Today morning, Biogen Idec (BIIB) reported third quarter earnings per share of $1.12, beating the Zacks Consensus Estimate of $1.02. The company reported earnings of 98 cents in the year-ago period. Revenues increased 3% to $1.12 billion, with Tysabri being the primary growth driver.
Tysabri sales came in at $207 million, up 21% from the prior period. The company estimates that as of the end of September 2009, about 46,200 patients were on commercial and clinical Tysabri therapy worldwide. This represents an increase from the 43,300 patients reported by the company in the second quarter of 2009.
Tysabri is an important growth driver and we expect the product, which is partnered with Elan (ELN), to cross $1 billion in worldwide sales in 2009.
Meanwhile, Biogen’s lead multiple sclerosis (MS) product Avonex posted sales of $580 million (up 1%) with U.S. sales growing 8% to $348 million. However, we were disappointed to see Avonex rest of world sales decline 8% to $232 million.
Biogen recognized $284 million in Rituxan revenues, which is co-promoted with Roche in the U.S. U.S. net sales of Rituxan increased 2% to $670 million. Revenues from other products came in at $15 million, as compared to $14 million in the year-ago period. Royalty revenues remained unchanged at $35 million.
In order to return cash to shareholders, Biogen’s Board of Directors authorized a share repurchase program worth $1 billion. This is in addition to the company’s previous share repurchase program under which 6 million shares remain outstanding. The repurchase of shares should help boost the bottom-line.
Biogen provided an updated outlook for 2009. The company now expects revenues to grow in the mid-to-high single-digit range as compared to its earlier expectation of high-single-digit growth.
The company maintained its guidance for operating expenses which are expected in the range of $2.1 to $2.2 billion. Both SG&A and R&D guidance remained unchanged at 19-20% of revenues and 28-30% of revenues, respectively. The company expects to deliver earnings in excess of $3.85 in 2009.
Biogen is the market leader in therapies for the treatment of multiple sclerosis. We believe the company will continue to retain a leading position in the MS market. We are encouraged to see that the company is working on expanding its MS and oncology pipeline.
The company recently launched a hostile bid to acquire Facet Biotech Corporation (FACT). The proposed acquisition of Facet, which should help strengthen Biogen’s pipeline, is the second major deal announced by the company in 2009. Earlier this year, Biogen signed a licensing deal with Acorda Therapeutics (ACOR) for a multiple sclerosis candidate. We currently have a Neutral rating on Biogen.
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