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The Medicines Company (MDCO) Reports Fourth Quarter And Full Year 2013 Financial Results


2/20/2014 10:01:38 AM

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PARSIPPANY, NJ--(Marketwired - February 19, 2014) - The Medicines Company (NASDAQ: MDCO), a global company focused on saving lives, alleviating suffering, and improving the economic efficiency of the world's leading hospitals, today announced fourth quarter and full year financial results for 2013.

Highlights for the fourth quarter of 2013:

Worldwide net revenue increased by 16% to $185.0 million for the fourth quarter of 2013 from $159.5 million in the fourth quarter of 2012 driven by:

  • Worldwide Angiomax® (bivalirudin)/Angiox® (bivalirudin) revenue, which was up 4% from $155.3 million in 2012 to $160.9 million in 2013, driven by international growth (32% from $14.0 million in 2012 to $18.5 million in 2013) and sustained revenue in the United States (1% from $141.2 million in 2012 to $142.4 million in 2013).

  • Recothrom® Thrombin, topical (recombinant) sales were $19.7 million in the US in 2013. No sales were recorded by MDCO in 2012.

  • Other products including Argatroban RTU, Cleviprex® (clevidipine), Minocin IV and injectable generics recorded sales of $4.4 million in the US.

Net income for the fourth quarter of 2013 was $1.2 million, or $0.02 per share, compared with net income of $20.7 million, or $0.38 per share for the fourth quarter of 2012.

Adjusted net income(1) for the fourth quarter of 2013 decreased 38% to $17.7 million, or $0.26 per share(1), compared to adjusted net income(1) of $28.4 million, or $0.52 per share(1) for the fourth quarter 2012.

During the fourth quarter of 2013, the Company completed two transactions including the acquisition of Rempex Pharmaceuticals and a co-promotion partnership with Boston Scientific.

Highlights for the full year of 2013:

Worldwide net revenue increased by 23% to $687.9 million in 2013, up from $558.6 million in 2012, driven by:

  • Worldwide Angiomax/Angiox revenue, which was up 11% from $548.2 million in 2012 to $608.6 million in 2013, driven by international growth (25% from $46.5 million in 2012 to $58.4 million in 2013) and growth in the United States (10% from $501.7 million in 2012 to $550.2 million 2013).

  • Recothrom US sales were $63.3 million in 2013. No sales were recorded by MDCO in 2012.

  • Net revenue for other products including Argatroban RTU, Cleviprex, Minocin IV and injectable generics were up 55% from $10.4 million to $16.0 million in the US.

Net income for the full year 2013 was $15.5 million, or $0.25 per share, compared with net income of $51.3 million, or $0.93 per share in 2012.

The 2013 net income results include one-time costs in the amount of $46.1 million including licensing costs of $25.0 million for a transaction with Alnylam on the PCSK9 RNAi hypercholesterolemia program, a restructuring charge of $6.4 million, $9.7 million of deal costs, and an arbitration payment in the amount of $5.0 million.

Adjusted net income(1) for the full year 2013 increased 28% to $91.9 million, or $1.50 per share(1), compared to adjusted net income(1) of $71.8 million, or $1.30 per share(1) in 2012.

During the full-year 2013, the Company completed three global acquisitions (Incline Therapeutics, Profibrix and Rempex Pharmaceuticals), a US license and a global option to acquire Recothrom from Bristol Myers Squibb, a global product development partnership with Alnylam, and a US co-promotion partnership with Boston Scientific.

During the full year 2013, the Company also reported successful phase III or phase IV study results for cangrelor, Fibrocaps, oritavancin and Angiomax/Angiox.

(1) Adjusted net income and adjusted earnings per share are non-GAAP financial performance measures with no standardized definitions under US GAAP. For further information and a detailed reconciliation, refer to the Non-GAAP Financial Performance Measures and Reconciliations of GAAP to Adjusted Net income sections of this release for explanations of the amounts excluded and included to arrive at adjusted net income and adjusted earnings per share amounts.

