Biogen Inc. shares fell $1.75 to $22.50 on Friday after thecompany released lower-than-expected revenue figures for thefirst quarter ended March 31.
The Cambridge, Mass., company (NASDAQ:BGEN) reported netincome of $814,000, or 2 cents per share, on revenues of $19.1million. For the 1991 quarter, Biogen had net income afterpreferred dividends of $1.4 million, or 5 cents per share, onrevenues of $18.1 million.
"This is a little disappointing," said Jay Silverman, an analyst atNomura Research Institute. He told BioWorld that he hadexpected more than the $1 million revenue increase. The bulkof revenues are royalties from Schering-Plough's sales of alphainterferon for hepatitis C and from SmithKline Beecham's salesof hepatitis B vaccine.
Research and development expenses, at $13.2 million, were 25percent higher than the 1991 quarter. The company haspreviously said it expects R&D expenses for the year to run 25percent above 1991 figures.
The increase is being driven by expanded clinical trials. Hirulogthrombin inhibitor is in Phase II trials and will move intoPhase III this year, possibly for two indications: unstableangina and angioplasty. Recombinant beta interferon is inPhase II trials for hepatitis B and C and other anti-viral andanti-cancer indications.
Wall Street estimates of Biogen's 1992 earnings range fromabout 6 cents per share to 55 cents per share, said companyspokeswoman Amy Seltzer. Seltzer said Biogen is morecomfortable with estimates at the lower end of the range. "Thecompany's strategy is to not grow earnings at the expense ofclinical trials," she said.
Biogen is among a number of top-tier companies, includingGenentech Inc., Immunex Corp. and Synergen Inc., that havesaid they expect significantly increased R&D expenditures forthe year. While such expenditures are an investment in long-term earnings potential, they mean that investors with shortertime horizons aren't going to see the numbers they might havewanted this year from the top group. -- KB
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