- Total Revenues of $753 Million; Increased 18
Percent Year-on-Year; 23 Percent Volume Increase Year-on-Year-
- Soliris® (eculizumab) Revenue Growth Driven
by Steady Number of New Patients with PNH and aHUS Treated Globally
-
- Strong Strensiq® (asfotase alfa) Launch
Continues in Initial Countries -
- Kanuma® (sebelipase alfa) Launch Progresses
with Newly Identified Patients Starting on Treatment -
- Eculizumab Phase 3 REGAIN Data in Refractory
gMG Presented at the ICNMD Congress -
- ALXN1210 Phase 1/2 Data Showed Rapid and
Sustained Reductions in LDH in All Patients with PNH Treated with
Once-Monthly Dosing -
- SBC-103 Phase 1/2 Data on MRI and
Neurocognitive Assessments Consistent With Potential Dose-Dependent
Disease Stabilization at Six Months in Patients with MPS IIIB -
- GAAP EPS of $0.51 Per Share; Non-GAAP EPS of
$1.13 Per Share, Which Reflects a Reduction of $0.12 Per Share
Attributable to the Modification of Reported Non-GAAP Income Tax
Expense -
Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN) today announced
financial results for the second quarter of 2016. Total revenues
grew to $753 million, an 18 percent increase, compared to $636
million for the same period in 2015. In the second quarter, the
negative impact of currency on total revenue was 3 percent or $18
million, net of hedging activities, compared to the same quarter
last year. On a GAAP basis, diluted earnings per share (EPS) for
the second quarter of 2016 was $0.51 per share, compared to $0.83
per share in the second quarter of 2015. Non-GAAP diluted EPS for
the second quarter 2016 was $1.13 per share, reflecting a reduction
of $0.12 per share attributable to the modification of reported
non-GAAP income tax expense; prior to this modification non-GAAP
diluted EPS would have been reported at $1.25 per share (Table 2).
Non-GAAP diluted EPS was $1.30 per share in the second quarter
2015, reflecting a reduction of $0.14 per share attributable to the
tax modification.
Alexion has modified the definition of its non-GAAP income tax
expense to align with the Compliance & Disclosure
Interpretations (C&DIs) issued by the U.S. Securities and
Exchange Commission (SEC) on May 17, 2016, and has reflected this
modification in 2015 and 2016 non-GAAP interim period results.
Alexion’s modified definition no longer includes the cash tax
benefits the Company realizes during the year from net operating
losses and income tax credits, and now includes other deferred
taxes. The modification does not change the amount of cash taxes
the Company will pay in 2016, or in the future, or have any impact
on cash flow. A reconciliation of GAAP to non-GAAP financial
results (Table 2) and supplemental effective tax rate information
for financial guidance (Table 6) are provided later in the press
release.
“In Q2 2016, we delivered strong financial performance as we
served an increasing number of patients with PNH, aHUS, HPP and
LAL-D. We are pleased with the sustained growth in our core Soliris
business, the strong launch of Strensiq, and the continued progress
with our Kanuma launch,” said David Hallal, Chief Executive Officer
of Alexion. “In the second half of 2016, we will continue to
leverage our rare disease expertise to reach more patients with
Soliris, Strensiq and Kanuma while advancing multiple milestones in
our robust pipeline.”
Second Quarter 2016 Financial
Highlights
- Soliris® (eculizumab) net product sales
were $701 million, compared to $636 million in Q2 2015,
representing a 10 percent increase. Soliris volume increased 15
percent year-on-year.
- Strensiq® (asfotase alfa) net product
sales were $45 million.
- Kanuma® (sebelipase alfa) net product
sales were $6 million.
- GAAP R&D expense was $179 million,
compared to $132 million in the same quarter last year. Non-GAAP
R&D expense was $165 million, compared to $117 million in the
same quarter last year.
- GAAP SG&A expense was $232 million,
compared to $221 million in the same quarter last year. Non-GAAP
SG&A expense was $200 million, compared to $169 million in the
same quarter last year.
