Biogen Idec records lower 1st-quarter profit on charges for investment, health care reform

Biogen Idec 1Q profit falls on charges

CAMBRIDGE, Mass. — Biogen Idec Inc. said Tuesday that its first-quarter profit fell 11 percent due to impairment charges related to an investment in another company, and a charge related to the recently passed health care reform law.

Biogen said its profit decreased to $217.4 million, or 80 cents per share, from $244 million, or 84 cents per share, in the same quarter a year ago. Excluding one-time costs, the company said it earned $1.08 per share.

Revenue increased 7 percent to $1.11 billion from $1.04 billion due to greater sales of the company’s treatments for multiple sclerosis.

Analysts expected profit of $1.13 per share and $1.12 billion in revenue, according to a Thomson Reuters survey.

Biogen took a $14 million charge during the quarter connected to its investment in AVEO Pharmaceuticals, which went public in March. It also reported a $13 million charge due to provisions of the health care overhaul. The law gives the government a larger discount on drugs for Medicaid patients, which will reduce revenue for Biogen. The law also extended rebates to managed care organizations that dispense drugs to Medicaid recipients, and made more health care facilities eligible for a prescription drug discount program.

The company said product sales rose 12 percent to $824.2 million for the quarter. Biogen’s shares of revenue from the multiple sclerosis drug Tysabri rose 32 percent to $219 million, and revenue from an older MS drug, Avonex, grew 7 percent to $593 million. Revenue from the cancer drug Rituxan, which Biogen markets through a partnership with Roche AG’s Genentech business, slipped 9 percent to $257 million.

A total of 50,300 patients were on Tysabri at the end of March, compared with 48,800 at the end of the fourth quarter.

Biogen markets Tysabri through a partnership with Irish drugmaker Elan Corp. PLC. It said total sales of Tysabri rose 28 percent to $292 million in the quarter.

In afternoon trading, Biogen stock lost 87 cents to $53.92.