10-QPeriod: Q3 FY2013

BIOGEN INC. Quarterly Report for Q3 Ended Sep 30, 2013

Filed October 28, 2013For Securities:BIIB

Summary

Biogen Idec Inc.'s third-quarter 2013 report highlights strong revenue growth driven by the acquisition of TYSABRI rights and the successful launch of TECFIDERA. Total revenues increased by 31.9% year-over-year to $1.83 billion, with product revenues up 39.8% primarily due to TYSABRI and TECFIDERA. The company reported a net income of $487.6 million, a 22.4% increase from the prior year, translating to diluted EPS of $2.05. Significant investments in R&D and SG&A were noted, largely attributed to the TECFIDERA launch and ongoing pipeline development. The company ended the quarter with $1.04 billion in cash, cash equivalents, and marketable securities, demonstrating solid liquidity despite substantial cash outflows for acquisitions and share repurchases.

Financial Highlights

54 data points
Beta

Revenue

$1.83B

87.2% Gross Margin

Net Income

$487.60M

26.7% Net Margin

EPS (Diluted)

$2.05

Total Assets

$11.25B

Cash & Equivalents

$427.81M

Free Cash Flow

$591.73M

Financial Statements
Beta
Revenue$1.83B
Cost of Revenue$234.70M
Gross Profit$1.59B
SG&A Expenses$405.58M
Operating Expenses$1.15B
Operating Income$684.53M
Interest Expense$6.60M
Net Income$487.60M
EPS (Basic)$2.06
EPS (Diluted)$2.05
Shares Outstanding (Basic)237.07M
Shares Outstanding (Diluted)238.35M

Key Highlights

  • 1Total revenues for Q3 2013 surged by 31.9% to $1.83 billion, significantly boosted by the full acquisition of TYSABRI rights and the launch of TECFIDERA.
  • 2Net income attributable to Biogen Idec Inc. rose by 22.4% to $487.6 million, with diluted EPS reaching $2.05.
  • 3Product revenues saw a substantial 39.8% increase to $1.45 billion, with TYSABRI revenue up 45.9% and new product TECFIDERA contributing $286.4 million in its first partial quarter.
  • 4Operating expenses increased, with R&D up 34.8% and SG&A up 35.4%, driven by the TECFIDERA launch and pipeline investments.
  • 5Amortization of acquired intangible assets more than doubled year-over-year, largely due to the TYSABRI intangible asset.
  • 6Cash, cash equivalents, and marketable securities stood at $1.04 billion as of September 30, 2013, reflecting strategic cash deployment for acquisitions and share repurchases.
  • 7The company repurchased approximately 1.7 million shares for $359.3 million in the third quarter, continuing its share repurchase program.

Frequently Asked Questions

Revenue growth was primarily driven by the full acquisition of TYSABRI rights from Elan in April 2013, allowing Biogen Idec to recognize 100% of U.S. TYSABRI revenues, and the successful commercial launch of TECFIDERA in the U.S. in April 2013.

The acquisition of TYSABRI rights led to a significant increase in TYSABRI revenues by consolidating all U.S. sales. It also resulted in higher cost of sales and amortization of acquired intangible assets due to the upfront payment and ongoing amortization of the capitalized intangible asset.

TECFIDERA is a key new product for Biogen Idec, offering a first-line oral treatment for relapsing forms of multiple sclerosis. Its successful launch in the U.S. contributed $286.4 million in revenue in its first partial quarter and is expected to be a major driver of future revenue growth, though it also led to increased selling, general, and administrative expenses for launch activities.

Biogen Idec maintained a solid liquidity position, with cash, cash equivalents, and marketable securities totaling $1.04 billion as of September 30, 2013. This was a decrease from the previous year-end, largely due to the TYSABRI acquisition and debt repayment, but still sufficient to fund ongoing operations and strategic initiatives.