10-QPeriod: Q1 FY2014

BIOGEN INC. Quarterly Report for Q1 Ended Mar 31, 2014

Filed April 23, 2014For Securities:BIIB

Summary

Biogen Idec Inc. reported strong financial performance for the first quarter ended March 31, 2014, with total revenues increasing by 50.5% year-over-year to $2.13 billion. This significant growth was primarily driven by the successful launch of TECFIDERA, which generated $505.7 million in its first year, and the full recognition of TYSABRI revenues following the acquisition of Elan's rights in April 2013. Net income attributable to Biogen Idec Inc. rose by 12.5% to $480 million, or $2.02 per diluted share, reflecting robust sales and operational efficiencies, although total costs and expenses saw a substantial increase of 60.8% due to higher R&D, amortization, and cost of sales. The company's strategic focus on its core multiple sclerosis (MS) franchise continues to yield strong results, with AVONEX revenues showing modest growth and TYSABRI revenues significantly increasing due to the full consolidation. The continued investment in research and development, including significant upfront payments for new collaborations, underscores Biogen Idec's commitment to innovation and future growth. The company maintains a strong liquidity position with $1.98 billion in cash, cash equivalents, and marketable securities, providing ample resources for ongoing operations, strategic investments, and potential future acquisitions.

Financial Highlights

55 data points
Beta

Revenue

$2.13B

86.9% Gross Margin

Net Income

$480.00M

22.5% Net Margin

EPS (Diluted)

$2.02

Total Assets

$12.23B

Cash & Equivalents

$828.60M

Free Cash Flow

$50.32M

Financial Statements
Beta
Revenue$2.13B
Cost of Revenue$279.25M
Gross Profit$1.85B
SG&A Expenses$511.67M
Operating Expenses$1.46B
Operating Income$671.35M
Interest Expense$7.60M
Net Income$480.00M
EPS (Basic)$2.03
EPS (Diluted)$2.02
Shares Outstanding (Basic)236.80M
Shares Outstanding (Diluted)237.80M

Key Highlights

  • 1Total revenues surged by 50.5% to $2.13 billion in Q1 2014 compared to Q1 2013.
  • 2Net income attributable to Biogen Idec Inc. increased by 12.5% to $480 million, with diluted EPS rising to $2.02.
  • 3TECFIDERA, launched in March 2013, generated $505.7 million in revenue in Q1 2014, demonstrating strong market adoption.
  • 4TYSABRI revenues increased by 41.3% to $441.0 million, significantly boosted by the full consolidation of rights acquired in April 2013.
  • 5Research and development expenses increased by 86.0% to $528.9 million, driven by significant upfront payments for new collaborations with Eisai and Sangamo BioSciences.
  • 6Total cost and expenses increased by 60.8%, largely due to higher amortization of acquired intangibles, R&D, and cost of sales, reflecting the impact of TYSABRI acquisition and TECFIDERA launch.
  • 7The company maintained a strong liquidity position with $1.98 billion in cash, cash equivalents, and marketable securities as of March 31, 2014.

Frequently Asked Questions

The significant increase in revenue was primarily driven by the strong performance of TECFIDERA, which contributed $505.7 million in its first year of commercialization, and the full recognition of TYSABRI revenues following the acquisition of remaining rights from Elan in April 2013. AVONEX showed modest growth, and revenue from unconsolidated joint businesses also increased.

Total costs and expenses increased by 60.8% compared to the prior year. This increase was largely due to a substantial rise in amortization of acquired intangible assets (up 179.2%), research and development expenses (up 86.0%), cost of sales (up 108.8%), and selling, general, and administrative expenses (up 45.1%). The increased R&D spending was significantly impacted by upfront payments made for new collaboration agreements.

Biogen Idec faces significant competition in the MS market from other companies developing or marketing similar therapies, including oral and alternative formulations. The company anticipates that TECFIDERA, AVONEX, and TYSABRI may face increased competition, and the launch of TECFIDERA has already seen patients switching from other MS therapies, including Biogen's own products. The potential emergence of biosimilars also poses a competitive threat.

Biogen Idec reported a strong financial position, with total assets of $12.23 billion and shareholders' equity of $9.14 billion. The company ended the quarter with $1.98 billion in cash, cash equivalents, and marketable securities, indicating robust liquidity. Operating activities generated $104.6 million in cash flow. The company believes its current resources are sufficient to meet its operating, capital expenditure, and debt service requirements.