Biogen Idec's recent $510 million collaboration deal with Acorda bit deeply into its quarterly profits. Biogen, one of the world's most successful biotech companies, says the deal drove its R&D expenses up 65 percent in the second quarter, driving a 30 percent slide in profits.
Biogen paid Acorda $110 million upfront for the rights to market its MS pill Fampridine SR outside the U.S. As a result, net income slid to $144.9 million. That amounted to 49 cents a share compared to 70 cents for the same period a year ago.
Biogen also announced that the Nobel prize-winning Phillip Sharp, who co-founded the company, has retired from the board of directors. Sharp has been at Biogen through its long, 31-year march from a research and development shop to an established biotech with billions of dollars in annual revenue. And analysts were left puzzling out how his departure might affect Biogen's future. Carl Icahn recently won two board seats in a long-running war aimed at gaining control of the company.
Revenue, meanwhile, jumped 10 percent to $1.1 billion, with a 27 percent increase in revenue from sales of Tysabri. Analysts are under no illusion just how critical Tysabri is to the company. Tysabri returned to the market three years ago this month after a 17-month suspension triggered by its link to PML, a lethal viral brain disease.
"The key to Biogen's near term growth will be the performance of Tysabri," Geoff Meacham, an analyst with JPMorgan, tells Bloomberg.