BIOGEN IDEC SECOND QUARTER 2014 REVENUES INCREASE 40% TO $2.4 BILLION; COMPANY RAISES FINANCIAL GUIDANCE FOR THE YEAR

Growth Bolstered by Increased Adoption of TECFIDERA® in New Markets Worldwide
Quarter Highlights include Approval of ELOCTATETM for Hemophilia A;
Positive Phase 3 Read Out for Multiple Sclerosis candidate Daclizumab HYP
 

CAMBRIDGE, Mass.Biogen Idec Inc. (NASDAQ: BIIB) today reported second quarter 2014 results, including revenue of $2.4 billion, a 40% increase compared to the second quarter of 2013. Second quarter 2014 non-GAAP diluted earnings per share (EPS) were $3.49, an increase of 52% over the second quarter of 2013. Non-GAAP net income attributable to Biogen Idec for the second quarter was $829 million, an increase of 51% over the second quarter of 2013.

On a reported basis, GAAP diluted EPS for the second quarter of 2014 were $3.01, an increase of 46% over the second quarter of 2013. GAAP net income attributable to Biogen Idec for the second quarter of 2014 was $715 million, an increase of 46% versus the same period in the prior year. (A reconciliation of GAAP to Non-GAAP quarterly financial results and 2014 full year guidance can be found in Table 3 at the end of this release).

Non-GAAP and GAAP diluted EPS benefited by approximately $0.15 and $0.13, respectively, following the approval of an agreement with the Italian National Medicines Agency (AIFA) relating to TYSABRI® sales in Italy from February 2013 through March 31, 2014.

"This past quarter highlighted significant accomplishments across our business, from the approval of ELOCTATE for hemophilia A, to the continued patient uptake of TECFIDERA in the U.S. and new markets worldwide, to strong clinical results for important emerging MS treatments," said Chief Executive Officer George A. Scangos, Ph.D. "During this time we also announced our intent with Swedish Orphan Biovitrum AB to donate up to one billion international units of clotting factor to humanitarian organizations, which we hope will have a significant impact on the lives of patients in developing countries who may otherwise not have access to these therapies."

"We remain focused on additional potential approvals and pivotal read-outs, and continue to look to increase investment in early-stage research to broaden and advance our neurology, immunology and hematology pipelines," Dr. Scangos added.

Second Quarter 2014 Performance Highlights

  • TECFIDERA revenues were $700 million, consisting of $585 million in U.S. sales and $115 million in sales outside the U.S.
  • AVONEX® revenues were $774 million in the second quarter of 2014. The total was composed of $498 million in U.S. sales and $276 million in sales outside the U.S.
  • TYSABRI revenues were $533 million, consisting of $250 million in U.S. sales and $284 million in sales outside the U.S.
    • TYSABRI sales outside the U.S. included $54 million of previously deferred revenue from February 2013 through March 31, 2014, which was recognized during the quarter following an agreement with AIFA. Beginning in the second quarter of 2014, sales of TYSABRI in Italy were recorded at the full reimbursed price. The Company continues to be in discussions with AIFA to resolve its dispute for the periods February 2009 through January 2013.
  • Net revenues relating to RITUXAN® and GAZYVA® from our unconsolidated joint business arrangement were $303 million in the second quarter of 2014, compared to $289 million in the second quarter of 2013.
  • ALPROLIXTM revenues were $10 million in the second quarter of 2014.

Other Financial Results

  • Revenues for FAMPYRA® and FUMADERMTM were $38 million in the second quarter of 2014, compared to $33 million in the second quarter of 2013.
  • Royalty revenues were $40 million in the second quarter of 2014, compared to $38 million in the second quarter of 2013.
  • Corporate partner revenues were $22 million in the second quarter of 2014, compared to $11 million in the second quarter of 2013.
  • As of June 30, 2014, Biogen Idec had cash, cash equivalents and marketable securities totaling approximately $2.6 billion.

Updated 2014 Financial Guidance

Biogen Idec increased its full year 2014 financial guidance. This change represents a meaningful increase from prior guidance owing primarily to the growth of TECFIDERA in the U.S. and the E.U., the strength of our other MS therapies, and clarity on the AIFA pricing matter.

