Alexion Reports Second Quarter 2011 Results
-- Soliris® (eculizumab)
Net Product Sales Increased 48% to $185.7 Million --
-- Guidance Revised Upward for Revenues and Non-GAAP EPS --
-- Soliris for aHUS Granted Priority Review in the US —
-- STEC-HUS Program Added to Development Pipeline --
Second Quarter 2011 Financial Highlights:
-
Q2 2011 revenues increased 48 percent to $185.7 million, compared to
$125.8 million in Q2 2010
-
Q2 2011 GAAP net income increased 60 percent to $34.7 million, or
$0.18 per share, compared to GAAP net income of $21.8 million, or
$0.12 per share, in Q2 2010
-
Q2 2011 non-GAAP net income increased 54 percent to $56.8 million, or
$0.29 per share, compared to non-GAAP net income of $36.9 million, or
$0.20 per share, in Q2 2010
CHESHIRE, Conn.--(BUSINESS WIRE)--
Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN) today announced financial
results for the three and six months ended June 30, 2011. Alexion
Pharmaceuticals, Inc. ("Alexion" or, the "Company") reported net product
sales of Soliris® (eculizumab) of $185.7 million in Q2,
reflecting steady addition of new patients, compared to $125.8 million
for the same period in 2010.
Soliris, approved in the US (2007), European Union (2007), Japan (2010)
and in other territories, is the only drug specifically indicated for
the treatment of patients with paroxysmal nocturnal hemoglobinuria
(PNH), an ultra-rare, debilitating and life-threatening blood disease.
Alexion's non-GAAP operating results are equal to GAAP operating results
less the impact of share-based compensation, taxes that are not payable
in cash (non-cash taxes), amortization of acquired intangible assets,
and costs associated with acquisitions. A reconciliation of GAAP and
non-GAAP results is summarized below:
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(in thousands of US dollars, except per-share data)
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Three months ended
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Six months ended
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|
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June 30
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June 30
|
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|
|
|
|
|
2011
|
|
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2010
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
|
$
|
185,699
|
|
$
|
125,834
|
|
$
|
351,825
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$
|
243,412
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
|
|
|
|
$
|
34,745
|
|
$
|
21,773
|
|
$
|
61,575
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|
$
|
42,707
|
|
|
|
|
|
|
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|
|
|
|
|
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Share-based compensation
|
|
|
|
|
11,834
|
|
|
8,250
|
|
|
23,165
|
|
|
16,354
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Acquisition-related costs
|
|
|
|
|
1,000
|
|
|
-
|
|
|
10,928
|
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|
-
|
|
Amortization of purchased intangibles
|
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|
|
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104
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|
|
-
|
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|
174
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|
|
-
|
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Non-cash tax expense
|
|
|
|
|
9,095
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|
|
6,923
|
|
|
17,205
|
|
|
12,439
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|
|
|
|
|
|
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|
|
|
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|
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Non-GAAP net income
|
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|
|
$
|
56,778
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$
|
36,946
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$
|
113,047
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$
|
71,500
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|
|
|
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|
|
|
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|
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Shares used in computing diluted earnings per share (GAAP)
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|
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191,187
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185,150
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|
|
190,790
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|
|
184,680
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Shares used in computing diluted earnings per share (non-GAAP)
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|
|
|
|
193,048
|
|
|
187,704
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|
|
192,605
|
|
|
187,222
|
|
|
|
|
|
|
|
|
|
|
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GAAP earnings per share - diluted
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$
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0.18
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$
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0.12
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$
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0.32
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$
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0.23
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Non-GAAP earnings per share - diluted
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$
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0.29
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$
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0.20
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$
|
0.59
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$
|
0.38
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The Company effected a 2-for-1 stock split in the form of a 100 percent
stock dividend on May 20, 2011. All share and per-share amounts in this
press release have been adjusted to reflect this split.
Second Quarter Non-GAAP Financial Results:
The Company reported non-GAAP net income of $56.8 million, or $0.29 per
share, for the second quarter of 2011, compared to non-GAAP net income
of $36.9 million, or $0.20 per share, in the second quarter of 2010.
