Contact: Michael Mitchell
Executive Director, Corporate Affairs
The Medicines Company
973-656-1616
investor.relations@themedco.com
FOR IMMEDIATE RELEASE:
THE MEDICINES COMPANY REPORTS THIRD QUARTER 2007
FINANCIAL RESULTS
PARSIPPANY, NJ — October 24, 2007 — The Medicines Company (NASDAQ: MDCO) today announced its financial results for the third quarter and first nine months of 2007. The Company reported net revenue of $62.2 million for third quarter and $185.2 million for the first nine months of 2007. The Company reported a net loss in the third quarter resulting primarily from non-recurring charges related to the July 2, 2007 termination of its distribution arrangements with Nycomed and the reacquisition of all development, commercial and distribution rights held by Nycomed for Angiox(R) (bivalirudin) in Europe.
Revenue highlights for third quarter 2007:
• Net revenue increased to $62.2 million for the third quarter of 2007, compared to $59.6 million for the third quarter of 2006.
o Angiomax® (bivalirudin) U.S. sales increased to $60.7 million in the third quarter of 2007, compared to $55.7 million in the third quarter of 2006.
o Angiomax/Angiox international net revenues decreased to $1.5 million for the third quarter of 2007, compared to $3.4 million in the third quarter of 2006. The international net revenues in the third quarter of 2007 included $1.2 million from the new distribution agreement with Nycomed.
Earnings (loss) highlights for third quarter 2007:
• Fully diluted loss per share as reported under U.S. generally accepted accounting principles (GAAP) was $0.46, which includes the non-recurring Nycomed transaction charges, stock-based compensation expense and a non-cash benefit for income taxes.
• Excluding the non-recurring Nycomed transaction charges, stock-based compensation expense and the non-cash benefit for income taxes, the Company reported fully diluted non-GAAP earnings per share (EPS) of $0.12.
“In the U.S. angioplasty market, Angiomax continues to gain market share, particularly among higher risk patients, where we anticipate further gains ahead,” said John Kelley, President and Chief Operating Officer. “We made significant progress in key operating goals recently. As planned, we filed in the third quarter a supplemental new drug application (sNDA) with data from the ACUITY trial of Angiomax use in acute coronary syndromes patients. We previously met our goal to submit an NDA to the FDA for Cleviprex(TM) (clevidipine butyrate injectable emulsion), our novel blood pressure control agent, and we continued with patient enrollment of Phase III trials for cangrelor, our novel antiplatelet therapy.”
The following table provides reconciliations between GAAP and non-GAAP net income for the third quarters (Q3) of 2007 and 2006, as well as the first nine months (9M) of 2007 and 2006, excluding for each of these periods the non-recurring Nycomed transaction charges, stock-based compensation expense and the non-cash benefit for income taxes:
(in millions) |
| Reported |
| Nycomed |
| FAS 123R Stock- |
| Non-Cash |
| Non-GAAP Net |
| |||||
Q3 2007 |
| $ | (23.6 | ) | $ | 28.1 |
| $ | 4.1 |
| $ | (2.2 | ) | $ | 6.3 |
|
Q3 2006 |
| $ | 10.7 |
| — |
| $ | 2.6 |
| — |
| $ | 13.3 |
| ||
9M 2007 |
| $ | (19.8 | ) | $ | 28.1 |
| $ | 11.3 |
| — |
| $ | 19.6 |
| |
9M 2006 |
| $ | 9.5 |
| — |
| $ | 6.1 |
| — |
| $ | 15.6 |
| ||
Note: Amounts may not sum due to rounding.
