SOURCE: The Medicines Company

The Medicines Company

July 27, 2011 08:00 ET

The Medicines Company Reports Second Quarter and First Half 2011 Results

Quarterly Net Revenues Rise 9% to $119.6 Million vs 2010

PARSIPPANY, NJ--(Marketwire - Jul 27, 2011) - The Medicines Company (NASDAQ: MDCO), a global pharmaceutical company focused on advancing the treatment of critical care patients through the delivery of innovative, cost-effective medicines, today announced results for the second quarter and first half of 2011. Highlights include:

  • A 9% increase in net revenues in the second quarter of 2011 to $119.6 million from $110.1 million in the comparable 2010 period.
  • Increased investments in R&D as Phase III trials for cangrelor and oritavancin accelerated
  • As a result, net income for the second quarter of 2011 was $11.4 million, or $0.21 per share, compared with net income of $15.4 million, or $0.29 per share, for the second quarter of 2010; net income for the first half of 2011 was $35.7 million, or $0.66 per share, compared with net income of $24.9 million, or $0.47 per share, for the first half of 2010.

R&D portfolio highlights for the second quarter included positive Phase IIa clinical trial results from MDCO-2010 in cardiac surgery patients and pre-clinical results from key mode-of-action and toxicology studies for MDCO-216. Detailed data from these Phase IIa and preclinical studies are expected to be presented at major medical meetings in the fourth quarter of 2011. The Company also continued enrollment in Phase III trials of oritavancin and cangrelor. For cangrelor, the BRIDGE trial studying a prolonged infusion was completed with data also expected to be presented in 4Q 2011.

Clive Meanwell, Chairman and Chief Executive Officer, stated, "Second quarter and first half year 2011 results reaffirm our ability to execute our strategy of growing net revenue, investing aggressively in our R&D portfolio; and making stepwise investments to extend our geographic reach while still generating significant positive cash flow. Our second quarter and first half year 2011 results evidence real growth consistent with our short and medium-term goals. Looking ahead, we expect continued revenue growth led by Angiomax® | Angiox® (bivalirudin) for years to come, and robust progress in R&D and geographic reach."

Dr. Meanwell added, "We were very excited by multiple R&D developments in the second quarter that show the vibrancy and longer term commercial promise of our R&D programs -- all of which are expected to generate products which serve the same customer channel we are building for Angiomax and Cleviprex -- namely, acute and intensive care hospitals worldwide. We expect continuous news flow because of the breadth and depth of our technologies."

Financial highlights for the second quarter of 2011:

  • Net revenue increased by 9% to $119.6 million for the second quarter of 2011 from $110.1 million in the second quarter of 2010.
    • Angiomax U.S. sales increased by 7% to $112.0 million in the second quarter of 2011 compared with $104.4 million in the second quarter of 2010.
    • Angiomax/Angiox international net revenue in the second quarter of 2011 increased by 27% to $7.3 million compared with $5.8 million in the second quarter of 2010.
  • Net income for the second quarter of 2011 was $11.4 million, or $0.21 per share, compared with net income of $15.4 million, or $0.29 per share, for the second quarter of 2010.
  • Non-GAAP net income for the second quarter of 2011 was $13.2 million, or $0.24 per share, compared with non-GAAP net income of $18.3 million, or $0.35 per share for the second quarter 2010. Non-GAAP net income excludes stock-based compensation expense and non-cash income taxes.

Financial highlights for the half of 2011:

  • Net revenue increased by 9% to $231.7 million for the first half of 2011 from $212.2 million in the first half of 2010.
    • Angiomax U.S. sales increased by 8% to $217.0 million in the first half of 2011 compared with $200.0 million in the first half of 2010.
    • Angiomax/Angiox international net revenue in the first half of 2011 increased by 27% to $14.4 million compared with $11.4 million in the first half of 2010.
  • Net income for the first half of 2011 was $35.7 million, or $0.66 per share, compared with net income of $24.9 million, or $0.47 per share, for the first half of 2010.
  • Non-GAAP net income for the first half of 2011 was $47.7 million, or $0.88 per share, compared with non-GAAP net income of $30.8 million, or $0.58 per share for the first half of 2010. Non-GAAP net income excludes stock-based compensation expense and non-cash income taxes.

The following table provides reconciliations between GAAP and non-GAAP net income for second quarter (Q2) and first half of 2011 and 2010. Non-GAAP net income excludes stock-based compensation expense and non-cash income taxes:

(in millions) Reported GAAP Net Income Stock-Based Compensation Expense Non-cash (Provision) Benefit
for Income Taxes
Non-GAAP Net Income(1)
Q2 2011 $ 11.4 $ 3.2 $ (1.4 ) $ 13.2
Q2 2010 $ 15.4 $ 2.3 $ 0.5 $ 18.3
1H 2011 $ 35.7 $ 5.4 $ 6.6 $ 47.7
1H 2010 $ 24.9 $ 5.1 $ 0.9 $ 30.8
Note: Amounts may not sum due to rounding.
(1) Excluding stock-based compensation expense and the non-cash (provision) benefit for income taxes.

