Biogen Idec Q Earnings Conference Call and Webcast. July 22 nd 2008

Transcription

1 Biogen Idec Q Earnings Conference Call and Webcast July 22 nd 2008

2 Forward Looking Statements This presentation includes forward-looking statements about: our 2008 guidance and our financial and operational goals through 2010 our expected revenues, earnings, and cash flows the size and growth of the markets for our products estimates of sales for our products our expected filings with regulatory agencies the anticipated development and timing of programs in our clinical pipeline the sales potential of TYSABRI Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those that we express or imply, including our continued dependence on our two principal products, AVONEX and RITUXAN, the uncertainty of success in commercializing other products including TYSABRI, the occurrence of adverse safety events with our products, the failure to execute our growth strategy successfully or to compete effectively in our markets, our dependence on collaborations over which we may not always have full control, possible adverse impact of government regulation and changes in the availability of reimbursement for our products, problems with our manufacturing processes and our reliance on third parties, our ability to attract and retain qualified personnel, the risk of doing business internationally, fluctuations in our operating results, our ability to protect our intellectual property rights and the cost of doing so, product liability claims, our significant investments in marketable securities, fluctuations in our effective tax rate, our substantial indebtedness, environmental risks, the actions of activist shareholders and the other risks and uncertainties that are described in Item 1.A. Risk Factors in our annual report on Form 10-K and our quarterly reports on Form 10-Q and in other reports we file with the SEC. These forward-looking statements speak only as of the date of this presentation, and we do not undertake any obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise. Page 2 July 22, 2008

3 Q Earnings Call Agenda Introduction Elizabeth Woo, Vice President, Investor Relations Overview Jim Mullen, Chief Executive Officer MS Franchise Update Bill Sibold, Senior Vice President, US Commercial R&D Update Al Sandrock, Senior Vice President, Neurology R&D Financial Performance Paul Clancy, Chief Financial Officer Q&A Page 3 July 22, 2008

4 James Mullen Chief Executive Officer Business Overview

5 Q Overview Robust Financial Performance Revenues +28% growth y/y GAAP and non-gaap diluted EPS +30% growth y/y Outstanding Product Performance Revenues to Biogen Idec from RITUXAN of $279 million, +21% growth y/y AVONEX worldwide revenues of $527 million, +14% growth y/y TYSABRI global end user sales exiting Q2-08 at run rate of $800 million annually Pipeline Advancing 15 products in Phase 2 and beyond Five novel compounds expected in registrational trials by year end 2008 Multiple data readouts near year end Raising FY 2008 Guidance Aspirational goal of $4 billion in Full Year 2008 Revenues 3 rd Consecutive Quarter of >25% Revenue Growth Y/Y Outstanding H and Start Toward 2010 Goals Note: See Table 3 from Biogen Idec s Q2 08 earnings press release or the end of this presentation for reconciliation of GAAP diluted EPS to non-gaap diluted EPS. Page 5 July 22, 2008

6 Bill Sibold Senior Vice President MS Franchise Update

7 Leading Multiple Sclerosis Franchise AVONEX #1 prescribed MS therapy worldwide TYSABRI New level of efficacy Pipeline Best and broadest for the future Page 7 July 22, 2008

8 AVONEX Disrupts Disease Not Patients Lives Most prescribed MS therapy & 11 years as market leader $ % Global Revenue Growth $400 $192 $189 $224 $228 $221 $300 $200 $100 $270 $266 $279 $308 $306 $0 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 AVONEX International Sales (in $ millions) AVONEX U.S. Sales (in $ millions) Page 8 July 22, 2008

