Securities International Inc., in Deerfield, Ill. "That underscores the bountiful evidence that Avonex is the treatment of choice, that is safe and effective, and that the label, which shows the drug reduces the progression of disease, has really caught on in the mainstream neurology community."
Biogen CEO Jim Tobin, in releasing the third quarter results after the market closed Monday, said 40,000 patients in the U.S. and 11,000 in Europe are on weekly Avonex therapy. That's an increase of 7,000 since the end of the second quarter, he said.
Cash Reserves Top $500M
The company has 77.3 million diluted shares outstanding. It reported cash of $505 million and research spending of $49 million.
Drake, who had projected third-quarter per-share earnings of 49 cents and Avonex sales of $105 million, told BioWorld Today his firm has raised its numbers for next year to reflect modest growth, although a brighter picture is likely.
"Specifically, we have taken our numbers from $2.35 to $2.46 on earnings per share, and our Avonex revenue projection from $480 million to $490 million," Drake said. "I view these increases as moderate, and I believe we will raise our numbers yet again."
The stock was moving up because the consensus 1998 numbers have gone up, Drake said, pointing out analysts now project earnings per share of $1.82 for 1998, up from $1.80, and the consensus next year is now nearly $2.50.
"One of our investment themes in Biogen is that this is not a cyclical story," Drake said. "This is not just a one-quarter phenomenon. Biogen's business is a secular 'up' trend [in] royalty revenues, product revenues and pipeline advances."
Biogen said it formed a joint venture in the third quarter with an Italian company for distribution of Avonex in Switzerland, and noted the Provincial Drug Formulary in Quebec approved reimbursement of Avonex. Biogen expects most Canadian provinces will follow suit by year's end.
Also, by the end of year new data are expected from one of Biogen's drugs in development. The three most advanced product candidates are Amevive (LFA-3/IgG), a human fusion protein for psoriasis; Antova (CD40 Ligand), a humanized antibody for autoimmune diseases; and CVT-124, a compound for congestive heart failure.
Early Phase II data from CVT-124 are expected by the end of the year, said Biogen spokeswoman Kathryn Bloom.
Safety data from a Phase IIa study of Amevive were presented last month. A broader placebo-controlled, blinded Phase IIb study of the protein began in May, with results expected by the middle of 1999, Bloom said. If all goes as hoped, the drug will be launched in late 2001 or early 2002, she added.
The lead indication for Antova is idiopathic thrombocytopenic purpura (ITP), for which Phase I results indicated the antibody was safe and well tolerated. Preliminary results from a Phase IIa trial in ITP are expected in the first half of 1998, and a blinded efficacy trial is expected to start in the new few weeks. A new Antova trial, for lupus nephritis, began a few weeks ago.
Biogen is also testing Avonex in trials to broaden the indication.
The company's stock (NASDAQ:BGEN) closed Tuesday at $68.375, up $3.187. *