SOURCE: The Medicines Company

The Medicines Company

February 16, 2011 08:15 ET

The Medicines Company Reports Fourth Quarter Revenue Rises 17.2% to $119.7 Million

Full Year EPS Is $1.97 per Share vs Year Ago Loss; Revenues of $437.6 Million vs Year Ago $404.2 Million

PARSIPPANY, NJ--(Marketwire - February 16, 2011) - The Medicines Company (NASDAQ: MDCO) today announced its financial results for the fourth quarter and full year of 2010.

Financial highlights for the fourth quarter of 2010:

  • Net revenue increased by 17.2% to $119.7 million for the fourth quarter of 2010 from $102.1 million in the fourth quarter of 2009.
    • Angiomax U.S. sales increased by 16.3% to $112 million in the fourth quarter of 2010 compared to $96.3 million in the fourth quarter of 2009.
    • Angiomax/Angiox international net revenue in the fourth quarter of 2010 increased by 48% to $7.7 million compared with $5.2 million in the fourth quarter of 2009.
  • Net income for the fourth quarter of 2010 was $58.6 million, or $1.09 per share, compared with a net loss of ($73.5) million, or ($1.40) per share, for the fourth quarter of 2009.
    • Net income impacted by the company's decision to reinstate a portion of its deferred tax assets in the amount of $44 million.
  • Non-GAAP net income for the fourth quarter of 2010 was $16.0 million, or $0.30 per share, compared to non-GAAP net loss of ($25.6 million), or ($0.49) per share for 2009. Non-GAAP net income excludes costs associated with the Targanta acquisition, stock-based compensation expense and non-cash income taxes. 

Financial highlights for the full year of 2010:

  • Net revenue increased by 8.3% to $437.6 million for 2010 from $404.2 million in 2009.
    • Angiomax U.S. sales increased by 7.7% to $412.3 million in 2010 compared with $382.9 million in 2009.
    • Angiomax/Angiox international net revenue in 2010 increased by 34.4% with $24.6 million compared with $18.3 million in 2009.
  • Net income for 2010 was $104.6 million, or $1.97 per share, compared with a net loss of ($76.2) million, or ($1.46) per share, for 2009. 
    • Net income impacted by the company's decision to reinstate a portion of its deferred tax assets in the amount of $44 million. 
  • Non-GAAP net income for 2010 was $69.7 million, or $1.31 per share, compared to non-GAAP net loss of ($4.8 million), or ($0.09) per share, for 2009. Non-GAAP net income excludes costs associated with the Targanta acquisition, stock-based compensation expense and non-cash income taxes.

Clive Meanwell, Chairman and Chief Executive Officer, stated, "This past quarter and past year our main products, Angiomax and Angiox, grew briskly through relentless innovation with our hospital customers. We believe our late-stage pipeline products progressed through perhaps the most efficient and intelligent R&D efforts in this industry. And throughout it all we created -- and continue to create -- enormous operating leverage to meet our global ambitions."

The following table provides reconciliations between GAAP and non-GAAP net (loss) income for the full year (FY) and fourth quarter (Q4) of 2010 and 2009. Non-GAAP net income excludes the transaction charges related to the Targanta acquisition, stock-based compensation expense and non-cash income taxes:

(in millions)   Reported GAAP Net Income     Targanta Acquisition Costs   FAS 123R Stock-Based Compensation Expense   Non-cash (Benefit) Provision for Income Taxes     Non-GAAP Net Income (1)  
                                     
FY 2010   $ 104.6     $ -   $ 8.3   $ (43.3 )   $ 69.7  
                                     
FY 2009   $ (76.2 )   $ 4.3   $ 19.4   $ 47.7     $ (4.8 )
                                     
Q4 2010   $ 58.6     $ -   $ 1.5   $ (44.0 )   $ 16.0  
                                     
Q4 2009   $ (73.5 )   $ -   $ 4.1   $ 43.8     $ (25.6 )
                                     
Note: Amounts may not sum due to rounding.  
   
(1) Excluding the Targanta acquisition costs, stock-based compensation expense and the non-cash provision (benefit) for income taxes. 
   

Reconciliations between GAAP and non-GAAP fully diluted (loss) earnings per share (EPS) for the FY and Q4 of 2010 and 2009 are provided in the following table:

(per share)   Reported GAAP EPS     Targanta Acquisition Costs   FAS 123R Stock-Based Compensation Expense   Non-cash (Benefit) Provision for Income Taxes     Non-GAAP EPS (1)  
                                     
FY 2010   $ 1.97     $ -   $ 0.16   $ (0.81 )   $ 1.31  
                                     
FY 2009   $ (1.46 )   $ 0.08   $ 0.37   $ 0.91     $ (0.09 )
                                     
Q4 2010   $ 1.09     $ -   $ 0.03   $ (0.82 )   $ 0.30  
                                     
Q4 2009   $ (1.40 )   $ -   $ 0.08   $ 0.84     $ (0.49 )
                                     
Note: Amounts may not sum due to rounding.  
   
