Potential suitors of Biogen Idec will be interested to see that the US firm has posted a fairly disappointing set of financials for the third quarter.
Net income fell 24.2% to $119 million, or $0.41 per share, due in part to a charge relating to its alliance with Cardiokine for lixivaptan, a treatment of hyponatremia. Sales were up 12% to $789 million, driven once again by the multiple sclerosis drug Avonex (interferon beta-1a), but they only rose 2% to $455 million.
There was healthier growth for the rheumatoid arthritis and cancer drug Rituxan (rituximab) and revenues, which come from Biogen's joint venture with Genentech, rose 15% to $235 million. Global sales of the new MS drug Tysabri (natalizumab), which is partnered with Elan and only returned to the market in July 2006 after being pulled off on safety concerns in February 2005, reached $93 million and Biogen's share was $63 million. 17,000 people have been prescribed with the drug and the company is confident that Tysabri will further penetrate the MS market.
The less-than-impressive Avonex sales were a cause of concern and chief executive James Mullen described them as “a major disappointment” on a conference call. Nevertheless, he said that Biogen is on track to hit its full-year earnings guidance of $1.84-$1.94 per share.
The company recently announced that it was exploring the possibility of a sale, a move which has caught the eye of pretty much all the big pharma players and billionaire investor Carl Icahn, who bought a small stake in Biogen in August and has reportedly bid $23 billion for the firm. Mr Mullen said on the conference call that there was no guarantee that any acquisition would take place and any such process “typically takes a number of months”.
How much it will cost to buy Biogen remains to be seen but in a research note, Eric Schmidt at broker Cowen & Co noted that because the firm’s stock is already riding high amid takeover talk, “the company may not be able to secure a deal at a significant premium to today's share price”. Biogen closed down almost 1.5% to $78.93.