In presentations to investors today and over the next week, Biogen
Idec (NASDAQ: BIIB) CEO James C. Mullen will outline key growth
opportunities and review the company's long-range strategic and
financial goals. Mullen is scheduled to speak at the Thomas Weisel
Partners Healthcare Conference at 8 a.m. today in Boston and the Bear
Stearns Healthcare Conference on Sept. 10 in New York. Both
presentations will be available via webcast on the Investor Relations
section of www.biogenidec.com. Supplemental information in the form of
a slide presentation will also be accessible on the internet at the
same location at the time of each presentation and will remain on the
Biogen Idec website until at least September 30, 2007.
Financial Goals
Biogen Idec will announce its goal to generate revenue growth at a
15% compound annual growth rate (CAGR) and non-GAAP EPS at a 20% CAGR
from 2007 through 2010.
These financial goals reflect the strong growth momentum already
underway at Biogen Idec. Specifically, the company expects its growth
to be driven by:
-- Continued solid performance of AVONEX(R) (Interferon beta-1a),
the world's leading multiple sclerosis treatment;
-- Expansion of RITUXAN(R) (rituximab), the world's leading
cancer treatment, into autoimmune diseases;
-- Achieving the milestone of 100,000 patients on TYSABRI(R)
(natalizumab) by year-end 2010; and,
-- Continued geographic diversification of its revenue base with
more than 40% of revenue from its International business by
2010.
"Now that Biogen Idec is more than a year into the reintroduction
of TYSABRI in the U.S., and we have launched and gained reimbursement
for this important therapy in the major European markets, we are
providing greater detail regarding our goals for long-range growth,"
Mullen said. "Over the near- to mid-term, we expect to see continued
strong performances by AVONEX and RITUXAN as well as the emergence of
TYSABRI as the world's leading therapy for patients with multiple
sclerosis."
Pipeline Highlights
The company has 15 product candidates in Phase 2 clinical trials
or beyond with more than 10 data readouts expected by the end of 2008.
These programs are expected to contribute to similar top-line growth
over the longer term. By 2010, the company's goal is to have four new
products and/or existing products launched in new indications as well
as six programs in late-stage clinical development.
"Our growth goals reflect the contribution of our robust
pipeline," Mullen said. "Over the past two years, we've successfully
advanced multiple internal programs. At the same time, we've pursued a
business development strategy that has allowed us to access more than
10 molecules for less than $640 million in upfront payments. We plan
to continue growing our core therapeutic areas while expanding into
new areas with a focus on first-in-class and best-in-class products."
As part of the presentation, Mullen will discuss several promising
programs: lumiliximab for chronic lymphocytic leukemia; RITUXAN for
lupus; LTBR-Fc for rheumatoid arthritis; long acting factor IX for
hemophilia B; and HSP90 inhibition for blood and solid cancers.
2007 Financial Guidance Reiterated
Mullen will reiterate guidance for the full-year 2007. On July 24,
in reporting its second-quarter financial results, the company
increased the full-year guidance to:
-- Total revenue growth of 16%-18% over 2006;
-- Non-GAAP diluted EPS - reflecting the repurchase of $3 billion
of shares through the recently completed Dutch tender offer -
in the range of $2.60 to $2.70, representing 16% to 20% annual
growth. This non-GAAP diluted EPS estimate excludes the impact
of purchase accounting, merger-related adjustments, stock
option expense, and other items and their related tax effects;
and,
-- GAAP diluted EPS in the range of $1.84 to $1.94, versus $0.63
per share in 2006. This estimate includes the impact of the
Cardiokine deal but excludes any other future acquisitions or
transactions. In order to reconcile GAAP and non-GAAP EPS
guidance, we have excluded the following items from our
non-GAAP EPS guidance provided above:
-- Purchase accounting charges, including amortization of
acquired intangible assets and IPR&D, is estimated to be $287
million, or approximately $0.90 per share, for already
completed transactions;
-- Stock option expense due to FAS 123R in 2007 is estimated to
be in the range of $30-$40 million, or approximately $ 0.07-$
0.09 per share.
Because the company cannot predict with certainty the nature or
the amount of non-operating or unusual charges for 2007, we have made
no assumption regarding future purchase accounting charges in this
GAAP guidance. The company may incur charges or realize income in 2007
which could cause actual results to vary from this guidance.
At the time of the merger in 2003, the company forecast 15% CAGR
in revenue and 20% CAGR in non-GAAP EPS though the end of 2007.
Achievement of this full-year 2007 guidance would enable the company
to fulfill those financial goals by generating 14% CAGR in revenue and
21% CAGR in non-GAAP EPS though the end of 2007.
