NEW YORK (CNN/Money) - Biogen Inc.'s shares dropped more than 5 percent in morning trading after the company lowered its earnings outlook Friday for the second quarter and all of 2002, citing inventory adjustments for its multiple sclerosis drug Avonex and a softer overall U.S. market.

The Cambridge, Mass.-based pharmaceutical company said it expects second-quarter U.S. revenue for Avonex to be $170 million to $180 million, about $20 million less than previously expected.

As a result, the company said earnings would come in about 9 cents per share lower than expected for the second quarter, now estimated in the range of 28 cents to 32 per share. Analysts expected earnings of 40 cents per share, down from 47 cents a year earlier, according to a consensus compiled by tracking firm First Call.

Biogen (BGEN: down $5.44 to $42.26, Research, Estimates) also revised its guidance for 2002, estimating operating earnings per share between $1.50 and $1.60 for the year. Analysts polled by First Call estimated earnings of $1.72 per share for 2002, down from $1.90 in 2001.

The market for multiple sclerosis drugs has slowed and "trends indicate that the overall U.S. market (percentage) growth in 2002 will be in the low double-digit range, as opposed to mid-teens assumed in previous guidance," the company said in a statement.

The company said it would provide earnings guidance for 2003 later this year.