Biogen Idec profits drop 26%

Biogen Idec Inc.'s third-quarter profits dropped 26 percent compared to the previous year amid charges from its 2003 merger and expenses from a layoff begun in September.

Net income for the quarter was $27.2 million, or 8 cents a share, down from $36.8 million, or 10 cents a share, in the year-ago period. Revenues grew to $596 million for the quarter, an increase of about 10 percent from the previous year, driven by sales of Avonex, the popular drug for multiple sclerosis.

''We took a lot of bold moves this quarter, selling assets, restructuring the company, bringing in three new products in the deal with Protein Design Labs," said Peter N. Kellogg, Biogen Idec's chief financial officer, in an interview.

He said the moves are part of the strategy laid out by Biogen Idec chief executive James C. Mullen in September to cut costs and funnel more money into business development deals.

In August, Biogen Idec signed a deal worth as much as $660 million to jointly develop treatments for multiple sclerosis, cancer and other diseases with Protein Design Labs Inc. of Fremont, Calif. It has paid $40 million so far.

Extraordinary charges that put a drag on earnings included $88 million of write-downs related to the 2003 merger between Biogen and Idec; $27 million to pay for employee severance and other expenses related to the layoff; and about $21 million for losses expected from the sale of a California manufacturing plant.

Biogen Idec's withdrawal of multiple sclerosis drug Tysabri has forced the company to rely on older drugs to bolster earnings. Biogen and its Irish partner, Elan Corp., withdrew Tysabri and disclosed the drug may heighten the risk of contracting a rare disease of the central nervous system.

The companies are seeking to resume sales in the United States with a revised label and a plan to address patient risks.

Wall Street analysts had expected earnings, excluding certain charges, of 43 cents a share. Biogen's earnings without the charges, 36 cents a share, were reduced in large part by expenses for the deal with Protein Design Labs. Biogen Idec predicted it would generate earnings per share next year, excluding unusual items, of $1.95 to $2.10, compared to a consensus of Wall Street analysts that predicts the company to generate $1.63 for the current year.

Biogen Idec released the earnings after the close of the market. In trading before the announcement, shares lost 41 cents to close at $40.01.

Jeffrey Krasner can be reached at krasner@globe.com. Material from Globe wire services was used in this report.