10-QPeriod: Q1 FY2007

BIOGEN INC. Quarterly Report for Q1 Ended Mar 31, 2007

Filed May 3, 2007For Securities:BIIB

Summary

Biogen Idec reported a significant increase in total revenues for the first quarter of 2007, reaching $715.9 million, a 17.1% rise compared to $611.2 million in the same period of 2006. This growth was primarily driven by strong performance in its key products, particularly AVONEX, which saw a 13.9% increase in total revenues to $448.8 million, benefiting from price increases in the U.S. and higher volume internationally. The re-launch of TYSABRI also contributed positively, generating $29.8 million in revenue after a minimal contribution in the prior year. The company also completed the acquisition of Syntonix Pharmaceuticals for $44.4 million, which included an $18.4 million charge for acquired in-process research and development. Despite revenue growth, the company's expenses also increased, with research and development expenses up 31.2% to $191.4 million and selling, general, and administrative expenses up 21.8% to $188.1 million. This increase in R&D was largely due to clinical trials for new drug candidates, while SG&A costs were driven by increased sales and marketing efforts for TYSABRI. The company ended the quarter with a strong liquidity position, holding $2.51 billion in cash, cash equivalents, and marketable securities.

Key Highlights

  • 1Total revenues increased by 17.1% to $715.9 million, driven by strong product sales.
  • 2AVONEX revenue grew by 13.9% to $448.8 million, supported by U.S. price increases and international volume growth.
  • 3TYSABRI began generating significant revenue ($29.8 million) following its reintroduction, a substantial increase from the prior year's nominal amount.
  • 4Acquisition of Syntonix Pharmaceuticals for $44.4 million, including $18.4 million in acquired in-process R&D.
  • 5Research and Development expenses rose 31.2% to $191.4 million, signaling increased investment in new drug development.
  • 6Selling, General, and Administrative expenses increased by 21.8% to $188.1 million, mainly due to TYSABRI marketing efforts.
  • 7Company maintains a robust liquidity position with $2.51 billion in cash, cash equivalents, and marketable securities as of March 31, 2007.

Frequently Asked Questions

The primary drivers of revenue growth were strong sales of AVONEX, which benefited from price increases and higher international volume, and the reintroduction of TYSABRI, which began generating significant revenue after a period of suspension. Revenues from unconsolidated joint businesses, particularly RITUXAN, also contributed positively.

Biogen Idec acquired Syntonix Pharmaceuticals for $44.4 million. A significant portion of this, $18.4 million, was recognized as an acquired in-process research and development (IPR&D) charge.

R&D expenses increased by 31.2% to $191.4 million. This increase is primarily attributed to higher expenses related to clinical trials for new drug candidates like BG-12 and anti-CD23, as well as new projects stemming from the Conforma acquisition, and increased salary and benefit costs due to higher headcount.

Biogen Idec maintained a strong liquidity position, with total cash, cash equivalents, and marketable securities amounting to $2.51 billion. Working capital also saw a substantial increase to $1.44 billion.