Alexion's non-GAAP operating expenses for Q2 2011 were $102.6 million,
compared to $71.8 million for Q2 2010. Non-GAAP research and development
(R&D) expenses for Q2 2011 were $33.4 million, compared to $21.7 million
for Q2 2010. The increase in R&D expenses primarily reflected the
expansion of the Company's clinical trial programs, including costs
associated with product supply and services for the STEC-HUS trial
initiated in the quarter. Non-GAAP selling, general and administrative
(SG&A) expenses for Q2 2011 were $69.2 million, compared to $50.1
million for Q2 2010. The increase in non-GAAP SG&A expenses primarily
reflected costs associated with the expansion of the Company's
commercial operations related to new geographies and with the
preparation for potential launch of Soliris in aHUS.
Second Quarter GAAP Financial Results:
Alexion reported GAAP net income of $34.7 million, or $0.18 per share,
compared to Q2 2010 GAAP net income of $21.8 million, or $0.12 per share.
On a GAAP basis, operating expenses for Q2 2011 were $114.9 million,
compared to $79.8 million for Q2 2010. GAAP R&D expenses for Q2 2011
were $35.6 million, compared to $23.7 million for Q2 2010. GAAP SG&A
expenses were $78.2 million for Q2 2011, compared to $56.1 million for
Q2 2010.
Balance Sheet:
As of June 30, 2011, the Company had $368.0 million in cash, cash
equivalents and marketable securities, compared to $348.8 million at the
end of Q1 2011. During Q2, the Company repaid $60 million of short-term
debt that was incurred related to the two acquisitions which closed
during Q1 2011.
"In the second quarter, we continued to serve a growing number of new
patients with PNH in our core territories of the US, Western Europe and
Japan," said Leonard Bell, M.D., Chief Executive Officer of Alexion.
"During Q2, we also focused on responding to the urgent public health
crisis related to the STEC-HUS outbreak in Germany. Towards the end of
this year, we expect to complete the aHUS regulatory process in the US
and are likewise focused on further accelerating the development of our
pipeline portfolio, which now comprises the widest group of compounds
and ultra-rare disorders in our history."
Research and Development Programs:
aHUS Regulatory Submissions
In April, the Company announced that it had submitted marketing
applications to the US Food and Drug Administration (FDA) and the
European Medicines Agency (EMA) for Soliris as a treatment for patients
with atypical Hemolytic Uremic Syndrome (aHUS). During Q2, the FDA
granted Priority Review status for the application in the US. If
approval is granted, the Company anticipates a US launch for eculizumab
in aHUS in the fourth quarter of 2011.
Transplant: Acute Humoral Kidney Rejection (AHR)
Eculizumab is being investigated as a treatment for patients undergoing
kidney transplant who are at elevated risk of antibody mediated
rejection, also known as acute humoral rejection (AHR). The FDA and EMA
have approved clinical protocols for a global, company-sponsored
controlled clinical trial evaluating eculizumab to prevent AHR in
patients undergoing kidney transplant. The Company is preparing to
initiate a living-donor study in the fall of 2011 and a deceased-donor
study near year-end.
STEC-HUS
Following authorization by the Paul-Ehrlich-Institut (PEI), Germany's
healthcare regulatory body for biologics, and an access program for
patients initiated in May, Alexion initiated an open-label clinical
trial to investigate eculizumab as a treatment for patients with
Shiga-toxin producing E. coli hemolytic uremic syndrome (STEC-HUS) in
Germany.
2011 Financial Guidance:
Alexion's 2011 revenue guidance has been revised upward, from the
previously announced range of $720 to $740 million, now to the higher
range of $745 to $755 million. The upward revision in revenue guidance
takes into account continued global growth of Soliris for PNH, and the
potential for the launch of Soliris for aHUS in the US in Q4, which
could occur if a positive decision on the Company's application is
received from the FDA. Guidance for non-GAAP EPS has been revised upward
from the previous range of $1.05 to $1.12 (adjusted for the 2-for-1
stock split effected in May 2011) now to the higher range of $1.10 to
$1.15, based on a forecast of approximately 194 million diluted shares
outstanding for the year.
