Biogen Idec, Inc. (BIIB) on Tuesday lifted its annual business outlook after reporting an increase in first-quarter profit. Adjusted earnings were down and missed Street estimates, despite higher sales of its major products, including multiple sclerosis drugs Tysabri and Avonex. The biotechnology firm also announced an additional $500 million share buyback program over the balance of the year.
Chief Executive Officer George Scangos attributed the improved results in the first quarter to the company's strong business fundamentals. He noted that, "While Avonex orders in January were impacted by what we believe to be isolated events, sales rebounded quickly and we believe the underlying Avonex business is solid. Tysabri and Rituxan generated double-digit sales growth."
For its first quarter, net income attributable to the company grew 3 percent to $302.66 million and earnings per share increased 4 percent to $1.25. Adjusted net income, which excluded certain items, fell about 3 percent to $338 million and earnings per share dropped 2 percent to $1.40.
On average, 24 analysts polled by Thomson Reuters expected the company to report earnings of $1.48 per share for the quarter. Analysts' estimates typically exclude special items.
Total revenues advanced 7 percent to $1.29 billion from $1.20 billion in the year-ago quarter, but missed analysts' estimate of $1.31 billion.
Tysabri, manufactured and distributed jointly with Elan Corp. plc (ELN), generated a 14 percent increase in revenues to $286 million. The company noted that global in-market sales of Tysabri were $399 million, an increase of 14 percent from last year.
Revenues of Avonex, used in patients with relapsing forms of multiple sclerosis, increased 3 percent to $662 million, despite a 4 percent decline in worldwide unit demand primarily due to unfavorable distribution channel dynamics.
Revenues for cancer drug Rituxan from the company's unconsolidated joint business arrangement were $285 million, 11 percent higher than last year. Psoriasis drug Fumaderm sales increased slightly.
In the quarter, the company filed for marketing approval for its oral MS candidate BG-12 in both the U.S. and Europe.
As of March 31, Biogen Idec had cash, cash equivalents and marketable securities of approximately $2.7 billion.
For fiscal 2012, the company now expects earnings per share above $5.54 and adjusted earnings per share above $6.15. Biogen's previous forecast for adjusted earnings were in a range of $6.10 to $6.20 per share.
Revenue growth is now expected to be in the mid-single digits versus 2011, in comparison to previous growth forecast in the low to mid-single digits.
Analysts expect the company to earn $6.19 per share on revenues of $5.37 billion for the year.
Scangos earlier had noted that the company in 2012 will focus on the continued growth and leadership of marketed products and the advancement of strong pipeline.
Biogen Idec said it is preparing for the potential of multiple product launches in the coming years. The company continued to make investments in the first quarter with the expectation of an early 2013 launch for BG-12 (dimethyl fumarate) in the U.S. and 2013 launches in hemophilia.
In pre-market activity, Biogen Idec shares lost $3.01 or 2.25% and are currently trading at $131.
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