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The Medicines Company (MDCO) Reports Third Quarter 2012 Financial Results



10/24/2012 8:45:58 AM

PARSIPPANY, NJ--(Marketwire - October 24, 2012) - 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 third quarter results for 2012.

Financial highlights for the third quarter of 2012:

  • Net revenue increased by 13.3% to $136.8 million for the third quarter of 2012 from $120.8 million in the third quarter of 2011.
    • Angiomax U.S. sales increased by 11.4% to $123.8 million in the third quarter of 2012 compared to $111.1 million in the third quarter of 2011.
    • Angiomax/Angiox international net revenue in the third quarter of 2012 increased by 8.1% to $10.0 million compared with $9.2 million in the third quarter of 2011. This included European Angiox volume growth of 44% in the third quarter of 2012 compared to the third quarter of 2011.
  • Net income for the third quarter of 2012 was $9.3 million, or $0.17 per share, compared with net income of $72.6 million, or $1.34 per share, for the third quarter of 2011. Net income for the third quarter of 2011 included a $66.5 million benefit for income taxes related to a reduction in the Company's valuation allowance against its deferred tax assets.
  • Non-GAAP net income for the third quarter of 2012 was $21.8 million, or $0.40 per share, compared to non-GAAP net income of $9.2 million, or $0.17 per share for the third quarter 2011. Non-GAAP net income excludes stock-based compensation expense, non-cash interest expense and non-cash income taxes. A reconciliation of the Company's GAAP to non-GAAP results is included within the press release.

Financial highlights for the nine months ended September 30, 2012:

  • Net revenue increased by 13.2% to $399.1 million for the first nine months ended of 2012 compared with $352.5 million for the same period in 2011.
    • Angiomax U.S. sales increased by 9.9% to $360.5 million for the first nine months of 2012 compared with $328.1 million for the same period of 2011.
    • Angiomax/Angiox international net revenue for the first nine months of 2012 increased by 37.5% to $32.5 million compared with $23.7 million for the same period of 2011. This included European Angiox volume growth of 54% in the first nine months of 2012 compared to the same period of 2011.
  • Net income for the first nine months of 2012 was $30.6 million, or $0.55 per share, compared with net income of $108.3 million, or $2.00 per share, for the same period of 2011. Net income for the first nine months of 2011 included a $59.7 million benefit for income taxes, or $1.10 per share, related to a reduction in the Company's valuation allowance against its deferred tax assets.
  • Non-GAAP net income for the first nine months of 2012 was $62.7 million, or $1.13 per share, compared with non-GAAP net income of $56.9 million, or $1.05 per share for same period of 2011. Non-GAAP net income excludes stock-based compensation expense, non-cash interest expense and non-cash income taxes.

Recent research and development highlights include:

  • Completed patient enrollment in SOLO-I, a 960 patient Phase 3 clinical trial of oritavancin
  • Completed patient enrollment in CHAMPION PHOENIX, an 10,900 patient Phase 3 clinical trial of cangrelor
  • Commenced patient enrollment in a pharmacodynamic equivalence study of intravenous MDCO-157 comparing it with oral clopidogrel

Glenn Sblendorio, President and Chief Financial Officer, stated, "We are consistently growing globally and our R&D programs progressed faster than expected. The progress our R&D team made with cangrelor and oritavancin -- completing the large PHOENIX and SOLO I Phase 3 trials -- is ahead of expectation."

There will be a conference call with management today at 8:30 a.m. Eastern Time to discuss third quarter 2012 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: 800-291-5365

International Dial In: 617-614-3922

Passcode for both dial in numbers: 80720546

Replay is available from 10:30 a.m. Eastern Time following the conference call through November 7, 2012. To hear a replay of the call dial 888-286-8010 (domestic) and 617-801-6888 (international). Passcode for both dial in numbers is 80649180.

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, 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 August 9, 2012, 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)                                
                                                                            
                                                        Three months ended  
(in thousands, except per share data)                     September 30,     
                                                    ------------------------
                                                        2012         2011   
                                                    -----------  -----------
                                                                            
Net revenue                                         $   136,786  $   120,773
                                                                            
Operating expenses:                                                         
  Cost of revenue                                        43,767       39,459
  Research and development                               34,536       26,550
  Selling, general and administrative                    43,396       45,353
                                                    -----------  -----------
    Total operating expenses                            121,699      111,362
                                                    -----------  -----------
                                                                            
Income from operations                                   15,087        9,411
  Co-promotion income                                     3,750            -
  Interest expense                                       (3,605)           -
  Other income                                              204          578
                                                    -----------  -----------
                                                                            
Income before income taxes                               15,436        9,989
(Provision) benefit for income taxes                     (6,172)      62,625
                                                    -----------  -----------
                                                                            
Net income                                                9,264       72,614
Net loss attributable to non-controlling interest             1            -
                                                    -----------  -----------
Net income attributable to The Medicines Company    $     9,265  $    72,614
                                                    ===========  ===========
                                                                            
Basic earnings per common share attributable to The                         
 Medicines Company                                  $      0.18  $      1.36
                                                    ===========  ===========
Shares used in computing basic earnings per common                          
 share                                                   52,896       53,534
                                                    ===========  ===========
                                                                            
Diluted earnings per common share attributable to                           
 The Medicines Company                              $      0.17  $      1.34
                                                    ===========  ===========
Shares used in computing diluted earnings per                               
 common share                                            55,145       54,260
                                                    ===========  ===========
                                                                            
                                                                            
                                                                        
                          The Medicines Company                         
             Condensed Consolidated Statements of Operations            
                               (unaudited)                              
                                                                        