On a non-GAAP basis, guidance for 2011 R&D expenses has been increased
from the previous range of $128 to $138 million to the higher range of
$138 to $143 million. Guidance for 2011 non-GAAP SG&A expenses has been
narrowed within the previous range, to $275 to $280 million. Guidance
for share-based compensation expense for the year has been increased
from the previous range of approximately $39 to $41 million to the
higher range of approximately $42 to $44 million. Cost of sales has been
reiterated at approximately 13 percent of sales. Guidance for 2011 GAAP
tax rate has been reiterated in the range of 30 to 32 percent; the
non-GAAP effective tax rate, reported on a cash tax liability basis, has
been reiterated in the range of 10 to 12 percent.
Conference Call/Web Cast Information:
Alexion will host a conference call/webcast to discuss matters mentioned
in this release. The call is scheduled for today, July 21, 2011, at
10:00 a.m., Eastern Time. To participate in this call, dial 888-437-9357
(USA) or 719-325-2407 (International), confirmation code 9969620 shortly
before 10:00 a.m., Eastern Time. A replay of the call will be available
for a limited period following the call, beginning at 1:00 p.m. Eastern
Time. The replay number is 888-203-1112 (USA) or 719-457-0820
(International), confirmation code 9969620. The audio webcast can be
accessed at www.alexionpharma.com.
About Soliris:
Soliris is a first-in-class terminal complement inhibitor developed from
the laboratory through regulatory approval and commercialization by
Alexion. Soliris has been approved in the US, European Union, Japan and
other territories as the first treatment for patients with PNH, an
ultra-rare, debilitating and life-threatening blood disorder defined by
chronic uncontrolled complement activation, which causes chronic red
blood cell destruction (hemolysis), leading to blood clots, organ
failure, and shortened survival. Prior to these approvals, there were no
therapies specifically available for the treatment of patients with PNH.
Soliris (eculizumab) is not approved for the treatment of aHUS or other
indications other than PNH. Alexion's breakthrough approach to
complement inhibition has received some of the pharmaceutical industry's
highest honors: the 2008 Prix Galien USA Award for Best Biotechnology
Product with broad implications for future biomedical research and the
2009 Prix Galien France Award in the category of Drugs for Rare
Diseases. More information on Soliris is available at www.soliris.net.
About Alexion:
Alexion Pharmaceuticals, Inc. is a biopharmaceutical company focused on
serving patients with severe and ultra-rare disorders through the
innovation, development and commercialization of life-transforming
therapeutic products. Alexion is the global leader in complement
inhibition and has developed and markets Soliris (eculizumab) as a
treatment for patients with PNH, a debilitating, ultra-rare and
life-threatening blood disorder. Soliris is approved in more than 35
countries. Alexion is evaluating other potential indications for Soliris
and is pursuing development of other innovative biotechnology product
candidates in early stages of development. This press release and
further information about Alexion Pharmaceuticals, Inc. can be found at: www.alexionpharma.com.
This press release includes certain non-GAAP financial measures that
involve adjustments to GAAP amounts. Alexion believes that these
non-GAAP financial measures, when considered together with the GAAP
amounts, can enhance an overall understanding of Alexion's past
financial performance and its prospects for the future. The non-GAAP
financial measures are included with the intent of providing both
management and investors with a more complete understanding of
underlying operational results and trends. In addition, these non-GAAP
financial measures are among the primary indicators Alexion management
uses for planning and forecasting purposes and for measuring the
Company's performance. These non-GAAP financial measures are not
intended to be considered in isolation or as a substitute for GAAP
amounts. A reconciliation of the GAAP to non-GAAP amounts is included in
this press release.
