* Biogen 1st-qtr profit falls on one-time charges
* Global net sales of Tysabri up less than expected
* Shares down 2.4 percent near midday
(Adds CFO comment on forecast, updates share price)
By Toni Clarke
BOSTON, April 20 Biogen Idec Inc (BIIB.O) said
on Tuesday that first-quarter earnings fell 11 percent, hurt by
one-time charges and lower-than-expected sales of its multiple
sclerosis drug Tysabri.
Global sales of Tysabri, the company's most important
growth driver, rose 28 percent to $292 million. Analysts had
expected sales of about $306 million.
Tysabri was temporarily withdrawn from the market in 2005
after it was associated with a potentially deadly brain
infection known as progressive multifocal leukoencephalopathy,
It was brought back in 2006 with stricter safety warnings,
but safety concerns have continued to dampen sales.
Biogen executives told analysts on a conference call that
Tysabri sales growth nay have been hurt by a recent update to
the drug's label to reflect an increased risk of PML with
But the company said growth picked up again in March, with
190 new patients starting on Tysabri per week, compared with
125 per week in January and February.
Net earnings in the quarter fell to $217 million, or 80
cents a share, from $244 million, or 84 cents a share, a year
Excluding one-time items, the company earned $1.08 a share.
Analysts had on average expected earnings of $1.13 a share,
according to Thomson Reuters I/B/E/S.
Revenue rose 7 percent to $1.1 billion. Analysts were
expecting revenue of $1.12 billion.
"Overall we thought the quarter was disappointing,
particularly on the Tysabri trends," said Geoff Meacham, an
analyst at J.P. Morgan, in a research note.
The company left its 2010 guidance unchanged, but conceded
it faces challenges for the remainder of the year. The new
healthcare reform bill, for example, will require it to provide
bigger discounts to the government for drugs prescribed under
the Medicaid program for people with low incomes.
"For us, we estimate a haircut of 2 percent of revenue for
2010, but we're not changing guidance yet," said Paul Clancy,
Biogen's chief financial officer, in an interview.
In February Biogen said it expects 2010 earnings per share
to be above $4.55 before one-time items. It said it expects
revenue growth in the mid-single-digit range.
Biogen sells Tysabri with Elan Corp Plc ELN.I. It booked
revenue from the drug of $219 million in the first quarter, up
32 percent from the year-ago period.
As of April 6, 46 cases of PML had been diagnosed in
patients taking the drug, with 11 deaths.
As of the end of March, about 50,300 patients were on
commercial and clinical Tysabri therapy worldwide. That
compares with a figure of 48,800 patients as of the end of
The company is seeking to develop a test that would detect
the presence in the body of an antibody to the virus -- known
as the JC virus -- that causes PML.
If successful, such a test could ease physician concerns
about prescribing the drug, but more work needs to be done
before the test can be considered reliably predictive.
In the meantime, experimental treatments from rival
companies are moving through the pipeline. Genzyme Corp
GENZ.O last week reported data showing its blood cancer drug
Campath has the potential to be more durably effective than
Tysabri, with more manageable risks.
Sales of the company's multiple sclerosis drug Avonex rose
7 percent to $593 million, helped by a 5.5 percent price
increase in the United States in February.
Biogen, which is based in Cambridge, Massachusetts, said it
authorized a $1.5 billion share repurchase plan. The company
also completed a previous $1 billion share repurchase program
announced during the fourth quarter of 2009.
Last month, the company came to an agreement with activist
investor Carl Icahn, under which Icahn gets a seat on the board
in return for abandoning his threatened proxy fight. Icahn will
now have three representatives on the board.
Jim Mullen, the company's chief executive, will be retiring
this year. He said a search committee is actively seeking a
Biogen's shares were down 2.4 percent at $53.50 on the
Nasdaq near midday on Tuesday.
(Reporting by Toni Clarke, editing by Gerald E. McCormick,
Dave Zimmerman and Matthew Lewis)