* Net profit falls on tax error
* 2013 forecast weaker than expected
* Q4 adjusted earnings $1.40/shr vs $1.46 view
(Updates with CFO and analyst comments)
By Toni Clarke
BOSTON, Jan 28 Biogen Idec Inc said
fourth-quarter net profit fell slightly due to a tax accounting
error, but the company's shares rose more than 3 percent Monday
on higher-than-expected drug sales and optimism over a new
multiple sclerosis treatment.
The oral drug BG-12, to be sold under the brand name
Tecfidera, is expected to become a leading treatment for
multiple sclerosis after its planned second quarter
Gene Mack, an analyst at Brean Capital LLC, estimates that
by 2015, Tecfidera will account for $1.4 billion, or roughly 25
percent, of the company's multiple sclerosis drug sales.
In the fourth quarter, global sales of Biogen's multiple
sclerosis drug Tysabri rose 14 percent to $433 million a year
ago, while sales of another MS treatment, Avonex, rose 7 percent
to $753 million, the company said. Biogen markets Tysabri in
conjunction with Elan Corp Plc.
"We believe we are entering into an era of significant
long-term growth driven by multiple potential new product
launches," George Scangos, Biogen's chief executive officer,
told analysts on a conference call.
Biogen's shares rose 3.4 percent to $151.14 in morning
trading on Nasdaq. Earlier, they traded as high as $156.94.
Net earnings in the quarter were $292 million, or $1.23 per
share, compared with $300 million, or $1.22 a share a year ago.
Revenue rose 7 percent to a higher-than-expected $1.4 billion.
"The revenue beat was primarily driven by higher than
expected Avonex sales," said Geoff Porges, an analyst at
Excluding the amortization of certain assets, restructuring
charges, and other items, the company earned $1.40 a share, down
from $1.51 per share a year earlier. Analysts on average were
expecting earnings of $1.46 a share according to data compiled
by Thomson Reuters I/B/E/S.
The company said that an error in its tax accounting related
to its Denmark facility accumulated over several years had hurt
earnings by an unexpected 12 cents per share.
Paul Clancy, Biogen's chief financial officer, said in an
interview that the company's auditor is PricewaterhouseCoopers
but he declined to assign blame, saying, "it's our
responsibility, we collaborate with them."
The Weston, Massachusetts-based company said it expects 2013
earnings per share excluding one-time items to be between $7.15
to $7.25 per share and revenue to grow 10 percent from $5.5
billion in 2012. Analysts on average were forecasting earnings
of $7.27 a share and revenue of $5.98 billion.
The short-fall versus expectations is likely due to higher
expenses related to the introduction of BG-12, which analysts on
average expect will generate around $350 million in 2013.
Clancy cautioned that it is too early to tell what the
compliance rate will be for patients taking BG-12, which must be
taken twice a day, adding an element of uncertainty to Wall
Biogen also sells the cancer drug Rituxan and is in
late-stage development of drugs to treat hemophilia. The company
expects to launch two hemophilia drugs in late 2013 or early
2014. It is hoping to provide a new injectable interferon for
multiple sclerosis that requires fewer doses than current
injectable treatments, including Avonex.
(Additional reporting By Caroline Humer; Editing by Maureen
Bavdek and Grant McCool)