Alexion Reports Fourth Quarter and Full Year 2010 Results
- Soliris® Net Product Sales Increased 40 Percent to $541 Million
in 2010 —
- Continued Strong Uptake of Soliris by New Patients in Core
Territories: U.S., Western Europe and Japan —
- aHUS and Transplant Programs Advance —
- Taligen and Orphatec Acquisitions Expand Rare Disease Pipeline -
Fourth Quarter 2010 Financial Highlights:
-
Q4 2010 net product sales increased 41 percent to $156.0 million,
compared to $110.6 million in Q4 2009.
-
Q4 2010 GAAP net income was $26.5 million, or $0.28 per share,
compared to Q4 2009 GAAP net income of $237.1 million, or $2.59 per
share, which included a non-recurring tax benefit of $215.5 million,
or $2.36 per share.
-
Q4 2010 non-GAAP net income increased 71 percent to $48.6 million, or
$0.51 per share, compared to Q4 2009 non-GAAP net income of $28.5
million, or $0.31 per share.
Full-Year 2010 Financial Highlights:
-
2010 net product sales increased 40 percent to $541.0 million,
compared to $386.8 million in 2009.
-
2010 GAAP net income was $97.0 million, or $1.04 per share, compared
to 2009 GAAP net income of $295.2 million, or $3.26 per share, which
included a non-recurring tax benefit of $215.5 million, or $2.38 per
share.
-
2010 non-GAAP net income increased 54 percent to $167.3 million, or
$1.78 per share, compared to 2009 non-GAAP net income of $108.4
million, or $1.18 per share.
CHESHIRE, Conn.--(BUSINESS WIRE)--
Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN) today announced financial
results for the quarter and year ended December 31, 2010. For the three
months ended December 31, 2010, Alexion Pharmaceuticals, Inc.
("Alexion", or the "Company") reported net product sales of Soliris®
(eculizumab) of $156.0 million, reflecting strong additions of new
patients, compared to $110.6 million for the same period in 2009.
Soliris, approved in the U.S. (2007), European Union (2007) and Japan
(2010), is the only drug specifically indicated for the treatment of
patients with paroxysmal nocturnal hemoglobinuria (PNH), a rare,
debilitating and life-threatening blood disease.
Historically, Alexion's non-GAAP operating results have been equal to
GAAP operating results less the impact of share-based compensation and
taxes that are not payable in cash (non-cash taxes). Additionally,
acquisition-related expenses are excluded from non-GAAP results. The
following summary table is provided for investors' convenience.
|
(in thousands, except per-share data)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Twelve Months Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2010
|
|
2009
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
Net product sales
|
|
$
|
155,975
|
|
$
|
110,649
|
|
|
|
$
|
540,957
|
|
$
|
386,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
|
|
$
|
26,450
|
|
$
|
237,127
|
|
|
|
$
|
97,030
|
|
$
|
295,166
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation
|
|
|
7,605
|
|
|
6,878
|
|
|
|
|
32,338
|
|
|
28,731
|
|
|
Acquisition expense
|
|
|
722
|
|
|
-
|
|
|
|
|
722
|
|
|
-
|
|
|
Non-cash taxes
|
|
|
13,860
|
|
|
(215,516
|
)
|
|
|
|
37,229
|
|
|
(215,516
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income
|
|
$
|
48,637
|
|
$
|
28,489
|
|
|
|
$
|
167,319
|
|
$
|
108,381
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing diluted earnings per share (GAAP)
|
|
|
94,293
|
|
|
91,449
|
|
|
|
|
93,037
|
|
|
90,582
|
|
|
Shares used in computing diluted earnings per share (non-GAAP)
|
|
|
95,208
|
|
|
92,532
|
|
|
|
|
94,247
|
|
|
91,780
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP earnings per share - diluted
|
|
$
|
0.28
|
|
$
|
2.59
|
|
|
|
$
|
1.04
|
|
$
|
3.26
|
|
|
Non-GAAP earnings per share - diluted
|
|
$
|
0.51
|
|
$
|
0.31
|
|
|
|
$
|
1.78
|
|
$
|
1.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter Non-GAAP Financial Results:
The Company reported non-GAAP net income of $48.6 million, or $0.51 per
share, in the fourth quarter of 2010, compared to non-GAAP net income of
$28.5 million, or $0.31 per share, in the fourth quarter of 2009.
Alexion's non-GAAP operating expenses for Q4 2010 were $82.8 million,
compared to $68.2 million for Q4 2009. Non-GAAP research and development
(R&D) expenses for Q4 2010 were $25.4 million, compared to $20.3 million
for Q4 2009. The increase in R&D expenses primarily reflected the
expansion of the Company's clinical trial programs. Non-GAAP selling,
general and administrative (SG&A) expenses for Q4 2010 were $57.4
million, compared to $47.9 million for Q4 2009. The increase in SG&A
expenses primarily reflected Alexion's growing global operations and the
Company's expanded participation at medical conferences.