This guidance consists of the following components:

  • Revenue growth is expected to be approximately 38% to 41%.
  • R&D expense is expected to be approximately 20% to 21% of total revenue.
    • For the balance of the year, full year guidance for R&D expense includes greater than $150 million intended for new early and mid-stage business development opportunities.
  • SG&A expense is expected to be approximately 22% to 23% of total revenue.
  • GAAP diluted EPS is expected to be between $11.26 and $11.46.
  • Non-GAAP diluted EPS is expected to be between $12.90 and $13.10.

Biogen Idec may incur charges, realize gains or experience other events in 2014 that could cause actual results to vary from this guidance.

Multiple Sclerosis (MS) Events

  • In May 2014, Biogen Idec received a positive recommendation from the Committee for Medicinal Products for Human Use of the European Medicines Agency for the marketing authorization of PLEGRIDY™ (Peginterferon Beta-1a), a pegylated interferon administered subcutaneously for adults with relapsing-remitting multiple sclerosis.
  • In June 2014, Biogen Idec and AbbVie announced positive top-line results from the Phase 3 DECIDE clinical trial investigating Daclizumab High Yield Process (HYP) in MS, with Daclizumab HYP demonstrating superiority over interferon beta-1a in annual relapse rate.
  • At the 66th American Academy of Neurology (AAN) annual meeting in April and May 2014, Biogen Idec presented new data on several of its MS programs, including:
    • Two-year data from its Phase 3 ADVANCE clinical trial for PLEGRIDY in people with relapsing MS.
    • Data that reinforces the efficacy of TECFIDERA (dimethyl fumarate) in a wide range of patients with relapsing MS, as well as support for its favorable safety and tolerability profile in the real-world setting.
    • Post hoc analysis of data from the AFFIRM study demonstrating improvement in walking speed for TYSABRI (natalizumab) relative to placebo at two years.
    • Additional data from observational registry studies showing the benefit of switching to TYSABRI after experiencing an MS relapse while taking interferon beta or glatiramer acetate.

Hemophilia Events

  • In June 2014, the U.S. Food and Drug Administration approved ELOCTATE [Antihemophilic Factor (Recombinant), Fc Fusion Protein] for the control and prevention of bleeding episodes, surgical management and routine prophylaxis in adults and children with hemophilia A.
  • In July 2014, ALPROLIX [Coagulation Factor IX (Recombinant), Fc Fusion Protein] for hemophilia B obtained marketing approval from Japan's Ministry of Health, Labor and Welfare, while ELOCTATE for hemophilia A was approved by Australia's Therapeutic Goods Administration.
  • At the World Federation of Hemophilia 2014 World Congress in May 2014, Biogen Idec and Swedish Orphan Biovitrum AB announced their intent to donate up to one billion international units of clotting factor therapy for humanitarian aid programs in the developing world.

Other Events

  • In April 2014, Biogen Idec and Quintiles entered into a five-year strategic clinical development agreement to help optimize Biogen Idec's clinical development processes.
  • In May 2014, Biogen Idec announced that Richard A. Rudick, M.D., has joined the Company as Vice President, Development Sciences, Value-Based Medicine. Dr. Rudick will lead Biogen Idec's newly created Value-Based Medicine Group, which will focus on using advanced technologies to develop innovative programs and tools to better understand, measure and manage the treatment of multiple sclerosis.
  • During the second quarter of 2014, the Company made a $35 million donation to the Biogen Idec Foundation to support the Foundation's mission of providing grants to STEM (Science, Technology, Engineering, Math) education programs.

Conference Call and Webcast

The Company's earnings conference call for the second quarter will be broadcast via the internet at 9:00 a.m. EDT on July 23, 2014, and will be accessible through the Investors section of Biogen Idec's homepage, www.biogenidec.com. Supplemental information in the form of a slide presentation will also be accessible at the same location on the internet at the time of the conference call and will be subsequently available on the website for at least one month.