GAAP EPS Reconciliation
On a reported basis, calculated in accordance with accounting
principles generally accepted in the U.S. (GAAP), the company aims to
grow GAAP EPS from 2007 through 2010 at a 25% CAGR. The long-term
non-GAAP EPS goal excludes the impact of purchase accounting,
merger-related adjustments, stock option expense, and their related
tax effects. In order to reconcile long-term GAAP and non-GAAP EPS
figures, the company has excluded the following items for 2008 through
2010 from our non-GAAP EPS goal provided above:
-- Purchase accounting charges, including amortization of
acquired intangible assets and IPR&D, is estimated to be
$760-$800 million for already completed transactions;
-- Stock option expense due to FAS 123R is estimated to be in the
range of $80-$90 million;
-- Tax benefit of $220-$240 million related to the pre-tax
reconciling items.
Because the company cannot predict with certainty the nature or
the amount of non-operating or unusual charges through 2010, it has
made no assumption regarding new purchase accounting charges in this
GAAP EPS goal. The company may incur charges or realize income through
2010 which could cause actual results to vary from the goal.
Use of Non-GAAP Financial Measures
"Non-GAAP EPS" financial measures are defined as reported, or
GAAP, EPS excluding, for the reasons discussed below, (1) purchase
accounting and merger-related adjustments, (2) stock option expense
and (3) other items. Management uses these non-GAAP financial measures
to establish financial goals and gain an understanding of the
comparative financial performance of the company from year to year and
quarter to quarter. Accordingly, Biogen Idec believes investors'
understanding of the company's financial performance is enhanced as a
result of our disclosing these non-GAAP financial measures. Non-GAAP
net income and diluted EPS should not be viewed in isolation or as a
substitute for reported, or GAAP, EPS.
Purchase accounting and merger-related adjustments - Non-GAAP EPS
exclude certain purchase accounting impacts such as those related to
the merger with Biogen, Inc. (the "Merger") and the acquisitions of
Fumapharm AG, Conforma Therapeutics Corp. and Syntonix
Pharmaceuticals, Inc. These include charges for in process research
and development and the incremental charge to cost of goods sold from
the company's sale of acquired inventory that was written up to fair
value at the acquisition date. Additionally, these excluded impacts
include the incremental charges related to the amortization of the
acquired intangible assets. Excluding these charges allows management
and investors an alternative view of the company's financial results
"as if" the acquired intangible asset had been developed internally
rather than acquired and, therefore, provides a supplemental measure
of performance in which the company's acquired intellectual property
is treated in a comparable manner to its internally developed
intellectual property.
Stock option expense - Non-GAAP net income and diluted EPS exclude
the impact of our stock option expense recorded in accordance with
SFAS No. 123R and the cumulative effect of an accounting change
relating to its initial adoption. The company believes that excluding
the impact of expensing stock options better reflects the recurring
economic characteristics of our integrated business. The company does
include the P&L impact of restricted stock awards and other cash
incentives in its non-GAAP results.
Other items - Non-GAAP net income and diluted EPS exclude other
unusual or non-recurring items that are evaluated on an individual
basis. The evaluation of whether to exclude an item for purposes of
determining our non-GAAP financial measures considers both the
quantitative and qualitative aspects of the item, including, among
other things (i) its size and nature, (ii) whether or not it relates
to the company's ongoing business operations, and (iii) whether or not
the company expects it to occur as part of its normal business on a
regular basis. Items excluded for purposes of determining non-GAAP net
income and diluted EPS are severance and restructuring charges and a
gain on sale of long-lived assets.
About Biogen Idec
Biogen Idec creates new standards of care in therapeutic areas
with high unmet medical needs. Founded in 1978, Biogen Idec is a
global leader in the discovery, development, manufacturing, and
commercialization of innovative therapies. Patients in more than 90
countries benefit from Biogen Idec's significant products that address
diseases such as lymphoma, multiple sclerosis, and rheumatoid
arthritis. For product labeling, press releases and additional
information about the company, please visit www.biogenidec.com.
Safe Harbor
This press release contains forward-looking statements about our
expected revenues, earnings, product sales, product development and
other matters. Forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially
from that which we expect. Important factors that could cause our
actual results to differ include our continued dependence on our two
principal products, AVONEX and RITUXAN, the uncertainty of success in
commercializing other products including TYSABRI, the occurrence of
adverse safety events with our products, the failure to execute our
growth strategy successfully or to compete effectively in our markets,
our dependence on collaborations over which we may not always have
full control, possible adverse impact of government regulation and
changes in the availability of reimbursement for our products,
problems with our manufacturing processes and our reliance on third
parties, fluctuations in our operating results, our ability to protect
our intellectual property rights and the cost of doing so, the risks
of doing business internationally and the other risks and
uncertainties that are described in Item 1A "Risk Factors" in our most
recent Form 10-Q filing with the SEC. These forward-looking statements
speak only as of the date of this press release, and we do not
undertake any obligation to publicly update any forward-looking
statements, whether as a result of new information, future events, or
otherwise.