Fourth Quarter GAAP Financial Results:
Alexion reported GAAP net income of $26.5 million, or $0.28 per share in
the fourth quarter of 2010, compared to Q4 2009 GAAP net income of
$237.1 million, or $2.59 per share, which included a non-recurring tax
benefit of $215.5 million, or $2.36 per share.
On a GAAP basis, operating expenses for Q4 2010 were $90.7 million,
compared to $75.1 million for Q4 2009. GAAP R&D expenses for Q4 2010
were $27.2 million, compared to $23.2 million for Q4 2009. GAAP SG&A
expenses were $63.5 million for Q4 2010, compared to $51.9 million for
Q4 2009.
Full Year 2010 Non-GAAP Financial Results:
The Company reported non-GAAP net income of $167.3 million in 2010, or
$1.78 per share, compared to non-GAAP net income of $108.4 million, or
$1.18 per share, in 2009.
Alexion's non-GAAP operating expenses for the full year 2010 were $294.1
million, compared to $225.9 million for 2009. Non-GAAP R&D expenses for
2010 were $90.4 million, compared to $72.9 million for the prior year.
The increase in R&D expenses primarily reflected the expansion of the
Company's clinical trial programs. Non-GAAP SG&A expenses for 2010 were
$203.7 million, compared to $153.1 million in 2009. The increase in SG&A
expenses primarily reflected Alexion's growing global operations and
expanded participation at medical conferences.
Full Year 2010 GAAP Financial Results:
Alexion reported GAAP net income of $97.0 million, or $1.04 per share in
2010 compared to 2009 GAAP net income of $295.2 million, or $3.26 per
share, which included a non-recurring tax benefit of $215.5 million, or
$2.38 per share.
Alexion's GAAP operating expenses for the full year 2010 were $325.9
million, compared to $254.7 million for the prior year. GAAP R&D
expenses for 2010 were $98.4 million, compared to $81.9 million in 2009.
GAAP SG&A expenses were $227.5 million in 2010, compared to $172.8
million for the prior year.
Balance Sheet:
As of December 31, 2010, the Company had $361.6 million in cash, cash
equivalents and marketable securities compared to $176.2 million at
December 31, 2009. In January and February 2011, the Company used $114
million of available cash for the Taligen and Orphatec acquisitions
described below.
Q4 Research and Development Progress:
During the fourth quarter of 2010, Alexion made significant progress on
advancing the development of eculizumab as a treatment for patients
suffering from additional rare and severe complement-mediated disorders
beyond PNH, with a focus on its two lead nephrology programs in aHUS and
transplant.
atypical Hemolytic Uremic Syndrome (aHUS)
In November 2010, researchers at the American Society of Nephrology
(ASN) annual meeting in Denver presented positive data from the
Company's two Phase 2 26-week studies of eculizumab as a treatment for
adult and adolescent patients with aHUS. aHUS is an ultra-rare, chronic
and life-threatening disease in which uncontrolled complement activation
causes blood clots in small blood vessels throughout the body
(thrombotic microangiopathy, or TMA) leading to kidney failure, stroke,
heart attack and death.
The Company has completed dosing in these two Phase 2 clinical studies
of eculizumab as an investigational treatment for patients with aHUS. A
separate clinical study in pediatric patients with aHUS, as well as an
additional study in adult patients, is ongoing.
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, or AHR. The Company is
supporting investigator-initiated studies in elevated-risk kidney
transplantation in the U.S. and Australia. Separately, an
investigator-initiated study in patients with ABO blood-type
incompatibility is enrolling. Alexion is now planning two global,
company-sponsored controlled clinical trials evaluating eculizumab to
prevent AHR in patients undergoing kidney transplant. The global studies
are expected to commence in multiple centers this year following
protocol finalization.
Acquisition of Orphatec Assets:
This morning, Alexion announced that it has purchased patents and assets
from Germany-based Orphatec Pharmaceuticals GmbH related to an
investigational therapy for patients with molybdenum cofactor deficiency
(MoCD) Type A. MoCD Type A is an ultra-rare metabolic disease in
newborns in which a genetic deficiency of cPMP causes a deficiency of
molybdenum cofactor, which in turn leads to catastrophic brain damage,
with survival generally measured in weeks or months.
Deficiency of the cofactor leads to accumulation of neurotoxic sulfite,
resulting in uncontrollable seizures, severe and rapid neurological
damage and death. There are currently no treatment options for patients
with MoCD Type A.
