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BIOGEN FIRST QUARTER REVENUES UP 50% TO $10.3 MIL.; MERCK SUBLICENSES HEPATITIS B PATENTS: LICENSING PROGRAM COULD ADD $20 MIL. IN REVENUES

Executive Summary

Biogen's first quarter royalty and product sales revenues increased 50% to $10.3 mil., the firm reported April 10. Net income jumped more than 10-fold, from $144,000 to over $1.7 mil. A sublicensing agreement with Merck covering Biogen's basic hepatitis B patents provided a "significant contribution" to first quarter revenues, the biotech company noted. Biogen announced that it had expanded its hepatitis B patents licensing program to include Merck on April 9. Under a sublicensing agreement with Biogen's licensing partner SmithKline Biologicals, Merck gets manufacturing and marketing rights to Biogen's hepatitis B patents worldwide (except Japan). Biogen, which was granted patents for core and surface antigens in December 1987, signed the SmithKline vaccine and diagnostics licensing agreement in the spring of 1988 ("The Pink Sheet" April 11, 1988, T&G-4). Biogen said at the time that it had been in discussions with Merck prior to signing the SmithKline deal. Biogen says it expects the hepatitis B licensing program to generate over $20 mil. in revenues this year. In addition to SmithKline and now Merck, Abbott has a royalty-bearing license covering the manufacture, use and sale of hepatitis B core antigens for diagnostic kits. The Merck agreement gives Biogen product royalties on all doses of recombinant hepatitis B vaccine sold in the U.S., since only SmithKline and Merck currently market such products, under the respective tradenames Engerix B and Recombivax B. Merck is the biggest seller of recombinant hepatitis B vaccine in the U.S. and sales of the company's two hepatitis B vaccines (Merck also sells a whole cell vaccine) topped $100 mil. in 1989. Worldwide sales of Engerix B approached $100 mil. last year, SmithKline said recently. Biogen Chairman and CEO Jim Vincent noted that annual sales of recombinant hepatitis B vaccines "exceed $175 mil. worldwide and should grow rapidly based on expanded use" under a U.S. government proposal to inoculate all U.S. health care workers. Also highlighted as a contributor to the revenue gains were "increasing royalties" from Schering-Plough's alpha interferon product Intron-A and the introduction in Japan of the recombinant gamma interferon product Imunomax by Shionogi & Company.
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