The world’s largest maker of medicines for multiple sclerosis had about $3.1 billion in cash and equivalents at the end of 2011, and will use it for business development and rewarding shareholders through buybacks and, potentially, a dividend, Clancy said today in a telephone interview.
“We always get this question as either/or,” Clancy said. “The reality is it’s a mixture of all, potentially.” A dividend, he said, is a “longer-term” possibility.
Biogen, based in Weston, Massachusetts, has been seeking deals with companies in earlier stages of drug development to build out its pipeline. The drugmaker has therapies for MS, hemophilia and amyotrophic lateral sclerosis in late-stage trials, and this year expects to file for marketing approval of its first pill for MS.
Biogen rose 1.2 percent to $117.95 at the close of New York trading. The shares have gained 80 percent in the last 12 months.
Biogen will spend as much as 25 percent of 2012 revenue on research and development to support those programs and others, the company said today in a statement. That’s higher than the 23 percent of sales estimated by analysts, said Mark Schoenebaum of ISI Group Inc. in New York. The research spending led Biogen to forecast 2012 earnings that were less than analysts estimated.
“It’s a very high-class problem,” Clancy said. “We just happen to have right now a very robust late-stage pipeline. It’s a great position to be in.”
Biogen said in October it would collaborate with Portola Pharmaceuticals Inc. on medicines for autoimmune and inflammatory diseases, in a deal worth $45 million upfront and $508.5 million in potential milestone payments. Earlier this month, Biogen partnered with Isis Pharmaceuticals Inc. (ISIS) on a program for spinal muscular atrophy, paying $29 million upfront with an additional $270 million possible.
The company said today that 2012 earnings, excluding some items, will be $6.10 to $6.20 a share. Twenty-four analysts surveyed by Bloomberg had estimated profit on that basis of $6.31 a share, on average. Revenue will grow in the “low to mid-single digits,” Biogen said.
Net income in the fourth quarter rose 25 percent to $300.2 million, or $1.22 a share, Biogen said.
Adjusted for some items, profit of $1.51 a share topped analysts’ average $1.49 estimate. Revenue rose 8.8 percent to $1.33 billion, helped by an 8 percent increase in sales of the top-selling MS drug Avonex, to $703 million, and an 11 percent increase in revenue from Tysabri, also used to treat the condition, to $269 million.
Thousand Oaks, California-based Amgen, the world’s largest biotechnology company, started paying a dividend last year for the first time. Biogen is the third-largest biotechnology company by revenue, after Gilead Sciences Inc. (GILD) of Foster City, California.
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