Media Contact:
Tim Hunt
Director, Public Affairs
Biogen, Inc.
Tel: (617) 914-6524
Investment Community Contact:
Elizabeth Woo
Senior Director, Investor Relations
Biogen, Inc.
Tel: (617) 679-2812
BIOGEN ANNOUNCES FIRST QUARTER 2003 RESULTS
- - -
REPORTED EARNINGS PER SHARE OF $0.42; OPERATING EARNINGS PER SHARE OF $0.50
- - -
RECORD QUARTER OF WORLDWIDE AVONEX(R) (INTERFERON BETA-1A) REVENUES
- - -
AMEVIVE(R) (ALEFACEPT) LAUNCHED IN FEBRUARY
- - -
For Immediate Release
Cambridge, MA (April 17, 2003) -- Biogen, Inc. (NASDAQ: BGEN) today announced
financial results for the first quarter of 2003.
For the three months ended March 31, 2003, total revenues were $321 million, an
increase of 11 percent over the first quarter of 2002.
- - AVONEX worldwide sales were $274 million, an increase of three percent over
first quarter 2002. U.S. sales were $189 million, and international sales
were $85 million.
- - AMEVIVE sales were $4 million for the period from the launch of AMEVIVE on
February 1 through March 31.
- - Royalties were $41 million, an increase of 85 percent over the first
quarter 2002, primarily driven by resumption of royalties on U.S. sales of
alpha interferon products by Schering-Plough.
Reported net income in the first quarter of 2003 was $64 million, or $0.42 per
share. In the first quarter of 2002, reported net income was $72 million, or
$0.47 per share.
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Page 2 Biogen Reports First Quarter 2003 Earnings
Operating results in the first quarter of 2003 exclude charges of $16 million
to other income (expense) related to a legal settlement with Dr. Rentschler
Biotechnologie GmbH related to an intellectual property dispute and a write-down
of certain investments. On an after-tax basis, these charges were $12 million,
or $0.08 per share. Operating earnings per share was $0.50 in the first quarter
of 2003 versus $0.48 in the same period of 2002. See attached "Operating
Condensed Consolidated Statements of Income" table for a reconciliation of
reported results (GAAP) to operating results (Non-GAAP).
Jim Mullen, Biogen's Chairman and Chief Executive Officer, noted, "The strength
of these results are driven by robust revenue performance of AVONEX worldwide
and operational efficiencies across the company. In addition, the AMEVIVE launch
has gone well and we expect AMEVIVE to become an important product. Later this
summer, we, along with our partner, Elan, expect to announce Phase 3 results for
ANTEGREN(R) (natalizumab) in Crohn's disease. These accomplishments put us on
track to achieve our goals for this year."
NEUROLOGY FRANCHISE
In January, the U.S. Food and Drug Administration (FDA) approved the use of
AVONEX to treat patients who have experienced their first Multiple Sclerosis
(MS) attack if brain scans show abnormalities characteristic of MS.
At the recent 55th annual meeting of the American Academy of Neurology, Dr.
Richard Rudick of The Cleveland Clinic Foundation presented a poster on the
study designs of two Phase 3 trials of ANTEGREN alone and in combination with
AVONEX in patients with relapsing-remitting MS. These two Phase 3 trials became
fully enrolled in the fourth quarter of 2002 and, combined, have enrolled more
than 2,100 patients.
DERMATOLOGY FRANCHISE
The FDA approved AMEVIVE at the end of January for the treatment of adult
patients with moderate-to-severe chronic plaque psoriasis who are candidates for
systemic therapy or phototherapy. As of mid-April, almost 800 physicians are
pursuing AMEVIVE therapy for more than 2,500 patients, most of whom are awaiting
insurance verification. More than 90 percent of patients who have completed the
insurance verification process have received coverage for AMEVIVE.
OTHER NOTABLE ACCOMPLISHMENTS
At the end of January, Biogen and IDEC Pharmaceuticals Corporation announced
plans to collaborate on the development of three oncology therapeutics from
Biogen's pipeline of early-stage development candidates. The collaboration
leverages the companies' world-class capabilities in their respective areas of
discovery research, development, and manufacturing. By working together, the
companies expect these promising new therapeutics for patients with cancer to
move forward more rapidly.
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Page 3 Biogen Reports First Quarter 2003 Earnings
2003 FINANCIAL GUIDANCE
For the second quarter of 2003, the Company expects diluted operating earnings
per share to be in the range of $0.38 - $0.44.
The Company reiterated that it expects its full year 2003 operating earnings per
share to be in the range of $1.72 - $1.85 announced on April 2, 2003. Specifics
are provided in the attached table. Guidance for full year 2003 and second
quarter reported earnings per share, which is the most comparable GAAP-based
financial measure to operating earnings per share, is not currently accessible
as the Company cannot predict with any certainty the nature or the amount of
non-operating or unusual charges for subsequent quarters. The Company does,
however, anticipate that it may have to take such charges in subsequent quarters
and that such charges, if material, would cause reported earnings per share to
differ from operating earnings per share.
