Biogen Idec (BIIB)
Q3 2010 Earnings Call
October 26, 2010 8:30 am ET
Elizabeth Woo - Vice President of Investor Relations
Company Speaker -
Alfred Sandrock -
George Scangos - Chief Executive Officer and Director
Paul Clancy - Chief Financial Officer and Executive Vice President of Finance
Geoffrey Porges - Bernstein Research
Jason Kantor - RBC Capital Markets Corporation
Robyn Karnauskas - Deutsche Bank AG
Joel Sendek - Lazard Capital Markets LLC
Thomas Wei - Jefferies & Company, Inc.
Joshua Schimmer - Leerink Swann LLC
Yaron Werber - Citigroup Inc
Christopher Raymond - Robert W. Baird & Co. Incorporated
Jason Zhang - BMO Capital Markets U.S.
Eric Schmidt - Cowen and Company, LLC
Mark Schoenebaum - ISI Group Inc.
Rachel McMinn - BofA Merrill Lynch
Geoffrey Meacham - JP Morgan Chase & Co
Previous Statements by BIIB
» Biogen Idec Inc. Q2 2010 Earnings Call Transcript
» Biogen Idec, Inc. Q1 2010 Earnings Call Transcript
» Biogen Idec, Inc. Q4 2009 Earnings Call Transcript
Good morning. My name is Steve, and I will be your conference operator today. At this time, I would like to welcome everyone to the Biogen Idec's Third Quarter 2010 Earnings Conference Call. [Operator Instructions] Ms. Kia Khaleghpour, you may begin your conference.
Thank you, Steve. Thank you, and welcome to Biogen Idec's Third Quarter 2010 Earnings Conference Call. Before we begin, I encourage everyone to go to the Investors section of biogenidec.com to find the press release and related financial tables, including a reconciliation of the non-GAAP financial measures I will discuss today. We've also posted slides on our website that followed the discussions related to today's call.
As usual, we'll start with the Safe Harbor statement. Comments made in this conference call include forward-looking statements that are subject to risks and uncertainties. Words such as believe, expect, may, plan, will and similar expressions are intended to identify such statements. Actual results could differ materially from our expectations, and you should carefully review the risks and uncertainties that are described in our earnings slide, earnings release and in the Risk Factors section of our most recent annual and quarterly reports filed with the SEC. We do not undertake any obligation to publicly update any forward-looking statements.
Today on the call, I'm joined by Dr. George Scangos, Chief Executive Officer of Biogen Idec; Dr. Al Sandrock, Senior Vice President of Neurology Research and Development; Dr. Francesco Granata, Executive Vice President of Global Commercial Operations; and Paul Clancy, Executive Vice President of Finance and Chief Financial Officer. Now, I'll turn the call over to George.
Thanks, Kia, and thanks to all of you for joining us this morning. It's hard to believe that we're sitting here today. Another quarter has passed. It doesn't seem like that long ago that we're on the Q2 call. I guess time flies when you're having fun. I'm happy to report that Biogen Idec delivered another solid quarter. And financial revenues were $1.2 billion, up 5% versus the third quarter of '09, non-GAAP earnings per share were $1.35, which is a 21% increase year-over-year. And we completed the $1.5 billion share buyback that the Board authorized this April, retiring a total of nearly 30 million shares at an average price of $15.35. During the quarter, we also made considerable progress on three top priorities, growing and expanding the commercial business, taking a hard look at R&D to ensure that we maximize the return in our investment and in choosing the sense of urgency in all parts of the organization. Our MS franchise delivered double-digit year-over-year revenue growth and continues to be the global leader in MS.
Importantly, AVONEX U.S. unit sales increased sequentially for the second straight quarter at the first such performance since 2004. And we just now completed the expansion of our sales force, finished strengthening the skills and competencies of the entire commercial organization and launched a number of new initiatives to keep these areas competitive as we prepare to face new market entrance. So anticipate that the full effect of the actions we've taken have not yet been fully felt.
Our Neurology, Research and Development organization made some noteworthy advances. Al Sandrock will provide more details later on the call, but here are some highlights. We made significant progress on our TYSABRI risk stratification efforts. Earlier this month at ECTRIMS, we presented interim results from our STRATIFY 1 study, which confirmed earlier data that roughly half of the MS patient population tested positive in our sclerosis collassay for JC virus. For STRATIFY 2, we've made tremendous progress on patient enrollment. And as of October 22, we enrolled over 6,800 patients. At ECTRIMS, along with our partner Roche, we announced positive data from the Phase II study of Ocrelizumab and relapsing remitting MS. Al will go through the data in more detail, but overall, it looks quite impressive.
And as we now announced last week, we reached an agreement with Genentech and Roche to allow them to move Ocrelizumab forward while allowing Biogen Idec to avoid a further concentration of its R&D dollars in Phase III trials in MS, while we maintain our economic interest in the compound. Importantly, we agree that the introduction of Ocrelizumab on to the market would not impact our profit sharing arrangement on RITUXAN. We also agree that the profit sharing arrangements for GA101 and RITUXAN, which were a potential area of dispute in the future. The company's interest are now in line, allowing us to work together to maximize with the collaboration revenues, as well as the benefits to patients. We also diversified our Neurology pipeline. In August, we announced the licensing agreement with Knopp Neurosciences to develop and commercialize for the treatment of amyotrophic lateral sclerosis, or ALS, and potentially other indications. We expect to initiate this trial during the first half of next year.