Profits fall for Elan partner Biogen

US drug group Biogen Idec reported a 26 per cent fall in quarterly net profit due to merger and severance charges.

The company, which in February suspended sales of multiple sclerosis drug Tysabri, which it developed in association with Irish group Elan, due to safety concerns, said third-quarter net income fell to $27.2 million (€22.54 million), or 8 cents per share, from $36.8 million, or 10 cents per share, in the year-ago quarter, which also included merger-related charges.

Excluding $136 million in charges, the biotechnology company earned 36 cents a share, falling short of the average analyst estimate of 43 cents a share.

The company and Elan earlier this month said they had completed evaluating the safety of Tysabri, which has been linked to a sometimes fatal brain infection.

Biogen's revenue for the quarter rose 10 per cent to $543 million, driven by older MS drug, Avonex, which saw sales grow 8 per cent to $375 million for the quarter.

Biogen also reaped $182 million in co-promotion profit from Rituxan, the non-Hodgkin's lymphoma drug it shares with Genentech. The partners were this week granted priority review of Rituxan as a treatment of certain types of non-Hodgkin's Lymphoa that are currently untreatable.

Looking ahead, Biogen projected adjusted earnings per share, excluding the impact of stock option expensing, of $1.95 to $2.10 per share for 2006.

For the third quarter, Biogen took charges of about $25 million, or 5 cents a share, related to Tysabri's suspension. First and second-quarter charges for the drug totalled $43.5 million.

Biogen's shares have fallen about 40 per cent so far this year, compared with a rise of around 16 per cent in the American Stock Exchange Biotech Index .