Biogen Says Royalty Revenue May Drop

Biogen Inc., maker of the top-selling multiple sclerosis drug Avonex, said patent expirations and a dispute with Schering-Plough Corp. may decrease royalty revenue by almost half this year. The decrease is already reflected in Biogen’s January forecast of earnings of 45 to 46 cents a share for the first quarter and $1.90 a share for all of 2001, the company said. Royalty revenue in 2001 will be $85 million to $95 million, a drop from $165 million last year, Biogen said. Schering-Plough stopped paying royalties to Biogen on its Interferon-alpha compound in January, when Biogen’s European patent on the drug expired, a Biogen spokeswoman said. “We all knew about this risk factor, but the magnitude of change in royalty was higher than expected,” said Elise Wang, an analyst with UBS Warburg. For Biogen’s earnings forecast to remain the same, either Avonex sales will have to be higher than anticipated, or the company will have to “cut back research and development expenditures,” Wang said. Shares of Cambridge, Mass.-based Biogen fell as low as $62.88 in trading after the close of U.S. markets, after closing at $65.06, up 75 cents, on Nasdaq.