Biogen Inc (BIIB) 2002 Q3 法說會逐字稿

Good morning.

I'd like to welcome everyone to the Biogen 3rd Quarter 2002 Earnings Conference Call.

All lines have been placed on mute.

After the speakers' remarks, there will be a question answer answer period.

If you would like to answer a question during this time, police star and the number one on your touch-tone phone.

If you would like to withdraw your question, press the pound key.

Thank you.

Miss Woo, you may begin your conference.

Welcome to our 1st Quarter 2002 Results Conference Call.

Today on the call, we have James Mullen, Chairman and CEO of Biogen, Peter Kellogg, our CFO and Executive Vice President, Finance, myself, Elizabeth Woo, Director of Investors Relations, and joining us for questions and answers will be Burt Adelman, Executive Vice President, Research and Development.

Let me review the Safe Harbor Statement.

Comments made in this conference call may contain forward-looking statements regarding future financial performance, including anticipated levels of revenues, product sales, royalties, expenses, and EPS, as well as statements regarding competition.

Such statements are based on management's current expectations and are subject to risks and uncertainties which could cause actual results to differ materially.

In particular, careful consideration should be given to the risks and uncertainties we have filed with the S.E.C., including the outlook sections of the MD and A in the company's most recently filed forms 10-Q and 10-K.

The company does not undertake any obligation to publicly update any forward-looking statements.

Peter will now go over the numbers.

Thank you.

Welcome to the Biogen call.

I'd like to begin with a briefly review of our overall P&L results for Q3 and then come back and discuss the performance in the U.S. and international businesses separately.

I'll then wrap up with a discussion of guidance for 2002.

As you've seen in the press release ow Q3 reported EPS is 28 cents.

Excluding non-recurring items, Q3 operating EPS was 37 cents oer share.

This operating result is towards the high end of our guidance range of 32 cents to 38 cents provided on our July 18th conference call.

Overall, a strong quarter and good results on the litigation front.

Now let's walk through the P&L lines.

Product revenue was $262 million, a 5% increase versus prior year and a 4% increase versus prior quarter.

Now, just for perspective, year to date, Avonex has grown 9% versus prior year.

We're right on track to deliver the 6 to 10% worldwide growth we've indicated in our guidance.

Royalties were $27 billion, a 67% increase versus last year and 43% increases versus Q2.

Our strong performance here is largely due to improving trends of international [Intron-A] sale.

Now, the announcement that came out this morning, was that we have a Schering-Plough settlement, and that relates to the US Alpha-[Interpheron] sales.

And for for Q3, we did not book any royalty revenue for US sales of Alpha-Interpheron products.

Our guidance has been to assume that the payments would not resume in Q3 or Q4 of this year, but would resume in 2003.

That was our previous guidance.

With today's settlement announcement, the good news, is that Schering-Plough has agreed to resume royalty payments on U.S.

Alpha-Interpheron sales as of October 1.

This is one quarter sooner than anticipated in our guidance, and so I'll talk about the favorable financial impact of this outcome when I discuss our updated 2002 guidance.

Moving down the P&L, our cost of sales was $42 million, or about 15% of revenues.

That drives a gross margin of 85%.

This margin is a little lower than our normal 86 to 87% range basically because of business mix.

We've had some great successes in our distributer markets which provides some slightly lower gross margins.

R&D for the quarter was $105 million, that's 36% of revenues and a 33% increase over prior year.

Now, R&D increased 17% sequentially over Q2 or about $15 million.

This is almost entirely due to significant milestone payments based on clinical progress and the payment totaled about $15 million to Elon and ICOS.

We had forecast these and had included them in our guidance, but they do create a bit of a sequential bump in our Q3 R&D.

The key activity drivers in R&D for Q3 were three large Phase 3 Antegren trials, two in multiple sclerosis and one in Crone's.

And in these trials patient accrual is going very well.

We will have accrued almost 3,000 patient on this year in one program.

So the Antegren program is moving ahead very nicely, Also in R&D we had continued dosing of patients in clinical trials for Ameviv and pipeline research and support.

