SOURCE: The Medicines Company

The Medicines Company

October 26, 2011 08:00 ET

The Medicines Company Reports Third Quarter 2011 Results

Quarterly Net Revenues Rise 14% to $121 Million

PARSIPPANY, NJ--(Marketwire - Oct 26, 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 third quarter of 2011. Highlights include:

  • A 14% increase in net revenues in the third quarter of 2011 to $120.8 million from $105.7 million in the comparable 2010 period.

  • The Company reinstated approximately $66 million of deferred tax assets during the quarter, as the Company expects sustained profits on an ongoing basis. Net income for the third quarter of 2011 was $72.6 million, or $1.34 per share, compared with net income of $21.2 million, or $0.40 per share, for the third quarter of 2010.

  • The Company increased its cash and available for sale securities balance by $24 million during the quarter, bringing its cash balance to $308 million at September 30, 2011, compared with $284 million at June 30, 2011.

  • During the quarter, the Company settled lawsuits it had filed in the U.S. District Court for the District of Delaware relating to the Abbreviated New Drug Applications (ANDAs) filed by Teva Parenteral Medicines, Inc. and its affiliate, Pliva Hrvatska d.o.o., for generic versions of Angiomax® (bivalirudin for injection).

Clive Meanwell, Chairman and Chief Executive Officer, stated, "Third quarter 2011 results again show that we can grow revenue organically, invest in our R&D portfolio and generate significant positive cash flow at the same time."

R&D portfolio highlights for the third quarter included presentation of detailed data from a positive Phase IIa clinical trial of MDCO-2010 at the ANESTHESIOLOGY 2011 conference. Upcoming presentations at major medical conferences for the portfolio in the fourth quarter include:

  • Cangrelor: BRIDGE trial studying a prolonged infusion
  • Angiomax: BRAVO program, first data of Angiomax use in structural heart disease
  • MDCO-216: pre-clinical results from key mode-of-action and toxicology studies

The Company also continued enrollment in Phase III trials of oritavancin and cangrelor and continued technology transfer of MDCO-157, an intravenous formulation of clopidogrel.

Revenue highlights for the third quarter of 2011:

  • Net revenue increased by 14% to $120.8 million for the third quarter of 2011 from $105.7 million in the third quarter of 2010.

    • Angiomax U.S. sales increased by 11% to $111.1 million in the third quarter of 2011 compared with $100.2 million in the third quarter of 2010.

    • Angiomax/Angiox international net revenue in the third quarter of 2011 increased by 67% to $9.2 million compared with $5.5 million in the third quarter of 2010.

Revenue highlights for the first nine months of 2011:

  • Net revenue increased by 11% to $352.5 million for the first nine months of 2011 from $318.0 million for same period of 2010.

    • Angiomax U.S. sales increased by 9% to $328.1 million in the first nine months of 2011 compared with $300.3 million for same period of 2010.

    • Angiomax/Angiox international net revenue in the first nine months of 2011 increased by 40% to $23.7 million compared with $16.9 million for same period of 2010.

The following table provides reconciliations between GAAP and non-GAAP net income for third quarter (Q3) and nine months (9M) of 2011 and 2010. Non-GAAP net income excludes the transaction charges related to stock-based compensation expense and non-cash income taxes:

(in millions) Reported GAAP Net Income Stock-Based Compensation Expense Non-cash (Benefit)
Provision for Income Taxes
Non-GAAP Net Income(1)
Q3 2011 $ 72.6 $ 2.9 $ (66.3 ) $ 9.2
Q3 2010 $ 21.2 $ 1.8 $ (0.2 ) $ 22.8
9M 2011 $ 108.3 $ 8.4 $ (59.8 ) $ 56.9
9M 2010 $ 46.1 $ 6.8 $ 0.7 $ 53.6

Note: Amounts may not sum due to rounding.
(1) Excluding stock-based compensation expense and the non-cash (benefit) provision for income taxes.

