Bittersweet News at Biogen Idec

Higher taxes in Denmark led to lower fourth-quarter profits for Biogen Idec, which saw its net income dip by 3% year-to-year despite rising sales of its drugs.

Biogen Idec finished Q4 with $292.1 million in net income, down from $300.2 million during the final three months of 2011. The company cited a $29 million tax expense for its Denmark facility, which it blamed on correction of a multi-year accounting error in computing taxes on capitalized interest.

The company blamed the error for a 12-cent decline in earnings per share, which ended Q4 at $1.23, up only one cent or 1% from fourth-quarter 2011. Excluding special items, earnings per share were $1.40, down 7% from a year earlier and six cents or 4% below the consensus estimate of 25 analysts polled by Thomson Reuters.

Also lowering Biogen Idec Q4 results was a drop in corporate partner revenues to $6 million, from $20 million in Q4 2011.

One bright spot for Biogen Idec was continued growth in sales of its drugs. Q4 revenues rose about 7% to $1.4 billion from $1.3 billion in the year-ago quarter, driven by rising sales of its drugs:

• Tysabri (natalizumab) for Crohn’s disease and relapsing forms of multiple sclerosis (U.S.) and relapsing-remitting MS (European Union). Its Q4 2012 revenues increased 10% year-over-year to about $295.2 million from $269.4 million a year earlier. Biogen Idec co-markets Tysabri with Elan.
• Avonex (interferon beta-1a) for relapsing forms of MS. The drug generated $753.2 million in Q4, up 7% from $703.2 million.
• Rituxan (rituximab) revenue from an unconsolidated joint business arrangement with Roche’s Genentech unit rose 9%, to $281 million.
• Fumaderm (fumaric acid esters), approved in Germany for psoriasis, but unapproved in the U.S. or U.K. Fumaderm saw quarterly sales rise 16.5%, to $15.8 million to $13.5 million in Q4 2011.
• Fampyra (prolonged-release fampridine tablets) for adults with MS who have walking disability. Biogen Idec markets Fampyra outside the U.S. under license from Acorda Therapeutics, which retains U.S. rights to the drug as Ampyra (dalfampridine). Fampyra sales edged up 0.7% to $10.5 million from $10.4 million.

For all of 2012, revenues rose 9% to $5.5 billion, accounting for a 12% year-to-year jump in net income, to about $1.4 billion from almost $1.3 billion in 2011. Full-year earnings per share climbed 14% to $5.76 from $5.04.

Avonex was Biogen Idec’s best-selling drug all 12 months of last year, generating $2.9 billion in revenues, up 8% from Q4 2012. Next-highest was Tysabri with $1.1 billion, up 5%; Rituxan, also at $1.1 billion, up 14%; then Fumaderm at $59.7 million, up 9%; and Fampyra at $57.4 million, also up 9%.