9 TYSABRI Safety and Utilization Utilization end of June 2008: More than 31,800 MS and CD patients on TYSABRI therapy worldwide U.S. Commercial: More than 17,800 patients on commercial therapy International Commercial: Nearly 13,400 patients on commercial therapy Clinical Trials: More than 600 patients on therapy in clinical trials Current Utilization Data as of: Mid July 2007 End of September 2007 End of December 2007 End of March 2008 End of June 2008 Update venue One Year Anniv & BIIB / ELN Q2-07 ECTRIMS & BIIB / ELN Q3-07 JPMorgan HC Conf AAN & BIIB / ELN Q1-07 earnings Two Year Anniv & BIIB / ELN Q2-08 U.S. commercial patients on therapy International commercial patients on therapy Total commercial & clinical trial patients on therapy Prescribing Neuro + GI physicians in the U.S. 8,600 4,300 14,000 1,800 10,500 5,500 17,000 2,100 12,900 7,500 21,100 2,500 15,300 10,200 26,000 2,750 17,800 13,400 31,800 3,100 Weeks from prior update weeks 13 weeks 13 weeks 13 weeks Safety in the clinical trial and post-marketing settings end of June 2008: More than 43,300 patients ever exposed Nearly 13,900 patients exposed for at least one year Approximately 6,600 patients exposed for at least 18 months No cases of confirmed PML since re-launch in US and launch Internationally in July 2006 Cumulative Safety Data as of: Feb 23, 2007 May 23, 2007 Aug 23, 2007 Mid Dec 2007 End of Mar 2008 End of Jun 2008 Update venue 2007 AAN Mtg 2007 ENS Mtg 2007 ECTRIMS Mtg 2008 JPMorgan HCC 2008 AAN Mtg 2 Year Anniversary Cumulative total patient exposure 18,000 21,000 26,200 30,900 36,700 43,300 Patients on therapy for one year ,300 9,900 13,900 Patients on therapy for 18 months ,600 6,600 Page 9 July 22, 2008 Most recent TYSABRI updates Utilization and safety: Tysabri two year anniversary of re-launch in US and launch Internationally. Numbers are approximate.

10 TYSABRI U.S. Source of Patients H Includes Returning quitters Non-ABCR therapy patients ABCR treatment naïve patients New to Market 28% AVONEX 20% Switchers from BETASERON, COPAXONE and REBIF 52% Single largest source of TYSABRI patients is COPAXONE ~4 out of 5 TYSABRI patients in the US are new to the Biogen Idec MS franchise Page 10 July 22, 2008 Note: BETASERON is a trademark of Bayer HealthCare Pharmaceuticals Inc.; REBIF is a trademark of Ares Trading S.A.; COPAXONE is a trademark of Teva Pharmaceutical Industries Ltd.

11 TYSABRI Approved In More Than 35 Countries Countries with Greater than 10% MS Market Share Denmark Greece Iceland Sweden Switzerland Launched in 26 countries: Austria Denmark Ireland Netherlands Spain Australia Estonia Israel New Zealand Sweden Bahrain Finland Italy Norway Switzerland Belgium France Kuwait Poland Tunisia Bulgaria Germany Latvia Portugal UK Canada Greece Lithuania Romania US Cyprus Hungary Luxembourg Slovakia Czech Iceland Malta Slovenia Launched countries listed in dark blue Page 11 July 22, 2008

12 TYSABRI Strong Quarterly Growth 250 TYSABRI In-Market Revenue >$800M Run Rate In-market Revenue (millions) $8 3 5 International U.S. $30 $48 $ $93 $ $200 $ Q3-06 Q4-06 Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q/Q growth rate 275% 63% 47% 29% 39% 24% 25% Page 12 July 22, 2008

13 Al Sandrock Senior Vice President, Neurology R&D R&D Update

14 Broad and Deep Pipeline NEUROLOGY ONCOLOGY Late Research/ Pre-Clinical Phase 1 Phase 2 Phase 3 Market Late Research/ Pre-Clinical Phase 1 Phase 2 Phase 3 Market AVONEX Multiple sclerosis RITUXAN NHL & CLL (Ph. 3) TYSABRI Multiple sclerosis Galiximab NHL BG-12 Multiple sclerosis Lumiliximab CLL RITUXAN / Ocrelizumab Multiple sclerosis Volociximab Solid tumors Daclizumab Multiple sclerosis HSP90 Inhibitor Solid tumors CDP323 Multiple sclerosis Anti-IGF-1R Solid tumors BIIB014 Parkinson s disease Anti-Cripto-DM4 Solid tumors Neublastin Pain TYSABRI Onco Anti-LINGO MS RAF Inhibitor Solid tumors BART AD Anti-Fn14 Solid tumors BIIB014 Backup PD IMMUNOLOGY CARDIOPULMONARY & EMERGING AREAS RITUXAN Rheumatoid arthritis Lixivaptan Heart Failure / Hyponatremia FUMADERM Psoriasis ADENTRI (IV) Acute Heart Failure TYSABRI Crohn s disease ADENTRI (oral) Chronic Heart Failure RITUXAN Lupus nephritis Aviptadil PAH Ocrelizumab (2 nd gen. α-cd20) Rheumatoid arthritis Long Acting rfactor IX Hemophilia B Baminercept alpha Rheumatoid arthritis Long Acting rfactor VIII Hem A Anti-CD40L SLE Anti-TWEAK RA Internally Sourced Externally sourced Page 14 July 22, 2008