About Biogen Idec

Through cutting-edge science and medicine, Biogen Idec discovers, develops and delivers to patients worldwide innovative therapies for the treatment of neurodegenerative diseases, hematologic conditions and autoimmune disorders. Founded in 1978, Biogen Idec is the world's oldest independent biotechnology company and patients worldwide benefit from its leading multiple sclerosis and innovative hemophilia therapies. For product labeling, press releases and additional information about the Company, please visit www.biogenidec.com.

Safe Harbor

This press release contains forward-looking statements, including statements about 2014 financial guidance. These forward-looking statements may be accompanied by such words as "anticipate," "believe," "could," "estimate," "expect," "forecast," "intend," "may," "plan," "potential," "project," "target," "will" and other words and terms of similar meaning. You should not place undue reliance on these statements.

These statements involve risks and uncertainties that could cause actual results to differ materially from those reflected in such statements, including: our dependence on sales from our principal products; uncertainty of success in execution of our commercialization of new products; failure to protect and enforce our data, intellectual property and other proprietary rights and the diminution of our ability to derive anticipated benefits from our products; difficulties in obtaining or changes in the availability of reimbursement for our products; uncertainty of success in developing other product candidates, including our ability to obtain product approvals in a timely manner or at all for new or current products; the occurrence of adverse safety events with our products; failure to compete effectively due to significant product competition in the markets for our products; dependence on collaborators and other third parties for the development and commercialization of products; problems with our manufacturing processes; failure to manage our growth and execute our growth initiatives; failure to comply with legal and regulatory requirements; the risks of doing business internationally; charges and other costs relating to our properties; risks and uncertainties relating to the timing, outcome and impact of legal, administrative and other proceedings and disputes; fluctuations in our effective tax rate; our ability to attract and retain qualified personnel; uncertainty and potential liabilities relating to product liability and intellectual property claims; the market, interest and credit risks associated with our portfolio of marketable securities; environmental risks; and the other risks and uncertainties that are described in the Risk Factors section of our most recent annual or quarterly report and in other reports we have filed with the SEC.

These statements are based on our current beliefs and expectations and speak only as of the date of this press release. We do not undertake any obligation to publicly update any forward-looking statements.

 

TABLE 1

Biogen Idec Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(unaudited, in thousands, except per share amounts)
                                     
                                     
          For the Three Months         For the Six Months
          Ended June 30,         Ended June 30,
            2014         2013             2014           2013  
Revenues:                                  
                                     
Product, net       $ 2,056,292       $ 1,385,918           $ 3,799,057         $ 2,481,697  
                                     
Unconsolidated joint business         303,296         288,785             600,181           553,391  
                                     
Royalty         40,344         38,111             78,200           70,931  
                                     
Corporate partner         21,520         10,659             73,765           32,550  
                                     
Total revenues         2,421,452         1,723,473             4,551,203           3,138,569  
                                     
Cost and expenses:                                  
                                     
Cost of sales, excluding amortization of acquired intangible assets         291,887         230,728             571,132           364,477  
                                     
Research and development         447,273         327,463             976,157           611,803  
                                     
Selling, general and administrative         576,622         431,012             1,088,296           783,610  
                                     
Amortization of acquired intangible assets         116,826         82,225             260,084           133,526  
                                     
Collaboration profit sharing         -         -             -           85,357  
                                     
(Gain) loss on fair value remeasurement of contingent consideration         4,019         (5,163 )           3,220           (2,886 )
                                     
Total cost and expenses         1,436,627         1,066,265             2,898,889           1,975,887  
                                     
Gain on sale of rights         3,900         5,319             7,759           10,370  
                                     
Income from operations         988,725         662,527             1,660,073           1,173,052  
                                     
Other income (expense), net         4,861         (10,428 )           (740 )         (24,885 )
                                     
Income before income tax expense and equity in loss of investee, net of tax         993,586         652,099             1,659,333           1,148,167  
                                     
Income tax expense         268,521         159,140             446,935           224,648  
                                     
Equity in loss of investee, net of tax         1,933         2,289             9,538           6,100  
                                     
Net income         723,132         490,670             1,202,860           917,419  
                                     
