Analyst Conference Summary

conference date: April 16, 2009 @ 5:30 AM Pacific Time
for quarter ending: March 31, 2009 (1st quarter)

At least at the time this summary was written.
Forward-looking statements

Overview: Growth rate slower for revenues, but excellent for GAAP net income and EPS.

Basic data (GAAP):

Revenues were $1.036 billion, down 3% sequentially $1.069 billion but up 10% from $942 million year-earlier.

Net income was $247 million, up 19% sequentially from $207 million, and up 49% from $166

EPS (earnings per share) were $0.84, up 20% sequentially from $0.70, and up 55.5% from $0.54 year-earlier.

Guidance:

Still expect over $4.00 per share (non-GAAP) in for full year 2009, with free cash flow better than EPS. High-single percentage growth in revenue year-over-year. Operating expenses less collaboration profit sharing of $2.0 to $2.1 billion. Tax rate 28% to 30% non-GAAP, 32% to 24% GAAP. GAAP EPS over $2.80. Capital expenditures between $210 and $250 million.

Conference Highlights:

There was a foreign exchange rate downside in the quarter. There has been impact from the economic downturn. Expansion of sales globally compensate for harsh economy. Giving more free drugs to patients in U.S. due to the recession. Overall performance was as expected and in line with guidance.

No one is doing more for MS [multiple sclerosis] than Biogen-Idec. Tysabri's efficacy gives hope that damage from MS may be repairable. The pipeline for MS is promising.

$1.05 non-GAAP EPS.

About $2.5 billion in cash and equivalents at end of quarter. 1.2 million shares were repurchased.

Revenue by product:

Avonex $555 million, up 4% from $536 million year-earlier.

Tysabri $165 million, up 44% from $115 million.

Fumaderm $10.6 million, down from $11.7 million year-earlier.

Other products $2.3 million, down from $2.6 million.

Total product revenues were $733 million, up from $665 million year-earlier. Rituxan unconsolidated joint business revenue $279 million. Royalties $24 million.

Working on Tysabri education, with good results from physicians. Efficacy is a big selling point. February and March showed improved trends for new versus dropped patients.

Cost of sales was $98.2 million, R&D expense $279.5, selling, general and administrative $221.8 million; amortization $89.2 million. Collaboration profit was $42.8 million. Total cost and expense was $731.5 million, leaving income from operations at $305.0 million. Income tax was $65.2 million. Other income $6.8 million.

Tysabri posters and updates will be presented at AAN meeting in Seattle on the 25th.

Pipeline

BG-12 Phase III trial enrollment completed, with enrollment in a second Phase III trial to be completed by year end.

Daclizumab Phase II results showed it may reduce T-cell activation in MS.

PEG IFN should be going into a Phase III clinical trial by mid 2009.

Q&A:

Tysabri trends? The quarter as a whole showed a steady pace of growth, but end of quarter showed high number of net patient adds. Discontinuations have returned to pre-PML levels. The last couple of cases of PML have had little impact.

There was an extra shipping week in Q4, so for Avonex that accounts for sequential quarter effects, but not for any year-over-year data. Avonex weeks in the channel have moved up slightly, but there was a decline in Tysabri in the channel.

Added patients and price increase not adding up to actual revenue increase for Tysabri? There has been an increase in the number of free therapy we have been given. There was also a small decline in the number of infusions per patient.

How will PML issue work going forward? Pipelines of new products all seem to have benefit versus risk profiles. Neurologists will adjust to the availability of different benefits and risks. They will become more comfortable with PML, dependent on the number and outcome of PML cases.

Avonex is very well positioned for reimbursements. Very comfortable about that.

New high-titre manufacturing process impact on gross margin? There will be a slight positive impact, but not until 2010.

Are physicians getting better at pre-screening for PML? We are seeing earlier recognition of cases and better management of them.

Tax rate? We had a one-time benefit from changes in state tax laws for R&D expense. For the rest of the quarters in the year we will be at our normal rate.

EPS going forward? Depends on rate of Tysabri uptake, macro environment, and rate of R&D expense acceleration. We want to be sure we can hit our EPS goal for the year.

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