Updated from 8:55 AM
Avonex got its groove back, just in time for
Biogen's best-selling multiple sclerosis drug, Avonex, is expected to reach global sales of $900 million in 2001, fueled by stronger-than-expected first-quarter sales and growing market share in the United States and Europe, company executives said Thursday.
Avonex sales had faltered late last year, leading to some concern on Wall Street about the ability of Biogen to meet growth expectations. With strong first-quarter results, company executives seem to have put those fears to rest.
Biogen reported Thursday first-quarter earnings of 47 cents per share on revenue of $237 million. Analysts were looking for earnings of 46 cents per share, lowered by a penny last month after the company revised its outlook for the year, according to
Thomson Financial/First Call.
Shares in the company jumped $2.54, or 4.3%, to $60.25 in recent trading Thursday.
Avonex revenue for the quarter totaled $220 million, up 28% over the same period last year. Several analysts were looking for Avonex revenue of between $205 million and $209 million for the quarter.
"This was a good quarter on strong Avonex sales," says Eric Schmidt of
SG Cowen Securities
. "This product is back on track and a growth driver for Biogen. There was talk about the company struggling to meet earnings targets for the year, but I think some people didn't realize how strong Avonex will be in 2001." Schmidt rates Biogen a buy and his firm doesn't do underwriting for the company.
Last month, Biogen said it was reducing its 2001 royalty revenue by half to $85 million to $90 million because of patent expirations and a royalty dispute with
. At the same time, the company said it would earn $1.90 per share or slightly above in 2001. Consensus estimates at the time called for the company to earn $1.93 per share, since lowered to $1.89 per share, according to Thomson Financial/First Call.
On its conference call this morning, Biogen CFO Peter Kellogg heaped praise on the Avonex sales force for the strong results. He said 103,000 patients are now using the drug, which pushed market share into the upper-50% range in the United States and stabilized market share in Europe, where the drug faces stiff competition from two rivals. Avonex is an "orphan" drug in the United States, which blocks competition from similar drugs until 2003.
Kellogg said the company is on track to record Avonex sales of $900 million in 2001, which would represent an 18% jump over 2000 sales. He also said Biogen should reach the $1 billion mark in total revenue in 2001, compared to $926 million in 2000.
But he guided analysts down slightly for second-quarter earnings due to higher research and development spending. The company said it will earn 46 cents per share in the second quarter, a penny shy of current consensus estimates. He reiterated current guidance of $1.90 per share for the year.
Investors have become increasingly concerned about biopharmaceutical companies that rely on a single drug for the bulk of their growth, so Biogen will be under the gun to produce positive results for two other experimental drugs under development.
Biogen just finished late-stage testing of Amevive, a drug to treat moderate-to-severe psoriasis. Data from this testing is expected to be released in the middle of the year, and if positive, could result in a late-year filing for approval from U.S. drug regulators, the company said.
Antegren, a drug to combat multiple sclerosis and Crohn's disease, is expected to begin late-stage testing later this year, as well.