The investigational therapy is designed to replace the deficient cPMP,
which enables MoCD production so that the infant's body can eliminate
the toxic sulfite. Scientific discoveries underlying this highly
innovative therapy were pioneered in Germany, and have led to
encouraging early clinical experience with cPMP replacement therapy in
several newborns. Investigators in Germany and Australia have reported
clinically meaningful results in the first patient treated.
The Orphatec assets were purchased with an upfront cash payment of
approximately $3 million plus contingent payments which would be earned
upon reaching various development, regulatory and commercial milestones.
Taligen Acquisition:
On January 31, 2011, Alexion announced that it acquired Taligen
Therapeutics, Inc., a privately held development-stage biotechnology
company based in Cambridge, Massachusetts. The acquisition was completed
with an upfront cash payment of $111 million for 100 percent of
Taligen's equity interests. Additional contingent payments would be
earned upon reaching various clinical efficacy and product approval
milestones in both the U.S. and European Union for up to six product
candidates. The acquisition broadens Alexion's portfolio of product
candidates and accelerates the Company's capabilities in translational
medicine by bringing additional accomplished researchers to the Company
to form the nucleus of a Translational Medicine Group in Cambridge,
Massachusetts. Alexion aims to accelerate the development of promising
pre-clinical compounds from the acquisition, including potential
treatments for patients with ophthalmic diseases such as age-related
macular degeneration (AMD), as well as other novel regulators of the
complement inflammatory pathways targeting the treatment of patients
with rare disorders.
"In 2010, we exceeded our clinical and commercial objectives. We served
significantly greater numbers of patients with PNH in our core
territories of the U.S., Western Europe and Japan, and made important
progress in our lead pipeline programs," said Leonard Bell, M.D., Chief
Executive Officer of Alexion. "In 2011, we are accelerating our
initiatives to serve more patients with PNH in our core territories and
new countries, as well as increasing our commitment to the more rapid
innovation of first-in-class therapies for patients with debilitating
and life-threatening rare diseases."
2011 Financial Guidance:
In 2011, worldwide net product sales are expected to be within a range
of $715 to $735 million. On a non-GAAP basis, R&D expenses are
anticipated to be in the range of $128 to $138 million, and selling,
general and administrative expenses in the range of $270 to $280
million. The Company's share-based compensation expense for the year is
expected to be in a range of approximately $39 to $41 million. Cost of
sales is expected to be approximately 13 percent of net product sales.
The GAAP effective tax rate is expected to be in the range of 30 to 32
percent. The non-GAAP effective tax rate, reported on a cash tax
liability basis, is expected to be in the range of 10 to 12 percent.
Based on a forecast of approximately 97 million diluted shares
outstanding, Alexion is providing guidance of $2.10 to $2.25 for
non-GAAP earnings per share for the year.
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, February 10, 2011, at
10:00 a.m., Eastern Time. To participate in this call, dial
719-457-2735, confirmation code 6342085, 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 719-457-0820, confirmation code 6342085. 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 U.S., 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
hemolysis. Prior to these approvals, there were no therapies
specifically available for the treatment of patients with PNH.
Eculizumab (Soliris) is not approved for the treatment of aHUS,
transplant or other indications other than PNH. Alexion's innovative
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 working to
develop and deliver life-changing drug therapies for patients with
serious and life-threatening medical conditions. Alexion is engaged in
the discovery, development and commercialization of therapeutic products
aimed at treating patients with a wide array of severe disease states,
including hematologic and kidney diseases, neurologic disorders,
ophthalmic, transplant, other inflammatory disorders, and cancer.
Soliris® (eculizumab), Alexion's first marketed product, is approved in
more than 35 countries as a therapy for patients with PNH, a
debilitating and ultra-rare life-threatening blood disorder. 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.
[ALXN-E]
This news release contains forward-looking statements, including
statements related to guidance regarding anticipated financial results
for 2011, projected tax rates, assessment of the Company's financial
position and commercialization efforts, potential benefits and
commercial potential for Soliris, potential of Alexion's
complement-inhibition technology for treatment of diseases other than
PNH; plans for clinical programs for Soliris in non-PNH indications and
for samalizumab; plans for recently acquired companies and programs;
progress in developing commercial infrastructure and interest about
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, delays in arranging
satisfactory manufacturing capabilities and establishing commercial
infrastructure, delays in developing or adverse changes in commercial
relationships, the possibility that results of clinical trials are not
predictive of safety and efficacy results of Soliris in broader patient
populations, 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 into Alexion, the possibility that initial
results of commercialization are not predictive of future rates of
adoption of Soliris, 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 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 Quarterly Report on Form 10-Q for the
period ended September 30, 2010 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.
