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Press release from Business Wire

Biogen Idec Reports First Quarter 2011 Results

<p class='bwalignc'> <i>50% GAAP and 32% Non-GAAP Diluted EPS Growth Over First Quarter 2010</i> </p>

Thursday, April 21, 2011

Biogen Idec Reports First Quarter 2011 Results06:15 EDT Thursday, April 21, 2011 WESTON, Mass. (Business Wire) -- Biogen Idec Inc. (NASDAQ: BIIB), a global biotechnology leader in the discovery, development, manufacturing and commercialization of innovative therapies, today announced its first quarter 2011 results. First Quarter 2011 Highlights: First quarter revenues were $1.2 billion, an increase of 9% versus 2010. The increase was driven primarily by the continued growth of TYSABRI® (natalizumab) revenues, which increased 15% to $251 million, and AVONEX® (interferon beta-1a) revenues, which increased 8% to $642 million. RITUXAN® (rituximab) revenues from our unconsolidated joint business arrangement were $256 million for the quarter, essentially flat versus prior year. Global in-market sales of TYSABRI in the first quarter of 2011 were $349 million, an increase of 20% over the first quarter of 2010. The total was comprised of $170 million in U.S. sales and $179 million in sales to markets outside the U.S. On a reported basis, calculated in accordance with accounting principles generally accepted in the U.S. (GAAP), first quarter 2011 GAAP diluted EPS were $1.20, an increase of 50% over the first quarter of 2010. GAAP net income attributable to Biogen Idec for the quarter was $294 million, an increase of 35% over the first quarter of 2010. Non-GAAP diluted EPS for the first quarter of 2011 were $1.43, an increase of 32% over the first quarter of 2010. Non-GAAP net income attributable to Biogen Idec for the first quarter of 2011 was $349 million, an increase of 18% over the first quarter of 2010. A reconciliation of our GAAP to non-GAAP results is included on Table 3 within this press release. As of March 31, 2011, Biogen Idec had cash, cash equivalents and marketable securities of approximately $2.1 billion. “We had a very solid first quarter based on the performance of our three blockbuster products,” said George A. Scangos, Ph.D., Chief Executive Officer of Biogen Idec. "We continued our transformation into a lean, aggressive and focused company, and the reinvigoration of Research and Development is well underway. We met several exciting pipeline milestones, including the positive Phase III data read-out from the DEFINE trial for BG-12, our oral MS drug candidate, and the enrollment of the first patient in our Phase III EMPOWER trial for dexpramipexole, a potential treatment for ALS. We continue to unlock TYSABRI's potential through cutting edge science and are encouraged by the CHMP's positive opinion to include anti-JC virus antibody status as an additional risk factor for PML in the TYSABRI label. With these successes, we look forward to continue to drive our core business and advance our deep late-stage pipeline.” Share Repurchases During the first quarter of 2011, Biogen Idec repurchased 2.8 million shares of stock at a total cost of $195 million. TYSABRI Patient Growth Based upon data available to us through the TOUCH® prescribing program and other third-party sources, as of the end of March 2011, we estimate that approximately 58,400 patients were on commercial and clinical TYSABRI therapy worldwide, and that cumulatively approximately 83,300 patients have ever been treated with TYSABRI in the post-marketing setting. Other Products and Royalties Revenues from other products in the first quarter of 2011 were $13 million, the same as in the first quarter of 2010. Table 4 provides individual product revenues. Royalties were $26 million in the first quarter of 2011, the same as in the first quarter of 2010. Corporate partner revenues in the first quarter of 2011 were $15 million, compared to $4 million in the first quarter of 2010. Recent Events On April 19, 2011, Biogen Idec announced that the European Medicines Agency's Committee for Medicinal Products for Human Use (CHMP) has issued a positive opinion recommending the approval of AVONEX PEN™ for patients with relapsing multiple sclerosis and patients with a single demyelinating event. On April 19, 2011, Biogen Idec and Genentech, a member of the Roche Group, announced that the U.S. Food and Drug Administration (FDA) approved RITUXAN, in combination with corticosteroids, as a new medicine for adults with Wegener's Granulomatosis and Microscopic Polyangiitis. On April 18, 2011, Biogen Idec and Elan Corporation announced that the CHMP has adopted a positive opinion for inclusion of an additional risk factor, anti-JC virus antibody status, to the product label for TYSABRI in the European Union. The CHMP also recommended a five year renewal of the Marketing Authorization for TYSABRI. On April 11, 2011, Biogen Idec announced positive top-line results from DEFINE, the first of two pivotal Phase III clinical trials designed to evaluate the investigational oral compound BG-12 (dimethyl fumarate) as a monotherapy in people with relapsing-remitting multiple sclerosis. More details about BG-12 will be provided on the company's