15 Late Stage Programs in Registrational Trials Program BG-12 Galiximab Lixivaptan Lumiliximab Adentri (expected H2 08) Indication MS (oral) NHL Hyponatremia/CHF CLL CHF Page 15 July 22, 2008

16 Pipeline Data Readouts Expected for 2008 Program Baminercept alfa RA BIIB14 Parkinson s Disease rfactor IX Hemophilia Hsp90i GI Stromal Tumors RITUXAN CLL Stage Phase 2b Phase 2a Phase 1/2 Phase 1/2 Phase 3 Page 16 July 22, 2008

17 Paul Clancy Chief Financial Officer Financial Performance

18 Q Financial Performance Revenue growth of 28% year over year GAAP and non-gaap diluted EPS growth of 30% year over year Raising 2008 financial guidance On track for achieving 2010 goals Note: See Table 3 from Biogen Idec s Q2 08 earnings press release or the end of this presentation for reconciliation of GAAP diluted EPS to non-gaap diluted EPS. Page 18 July 22, 2008

19 AVONEX & RITUXAN Revenue Growth AVONEX RITUXAN +14% Y/Y +12% Y/Y 500 $462 $455 $503 $536 $527 $700 $600 $582 $572 $596 $605 $ $ $ % Y/Y 200 $300 $231 $235 $254 $247 $279 $ $100 0 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 $0 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 AVONEX Worldwide Sales (in $ millions) BIIB Revenue (in $ millions) US Net Sales (in $ millions) Page 19 July 22, 2008

20 Robust Products Revenue to Biogen Idec 2010 Commercial Goals $2,400 2,109 $2,000 $1,600 1,417 1,543 1,707 1,868 Expand into new geographic regions Maintain competitive position in the ABCR market $ Millions $1,200 $800 $400 $ , E Based on Q2-08 Run Rate Increase penetration in TNF-IR RA File & launch in DMARD-IR RA Expand label into other autoimmune indications 100,000 patients by year-end 2010 AVONEX RITUXAN TYSABRI Page 20 July 22, 2008

21 Q Financial Worksheet Revenues ($ millions) Q Q %Δ Notes AVONEX U.S. Revenues $270 $306 13% AVONEX International Revenues $192 $221 15% Total AVONEX Sales $462 $527 14% TYSABRI Revenue to BIIB $48 $ % Total Product Sales $519 $684 32% Revenue from Unconsolidated Joint Business [RITUXAN ] $231 $279 21% Royalties $23 $28 22% Total Revenue $773 $993 28% Page 21 July 22, 2008

22 Q Financial Worksheet Costs and Expenses ($ millions) Q Q %Δ Notes Non-GAAP and GAAP Cost of Sales 1 $84 $92 10% % of Product Sales 16.2% 13.5% Non-GAAP R&D Expenses 1 $215 $249 16% % of Total Revenues 27.8% 25.1% GAAP R&D Expenses $218 $252 Non-GAAP SG&A Expenses 1 $198 $242 22% % of Total Revenues 25.6% 24.4% GAAP SG&A Expenses $204 $246 Collaboration Profit (Loss) Sharing [TYSABRI ] ($0.1) $33.4 na 1. Please see the end of this presentation for a reconciliation of our GAAP to non-gaap results. Page 22 July 22, 2008