(1) Excluding the Targanta acquisition costs, stock-based compensation expense and the non-cash provision for income taxes.
   

The Company believes that presenting the non-GAAP information contained in the financial tables and in this press release assists investors and others in gaining a better understanding of the Company's core operating results and future prospects, expected growth rates or forecasted guidance, particularly as related to transaction charges associated with the Targanta acquisition, stock-based compensation expense and non-cash income taxes. Management uses this non-GAAP information, in addition to the GAAP information, as the basis for measuring the Company's core operating performance and comparing such performance to that of prior periods and to the performance of its competitors. Such measures are also used by management in its financial and operating decision-making. Non-GAAP information is not meant to be considered superior to or a substitute for the Company's results of operations prepared in accordance with GAAP. A reconciliation of GAAP results with non-GAAP results may also be found in the attached financial tables.

There will be a conference call with management today at 8:30 a.m. Eastern Time to discuss full year and fourth quarter 2010 financial results and operational developments. The conference call will be available via phone and webcast. The webcast can be accessed at The Medicines Company website at www.themedicinescompany.com.

 
The dial in information is listed below:
Domestic Dial In: 800.561.2601
International Dial In: 617.614.3518
Passcode for both dial in numbers: 37185392

Replay is available from 11:30 a.m. Eastern Time following the conference call through March 2, 2011. To hear a replay of the call dial 888-286-8010 (domestic) and 617-801-6888 (international). Passcode for both dial in numbers is 41479697.

About The Medicines Company
The Medicines Company (NASDAQ: MDCO) provides medical solutions to improve health outcomes for patients in acute and intensive care hospitals worldwide. These solutions comprise medicines and knowledge that directly impact the survival and well being of critically ill patients. The Medicines Company's website is www.themedicinescompany.com.

Statements contained in this press release about The Medicines Company that are not purely historical, and all other statements that are not purely historical, may be deemed to be forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Without limiting the foregoing, the words "believes," "anticipates" and "expects" and similar expressions, including the Company's preliminary revenue results, are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties that may cause the Company's actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by these forward-looking statements. Important factors that may cause or contribute to such differences include the Company's ability to develop its global operations and penetrate foreign markets, whether the Company's products will advance in the clinical trials process on a timely basis or at all, whether the Company will make regulatory submissions for product candidates on a timely basis, whether its regulatory submissions will receive approvals from regulatory agencies on a timely basis or at all, whether physicians, patients and other key decision makers will accept clinical trial results, risks associated with the establishment of international operations, whether the Company is able to obtain or maintain patent protection for the intellectual property relating to the Company's products; and such other factors as are set forth in the risk factors detailed from time to time in the Company's periodic reports and registration statements filed with the Securities and Exchange Commission including, without limitation, the risk factors detailed in the Company's Quarterly Report on Form 10-Q filed on November 9, 2010, which are incorporated herein by reference. The Company specifically disclaims any obligation to update these forward-looking statements. 

   
   
The Medicines Company  
Condensed Consolidated Statements of Operations  
   
(unaudited)  
   
(in thousands, except per share data)   Three months ended  
    December 31,  
    2010     2009  
         
Net revenue   $ 119,679     $ 102,060  
                 
Operating expenses:                
  Cost of revenue     35,394       31,190  
  Research and development     31,113       48,925  
  Selling, general and administrative     37,372       46,969  
    Total operating expenses     103,879       127,084  
                     
Income (loss) from operations     15,800       (25,024 )
                 
Other loss     (322 )     (4,873 )
                 
Income (loss) before income taxes     15,478       (29,897 )
Benefit (provision) for income taxes     43,094       (43,597 )
                 
Net income (loss)   $ 58,572     $ (73,494 )
                 
Basic earnings (loss) per common share   $ 1.10     $ (1.40 )
Shares used in computing basic earnings (loss) per common share     53,041       52,395  
                 
Diluted earnings (loss) per common share   $ 1.09     $ (1.40 )
Shares used in computing diluted earnings (loss) per common share     53,714       52,395  
   
   
   
   
The Medicines Company  
Condensed Consolidated Statements of Operations  
   
(unaudited)  
   
(in thousands, except per share data)   Year Ended December 31,  
    2010     2009  
Net revenue   $ 437,645     $ 404,241  
Operating expenses:                
  Cost of revenue     129,299       118,148  
  Research and development     85,241       117,610  
  Selling, general and administrative     158,690       193,832  
    Total operating expenses     373,230       429,590  
Income (loss) from operations     64,415       (25,349 )
                 
Other loss     (267 )     (2,818 )
Income (loss) before income taxes     64,148       (28,167 )
Benefit (provision) for income taxes     40,487       (48,062 )
Net income (loss)   $ 104,635     $ (76,229 )
                 
Basic earnings (loss) per common share   $ 1.98     $ (1.46 )
Shares used in computing basic earnings (loss) per common share     52,842       52,269  
                 