earnings conference call. On April 6, 2011, Biogen Idec submitted an investigational new drug application to the FDA to evaluate its anti-beta-amyloid antibody BART (BIIB037) as a potential new treatment for Alzheimer's disease. Biogen Idec licensed BART from Swiss biotech company Neurimmune in 2007. On March 31, 2011, Biogen Idec and Knopp Biosciences announced the enrollment of the first patient in EMPOWER, a multi-national Phase III study evaluating the efficacy, safety and pharmacokinetics of dexpramipexole in patients with amyotrophic lateral sclerosis. Conference Call and Webcast The company's earnings conference call for the first quarter will be broadcast via the internet at 7 a.m. ET on April 21, 2011, and will be accessible through the Investors section of Biogen Idec's homepage, www.biogenidec.com. Supplemental information in the form of a slide presentation will also be accessible at the same location on the internet at the time of the earnings conference call and will be available there subsequently through May 21, 2011. About Biogen Idec Biogen Idec uses cutting-edge science to discover, develop, manufacture and market therapies for the treatment of serious diseases with a focus on neurological disorders. Founded in 1978, Biogen Idec is the world's oldest independent biotechnology company. Patients worldwide benefit from its leading multiple sclerosis therapies, and the company generates more than $4 billion in annual revenues. For product labeling, press releases and additional information about the company, please visit www.biogenidec.com. Safe Harbor This press release contains forward-looking statements, including statements about the anticipated development of programs in our clinical pipeline. These forward-looking statements may be accompanied by such words as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “project,” “target,” “will” and other words and terms of similar meaning. You should not place undue reliance on these statements. These statements involve risks and uncertainties that could cause actual results to differ materially from those reflected in such statements, including our dependence on our three principal products, AVONEX, RITUXAN and TYSABRI, the importance of TYSABRI's sales growth, product competition, uncertainty of success in commercializing other products, the occurrence of adverse safety events with our products, changes in the availability of reimbursement for our products, adverse market and economic conditions, our dependence on collaborations and other third parties over which we may not always have full control, failure to execute our growth initiatives, failure to comply with government regulation and possible adverse impact of changes in such regulation, charges and other costs relating to our properties, problems with our manufacturing processes and our reliance on third parties, fluctuations in our effective tax rate, our ability to attract and retain qualified personnel, the risks of doing business internationally, our ability to protect our intellectual property rights and the cost of doing so, product liability claims, fluctuations in our operating results, the market, interest and credit risks associated with our portfolio of marketable securities, our level of indebtedness, environmental risks, aspects of our corporate governance and collaborations, representation of activist shareholders on our board of directors, and the other risks and uncertainties that are described in the Risk Factors section of our most recent annual or quarterly report and in other reports we have filed with the SEC. These statements are based on our current beliefs and expectations and speak only as of the date of this press release. We do not undertake any obligation to publicly update any forward-looking statements. TABLE 1Biogen Idec Inc.March 31, 2011Consolidated Statements of Income(in thousands, except per share amounts)(unaudited)         Three Months EndedMarch 31,20112010REVENUES   Product $ 907,102 $ 824,220   Unconsolidated joint business 256,124 254,928   Royalties 25,578 26,023   Corporate partner   14,538   3,689     Total revenues   1,203,342   1,108,860     COSTS AND EXPENSES   Cost of sales, excluding amortization of acquired intangible assets 103,113 97,055   Research and development 293,633 307,030   Selling, general and administrative 244,516 248,664   Collaboration profit sharing 74,794 63,557   Amortization of acquired intangible assets 53,216 48,889   Restructuring charges 16,587 -   Acquired in-process research and development - 39,976   Fair value adjustment of contingent consideration   1,200   -     Total costs and expenses   787,059   805,171     Income from operations 416,283 303,689   Other income (expense), net   9,951   (8,386 )   INCOME BEFORE INCOME TAX EXPENSE 426,234 295,303   Income tax expense   117,468   75,310     NET INCOME $ 308,766 $ 219,993     Net income attributable to noncontrolling interest, net of tax   14,435   2,551     NET INCOME ATTRIBUTABLE TO BIOGEN IDEC INC. $ 294,331 $ 217,442       BASIC EARNINGS PER SHARE $ 1.22 $ 0.80     DILUTED EARNINGS PER SHARE $ 1.20 $ 0.80       WEIGHTED-AVERAGE SHARES USED IN CALCULATING:BASIC EARNINGS PER SHARE   