10-QPeriod: Q1 FY2013

BIOGEN INC. Quarterly Report for Q1 Ended Mar 31, 2013

Filed April 25, 2013For Securities:BIIB

Summary

Biogen Idec Inc. reported strong financial performance for the first quarter of 2013, with total revenues increasing by 9.5% year-over-year to $1.415 billion. This growth was driven primarily by robust sales of its key products, AVONEX and TYSABRI, which saw increases in revenue. Income from operations surged by 38.2% to $510.5 million, and net income attributable to Biogen Idec Inc. grew by 41.0% to $426.7 million. Diluted earnings per share also showed significant improvement, rising 43.1% to $1.79. A notable event during the quarter was the acquisition of full ownership of TYSABRI from Elan for $3.25 billion, which closed shortly after the quarter ended. This strategic move is expected to allow Biogen Idec to capture 100% of TYSABRI's future profits. The company also announced the FDA approval of TECFIDERA, a new oral treatment for relapsing multiple sclerosis, marking a significant addition to its product portfolio and a driver for future revenue growth. Research and development expenses decreased by 20.1%, largely due to the conclusion of late-stage clinical trials for certain candidates and the discontinuation of others, while selling, general, and administrative expenses increased by 17.5% in preparation for new product launches. Financially, the company maintained a strong liquidity position with approximately $3.6 billion in cash, cash equivalents, and reverse repurchase agreements at the end of the quarter, despite significant cash outlays for the TYSABRI acquisition. The company generated $178.9 million in net cash flow from operations. Management expressed confidence in its ability to fund ongoing operations, future capital expenditures, and strategic initiatives.

Financial Highlights

57 data points
Beta

Revenue

$1.42B

90.6% Gross Margin

Net Income

$426.70M

30.2% Net Margin

EPS (Diluted)

$1.79

Total Assets

$10.16B

Cash & Equivalents

$663.30M

Free Cash Flow

$145.65M

Financial Statements
Beta
Revenue$1.42B
Cost of Revenue$133.75M
Gross Profit$1.28B
R&D Expenses$284.34M
SG&A Expenses$352.60M
Operating Expenses$909.62M
Operating Income$510.52M
Interest Expense$11.50M
Net Income$426.70M
EPS (Basic)$1.80
EPS (Diluted)$1.79
Shares Outstanding (Basic)236.84M
Shares Outstanding (Diluted)238.30M

Key Highlights

  • 1Total revenues increased 9.5% to $1.415 billion, driven by strong product sales.
  • 2Net income attributable to Biogen Idec Inc. grew 41.0% to $426.7 million, with diluted EPS rising 43.1% to $1.79.
  • 3Acquisition of full ownership rights to TYSABRI from Elan for $3.25 billion closed shortly after the quarter.
  • 4FDA approval received for TECFIDERA, a new oral treatment for relapsing multiple sclerosis, marking a significant pipeline advancement.
  • 5Income from operations increased by 38.2%, reflecting efficient cost management.
  • 6Research and development expenses decreased 20.1% due to the conclusion of late-stage programs.
  • 7Strong liquidity position maintained with $3.6 billion in cash, cash equivalents, and reverse repurchase agreements.
  • 8AVONEX and TYSABRI revenues showed year-over-year growth.

Frequently Asked Questions

Revenue growth was primarily driven by strong performance in key products, AVONEX and TYSABRI. AVONEX saw a 12.8% increase in revenues, largely due to price increases and higher unit sales in the U.S. TYSABRI's revenues increased by 9.4%, fueled by higher unit sales and price increases in the U.S., and stable performance in the rest of the world.

The FDA approval of TECFIDERA in March 2013 for relapsing forms of multiple sclerosis is a major milestone. As Biogen Idec's first oral MS treatment, it represents a significant opportunity for future revenue growth and strengthens the company's position in the competitive MS market.

The acquisition of full ownership of TYSABRI, completed shortly after the quarter for $3.25 billion, allows Biogen Idec to retain 100% of TYSABRI's revenues and profits, eliminating the previous 50/50 profit-sharing arrangement with Elan. This is expected to significantly boost future profitability. Post-acquisition, TYSABRI-related costs will be recognized differently, with future contingent payments to Elan recognized as cost of sales.

Biogen Idec reported strong profitability and a healthy liquidity position with approximately $3.6 billion in cash, cash equivalents, and reverse repurchase agreements at the end of Q1 2013. The company generated $178.9 million in operating cash flow and expects its current funds, combined with operational cash flow and potential financing, to be sufficient for future needs, including ongoing operations, capital expenditures, and strategic initiatives like the TYSABRI acquisition.