Net income (loss) attributable to noncontrolling interests, net of tax         8,626         -             8,398           -  
                                     
Net income attributable to Biogen Idec Inc.       $ 714,506       $ 490,670           $ 1,194,462         $ 917,419  
                                     
                                     
Net income per share:                                  
Basic earnings per share attributable to Biogen Idec Inc.       $ 3.02       $ 2.07           $ 5.05         $ 3.87  
                                     
Diluted earnings per share attributable to Biogen Idec Inc.       $ 3.01       $ 2.06           $ 5.03         $ 3.85  
                                     
                                     
Weighted-average shares used in calculating:                                  
Basic earnings per share attributable to Biogen Idec Inc.         236,661         237,484             236,729           237,162  
                                     
Diluted earnings per share attributable to Biogen Idec Inc.         237,401         238,743             237,634           238,543  

 

                                 
                                   
                                   
 
 
TABLE 2
Biogen Idec Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(unaudited, in thousands)
                     
        As of           As of
        June 30,           December 31,
        2014           2013
ASSETS                    
                     
                     
Cash, cash equivalents and marketable securities       $ 1,573,066           $ 1,222,729
                     
Accounts receivable, net         1,002,328             824,406
                     
Inventory         715,935             659,003
                     
Other current assets         633,684             478,796
                     
Total current assets         3,925,013             3,184,934
                     
Marketable securities         1,010,837             625,772
                     
Property, plant and equipment, net         1,756,164             1,750,710
                     
Intangible assets, net         4,249,378             4,474,653
                     
Goodwill         1,364,815             1,232,916
                     
Investments and other assets         611,791             594,350
                     
TOTAL ASSETS       $ 12,917,998           $ 11,863,335
                     
                     
LIABILITIES AND EQUITY                    
                     
Current portion of notes payable and line of credit       $ 3,386           $ 3,494
                     
Other current liabilities         1,913,238             1,754,785
                     
Notes payable         586,091             592,433
                     
Long-term deferred tax liability         139,092             232,554
                     
Other long-term liabilities         710,965             659,231
                     
Equity         9,565,226             8,620,838
                     
TOTAL LIABILITIES AND EQUITY       $ 12,917,998           $ 11,863,335
                         
                         
 
 
TABLE 3
Biogen Idec Inc. and Subsidiaries
GAAP to Non-GAAP Reconciliation: Net Income and Net Income Per Share
(unaudited, in millions, except per share amounts)
                                       
                                       
              For the Three Months       For the Six Months
              Ended June 30,       Ended June 30,
EARNINGS PER SHARE             2014           2013           2014           2013  
                                       
GAAP earnings per share - Diluted           $ 3.01         $ 2.06         $ 5.03         $ 3.85  
Adjustments to net income attributable to Biogen Idec Inc. (as detailed below)             0.48           0.24           0.93           0.42  
Non-GAAP earnings per share - Diluted           $ 3.49         $ 2.30         $ 5.96         $ 4.27  
                                       
An itemized reconciliation between net income attributable to Biogen Idec Inc. on a GAAP basis and net income attributable to Biogen Idec Inc. on a non-GAAP basis is as follows:
                                       
GAAP net income attributable to Biogen Idec Inc.           $ 714.5         $ 490.7         $ 1,194.5         $ 917.4  
  Adjustments:                                    
  Amortization of acquired intangible assets             113.0           79.5           252.8           128.1  
  (Gain) loss on fair value remeasurement of contingent consideration             4.0           (5.2 )         3.2           (2.9 )
  SG&A: Stock option expense             1.5           1.0           4.0           2.9  
  R&D: Stock option expense             1.2           0.8           3.5           2.4  
  Donation to Biogen Idec Foundation             35.0           -           35.0           -  
  Income tax effect related to reconciling items             (40.1 )         (18.0 )         (77.1 )         (29.7 )
Non-GAAP net income attributable to Biogen Idec Inc.           $ 829.1         $ 548.8         $ 1,415.9         $ 1,018.2  
                                       
