Biogen reports $171 million GAAP net loss for second quarter; Avonex approved in Japan

By Jennifer Lanning Drey

Eugene, Ore., July 26 - Biogen Idec reported a GAAP net loss of $171 million, or $0.50 per share, on revenues of $660 million for the second quarter, according to a company news release.

The company posted net income of $35 million, or $0.10 per share, on revenues of $606 million in the second quarter of 2005, according to the release.

On a non-GAAP basis, Biogen reported net income of $197 million, or $0.57 per share, for the second quarter, according to the release.

The difference in GAAP versus non-GAAP earnings for the second quarter reflects pre-tax charges related to the acquisitions of Conforma and Fumapharm and pre-tax charges related to the Biogen and Idec merger, according to Peter Kellogg, chief financial officer of Biogen.

Strong performances by Avonex (interferon beta-1a) and Rituxan (rituximab) contributed to revenue growth in the second quarter, said James Mullen, chief executive officer of Biogen, during a company conference call held Wednesday.

Biogen also announced Wednesday that Avonex has received approval in Japan.

Avonex has been approved treatment for multiple sclerosis (MS) in the United States for 10 years, and the company considers it the foundation of its MS franchise, Mullen said.

Mullen said although MS is not as prevalent in Japan as it is in the United States, the approval represents a move into a strong market.

"We estimate there's 10,000 to 12,000 MS patients in Japan; however, this establishes Biogen Idec's commercial presence in the third largest health care market in the world," said Mullen.

Tysabri training starts

Biogen is also in the process of an international launch of Tysabri (natalizumab), following the products' approval in the United States and Europe.

"We expect Tysabri will enhance our neurology business and begin to accelerate top line growth over the coming quarters," Mullen said.

Tysabri can only be prescribed by physicians, infusion centers and pharmacies registered in the Touch Prescribing Program, and the company began training sessions for the program last week, Mullen said.

The company expects to provide training at 2,000 to 2,500 practices in the next few months, he said.

"Physician interest is high, and many have identified a list of patients that may be appropriate for Tysabri treatment," Mullen said.

In Europe, Biogen will first launch Tysabri in Germany, the United Kingdom, Ireland and Sweden.

The company also has plans in place to launch the drug in the Netherlands, Denmark, Austria, Finland and Norway in the third quarter, and it expects to launch in other major markets by the first half of next year, Mullen said.

"Our main goal for the remainder of the year is to build an appropriate base of trained sites so that appropriate patients can have access to Tysabri," said Bob Hamm, senior vice president of the neurology business at Biogen, also during Wednesday's call.

Biogen said Wednesday that it is also continuing research and development of BG-12, which it hopes to add to its current portfolio of MS treatments. BG-12 is a developmental oral therapy for treatment of relapsing-remitting MS.

The company reported in late May that in a phase 2 study, BG-12 achieved its primary endpoint of demonstrating that treatment with BG-12 led to a statistically significant reduction in the total number of gadolinium-enhancing brain lesions as measured by MRI with six months of treatment versus a placebo.

The drug has also produced promising in a phase 3 clinical trial for treatment of psoriasis, Mullen said.

Biogen is a pharmaceutical company located in Cambridge, Mass.

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