Our SG&A line was $73 million, that's about 25% of revenue and a 23% increase over prior year.

Our SGA investment reflects continued aggressive spending on physician and patient based programs to maintain Avonex's share of voice in the marketplace.

Knowing that there would eventually be new competitors in both the US an Europe market, we've been very proactive in our sales and marketing strategy in the last year and a half.

Our goal was to strike early and define our position in the marketplace.

Last year we increased SG&A spending over 35% versus 2000.

Then, on March 11 this year, we released further funds to further our position in the MS marketplace.

Now, you will note that a larger portion of these funds was spent in Q2 versus Q3, and that's not really one-timers, that's just market timing on the additional patient and physician programs.

Now, finally, we have gradually increased spending preparing for the Ameviv launch,including the addition of most of our sales and marketing management teams for both North America and Europe, and the first round of area business managers in the field.

Things are progressing quite well on that front.

Other income and expense was negative $10 million for the quarter.

This includes the nonoperating charge of $18 million. $8 million of that reflects a writedown of impaired biotech equity securities.

And 10-1/2 million dollars reflects the establishment of a reserve for our loan to targeted genetics.

Now how should you look at this?

As you're aware, most of the bio tech sector experienced a down cycle in 2002.

From time to time in accordance with FAS-115, we review the book and market value of our biotech equity investments and mark the book value down to the fair market value.

In addition, based on a review of a loan to collaborator, we decided to establish reserve due to collectability concerns.

After the writedowns, you may ask how much in equity holdings is left on Biogen's balance sheet.

Well, as a result of these charges, Biogen's ending balance in equity holdings at the end of Q3, it amounted to $5.3 million.

There is only minor exposure in equities going forward.

Our taxes went up $6 million in the quarter, 28% effective tax rate as anticipated.

Our reported EPS was 28 cents per share and our operating EPS was 37 cents per share, once again, this is towards the high end of our guidance range that we provided on our July 18th conference call.

Now let's turn to the sales performance in U.S. and international businesses.

In the United States, product sales were $186 million, 2% growth over prior year, and a 6% growth over Q2.

Throughout Q3, our inventory levels have been very stable at roughly 1-1/2 weeks, so it's clear we're successfully monitoring and managing the channels in the U.S. so there's no inventories to fluctuations.

We haven't seen any upside from the recent approval of Avonex for medicare reimbursement and none is assumed in our full year guidance.

However, there are about 20 to 30,000 medicare-eligable patients, so it is a big opportunity and we hope to gain a good portion of these patients over the next couple of years.

Avonex unit market share, including all channels, no stands in the low 50s as expected.

Jim will provide comments on the U.S. market later.

Turning to the international front, product sales were $75 million, a 15% revenue growth over the same period last year.

Biogen's revenue growth in local currency was 11% since the Euro has strengthened over last year.

Now, there is no real impact yet from expanded label, for mono-symptomatic patients in Europe.

Reimbursement for this indication is now available in Germany and Australia.

We expect the other countries to gain approval early next year.

This really should become a source of improvement in the 2003-2004 time frame.

Now let's turn to the financial guidance for the full year.

For 2002, as you can see, we're on track to deliver operating financial results that are consistent with the guidance which gave you on June 7, before the impact of this Schering-Plough settlement.

Let's review that.

On that basis, this year we still expect worldwide Avonex revenue growth of 6 to 10%, resulting in well over a billion dollars in 2002.

We are also on track to deliver operating EPS in the $1.50 to $1 60 range.

The only change is royalties.

We told you before royalties would be in the 75 to 85 million dollar range.

Based on the performance trends and the positive arbitration outlook which drives the resumption of U.S.

Schering-Plough royalties as of October 1, our royalties in 2002 will just exceed $100 million.

This would add approximately 5 to 7 cents of EPS and leave Biogen at the high end of its $1.50-$1.60 operating EPS guidance range.

In addition as you note in the press release we expect to receive a one-time nonoperating payment in Q4 of something in the range of 45 to $50 million from Schering-Plough from past due royalties.

