UPDATE 3-Biogen 3rd-qtr profit beats; Tysabri data mixed

* Profit excluding items $1.12/shr vs Street view $1.04

* Authorizes $1 billion share repurchase program

* PML risk with Tysabri increases with length of treatment

* Shares down 2.3 percent (Updates with company, analyst comment; share price)

By Toni Clarke

BOSTON, Oct 20 (Reuters) - Biogen Idec Inc (BIIB.O) reported third-quarter earnings on Tuesday that topped expectations, but concern over the future of its multiple sclerosis drug Tysabri sent its shares down more than 2 percent.

Revenue from sales of Tysabri rose 21 percent to $207 million in the quarter, but there was a decline in the weekly number of new patients added to the rolls.

According to Geoffrey Meacham, an analyst at J.P. Morgan, only 223 net new patients were added per week in the latest quarter, down from 262 a week in the second quarter.

"Overall, we thought the quarter looked OK on a revenue basis for Tysabri, but lower new adds were a negative surprise," Meacham said.

Jim Mullen, the company's chief executive, said on a conference call with investors that the slower addition of new patients was the result mainly of the summer holidays in Europe, when many physicians were away.

Tysabri, which Biogen markets with partner Elan Corp Plc (ELN.I) of Ireland, was temporarily withdrawn from the market in 2005 after being linked with a potentially deadly brain infection known as progressive multifocal leukoencephalopathy, or PML.

It was reintroduced to the market in 2006. Since then, 13 cases of PML have been reported. The company ceased announcing new cases of the disease earlier this year, saying it wanted to focus on the benefits of the drug rather than its risks.

Investors have speculated for some time that the risk of PML increases with the length of time a patient is on the drug. As recently as last month, Biogen said it would be premature to draw such a conclusion.

But on its conference call on Tuesday, the company said it has now determined that the risk of PML does indeed increase with time, and it is in discussions with the U.S. Food and Drug Administration to change the label on the drug's prescribing information to reflect the conclusion.

The company declined to say whether the label change was requested by the FDA, or offered voluntarily.

Nor did it say what new information led the company to reach its latest conclusion. Biogen said the rate of infection was still within the range of 1-in-1,000 listed on the drug's prescribing information.

Biogen, which is based in Cambridge, Massachusetts, said net profit rose 34 percent to $278 million, or 95 cents a share, from $207 million, or 70 cents a share, a year earlier. Revenue rose 3 percent to $1.12 billion.

Excluding one-time items, the company earned $1.12 a share. Analysts on average were expecting $1.04, according to Thomson Reuters I/B/E/S.

Revenue from Avonex, the company's main product for treating multiple sclerosis, rose 1 percent to $580 million. U.S. sales of the drug rose 8 percent to $348 million.

Biogen said its market share for Avonex in the United States fell 2 percentage points, but said it expects to regain that share by tightening its sales and marketing message.

The company also said its board had authorized a $1 billion share repurchase program. It said this was in addition to the 6 million shares remaining from its previous share repurchase authorization.

"While we have used the prior program principally for share stabilization, this new $1 billion authorization is intended to reduce our shares outstanding with the objective of returning excess cash to shareholders," the company said.

Mullen said the company's decision to buy back shares should not be seen as a signal that the company does not plan to make acquisitions.

Biogen said it expects to report 2009 revenue in the mid- to high-single digit range. It expects earnings excluding one-time items to be above $3.85 a share and net earnings to be above $2.97 a share.

Biogen shares fell 2.3 percent, or $1.15, to $48.26 in midday trading on Nasdaq. (Reporting by Toni Clarke; Editing by Dave Zimmerman and Maureen Bavdek)