10-QPeriod: Q1 FY2010

BIOGEN INC. Quarterly Report for Q1 Ended Mar 31, 2010

Filed April 20, 2010For Securities:BIIB

Summary

Biogen Idec reported strong revenue growth of 7.0% to $1,108.9 million for the first quarter ended March 31, 2010, primarily driven by increased sales of key products AVONEX, TYSABRI, and RITUXAN. Despite revenue growth, net income attributable to Biogen Idec decreased by 10.9% to $217.4 million, and diluted earnings per share fell by 4.8% to $0.80, largely due to higher costs and expenses, including increased collaboration profit sharing and R&D spending. The company also announced a new $1.5 billion share repurchase authorization, signaling a commitment to returning capital to shareholders. Significant events during the quarter included the enactment of U.S. healthcare reform legislation, which is expected to reduce revenues in 2010, and ongoing pipeline developments, such as new studies for TYSABRI and progress in hemophilia B programs.

Financial Highlights

54 data points
Beta

Revenue

$1.11B

91.2% Gross Margin

Net Income

$217.40M

19.6% Net Margin

EPS (Diluted)

$0.80

Total Assets

$8.22B

Cash & Equivalents

$639.56M

Free Cash Flow

$298.69M

Financial Statements
Beta
Revenue$1.11B
Cost of Revenue$97.06M
Gross Profit$1.01B
R&D Expenses$307.03M
SG&A Expenses$248.66M
Operating Expenses$805.17M
Operating Income$303.69M
Interest Expense$8.30M
Net Income$217.40M
EPS (Basic)$0.80
EPS (Diluted)$0.80
Shares Outstanding (Basic)269.92M
Shares Outstanding (Diluted)272.70M

Key Highlights

  • 1Total revenues increased 7.0% to $1,108.9 million, driven by strong performance in key products.
  • 2AVONEX revenue grew 6.7% to $592.5 million, while TYSABRI revenue saw a significant increase of 32.3% to $218.6 million.
  • 3Biogen Idec's share of RITUXAN revenues increased by 11.6% to $254.9 million, reflecting strong U.S. co-promotion profits.
  • 4Net income attributable to Biogen Idec decreased by 10.9% to $217.4 million, impacted by rising costs and expenses.
  • 5The company initiated a new $1.5 billion share repurchase program, demonstrating a commitment to shareholder returns.
  • 6The U.S. enacted healthcare reform legislation, which is expected to reduce 2010 revenues by an estimated $70-$90 million due to increased rebates and discounts.
  • 7Research and development expenses increased by 9.9% to $307.0 million, reflecting investments in the pipeline, including Factor VIII and IX programs.

Frequently Asked Questions

Biogen Idec's primary revenue drivers are AVONEX, RITUXAN, and TYSABRI. For the first quarter of 2010, AVONEX revenue increased by 6.7% to $592.5 million. TYSABRI revenue experienced substantial growth of 32.3% to $218.6 million. Biogen Idec's share of RITUXAN revenues rose by 11.6% to $254.9 million, primarily due to increased co-promotion profits in the U.S.

The U.S. healthcare reform legislation enacted in March 2010 is expected to reduce Biogen Idec's revenues by approximately $70 to $90 million in 2010 due to increased Medicaid rebates and discounts. While some provisions are expected to reduce near-term revenues, others may lead to increased patient coverage and potentially higher revenues in the longer term, though this may be offset by a new fee on branded prescription drug manufacturers.

Biogen Idec generated $336.9 million in net cash flows from operations in Q1 2010. The company completed a $1.0 billion share repurchase program during the quarter and announced a new $1.5 billion authorization, underscoring its strategy to return excess cash to shareholders. As of March 31, 2010, the company had approximately $2,184.9 million in cash and marketable securities.

Key pipeline developments include a Phase 3b study for TYSABRI comparing it to COPAXONE or REBIF, and studies investigating a blood test to detect JC virus antibodies to stratify PML risk in TYSABRI patients. The company also initiated patient enrollment for a registrational study for long-acting recombinant Factor IX in hemophilia B (B-LONG). Separately, ocrelizumab treatment in the RA and lupus programs was suspended, but a Phase 2 study for relapsing MS remains ongoing.