Reconciliations between GAAP and non-GAAP fully diluted earnings per share (EPS) for the second quarter (Q2) and first half of 2011 and 2010 are provided in the following table:

(per share) Reported GAAP EPS Stock-Based Compensation Expense Non-cash (Provision) Benefit for Income Taxes Non-GAAP EPS (1)
Q2 2011 $ 0.21 $ 0.06 $ (0.03 ) $ 0.24
Q2 2010 $ 0.29 $ 0.04 $ 0.01 $ 0.35
1H 2011 $ 0.66 $ 0.10 $ 0.12 $ 0.88
1H 2010 $ 0.47 $ 0.10 $ 0.02 $ 0.58
Note: Amounts may not sum due to rounding.
(1) Excluding stock-based compensation expense and the non-cash (provision) benefit 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, 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 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: 800-638-4930
International Dial In: 617-614-3944
Passcode for both dial in numbers: 15988273

Replay is available from 11:30 a.m. Eastern Time following the conference call through August 10, 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 84976700.

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 extent of the commercial success of Angiomax, 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, 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, May 10, 2011, 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 June 30,
2011 2010
Net revenue $ 119,591 $ 110,135
Operating expenses:
Cost of revenue 37,830 33,568
Research and development 26,536 20,575
Selling, general and administrative 41,420 39,409
Total operating expenses 105,786 93,552
Income from operations 13,805 16,583
Other income (loss) 61 (117 )
Income before income taxes 13,866 16,466
Provision for income taxes (2,426 ) (1,040 )
Net income $ 11,440 $ 15,426
Basic earnings per common share $ 0.21 $ 0.29
Shares used in computing basic earnings per common share 53,441 52,819
Diluted earnings per common share $ 0.21 $ 0.29
Shares used in computing diluted earnings per common share 54,314 52,924
The Medicines Company
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except per share data) Year to Date June 30,
2011 2010
Net revenue $ 231,728 $ 212,223
Operating expenses:
Cost of revenue 73,400 62,337
Research and development 50,328 37,452
Selling, general and administrative 79,348 85,530
Total operating expenses 203,076 185,319
Income from operations 28,652 26,904
Legal settlement 17,984 -
Other income (loss) 872 (428 )
Income before income taxes 47,508 26,476
Provision for income taxes (11,827 ) (1,618 )
Net income $ 35,681 $ 24,858
Basic earnings per common share $ 0.67 $ 0.47
Shares used in computing basic earnings per common share 53,343 52,658
Diluted earnings per common share $ 0.66 $ 0.47
Shares used in computing diluted earnings per common share 54,223 52,823
The Medicines Company
Condensed Consolidated Balance Sheets
June 30, December 31,
(in thousands) 2011 2010
(unaudited)
ASSETS
Cash, cash equivalents and available for sales securities $ 283,629 $ 246,644
Accrued interest receivable 895 1,279
Accounts receivable, net 67,008 46,551
Inventory 29,161 25,343
Prepaid expenses and other current assets 8,908 4,804
Total current assets 389,601 324,621
Fixed assets, net 19,298 20,662
Intangible assets, net 81,740 82,925
Restricted cash 5,783 5,778
Deferred tax assets 27,286 25,197
Goodwill 14,671 14,671
Other assets 296 270
Total assets $ 538,675 $ 474,124
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 103,841 $ 85,370
Contingent purchase price 27,416 25,387
Other Long Term Liabilities 5,854 5,769
Stockholders' equity 401,564 357,598
Total liabilities and stockholders' equity $ 538,675 $ 474,124
The Medicines Company
Reconciliation of GAAP to non-GAAP Measures
(All amounts in thousands, except per share amounts)
(unaudited)
Three Months Ended June 30,
2011
GAAP(1) Stock-Based Compensation Non-cash
Tax Provision
Non-GAAP (4)
As Adjusted
Net revenue $ 119,591 $ - $ - $ 119,591
Operating expenses:
Cost of revenue 37,830 (35 ) (2 ) - 37,795
Research and development 26,536 (531 ) (2 ) - 26,005
Selling, general and administrative 41,420 (2,648 ) (2 ) - 38,772
Total operating expenses 105,786 (3,214 ) - 102,572
Income from operations 13,805 3,214 - 17,019
Legal settlement - - - -
Other income 61 - - 61
Income before income taxes 13,866 3,214 - 17,080
