Biogen Inc.'s fourth-quarter earnings were in line with or better thanexpectations as the company and investment community anticipatethe launch of Avonex.

The Cambridge, Mass., company had earnings of $984,000, or 3cents per share, on revenues of $40.6 million of the fourth quarterending Dec. 31, 1995, compared with $9.7 million, or 27 cents pershare, in earnings on revenues of $43 million a year earlier.

Biogen essentially is using the royalties on sales of licensed productsto fund the rest of the operation. That should change this year asAvonex (interferon-1a) is expected to gain regulatory approval. AnFDA advisory panel recommended in December the product beapproved to treat relapsing forms of multiple sclerosis.

Matthew Geller, an analyst at Oppenheimer & Co. in New York, saidBiogen is doing well.

"They should get approval for Avonex in the first half of the yearand, based on people I've talked to, it should be a very successfulproduct in the marketplace," Geller said.

David Stone, a managing director at New York-based Cowen & Co.,said fourth quarter earnings were in line with estimates, particularlysince they were about what company officials said they would bewhen Biogen presented at the Hambrecht & Quist conference earlierthis month.

"The good news is royalty revenues have been strong enough tooffset the build-up and launch of Avonex," Stone said. "The royaltiesare stronger and the build-up more modest than we had expected."

A year ago Stone and others expected Biogen to post losses for twoor three quarters as the company ramped up for Avonex sales. NowStone projects a 5-cent loss this quarter and profitable quarters afterthat.

Craig Parker, a vice president and biotechnology analyst at NewYork-based J.P. Morgan Securities Inc., also is expecting a loss in thefirst quarter and positive earnings after that, assuming an Avonexlaunch by late in the second quarter.

"It's always nice to have positive earnings going into a productlaunch," Parker said.

Parker said those in the multiple sclerosis market ultimately willdecide, although Avonex appears to be in good position.

Avonex will compete with Emeryville, Calif.,-based Chiron Corp.'sBetaseron, which also is a form of beta interferon. TevaPharmaceuticals Industries Ltd., of Jerusalem, has a multiplesclerosis drug, Copaxone, that also is under review by the FDA.

An Avonex advantage over Betaseron is that it is injected lessfrequently, as is Copaxone. Avonex also may have a better side effectprofile. Parker said Copaxone and one of the interferons may end upbeing used in tandem, which would favor Avonex because of theneed for fewer injections, Parker said.

Biogen's stock (NASDAQ:BGEN) closed Friday at $66 per share,down 25 cents. n

-- Jim Shrine

(c) 1997 American Health Consultants. All rights reserved.