* Adjusted EPS $1.36 vs Street view $1.37
* Revenue flat at $1.2 billion
* Sees 2011 revenue growth in low to mid-single digits
* Global sales of Tysabri rise 31 pct to $389 mln
* Biogen shares rise 1.2 percent (Adds CFO comment, details)
By Toni Clarke
BOSTON, July 26 (Reuters) - Biogen Idec Inc (BIIB.O) reported higher-than-expected sales of its multiple sclerosis drug Tysabri in the second quarter as the net number of new users grew at the highest rate in more than a year.
The strong Tysabri sales helped push Biogen’s revenue forecast up slightly for the year, to the low to mid-single digits from a prior forecast of flat to low-single digits.
The company’s shares rose 1.2 percent to $105.22 in afternoon trading on Nasdaq.
Biogen said its second-quarter net income fell about 2 percent to $288 million, or $1.18 a share, hurt by a charge of 15 cents a share due to arbitration between its partner Roche Holding AGROG.VX and Hoechst GmbH. Biogen and Roche share profits from the cancer drug Rituxan.
Excluding one-time items, the company earned $1.36 a share. Analysts on average expected earnings, excluding items, of $1.37, according to Thomson Reuters I/B/E/S.
Revenue was flat at $1.2 billion. Analysts expected revenue of $1.18 billion.
“Overall, second-quarter results were better than expectations, with a good quarter for Tysabri,” JPMorgan analyst Geoff Meacham said in a research note.
Global sales of Tysabri, which is administered once a month through an infusion, rose 31 percent to $389 million. The drug faces increasing competition from new products entering the market, particularly from oral drugs such as Novartis AG’s NOVN.VX Gilenya, and laquinimod, an experimental pill being developed by Teva Pharmaceutical Industries Ltd. (TEVA.TA)TEVA.O
Biogen is developing its own oral multiple sclerosis drug, BG-12, which, if approved, could help the company take the lead in the oral MS drug market.
Promising data from a clinical trial of BG-12 sent Biogen’s shares soaring as much as 24 percent in April, helping drive a gain of 98 percent since last August, when the shares hit a year low of $53.14.
The share increase has also been driven by a structuring initiated by the company’s chief executive, George Scangos, who took over the top job a year ago. The company has cut jobs, streamlined its research programs and consolidated certain facilities.
Biogen said it expects sales of Tysabri, which the company sells in conjunction with Irish drugmaker Elan Corp Plc ELN.I to remain competitive as a treatment for patients who have failed to respond to other therapies.
Tysabri was temporarily withdrawn from the market in 2005 after being linked with a potentially deadly brain infection known as PML. It was reintroduced in 2006 with stricter safety warnings, but sales have been held back.
Revenue from Tysabri to Biogen rose 28 percent in the quarter to $281 million.
As of the end of June, Biogen said about 61,500 patients were using the drug worldwide.
Paul Clancy, Biogen’s chief financial officer, said in an interview that the stronger-than-expected sales of Tysabri were driven in part by the growing adoption among physicians of a test that screens patients for the JC virus. The virus is thought to cause PML.
“The interest in risk stratification as a tool seems to be gaining momentum,” Clancy said.
Biogen is allowed to promote the test to physicians in Europe since regulators have allowed the company to note on the drug’s label that the presence of the JC virus in a patient’s blood is considered a risk factor for PML. The United States has not yet given such an approval, though patients are able to be tested as part of an ongoing clinical trial.
Still, Clancy said that for the next few quarters he remains “in a cautious mode” when thinking about Tysabri’s growth potential. Over the long term, he said, the company is optimistic that growth will be strong.
Sales of the company’s cancer drug Rituxan fell 29 percent to $216 million in the quarter. Sales of the drug were reduced by $50 million due to the Roche arbitration.
Sales of the company’s older multiple sclerosis drug Avonex rose 5 percent to $659 million.
The company maintained its 2011 forecast for earnings per share above $5.70, excluding one-time items. (Reporting by Toni Clarke; editing by John Wallace, Maureen Bavdek, Gary Hill)