- GAAP diluted EPS was $0.51 per share,
compared to $0.83 per share in the same quarter last year. Non-GAAP
diluted EPS was $1.13 per share, reflecting a reduction of $0.12
per share attributable to the modification of reported non-GAAP
income tax expense, compared to $1.30 per share, reflecting a
reduction of $0.14 per share attributable to the modification of
non-GAAP income tax expense in the same quarter last year. GAAP and
non-GAAP EPS in the second quarter of 2016 includes the impact of a
full quarter of Synageva operations, shares issued for the
acquisition and interest expense on related borrowings.
Product and Pipeline
Updates
Complement Portfolio
- Eculizumab- Refractory Generalized
Myasthenia Gravis (gMG): Data from the REGAIN study, a single,
multinational, placebo-controlled Phase 3 trial of eculizumab in
patients with refractory gMG, were presented at the International
Congress on Neuromuscular Diseases (ICNMD) meeting. Alexion expects
to provide an update on discussions with regulators by the end of
the year.
- Eculizumab- Relapsing Neuromyelitis
Optica Spectrum Disorder (NMOSD): Alexion expects to complete
enrollment this year in the PREVENT study, a single, multinational,
placebo-controlled Phase 3 trial of eculizumab in patients with
relapsing NMOSD.
- Eculizumab- Delayed Graft Function
(DGF): Enrollment is complete in the PROTECT study, a single,
multinational, placebo-controlled Phase 3 trial of eculizumab in
the prevention of DGF, and data are expected in the second half of
2016.
- ALXN1210: New data from the
Phase 1/2 study of ALXN1210, a highly innovative longer-acting C5
antibody, in patients with paroxysmal nocturnal hemoglobinuria
(PNH) were presented at the European Hematology Association (EHA)
Congress. Alexion expects to present additional PNH data later this
year. Alexion also expects to initiate a clinical program with
ALXN1210 in patients with atypical hemolytic uremic syndrome (aHUS)
later this year. The European Commission granted Orphan Drug
Designation (ODD) to ALXN1210 for the treatment of patients with
PNH.
- ALXN1007: New data from the
Phase 2 study of ALXN1007, a complement inhibitor that targets C5a,
in patients with graft-versus-host disease involving the lower
gastrointestinal tract (GI-GVHD) were presented at EHA and Alexion
is now evaluating higher doses of ALXN1007 in patients with
GI-GVHD.
Metabolic Portfolio
- SBC-103: New Phase 1/2 data of
SBC-103, a recombinant form of the NAGLU enzyme, in patients with
mucopolysaccharidosis IIIB, or MPS IIIB, were presented at the
International Symposium on MPS and Related Diseases meeting.
Alexion has now completed the planned dose escalation, with all
patients now randomized to either a 5 mg/kg or 10 mg/kg dose. A
natural history study to characterize the course of disease
progression in patients with MPS IIIB is ongoing.
- cPMP Replacement Therapy
(ALXN1101): Alexion is enrolling patients in a pivotal study to
evaluate ALXN1101 in neonates with Molybdenum Cofactor Deficiency
(MoCD) Type A. A study to characterize the natural history of MoCD
type A was completed in Q2.
Preclinical Portfolio
- Alexion has more than 30 diverse
preclinical programs across a range of therapeutic modalities, with
four of these programs expected to enter the clinic in 2016.
2016 Financial Guidance
Alexion is reiterating its total revenue and Soliris guidance
ranges provided on the first quarter of 2016 earnings call on April
28, 2016, and based on the strength of the Strensiq launch is
increasing its Metabolic revenue guidance to $200 to $220 million.
Alexion is reiterating its non-GAAP operating expense guidance and
is updating its non-GAAP tax rate and non-GAAP EPS guidance.
Alexion is also issuing 2016 GAAP financial guidance.