|
|
|
ALEXION PHARMACEUTICALS, INC.
|
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(in thousands, except per share amounts)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Twelve Months Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2010
|
|
2009
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
Net product sales
|
|
$
|
155,975
|
|
|
$
|
110,649
|
|
|
|
$
|
540,957
|
|
|
$
|
386,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales (1)
|
|
|
20,222
|
|
|
|
12,892
|
|
|
|
|
64,437
|
|
|
|
45,059
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
Research and development (1)
|
|
|
27,177
|
|
|
|
23,215
|
|
|
|
|
98,394
|
|
|
|
81,915
|
|
|
Selling, general and administrative (1)
|
|
|
63,547
|
|
|
|
51,887
|
|
|
|
|
227,488
|
|
|
|
172,767
|
|
|
Total operating expenses
|
|
|
90,724
|
|
|
|
75,102
|
|
|
|
|
325,882
|
|
|
|
254,682
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
45,029
|
|
|
|
22,655
|
|
|
|
|
150,638
|
|
|
|
87,059
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense
|
|
|
(782
|
)
|
|
|
(61
|
)
|
|
|
|
(1,627
|
)
|
|
|
(350
|
)
|
|
Debt exchange expense
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
(3,395
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
44,247
|
|
|
|
22,594
|
|
|
|
|
149,011
|
|
|
|
83,314
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision (benefit)
|
|
|
17,797
|
|
|
|
(214,533
|
)
|
|
|
|
51,981
|
|
|
|
(211,852
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
26,450
|
|
|
$
|
237,127
|
|
|
|
$
|
97,030
|
|
|
$
|
295,166
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.29
|
|
|
$
|
2.70
|
|
|
|
$
|
1.09
|
|
|
$
|
3.46
|
|
|
Diluted
|
|
$
|
0.28
|
|
|
$
|
2.59
|
|
|
|
$
|
1.04
|
|
|
$
|
3.26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing earnings per common share
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
90,068
|
|
|
|
87,885
|
|
|
|
|
89,271
|
|
|
|
85,326
|
|
|
Diluted
|
|
|
94,293
|
|
|
|
91,449
|
|
|
|
|
93,037
|
|
|
|
90,582
|
|
|
|
|
|
|
|
(1
|
)
|
|
The following represents share-based compensation expense included
in the respective captions of the
|
|
|
|
condensed consolidated statements of operations above:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Twelve Months Ended
|
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
|
2010
|
|
2009
|
|
|
2010
|
|
2009
|
|
|
|
Share-based compensation expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
$
|
411
|
|
$
|
-
|
|
|
$
|
1,266
|
|
$
|
-
|
|
|
|
Research and development
|
|
|
1,739
|
|
|
2,886
|
|
|
|
7,878
|
|
|
9,049
|
|
|
|
Selling, general and administrative
|
|
|
5,455
|
|
|
3,992
|
|
|
|
23,194
|
|
|
19,682
|
|
|
|
|
|
$
|
7,605
|
|
$
|
6,878
|
|
|
$
|
32,338
|
|
$
|
28,731
|
|
|
|
ALEXION PHARMACEUTICALS, INC.
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
2010
|
|
2009
|
|
Cash, cash equivalents and marketable securities
|
|
$
|
361,605
|
|
$
|
176,220
|
|
Trade accounts receivable, net
|
|
|
168,732
|
|
|
113,731
|
|
Inventories, net
|
|
|
62,165
|
|
|
40,885
|
|
Deferred tax assets, current
|
|
|
19,643
|
|
|
16,726
|
|
Other current assets
|
|
|
34,411
|
|
|
25,894
|
|
Property, plant and equipment, net
|
|
|
162,240
|
|
|
164,691
|
|
Deferred tax assets, noncurrent
|
|
|
154,569
|
|
|
194,308
|
|
Other noncurrent assets
|
|
|
48,672
|
|
|
53,946
|
|
Total assets
|
|
$
|
1,012,037
|
|
$
|
786,401
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
$
|
123,056
|
|
$
|
78,445
|
|
Other current liabilities
|
|
|
15,459
|
|
|
6,817
|
|
Long term debt
|
|
|
3,718
|
|
|
9,918
|
|
Other noncurrent liabilities
|
|
|
10,068
|
|
|
2,865
|
|
Total liabilities
|
|
|
152,301
|
|
|
98,045
|
|
|
|
|
|
|
|
Total stockholders' equity
|
|
|
859,736
|
|
|
688,356
|
|
Total liabilities and stockholders' equity
|
|
$
|
1,012,037
|
|
$
|
786,401
|
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