Three years ago, Biogen Idec Inc. reported some stunningly bad news. It was yanking Tysabri, its promising multiple sclerosis drug, off the market after it was linked to a potentially fatal brain disease. Biogen Idec's shares lost nearly half their value.
But Biogen Idec reintroduced Tysabri in 2006 — with stricter prescription guidelines. And defying skeptics, Tysabri has started to look like a potential blockbuster again. Last year alone, the drug generated nearly $230 million in sales for Biogen Idec, up from $35.8 million in 2006, and helped reinvigorate Biogen Idec's revenues and profits. By the end of 2010, Biogen Idec predicts 100,000 patients will be taking Tysabri, up from 21,000 at the end of last year.
"That's kind of our growth driver right now," says Biogen Idec chief financial officer Paul Clancy. "To enjoy the good times, you have to go through some of the bad times."
At the same time, Biogen Idec has continued to find ways to squeeze more revenue out of its two stalwart drugs — Avonex (aimed at multiple sclerosis) and Rituxan (for non-Hodgkin lymphoma, a type of cancer). Avonex sales rose 9 percent to $1.9 billion. Biogen's share of Rituxan revenue increased 14 percent to $926 million. Part of the reason: Biogen Idec won permission to market Rituxan for another illness, rheumatoid arthritis, in 2006. And Biogen Idec raised its prices for Avonex three times in the United States last year, according to Wachovia analyst George Farmer.
In addition, Biogen Idec has stepped up its marketing efforts abroad. Product sales climbed 13 percent in the United States last year but surged 31 percent in the rest of the world. By 2010, the company expects foreign sales to account for two-fifths of its revenue.
"A lot of people miss the importance of the international business," Clancy says.
At the same time, Biogen Idec faces a brewing shareholder battle with billionaire investor Carl Icahn, who has nominated three people to sit on Biogen Idec's board. At Icahn's urging, Biogen Idec unsuccessfully searched for a buyer late last year, but Icahn complained the process was "flawed" and filed suit to try to obtain records. Biogen Idec insisted its process was thorough and is fighting Icahn's efforts.
Regardless, Clancy says, Icahn's move is puzzling because Biogen Idec has posted good returns. Biogen Idec predicted revenue will increase 20 percent this year.
"Shareholder investors typically go after struggling or distressed companies," Clancy says. "Our business is very strong."
Todd Wallack can be reached at email@example.com.