Tysabri: "Biogen Idec CEO awarded $1.2M bonus despite tough 2005"

CLICK HERE TO READ MORE: BUSNIESS WEEK..."Biogen Idec Inc.'s top executive was awarded a $1.2 million bonus and a 10 percent salary increase after a year in which the biotechnology company withdrew a promising drug from the market, leading to job cuts and 32 percent drop in its stock price, according to a regulatory filing Friday.

Biogen Idec's board this month also awarded James C. Mullen options to buy 240,000 shares of the company's stock and granted another 180,000 shares of restricted stock, according to the filing Friday.

The Securities and Exchange Commission filing also shows the board awarded $2.83 million in 2005 bonuses to 10 Biogen Idec executives, including Mullen.
Biogen Idec spokesman Tim Hunt said Mullen's compensation is based on several performance measures including the company's earnings and stock performance as well progress in bringing new drugs to market.

"2005 was certainly a challenging year for the organization in many respects, but the company remained focused and disciplined, and made difficult decisions to ensure that we be in a position of strength going forward," Hunt said.

Mullen's $1.2 million performance-based bonus for 2005 is smaller than the nearly $1.35 million bonus the Cambridge-based company's board awarded him in 2004. That year, Biogen Idec's stock rose more than 75 percent in anticipation of the November 2004 introduction of Tysabri, a multiple sclerosis drug that had been widely forecast to become a blockbuster.

But Biogen Idec and its Irish drug development partner Elan Corp. withdrew Tysabri on Feb. 28, 2005, and disclosed the drug may heighten the risk of contracting a rare and often fatal disease of the central nervous system.

Biogen Idec shares plunged more than 42 percent the day the drug was withdrawn. The stock recovered some of the loss as Biogen Idec completed a safety review of Tysabri and applied with federal regulators to resume sales in the United States with a revised label and a plan to address patient risks.

However, Biogen Idec's stock still ended up closing the year at $45.28 per share, compared with $66.61 at the end of 2004. Shares rose 3 cents to close at $44.27 on the Nasdaq Stock Market on Friday.

Tysabri's withdrawal helped trigger a September announcement of plans to cut 650 jobs, or about 17 percent of the work force. Biogen Idec's third-quarter profit fell by 27 percent, partly due to severance expenses from the job cuts. The company is scheduled to release fourth-quarter and full-year earnings on Wednesday.

Mullen has been president and chief executive since the November 2003 merger of drug makers Biogen and Idec -- a deal that preceded a more than yearlong rise in the company's stock before Tysabri's withdrawal."