(Reuters) - Biogen Idec Inc reported much higher-than-expected third-quarter profit on Thursday on increased sales of its drugs for multiple sclerosis and cancer, and the U.S. biotechnology company raised its full-year earnings forecast.
The results were also helped by lower-than-expected costs, analysts said.
“They put up a nice solid quarter,” said RBC Capital Markets analyst Michael Yee. “What’s being appreciated in biotech is the consistent beat and raise by all four of the large cap biotechs this week and that’s got the sector on the move.”
In addition to Biogen, Amgen Inc, Gilead Sciences Inc, and Celgene Corp all reported higher-than-expected third quarter profits and raised their full-year earnings forecasts.
Excluding one-time items, Biogen earned $1.91 per share, topping analysts’ average expectations by 31 cents, according to Thomson Reuters I/B/E/S. Biogen shares rose 2.6 percent.
Biogen now expects 2012 earnings of $6.40 per share to $6.50 per share, excluding items, up from its prior view above $6.20.
The company also now expects 2012 revenue growth to be in the mid-to-high single digits in percentage terms, compared with 2011. It had forecast growth in the mid-single digits.
Wells Fargo analyst Brian Abrahams said in a research note the new forecast was in a range that he and Wall Street had expected, adding “and with this quarter’s performance seems easily achievable or beatable”.
However, most investors are focused on Biogen’s experimental oral MS drug BG-12, which is expecting a U.S. approval decision around March, after the Food and Drug Administration earlier this month extended its review of the medicine by three months.
The company told analysts the agency had some questions for which Biogen submitted written responses, but that they did not involve any additional safety analysis. It said the FDA simply needed more time to review the BG-12 data and characterized the delay as the normal course of business. It had previously said the FDA was not seeking any additional data.
Biogen shares have nearly doubled during the last 18 months, driven primarily by enthusiasm over the impressive data for BG-12, also known as dimethyl fumarate. Once approved, BG-12 would be the third oral treatment for the debilitating disease, but based on its safety and efficacy data it is expected to become the industry leader with annual sales in excess of $1 billion, according to analysts. MS affects more than 400,000 people in the U.S., and 2.1 million worldwide, according to the National Multiple Sclerosis Society.
The company told analysts on a conference call it was “well prepared for upcoming product launches” and said costs would likely rise in the fourth quarter as it gets ready to start selling what is seen as by far its most important future growth driver, BG-12.
Biogen also expects to submit an application in the first quarter of 2013 seeking U.S. approval of its promising long-acting treatment for hemophilia B - the less common form of the disorder in which patients lack certain proteins necessary for blood clotting. Hemophilia will be a new market for the company.
Key data on an experimental drug for ALS, also known as Lou Gherig’s disease, is expected late this year or early next year, Biogen said.
Biogen’s net profit in the third quarter rose to $398 million, or $1.67 per share, from $354 million, or $1.43 per share, a year ago.
Revenue rose 6 percent to $1.39 billion, a tad above Wall Street estimates of $1.38 billion.
Sales of the MS drug Avonex rose 8 percent to $736 million. Biogen reported that its revenue from its other multiple sclerosis treatment Tysabri dipped 1 percent to $275 million.
Irish drugmaker Elan Corp, Biogen’s Tysabri marketing partner, previously reported worldwide sales of $404 million for the quarter, with U.S. sales of the infused drug higher than expected, while sales outside the United States fell short of analysts’ estimates.
The company said 2,100 new Tysabri patients were added in the third quarter. The medicine is approved for patients who have had an inadequate response to or are intolerant of other MS treatments.
Avonex demand was being driven by the recently available, more convenient pen-like injector for the drug. Biogen said it was seeing significant conversion from the older needle delivery system, and that more than two-thirds of new Avonex patients were using the once-weekly pen injector.
International Avonex sales were $274 million. While the result was strong, it was hurt somewhat by unfavorable foreign exchange rates and price decreases in some markets like Spain and France.
Company revenue for Rituxan, the non-Hodgkin’s lymphoma and rheumatoid arthritis drug Biogen co-markets with Roche, rose 8 percent to $288 million.
Biogen Idec shares rose $3.81, or 2.6 percent, to $145.87 in late morning trade on the Nasdaq.
Reporting by Bill Berkrot; Editing by Gerald E. McCormick, Jeffrey Benkoe and Andrew Hay