Just as we don't include the writedowns from equity holdings, as we discussed earlier, the upside from this payment is not included in our operating EPS guidance, nor is the royalty revenue estimate of $100 million.

Importantly, this positive settlement outcome confirms our prior guidance that Schering-Plough US royalties will be paid in 2003 and onward, so no change in our future year outlook.

These Schering-Plough US royalties will continue well on to the future, out towards 2018 or more.

Finally, just a comment on one other topic.

We have no update on the Burlex situation.

When we have final resolution, we will issue a press release immediately.

We will be giving 2003 guidance early next year.

So to wrap up here, from a financial standpoint, we had a very good quarter.

I'll pass it on to Jim Mullen for some other comments.

Good morning.

I'll spend a few minutes and cover some issues and outlook for the next couple of years.

Let me start with the MS franchise and really go back to the quote that I have in the press release, which is Avonex revenues continue to grow, that is a testament to the ability of our sales team to successfully post strong results in an increasingly competitive environment.

The U.S. [rebib] share is held below 5% and I'm basing that on the monthly IMS data, which is visible to most of you folks.

I'm using that now as sort of a touchstone.

Everybody can agree that that's a third party independent source.

We are prepared, Pfizer is coming, they're already in the field, we're tracking their movement quite closely.

We haven't seen anything that we haven't anticipated.

And I just want to remind everybody that Biogen has the number one rate neurology sales force and we have the best customer service and support in the business.

I'm fairly confident that Avonex will remain its number one position and defend the market aggressively.

Further in the MS franchise, the Antegren Phase 3 trials have enrolled very rapidly, they are progressing on track to complete accrual by year-end.

That is a big accomplishment for the joint project teams.

We will have enrolled over 3,000 patients in one year.

It's the only product coming to the market -- I'm sorry, we're the only company with really novel products, follow on products coming to the market, and as I've discussed many times in the past, our franchise strategy is to bring multiple products into these therapeutic categories.

Let me turn to the psoriasis franchise.

We announced in September that the Ameviv resubmission was classified as a class 2 by the FDA, putting us on track for an early 2003 launch.

What remains to be done is a typical cleanup of detail items and post marketing commitments and the label negotiations, so it's a fairly typical kind of process at this stage and I don't see -- haven't seen any new issues.

In the EU, similarly we expect in early 2003 we'll have a launch.

Germany would be first due to ability to free price and then we will begin negotiating reimbursements and rolling it out through the other markets and Europe over the course of the following year.

So we're well prepared to launch Ameviv, we've hit all of our internal milestones, we've passed all the FDA and the EMEA pre-approval inspections, we've got manufactured product in vials ready to go, we've well exceeded our prelaunch goal getting 30,000 names in the psoriasis database.

They are prescription willing.

We've been working hard on the reimbursement issues and also we've been building out the sales force of the marketing group.

Our next product in the psoriasis area is the LFA 1 antagonist.

That's a program we have in collaboration with ICOS.

That has advanced into Phase 2 A trial.

To remind people, that is an oral compound and that could be really a game changing kind of treatment here in psoriasis.

Let me put the broad perspective on how we're trying to manage the business and drive it over into the next few years.

When we look back over the last couple, we've spent a lot of time in the work and investment and money in rebuilding the pipeline.

We've been successful in that.

We've worked hard at driving Ameviv through the trial and the filing.

The progress has been good and we haven't hit any unexpected delays there.

Antegren is moving ahead just as planned.

We are creating positive cash flow in the business even through a phase very heavy investment in research and development and capital expenditures for manufacturing assets.

Over this year and of course over next, as I've said before, I do expect some choppiness in earnings.

Really how the next year unfolds is largely based on what becomes the precise timing of the Ameviv launch and I think when we have better visibility on that, of course we'll be able to provide a better forecast of what we see as 2003 earnings, which is why we've decided to push off the 2003 earnings guidance until early next year.

Taking a little bit longer term vision, our 2005 goal of $2 billion in revenue, I think we're on track for that.

We've built the foundation.

Avonex is doing well, Ameviv is on track.

Antegren is moving as we expected.