Diluted earnings (loss) per common share   $ 1.97     $ (1.46 )
Shares used in computing diluted earnings (loss) per common share     53,184       52,269  
   
   
   
   
The Medicines Company  
Condensed Consolidated Balance Sheets  
   
(unaudited)  
           
    December 31,   December 31,  
(in thousands)   2010   2009  
               
ASSETS              
Cash, cash equivalents and available for sales securities   $ 246,644   $ 176,191  
Accrued interest receivable     1,279     922  
Accounts receivable, net     46,551     29,789  
Inventory     25,343     25,836  
Prepaid expenses and other current assets     4,804     9,984  
  Total current assets     324,621     242,722  
               
Fixed assets, net     20,662     25,072  
Intangible assets, net     82,925     84,678  
Restricted cash     5,777     7,049  
Deferred tax assets     25,197     -  

Goodwill
    14,671     14,934  
Other assets     270     321  
  Total assets   $ 474,124   $ 374,776  
               
LIABILITIES AND STOCKHOLDERS' EQUITY              
Current liabilities   $ 85,370   $ 86,619  
Contingent purchase price     25,387     23,667  
Deferred tax liability     --     18,395  
Other long term liabilities     5,769     5,706  
Stockholders' equity     357,598     240,389  
  Total liabilities and stockholders' equity   $ 474,124   $ 374,776  
   
   
   
   
The Medicines Company  
Reconciliation of GAAP to non-GAAP Measures  
(All amounts in thousands, except per share amounts)  
(Unaudited)  
                                   
    Three Months Ended December 31,  
          2010          
    GAAP(1)     Targanta Acquisition   SFAS 123R       Non-cash
Tax Provision
  Non-GAAP (5)
As Adjusted
 
Net revenue   $ 119,679     $ -     $ -       $ -       $ 119,679  
                                             
Operating expenses:                                            
                                             
Cost of revenue     35,394       -       (33 ) (3)     -         35,361  
Research and development     31,113       -       (231 ) (3)     -         30,882  
Selling, general and administrative     37,372       - (2)     (1,217 ) (3)     -         36,155  
Total operating expenses     103,879       -       (1,481 )       -         102,398  
                                             
Income from operations     15,800       -       1,481         -         17,281  
                                             
Other loss     (322 )     -       -         -         (322 )
Income before income taxes     15,478       -       1,481         -         16,959  
Benefit (provision) for income taxes     43,094       - (2)     -         (44,010 ) (4)     (916 )
Net income     58,572       -       1,481         (44,010 )       16,043  
                                             
Basic earnings per common share   $ 1.10     $ -     $ 0.03       $ (0.83 )     $ 0.30  
                                             
Shares used in computing basic earnings per common share     53,041       53,041       53,041         53,041         53,041  
                                             
Diluted earnings per common share   $ 1.09     $ -     $ 0.03       $ (0.82 )     $ 0.30  
                                             
Shares used in computing diluted earnings per common share     53,714       53,714       53,714         53,714         53,714  
                                             
(1) GAAP Results  
(2) Targanta Acquisition  
(3) Non-cash stock compensation expense  
(4) Non-cash income taxes  
(5) Non-GAAP Results  
   
   
   
   
The Medicines Company  
Reconciliation of GAAP to non-GAAP Measures  
(All amounts in thousands, except per share amounts)  
(Unaudited)  
       
    Twelve Months Ended December 31,  
    2010  
    GAAP (1)
As Reported
 
    Targanta Acquisition   SFAS 123R       Non-cash
Tax Provision
  Non-GAAP (5)
As Adjusted
 
Net revenue   $ 437,645     $ -     $ -       $ -       $ 437,645  
                                             
Costs and expenses:                                            
                                             
Cost of revenue     129,299       -       (250 ) (3)     -         129,049  
Research and development     85,241       -       (1,801 ) (3)     -         83,440  
Selling, general and administrative     158,690       - (2)     (6,285 ) (3)     -         152,405  
Total operating expenses     373,230       -       (8,336 )       -         364,894  
                                             
Income from operations     64,415       -       8,336         -         72,751  
                                             
Other loss     (267 )     -       -         -         (267 )
Income before income taxes     64,148       -       8,336         -         72,484  
Benefit (provision) for income taxes     40,487       - (2)     -         (43,300 ) (4)     (2,813 )
Net income     104,635       -       8,336         (43,300 )       69,671  
                                             
Basic earnings per common share   $ 1.98     $ -     $ 0.16       $ (0.82 )     $ 1.32  
                                             
Shares used in computing basic earnings per common share     52,842       52,842       52,842         52,842         52,842  
                                             
Diluted earnings per common share   $ 1.97     $ -     $ 0.16       $ (0.81 )     $ 1.31  
                                             
Shares used in computing diluted earnings per common share     53,184       53,184       53,184         53,184         53,184  
                                             
(1) GAAP Results  
(2) Targanta Acquisition  
(3) Non-cash stock compensation expense  
(4) Non-cash income taxes  
(5) Non-GAAP Results  
   

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