10-QPeriod: Q1 FY2012

BIOGEN INC. Quarterly Report for Q1 Ended Mar 31, 2012

Filed May 1, 2012For Securities:BIIB

Summary

Biogen Idec Inc. (BIIB) reported total revenues of $1,292.0 million for the first quarter of 2012, an increase of 7.4% compared to the prior year period. While income from operations saw a decline of 11.3% to $369.4 million, net income attributable to Biogen Idec Inc. grew by 2.8% to $302.7 million, resulting in diluted earnings per share of $1.25, up 4.2% from $1.20 in the prior year quarter. The company made a significant strategic acquisition, purchasing Stromedix, Inc. for $202.8 million, which includes substantial contingent consideration related to its fibrosis disorder candidate, STX-100. Geographic revenue breakdown shows consistent growth in product revenues, with AVONEX revenues increasing by 3.0% to $661.6 million, TYSABRI revenues up 13.6% to $285.5 million, and RITUXAN (unconsolidated joint business) revenue up 11.1% to $284.6 million. The company also highlighted progress in its pipeline, including the submission of New Drug Applications for BG-12 (dimethyl fumarate) for multiple sclerosis in both the U.S. and Europe. However, rising R&D expenses, including a $29.0 million upfront payment for an agreement with Isis Pharmaceuticals, and increased selling, general, and administrative costs, driven by preparations for BG-12 launch, contributed to a higher total cost and expense base.

Financial Highlights

57 data points
Beta

Revenue

$1.29B

89.7% Gross Margin

Net Income

$302.70M

23.4% Net Margin

EPS (Diluted)

$1.25

Total Assets

$9.11B

Cash & Equivalents

$298.14M

Free Cash Flow

$140.07M

Financial Statements
Beta
Revenue$1.29B
Cost of Revenue$133.20M
Gross Profit$1.16B
R&D Expenses$355.96M
SG&A Expenses$300.09M
Operating Expenses$922.64M
Operating Income$369.37M
Interest Expense$7.40M
Net Income$302.70M
EPS (Basic)$1.26
EPS (Diluted)$1.25
Shares Outstanding (Basic)239.75M
Shares Outstanding (Diluted)241.83M

Key Highlights

  • 1Total revenues increased by 7.4% year-over-year to $1,292.0 million in Q1 2012.
  • 2Net income attributable to Biogen Idec Inc. grew by 2.8% to $302.7 million, with diluted EPS rising 4.2% to $1.25.
  • 3Acquisition of Stromedix, Inc. for $202.8 million, including significant contingent consideration, to bolster pipeline in fibrosis disorders.
  • 4Key product revenues showed strength: AVONEX up 3.0% ($661.6M), TYSABRI up 13.6% ($285.5M), and RITUXAN up 11.1% ($284.6M).
  • 5New Drug Applications for BG-12 submitted in the U.S. and Europe for multiple sclerosis, indicating progress towards potential launch.
  • 6R&D expenses increased significantly due to late-stage programs and a $29.0 million upfront payment for a new collaboration.
  • 7Company continues to navigate challenging European economic conditions, impacting accounts receivable collection and revenue recognition in certain countries like Greece.

Frequently Asked Questions

Biogen Idec reported a 7.4% increase in total revenues to $1,292.0 million for Q1 2012 compared to Q1 2011. Net income attributable to Biogen Idec Inc. rose by 2.8% to $302.7 million, resulting in diluted earnings per share of $1.25, up from $1.20 in the prior year quarter. However, income from operations decreased by 11.3% to $369.4 million.

Revenue growth was primarily driven by increases in sales of AVONEX, TYSABRI, and RITUXAN. Cost increases were largely due to a 21.2% rise in research and development expenses, including a $29.0 million upfront payment to Isis Pharmaceuticals, and a 22.7% increase in selling, general, and administrative expenses, driven by preparations for the potential launch of BG-12. Cost of sales also increased by 29.2%.

The company completed the acquisition of Stromedix, Inc. for $202.8 million, adding STX-100, a candidate for fibrosis disorders, to its pipeline. This acquisition includes substantial contingent consideration tied to development and approval milestones. Additionally, Biogen Idec submitted New Drug Applications for BG-12 for multiple sclerosis in both the U.S. and Europe, indicating progress towards its potential launch.

Key risks include heavy reliance on a few core products (AVONEX, TYSABRI, RITUXAN), intense competition in the multiple sclerosis market, potential adverse safety events for TYSABRI and other products, dependence on third-party reimbursement, navigating complex international regulations, manufacturing risks, and the economic downturn impacting European markets, which has led to extended collection periods for accounts receivable and revenue deferrals in countries like Greece.