1Excluding non-recurring Nycomed transaction charges, stock-based compensation expense and the non-cash benefit for income taxes
Reconciliations between GAAP and non-GAAP fully diluted EPS for the third quarters (Q3) of 2007 and 2006, as well as the first nine months (9M) of 2007 and 2006 are provided in the following table:
(per share) |
| Reported |
| Nycomed |
| FAS 123R Stock- |
| Non-Cash |
| Non-GAAP Net |
| |||||
Q3 2007 |
| $ | (0.46 | ) | $ | 0.54 |
| $ | 0.08 |
| $ | (0.04 | ) | $ | 0.12 |
|
Q3 2006 |
| $ | 0.21 |
| — |
| $ | 0.05 |
| — |
| $ | 0.26 |
| ||
9M 2007 |
| $ | (0.38 | ) | $ | 0.54 |
| $ | 0.22 |
| — |
| $ | 0.38 |
| |
9M 2006 |
| $ | 0.19 |
| — |
| $ | 0.12 |
| — |
| $ | 0.31 |
| ||
Note: Amounts may not sum due to rounding.
1Excluding non-recurring Nycomed transaction charges, stock-based compensation expense and the non-cash benefit for income taxes
2
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 the non-recurring Nycomed transaction charges, stock-based compensation expense and the non-cash benefit for 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 4:30 PM ET to discuss financial results, guidance, outlook 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:
| 877-675-4755 | |
International Dial In: |
| 719-325-4850 |
Replay is available from 7 p.m. Eastern Time following the conference call through November 7, 2007. To hear a replay of the call dial 888-203-1112 (domestic) and 719-457-0820 (international). Passcode for both dial in numbers is 1150439.
MDCO-F
About The Medicines Company: The Medicines Company (NASDAQ: MDCO) is committed to delivering innovative, cost-effective acute care products in the worldwide hospital marketplace. The Company markets Angiomax®/Angiox® (bivalirudin) in the United States and other countries for use in patients undergoing coronary angioplasty, a procedure to clear restricted blood flow in arteries around the heart. The Company also has two products in late-stage development, Cleviprex™ (clevidipine butyrate injectable emulsion) and cangrelor. The Company’s website is http://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 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 whether the Company is successful in extending the term of the principal patent covering Angiomax, the extent of the commercial success of Angiomax, 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, risks associated with
3
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 9, 2007, which are incorporated herein by reference. The Company specifically disclaims any obligation to update these forward-looking statements
4
The Medicines Company
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except per share data) |
| Three months ended September 30, |
| ||||
|
| 2007 |
| 2006 |
| ||
|
|
|
|
|
| ||
Net revenue |
| $ | 62,191 |
| $ | 59,580 |
|
Operating expenses: |
|
|
|
|
| ||
Cost of revenue |
| 16,157 |
| 14,342 |
| ||
Research and development |
| 18,741 |
| 15,867 |
| ||
Selling, general and administrative |
| 55,499 |
| 20,312 |
| ||
Total operating expenses |
| 90,397 |
| 50,521 |
| ||
Income (loss) from operations |
| (28,206 | ) | 9,059 |
| ||
Other income |
| 2,664 |
| 2,045 |
| ||
Income (loss) before income taxes |
| (25,542 | ) | 11,104 |
| ||
Benefit (provision) for income taxes |
| 1,899 |
| (432 | ) | ||
|
|
|
|
|
| ||
Net income (loss) |
| $ | (23,643 | ) | $ | 10,672 |
|
|
|
|
|
|
| ||
Basic earnings (loss) per common share |
