EXHIBIT 99.1
CUBIST REPORTS THIRD QUARTER 2013 FINANCIAL RESULTS
· Total Net Revenues of $266.0 Million, Up 12% Over Q3 2012; U.S. CUBICIN Net Revenues of $229.9 Million, Up 10% Over Q3 2012
· Non-GAAP Diluted EPS of $0.41; GAAP Diluted EPS of $(0.50)
· Non-GAAP Adjusted Operating Income of $52.5 Million; GAAP Operating Income of $4.1 Million
Lexington, Mass., October 22, 2013 — Cubist Pharmaceuticals, Inc. (NASDAQ: CBST) today announced results for the third quarter ended September 30, 2013. The Company will host a conference call and webcast today at 5:00 p.m. ET (details below).
Financial highlights for the third quarter of 2013 (unaudited)
· Q3 2013 total net revenues were $266.0 million, up 12% compared to $238.2 million in Q3 2012.
· U.S. CUBICIN® (daptomycin for injection) net product revenues increased 10% to $229.9 million from $208.3 million in Q3 2012. CUBICIN international revenues were $13.0 million compared to $12.0 million in Q3 2012.
· Non-GAAP diluted earnings per share (EPS) was $0.41 compared to $0.62 in the third quarter of 2012. GAAP diluted EPS was $(0.50) compared to $0.55 in the third quarter of 2012.
· Non-GAAP adjusted operating income was $52.5 million compared to $77.7 million in the third quarter of 2012. GAAP operating income was $4.1 million compared to $70.4 million in the third quarter of 2012.
“This was an exciting quarter for Cubist as we extended our global leadership in the acute care environment and took a major step towards achieving our Building Blocks of Growth strategic goals. We believe our transactions to acquire Trius and Optimer will enhance our product portfolio and position us to further leverage our differentiated business model with our promising pipeline candidates,” said Michael Bonney, Chief Executive Officer of Cubist. “We look forward to another important quarter ahead that we expect will include top-line data readouts from the cUTI and cIAI trials of our Phase 3 candidate ceftolozane/tazobactam.”
Third quarter ENTEREG® (alvimopan) net product revenues were $13.7 million, up 36% compared to $10.1 million in the third quarter of 2012. Service revenues for the Company’s co-promote of DIFICID® (fidaxomicin) for the third quarter were $3.8 million. Other revenues for the third quarter were $5.6 million, which primarily consist of a $5.0 million milestone from Novartis due to achieving a predetermined level of CUBICIN sales in its territories.
As of September 30, 2013, Cubist had $997.8 million in cash, cash equivalents and investments. The total number of Cubist’s common shares outstanding as of September 30, 2013, was 74,011,707.
65 Hayden Avenue, Lexington, MA 02421 P 781.860.8660 F 781.861.0566 www.cubist.com
Recent Pipeline Highlights
· On October 22, 2013, Cubist announced that the Company has submitted a new drug application to the FDA requesting approval of tedizolid phosphate for the treatment of acute bacterial skin and skin structure infections;
· On October 21, 2013, Cubist announced that the U.S. Food and Drug Administration approved the Company’s supplemental new drug application for the use of ENTEREG to accelerate gastrointestinal recovery following any surgery that includes a bowel resection with primary anastomosis, expanded from the previously approved indication in patients requiring surgery for colorectal disease; and
· On July 18, 2013, Cubist announced the initiation of Phase 3 efficacy studies of bevenopran in patients with chronic non-cancer pain and opioid-induced constipation.
Recent Corporate Highlights
· On September 23, 2013, Kenneth Martin was appointed to the Company’s Board of Directors;
· On September 13, 2013, Cubist announced the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 in connection with its pending acquisition of Optimer Pharmaceuticals, Inc. The transaction is expected to close this week;
· On September 11, 2013, Cubist announced that it completed its acquisition of Trius Therapeutics, Inc. for an aggregate upfront cash consideration of $704.4 million, excluding transaction costs;
· On September 10, 2013, Cubist announced the closing of its offering of $800.0 million aggregate principal amount of convertible senior unsecured notes. The Company intends to use the majority of the proceeds to fund its acquisition of Optimer and for general corporate purposes; and
· On July 30, 2013, Cubist announced the planned acquisitions of Trius and Optimer.