                                                 Year to Date September 
(in thousands, except per share data)                      30,          
                                                ------------------------
                                                    2012         2011   
                                                -----------  -----------
Net revenue                                     $   399,098  $   352,501
Operating expenses:                                                     
  Cost of revenue                                   125,111      112,859
  Research and development                          100,276       76,878
  Selling, general and administrative               127,049      124,701
                                                -----------  -----------
    Total operating expenses                        352,436      314,438
                                                -----------  -----------
                                                                        
Income from operations                               46,662       38,063
  Legal settlement                                        -       17,984
  Co-promotion income                                 6,250            -
  Interest expense                                   (4,389)           -
  Other income                                          963        1,450
                                                -----------  -----------
                                                                        
Income before income taxes                           49,486       57,497
(Provision) benefit for income taxes                (18,897)      50,798
                                                -----------  -----------
Net income                                           30,589      108,295
Net loss attributable to non-controlling                                
 interest                                                 2            -
                                                -----------  -----------
Net income attributable to The Medicines                                
 Company                                        $    30,591  $   108,295
                                                ===========  ===========
                                                                        
Basic earnings per common share attributable to                         
 The Medicines Company                          $      0.57  $      2.03
                                                ===========  ===========
Shares used in computing basic earnings per                             
 common share                                        53,653       53,414
                                                ===========  ===========
                                                                        
Diluted earnings per common share attributable                          
 to The Medicines Company                       $      0.55  $      2.00
                                                ===========  ===========
Shares used in computing diluted earnings per                           
 common share                                        55,455       54,242
                                                ===========  ===========
                                                                        
                                                                        
                                                                            
                            The Medicines Company                           
                    Condensed Consolidated Balance Sheets                   
                                                                            
                                                 September 30,  December 31,
(in thousands)                                        2012          2011    
                                                 ------------- -------------
                                                  (unaudited)               
                     ASSETS                                                 
Cash, cash equivalents and available for sales                              
 securities                                      $     545,355 $     340,512
Accrued interest receivable                                414           374
Accounts receivable, net                                83,425        74,559
Inventory                                               62,337        45,145
Deferred tax assets                                      8,123         9,395
Prepaid expenses and other current assets               12,922        11,738
                                                 ------------- -------------
  Total current assets                                 712,576       481,723
                                                                            
Fixed assets, net                                       16,540        17,979
Intangible assets, net                                 120,702        87,329
Restricted cash                                          1,564         4,714
Deferred tax assets                                     72,531        78,441
Goodwill                                                14,671        14,671
Other assets                                            14,950         7,790
                                                 ------------- -------------
  Total assets                                   $     953,534 $     692,647
                                                 ============= =============
                                                                            
      LIABILITIES AND STOCKHOLDERS' EQUITY                                  
Current liabilities                              $     142,572 $     154,635
  Contingent purchase price                             22,633        20,431
  Convertible senior notes (due 2017)                  223,711             -
  Deferred Tax Liability                                     -             -
  Other Long Term Liabilities                            6,076         5,939
Stockholders' equity                                   558,542       511,642
                                                 ------------- -------------
  Total liabilities and stockholders' equity     $     953,534 $     692,647
                                                 ============= =============
                                                                            
                                                                            

The following table provides reconciliations between GAAP and non-GAAP net income for the third quarter (Q3) and nine months ended September 30, 2012 and 2011. Non-GAAP net income excludes the transaction charges related to stock-based compensation expense, non-cash interest expense and non-cash income taxes:

                                                                            
                         The Medicines Company                              
              Reconciliation of GAAP to non-GAAP Measures                   
                              (unaudited)                                   
                                                Three months                
                                                   ended       Year to Date 
                                               September 30,  September 30, 
                                               -------------  ------------- 
EARNINGS PER SHARE                              2012   2011    2012   2011  
                                               ------ ------  ------ ------ 
                                                                            
GAAP earnings per share - Diluted              $ 0.17 $ 1.34  $ 0.55 $ 2.00 
  Adjustments to net income attributable to                                 
   The Medicines Company (as detailed below)     0.23  (1.17)   0.58  (0.95)
                                               ------ ------  ------ ------ 
Non-GAAP earnings per share - Diluted          $ 0.40 $ 0.17  $ 1.13 $ 1.05 
                                               ====== ======  ====== ====== 
                                                                            
                                                                            

An itemized reconciliation between net income attributable to The Medicines Company on a GAAP basis and net income attributable to The Medicines Company on a non-GAAP basis is as follows:

                                                                            
                                    Three months ended     Year to Date     
(in thousands)                        September 30,        September 30,    
                                   -------------------  ------------------- 
                                      2012      2011       2012      2011   
                                   --------- ---------  --------- --------- 
                                                                            
GAAP net income attributable to                                             
 The Medicines Company             $   9,265 $  72,614  $  30,591 $ 108,295 
  Adjustments:                                                              
  Cost of revenue: Stock-based                                              
   compensation expense                   54        21        127        98 
  Research and development: Stock-                                          
   based compensation expense            700       527      1,726     1,486 
  Selling, general and                                                      
   administrative: Stock-based                                              
   compensation expense                3,083     2,353      9,279     6,792 
  Non-cash interest expense            2,656         -      3,233         - 
  Non-cash tax provision               6,036   (66,296)    17,746   (59,743)
                                   --------- ---------  --------- --------- 
Non-GAAP net income attributable                                            
 to The Medicines Company          $  21,794 $   9,219  $   2,702 $  56,928 
                                   ========= =========  ========= ========= 
                                                                            

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 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.


Contact:
Michael Mitchell
The Medicines Company
973-290-6000
investor.relations@themedco.com


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