Biotech Values

[DewDiligence]

BIIB lays off 17% of workforce (650 people):

[They also plan to sell the Amevive product, which has been a bust.]

http://biz.yahoo.com/bw/050908/85846.html?.v=1
http://biz.yahoo.com/bw/050908/85853.html?.v=1

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Biogen Idec Announces Strategic Initiative to Drive Long-Term Growth and Accelerate Business Development Activities

Thursday September 8, 4:01 pm ET

Plan Expected to Deliver Annualized Savings of $200 million to $300 million

Includes Workforce Reduction of 17%

Business Development Commitment Increased to $200 Million Annually

CAMBRIDGE, Mass. & SAN DIEGO--(BUSINESS WIRE)--Sept. 8, 2005-- Biogen Idec (NASDAQ: BIIB - News) today announced a comprehensive strategic plan to position the company for long-term growth. The plan builds on the continuing strength of the core products and expected near-term developments. The plan has three principal elements:

1. Reducing operating expenses and enhancing economic flexibility by recalibrating Biogen Idec's asset base, geographic site missions, staffing levels and business processes;

2. Committing significant additional capital to external business development and research opportunities; and

3. Changing Biogen Idec's organizational culture to enhance innovation and support the first two elements of the plan.

"In the second quarter, Biogen Idec reported a significant increase in earnings, driven in large part by the strong performance of our AVONEX® (Interferon beta-1a) and RITUXAN® (rituximab) products. While Biogen Idec is well poised for near-term success, we believe that to continue to deliver for patients, employees, and shareholders requires a bold reshaping of the company in an effort to generate high-level, sustainable growth beyond the current decade," said James C. Mullen, Biogen Idec's President and Chief Executive Officer. "The first step in executing our new plan is to discontinue activities and programs that are unlikely to create significant value and reallocate our intellectual and financial resources to growth projects."

The strategic plan announced today will build on several expected near-term developments, including:

• Continuing to deliver on core business strengths, including meeting the needs of the multiple sclerosis (MS) community with AVONEX, the world's leading MS treatment, and the needs of B-cell non-Hodgkin's lymphomas (NHL) patients with RITUXAN, the world's leading cancer therapeutic;
• Discussions with regulatory authorities regarding the return of TYSABRI® (natalizumab) for people with MS in the United States (U.S.) and its potential launch in Europe;
• The launch of RITUXAN in rheumatoid arthritis (RA) in the U.S.; and
• The launch of PANACLAR(TM), known as BG-12, for psoriasis patients in Germany.

Enhanced Economic Flexibility

Reflecting a comprehensive review of its organizational structure, geographic site missions, asset base, staffing levels and business processes, Biogen Idec has taken and plans to take a series of actions aimed at reducing annual operating expenses by $200 million to $300 million.

• Reduction of staffing levels - In conjunction with the plan announced today, the company will consolidate or eliminate certain internal management layers and staff functions, resulting in the reduction of its workforce by approximately 17%, or approximately 650 positions worldwide. These adjustments will take place across company functions, departments and sites, and are expected to be substantially implemented by year-end. Biogen Idec expects to take a pre-tax charge of between $30 million to $40 million related to severance and associated staff restructuring costs.
• Divestment of assets – The company will seek to divest several non-core assets, including the NICO clinical manufacturing facility in San Diego, CA, property in Oceanside, CA, as well as its AMEVIVE® (alefacept) product, which had revenues of $43 million in 2004. As they occur, Biogen Idec will provide gain and loss financial information on these divestures.

Acceleration of Growth Through External Opportunities:

A key element of the strategic plan is to accelerate long-term growth through increased business development and research activities. Biogen Idec expects that the increased economic flexibility will permit it to earmark approximately $200 million a year for business development and external research opportunities starting in 2006. By comparison, the company had earmarked approximately $50 million for business development in 2005.

Biogen Idec will consider a range of business opportunities, including the in-licensing of, and formation of collaborations around, product opportunities and the acquisition of products and companies, as well as expanding collaborative research with academic institutions and teaching hospitals. Biogen Idec believes that these corporate initiatives will enable it to significantly expand the number of potential products in its pipeline in subsequent years.

Biogen Idec has cash and cash equivalents (short- and long-term) of approximately $1.8 billion.

Organizational and Cultural Transformation

Driving future growth through business development activities such as in-licensing, collaborations and acquisitions will require certain organizational and cultural changes. This includes:

• Modifying internal discovery and support infrastructure to maximize external opportunities;
• Streamlining geographic site missions to leverage the Oncology Center of Excellence in San Diego, CA, the Neurology Center of Excellence in Cambridge, MA, and the manufacturing expertise and capacity in Research Triangle Park (RTP), NC;
• Increasing the company's capacity for external research and development and
• Attracting, retaining, and rewarding top talent.

About Biogen Idec

Biogen Idec creates new standards of care in oncology, neurology and immunology. As a global leader in the development, manufacturing, and commercialization of novel therapies, Biogen Idec transforms scientific discoveries into advances in human healthcare. Total revenues in 2004 exceeded $2.2 billion. With patients in more than 90 countries, two blockbuster products lead Biogen Idec's product lineup:

RITUXAN was discovered by Biogen Idec for the treatment of certain B-cell non-Hodgkin's lymphomas (NHL). The company co-promotes the product in the United States with Genentech, Inc. In 2004, RITUXAN generated U.S. net sales of $1.57 billion of which Biogen Idec recorded $469.5 million as co-promotion profits.

AVONEX is indicated for the treatment of patients with relapsing forms of MS and is the most prescribed product in MS worldwide with close to 130,000 patients on therapy. In 2004, sales of AVONEX generated worldwide revenues of $1.42 billion.

The company has two other marketed products: ZEVALIN® (Ibritumomab tiuxetan) and AMEVIVE which were launched in 2002 and 2003, respectively.

In November 2004, Biogen Idec, in partnership with Elan Corporation plc., received FDA approval for TYSABRI. The companies voluntarily suspended the marketing and clinical dosing of TYSABRI on February 28, 2005 based on reports of progressive multifocal leukoencephalopathy (PML), a rare and potentially fatal, demyelinating disease of the central nervous system. For product labeling, press releases and additional information about the company, please visit www.biogenidec.com.
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