2016 financial guidance is as follows:
GAAP Guidance
Updated Non-GAAP Guidance
Prior Non-GAAP Guidance
Total revenues $3,050 to $3,100 million $3,050 to $3,100 million
Low end of $3,050 to $3,100 million Soliris revenues $2,835 to
$2,875 million $2,835 to $2,875 million $2,835 to $2,875 million
Metabolic revenues $200 to $220 million $200 to $220 million $180
to $200 million Cost of sales 8% to 9% 8% to 9% 8% to 9% Research
and development expense $708 to $779 million High end of $650 to
$680 million High end of $650 to $680 million Selling, general and
administrative expense
$883 to $935 million
High end of $760 to $790 million High end of $760 to $790 million
Interest expense $100 million $100 million $100 million Effective
tax rate 32% to 34% 15.5% to 16.5% (1) 7% to 8% Earnings per share
$1.91 to $2.26
$4.50 to $4.65
Low end of $5.00 to $5.20 Diluted shares outstanding 228 million
230 million 230 million
Alexion’s 2016 financial guidance is based on current foreign
exchange rates net of hedging activities, and does not include the
effect of business combinations, license and collaboration
agreements, asset acquisitions, intangible asset impairments,
changes in fair value of contingent consideration or restructuring
activity that may occur after the day prior to the date of this
press release.
(1)
Alexion has modified the definition of its
non-GAAP income tax expense. The modified definition no longer
includes the cash tax benefits the Company realizes during the year
from net operating losses and income tax credits, and now includes
other deferred taxes. The modification does not change the amount
of cash taxes the Company will pay in 2016, or in the future, or
have any impact on cash flow. Refer to the reconciliation of GAAP
to non-GAAP financial guidance (Table 3) and the supplemental
effective tax rate information for financial guidance (Table 6)
provided later in the press release.
Conference Call/Webcast Information:
Alexion will host a conference call/audio webcast to discuss
matters mentioned in this release. The call is scheduled for today,
July 28, at 10:00 a.m., Eastern Time. To participate in this call,
dial 888-505-4328 (USA) or 719-325-2344 (International), passcode
3353485 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), passcode
3353485. The audio webcast can be accessed on the Investor page of
Alexion’s website at: http://ir.alexionpharm.com.
About Alexion
Alexion is a global biopharmaceutical company focused on
developing and delivering life-transforming therapies for patients
with devastating and rare disorders. Alexion developed and
commercializes Soliris® (eculizumab), the first and only approved
complement inhibitor to treat patients with paroxysmal nocturnal
hemoglobinuria (PNH) and atypical hemolytic uremic syndrome (aHUS),
two life-threatening ultra-rare disorders. As the global leader in
complement inhibition, Alexion is strengthening and broadening its
portfolio of complement inhibitors, including evaluating potential
indications for eculizumab in additional severe and ultra-rare
disorders. Alexion’s metabolic franchise includes two highly
innovative enzyme replacement therapies for patients with
life-threatening and ultra-rare disorders, Strensiq® (asfotase
alfa) to treat patients with hypophosphatasia (HPP) and Kanuma®
(sebelipase alfa) to treat patients with lysosomal acid lipase
deficiency (LAL-D). In addition, Alexion is advancing the most
robust rare disease pipeline in the biotech industry with highly
innovative product candidates in multiple therapeutic areas. This
press release and further information about Alexion can be found
at: www.alexion.com.