Glenn Sblendorio, President and Chief Financial Officer, stated, "2013 was a very strong year for us, including robust growth in net revenue, positive cash-flow, a string of product development successes and an aggressive build-up of our diversified yet focused acute and intensive care medicines portfolio. We believe that this sets us up for a prolonged period of growth to 2018 and beyond."

Clive Meanwell, Chairman and Chief Executive Officer, added, "During 2013 we continued to pursue our purpose which is to save lives, alleviate suffering and contribute to the efficiency of healthcare by focusing on around 3000 leading hospitals worldwide. We look forward to significant further progress in 2014."

Conference Call Information

There will be a conference call with management today at 8:30 a.m. Eastern Time to discuss 2013 financial results, operational developments, and outlook. The conference call will be available via phone and webcast. The webcast can be accessed at www.themedicinescompany.com.

Domestic Dial In: +1 (866) 318 8620
International Dial In: +1 (617) 399 5139
Passcode for both dial in numbers: 76913820

Replay is available from 12:30 p.m. Eastern Time following the conference call through February 26, 2014. To hear a replay of the call dial +1 888 286 8010 (domestic) and +1 617 801 6888 (international). Passcode for both dial in numbers is 98856638.

NON-GAAP FINANCIAL PERFORMANCE MEASURES

In addition to financial information prepared in accordance with U.S. GAAP, this press release also contains adjusted net income and adjusted earnings per share measures that we believe provide investors and management with supplemental information relating to operating performance and trends that facilitate comparisons between periods and with respect to projected information. Adjusted net income excludes upfront collaboration payments, amortization of acquired intangible assets, deal related charges, restructuring charges, stock-based compensation expense, arbitration award, changes in contingent consideration, non-cash interest and net income tax adjustments. See the attached Reconciliations of GAAP to Adjusted Net Income and Adjusted Earnings Per Share for explanations of the amounts excluded and included to arrive at adjusted net income and adjusted earnings per share amounts for the three month periods and year ended December 31, 2013 and December 31, 2012.

These adjusted measures are non-GAAP and should be considered in addition to, but not as a substitute for, the information prepared in accordance with U.S. GAAP. We typically exclude certain GAAP items that management does not believe affect our basic operations and that do not meet the GAAP definition of unusual or non-recurring items. Other companies may define these measures in different ways.

About The Medicines Company

The Medicines Company's purpose is to save lives, alleviate suffering, and contribute to the economics of healthcare by focusing on 3,000 leading acute/intensive care hospitals worldwide. Its vision is to be a leading provider of solutions in three areas: acute cardiovascular care, surgery and perioperative care, and serious infectious disease care. The company operates in the Americas, Europe and the Middle East, and Asia Pacific regions with global centers today in Parsippany, NJ, USA and Zurich, Switzerland.

Forward Looking Statements

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, 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 5, 2013, 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               
                                                                            
                                                      Three months ended    
(in thousands, except per share data)                     December 31       
                                                   ------------------------ 
                                                       2013         2012    
                                                   -----------  ----------- 
                                                                            
Net revenue                                        $   185,003  $   159,490 
Operating expenses:                                                         
  Cost of revenue                                       76,339       52,228 
  Research and development                              38,522       26,147 
  Selling, general and administrative                   86,004       44,704 
                                                   -----------  ----------- 
    Total operating expenses                           200,865      123,079 
                                                   -----------  ----------- 
                                                                            
Income (loss) from operations                          (15,862)      36,411 
  Co-promotion income                                    5,142        3,750 
  Interest expense                                      (4,388)      (3,616)
  Other income                                             391          177 
                                                   -----------  ----------- 
                                                                            
Income (loss) before income taxes                      (14,717)      36,722 
Benefit (provision) for income taxes                    15,803      (16,141)
                                                   -----------  ----------- 
                                                                            