| $ | (0.46 | ) | $ | 0.21 |
|
Shares used in computing basic earnings (loss) per common |
| 51,672 |
| 50,478 |
| ||
|
|
|
|
|
| ||
Diluted earnings (loss) per common share |
| $ | (0.46 | ) | $ | 0.21 |
|
Shares used in computing diluted earnings (loss) per |
| 51,672 |
| 51,114 |
|
5
The Medicines Company
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except per share data) |
| Nine months ended September 30, |
| ||||
|
| 2007 |
| 2006 |
| ||
|
|
|
|
|
| ||
Net revenue |
| $ | 185,237 |
| $ | 153,595 |
|
Operating expenses: |
|
|
|
|
| ||
Cost of revenue |
| 49,031 |
| 38,291 |
| ||
Research and development |
| 53,948 |
| 44,393 |
| ||
Selling, general and administrative |
| 109,457 |
| 65,965 |
| ||
Total operating expenses |
| 212,436 |
| 148,649 |
| ||
Income (loss) from operations |
| (27,199 | ) | 4,946 |
| ||
|
|
|
|
|
| ||
Other income |
| 7,965 |
| 4,907 |
| ||
Income (loss) before income taxes |
| (19,234 | ) | 9,853 |
| ||
Provision for income taxes |
| (545 | ) | (380 | ) | ||
Net income (loss) |
| $ | (19,779 | ) | $ | 9,473 |
|
|
|
|
|
|
| ||
Basic earnings (loss) per common share |
| $ | (0.38 | ) | $ | 0.19 |
|
Shares used in computing basic earnings (loss) per common |
| 51,596 |
| 50,116 |
| ||
|
|
|
|
|
| ||
Diluted earnings (loss) per common share |
| $ | (0.38 | ) | $ | 0.19 |
|
Shares used in computing diluted earnings (loss) per |
| 51,596 |
| 50,779 |
|
6
The Medicines Company
Condensed Consolidated Balance Sheets
(unaudited)
|
| September 30, |
| December 31, |
| ||
(in thousands) |
| 2007 |
| 2006 |
| ||
|
|
|
|
|
| ||
ASSETS |
|
|
|
|
| ||
Cash, cash equivalents, available for sales securities |
| $ | 210,216 |
| $ | 196,817 |
|
Accrued interest receivable |
| 1,824 |
| 1,414 |
| ||
Accounts receivable, net |
| 30,577 |
| 21,504 |
| ||
Inventory |
| 29,116 |
| 41,628 |
| ||
Prepaid expenses and other current assets |
| 11,751 |
| 12,963 |
| ||
Total current assets |
| 283,484 |
| 274,326 |
| ||
|
|
|
|
|
| ||
Fixed assets, net |
| 2,623 |
| 3,071 |
| ||
Intangible assets, net |
| 14,929 |
| — |
| ||
Deferred tax assets |
| 41,032 |
| 41,032 |
| ||
Other assets |
| 135 |
| 139 |
| ||
Total assets |
| $ | 342,203 |
| $ | 318,568 |
|
|
|
|
|
|
| ||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
| ||
Current liabilities |
| $ | 71,240 |
| $ | 45,803 |
|
Deferred revenue |
| — |
| 2,814 |
| ||
Stockholders’ equity |
| 270,963 |
| 269,951 |
| ||
Total liabilities and stockholders’ equity |
| $ | 342,203 |
| $ | 318,568 |
|
7
The Medicines Company
Reconciliation of GAAP to non-GAAP Measures
(All amounts in thousands, except per share amounts)
(Unaudited)
|
| Three Months Ended September 30, |
| |||||||||||||
|
| 2007 |
| |||||||||||||
|
| GAAP (1) |
| Nycomed |
| SFAS 123R |
| Tax Benefit |
| Non-GAAP (5) |
| |||||
Net revenue |
| $ | 62,191 |
| $ | — |
| $ | — |
| $ | — |
| $ | 62,191 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
| |||||
Cost of revenue |
| 16,157 |
| — |
| (99 | )(3) | — |
| 16,058 |
| |||||
Research and development |
| 18,741 |
| — |
| (846 | )(3) | — |
| 17,895 |
| |||||
Sellling, general and administrative |
| 55,499 |
| (28,110 | )(2) | (3,113 | )(3) | — |
| 24,276 |
| |||||
Total costs and expenses |
| 90,397 |
| (28,110 | ) | (4,058 | ) | — |
| 58,229 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Income (loss) from operations |
| (28,206 | ) | 28,110 |
| 4,058 |
| — |
| 3,962 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Other income |
| 2,664 |