[ALXN-E]
This press release contains forward-looking statements,
including statements related to guidance regarding anticipated
financial results for 2016, assessment of the Company's financial
position and commercialization efforts, medical benefits and
commercial potential for Soliris, Strensiq and Kanuma, medical and
commercial potential of each of Alexion's product candidates,
launch expectations for Strensiq and Kanuma, and plans for clinical
programs for our product candidates. 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 our products, delays, interruptions
or failures in the manufacture and supply of our products and our
product candidates, progress in establishing and developing
commercial infrastructure, failure to satisfactorily address
matters raised by the FDA and other regulatory agencies, the
possibility that results of clinical trials are not predictive of
safety and efficacy results of our products in broader patient
populations in the disease studied or other diseases, the risk that
strategic transactions will not result in short-term or long-term
benefits, the possibility that current results of commercialization
are not predictive of future rates of adoption of Soliris in PNH,
aHUS or other diseases, the possibility that clinical trials of our
product candidates could be delayed or that additional research and
testing is required by regulatory agencies, the adequacy of our
pharmacovigilance and drug safety reporting processes, the risk
that third party payors (including governmental agencies) will not
reimburse or continue to reimburse for the use of our products at
acceptable rates or at all, risks regarding government
investigations, including the SEC and DOJ investigations, the risk
that estimates regarding the number of patients with PNH, aHUS, HPP
and LAL-D are inaccurate, the risks of shifting foreign exchange
rates, and a variety of other risks set forth from time to time in
Alexion's filings with the U.S. Securities and Exchange Commission,
including but not limited to the risks discussed in Alexion's
Quarterly Report on Form 10-Q for the period ended March 31, 2016
and in our other filings with the U.S. 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.
In addition to financial information prepared in accordance with
GAAP, this press release also contains non-GAAP financial measures
that Alexion believes, when considered together with the GAAP
information, provide investors and management with supplemental
information relating to performance, trends and prospects that
promote a more complete understanding of our operating results and
financial position during different periods. The non-GAAP results
exclude the impact of the following GAAP items: share-based
compensation expense, fair value adjustment of inventory acquired,
amortization of purchased intangible assets, changes in fair value
of contingent consideration, acquisition-related costs,
restructuring expenses, upfront and milestone payments related to
licenses and collaborations and adjustments to income tax expense.
These non-GAAP financial measures are not intended to be considered
in isolation or as a substitute for, or superior to, the financial
measures prepared and presented in accordance with GAAP and should
be reviewed in conjunction with the relevant GAAP financial
measures. Please refer to the attached Reconciliations of GAAP to
non-GAAP Financial Results and GAAP to non-GAAP 2016 Financial
Guidance for explanations of the amounts adjusted to arrive at
non-GAAP net income and non-GAAP earnings per share amounts for the
three and six month periods ended June 30, 2016 and 2015 and
projected twelve months ended December 31, 2016.
(Tables Follow)
ALEXION PHARMACEUTICALS, INC. TABLE 1: CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except
per share amounts) (unaudited)
Three months ended Six months ended June 30
June 30 2016 2015 2016 2015
Net product sales $ 752,546 $ 635,983 $ 1,452,971 $
1,236,316 Other revenue 570 227
1,183 227 Total revenues 753,116 636,210
1,454,154 1,236,543 Cost of sales 60,627 52,007 119,613
121,406 Operating expenses: Research and development 179,311
131,693 355,601 352,773 Selling, general and administrative 231,802
221,383 464,363 408,499 Amortization of purchased intangible assets
80,055 - 160,149 - Change in fair value of contingent consideration
5,186 4,044 (9,614 ) 16,023 Acquisition-related costs 974 29,777
2,313 29,777 Restructuring expenses 455 16,224 1,177 23,276
Total operating expenses 497,783
403,121 973,989 830,348
Operating income 194,706 181,082 360,552 284,789
Other income and expense: Investment income 1,872 2,226 3,423 5,110
Interest expense (23,793 ) (3,971 ) (47,683 ) (4,622 ) Foreign
currency loss (2,820 ) (2,045 ) (2,729 )
(1,040 ) Income before income taxes 169,965 177,292
313,563 284,237 Income tax expense 55,022 7,077 106,454
22,699 Net income $ 114,943 $
170,215 $ 207,109 $ 261,538 Earnings
per common share Basic $ 0.51 $ 0.84 $ 0.92 $
1.30 Diluted $ 0.51 $ 0.83 $ 0.92 $
1.29 Shares used in computing earnings per common
share Basic 224,089 202,234
224,593 200,806 Diluted 225,756
204,546 226,328 203,302
ALEXION PHARMACEUTICALS, INC.