Use of Non-GAAP Financial Measures
Cubist uses non-GAAP financial measures, such as non-GAAP net income, non-GAAP adjusted operating income and non-GAAP diluted EPS, to assess and analyze its operational results and trends and to make financial and operational decisions. Cubist believes these non-GAAP financial measures are also useful to investors because they provide greater transparency regarding Cubist’s operating performance. These non-GAAP financial measures should not be considered an alternative to measurements required by GAAP, such as net income, operating income and earnings per share, and should not be considered measures of Cubist’s liquidity. In addition, these non-GAAP financial measures are unlikely to be comparable with non-GAAP information provided by other companies. Reconciliations between non-GAAP financial measures and GAAP financial measures are included in the tables accompanying this press release after the unaudited condensed consolidated financial statements.
***********************CONFERENCE CALL & WEBCAST INFORMATION***********************
CUBIST Q3 2013 FINANCIAL RESULTS
Tuesday October 22, 2013 at 5:00 pm ET
U.S./Canada Attendee Dial-in: (855) 319-7654
International Attendee Dial-in: (484) 756-4327
Attendee Passcode: 27242301
24-HOUR REPLAY U.S./CANADA: (855) 859-2056
24-HOUR REPLAY INTERNATIONAL: (404) 537-3406
Conference ID: 27242301
CALL WILL ALSO BE BROADCAST LIVE, LISTEN ONLY, VIA THE WEB AT:
https://cubist.webex.com/cubist/onstage/g.php?t=a&d=624937217 Attendee Password: 041813
Replay will be available for 90 days at www.cubist.com
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About Cubist
Cubist Pharmaceuticals, Inc. is a biopharmaceutical company focused on the research, development, and commercialization of pharmaceutical products that address significant unmet medical needs in the acute care environment. Cubist is headquartered in Lexington, Mass. Additional information can be found at Cubist’s web site at www.cubist.com.
Cubist Safe Harbor Statement
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Any statements contained herein which do not describe historical facts, including but not limited to, statements regarding our unaudited third quarter financial results; the expected timing of clinical trial data readouts for ceftolozane/tazobactam; the anticipated benefits of our acquisition of Trius and pending acquisition of Optimer; the intended uses of the proceeds from our $800 million convertible debt financing; and our progress against our Building Blocks of Growth strategic goals, are forward-looking statements which involve risks and uncertainties that could cause actual results to differ materially from those discussed in such forward-looking statements. Such risks and uncertainties include: the risk that our final third quarter financial results will differ materially from our expected results disclosed in this release; the anticipated benefits of our acquisitions of Trius and Optimer may not be realized, including the risk that our acquisition of Optimer may not be completed in a timely manner, or at all; risks related to drug development and commercialization, including our ability to release top-line data for ceftolozane/tazobactam on the timelines we expect; the ability of Cubist to achieve its Building Blocks of Growth long-range goals, including as a result of Cubist’s ability to continue to grow revenues from the sale of CUBICIN® and ENTEREG®, generic and other competition, manufacturing issues, Cubist’s ability to successfully develop, gain marketing approval for and commercially launch its product candidates for their planned indications and on their expected timelines, and Cubist’s ability to discover, in-license or acquire new
products and product candidates; and those additional factors discussed in our and Trius’ and Optimer’s most recent Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission. We caution investors not to place considerable reliance on the forward-looking statements contained in this press release. These forward-looking statements speak only as of the date of this document, and we undertake no obligation to update or revise any of these statements.
Cubist Pharmaceuticals, Inc.
INVESTORS:
Cubist Pharmaceuticals, Inc.
