BIIB » Topics » Executive Summary

This excerpt taken from the BIIB 10-Q filed Apr 17, 2009.
Executive Summary
 
Biogen Idec Inc. (“Biogen Idec,” “we,” “us” or “the Company”) is a global biotechnology company that creates new standards of care in therapeutic areas with high unmet medical needs.
 
We currently have four marketed products:
 
  •  AVONEX® (interferon beta-1a);
 
  •  RITUXAN® (rituximab);
 
  •  TYSABRI® (natalizumab); and,
 
  •  FUMADERM® (dimethylfumarate and monoethylfumarate salts).
 
Results for the first three months of 2009 included total revenue of $1,036.5 million, net income attributable to Biogen Idec Inc. of $244.0 million and diluted net income per share of $0.84. The 2009 first quarter revenues increased 10.0% over the same period in 2008. The diluted net income per share represents a 55.6% increase over the same period in 2008. These results were primarily driven by the continued growth of TYSABRI revenue to $165.2 million in the quarter, a 3.6% increase in AVONEX revenues to $555.3 million, a 12.8% increase in RITUXAN revenues from our unconsolidated joint business arrangement totaling $278.8 million, and a 21.7% decrease in income tax expense, partially offset by a 5.1% increase in total costs and expenses.
 
During the first quarter of 2009, Biogen Idec recognized revenue of $165.2 million related to TYSABRI. This amount represents an increase of 44.0% as compared to the same period in 2008 and is comprised of $53.0 million related to product sold through Elan in the U.S. and $112.2 million related to product sold outside the U.S., or the rest of world. This growth is primarily due to an overall increase in the number of patients using TYSABRI in both the United States and in our rest of world markets. Pursuant to our collaboration agreement with Elan, Elan paid us a $50.0 million milestone payment during the first quarter of


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2009 in order to maintain the current collaboration profit sharing split, which is further discussed below under Results of Operations.
 
U.S. Sales of AVONEX increased 10.2% to $340.0 million during the three months ended March 31, 2009 as compared to the same period in 2008. This increase was primarily due to price increases partially offset by a decrease in patient demand. The increase in U.S. sales was partially offset by a 5.4% decrease in international sales, primarily resulting from the negative impact of exchange rates.
 
As described below under Results of Operations, we record our share of the pretax co-promotion profits from our joint business arrangement related to sales of RITUXAN. Net sales of RITUXAN to third-party customers in the U.S. for the three months ended March 31, 2009 totaled $641.6 million, which resulted in $179.5 million of co-promotion profits recognized as unconsolidated joint business revenue. In addition, we achieved a 10.2% increase in royalty revenues on sales of RITUXAN outside of the U.S. These increases were primarily due to increased unit sales resulting from continued growth for treatment of B-cell NHL and chronic lymphocytic leukemia (an unapproved and unpromoted use of RITUXAN) and increased unit sales for the treatment of rheumatoid arthritis.
 
The effect of the 10.0% increase in total revenue was partially offset by a 5.1% increase in total costs and expenses. Research and development expense increased $21.3, million or 8.2,% primarily due to the continued advancement of several of our late stage programs. Selling, general and administrative expense increased $6.0 million, or 2.8,% as a result of increased census costs and personnel to support the AVONEX business and support TYSABRI growth. The increases in research and development and selling, general and administrative expenses were partially offset by a 2.7% decrease in cost of sales and 10.6% reduction in costs associated with amortization of acquired intangible assets and acquired in-process research and development. The reduction in income tax expense is more fully described within Note 10, Income Taxes, in “Notes to Consolidated Financial Statements” of this Form 10-Q.
 
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