BioCentury's websites will be down for upgrades starting at 9 p.m. PDT on Monday, August 26. We expect the downtime to last no more than 6 hours, and we apologize for any inconvenience.

12:00 AM
Oct 29, 2007
 |  BioCentury  |  Finance

Ebb & Flow

Biogen Idec (BIIB) was off last week on slowing sales of Avonex interferon beta-1a, eroding $3.50 to $76.72 for the week. On the company's conference call, President and CEO James Mullen said 3Q07 sales of the multiple sclerosis drug were a "major disappointment."

The company didn't officially chalk up the shortfall to its competitive MS product Tysabri natalizumab, but it did warn that Tysabri could play a role in the future of the Avonex franchise.

Avonex sales were $455 million in 3Q07, a sequential decline of 1.5% from $462 million in 2Q07. Still, sales were up 2.2% over 3Q06, which EVP and CFO Paul Clancy noted had been "a very strong quarter" for the drug.

Sequentially compared to 2Q07, both U.S. and international Avonex sales were off last quarter by 1.2% to $266.4 million and 1.8% to $188.5 million, respectively. But the year-over-year numbers revealed a marked diversion between the markets, as U.S. sales were down by 0.7%, while international sales gained 6.6%.

In its SEC filing, BIIB attributed this shrinkage to "decreased product demand resulting in lower volume." The company went on to note that lower volume was largely offset by a price increase in August 2007.

BIIB also cautioned that Avonex faces increasing competition with new and existing MS treatments, including its own Tysabri. Sales of the drug, which is partnered with Elan (ELN), were $93 million in 3Q07, up from $72 million in 2Q07 and $8 million in 3Q06. BIIB posted $63 million in 3Q07 revenues for Tysabri, which the partners re-launched in July 2006.

Market makeover

"We are beginning to see the impact of Tysabri on the ABCR market in the U.S., which is now flat to declining on a year-over-year basis," BIIB's VP of Pharmaceutical Operations and Technology Robert Hamm said on the call.

ABCR refers to the market for MS treatments Avonex; Betaseron interferon beta-1b from Bayer (FSE:BAY; BAY) and Novartis (NVS; SWX:NOVN); Copaxone glatiramer acetate from Teva (TEVA); and Rebif interferon beta-1a from Merck (FSE:MRK) and Pfizer (PFE).

Four out of five patients prescribed Tysabri are new to BIIB's MS franchise, Hamm said. He also noted that one-third of Tysabri patients had quit a previous treatment or were treatment naïve.

According to Hamm, patients on Copaxone, which requires daily injections, comprise the single largest source of Tysabri patients in the U.S. TEVA reports its 3Q results on Oct. 30, but in 2Q07 the company said Copaxone sales were up 8% sequentially and 23% quarter-over-quarter to $436 million.

BIIB hopes to have 100,000 Tysabri patients on therapy worldwide by year end 2010 - 17,000 were on the drug at the end of last quarter.

Spokesperson Naomi Aoki said BIIB expects that Avonex will be a good drug for patients starting treatment, but that they may later move on to Tysabri.

BIIB also has several MS candidates in its pipeline that have "different approaches and benefits," said Aoki. These include BG-12, an oral fumarate in Phase III; Rituxan rituximab in Phase II; and daclizumab, a humanized antibody against IL-2 in Phase II.

Rituxan is partnered with Genentech (DNA) and Roche (SWX:ROG), while daclizumab is partnered with PDL (PDLI).

BIIB revenues in 3Q07 rose 12% to $789.2 million from $703.5 million in 3Q06. The Street was expecting $803.7 million. But the company said it continues to expect 2007 revenue growth of 16-18% vs. 2006 and full-year non-GAAP diluted EPS of $2.60-$2.70.

Missing the Street's EPS consensus of $0.65, BIIB came in at a non-GAAP EPS of $0.58. The quarter included a $0.11 per share R&D expense related to BIIB's July deal with Cardiokine to develop and commercialize lixivaptan to treat hyponatremia.

BIIB refused to comment on its Oct. 12 statement that it would consider being acquired.

Overly optimistic

The Street's expectations for European sales of Revlimid lenalidomide may have been overblown, as Celgene (CELG) fell $5.96 to $64.22 on Thursday after reporting 3Q07 revenues that missed the consensus. Third quarter revenues came in at $350 million, up 43% from $245 million in the same period last year but short of the $369 million consensus, due to smaller than expected Revlimid sales.

Although sales of Revlimid rose 97% over 3Q06 and 10% over 2Q07, coming in at $199 million, analysts were expecting sales of $210-$220 million. The drug is marketed to treat relapsed or refractory multiple myeloma (MM) in combination with dexamethasone in the U.S. and EU as well as myelodysplastic syndromes (MDS) in the U.S.

The EU approved the drug in June, and Revlimid has only been officially launched in Germany, CFO David Gryska said on the...

Read the full 3849 word article

User Sign in

Trial Subscription

Get a 4-week free trial subscription to BioCentury

Article Purchase

$150 USD
More Info >