The chief executive of
said Tuesday that his company is "on target" to achieve long-term revenue and earnings growth goals.
Jim Mullen told analysts that the company expects to achieve on average 15% revenue growth and 20% EPS growth between the years 2003 and 2007, reaffirming earlier growth forecasts. He noted that Wall Street analysts are predicting revenue growth of 17% to 18% and EPS growth of 16% to 21% this year.
Mullen said research and development spending will be in the range of 30% to 31% as a percentage of revenue for the next several years, and net margins will be in the range of 23% to 25%.
"We're in great shape," said Peter Kellogg, the company's chief financial officer, adding that the company has the third highest profit margins in the biotech industry. He said Biogen Idec has "ample balance sheet capacity" to invest substantially in R&D and make small, strategic acquisitions. (The company was created by the merger of Biogen and Idec Pharmaceuticals in November 2003.)
Kellogg said the company's R&D spending as a percentage of revenue is higher than that of the average biotech company or the average Big Pharma company. He added that the company's commitment to R&D "positions us with explosive potential for growth."
Biogen Idec's presentation to analysts occurred a week after the FDA approved Tysabri, the much-awaited multiple sclerosis drug developed and marketed with
, which was called Antegren while in development. "Tysabri is the tip of the iceberg," Mullen said.
Tysabri is one of several drugs being tested for other uses. For example, the company expects phase II clinical trial results in mid-2005 for Tysabri as a treatment for rheumatoid arthritis. Phase II is the second of three rounds of clinical tests before a drug is submitted to regulators.
Tysabri is also being tested as a treatment for the chronic, debilitating gastrointestinal ailment called Crohn's Disease. In September, the companies filed an application with the European Union for this indication. Test results from another phase III test are due in mid-2005; then the companies will decide about seeking U.S. approval.
In another collaborative effort, Biogen Idec is working with partners to test Rituxan as a treatment for rheumatoid arthritis. Rituxan is now available for non-Hodgkin's lymphoma. The partners are
. They expect data from a phase III test by the first half of 2005.
And in yet another partnership, Biogen Idec is working with a German company, Fumapharm, to develop a second generation drug called BG-12 for treating psoriasis and rheumatoid arthritis. The German company developed the first generation compound, which it sells in Germany. But the big drawback is a high rate of gastrointestinal side effects, said Dr. Evan Beckman, Biogen Idec's vice president for medical research-immunology.
Beckman said tests show that BG-12 has less than a 5% gastrointestinal side effect rate compared to an almost 50% rate for the first generation drug. Beckman said phase III test results should be ready by year-end, enabling the filing of an application in Germany next year. He didn't discuss a timetable for seeking U.S. approval.
In a related matter, Biogen Idec announced after markets had closed Monday that William R. Rohn, its chief operating officer, will retire effective Jan. 31. The company said his duties will be assumed by Mullen and other senior managers effective today. Prior to the merger of Biogen and Idec, Rohn was chief operating officer at Idec.