Provision for income taxes (2,426 ) - (1,437 ) (3 ) (3,863 )
Net income 11,440 3,214 (1,437 ) 13,217
Basic earnings per common share $ 0.21 $ 0.06 $ (0.03 ) $ 0.25
Shares used in computing basic earnings per common share 53,441 53,441 53,441 53,441
Diluted earnings per common share $ 0.21 $ 0.06 $ (0.03 ) $ 0.24
Shares used in computing diluted earnings per common share 54,314 54,314 54,314 54,314
Note: Amounts may not sum due to rounding.
(1) GAAP Results
(2) Non-cash stock compensation expense
(3) Non-cash income taxes
(4) Non-GAAP Results
The Medicines Company
Reconciliation of GAAP to non-GAAP Measures
(All amounts in thousands, except per share amounts)
(Unaudited)
Three Months Ended June 30,
2010
GAAP(1) Stock-Based Compensation Non-cash
Tax Provision
Non-GAAP (4)
As Adjusted
Net revenue $ 110,135 $ - $ - $ 110,135
Operating expenses:
Cost of revenue 33,568 (72 ) (2 ) - 33,496
Research and development 20,575 (442 ) (2 ) - 20,133
Selling, general and administrative 39,409 (1,823 ) (2 ) - 37,586
Total operating expenses 93,552 (2,337 ) - 91,215
Income from operations 16,583 2,337 - 18,920
Other (loss)/income (117 ) - - (117 )
Income before income taxes 16,466 2,337 - 18,803
(Provision for) Benefit from income taxes (1,040 ) - 531 (3 ) (509 )
Net income 15,426 2,337 531 18,294
Basic earnings per common share $ 0.29 $ 0.04 $ 0.01 $ 0.35
Shares used in computing basic earnings per common share 52,819 52,819 52,819 52,819
Diluted earnings per common share $ 0.29 $ 0.04 $ 0.01 $ 0.35
Shares used in computing diluted earnings per common share 52,924 52,924 52,924 52,924
Note: Amounts may not sum due to rounding.
(1) GAAP Results
(2) Non-cash stock compensation expense
(3) Non-cash income taxes
(4) Non-GAAP Results
The Medicines Company
Reconciliation of GAAP to non-GAAP Measures
(All amounts in thousands, except per share amounts)
(unaudited)
Six Months Ended June 30,
2011
GAAP(1) Stock-Based Compensation Non-cash
Tax Provision
Non-GAAP (4)
As Adjusted
Net revenue $ 231,728 $ - $ - $ 231,728
Operating expenses:
Cost of revenue 73,400 (78 ) (2 ) - 73,322
Research and development 50,328 (959 ) (2 ) - 49,369
Selling, general and administrative 79,348 (4,438 ) (2 ) - 74,910
Total operating expenses 203,076 (5,475 ) - 197,601
Income from operations 28,652 5,475 - 34,127
Legal settlement 17,984 - - 17,984
Other income 872 - - 872
Income before income taxes 47,508 5,475 - 52,983
(Provision for) Benefit from income taxes (11,827 ) - 6,554 (3 ) (5,273 )
Net income 35,681 5,475 6,554 47,710
Basic earnings per common share $ 0.67 $ 0.10 $ 0.12 $ 0.89
Shares used in computing basic earnings per common share 53,343 53,343 53,343 53,343
Diluted earnings per common share $ 0.66 $ 0.10 $ 0.12 $ 0.88
Shares used in computing diluted earnings per common share 54,223 54,223 54,223 54,223
Note: Amounts may not sum due to rounding.
(1) GAAP Results
(2) Non-cash stock compensation expense
(3) Non-cash income taxes
(4) Non-GAAP Results
The Medicines Company
Reconciliation of GAAP to non-GAAP Measures
(All amounts in thousands, except per share amounts)
(Unaudited)
Six Months Ended June 30,
2010
GAAP(1) Stock-Based Compensation Non-cash
Tax Provision
Non-GAAP (4)
As Adjusted
Net revenue $ 212,223 $ - $ - $ 212,223
Operating expenses:
Cost of revenue 62,337 (161 ) (2 ) - 62,176
Research and development 37,452 (1,238 ) (2 ) - 36,214
Selling, general and administrative 85,530 (3,681 ) (2 ) - 81,849
Total operating expenses 185,319 (5,080 ) - 180,239
Income from operations 26,904 5,080 - 31,984
Other (loss)/income (428 ) - - (428 )
Income before income taxes 26,476 5,080 - 31,556
(Provision for) Benefit from income taxes (1,618 ) - 857 (3 ) (761 )
Net income 24,858 5,080 857 30,795
Basic earnings per common share $ 0.47 $ 0.10 $ 0.02 $ 0.58
Shares used in computing basic earnings per common share 52,658 52,658 52,658 52,658
Diluted earnings per common share $ 0.47 $ 0.10 $ 0.02 $ 0.58
Shares used in computing diluted earnings per common share 52,823 52,823 52,823 52,823
Note: Amounts may not sum due to rounding.
(1) GAAP Results
(2) Non-cash stock compensation expense
(3) Non-cash income taxes
(4) Non-GAAP Results

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