February 7, 2008

Biogen Idec profit beats expectations

BOSTON - After Biogen Idec Inc. reported a sharp increase in its fourth-quarter profit, the biotechnology company's top executive said he remains wary of spending more time searching for a big pharmaceutical firm willing to buy his company.

Carl Icahn continues to press for a buyout after Biogen Idec's recent efforts to find a buyer failed to yield any bids, and the activist investor is trying to elect supporters to Biogen's board.

Chief Executive Jim Mullen said that resuming the two-month search that was halted in December would distract Biogen Idec from focusing on its growth.

Biogen "will continue to remain open to all the opportunities to maximize shareholder value," Mullen told analysts on a conference call Wednesday. "But I don't think the right way to run the business ... is to have a permanent 'for sale' sign out on the front lawn."

Biogen Idec's fourth-quarter profit jumped 84 percent, exceeding Wall Street's expectations. Biogen shares were unchanged from Tuesday, closing at $60.52.

The Cambridge-based company reported net income of $201.2 million, or 67 cents per share, compared with $108.6 million, or 32 cents, in the same period a year earlier. Revenue rose 26 percent to $893.3 million, beating the consensus estimate of analysts surveyed by Thomson Financial, who expected $836.2 million.

Excluding one-time items in both quarters, Biogen Idec's profit rose 45 percent to $266 million, or 89 cents per share, up from $184 million, or 53 cents, in the year-ago period. The latest quarter's result beat analysts' expectations for a profit of 80 cents per share.

Biogen Idec's rising revenue was led by a 17 percent increase in sales of Rituxan, a treatment for non-Hodgkins lymphoma and rheumatoid arthritis, and a 15 percent increase for the multiple sclerosis treatment Avonex.

The newer MS treatment Tysabri generated revenue of $90 million, up from $18 million in the year-ago quarter.

Tysabri had been seen as a potential blockbuster before it was withdrawn three years ago after two clinical trial patients died of a rare brain disorder. Regulators approved Tysabri's reintroduction in June 2006.

Although no new cases of the brain disorder have turned up since Tysabri's return, Mullen told analysts Wednesday that lingering concerns about the drug's safety scared off potential buyers who had been expected to make bids of more than $20 billion.

Icahn on Jan. 28 accused Biogen Idec of rigging its search so that it was doomed to fail, but the company defends the process as fair and thorough.

Icahn helped trigger Biogen Idec's search for a buyer after snapping up millions of Biogen shares last summer. Last month, he submitted names of three supporters he hopes will be elected to Biogen's board, and he holds about 4 percent of Biogen's shares.

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