Biogen Idec's CEO Discusses Q3 2011 Results - Earnings Call Transcript

Biogen Idec (BIIB)

Q3 2011 Earnings Call

October 28, 2011 8:30 am ET

Executives

Francesco Granata - Executive Vice President of Global Commercial Operations

George A. Scangos - Chief Executive Officer and Director

Alfred Sandrock -

Paul J. Clancy - Chief Financial Officer and Executive Vice President of Finance

Douglas Edward Williams - Executive Vice President of Research and Development

Kia Khaleghpour - Associate Director of Investor Relations

Analysts

Sapna Srivastava - Goldman Sachs Group Inc., Research Division

Michael J. Yee - RBC Capital Markets, LLC, Research Division

Rachel L. McMinn - BofA Merrill Lynch, Research Division

Robyn Karnauskas - Deutsche Bank AG, Research Division

Mark J. Schoenebaum - ISI Group Inc., Research Division

Matthew Roden - UBS Investment Bank, Research Division

Yaron Werber - Citigroup Inc, Research Division

Geoffrey C. Porges - Sanford C. Bernstein & Co., LLC., Research Division

Eric Schmidt - Cowen and Company, LLC, Research Division

Ravi Mehrotra - Crédit Suisse AG, Research Division

Gene Mack - Mizuho Securities USA Inc., Research Division

Presentation

Operator

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Good morning. My name is Melissa, and I will be your conference operator today. At this time, I would like to welcome everyone to the Biogen Idec Third Quarter 2011 Earnings Conference Call. [Operator Instructions] Ms. Kia Khaleghpour, you may begin your conference.

Kia Khaleghpour

Thank you, Melissa. Welcome to Biogen Idec's Third Quarter 2011 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 that we'll discuss today. We've also posted slides in our website that follow the discussions related to this 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 slides, 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; Dr. Francesco Granata, Executive Vice President of Global Commercial Operations; Dr. Doug Williams, Executive Vice President of Research; and Paul Clancy, Executive Vice President of Finance and Chief Financial Officer. We'll also be joined for the Q&A portion of the call by Dr. Al Sandrock, Senior Vice President of Development.

Now I'll turn the call over to George.

George A. Scangos

Okay. Thanks, Kia, and good morning, everyone. We had a very productive third quarter and several exciting announcements during the month of October as well. Our financial performance was excellent as our products with TYSABRI continued to do extremely well. Our pipeline advanced substantially, led obviously by BG-12, but also including significant advances in many other portfolio compounds, both early and late. And while not so visible from the outside, the company is executing extremely well and is much more effective and efficient than it was a year ago.

Let me start with our business performance. We're now through our 3 quarters of the year, and we continued to deliver solid financial results. For the quarter, product revenues grew by 11% year-over-year. AVONEX continued to do well this quarter, with revenues up 6% year-over-year. The continued rollout of the AVONEX autoinjector device in the EU and Canada fueled addition patient and physician interest in AVONEX, one of the most trusted MS therapies in the world. TYSABRI was a key driver of our overall growth. Revenues were up 26% year-over-year, and TYSABRI is on a trajectory to reach over $1.5 billion in annualized end market sales. As a result, total revenues were $1.3 billion, up 11% year-over-year, and non-GAAP diluted EPS was up 19% at $1.61.

This was a good quarter for TYSABRI, which continues to be a main growth driver for us. First, key data were presented at ECTRIMS in Amsterdam last week that showed that patients who received treatment with TYSABRI early in the course of MS received more clinical benefit than those who delayed treatment with TYSABRI and were first treated with immunosuppressive therapies or switched between glatiramer acetate and the interferon.

Second, we made important progress on our JCV risk stratification efforts, as the JCV antibody assay became commercially available in the U.S., as well as the EU. There are now over 59,000 patients who have been through JCV antibody status, highlighting the tremendous interest in risk stratification. We believe that this interest means that many patients and physicians are aware of the substantial benefits that can be gained from TYSABRI, as well as the potential risk of PML, and are using the information to make appropriate treatment decisions. I'm particularly encouraged by the increasing number of patients who have been tested, who are not current TYSABRI patients, and I believe that bodes very well for the future of the drug.

Turning to the advancement of our late-stage pipeline, as you all know, details of the defined study for BG-12, our oral candidate for MS, were presented at ECTRIMS last week. And top line data for CONFIRM, the second registrational trial for BG-12, were announced Wednesday. Doug will provide more details. Let me just say that both DEFINE and CONFIRM displayed compelling efficacy and safety data for BG-12. We now have strong positive results for BG-12 and 2 robust pivotal clinical trials, with more than 2,600 patients. We're now focused on filing BG-12 with both the FDA and EMA, which will occur in the first half of next year, with the intent of bringing this potentially major new therapy to patients with MS as soon as possible.

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