Biogen Beats Estimates as Avonex Sales Rise

Earnings Scorecard
Actual	Estimated*	Year-Ago
$0.47	$0.46	$0.44
*By First Call/Thomson Financial

Biogen(BGEN Quote) reported Wednesday that fourth-quarter earnings rose 6.8%, beating estimates, on strong sales of top-selling multiple sclerosis treatment Avonex.

Biogen said fourth-quarter earnings rose to 47 cents a share from 44 cents a year ago, beating the 46-cent consensus forecast published by First Call/Thomson Financial. Revenue rose to 9% to $245 million. The stock rose modestly in after-hours trading, hitting $57 on Island after dropping $1.25 during the regular session to $56.

Avonex sales rose to a record $203 million from $180 million a year earlier. Biogen said it expects Avonex sales to grow in the mid-teens percentagewise in 2001. It also said it expects EPS of between $1.90 to $1.98 for 2001, compared to $1.75 for 2000 before a gain.

"During the quarter, we reinvigorated sales of Avonex," said James C. Mullen, president and CEO. He said 97,000 patients were using Avonex at year-end, more than all other MS drugs combined.

Avonex has "orphan drug" status in the U.S., which blocks competition from similar "beta interferon" multiple sclerosis drugs until 2003. But Biogen is facing more pressure in Europe from competitors like Serono (SRA Quote), which markets Rebif.

Faced with increasing competition in the multiple sclerosis market, Biogen is striving to speed replacement drugs to the market, including Amevive, a promising psoriasis drug in late-stage clinical trials.

It said last week it expects to bring three new drugs into clinical trials this year of its 20 projects in development. It also said it expects to release data from phase 3 trials of Amevive by midyear and could launch the drug in the second half of 2002, assuming regulatory clearance.

"Although Avonex growth is slowing and increased pressure from competing products should weigh on the product's market share, we see increased pipline visibility in coming years," said Morgan Stanley Dean Witter in a recent note. The broker rates Biogen outperform and does no underwriting for it.

Biogen shares are well down from the highs of last March, when many biotech company shares peaked and Biogen was trading at 129. Still, Biogen, one of the most heavily traded biotech companies, has a healthy $8.3 billion market cap for what is essentially a one-product company, analysts say. Shares closed down $1.25 Wednesday to $56.