Bullish Biogen Idec CEO Forecasts 15 Percent Revenue Growth While Fending Off Talk of Icahn Plans
Riding a year of solid earnings and strong stock market gains, Biogen Idec CEO James Mullen today provided an upbeat outlook for the next few years, basically saying the good times for the biotech company were far from over. Foreseeing vigorous international expansion and a healthy pipeline that would enable Biogen (NASDAQ: BIIB) to expand into new markets, Mullen set the goal of achieving at least 15 percent annual growth in revenues through 2010. At the same time, he fended off talk of Carl Icahn’s recent purchase of Biogen stock.
“There’s no updates there,” he said in response to a question about Icahn after his presentation at the Thomas Weisel Partners Healthcare Conference this morning in Boston. “I have conversations with lots of investors all the time…It’s not policy really to try to then describe what those conversations are and what their investment thesis is. If Carl chooses to describe his investment thesis, I’ll leave that to him.”
Mullen was more than willing to share his positive outlook about Biogen, however. In advance of the meeting, the company reiterated the increased 2007 targets it announced in late July, when it predicted revenue growth of 16 to 18 percent for the year over its 2006 figures and earnings growth of at least that much.
At today’s conference Mullen then looked ahead to the next three years, setting the targets of 15 percent compounded annual topline growth in revenues, and 20 percent bottom line growth through 2010. The key items Mullen highlighted as evidence for his rosy forecast included:
—Solid continued performance of key existing drugs, including Biogen’s multiple sclerosis treatment Avonex, which had sales of $1.7 billion last year.
—Growth of Biogen’s international business from less than a third of sales today to more than 40 percent by 2010.
—Expansion of the cancer treatment Rituxan (which is jointly marketed by Biogen and Genentech in the U.S.) into autoimmune diseases.
—A bullish future for Tysabri, an MS treatment that was pulled from the market months after its 2004 launch over safety concerns. The drug was reintroduced last year, and is going strong, according to Mullen. “This has the ability to bring a whole new set of patients back into this marketplace,” he said, later adding, “We think that’s going to become the number one program in MS.”
—A strong pipeline that includes 15 products in Phase 2 trials or beyond that address both existing and new markets, including: MS, neuropathic pain, Parkinson’s disease, lupus, rheumatoid arthritis, congestive heart failure, and hemophilia. “We believe that the pipeline we’ve now assembled and can move forward with reasonable industry success rate can continue to propel that growth beyond 2010,” Mullen said.
It wasn’t until the Question & Answer period that the subject of Carl Icahn came up. Earlier this year, Icahn purchased nearly 1 percent of Biogen stock and last month the Federal Trade Commission granted approval for him to increase that stake. Speculation has been rampant that the famed investor and corporate raider sees Biogen as undervalued and might try to force a sale to a major pharmaceutical maker.
Today’s questioner didn’t even mention Icahn by name, but only asked only about Mullen’s “conversations with your new shareholder.”
“I presume you’re talking about Carl Icahn,” Mullen replied. He then issued his remark about letting Icahn speak for himself.
Biogen’s shares were up $3.30 (more than 5 percent) to $66.17 in early trading this morning.