Elan Reports Third Quarter 2012 Financial Results
The revenue reserve for Italy relates to a notification received by Biogen Idec from the Italian National Medicines Agency during the fourth quarter of 2011, stating that sales of Tysabri had exceeded a limit established by the agency in 2007. Biogen Idec filed an appeal in December 2011 seeking a ruling that Biogen Idec’s interpretation is valid and that the position of the agency is unenforceable. As a result of this dispute, Biogen Idec deferred $14.2 million of revenue recognized on in-market net sales of Tysabri in Italy during the third quarter of 2012, having previously deferred $16.3 million of revenue in Italy during the second quarter of 2012, $16.5 million during the first quarter of 2012 and $13.8 million during the fourth quarter of 2011. Elan expects that Biogen Idec will continue to defer a portion of in-market revenues on future sales of Tysabri for Italy until the matter is resolved. As a consequence of this deferral of in-market net sales by Biogen Idec, Elan has deferred $6.8 million of revenue in the third quarter of 2012 related to these sales, $22.5 million in the first nine months of 2012 and $29.4 million to date, reflecting the operating and accounting arrangements between the companies.
If the matter is not resolved during 2012, Elan estimates that Biogen Idec would defer $60-70 million of 2012 Tysabri in-market net sales as a result. This would result in a deferral of revenues and Adjusted EBITDA by Elan for the full-year 2012 of approximately $30-35 million and $20-25 million, respectively.
In the ROW market, Biogen Idec is responsible for distribution, and Elan records as revenue its share of the profit or loss on ROW sales of Tysabri, plus Elan’s directly-incurred expenses on these sales. As a result, in the ROW market, Elan recorded net revenue of $75.9 million for the third quarter of 2012 compared to $81.9 million for the third quarter of 2011.
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