Eileen C. McIntyre, (781) 860-8533
Vice President, Investor Relations
eileen.mcintyre@cubist.com
or
MEDIA:
Julie DiCarlo, (781) 860-8063
Senior Director, Corporate Communications
julie.dicarlo@cubist.com
Tables to follow
CUBIST PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
UNAUDITED
(in thousands)
| | September 30,
2013 | | December 31,
2012 | |
ASSETS | |
Cash, cash equivalents and investments | | $ | 997,825 | | $ | 979,396 | |
Accounts receivable, net | | 106,451 | | 93,467 | |
Inventory | | 88,217 | | 79,440 | |
Property and equipment, net | | 170,122 | | 166,465 | |
Deferred tax assets, net | | 38,383 | | 14,190 | |
In-process research and development | | 931,700 | | 272,700 | |
Other assets | | 533,534 | | 326,727 | |
| | | | | |
Total assets | | $ | 2,866,232 | | $ | 1,932,385 | |
| | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |
Accounts payable and accrued expenses | | $ | 196,705 | | $ | 209,236 | |
Deferred tax liabilities, net | | 252,398 | | 103,081 | |
Deferred revenue | | 39,369 | | 40,875 | |
Contingent consideration | | 161,372 | | 189,213 | |
Debt and other liabilities, net | | 840,805 | | 399,232 | |
Total liabilities | | 1,490,649 | | 941,637 | |
| | | | | |
Total stockholders’ equity | | 1,375,583 | | 990,748 | |
| | | | | |
Total liabilities and stockholders’ equity | | $ | 2,866,232 | | $ | 1,932,385 | |
CUBIST PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED
(in thousands, expect share and per share data)
| | Three Months Ended
September 30, | | Nine Months Ended
September 30, | |
| | 2013 | | 2012 | | 2013 | | 2012 | |
Revenues: | | | | | | | | | |
U.S. CUBICIN product revenues, net | | $ | 229,920 | | $ | 208,272 | | $ | 659,082 | | $ | 593,159 | |
U.S. ENTEREG product revenues, net | | 13,676 | | 10,082 | | 37,265 | | 29,230 | |
Total U.S. product revenues, net | | 243,596 | | 218,354 | | 696,347 | | 622,389 | |
International product revenues | | 12,987 | | 11,959 | | 40,349 | | 35,976 | |
Service revenues | | 3,755 | | 7,215 | | 11,044 | | 19,544 | |
Other revenues | | 5,655 | | 653 | | 6,961 | | 2,531 | |
Total revenues, net | | 265,993 | | 238,181 | | 754,701 | | 680,440 | |
| | | | | | | | | |
Costs and expenses: | | | | | | | | | |
Cost of product revenues | | 60,989 | | 55,740 | | 179,705 | | 168,583 | |
Research and development | | 123,423 | | 70,197 | | 352,822 | | 188,575 | |
Contingent consideration | | 2,641 | | 1,473 | | 7,280 | | 6,996 | |
Selling, general and administrative | | 74,884 | | 40,420 | | 172,974 | | 124,455 | |
Total costs and expenses | | 261,937 | | 167,830 | | 712,781 | | 488,609 | |
| | | | | | | | | |
Operating income | | 4,056 | | 70,351 | | 41,920 | | 191,831 | |
| | | | | | | | | |
Other income (expense), net | | (43,171 | ) | (10,171 | ) | (56,051 | ) | (29,957 | ) |
| | | | | | | | | |
(Loss) income before income taxes | | (39,115 | ) | 60,180 | | (14,131 | ) | 161,874 | |
| | | | | | | | | |
(Benefit) provision for income taxes | | (5,220 | ) | 19,859 | | (1,566 | ) | 45,636 | |
| | | | | | | | | |
Net (loss) income | | $ | (33,895 | ) | $ | 40,321 | | $ | (12,565 | ) | $ | 116,238 | |