Reconciliations between GAAP and non-GAAP fully diluted earnings per share (EPS) for the third quarter and nine months of 2011 and 2010 are provided in the following table:

(per share) Reported GAAP EPS Stock-Based Compensation Expense Non-cash (Benefit) Provision for Income Taxes Non-GAAP EPS (1)
Q3 2011 $ 1.34 $ 0.05 $ (1.22 ) $ 0.17
Q3 2010 $ 0.40 $ 0.03 $ - $ 0.43
9M 2011 $ 2.00 $ 0.15 $ (1.10 ) $ 1.05
9M 2010 $ 0.87 $ 0.13 $ 0.01 $ 1.01
Note: Amounts may not sum due to rounding.
(1) Excluding stock-based compensation expense and the non-cash (benefit) 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, 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: 866-700-7101
International Dial In: 617-213-8837
Passcode for both dial in numbers: 25392199

Replay is available from 11:30 a.m. Eastern Time following the conference call through November 11, 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 31428239.

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, August 2, 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
September 30,
2011 2010
Net revenue $ 120,773 $ 105,743
Operating expenses:
Cost of revenue 39,459 31,568
Research and development 26,550 16,676
Selling, general and administrative 45,353 35,788
Total operating expenses 111,362 84,032
Income from operations 9,411 21,711
Other income 578 483
Income before income taxes 9,989 22,194
Benefit (provision) for income taxes 62,625 (989 )
Net income $ 72,614 $ 21,205
Basic earnings per common share $ 1.36 $ 0.40
Shares used in computing basic earnings per common share 53,534 52,991
Diluted earnings per common share $ 1.34 $ 0.40
Shares used in computing diluted earnings per common share 54,260 53,359

The Medicines Company
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except per share data) Year to Date
September 30,
2011 2010
Net revenue $ 352,501 $ 317,966
Operating expenses:
Cost of revenue 112,859 93,905
Research and development 76,878 54,128
Selling, general and administrative 124,701 121,318
Total operating expenses 314,438 269,351
Income from operations 38,063 48,615
Legal settlement 17,984 -
Other income 1,450 55
Income before income taxes 57,497 48,670
Benefit (provision) for income taxes 50,798 (2,607 )
Net income $ 108,295 $ 46,063
Basic earnings per common share $ 2.03 $ 0.87
Shares used in computing basic earnings per common share 53,414 52,773
Diluted earnings per common share $ 2.00 $ 0.87
Shares used in computing diluted earnings per common share 54,242 53,005

The Medicines Company
Condensed Consolidated Balance Sheets
September 30, December 31,
(in thousands) 2011 2010
(unaudited)
ASSETS
Cash, cash equivalents and available for sales securities $ 307,774 $ 246,644
Accrued interest receivable 443 1,279
Accounts receivable, net 72,725 46,551
Inventory 30,426 25,343
Prepaid expenses and other current assets 7,452 4,804
Total current assets 418,820 324,621
Fixed assets, net 18,528 20,662
Intangible assets, net 86,147 82,925
Restricted cash 4,626 5,778
Deferred tax assets 93,582 25,197
Goodwill 14,671 14,671
Other assets 289 270
Total assets $ 636,663 $ 474,124
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 125,270 $ 85,370
Contingent purchase price 28,204 25,387
Other long term liabilities 5,896 5,769
Stockholders' equity 477,293 357,598
Total liabilities and stockholders' equity $ 636,663 $ 474,124

