10-QPeriod: Q3 FY2009

BIOGEN INC. Quarterly Report for Q3 Ended Sep 30, 2009

Filed October 21, 2009For Securities:BIIB

Summary

Biogen Idec Inc. (BIIB) reported strong financial performance for the third quarter of 2009, with total revenues increasing by 2.5% year-over-year to $1,120.5 million and net income attributable to the company surging by 34.3% to $277.7 million, resulting in diluted earnings per share of $0.95, up 35.7% from the prior year. The company's growth was primarily driven by continued strong performance from its key products, TYSABRI and AVONEX, alongside robust contributions from its unconsolidated joint business, RITUXAN. TYSABRI revenue saw a significant 20.9% increase, highlighting its growing market acceptance. The company also announced strategic initiatives, including a $1.0 billion share repurchase program and a tender offer to acquire Facet Biotech, signaling a commitment to returning value to shareholders and expanding its pipeline. Financially, Biogen Idec maintained a strong liquidity position with cash and cash equivalents and marketable securities totaling $2,905.1 million as of September 30, 2009. The company is actively managing its pipeline and strategic investments, as evidenced by the advancement of several key drug candidates and a substantial commitment to research and development, which increased by 13.1% for the quarter.

Financial Highlights

54 data points
Beta

Revenue

$1.12B

91.7% Gross Margin

Net Income

$277.70M

24.8% Net Margin

EPS (Diluted)

$0.95

Total Assets

$9.03B

Cash & Equivalents

$585.79M

Free Cash Flow

$227.85M

Financial Statements
Beta
Revenue$1.12B
Cost of Revenue$93.49M
Gross Profit$1.03B
R&D Expenses$304.06M
SG&A Expenses$226.75M
Operating Expenses$736.34M
Operating Income$384.18M
Interest Expense$8.50M
Net Income$277.70M
EPS (Basic)$0.96
EPS (Diluted)$0.95
Shares Outstanding (Basic)288.92M
Shares Outstanding (Diluted)291.04M

Key Highlights

  • 1Total revenues increased 2.5% to $1,120.5 million for Q3 2009 compared to Q3 2008.
  • 2Net income attributable to Biogen Idec Inc. increased 34.3% to $277.7 million, with diluted EPS growing 35.7% to $0.95.
  • 3TYSABRI revenue grew significantly by 20.9% to $207.0 million, indicating strong market traction.
  • 4AVONEX revenue saw a modest 1.1% increase to $580.0 million, with US sales driving the growth.
  • 5Shareholder returns are a focus, with a new $1.0 billion share repurchase program authorized.
  • 6Strategic acquisition activity includes a tender offer for Facet Biotech, aiming to strengthen the pipeline.
  • 7The company maintained a robust financial position with $2,905.1 million in cash and marketable securities as of September 30, 2009.

Frequently Asked Questions

The primary drivers of revenue growth were continued strong performance from TYSABRI (up 20.9%) and increased AVONEX worldwide revenue (up 1.1%). Additionally, revenue from the unconsolidated joint business with Genentech for RITUXAN contributed significantly, with Biogen Idec's share of co-promotion profits increasing by 5.8%.

Biogen Idec's Board of Directors authorized a new share repurchase program of up to $1.0 billion, intended to reduce shares outstanding and return excess cash to shareholders. This is in addition to any remaining authorization from previous programs.

A key concern is the risk of progressive multifocal leukoencephalopathy (PML) associated with TYSABRI, which the company believes increases with the number of infusions. Biogen Idec is discussing potential label changes with regulatory authorities to reflect this increased risk. The filing also notes increasing competition in the Multiple Sclerosis market, which could impact AVONEX sales.

The company reported a strong financial condition with $2,905.1 million in cash, cash equivalents, and marketable securities as of September 30, 2009. Management believes existing funds, cash generated from operations, and access to financing are adequate to meet operating, capital expenditure, and debt service requirements for the foreseeable future.