CONFERENCE CALL AND WEBCAST
The Company's earnings conference call for the first quarter will be broadcast
via the Internet at 8:30 a.m. ET on April 17, 2003, and will be accessible
through the investor relations section of Biogen's homepage,
http://www.biogen.com.
INVESTOR CALENDAR
Second quarter results Thursday, July 24, 2003, 8:30 a.m. ET
ABOUT BIOGEN
Biogen is the world's oldest independent biotechnology company and a leader in
biologics research, development and manufacturing. A pioneer in leading edge
research in immunology, neurobiology and oncology, Biogen brings novel therapies
to improve patients' lives around the world through its global marketing
capabilities. For press releases and additional information about the company,
please visit http://www.biogen.com.
ABOUT AVONEX
The most common side effects associated with AVONEX treatment are flu-like
symptoms including myalgia, fever, fatigue, headache, chills, nausea, vomiting,
pain and asthenia.
AVONEX should be used in caution with patients with depression or other mood
disorders and in patients with seizure disorders. AVONEX should not be used by
pregnant women. Patients with cardiac disease should be closely monitored.
Patients should also be monitored for signs of hepatic injury. Routine periodic
blood chemistry and hematology tests are recommended during treatment with
AVONEX. Rare cases of anaphylaxis have been reported.
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Page 4 Biogen Reports First Quarter 2003 Earnings
FORWARD LOOKING STATEMENTS / SAFE HARBOR
This press release contains forward-looking statements regarding expected future
financial results and expectations related to the development of the Company's
pipeline products.
These statements are based on the Company's current beliefs and expectations. A
number of risks and uncertainties could cause actual results to differ
materially. For example, financial results, including future revenues, revenue
growth, earnings per share, expenses, income tax rate and capital expenditures,
may be affected by any slowing of growth of the multiple sclerosis market, any
change in market acceptance of AVONEX in key markets worldwide, the Company's
ability to achieve market acceptance of AMEVIVE and to successfully launch
AMEVIVE in the U.S., the impact of reimbursement and pricing decisions related
to the Company's products, the impact of competitive products on AVONEX and
AMEVIVE sales, the impact of litigation, any unanticipated increase in expenses
including in the areas of research and development and sales and marketing, and
in-licensing and product opportunities. The Company's expectations regarding the
development of its pipeline products, including the timing of anticipated
results from our clinical trials of ANTEGREN in Crohn's disease and expectations
regarding the collaboration with IDEC Pharmaceuticals, are subject to the risks
inherent in drug development, including the risk of unexpected new data or
information, unexpected technical or manufacturing issues and intellectual
property disputes. Drug development involves a high degree of risk. Only a small
number of research and development programs result in the commercialization of a
product. Success in early stage clinical trials does not ensure that later stage
or larger scale clinical trials will be successful.
For more detailed information on the risks and uncertainties associated with
these forward looking statements and the Company's other activities see the
Outlook section in MD&A of the Company's Annual Report on Form 10-K and
quarterly reports on Form 10-Q filed with the Securities and Exchange
Commission. The Company does not undertake any obligation to publicly update any
forward-looking statements.
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Page 5 Biogen Reports First Quarter 2003 Earnings
FINANCIAL RESULTS FOR THE FIRST QUARTER OF 2003
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED
MARCH 31,
2003 2002
--------- ---------
REVENUES
Product $ 278,177 $ 265,985
Royalties 41,373 22,358
Contract 1,149 --
--------- ---------
Total Revenues 320,699 288,343
--------- ---------
COST AND EXPENSES
Cost of product and royalty revenues 46,266 39,318
Research and development 85,106 82,467
Selling, general and administrative 95,423 73,390
--------- ---------
Total Cost and Expenses 226,795 195,175
--------- ---------
Income from Operations 93,904 93,168
Other income (expense), net (5,664) 7,028
--------- ---------
INCOME BEFORE INCOME TAXES 88,240 100,196
Income Taxes 24,707 28,055
--------- ---------
NET INCOME $ 63,533 $ 72,141
========= =========
BASIC EARNINGS PER SHARE $ 0.42 $ 0.49
========= =========
DILUTED EARNINGS PER SHARE $ 0.42 $ 0.47
========= =========
SHARES USED IN CALCULATING:
BASIC EARNINGS PER SHARE 149,611 148,660
========= =========
DILUTED EARNINGS PER SHARE 151,494 152,202
========= =========
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Page 6 Biogen Reports First Quarter 2003 Earnings
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
MAR. 31, 2003 DEC. 31, 2002
---------- ----------
ASSETS
CURRENT ASSETS
Cash and marketable securities $ 812,381 $ 867,109
Accounts receivable, net 177,966 171,067
Other current assets 190,129 177,848
---------- ----------
Total current assets 1,180,476 1,216,024
---------- ----------
Property and equipment, net 749,183 738,059
Other assets 46,230 52,905
---------- ----------
$1,975,889 $2,006,988
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 271,010 $ 326,333
Long term debt & liabilities 86,200 85,234
Shareholders' equity 1,618,679 1,595,421
---------- ----------
$1,975,889 $2,006,988
========== ==========
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Page 7 Biogen Reports First Quarter 2003 Earnings
FINANCIAL RESULTS FOR THE FIRST QUARTER OF 2003
OPERATING CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The non-GAAP financial measure presented below is utilized by Biogen management
to gain an understanding of the comparative operating performance of the
Company. This non-GAAP financial measure may be useful in excluding those
non-operational or unusual activities or transactions that are not necessarily
relevant to obtaining an understanding of the trends of the Company or the
prospects of future performance.