The royalties have firmed up, and from those four revenue producing streams, I can envision scenarios where they take us beyond $2 billion, and we're still locking to bring in additional products.

Our strategy is to leverage the current infrastructure with a goal of more in-licensing or acquisition of products and companies.

One example that we talked about earlier this year is the collaboration with CellTech on [CC571].

The Phase 3 data, obviously wasn't as positive as we expected, but that is an example of the kinds of products and the kinds of collaborations that we continue to seek.

We'll also look to leverage our neurology and psoriasis commercial organizations.

We're relatively unique for our size in the biotech space with global presence and direct presence in virtually every European market, and of course, we sit in the sweet spot of biologic's manufacturing.

That creates numberous discussions and opportunities for in-licensing.

For the next year, we'll be focused on continuing to drive for forward the Avonex business, aggressively launch Ameviv and continue to build up the pipeline with the same progress we made this year.

With that, we'll turn it to the question and answer session.

Thank you.

Operator, if you could open the call up to questions and I would ask that you state your name and your company, and folks, if you can just keep to one question and then if you have follow-up questions, if you could re-enter the queue.

Operator, please take the first question.

At this time I would like to remind everyone, in order to ask a question, please press star then the number 1 on your touch-tone phone.

If you wish to withdraw your question, press star then the number two.

We'll pause for a moment to compile the Q&A roster.

Your first question is from Eric Schmidt of SG Cowen.

Good morning.

Congrats on a nice quarter.

My question is on the settlement with Schering-Plough.

It sounds like it was a settlement rather that winning the arbitration.

That makes me think that perhaps the royalty rate going forward isn't quite as high as it was back two years ago or how should we think about that?

This is Jim.

The settlement really, what we have done in the settlement is there were really three issues of significance that were in dispute.

We have settled those issues.

It has no impact on royalty rate going forward.

It does clarify the definitions of what are combination products and all the rest and exactly how the royalties will be calculated, so we'll have the full royalties on Intron and on Intron A, and then on [Rebitron], we'll have royalties on the Intron-A portion of the product, so that's the nature of the settlement.

We came to agreement on the amount due based on the gap between the cessation of royalty payments and I guess January of 2001 and October 1 of this year.

Are there any other IPs that expire in the next year?

Should we assume that 2003 royalties --

Not that I'm wear of, no.

This pretty well cleans it up.

This royalty on Intron-A should extend out -- I think it's 2016, but Peter has one more comment here.

Eric, you asked a broad question.

Obviously we have a portfolio with various different intellectual property bases.

From time to time the rates change a little bit.

Some drop off and some come in in a heavier way.

In general, we've always given guidance that incorporates the total of that portfolio.

The way I look at this is the settlement basically confirms what we've within been talking about going forward so there's no change in that and our guidance has always incorporated the total ins and outs of our portfolio.

So we would be looking at $100 million in royalty next year as well?

Yes.

You're going back a little bit.

Back in the analyst day of November 1, 2001, we gave forward view of royalties.

At that point we said that in 2003 onward, we'd be above $100 million.

So that's right.

But we will give tighter guidance as we give guidance for 2003.

That is what we indicates at that time.

This confirms the basis for all of that.

Thanks.

Next question from Matt Geller of CIBC.

I wanted to ask you about competing with [Rebiv].

What kind of sales points will you I don't how you're competing about it and how have you been doing so well.

Burt is going to answer this question.

Thank you.

I think we will continue our sales force will continue to carry the messages that they have over the past year, which have to date been so successful in defending our franchise that Avonex is the best therapy for the treatment of multiple sclerosis based on the combination of efficacy and safety attributes, once a week dosing, exceedingly low antibody rates.

Data regarding progression of disability which are as good if not better than any of the the data of the competitive products.

The message that our sales force has been delivering will continue to be the core of the message that they continue to deliver around the world.

Thanks.

Next question, Greg Parker of Lehman Brothers.

Morning.

I wonder if you could provide a little more characterization on the Ameviv waiting list, in particular, how you generated the list.

Any data you have on the frequency of visits of the people on the list and historically to dermatologists, what kind of treatments they're getting now.

