Biogen's new MS drug tops expectations; ups 2013 forecast

Reuters

By Bill Berkrot

Oct 28 (Reuters) - Biogen Idec Inc on Mondayreported $286 million in third-quarter sales of its high-profilenew multiple sclerosis drug Tecfidera, providing fresh evidencethat the medicine is off to an impressive launch and exceedingall expectations.

The company also reported higher-than-expected third-quarterearnings and raised its full-year profit and revenue forecasts,and its shares rose nearly 4 percent before paring gains.

In just its second quarter on the market, Tecfidera saleseasily topped Wall Street analysts' increased forecasts ofbetween $205 million and $235 million. It had chalked up salesof $192 million in its first quarter on the market, surpassing initial Wall Street estimates of about $66 million.

"Tecfidera crushed (expectations)," ISI Group analyst MarkSchoenebaum said in a research note. "This is really, trulyincredible."

Tecfidera is the third oral MS drug to market after Gilenyafrom Novartis and Sanofi's Aubagio, but isseen as likely to dominate the class. According to IMS, whichprovides data on prescription medicines, it has already laidclaim to being the leading oral drug for multiple sclerosisafter just six months, Biogen said.

More than 5,000 doctors had already prescribed Tecfidera,Biogen said, with about three-quarters of patients switchingover from other drugs, including older Biogen products.

Analysts consider the drug to be Biogen's most importantfuture growth driver and forecast eventual peak annual sales inexcess of $3 billion.

"The company commentary suggests that the spectacular launchtrajectory has started to slow down, but it's still on track tobecoming a dominant, if not the dominant, treatment for MS," Sanford Bernstein analyst Geoffrey Porges said.

The company provided no new details on its efforts to ensurepatent protection for Tecfidera in Europe but suggested anapproval decision could be coming soon. The drug is approved inCanada and Australia, as well as the United States.

Biogen cautioned that there was a possibility of an approvaldelay for its experimental long-acting drug for hemophilia A,eloctate. It said discussions with the U.S. Food and DrugAdministration involved manufacturing issues and not safety ofthe treatment.

"We're not talking jeopardy to approval here, we're talkingtime lines," Biogen Chief Executive George Scangos told analystson a conference call.

Eloctate approval had been expected late in the firstquarter or early in the second quarter of 2014.

"We were expecting a time to market advantage," saidBernstein's Porges. "If this is a three- to six-month delay itnarrows the window to convert patients before rivals come tomarket."

The U.S. biotechnology company said net profit for thequarter rose to $488 million, or $2.05 per share, from $398million, or $1.67 per share, a year before.

Excluding items, Biogen had adjusted earnings of $2.35 pershare, topping analysts' average expectations by 25 cents,according to Thomson Reuters I/B/E/S.

Biogen said it now expects 2013 earnings, excluding items,of $8.65 to $8.85, up from its prior forecast of $8.25 to $8.50per share. Wall Street is forecasting earnings of $8.62 pershare for the year.

Biogen now sees full-year revenue growth of 23 percent to 25percent. It had previously projected growth of 22 percent to 23percent.

Revenue for the quarter rose 32 percent to $1.8 billion,edging past Wall Street estimates of $1.78 billion.

Sales of Biogen's older injectable MS drug Avonex decreasedslightly to $733.4 million from $736.2 million a year ago, asthe drug likely lost some sales to the company's own new drug.

Biogen reported a 46 percent increase in sales of its otherinjectable MS drug Tysabri to $401 million, largely due to thecompany's acquisition of the portion of the medicine held byIrish drugmaker Elan Corp earlier this year. Biogen nowowns full rights to Tysabri.

The company also recorded $303 million from its portion ofsales of Rituxan, the lymphoma drug it shares with Roche HoldingAG.

Biogen Idec shares were up 35 cents to $252 in morningtrading on Nasdaq after earlier reaching a new high of $262. Thecompany's shares were already up about 70 percent this year,largely due to Tecfidera enthusiasm.

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