241,536   269,922     DILUTED EARNINGS PER SHARE   244,551   272,703     TABLE 2Biogen Idec Inc.March 31, 2011Condensed Consolidated Balance Sheets(in thousands)(unaudited)           March 31,2011   December 31,2010ASSETS   Cash, cash equivalents and marketable securities $ 1,228,545 $ 1,207,744   Accounts receivable, net 687,609 605,329   Inventory 295,260 289,066   Other current assets   416,901   438,281   Total current assets   2,628,315   2,540,420   Marketable securities 885,444 743,101   Property, plant and equipment, net 1,673,502 1,641,634   Intangible assets, net 1,731,844 1,772,826   Goodwill 1,146,314 1,146,314   Investments and other assets   228,105   248,198   TOTAL ASSETS $ 8,293,524 $ 8,092,493     LIABILITIES AND SHAREHOLDERS' EQUITY     Current portion of notes payable and other financing arrangements $ 134,779 $ 137,153   Other current liabilities 844,067 912,969   Long-term deferred tax liability 218,504 200,950   Notes payable and line of credit 1,065,613 1,066,379   Other long-term liabilities 356,261 325,599   Shareholders' equity   5,674,300   5,449,443   TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 8,293,524 $ 8,092,493   TABLE 3Biogen Idec Inc.March 31, 2011Condensed Consolidated Statements of Income - Non-GAAP(in millions, except per share amounts)(unaudited)             Three Months EndedMarch 31,EARNINGS PER SHARE20112010   GAAP earnings per share - Diluted $ 1.20 $ 0.80 Adjustments to net income attributable to Biogen Idec Inc. (as detailed below)   0.23     0.28   Non-GAAP earnings per share - Diluted $ 1.43   $ 1.08       An itemized reconciliation between net income attributable to Biogen Idec Inc. on a GAAP basis and net income attributable to Biogen Idec Inc. on a non-GAAP basis is as follows:   GAAP net income attributable to Biogen Idec Inc. $ 294.3 $ 217.4 Adjustments: R&D: Restructuring and severance - 0.6 R&D: Stock option expense 1.2 1.6 R&D: Expenses paid by Cardiokine - 1.8 SG&A: Restructuring and severance - 4.3 SG&A: Stock option expense 1.4 10.8 Amortization of acquired intangible assets 53.2 48.9 Restructuring charges 16.6 - Fair value adjustment of contingent consideration 1.2 - Acquired in-process research and development related to the contingent consideration payment made associated with the 2007 Syntonix acquisition - 40.0 Income tax expense: Income tax effect related to reconciling items (18.6 ) (27.2 ) Noncontrolling interest: Expenses paid by Cardiokine   -     (1.8 ) Non-GAAP net income attributable to Biogen Idec Inc. $ 349.3   $ 296.4     Use of Non-GAAP Financial Measures Our “non-GAAP net income attributable to Biogen Idec Inc.” and “non-GAAP diluted EPS” financial measures exclude the following items from GAAP net income attributable to Biogen Idec Inc. and diluted EPS: 1. Purchase accounting and merger-related adjustments. We exclude certain purchase accounting impacts, such as those related to the 2003 merger between Biogen, Inc. and Idec Pharmaceuticals, Inc., the acquisitions of Fumapharm AG, Syntonix Pharmaceuticals, and Panima Pharmaceuticals AG and the consolidation of Knopp, Cardiokine and Neurimmune. These include charges for in-process research and development and amortization of the acquired intangible assets. Excluding these charges provides management and investors with a supplemental measure of performance in which the Company's acquired intellectual property is treated in a comparable manner to its internally developed intellectual property. 2. Stock option expense recorded in accordance with the accounting standard for share-based payments. We believe that excluding the impact of expensing stock options better reflects the recurring economic characteristics of our business. We exclude stock option expense from our non-GAAP R&D expenses and SG&A expenses, but include the P&L impact of all other share-based awards and cash incentives in our non-GAAP results. 3. Unusual or non-recurring items. We evaluate these on an individual basis, and consider both the quantitative and qualitative aspects of the item, including (i) its size and nature, (ii) whether or not it relates to our ongoing business operations, and (iii) whether or not we expect it to occur as part of our normal business on a regular basis. We believe it is important to share these non-GAAP financial measures with shareholders as they better represent the ongoing economics of the business, reflect how we manage the business internally and set operational goals, and form the basis of our management incentive programs. Non-GAAP net income attributable to Biogen Idec Inc. and diluted EPS should not be viewed in isolation or as a substitute for reported, or GAAP, net income attributable to Biogen Idec Inc. and diluted EPS. TABLE 4Biogen Idec Inc.March 31, 2011Product Revenues(in thousands)(unaudited)                   Three Months EndedMarch 31,20112010PRODUCT REVENUES   Avonex® $ 642,478 $ 592,527   Tysabri® 251,393 218,643   Fumaderm® 12,506 13,050   Other 725 -     Total product revenues $ 907,102 $ 824,220 Media Contact:Biogen IdecChristina Chan, 781-464-3260Senior Manager, Public AffairsorInvestment Community Contact:Biogen IdecKia Khaleghpour, 781-464-2442Associate Director, Investor Relations