Hi, this is Peter.

Let me just back up to the benefit of in a sense repeating your question in one direction.

When we talked actually at the analyst's day in November of 2001, as we were preparing to go to the final stretch for Ameviv, we indicated we would try to get a list of patients who had moderate to severe psoriasis ahead of our launch.

This would be probably patients who would be self-identifying themselves through kind of open forums.

We had set a goal at the time that we thought was ah dash us which was to have 30,000 patients self-identified.

We've blown past that number very nicely, so we had a very effective effort.

What we know is who those patient are and we know that they are interested and motivated to understand more about new therapies.

We don't have a whole detailed on them, but we do know that they are people who have self-identification process.

What we do know is that they are people who have self identified with moderate or severe psorosis who have perhaps tried other therapies and are interested in other and new therapies are coming through.

This is a perfect audience for us to be addressing as we get approval and launch.

None of this has been throw an Ameviv associate market launch.

This is an open effort to identify patient who are interested.

I would add to that, I think the enthusiastic response to these efforts demonstrate both the significant knowledge base develop within the dermatology prescriber and patient community about the value of biologics and the treatment of moderate to severe psoriasis, suggesting that there's a lot of enthusiasm for these novel approaches.

Did patients found out about the lists through their dermatologists or through advertising at the dermatologist's office?

Through the dermatologist.

It's also through a website site by the National psoriasis Foundation, which we've sponsored.

There is probably a couple of other modalities, but those are the primary ones.

There are spent websites describing biologics in psoriasis and just providing a lot of information for patients, and I would suggest that any of you who are interested, check them out.

One is psoriasissupport.com and another one stepintomyskin.org.

Any estimate on how many of those patients that would present within a month of approval?

We haven't actually given that kind of guidance, so that will be part of our launch plan which we're keeping quiet on until we actually get the approval and get into the market at this point.

Thanks.

Next question, Jason Kantor of WR Hendrick.

Congratulations for this good quarter.

Thanks for taking my question.

I have two questions related to expenses.

In the past you've given guidance for expenses that are based on percentage of revenue, and now you're increasing the revenue guidance.

Do you stand by the percent expenses, or should we be looking stay numerical value based on your previous guidance?

And also R&D was sequentially much higher.

Do you expect that same level or higher the 4th quarter?

This is Jim.

We have given ranges on those expenses as a percentage of sales.

Mostly I have done that to illustrate how we're thinking about how the business over a period of years, so I don't think it's a very relevant way on a quarter by quarter on any given year.

What I've said on the past on that is while R&D is now about 33% of sales, that we would anticipate that that would decline as the revenues decline.

The absolute spending will go up, but as percentage of sales it would decline into the next few years in the mid-20s, that our sales and marketing or SG&A, we've invested heavily, we'll invest heavily behind Ameviv, so you'll see that go up and start to come down as we reap the benefits from Ameviv revenues.

So that is sort of the general answer.

I think it's probably for relevant to look at them in the absolute numbers.

In terms of the R&D expense for this particular quarter, there is $15 million of milestone payments into collaborators, Elon and ICOS, on progress that we made in the trials and we are accounting for them as operating expenses.

So it's not truly reflective, if you will of the embedded run right there.

It creates a little bit of a bumpy 3rd quarter in terms of the large R&D number.

Q4 won't be as large.

How did you manage getting away on spending so little on SG&A compared to last quarter even when you take out the one-time charge for last quarter?

Yeah, when we -- let me go back to in the end of the -- we at that time kind of built out a strategy on how we wanted to go out and work with the market to make sure established Avonex and positioned Avonex in the MS marketplace.

We stepped up our spending on patient and position programs, and those things are really -- really can be timed anyway you like.

We accelerated those efforts in Q2 a little more heavily to make sure we jumped out ahead of everybody else and established the position we wanted to establish.

That's been quite successful.

Going to Q2 and Q3, the marketing spend in that area is quite high compared to prior years and quite high on an absolute share voice basis in the marketplace.

We didn't repeat that full level of service we had in Q2.

