Biogen Inc. announced Tuesday at the Hambrecht & Quist LifeSciences Conference in San Francisco that it has completed allnecessary patent acquisitions to allow it to make, use and sellits recombinant beta-interferon in the U.S.
Biogen of Cambridge, Mass., did not specify the exactagreements it entered into with the holders of various beta-interferon-related patents, but a spokeswoman said thecompany will pay royalties on product sales to a number ofdifferent patent holders in exchange for the right tounhindered sale of its product.
Jim Vincent, Biogen's chairman and chief executive officer, alsosaid at H&Q that earnings per share in 1993 would be slightlyin excess of 90 cents -- somewhat less than projected becauseof the costs of the patent acquisitions. The total cost to Biogenwas not disclosed. Biogen expects to report its fourth-quarterfinancial results toward the end of this month.
Wall Street reacted strongly to Biogen's announcement. Thecompany's stock (NASDAQ:BGEN) closed at $46.25 on Tuesday,up $5 a share, in extremely heavy trading. More than 4.4million shares traded hands; this is about 10 times the volumetraded recently.
Biogen's recombinant beta-interferon is currently in Phase IIItrials, being tested as a treatment for multiple sclerosis in astudy sponsored by the National Institutes of Health. Althoughthe company had not expected trial results until 1995, itannounced Tuesday that patient dosing would end next month.Biogen now expects to report the results of the trial in thesecond half of this year.
Vincent also announced Tuesday that Biogen has concluded anagreement with Eli Lilly and Co. regarding Biogen's geneexpression patents. Under the agreement, Biogen will receiveunspecified royalties for the sale of Lilly products that useBiogen's patented technology regarding expression vectors andmethods for manufacturing recombinantly derived products.Lilly will also pay Biogen for the value of the technology fromthe issuance of the patent. While further details of theagreement were not disclosed, Vincent estimated that it wouldgenerate about $15 million in revenues for Biogen during 1994,most of which will be realized in the first quarter.
Although the company said Lilly has been using the patentedtechnology in products that are already on the market, Biogen'sspokeswoman said the products were not the subject of anyprior litigation.
Prior to Biogen's announcement, analyst Peter Drake of VectorSecurities International Inc. updated his rating of Biogen to"buy" from "neutral," citing the acceleration of beta-interferonPhase III trials as the primary impetus for the change. He alsocited Biogen's "strong, existing royalty-based revenue stream"and the 1995 market potential of hirulog, Biogen's thrombininhibitor.
Assuming a 1995 approval of beta interferon, Drake predicted1995 sales of $30 million, rising to $250 million by 1997.
-- Karl A. Thiel Associate Editor
(c) 1997 American Health Consultants. All rights reserved.