Biogen Idec has reported third quarter 2014 results, including revenue of $2.5 billion, a 37% increase compared to the third quarter of 2013. Third quarter 2014 non-GAAP diluted earnings per share (EPS) were $3.80, an increase of 61% over the third quarter of 2013. Non-GAAP net income attributable to Biogen Idec for the third quarter was $900 million, an increase of 60% over the third quarter of 2013.
On a reported basis, GAAP diluted EPS for the third quarter of 2014 were $3.62, an increase of 77% over the third quarter of 2013. GAAP net income attributable to Biogen Idec for the third quarter of 2014 was $857 million, an increase of 76% versus the same period in the prior year. A reconciliation of GAAP to Non-GAAP quarterly financial results and 2014 full year guidance can be found in Table 3 at the end of this release.
“The third quarter was a period of significant achievement as we continued to make progress against our corporate objectives,” said Chief Executive Officer George A. Scangos, Ph.D. “We introduced innovative therapies for MS and hemophilia and began to launch them in markets worldwide. We also launched TECFIDERA in several European countries, furthering its position as a leading oral MS therapy.
“As we continued to extend our commercial business we remained focused on building our future, bringing to our team leading talent in technology, ALS research, neurology and gene therapy. I am also very proud of being recognized for our focus on corporate citizenship as again we were named the leading biotechnology company on the Dow Jones Sustainability Index,” Dr. Scangos added.
Third Quarter 2014 Performance Highlights
• TECFIDERA revenues were $787 million, consisting of $638 million in U.S. sales and $149 million in sales outside the U.S.
• Interferon revenues, including AVONEX® and PLEGRIDY, were $745 million, consisting of $482 million in U.S. sales and $263 million in sales outside the U.S.
• TYSABRI® revenues were $501 million, consisting of $275 million in U.S. sales and $226 million in sales outside the U.S.
• Net revenues relating to RITUXAN® and GAZYVA® from our unconsolidated joint business arrangement were $291 million.
• ALPROLIX® revenues were $25 million, and ELOCTATETM revenues were $22 million.
Other Third Quarter 2014 Financial Results
• Revenues for FAMPYRA® and FUMADERMTM were $37 million.
• Royalty revenues were $67 million.
• Corporate partner revenues were $36 million.
• As of September 30, 2014, Biogen Idec had cash, cash equivalents and marketable securities totaling approximately $3.2 billion.
• During the quarter, the Internal Revenue Service issued final regulations related to the Branded Pharmaceutical Drug (BPD) Fee, which had the effect of changing the recognition of the fee for accounting purposes, from the period in which the fee was paid, to the period when the sale occurs. Our products that are subject to the BPD fee include PLEGRIDY, TECFIDERA, TYSABRI and RITUXAN. As a result of these final regulations, we recognized an incremental BPD fee which reduced our share of revenues from unconsolidated joint business by $21.0 million and increased selling, general and administrative expense by $18.5 million for the periods 2013 through the end of this quarter.
2014 Financial Guidance
Biogen Idec updated its full year 2014 financial guidance.
This updated guidance consists of the following components:
• Revenue growth is expected to be approximately 38% to 41% compared to 2013, unchanged from prior guidance.
• R&D expense is expected to be approximately 20% to 21% of total revenue.
o For the balance of the year, full year guidance for R&D expense includes approximately $50 million intended for new early and mid-stage business development opportunities. This amount is reduced from prior guidance due to revised business development expectations through the end of the year.
• SG&A expense is expected to be approximately 22% to 23% of total revenue, unchanged from prior guidance.
• GAAP diluted EPS is expected to be between $12.00 and $12.10.
• Non-GAAP diluted EPS is expected to be between $13.45 and $13.55, an increase over prior guidance primarily due to updated business development expectations.
Biogen Idec may incur charges, realize gains or experience other events in 2014 that could cause actual results to vary from this guidance.
Multiple Sclerosis (MS) Events
• In July 2014, Biogen Idec received marketing authorization from the European Commission for PLEGRIDY, a pegylated interferon administered subcutaneously once every two weeks for adults with relapsing-remitting multiple sclerosis.
• In August 2014, the U.S. Food and Drug Administration approved PLEGRIDY as a new treatment for people with relapsing forms of multiple sclerosis.
• In September 2014, Biogen Idec presented extensive new data from its multiple sclerosis portfolio at the sixth Triennial Joint Meeting of the Americas Committee for Treatment and Research in Multiple Sclerosis and the European Committee for Research and Treatment in Multiple Sclerosis in Boston.
• TECFIDERA was recently launched in Denmark, the Netherlands, Switzerland, and Hungary.
• In July 2014, Biogen Idec launched ELOCTATE in the U.S. for the treatment of adults and children with hemophilia A.
• In October 2014, Biogen Idec submitted a Marketing Authorisation Application (MAA) for ELOCTA to the European Medicines Agency (EMA). ELOCTA is the approved trade name in Europe for ELOCTATE. The MAA submission is subject to validation by the EMA.
• During the third quarter of 2014, Biogen Idec announced the hiring of several key leaders including:
o Adriana Karaboutis, Executive Vice President, Technology and Business Solutions, to lead Biogen Idec’s information technology (IT) operations and advance the Company’s use of technology and data to enhance overall engagement with patients and healthcare providers.
o Donald R. Johns, M.D., Vice President, to lead Biogen Idec’s amyotrophic lateral sclerosis (ALS) Innovation Hub (ALS iHub), a dedicated unit focused on accelerating the discovery and development of novel therapies for ALS by integrating research with clinical development.
o Olivier Danos, Ph.D., Senior Vice President, Gene Therapy, to lead the Company’s gene therapy research group, a team dedicated to identifying and developing new technologies for gene transfer and genome engineering.
• In September 2014, Biogen Idec announced that it was named the biotechnology industry leader on the Dow Jones Sustainability World Index. The Company was also named to the Dow Jones Sustainability Index North America for the fifth consecutive year, one of only two biotech companies included.