[ALXN-E]
This news release contains forward-looking statements, including
statements related to guidance regarding anticipated financial results
for 2011, assessment of the Company's financial position and
commercialization efforts, medical benefits and commercial potential for
Soliris for PNH and aHUS and other potential indications, expansion of
clinical and commercial operations to additional countries, medical and
commercial potential of Alexion's complement-inhibition technology and
other technologies; plans for clinical programs for each of our product
candidates; progress in developing commercial infrastructure, and
interest and acceptance regarding Soliris in the patient, physician and
payor communities. Forward-looking statements are subject to factors
that may cause Alexion's results and plans to differ from those
expected, including for example, decisions of regulatory authorities
regarding marketing approval or material limitations on the marketing of
Soliris for PNH and aHUS and other potential indications, delays in
arranging satisfactory manufacturing capabilities and establishing
commercial infrastructure, the possibility that results of clinical
trials are not predictive of safety and efficacy results of Soliris in
broader patient populations in the disease studied or other diseases,
the risk that recent acquisitions will not result in short-term or
long-term benefits, risks related to the integration of the operations
of Taligen Therapeutics into Alexion, the possibility that initial
results of commercialization are not predictive of future rates of
adoption of Soliris in PNH, aHUS or other diseases, the risk that third
parties will not agree to license any necessary intellectual property to
Alexion on reasonable terms or at all, the risk that third party payors
(including governmental agencies) will not reimburse for the use of
Soliris at acceptable rates or at all, the risk that estimates regarding
the number of patients with PNH, aHUS or other disorders is inaccurate,
and a variety of other risks set forth from time to time in Alexion's
filings with the Securities and Exchange Commission, including but not
limited to the risks discussed in Alexion's Annual Report on Form 10-Q
for the three months ended March 31, 2011 and in our other filings with
the Securities and Exchange Commission. Alexion does not intend to
update any of these forward-looking statements to reflect events or
circumstances after the date hereof, except when a duty arises under law.
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ALEXION PHARMACEUTICALS, INC.
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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(in thousands, except per share amounts)
|
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(unaudited)
|
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Three months ended
|
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Six months ended
|
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|
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|
|
June 30
|
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June 30
|
|
|
|
|
|
|
2011
|
|
|
2010
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Net product sales
|
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$
|
185,699
|
|
$
|
125,834
|
|
|
$
|
351,825
|
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$
|
243,412
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Cost of sales (1)
|
|
|
21,745
|
|
|
13,721
|
|
|
|
40,973
|
|
|
27,720
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Operating expenses:
|
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|
|
|
|
|
|
|
|
|
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Research and development (1)
|
|
|
35,646
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|
|
23,690
|
|
|
|
66,456
|
|
|
46,064
|
|
|
|
|
Selling, general and administrative (1)
|
|
|
78,180
|
|
|
56,098
|
|
|
|
144,037
|
|
|
106,733
|
|
|
|
|
Acquisition-related costs (2)
|
|
|
1,000
|
|
|
-
|
|
|
|
10,928
|
|
|
-
|
|
|
|
|
Amortization of purchased intangibles
|
|
|
104
|
|
|
-
|
|
|
|
174
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Total operating expenses
|
|
|
114,930
|
|
|
79,788
|
|
|
|
221,595
|
|
|
152,797
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
49,024
|
|
|
32,325
|
|
|
|
89,257
|
|
|
62,895
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
63
|
|
|
(242
|
)
|
|
|
656
|