| — |
| — |
| — |
| 2,664 |
| |||||
Income before income taxes |
| (25,542 | ) | 28,110 |
| 4,058 |
| — |
| 6,626 |
| |||||
(Provision) benefit for income taxes |
| 1,899 |
| — |
|
|
| (2,217 | )(4) | (318 | ) | |||||
Net income (loss) |
| (23,643 | ) | 28,110 |
| 4,058 |
| (2,217 | ) | 6,308 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Basic earnings per common share |
| $ | (0.46 | ) | $ | 0.54 |
| $ | 0.08 |
| $ | (0.04 | ) | $ | 0.12 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Shares used in computing basic earnings (loss) per common share |
| 51,672 |
| 51,672 |
| 51,672 |
| 51,672 |
| 51,672 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Diluted earnings per common share |
| $ | (0.46 | ) | $ | 0.54 |
| $ | 0.08 |
| $ | (0.04 | ) | $ | 0.12 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Shares used in computing diluted earnings (loss) per common share |
| 51,672 |
| 51,672 |
| 51,672 |
| 51,672 |
| 51,672 |
|
(1) GAAP Results
(2) Charge of $30,760 due to the termination of pre-existing relationship with Nycomed, offset by a write-off of deferred revenue previously recorded of $2,650
(3) Non-cash stock compensation expense
(4) Non -cash tax benefit
(5) Non-GAAP Results
8
The Medicines Company
Reconciliation of GAAP to non-GAAP Measures
(All amounts in thousands, except per share amounts)
(Unaudited)
|
| Nine Months Ended September 30, |
| |||||||||||||||
|
| 2007 |
| |||||||||||||||
|
| GAAP (1) |
| Nycomed |
| SFAS 123R |
| Tax Benefit |
| Non-GAAP (5) |
| |||||||
Net revenue |
| $ | 185,237 |
| $ | — |
| $ | — |
| $ | — |
| $ | 185,237 |
| ||
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
| |||||||
Cost of revenue |
| 49,031 |
| — |
| (292 | )(3) | — |
| 48,739 |
| |||||||
Research and development |
| 53,948 |
| — |
| (2,371 | )(3) | — |
| 51,577 |
| |||||||
Sellling, general and administrative |
| 109,457 |
| (28,110 | )(2) | (8,622 | )(3) | — |
| 72,725 |
| |||||||
Total costs and expenses |
| 212,436 |
| (28,110 | ) | (11,285 | ) | — |
| 173,041 |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Income (loss) from operations |
| (27,199 | ) | 28,110 |
| 11,285 |
| — |
| 12,196 |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Other income |
| 7,965 |
| — |
| — |
| — |
| 7,965 |
| |||||||
Income before income taxes |
| (19,234 | ) | 28,110 |
| 11,285 |
| — |
| 20,161 |
| |||||||
(Provision) benefit for income taxes |
| (545 | ) | — |
| — |
| — | (4) | (545 | ) | |||||||
Net income (loss) |
| (19,779 | ) | 28,110 |
| 11,285 |
| — |
| 19,616 |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Basic earnings per common share |
| $ | (0.38 | ) | $ | 0.54 |
| $ | 0.22 |
| $ | — |
| $ | 0.38 |
| ||
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Shares used in computing basic earnings (loss) per common share |
| 51,596 |
| 51,596 |
| 51,596 |
| 51,596 |
| 51,596 |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Diluted earnings per common share |
| $ | (0.38 | ) | $ | 0.54 |
| $ | 0.22 |
| $ | — |
| $ | 0.38 |
| ||
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Shares used in computing diluted earnings (loss) per common share |
| 51,596 |
| 51,596 |
| 51,596 |
| 51,596 |
| 51,596 |
| |||||||
(1) GAAP Results
(2) Charge of $30,760 due to the termination of pre-existing relationship with Nycomed, offset by a write-off of deferred revenue previously recorded of $2,650
(3) Non-cash stock compensation expense
(4) Non-cash tax benefit
(5) Non-GAAP Results
9