Biotechnology company Biogen Idec Inc. (BIIB) on Tuesday reported a sharp rise in fourth-quarter profit, which surpassed Street view, benefited mainly by a 39% growth in revenues from Tysabri and lower costs. The company also provided an earnings guidance for the full year 2010, which is above analysts' current estimates.
For the fourth quarter, net profit attributable to company was $305.64 million, up 48% from $206.65 million in the prior-year period. Earnings per share surged 51% to $1.06 from $0.70 last year.
On an adjusted basis, attributable income was $345.2 million or $1.20 per share compared to $274.3 million or $0.93 per share a year earlier. On average, 20 analysts polled by Thomson Reuters expected the company to earn $1.05 per share for the quarter. Analysts' estimates typically exclude special items.
The drug maker's total revenues for the quarter increased 5% to $1.13 billion from $1.07 billion in the fourth quarter of fiscal 2008, driven primarily by continued growth of both Tysabri and Avonex revenues. Analysts expected the company to generate revenues of $1.13 billion for the quarter.
By products, Avonex revenues grew 5% to $596.47 million from $565.78 million in the prior year, revenues from Tysabri surged 39% to $216.19 million from $155.59 million, and Fumaderm revenues were $14.22 million versus $10.63 million in the 2008 fourth quarter.
In the fourth quarter of fiscal 2009, global in-market net sales of Tysabri grew 37% from the prior year to $296 million, of which $137 million were from the US and $159 million were from the rest of world markets.
Quarterly product revenues were $826.87 million versus $731.84 million last year and revenues from royalties rose to $40.81 million from $28.97 million in the year-ago quarter. Meanwhile revenues from unconsolidated joint business fell to $256.56 million from $303.21 million last year.
The Cambridge, Massachusetts-based company is best known for its multiple sclerosis drug Tysabri, which achieved "blockbuster" status in 2009. The drug is co-marketed by Biogen Idec and Elan Pharmaceuticals Inc., a subsidiary of Elan Corp Plc (ELN).
Biogen's president and chief executive officer James Mullen said at the 28th Annual J.P. Morgan Healthcare Conference in San Francisco last month that as of the end of December 2009, the company estimates that about 48,800 patients were on commercial and clinical Tysabri therapy worldwide. He added that in 2009, the number of patients on the therapy grew by 30% over the prior year and sales of the drug topped $1 billion, compared to $813 million in 2008.
Tysabri, which was given Food and Drug Administration, or FDA, approval for multiple sclerosis in November 2004, was voluntarily withdrawn from the market in February 2005, after it was found that three patients taking the drug developed a rare but potentially fatal brain disease, progressive multifocal leukoencephalopathy, or PML. The drug proved fatal in two cases.
Later, in July 2006, the drug was allowed back on the US market by the FDA and launched in several European countries, but with certain restrictions and enhanced safety warnings. The FDA last week alerted public that the risk of developing PML increases with the use of the drug.
In another event during the quarter, Biogen made an unsuccessful attempt to acquire Facet Biotech Corp. (FACT). Biogen offered up to $17.50 per share for Facet, but failed to woo it sufficiently and later terminated the offer.
During the three-month period, total cost and expenses were $743.68 million compared to $743.95 million a year ago. Research and development costs declined to $283.08 million from $292.77 million in the same period last year, and amortization of acquired intangible assets were $55.98 million versus $90.63 million in the prior-year period.
During the quarter, Biogen repurchased 14.8 million shares at a total cost of $694 million, and also purchased an additional 5.4 million shares for a total of $289 million under October 2009 share repurchase authorization, during the first quarter of 2010 to February 5, 2010. The company noted that there is $288 million remaining under this program.
In late January, Biogen received notice from Icahn Partners LP and certain of its affiliates of their intention to nominate three individuals to Biogen's board at the company's 2010 Annual Meeting. The notice also includes a proposal to amend Biogen's bylaws to fix the number of directors at 12. The activist investor is believed to be unhappy with the company's management.
In the preceding third quarter, the company reported an attributable net income of $277.66 million or $0.95 per share as compared to $206.79 million or $0.70 per share reported last year, and revenues of $1.12 billion versus $1.09 billion generated in the previous year.
For fiscal 2009, Biogen's attributable profit increased to $970.13 million or $3.35 per share from $783.17 million or $2.65 per share a year ago. Adjusted earnings were $1.20 billion or $4.12 per share versus $1.08 billion or $3.66 per share in the same quarter last year.
Full year revenues were up 7% to $4.38 billion from $4.10 billion in fiscal 2008, reflecting continued growth of Tysabri revenues, which grew 32% to $776 million, and Avonex revenues, which rose 5% to $2.3 billion. Analysts expected the company to earn $3.94 per share on revenues of $4.38 billion for the year.
Commenting on the results, Mullen said, "We recorded our sixth consecutive year of double-digit EPS growth, TYSABRI became Biogen Idec's third blockbuster product and we advanced two programs into registrational trials."
Looking ahead to fiscal 2010, Biogen estimates full year earnings to be above $3.71 per share and adjusted earnings to be above $4.55 per share, and anticipates revenue growth in 2010 to be in mid single digits. Analysts currently expect the company to earn $4.37 per share on revenues of $4.51 billion for the full year 2010.
Capital expenditures for the year are anticipated to be between $170 million and $200 million.
Among peers, Bristol Myers Squibb Co. (BMY) on January 28 reported a significant rise in fourth quarter profit, helped by a gain from split-off of Mead Johnson. New York-based Bristol's fourth-quarter attributable income surged to $8.03 billion or $4.06 per share from $1.24 billion or $0.63 per share in the same period a year earlier, and net sales were up 11% to $5.03 billion from $4.54 billion in the prior-year quarter.
BIIB is currently trading on the Nasdaq at $53.94 per share, up $1.10 or 2.08%, on a volume of 827,565 shares. In the past 52-week period, the stock has been trading in a range of $41.75 to $55.37.
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