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Biogen Idec Delivers Double-Digit Top & Bottom-Line Growth In Second Quarter 2013

These statements involve risks and uncertainties that could cause actual results to differ materially from those reflected in such statements, including: our dependence on sales from our four principal products, AVONEX, TECFIDERA, TYSABRI and RITUXAN; failure to protect and enforce our data, intellectual property and other proprietary rights and the diminution of our ability to derive anticipated benefits from our products; uncertainty of success in executing our commercial launch of TECFIDERA and in commercializing and developing other products; product competition; 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; problems with our manufacturing processes, limitation in our capacity and our reliance on third parties; failure to comply with government regulation; the risks of doing business internationally; failure to manage our growth and execute our growth initiatives; charges and other costs relating to our properties; fluctuations in our effective tax rate; our ability to attract and retain qualified personnel; uncertainty and potential liabilities relating to product liability and intellectual property claims; the market, interest and credit risks associated with our portfolio of marketable securities; environmental risks; 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 1
Biogen Idec Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(unaudited, in thousands, except per share amounts)
               
 
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2013 2012 2013 2012
Revenues:
 
Product, net $ 1,385,918 $ 1,076,800 $ 2,481,697 $ 2,052,288
 
Unconsolidated joint business 288,785 284,630 553,391 569,183
 
Royalty 38,111 37,084 70,931 65,884
 
Corporate partner   10,659     22,437   32,550     25,611
 
Total revenues   1,723,473     1,420,951   3,138,569     2,712,966
 
Cost and expenses:
 
Cost of sales, excluding amortization of acquired intangible assets 230,728 139,112 364,477 272,308
 
Research and development 327,463 329,559 611,803 685,521
 
Selling, general and administrative 431,012 301,767 783,610 601,856
 
Amortization of acquired intangible assets 82,225 52,282 133,526 98,243
 
Collaboration profit sharing - 78,511 85,357 164,406
 
(Gain) Loss on Fair Value Remeasurement of Contingent Consideration (5,163 ) 12,858 (2,886 ) 14,117
 
Restructuring charge   -     1,139   -     1,422
 
Total cost and expenses   1,066,265     915,228   1,975,887     1,837,873
 
Gain on sale of rights   5,319     -   10,370     -
 
Income from operations 662,527 505,723 1,173,052 875,093
 
Other income (expense), net   (10,428 )   2,950   (24,885 )   18,094
 
Income before income tax expense and equity in loss of investee, net of tax 652,099 508,673 1,148,167 893,187
 
Income tax expense 159,140 121,021 224,648 203,169
 
Equity in loss of investee, net of tax   2,289     511   6,100     511
 
Net income 490,670 387,141 917,419 689,507
 
Net income attributable to non-controlling interests, net of tax   -     295   -     -
 
Net income attributable to Biogen Idec Inc. $ 490,670   $ 386,846 $ 917,419   $ 689,507
 
 
Net income per share:
Basic earnings per share attributable to Biogen Idec Inc. $ 2.07   $ 1.62 $ 3.87   $ 2.88
 
Diluted earnings per share attributable to Biogen Idec Inc. $ 2.06   $ 1.61 $ 3.85   $ 2.86
 
 
Weighted-average shares used in calculating:
Basic earnings per share attributable to Biogen Idec Inc.   237,484     238,988   237,162     239,389
 
Diluted earnings per share attributable to Biogen Idec Inc.   238,743     240,622   238,543     241,245
 
TABLE 2
Biogen Idec Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(unaudited, in thousands)
       
As of As of
June 30, December 31,
2013 2012
ASSETS
 
 
Cash, cash equivalents and marketable securities $ 667,670 $ 1,705,710
 
Accounts receivable, net 861,457 686,848
 
Inventory 570,390 447,373
 
Other current assets   423,704   404,406
 
Total current assets 2,523,221 3,244,337
 
Marketable securities 107,139 2,036,658
 
Property, plant and equipment, net 1,787,776 1,742,226
 
Intangible assets, net 4,678,884 1,631,547
 
Goodwill 1,210,718 1,201,296
 
Investments and other assets   533,852   274,054
 
TOTAL ASSETS $ 10,841,590 $ 10,130,118
 
 
LIABILITIES AND EQUITY
 
Current portion of notes payable and line of credit $ 3,188 $ 453,379
 
Other current liabilities 1,300,886 1,204,010
 
Notes payable and other financing arrangements 726,388 687,396
 
Long-term deferred tax liability 313,341 217,272
 
Other long-term liabilities 595,642 604,266
 
Equity   7,902,145   6,963,795
 
TOTAL LIABILITIES AND EQUITY $ 10,841,590 $ 10,130,118
 
TABLE 3
Biogen Idec Inc. and Subsidiaries
GAAP to Non-GAAP Reconciliation: Net Income and Net Income Per Share
(unaudited, in millions, except per share amounts)
             
 
For the Three Months For the Six Months
Ended June 30, Ended June 30,
EARNINGS PER SHARE 2013 2012 2013 2012
 
GAAP earnings per share - Diluted $ 2.06 $ 1.61 $ 3.85 $ 2.86
Adjustments to net income attributable to Biogen Idec Inc. (as detailed below)   0.24     0.21     0.42     0.36  
Non-GAAP earnings per share - Diluted $ 2.30   $ 1.82   $ 4.27   $ 3.22  
 
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. $ 490.7 $ 386.8 $ 917.4 $ 689.5
Adjustments:
Amortization of acquired intangible assets 79.5 51.0 128.1 94.3
(Gain) Loss on Fair Value Remeasurement of Contingent Consideration (5.2 ) 12.9 (2.9 ) 14.1
SG&A: Stock option expense 1.0 0.9 2.9 1.4
R&D: Stock option expense 0.8 0.5 2.4 1.6
R&D: Restructuring and other - - - 1.3
2010 Restructuring initiatives - 1.1 - 1.4
Non-controlling interests - 0.3 - -
Income tax effect related to reconciling items   (18.0 )   (14.4 )   (29.7 )   (26.1 )
Non-GAAP net income attributable to Biogen Idec Inc. $ 548.8   $ 439.1   $ 1,018.2   $ 777.5  
 
 
2013 Full Year Guidance GAAP to non-GAAP adjustments
An itemized reconciliation between projected EPS on a GAAP basis and on a non-GAAP basis is as follows:
 
$ Shares Diluted EPS
Projected GAAP net income attributable to Biogen Idec Inc. $ 1,767 239 $ 7.40
Adjustments:
Stock option expense 8
Restructuring and other -
Amortization of acquired intangible assets 287
(Gain) Loss on Fair Value Remeasurement of Contingent Consideration 5
Income tax expense: Income tax effect related to reconciling items   (67 )    
Projected Non-GAAP net income attributable to Biogen Idec Inc. $ 2,000     239   $ 8.38  
 

Use of Non-GAAP Financial Measures

We supplement our consolidated financial statements presented on a GAAP basis by providing additional measures which may be considered “non-GAAP” financial measures under applicable SEC rules. We believe that the disclosure of these non-GAAP financial measures provides additional insight into the ongoing economics of our business and reflects how we manage our business internally, set operational goals and forms the basis of our management incentive programs. These non-GAAP financial measures are not in accordance with generally accepted accounting principles in the United States and should not be viewed in isolation or as a substitute for reported, or GAAP, net income attributable to Biogen Idec Inc. and diluted earnings per share.

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