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Biogen Idec Posts Quarterly Loss of $991 Million on Merger Expenses

The biotech company's results are hurt by an $833-million write- down on research and development projects.

March 03, 2004|Denise Gellene | Times Staff Writer

Biogen Idec Inc., releasing its first quarterly results since it was formed last fall in the combination of two biotech firms, on Tuesday reported a fourth-quarter loss because of merger-related expenses.

Biogen Idec reported a net loss of $991 million, or $4.03 a share, for the last three months of 2003. The results were hurt by an $833-million write-down on research and development projects -- a common occurrence when pharmaceutical firms merge.

Revenue was $300 million in the fourth quarter, driven by an 11% gain in sales of Rituxan, a cancer drug.

Biogen Idec was formed in November by the merger of Biogen Inc. of Cambridge, Mass., and Idec Pharmaceuticals Corp. of San Diego, which developed Rituxan. The combined company is based in Cambridge.

For the year, Biogen Idec had a net loss of $875 million, or $4.92 a share. Revenue in 2003 was $679 million.

The 2003 results reflect Idec's performance for the entire year and Biogen's performance for the last six weeks of 2003.

If the companies had been combined for all of the fourth quarter, net income would have been $87.8 million, or 24 cents a share, excluding all one-time charges, including those related to the merger. Revenue for the companies in the quarter would have been $491 million.

The company said it expected net profit in 2004 of about $1.50 a share, in line with Wall Street's expectations.

"We're off to a good start," Chief Financial Officer Peter N. Kellogg said.

The company employs about 4,000 people, Kellogg said. A percentage of workers "in the low single-digit range" lost jobs as a result of the merger, he said.

However, he said new hiring in production and marketing would add to the company's workforce this year.

In a conference call with analysts, the company revealed it wrote off $28 million of product inventory in the fourth quarter, in part because of production glitches related to Avonex, a drug developed by Biogen to treat multiple sclerosis and a key product for the combined company. The company said if the problems were not resolved, supplies of Avonex could be interrupted.

Kellogg said in an interview that about half of the $28-million write-down was related to Avonex.

Biogen Idec's stock gained $1.53 to $57.64 in Nasdaq trading. The results were reported after the market close.

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