Q3 is a slightly lower level.

With the orphan drug surprise in the 1st quarter, we said on that call, as a matter of fact, that we would put in place our marketing program immediately and that's what we did and that's what you saw flow through in Q2, so we very aggressively got out there and positioned our product appropriately and I think we've shown the benefits of that investment.

I think the investment level right now is -- we're very comfortable with it.

Thank you.

Next question, Carolyn Copithorne of Morgan Stanley.

Thank you.

Let me add my congratulations on a good quarter.

Trying to get a little more background on the Avonex sales, on the U.S first., it's a really strong quarter, you mentioned this was just the timing and the spending on it with some of the programs, has there been any change in the feedback of what we're seeing in the market, maybe acceptance of your message And if there's another wave of this support that you have planned into your strategy, and secondly, in Europe, actually it looked a little weaker than we'd expected, flat versus Q2 and net of FX down a little bit and wanted to know if there was any change there or if it was just seasonal.

This is Peter.

First in the U.S., I think the U.S.

I best characterize as continuing strong trend.

Unfortunately in could you we had that inventory blip.

We're pretty much consistent, I think as Jim mentioned, it's a result of a very strong effort by our commercial organization in the U.S. and it reflects the strength that we have in the marketplace.

In terms of another wave, we don't anticipate anything right away.

We think as we mentioned earlier spending at quite a competitive level.

We know we have a new effort going on with one of our competitors as -- Pfizer comes in.

Everything has been as we anticipated, so we think we're on course there.

In Europe, I think yes, you asked a question about net/net, how do we view the results.

It's not all unusual for us to see Q3 be a little softer in terms of growth rate than Q2 or do you know so we've seen that before.

It is competitive in Europe. [Copaxone] is the brand - or the product that's being introduced and rolling into the European market.

All of the competitors are focused on that.

We would characterize it as very competitive in Germany, they've done pretty well there, so we're holding our own nicely and we've had a good performance in Q3 across the board and I think the sales organization over there is really teed up on jump on the mono-symptomatic opportunity with the label.

As you know, we've increased our sales organization over the last year.

I think that is just now settling in and we'll hopefully start seeing nice results from that, too.

I think the team is quite pumped up and ready to charge ahead.

This is Burt.

Just to add some color to the first part of your question, the emergence of the antibody issue ago recognized by the scientific community juxtaposed with the [champs] early treatment message really brings home the issue that the choice of therapy has to be one that will last for a long time.

The antibody issue says if the value of therapy is short-lived, and I'm trying to treat people earlier, then the logic is to choose a therapeutic modality for which the patient is likely to have the longest period of time from which there is significant clinical value, so I do believe that the champs early treatment message, the increasing recognition of the clinical significance of antibodies, puts a favorable perspective on Avonex as the choice of therapies.

Another way to interpret the numbers, we did respond quickly to the market, we said we'd do that, it was very effective, the organization, we moved the organization exactly as we wanted to and the perceptions out there and we're prepared to do that again if necessary to defend the market.

Can you remind me what the current inventory levels are relative to your targets for Avonex?

In the U.S.?

The the wholesaler channel?

Yes.

About 1-1/2 weeks.

It's been consistent.

We are monitoring that weekly.

We have a very good handle on that at this point.

Thanks.

Next question, Bill Tanner of Leerink Swann.

Good morning.

I'm curious if you could speak to the level of Ameviv sales that would be required to achieve profitability on that program.

This is Peter.

We talked a little about that in the July conference call.

At that time we indicated probably -- first of all we always caution people talking about breaking even next year, would it be profitable because some of it depends on the timing of the launch, and some of the marketing spend is a bit variable.

If we get off to a good launch, we may step up our spending just to drive ahead in the market, or we may recalibrate a bit if we see something we don't anticipate.

You should probably think about break even being below the $100 million range, but high, something we said in the July call, $80 to 100 million range roughly.

Over 100 you'd start to see contribution.

A lot will be dynamic as we go through the year.

The sales and marketing effort in the launch period is not a fixed spend.

It's very much a dynamic market.

