Biogen Idec profits fall, as firm seeks revenue from older drugs
Biogen Idec's third-quarter profit fell 26 percent compared to the previous year as the biotech firm took charges from its 2003 merger and expenses from a layoff that began in September.
The firm reported net income of $27 million, or 8 cents per share, in the third quarter, compared to net income of $37 million, or 10 cents per share, in the third quarter last year. But revenues grew to $596 million, up 10 percent from the same period last year, boosted by improved sales of non-Hodgkin's lymphoma (NHL) drug Rituxan (Rituximab) and Avonex (Interferon beta-1a), its therapy for patients with relapsing forms of multiple sclerosis (MS).
Biogen Idec made cost-cutting moves in the quarter, including the layoffs of 17 percent of its workforce and other efforts to channel money into business development. The firm signed a deal with Protein Design Labs worth as much as $660 million to develop three treatments for MS, cancer and other diseases. Biogen Idec so far has paid $40 million to Protein Design Labs.
Charges that brought down earnings included $88 million of write-downs related to the 2003 merger of Biogen and Idec, $27 million in layoff expenses and $21 million in losses from the sale of a California manufacturing plant.
The firm also said it could learn as soon as February whether the FDA will allow it to market Rituxan for use in patients with a different form of NHL. The agency granted priority review status to the firm's request to market Rituxan in front-line patients with the intermediate grade or aggressive, CD20-positive, B-cell type of NHL.
If granted, the expanded NHL indication is not expected to have a major impact on Rituxan sales. But the Cambridge, Mass., biotech company has also applied to the FDA to market the drug as a treatment for rheumatoid arthritis, a potentially very lucrative area.
Mining older drugs like Rituxan, approved in 1997, for revenue was necessitated by the withdrawal of MS drug Tysabri (natalizumab) by Biogen Idec and Elan, its marketing partner. Tysabri was pulled in February due to safety concerns but could be reinstated, pending a ruling from the FDA, in the first half of 2006.