THREE MONTHS ENDED
MARCH 31,
2003 (a) 2002 (b)
-------------------------------------- -------------------------------------
Operating Operating
Reported Adjustments Results Reported Adjustments Results
--------- --------- --------- --------- --------- ---------
REVENUES
Product $ 278,177 $ 278,177 $ 265,985 $ 265,985
Royalties 41,373 41,373 22,358 22,358
Contract 1,149 1,149 -- --
--------- --------- --------- --------- --------- ---------
Total Revenues 320,699 -- 320,699 288,343 -- 288,343
--------- --------- --------- --------- --------- ---------
COST AND EXPENSES
Cost of product and royalty revenues 46,266 46,266 39,318 39,318
Research and development 85,106 85,106 82,467 82,467
Selling, general and administrative 95,423 95,423 73,390 73,390
--------- --------- --------- --------- --------- ---------
Total Cost and Expenses 226,795 -- 226,795 195,175 -- 195,175
--------- --------- --------- --------- --------- ---------
Income from Operations 93,904 -- 93,904 93,168 -- 93,168
Other income (expense), net (5,664) 15,989 10,325 7,028 2,182 9,210
--------- --------- --------- --------- --------- ---------
INCOME BEFORE INCOME TAXES 88,240 15,989 104,229 100,196 2,182 102,378
Income Taxes 24,707 4,477 29,184 28,055 611 28,666
--------- --------- --------- --------- --------- ---------
NET INCOME $ 63,533 $ 11,512 $ 75,045 $ 72,141 $ 1,571 $ 73,712
========= ========= ========= ========= ========= =========
BASIC EARNINGS PER SHARE $ 0.42 $ 0.08 $ 0.50 $ 0.49 $ 0.01 $ 0.50
========= ========= ========= ========= ========= =========
DILUTED EARNINGS PER SHARE $ 0.42 $ 0.08 $ 0.50 $ 0.47 $ 0.01 $ 0.48
========= ========= ========= ========= ========= =========
SHARES USED IN CALCULATING:
BASIC EARNINGS PER SHARE 149,611 149,611 149,611 148,660 148,660 148,660
========= ========= ========= ========= ========= =========
DILUTED EARNINGS PER SHARE 151,494 151,494 151,494 152,202 152,202 152,202
========= ========= ========= ========= ========= =========
(a) Non-operational adjustments for the first quarter of 2003 include charges
of $12.9 million related to the settlement of litigation and $3.1 million
for the write-down of certain investments.
(b) Non-operational adjustments for the first quarter of 2002 includes a $2.2
million charge related to the write-down of certain non-current marketable
securities.
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Page 8 Biogen Reports First Quarter 2003 Earnings
2003 GUIDANCE FOR BIOGEN, INC.
APRIL 17, 2003
2003 GUIDANCE
-------------
REVENUES
Product
AVONEX 3 - 6% growth
US 0 - 2% growth
Rest of World 12 - 16% growth
AMEVIVE Over $85 MM
Royalties $ 145 - 160 MM
Total Revenues Mid-teen growth
COSTS, EXPENSES, & TAX RATE as % OF TOTAL REVENUES
Cost of Sales 14 - 15 %
Research and development 30 - 32 %
Selling, general and administrative 28 - 30 %
Other income and expense $ 35 - 45 MM
Tax rate Approximately 28 %
DILUTED OPERATING EARNINGS PER SHARE $ 1.72 - 1.85
=============
DILUTED SHARES OUTSTANDING 151 - 153 MM
CAPITAL EXPENDITURES $ 150 - 175 MM
This financial guidance, which is provided as part of a press release dated
April 17, 2003, is based on the Company's expectations and is subject to all of
the qualifications and limitations described in the press release. Actual
results may differ from these forward-looking statements. See the safe harbor
statement for more information.
## ## ##