                                       
2014 Full Year Guidance: GAAP to Non-GAAP Adjustments
An itemized reconciliation between projected EPS on a GAAP basis and on a non-GAAP basis is as follows:
                                       
                $         Shares       Diluted EPS        
Projected GAAP net income attributable to Biogen Idec Inc.             2,697           237         $ 11.36          
  Adjustments:                                    
  Amortization of acquired intangible assets             463                          
  (Gain) loss on fair value remeasurement of contingent consideration             8                          
  Stock option expense             13                          
  Donation to Biogen Idec Foundation             35                          
  Income tax effect related to reconciling items             (131 )                        
Projected Non-GAAP net income attributable to Biogen Idec Inc.             3,085           237         $ 13.00          
                                                 

Numbers may not foot due to rounding.

                                     

Use of Non-GAAP Financial Measures

We supplement our consolidated financial statements presented on a GAAP basis by providing additional measures which may be considered "non-GAAP" financial measures under applicable SEC rules. We believe that the disclosure of these non-GAAP financial measures provides additional insight into the ongoing economics of our business and reflects how we manage our business internally, set operational goals and forms the basis of our management incentive programs. These non-GAAP financial measures are not in accordance with generally accepted accounting principles in the United States and should not be viewed in isolation or as a substitute for reported, or GAAP, net income attributable to Biogen Idec Inc. and diluted earnings per share.

Our "Non-GAAP net income attributable to Biogen Idec Inc." and "Non-GAAP earnings per share - Diluted" financial measures exclude the following items from GAAP net income attributable to Biogen Idec Inc. and diluted earnings per share:

1. Purchase accounting and merger-related adjustments.

We exclude certain purchase accounting related items associated with the acquisition of businesses, assets and amounts in relation to the consolidation of variable interest entities for which we are the primary beneficiary. These adjustments include charges for in-process research and development, the amortization of certain acquired intangible assets and fair value remeasurements of our contingent consideration obligations. The exclusion of these charges provides management and investors with a supplemental measure of performance which the Company believes better reflects the underlying economics of the business.

2. Stock option expense recorded in accordance with the accounting standard for share-based payments.

We believe that excluding the impact of expensing stock options better reflects the recurring economic characteristics of our business.

3. Other items.

We evaluate other items on an individual basis, and consider both the quantitative and qualitative aspects of the item, including (i) its size and nature, (ii) whether or not it relates to our ongoing business operations, and (iii) whether or not we expect it to occur as part of our normal business on a regular basis. We also include an adjustment to reflect the related tax effect of all reconciling items within our reconciliation of our GAAP to Non-GAAP net income attributable to Biogen Idec Inc.

 
 
TABLE 4
Biogen Idec Inc. and Subsidiaries
Product Revenues
(unaudited, in thousands)
                       
                       
            For the Three Months
            Ended June 30,
            2014         2013
PRODUCT REVENUES                    
                       
  AVONEX         $ 773,772         $ 774,416
                       
  TYSABRI           533,440           386,741
                       
  TECFIDERA           700,380           192,134
                       
  FAMPYRA           22,316           16,811
                       
  FUMADERM           15,987           15,816
                       
  ALPROLIX           10,397           -
                       
Total product revenues, net         $ 2,056,292         $ 1,385,918
                       
                       
            For the Six Months
            Ended June 30,
              2014           2013
PRODUCT REVENUES                    
                       
  AVONEX         $ 1,535,246         $ 1,520,514
                       
  TYSABRI           974,485           698,911
                       
  TECFIDERA           1,206,090           192,134
                       
  FAMPYRA           41,277           40,014
                       
  FUMADERM           31,562           30,124
                       
  ALPROLIX           10,397           -
                       
Total product revenues, net         $ 3,799,057         $ 2,481,697
                         
                         

 

Biogen Idec Media Contact:
Biogen Idec
Jason Glashow, (781) 464-3260
Senior Director, Public Affairs
or
Biogen Idec Investor Contacts:
Biogen Idec
Claudine Prowse, Ph.D., (781) 464-2442
Vice President, Investor Relations
or
Biogen Idec
Ben Strain, (781) 464-2442
Associate Director, Investor Relations

 

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