TABLE 2: RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
RESULTS (in thousands, except per share amounts)
(unaudited) Three months ended Six
months ended June 30 June 30 2016
2015 2016 2015 GAAP net income $
114,943 $ 170,215 $ 207,109 $ 261,538 Before tax
adjustments: Cost of sales: Share-based compensation 2,078 1,344
5,481 2,753
Fair value adjustment on inventory
acquired (1)
1,326 - 1,857 - Research and development expense: Share-based
compensation 14,394 13,329 29,579 24,413 Upfront and milestone
payments related to licenses and collaborations - 1,750 3,050
114,250 Selling, general and administrative expense: Share-based
compensation 31,507 52,327 69,808 82,631 Amortization of purchased
intangible assets (2) 80,055 - 160,149 - Change in fair value of
contingent consideration (3) 5,186 4,044 (9,614 ) 16,023
Acquisition-related costs (4) 974 29,777 2,313 29,777 Restructuring
expenses 455 16,224 1,177 23,276 Adjustments to income tax expense
(5) 6,843 (20,172 ) 14,499 (27,880 )
Non-GAAP net income $ 257,761 $ 268,838 $ 485,408 $
526,781 GAAP earnings per share - diluted $ 0.51 $
0.83 $ 0.92 $ 1.29 Non-GAAP earnings per share
- diluted (6) $ 1.13 $ 1.30 $ 2.12 $ 2.56
Shares used in computing diluted earnings per share (GAAP)
225,756 204,546 226,328
203,302 Shares used in computing diluted earnings per share
(non-GAAP) 228,212 206,934 228,720
205,488 (1) Inventory
fair value adjustment associated with the amortization of Kanuma
inventory step-up related to the purchase accounting for Synageva.
(2) In the third quarter of 2015, the Company initiated
amortization of its purchased intangible assets due to the
regulatory approvals for Strensiq and Kanuma. (3) In
the first quarter of 2016, the Company realized a change in fair
value of contingent consideration due to changes in the likelihood
of payments for contingent consideration associated with our prior
business combinations. (4) The following table
summarizes acquisition-related costs:
Three months
ended Six months ended June 30 June 30
2016 2015 2016 2015
Acquisition-related costs: Transaction costs $ - $ 26,799 $
375 $ 26,799 Integration costs 974 2,978
1,938 2,978 $ 974 $ 29,777 $
2,313 $ 29,777 (5)
Alexion's modified non-GAAP income tax
expense definition includes the tax effect of pre-tax adjustments
to GAAP net income, intercompany transactions with our captive
foreign partnership which would become due and payable only upon
liquidation of a substantial portion of our non-US business
interests, and share based compensation deductions not included in
GAAP tax expense.
(6) Alexion has modified its non-GAAP income
tax expense definition. The following table is provided for
informational purposes only, during the period of the modification,
and will not be included in future earnings releases.
Three months ended Six months ended June
30 June 30 2016 2015 2016
2015 Non-GAAP earnings per share - diluted $ 1.13 $ 1.30 $
2.12 $ 2.56 Reduction attributable to the modified definition of
non-GAAP income tax expense $ 0.12 $ 0.14 $ 0.24 $
0.16 $ 1.25 $ 1.44 $ 2.36 $ 2.72
ALEXION PHARMACEUTICALS, INC.