| | | | | | | | | |
Basic (loss) income per share | | $ | (0.50 | ) | $ | 0.63 | | $ | (0.19 | ) | $ | 1.83 | |
Diluted (loss) income per share | | $ | (0.50 | ) | $ | 0.55 | (1) | $ | (0.19 | ) | $ | 1.59 | (2) |
| | | | | | | | | |
Shares used in calculating: | | | | | | | | | |
Basic (loss) income per share | | 67,841,665 | | 64,048,673 | | 66,122,521 | | 63,521,491 | |
Diluted (loss) income per share | | 67,841,665 | | 82,856,912 | | 66,122,521 | | 81,251,074 | |
(1) Includes add back of interest expense, debt issuance costs and debt discount amortization on 2017 Notes and 2013 Notes to income, net of tax effect
(2) Includes add back of interest expense, debt issuance costs and debt discount amortization on 2017 Notes to income, net of tax effect
CUBIST PHARMACEUTICALS, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
UNAUDITED
(in thousands, except share and per share data)
| | Three Months Ended
September 30, | | Nine Months Ended
September 30, | |
| | 2013 | | 2012 | | 2013 | | 2012 | |
| | | | | | | | | |
Reconciliation of GAAP net (loss) income to non-GAAP net income | | | | | | | | | |
GAAP net (loss) income | | $ | (33,895 | ) | $ | 40,321 | | $ | (12,565 | ) | $ | 116,238 | |
Non-cash debt discount amortization | | 4,765 | | 3,963 | | 12,042 | | 13,444 | |
Loss on extinguishment of convertible notes | | 34,578 | | — | | 34,578 | | 3,728 | |
Loss on disposal of property and equipment | | — | | 3,248 | | — | | 3,248 | |
ENTEREG intangible asset amortization | | 4,552 | | 4,589 | | 13,529 | | 13,766 | |
ENTEREG inventory step-up | | 1,068 | | 960 | | 3,090 | | 2,329 | |
Restructuring charges | | 1,029 | | — | | 1,029 | | — | |
Acquisition-related expenses | | 39,180 | | 356 | | 39,180 | | 5,393 | |
Hydra license fee | | — | | — | | 15,000 | | — | |
Acquisition of rights from Astellas | | — | | — | | 25,000 | | — | |
Contingent consideration | | 2,641 | | 1,473 | | 7,280 | | 6,996 | |
Tax adjustment(1) | | (21,185 | ) | (5,650 | ) | (46,236 | ) | (27,729 | ) |
Non-GAAP net income | | $ | 32,733 | | $ | 49,260 | | $ | 91,927 | | $ | 137,413 | |
| | | | | | | | | |
Non-GAAP basic income per share | | $ | 0.48 | | $ | 0.77 | | $ | 1.39 | | $ | 2.16 | |
Non-GAAP diluted income per share | | $ | 0.41 | (2) | $ | 0.62 | (3) | $ | 1.17 | (2) | $ | 1.73 | (3) |
| | | | | | | | | |
Shares used in calculating: | | | | | | | | | |
Non-GAAP basic income per share | | 67,841,665 | | 64,048,673 | | 66,122,521 | | 63,521,491 | |
Non-GAAP diluted income per share | | 86,486,130 | | 82,856,912 | | 84,048,347 | | 83,772,930 | |
(1) The methodology used to compute the tax adjustments above was revised in Q1 2013 to reflect the tax effect of non-GAAP adjustments and to include material, non-recurring discrete items for the period. The prior year tax adjustment has been revised to conform to the current quarter’s presentation
(2) Includes add back of interest expense and debt issuance costs on 2020 Notes, 2018 Notes and 2017 Notes to income, net of tax effect
(3) Includes add back of interest expense and debt issuance costs on 2017 Notes and 2013 Notes to income, net of tax effect