Net income                                               1,086       20,581 
Net loss attributable to non-controlling interest          112           82 
                                                   -----------  ----------- 
Net income attributable to The Medicines Company   $     1,198  $    20,663 
                                                   ===========  =========== 
                                                                            
Earnings per common share attributable to The                               
 Medicines Company:                                                         
Basic                                              $      0.02  $      0.39 
                                                   ===========  =========== 
Diluted                                            $      0.02  $      0.38 
                                                   ===========  =========== 
Weighted average number of common shares                                    
 outstanding:                                                               
Basic                                                   63,437       53,221 
                                                   ===========  =========== 
Diluted                                                 69,019       55,022 
                                                   ===========  =========== 
                                                                            
                                                                            
                                                                            
                           The Medicines Company                            
              Condensed Consolidated Statements of Operations               
                                                                            
                                                                            
(in thousands, except per share data)              Year to Date December 31 
                                                   ------------------------ 
                                                       2013         2012    
                                                   -----------  ----------- 
Net revenue                                        $   687,864  $   558,588 
Operating expenses:                                                         
  Cost of revenue                                      262,785      177,339 
  Research and development                             146,930      126,423 
  Selling, general and administrative                  264,958      171,753 
                                                   -----------  ----------- 
    Total operating expenses                           674,673      475,515 
                                                   -----------  ----------- 
                                                                            
Income (loss) from operations                           13,191       83,073 
  Co-promotion income                                   17,383       10,000 
  Interest expense                                     (15,531)      (8,005)
  Other income                                           1,577        1,140 
                                                   -----------  ----------- 
Income (loss) before income taxes                       16,620       86,208 
Provision for income taxes                              (1,360)     (35,038)
                                                   -----------  ----------- 
Net income                                              15,260       51,170 
Net loss attributable to non-controlling interest          252           84 
                                                   -----------  ----------- 
Net income attributable to The Medicines Company   $    15,512  $    51,254 
                                                   ===========  =========== 
                                                                            
Earnings per common share attributable to The                               
 Medicines Company:                                                         
Basic                                              $      0.27  $      0.96 
                                                   ===========  =========== 
Diluted                                            $      0.25  $      0.93 
                                                   ===========  =========== 
Weighted average number of common shares                                    
 outstanding:                                                               
Basic                                                   58,096       53,545 
                                                   ===========  =========== 
Diluted                                                 62,652       55,346 
                                                   ===========  =========== 
                                                                            
                                                                            
                                                                            
                                                                            
                                                                            
Balance Sheet Items                                        December 31,     
                                                     -----------------------
(in thousands)                                           2013        2012   
                                                     ----------- -----------
                                                                            
                                                                            
Cash, cash equivalents and available for sales                              
 securities                                          $   376,727 $   570,321
Total assets                                         $ 1,741,282 $   972,182
Convertible senior notes (due 2017)                  $   236,088 $   226,109
Total The Medicines Company stockholders' equity     $   892,161 $   586,222
                                                                            
                                                                            
                                                                            
                                                                            
                        The Medicines Company                               
            Reconciliation of GAAP to Adjusted Net Income                   
                             (unaudited)                                    
                            (in thousands)                                  
                                                                            
                                  Three months ended   Twelve months ended  
                                     December 31,          December 31,     
                                 --------------------  -------------------- 
                                    2013       2012       2013       2012   
                                 ---------  ---------  ---------  --------- 
                                                                            