TABLE 3: RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL GUIDANCE
(in millions, except per share amounts) (unaudited)
Twelve months ended December 31, 2016
Low High GAAP net income guidance $
435
$ 515 Before tax adjustments: Cost of sales: Share-based
compensation 12 5
Fair value adjustment on inventory
acquired
5 2 Research and development expense: Share-based compensation 73
55 Upfront and milestone payments related to licenses and
collaborations 26 3 Selling, general and administrative expense:
Share-based compensation 145 123 Amortization of purchased
intangible assets 320 320 Change in fair value of contingent
consideration (2 ) (2 ) Acquisition-related costs 2 2 Restructuring
expenses 2 1
Adjustments to income tax expense
17 46 Non-GAAP net income guidance $
1,035
$ 1,070
Diluted GAAP earnings per share
$
1.91
$ 2.26
Diluted Non-GAAP earnings per share
$
4.50
$ 4.65 Shares used in computing diluted
earnings per share guidance (GAAP) 228 228
Shares used in computing diluted earnings per share guidance
(non-GAAP) 230 230
ALEXION PHARMACEUTICALS, INC. TABLE 4:
REVENUES (in thousands) (unaudited)
Three months ended Six months ended June 30
June 30 2016 2015 2016 2015
Soliris $ 701,009 $ 635,983 $ 1,365,665 $ 1,236,316 Strensiq
45,141 - 78,383 - Kanuma 6,396 - 8,923
- Total net product sales 752,546 635,983 1,452,971 1,236,316
Royalty revenue 570 227 1,183
227 Total other revenue 570 227 1,183 227
Total revenues $ 753,116 $ 636,210 $ 1,454,154 $ 1,236,543
ALEXION PHARMACEUTICALS, INC. TABLE 5: CONDENSED
CONSOLIDATED BALANCE SHEETS (in thousands)
(unaudited) June 30 December
31 2016 2015 Cash and cash equivalents $ 597,550
$ 1,010,111 Marketable securities 582,501 374,904 Trade accounts
receivable, net 609,297 532,832 Inventories 329,847 289,874 Prepaid
expenses and other current assets 242,014 208,993 Property, plant
and equipment, net 825,301 697,025 Intangible assets, net 4,547,762
4,707,914 Goodwill 5,037,444 5,047,885 Other assets 257,631
228,343 Total assets $ 13,029,347 $ 13,097,881
Accounts payable and accrued expenses $ 436,267 $ 460,708 Deferred
revenue 53,422 20,504 Current portion of long-term debt 79,136
166,365 Other current liabilities 89,637 62,038 Long-term debt,
less current portion 3,171,092 3,254,536 Facility lease obligation
196,439 151,307 Contingent consideration 109,565 121,424 Deferred
tax liabilities 570,074 528,990 Other liabilities 124,376
73,393 Total liabilities 4,830,008 4,839,265
Total stockholders' equity 8,199,339 8,258,616
Total liabilities and stockholders' equity $ 13,029,347 $
13,097,881
ALEXION PHARMACEUTICALS, INC. TABLE 6:
SUPPLEMENTAL EFFECTIVE TAX RATE INFORMATION FOR FINANCIAL GUIDANCE
- FOR INFORMATION PURPOSES ONLY (unaudited)
Twelve months ended December
31, 2016 High Low GAAP income tax expense as a
percentage of GAAP pre-tax income 34 % 32 % Tax
effect of pre-tax adjustments to GAAP net income (6.5 %) (4.5 %)
Tax effect of intercompany transactions (1) (11.0 %) (11.0 %)
Share-based compensation deductions not included in GAAP tax
expense - (1.0 %) Non-GAAP income tax expenses as a
percentage of non -GAAP pre-tax income 16.5 % 15.5 % Effect
of other tax attributes (2) (8.5 %) (8.5 %)
Cash taxes as a percentage of non-GAAP
pre-tax income (3)
8.0 % 7.0 % (1) Primarily related to deferred tax
resulting from intercompany transactions with our captive foreign
partnership. This deferred tax expense is not correlated to income
before income taxes and would become due and payable only upon
liquidation of a substantial portion of our non-US business
interests. (2) Primarily related to deferred tax
expense attributable to the utilization of acquired Synageva net
operating losses and tax credits. We expect to substantially
utilize these losses and credits prior to the fiscal year ending
December 31, 2018. (3) Represents the amount of
income taxes accrued during the period that will be due and payable
in cash in connection with Alexion's income tax returns for the
period as a percentage of non-GAAP pre-tax income.
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version on businesswire.com: http://www.businesswire.com/news/home/20160728005513/en/
Alexion Pharmaceuticals, Inc.MediaStephanie Fagan,
203-271-8223Senior Vice President, Corporate CommunicationsorKim
Diamond, 203-439-9600Executive Director, Corporate
CommunicationsorInvestorsElena Ridloff, CFA,
203-699-7722Vice President, Investor Relations
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