By Charles Craig

Biogen Inc. said sales of its multiple sclerosis drug, Avonex, continued to grow during the first quarter of 1997, topping $50 million and boosting the company's net profit for the first three months of the year to $17 million, or 22 cents per share.

The quarterly net income represented a considerable jump over the first quarter of 1996, when Biogen reported a net loss of $3.66 million, or 5 cents per share, as expenses mounted in preparation for the launch of Avonex, which is the company's first directly marketed product. The drug, beta interferon-1a, was approved in May 1996 and is on the market in the U.S. and Europe.

Despite an $8 million increase in Avonex revenues from the fourth quarter of 1996, sales growth was slower than Wall Street analysts projected and the company's stock (NASDAQ:BGEN) suffered Friday, dropping nearly 15 percent to $32.875.

In addition, Biogen officials lowered forecasts for Avonex growth in the second quarter of 1997, causing analysts to reduce estimates of year-end revenues.

David Stone, an analyst with Cowen and Co., in Boston, dropped his 1997 Avonex sales projections to $265 million from $290 million.

He also noted revised forecasts for the company are based on slower than expected sales in the U.S., where the major growth potential exists.

"When you only have one product driving revenues," Stone observed, "that's not good."

However, for 1998, he maintained his estimates of $350 million in U.S. sales and $100 million in Europe.

Avonex, whose first quarter sales this year reached $52.6 million, competes with two other multiple sclerosis drugs. Betaseron is sold by Berlex Laboratories Inc., of Wayne, N.J., and made by Chiron Corp., of Emeryville, Calif. The other is Copaxone, made by Teva Industries Inc., of Jerusalem, and marketed in the U.S. by Teva Marion Partners, a joint venture between Teva and Hoechst Marion Roussel, of Frankfurt, Germany.

Betaseron, beta interferon-1b, has been on the market since 1993 and is nearly the same molecule as Avonex. Copaxone, an amino acid peptide fragment derived from myelin basic protein, was launched this year.

Biogen and Schering, Berlex's parent company in Berlin, have been embroiled in patent fights in the U.S. and Europe over their products. (See BioWorld Today, April 11, 1997, p. 1.)

Biogen has said Avonex, after eight months on the market in 1996, was favored by more patients than Betaseron. Avonex sales last year totaled $78 million from the latter part of May through December.

Schering, in its 1996 fiscal report, said Betaseron sales in the U.S. were DM350 million. The drug is sold as Betaferon outside the U.S., where revenues were DM183 million. Schering said worldwide totals of DM533 million in 1996 represented a 34 percent increase over 1995. Based on monetary exchange rates Friday of $1.72 for DM1, sales were $203 million in the U.S. and $309 million worldwide.

Biogen's total revenues for the first quarter of 1997 reached nearly $100 million, compared with $38 million the year before. Prior to the launch of Avonex, Biogen's revenues were driven by royalties on products developed with corporate partners: Schering-Plough Corp., of Madison, N.J., sells Biogen's alpha interferon; and SmithKline Beecham plc, of London, and Merck & Co., of Whitehouse Station, N.J., market Biogen's hepatitis B vaccines.

In the first three months of this year royalty revenue was up, jumping to $42 million from $34.4 million during the same period in 1996.

Biogen said its expenses for the quarter included 5 cents per share, or about $3.8 million, related to a collaboration with CV Therapeutics, of Palo Alto, Calif., for development of CVT-124, an adenosine A-receptor antagonist for treatment of congestive heart failure.

CVT-124 is in Phase II trials and is among several in Biogen's clinical development pipeline. Two others mentioned by the company are drugs for autoimmune diseases. A CD40 ligand antibody, designed to inhibit B cells, is in a Phase I safety trial and lupus is among the potential disease targets. The second product is a T cell-inhibiting protein, called LFA3TIP, which is in a Phase II study for psoriasis.

Biogen's research and development expenses for the first quarter of 1997 increased to $38 million from $24.4 million during the first three months of 1996. *