|
|
(739
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
49,087
|
|
|
32,083
|
|
|
|
89,913
|
|
|
62,156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision (3)
|
|
|
14,342
|
|
|
10,310
|
|
|
|
28,338
|
|
|
19,449
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
34,745
|
|
$
|
21,773
|
|
|
$
|
61,575
|
|
$
|
42,707
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share
|
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|
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|
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|
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Basic
|
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$
|
0.19
|
|
$
|
0.12
|
|
|
$
|
0.34
|
|
$
|
0.24
|
|
|
|
|
Diluted
|
|
$
|
0.18
|
|
$
|
0.12
|
|
|
$
|
0.32
|
|
$
|
0.23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing earnings per common share
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
182,962
|
|
|
178,004
|
|
|
|
182,347
|
|
|
177,510
|
|
|
|
|
Diluted
|
|
|
191,187
|
|
|
185,150
|
|
|
|
190,790
|
|
|
184,680
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
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The following table summarizes the share-based compensation
expense included in the respective captions of the condensed
consolidated statements of operations:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
|
|
|
|
|
June 30
|
|
June 30
|
|
|
|
|
|
|
2011
|
|
|
2010
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
Share-based compensation expense:
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
$
|
572
|
|
$
|
250
|
|
|
$
|
1,117
|
|
$
|
565
|
|
|
|
|
Research and development
|
|
|
2,245
|
|
|
2,025
|
|
|
|
4,978
|
|
|
4,110
|
|
|
|
|
Selling, general and administrative
|
|
|
9,017
|
|
|
5,975
|
|
|
|
17,070
|
|
|
11,679
|
|
|
|
|
|
|
$
|
11,834
|
|
$
|
8,250
|
|
|
$
|
23,165
|
|
$
|
16,354
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
|
The following table summarizes the acquisition-related costs
included in the condensed consolidated statements of operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
|
|
|
|
|
June 30
|
|
June 30
|
|
|
|
|
|
|
2011
|
|
|
2010
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction and separation costs
|
|
$
|
255
|
|
$
|
-
|
|
|
$
|
10,047
|
|
$
|
-
|
|
|
|
|
Adjustments to fair value of contingent consideration
|
|
|
745
|
|
|
-
|
|
|
|
881
|
|
|
-
|
|
|
|
|
|
|
$
|
1,000
|
|
$
|
-
|
|
|
$
|
10,928
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
|
The following table summarizes the non-cash tax expense
representing the reduction in cash taxes attributable to the
utilization of US net operating losses (NOL's):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
|
|
|
|
|
June 30
|
|
June 30
|
|
|
|
|
|
|
2011
|
|
|
2010
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash taxes
|
|
$
|
9,095
|
|
$
|
6,923
|
|
|
$
|
17,205
|
|
$
|
12,439
|
|
|
|
|
|
|
|
|
ALEXION PHARMACEUTICALS, INC.
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
December 31,
|
|
|
|
|
2011
|
|
|
2010
|
|
Cash, cash equivalents and marketable securities
|
|
$
|
368,009
|
|
$
|
361,605
|
|
Trade accounts receivable, net
|
|
|
212,720
|
|
|
168,732
|
|
Inventories, net
|
|
|
75,222
|
|
|
62,165
|
|
Deferred tax assets, current
|
|
|
20,863
|
|
|
19,643
|
|
Other current assets
|
|
|
23,581
|
|
|
34,411
|
|
Property, plant and equipment, net
|
|
|
163,763
|
|
|
162,240
|
|
Deferred tax assets, noncurrent
|
|
|
135,518
|
|
|
154,569
|
|
Intangibles assets, net
|
|
|
94,019
|
|
|
24,146
|
|
Goodwill
|
|
|
80,033
|
|
|
19,954
|
|
Other noncurrent assets
|
|
|
5,847
|
|
|
4,572
|
|
Total assets
|
|
$
|
1,179,575
|
|
$
|
1,012,037
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
$
|
154,683
|
|
$
|
123,056
|
|
Other current liabilities
|
|
|
33,086
|
|
|
15,459
|
|
Long term debt
|
|
|
-
|
|
|
3,718
|
|
Contingent consideration
|
|
|
17,601
|
|
|
-
|
|
Other noncurrent liabilities
|
|
|
20,703
|
|
|
10,068
|
|
Total liabilities
|
|
|
226,073
|
|
|
152,301
|
|
|
|
|
|
|
|
Total stockholders' equity
|
|
|
953,502
|
|
|
859,736
|
|
Total liabilities and stockholders' equity
|
|
$
|
1,179,575
|
|
$
|
1,012,037
|
Alexion Pharmaceuticals, Inc.
Irving Adler, 203-271-8210
Sr.
Director, Corporate Communications
or
Makovksy + Company
(Media)
Kristie Kuhl, 212-508-9642
or
Rx Communications
(Investors)
Rhonda Chiger, 917-322-2569
Source: Alexion Pharmaceuticals, Inc.
News Provided by Acquire Media