The Medicines Company
Reconciliation of GAAP to non-GAAP Measures
(All amounts in thousands, except per share amounts)
(Unaudited)
Three Months Ended September 30,
2011
GAAP(1) Stock-Based Compensation Non-cash
Tax Provision
Non-GAAP(4)
As Adjusted
Net revenue $ 120,773 $ - $ - $ 120,773
Operating expenses:
Cost of revenue 39,459 (21 ) (2 ) - 39,438
Research and development 26,550 (527 ) (2 ) - 26,023
Selling, general and administrative 45,353 (2,353 ) (2 ) - 43,000
Total operating expenses 111,362 (2,901 ) - 108,461
Income from operations 9,411 2,901 - 12,312
Legal settlement - - - -
Other income 578 - - 578
Income before income taxes 9,989 2,901 - 12,890
Benefit (provision) for income taxes 62,625 - (66,296 ) (3 ) (3,671 )
Net income $ 72,614 $ 2,901 $ (66,296 ) $ 9,219
Basic earnings per common share $ 1.36 $ 0.05 $ (1.24 ) $ 0.17
Shares used in computing basic earnings per common share 53,534 53,534 53,534 53,534
Diluted earnings per common share $ 1.34 $ 0.05 $ (1.22 ) $ 0.17
Shares used in computing diluted earnings per common share 54,260 54,260 54,260 54,260
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 September 30,
2010
GAAP(1) Stock-Based Compensation Non-cash
Tax Provision
Non-GAAP (4)
As Adjusted
Net revenue $ 105,743 $ - $ - $ 105,743
Operating expenses:
Cost of revenue 31,568 (57 ) (2 ) - 31,511
Research and development 16,676 (331 ) (2 ) - 16,345
Selling, general and administrative 35,788 (1,387 ) (2 ) - 34,401
Total operating expenses 84,032 (1,775 ) - 82,257
Income from operations 21,711 1,775 - 23,486
Other income 483 - - 483
Income before income taxes 22,194 1,775 - 23,969
(Provision) benefit for income taxes (989 ) - (148 ) (3 ) (1,137 )
Net income $ 21,205 $ 1,775 $ (148 ) $ 22,832
Basic earnings per common share $ 0.40 $ 0.03 $ - $ 0.43
Shares used in computing basic earnings per common share 52,991 52,991 52,991 52,991
Diluted earnings per common share $ 0.40 $ 0.03 $ - $ 0.43
Shares used in computing diluted earnings per common share 53,359 53,359 53,359 53,359
(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)
Nine Months Ended September 30,
2011
GAAP(1) Stock-Based Compensation Non-cash
Tax Provision
Non-GAAP(4)
As Adjusted
Net revenue $ 352,501 $ - $ - $ 352,501
Operating expenses:
Cost of revenue 112,859 (98 ) (2 ) - 112,761
Research and development 76,878 (1,486 ) (2 ) - 75,392
Selling, general and administrative 124,701 (6,792 ) (2 ) - 117,909
Total operating expenses 314,438 (8,376 ) - 306,062
Income from operations 38,063 8,376 - 46,439
Legal settlement 17,984 - - 17,984
Other income 1,450 - - 1,450
Income before income taxes 57,497 8,376 - 65,873
Benefit (provision) for income taxes 50,798 - (59,743 ) (3 ) (8,945 )
Net income $ 108,295 $ 8,376 $ (59,743 ) $ 56,928
Basic earnings per common share $ 2.03 $ 0.16 $ (1.12 ) $ 1.07
Shares used in computing basic earnings per common share 53,414 53,414 53,414 53,414
Diluted earnings per common share $ 2.00 $ 0.15 $ (1.10 ) $ 1.05
Shares used in computing diluted earnings per common share 54,242 54,242 54,242 54,242
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)
Nine Months Ended September 30,
2010
GAAP(1) Stock-Based Compensation Non-cash
Tax Provision
Non-GAAP (4)
As Adjusted
Net revenue $ 317,966 $ - $ - $ 317,966
Costs and expenses:
Cost of revenue 93,905 (218 ) (2 ) - 93,687
Research and development 54,128 (1,569 ) (2 ) - 52,559
Selling, general and administrative 121,318 (5,068 ) (2 ) - 116,250
Total operating expenses 269,351 (6,855 ) - 262,496
Income from operations 48,615 6,855 - 55,470
Other income 55 - - 55
Income before income taxes 48,670 6,855 - 55,525
(Provision) benefit for income taxes $ (2,607 ) - 710 (3 ) (1,897 )
Net income $ 46,063 $ 6,855 $ 710 $ 53,628
Basic earnings per common share $ 0.87 $ 0.13 $ 0.01 $ 1.02
Shares used in computing basic earnings per common share 52,773 52,773 52,773 52,773
Diluted earnings per common share $ 0.87 $ 0.13 $ 0.01 $ 1.01
Shares used in computing diluted earnings per common share 53,005 53,005 53,005 53,005
(1) GAAP Results
(2) Non-cash stock compensation expense
(3) Non-cash income taxes
(4) Non-GAAP Results

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