Since we have first mover advantage, we're going to be aggressive.

We think it's a great opportunity, we're going to drive ahead, and if we can establish a strong position in the first year, it will be great advantage for us.

Also, on the cost of goods, I know that you made a comment they were a little bit lower and there was a business mix.

If you could elaborate on that.

You're not obviously giving forward guidance yet, but should we be thinking of a return back to more historic levels?

The cost sales does bobble around a little bit because there are different items that affect it so it's never precise.

What happened in Q3 is we had on the international front stronger sales.

We had great successes on the distributor markets really outside of Europe, lateral in America.

So that went we well.

And, when we go through distributer channels we have a slightly lower than we do when we go direct, just because the revenue per unit is slightly lower.

That is the only effect that you saw there.

In any given quarter there, there's always a number of moving parts in terms of exactly what production batch we have, going through the P&L so forth, so it's not such a precise item, but in general we think it will remain in the range it's been in for the Avonex/royalties type business.

As Ameviv comes in, you'll see fluctuation.

We'll incorporate that in our guidance, but it won't be dramatic.

Thank you.

Next question, Martin Auster of SunTrust Robinson Humphrey.

Hi.

How are you doing?

Actually was going to ask about gross margin, as well.

If you could instead maybe quickly outline your Antegren time line, when we could expect to see data points on that.

That would be good.

Thanks.

AODA data points.

I think being given the precise dates, the answer is, as we've discussed in the past for multiple sclerosis, which is the clinical program directly under Biogen's control, we are running two large trials.

As we've discussed with you in the past, it is our intention to have an early submission as a result of an interim analysis in this program.

We probably would put us out into the very beginning of 2005 -- 2004, sorry -- if we and the agency agree that the quality of the outcome at the interim analysis warrants that early submission.

Next question, from Meirav Chovav of UBS Warburg.

My question is on Ameviv.

We are hearing it will require weekly monitoring of T-cells as part of the Ameviv label, A, whether this is accurate and B, if so, how do you think that'll effect the market and the marketing effort and obviously patient acceptance of the drug.

Thanks.

I'll answer that question.

This is Burt.

At the moment, we're in label discussions with the agency, and therefore -- and it's not long until the label will be out as we anticipate approval reasonably soon, so that's the time when everybody will actually find out precisely what the monitoring requirements are.

However, I will say in general, we have always anticipated that there would be some degree of T-cell monitoring associated with the treatment of the use of the drug, and we have been building with ourselves and marketing organization, have been building solutions for prescribers so that this will not be a big problem.

Let me remind you that for many of the current systemic therapies used to treat psoriasis such as Cyclosporin, Mesatrex[8], and Oral Retnoids, there are also monitoring requirements, and physicians have learned how to manage the therapy and deal with the monitoring requirements.

So we don't think it's a big deal.

We don't know precisely what the requirements will be.

We're still working that through with the agency.

But we'll be able to manage that.

Your next question comes from Peter Ginsburg of Piper Jaffrey.

Good morning.

A quick question for Burt or Jim regarding European -- the progress on the regulatory 41 in Europe.

It was our impression that there would be a closed panel coming up this fall.

Has that occurred yet and if it had, how well it went.

If it hasn't, if it's been scheduled yet.

This is Burt.

I'll respond to that.

We're still working our way through the regulatory process in Europe, and that's really all that I'm going to -- going to comment on.

The regulatory process in Europe, sometimes requires -- affords the sponsor the opportunity to make an oral presentation to the CPMP if it's necessary, and if so, we'll certainly do that.

But we're still working our way through that.

Okay.

Thanks.

Next question?

At this time, there are no further questions.

Okay, great.

Thank you.

Thank you for joining us and we'll see you on the call in January.

Thanks for joining us today.

I think we had a good strong quarter.

I think we've alleviated some of the concerns that people had around how we would perform in the Avonex business.

I'm very pleased we've had a good strong performance there.

Ameviv is on track, Antegren is exactly where we want it to be, the rest of the pipeline moves ahead and I'm still aiming at that $2 billion of revenue in 2005.

Thanks.