Net (loss) income                                                           
 attributable to The                                                        
 Medicines Company - GAAP        $   1,198  $  20,663  $  15,512  $  51,254 
Before tax adjustments:                                                     
 Cost of revenue:                                                           
  Stock based compensation                                                  
   expense                  (1)         84         49        231        175 
  Amortization of acquired                                                  
   intangible assets        (2)     10,075        226     23,969        922 
  Restructuring charges     (3)          -          -        581          - 
 Research and development:                                                  
  Stock based compensation                                                  
   expense                  (1)      1,423        539      4,053      2,265 
  Restructuring charges     (3)          -          -      1,252          - 
  Upfront collaboration                                                     
   payments                 (4)          -          -     25,000          - 
 Selling, general and                                                       
  administrative:                                                           
  Stock based compensation                                                  
   expense                  (1)      5,705      3,258     18,555     12,537 
  Amortization of acquired                                                  
   intangible assets        (2)      1,136        900      4,544      3,508 
  Restructuring charges     (3)          -          -      4,525          - 
  Change in contingent                                                      
   value rights             (5)     17,110     (3,662)    16,942     (1,460)
  Expenses incurred for                                                     
   certain transactions     (6)      2,644      1,660      9,720      1,772 
  Arbitration award         (7)          -          -      5,000          - 
 Other:                                                                     
  Non-cash interest expense (8)      2,851      2,671     11,158      5,904 
 Net income tax adjustments (9)    (24,533)     2,124    (49,165)    (5,038)
                                 ---------  ---------  ---------  --------- 
Net income attributable to                                                  
 The Medicines Company -                                                    
 Adjusted                        $  17,693  $  28,428  $  91,877  $  71,839 
                                 =========  =========  =========  ========= 
                                                                            
Net income per share                                                        
 attributable to The                                                        
 Medicines Company -                                                        
 Adjusted:                                                                  
 Basic                           $    0.28  $    0.53  $    1.58  $    1.34 
 Diluted                    (10) $    0.26  $    0.52  $    1.50  $    1.30 
Weighted average number of                                                  
 common shares outstanding:                                                 
 Basic                              63,437     53,221     58,096     53,545 
 Diluted - Adjusted         (10)    66,864     55,022     61,184     55,346 
                                                                            
Explanation of Adjustments:                                                 
(1) Exclude share based compensation of $7,212 and $3,846 for three months  
 ended December 31, 2013 and December 31, 2012 and $22,839 and $14,977 for  
 the twelve months ended December 31, 2013 and December 31, 2012.           
(2) Exclude amortization of intangible assets resulting from transactions   
 with Nycomed, CSL, APP, Teva, and BMS.                                     
(3) Exclude restructuring charges relating to headcount reduction of $6,358 
 during 2013.                                                               
(4) Exclude upfront payments for research and development collaboration     
 arrangements.                                                              
(5) Exclude changes in contingent value rights due to shareholders of       
 Targanta Therapeutics, Incline Therapeutics, ProFibrix and Rempex.         
(6) Exclude charges related to the acquisition of Incline, ProFibrix,       
 Rempex and license of Recothrom.                                           
(7) Exclude one time arbitration award to Eagle.                            
(8) Exclude non-cash interest expense related to convertible senior notes.  
(9) Net income tax adjustments reflect the estimated tax effect of the      
 above adjustments and the impact of certain other non-operating tax        
 adjustments.                                                               
(10) Reflects impact of note hedge transactions on outstanding diluted      
 share amounts and net income per share associated with convertible senior  
 notes.                                                                     
                                                                            
In addition to the financial information prepared in accordance with U.S.   
 GAAP, this press release also contains adjustedfinancial measures that we  
 believe provide investors and management with supplemental information     
 relating to operatingperformance and trends that facilitate comparisons    
 between periods and with respect to projected information. Theseadjusted   
 measures should be considered in addition to, but not as a substitute for, 
 the information prepared in accordancewith U.S. GAAP. We typically exclude 
 certain GAAP items that management does not believe affect our basic       
 operationsand that do not meet the GAAP definition of unusual or non-      
 recurring items. Other companies may define these measuresin different     
 ways.                                                                      
                                                                            

Contact:
Neera Dahiya Ravindran, MD
The Medicines Company
Vice President, Investor Relations & Strategic Planning
+1 (973) 290-6044
neera.ravindran@themedco.com



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