Biogen Idec (BIIB)

Q4 2011 Earnings Call

January 31, 2012 8:00 am ET

Executives

Kia Khaleghpour - Associate Director of Investor Relations

George A. Scangos - Chief Executive Officer and Director

Douglas Edward Williams - Executive Vice President of Research and Development

Tony Kingsley - Executive Vice President of Global Commercial Operations

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

Alfred Sandrock - Head of Neurology Research & Development

William D. Young - Chairman, Member of Corporate Governance Committee and Member of Science & Technology Committee

Analysts

Geoffrey C. Meacham - JP Morgan Chase & Co, Research Division

Robyn Karnauskas - Deutsche Bank AG, Research Division

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

Matthew Roden - UBS Investment Bank, Research Division

Eric Schmidt - Cowen and Company, LLC, Research Division

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

Rachel L. McMinn - BofA Merrill Lynch, Research Division

Yaron Werber - Citigroup Inc, Research Division

Ravi Mehrotra - Crédit Suisse AG, Research Division

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

Thomas Wei - Jefferies & Company, Inc., Research Division

Joshua Schimmer - Leerink Swann LLC, Research Division

Charles Anthony Butler - Barclays Capital, 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 Fourth Quarter and Year-End Earnings Conference Call. [Operator Instructions] Ms. Kia Khaleghpour, Associate Director of Investor Relations, you may begin your conference.

Kia Khaleghpour

Thank you, and welcome to Biogen Idec's fourth 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.

Our GAAP financials are provided in tables 1 and 2. Table 3 include a reconciliation of the GAAP to non-GAAP results, which we believe that it represents the ongoing economics of our business and reflects how we manage the business internally. We have also posted slides on our website that follow the discussion 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. Doug Williams, Executive Vice President of Research and Development; Tony Kingsley, Executive Vice President of Global Commercial Operations; 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, Sciences and Chief Medical Officer. Now I'll turn the call over to George.

George A. Scangos

Okay, thanks, Kia, and good morning, everyone. We had a very productive fourth quarter and -- which concluded a really, I think, great year for Biogen Idec. Recall that in 2011, our goals were to deliver double-digit EPS growth, grow AVONEX and TYSABRI share while pursuing the serological assay and risk stratification to further unlock the value of TYSABRI, advanced or late stage pipeline and continue to drive cultural change. We delivered on all these goals and we've run a long way towards building a foundation for long term growth for Biogen Idec.

In 2011, our product -- total product revenues were up 11% year-over-year and non-GAAP diluted EPS ended the year at $5.90, a 15% increase over 2010. In 2011, our AVONEX commercial team substantially improved the business and AVONEX global sales reached $2.7 billion, a 7% increase year-over-year.

We introduced the AVONEX PEN to the European markets and Canada, thereby improving the administration for patients and reinvigorating physician interest and we filed for marketing authorization of the AVONEX PEN in the U.S.

TYSABRI in-market sales grew 23% year-over-year to reach $1.5 billion in 2011, and we hit key milestones that are important for unlocking the value of TYSABRI. First, the assay for JC virus antibodies was made broadly available in both the U.S. and the EU. Second, the TYSABRI product label was updated in both the EU and the U.S. to include JC virus antibody status as a risk factor for the development of PML.

There's been tremendous interest from the MS community in risk stratification and we believe that the large majority of TYSABRI patients now know their antibody status and that increasing numbers of patients considering TYSABRI are being tested as well.

Against long odds, we were able to convince the EMA to reverse their initially negative opinion for FAMPYRA and we obtained conditional EU marketing approval. We launched FAMPYRA in Germany in 2011 and plan additional launches this year.

Turning to R&D, our late-stage pipeline advanced substantially in 2011, led obviously by BG-12, but also including significant advances in many other portfolio compounds, both early and late. As you know, BG-12 data in 2 large clinical trials were very encouraging. These 2 clinical trials, with more than 2,600 patients, represent the largest data set for any new drug in relapsing-remitting MS to date. We're now focused on bringing this potentially major new therapy to patients with MS as soon as possible.

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