CUBIST PHARMACEUTICALS, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
UNAUDITED
(in thousands, except share and per share data)
| | Three Months Ended
September 30, | | Nine Months Ended
September 30, | |
| | 2013 | | 2012 | | 2013 | | 2012 | |
Reconciliation of GAAP basic net (loss) income per share to non-GAAP basic net income per share | | | | | | | | | |
Non-GAAP basic net income - from table above | | $ | 32,733 | | $ | 49,260 | | $ | 91,927 | | $ | 137,413 | |
GAAP and Non-GAAP basic shares | | 67,841,665 | | 64,048,673 | | 66,122,521 | | 63,521,491 | |
| | | | | | | | | |
GAAP basic (loss) income per share | | $ | (0.50 | ) | $ | 0.63 | | $ | (0.19 | ) | $ | 1.83 | |
Non-GAAP adjustments - from table above | | 0.98 | | 0.14 | | 1.58 | | 0.33 | |
Non-GAAP basic income per share | | $ | 0.48 | | $ | 0.77 | | $ | 1.39 | | $ | 2.16 | |
| | | | | | | | | |
Reconciliation of GAAP diluted net (loss) per share to non-GAAP diluted net income per share | | | | | | | | | |
Non-GAAP basic net income — from table above | | $ | 32,733 | | $ | 49,260 | | $ | 91,927 | | $ | 137,413 | |
Non-GAAP dilutive adjustments | | 2,519 | (1) | 2,243 | (2) | 6,793 | (1) | 7,162 | (2) |
Non-GAAP diluted net income | | $ | 35,252 | | $ | 51,503 | | $ | 98,720 | | $ | 144,575 | |
| | | | | | | | | |
GAAP diluted shares | | 67,841,665 | | 82,856,912 | | 66,122,521 | | 81,251,074 | |
Non-GAAP dilutive adjustments | | 18,644,465 | (3) | — | | 17,925,826 | (3) | 2,521,856 | (3) |
Non-GAAP diluted shares | | 86,486,130 | | 82,856,912 | | 84,048,347 | | 83,772,930 | |
| | | | | | | | | |
GAAP diluted (loss) income per share | | $ | (0.50 | ) | $ | 0.55 | | $ | (0.19 | ) | $ | 1.59 | |
Non-GAAP dilutive adjustments | | 0.91 | | 0.07 | | 1.36 | | 0.14 | |
Non-GAAP diluted income per share | | $ | 0.41 | | $ | 0.62 | | $ | 1.17 | | $ | 1.73 | |
(1) Includes add back of interest expense and debt issuance costs on 2017 Notes, 2018 Notes and 2020 Notes to income, net of tax effect
(2) Includes add back of interest expense and debt issuance costs on 2013 Notes and 2017 Notes to income, net of tax effect
(3) Weighted average shares issued on full conversion
CUBIST PHARMACEUTICALS, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
UNAUDITED
(in thousands)
| | Three Months Ended
September 30, | | Nine Months Ended
September 30, | |
| | 2013 | | 2012 | | 2013 | | 2012 | |
Reconciliation of GAAP operating income to non-GAAP adjusted operating income | | | | | | | | | |
Operating income | | $ | 4,056 | | $ | 70,351 | | 41,920 | | $ | 191,831 | |
ENTEREG intangible asset amortization | | 4,552 | | 4,589 | | 13,529 | | 13,766 | |
ENTEREG inventory step-up | | 1,068 | | 960 | | 3,090 | | 2,329 | |
Restructuring charges | | 1,029 | | — | | 1,029 | | — | |
Acquisition-related expenses | | 39,180 | | 356 | | 39,180 | | 5,393 | |
Hydra license fee | | — | | — | | 15,000 | | — | |
Acquisition of rights from Astellas | | — | | — | | 25,000 | | — | |
Contingent consideration | | 2,641 | | 1,473 | | 7,280 | | 6,996 | |
Non-GAAP adjusted operating income | | $ | 52,526 | | $ | 77,729 | | $ | 146,028 | | $ | 220,315 | |
| | | | | | | | | | | | | |
