Notes on Biogen shareholder meeting, 19 June 1998, 10AM:
Jim Vincent started meeting off by stating that on Biogen's 20th Anniversary, the company is the oldest independent Biotech. There are only 5 independent biotechs that develop, manufacture and market their own products and Biogen is one of them.
"After 20 years we are gaining momentum. Not plateauing or anything else. We are gaining momentum."
"Those of us in the company feel you ain't seen nothing yet."
The nominated directors were then elected.
Jim Tobin then began an overview of the state of the company and its financial operation and also gave a brief introduction to the pipeline:
14% of revenues goes to cost-of-goods-sold, 17% to SG&A, 69% goes right to pre-tax profit. (Pretty impressive).
Avonex: has 56% of market share (largest share yet) and the market is growing as a whole. There are nearly 45,000 patients now on Avonex and sales have been accelerating since the beginning of the year. The ramp up in Europe has gained "escape velocity" and Europe is now profitable. Customer service calls have been a leading indicator and they are at an all-time high.
Royalty income looks to be set to grow considerably. The outlook had been seen to be iffy on this front after 2002. With the recent alpha interferon patent litigation amicably settled, and with Schering Plough now launching Intron A into the Hepatitis C market, Intron A royalties will probably provide a steady if not growing royalty income. VLA4 is a future royalty stream component - Biogen will receive 35%-40% of Merck profits gained from VLA-4 sales. Merck has begun Phase II trials in Asthma patients (this is extremely fast action here). An oral delivery method is being worked on.
VLA-4 will also be tested on MS and other indications.
LFA3TIP is entering Phase IIb clinicals for severe psoriasis patients - the 200 patient trial will yield results in Q2 of 1999. The Phase IIa study showed encouraging efficacy data even though the trial was not designed to show efficacy. The target psoriasis market is roughly 250,000 patients - there are roughly 1.4 million total psoriasis patients in the US.
5C8 is in the clinic on a host of indications. Phase II trials for Lupus and ITP, transplants, etc. The target lupus population is the roughly 70,000 lupus patients that currently develop nephritis - there are no real treatment options here and current treatments are no better than the disease itself (described as a "Hobson's choice" for the patient). The enthusiasm for 5C8 was dignified but extreme. Biogen said they hold a very strong patent position here and that some very large pharmaceutical companies had taken a long look at 5C8 before deciding that Biogen's patent position was too strong to challenge - they said Idec Pharmaceutical's travelling down the CD40L path would be an expensive trip.
CVT-124 is going into Phase IIb trials for congestive heart failure - a condition where a weakened heart is not providing enough blood flow and the kidney's, seeing this, assume the body is hemorrhaging and retains fluids, thereby causing congestion and putting more strain on the heart and renewing the cycle until the heart eventually fails. The Phase IIa trials showed promise.
Curagen and Ontogeny partnerships were both described as promising early-stage ventures that held great promise.
It was a well-run meeting. Biogen continues to impress me as the best-managed company in biotech and perhaps pharmaceuticals as well.
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