Biogen profit rises as Tecfidera shines
By Bill Berkrot
(Reuters) - Biogen Idec Inc said on Wednesday its new, high-profile oral multiple sclerosis drug Tecfidera had sales of $398 million in the fourth quarter, easily exceeding estimates for a third successive quarter and keeping it on track to top $1 billion in its first year on the market.
Some of those sales were due to U.S. inventory stocking ahead of a 10 percent Tecfidera price increase in December. Biogen said underlying patient demand for the drug represented about $348 million of the U.S. sales, still ahead of analysts' consensus expectations of about $335 million.
Biogen provided forecasts for 2014 that were likely to be viewed as a mixed bag, with revenue growth projections ahead of Wall Street expectations but an earnings outlook that fell short of the current analysts' view.
The company forecast revenue growth of about 22 percent to 25 percent and earnings of $11 to $11.20 per share, excluding items. Analysts, on average, were looking for revenue growth of about 20 percent and earnings of $11.63 per share, according to Thomson Reuters I/B/E/S.
"The guidance was very robust on the top line," said Cowen and Co analyst Eric Schmidt. "A conservative management team like Biogen starting the year off with guidance that's significantly above consensus, that's a strong signal."
The earnings forecast shortfall was likely due to $200 million in the research and development budget that the company has earmarked for future business development, Schmidt said.
"The EPS guidance appears conservative in light of revenue growth expectations," Sanford Bernstein analyst Geoffrey Porges said in a note. "Historically, Biogen has been able to beat initial guidance by 7 percent in the top line and 12 percent in the bottom line."
Investors gave Biogen management the benefit of the doubt, sending shares up nearly 2 percent on a down day for the broader markets. Biogen was one of the best performers of 2013, with the stock soaring more than 90 percent.
Investor focus has been squarely on the performance of Tecfidera, which has become the top-selling oral MS treatment in the United States despite being third to market. The company expects European approval in the coming days or weeks, which would be another major catalyst for sales.
Biogen said it was set to begin selling the drug in Germany as soon as European Union approval comes through with subsequent launches on a country-by-country basis as reimbursement is secured. The drug is already approved in Australia and Canada.
Biogen said more than 6,000 doctors have prescribed Tecfidera so far, and that more than 30 percent of new patients in the fourth quarter had not been on prior therapies, such as Biogen's injectable MS drugs Avonex and Tysabri.
Biogen said its fourth-quarter profit jumped 57 percent, fueled by Tecfidera. The net profit rose to $457.3 million, or $1.92 per share, from $292.1 million, or $1.23 per share, a year earlier. Excluding special items, Biogen earned $2.34 per share, topping analysts' average expectations by 6 cents, according to Thomson Reuters I/B/E/S.
Total revenue rose 39 percent to $1.97 billion, edging past the average analyst estimate of $1.93 billion.
Avonex sales were flat at $751 million, but were about 3 percent ahead of analysts' expectations.
Tysabri sales of $427 million fell well short of Wall Street estimates of about $470 million, in part due to an Italian reimbursement dispute that was expected to be settled in the quarter but carried over to 2014.
Biogen said Tysabri discontinuation rates improved in the quarter, but that it remained under pressure in Europe due to competition from oral medicines sold by Novartis and Sanofi.
The company said it continued to expect approvals this year for hemophilia drugs Eloctate and Alprolix, putting Biogen into that market for the first time. It sees a mid-year launch of Plegridy, a new interferon drug for relapsing MS.
Biogen Idec shares rose $5.79 to $311.44 in afternoon trading on Nasdaq.
(Reporting by Bill Berkrot in New York and Esha Dey in Bangalore; Editing by Savio D'Souza and Jeffrey Benkoe)
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