23 Q Financial Worksheet Other Selected Financials ($ millions except EPS) Q Q %Δ Notes Other income (expense), net 1 $32 ($7) na Non-GAAP Tax Rate % 27.3% GAAP Tax Rate % 29.1% Non-GAAP Net Income 1 $240 $269 12% GAAP Net Income $186 $207 11% Weighted average shares used in calculating diluted EPS (millions) Non-GAAP EPS 1 $0.70 $ % GAAP EPS 1 $0.54 $ % 1. Please see the end of this presentation for a reconciliation of our GAAP to non-gaap results. Page 23 July 22, 2008

24 Financial Guidance Raising Guidance for Full Year 2008 Total revenue growth in the mid-20% range over 2007 revenues Operating margins similar to previous guidance; Total GAAP and non-gaap R&D and SG&A expenses to be in the range of $2 billion Non-GAAP tax rate expected to be 28%-30%; GAAP tax rate expected to be 31%-33% The difference between the GAAP and non-gaap tax rate is a result of the cumulative effects of the reconciliation items as detailed in Table 3 within this presentation Non-GAAP diluted EPS at or above $3.50; GAAP diluted EPS at or above $2.51 Consistent with goal of 20% non-gaap EPS CAGR through 2010 Capital expenditures of $270 to $290 million Note: See Table 3 from Biogen Idec s Q2 08 earnings press release or the end of this presentation for reconciliation of our GAAP to non-gaap guidance. Page 24 July 22, 2008

25 Questions & Answers

26 Page 26 July 22, 2008 GAAP to non-gaap Reconciliation Diluted EPS and Net Income: Q2 2008

27 GAAP to non-gaap Reconciliation Diluted EPS and Net Income: Five Year History Condensed Consolidated Statements of Income Operating Basis FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 GAAP diluted EPS (4.92) Adjustment to net income (see below ) Effect of FAS128 and EITF (0.05) Non-GAAP diluted EPS GAAP Net Income ($M) (875.1) Revenue Pre-merger Biogen product, royalty and corporate partner revenue 1, COGS Fair value step up of inventory acquired from Biogen and Fumapharm COGS Pre-merger Biogen cost of sales (179.2) COGS Royalties related to Corixa COGS Amevive divesture R&D Pre-merger Biogen net R&D (301.1) R&D Severance and restructuring R&D Sale of plant SG&A Pre-merger Biogen SG&A (346.7) SG&A Merger related and purchase accounting costs SG&A Severance and restructuring Amortization of intangible assets primarily related to Biogen merger In-process R&D related to the Biogen Idec merger, acquisitions of Conforma, Syntonix, and Fumapharm, and consolidation of Cardiokine, Neurimmune and Escoubloc Loss/(gain) on settlement of license agreements w ith Fumedica and Fumapharm (6.1) - (Gain)/loss on sale of long lived assets (16.5) (0.4) Other income, net: Pre-merger Biogen Other income, net: Consolidation of Cardiokine and Neurimmune and gain on sale of long lived assets (72.3) Write dow n of investments Charitable donations and legal settlements Income taxes Effect of reconciling items (205.8) (195.4) (145.2) (70.3) (65.5) Stock option expense Non-GAAP Net Income Notes: The non-gaap financial measures presented in this table are utilized by Biogen Idec management to gain an understanding of the comparative financial performance of the Company. Our non- GAAP financial measures are defined as reported, or GAAP, values excluding (1) purchase accounting and merger-related adjustments, (2) stock option expense and the cumulative effect of an accounting change relating to the initial adoption of SFAS No. 123R and (3) other items. Our management uses these non-gaap financial measures to establish financial goals and to gain an understanding of the comparative financial performance of the Company from year to year and quarter to quarter. Accordingly, we believe investors understanding of the Company s financial performance is enhanced as a result of our disclosing these non-gaap financial measures. Non-GAAP net income and non-gaap diluted EPS should not be viewed in isolation or as a substitute for reported, or GAAP, net income and diluted EPS. The GAAP figures reflect: * 2004 and beyond the combined Biogen Idec * 2003 a full year of IDEC Pharmaceuticals and 7 weeks of the former Biogen, Inc. (for the period 11/13/03 through 12/31/03) Numbers may not foot due to rounding. Source: Biogen Idec Annual Reports, 10-K filings and earnings press releases (FY ). Page 27 July 22, 2008