Cubist Increases Revenue 18% to $238 Million in the Third Quarter

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Cubist Increases Revenue 18% to $238 Million in the Third Quarter

  • CUBICIN U.S. Net Revenues of $208 Million, Up 12% Over Q3 2011
  • CUBICIN International Revenues Increased 22%, Compared to Q3 2011
  • Non-GAAP Adjusted Operating Income for Q3 2012 Increased 9% Over Q3 2011 to $78 Million; Q3 GAAP Operating Income was $70 Million

LEXINGTON, Mass.--(BUSINESS WIRE)-- Cubist Pharmaceuticals, Inc. (NAS: CBST) today announced results for the third quarter ended September 30, 2012. 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 2012 (unaudited)

  • Cubist's strong double-digit revenue growth continued in the third quarter, with total net revenues up 18% over the same period in 2011. Q3 2012 total net revenues were $238.2 million, compared to $201.7 million in Q3 2011.
  • U.S. CUBICIN® (daptomycin for injection) net product revenues increased 12% to $208.3 million from $186.4 million in Q3 2011 - marking the second consecutive quarter to exceed $200 million in revenue; CUBICIN international revenues increased 22% to $12.0 million, compared to $9.8 million in Q3 2011.
  • Non-GAAP adjusted operating income increased 9% to $77.7 million, compared to $71.2 million in Q3 2011; GAAP operating income was $70.4 million, compared to $69.1 million in Q3 2011.
  • Non-GAAP diluted earnings per share (EPS) decreased 13% to $0.68, compared to $0.78 in Q3 2011; GAAP diluted EPS was $0.55, compared to $0.33 per share in Q3 2011.

"2012 continues to position us well as we drive toward our Building Blocks of Growth five-year goals," said Michael Bonney, CEO of Cubist. "Our market strength and experience, backed by solid business fundamentals, have allowed us to deliver another quarter of strong growth. With revenue growth of 18% and strong bottom line growth, we're building on our momentum as we continue to deliver important products to our customers and drive value for our shareholders."

Service revenues for DIFICID® (fidaxomicin) for the third quarter were $7.2 million. This includes $3.5 million of profit sharing revenue from Optimer Pharmaceuticals, Inc., reflecting over-performance versus revenue goals for the first year of sales of DIFICID under the Company's co-promotion agreement. ENTEREG® (alvimopan), acquired through our acquisition of Adolor Corporation in December 2011, net product revenues were $10.1 million in the third quarter of 2012.

As of September 30, 2012, Cubist had $911.4 million in cash, cash equivalents and investments. The total number of Cubist's common shares outstanding as of September 30, 2012, was 64,377,426.

Recent Company Highlights

  • In October 2012, Cubist submitted applications to the U.S. Food and Drug Administration (FDA) for QIDP (Qualified Infectious Disease Product Designation) under the Generating Antibiotic Incentives Now (GAIN) act for its late-stage investigational antibiotics, CXA-201 (ceftolozane/tazobactam) and CB-315. A response from the FDA is expected within 60 days of submission. If granted, the designations would respectively qualify CXA-201 and CB-315 for a five year extension of Hatch-Waxman exclusivity, priority review and eligibility for fast-track status.
  • On October 16, 2012, Cubist announced plans to present posters on selected studies at IDWeek. The studies focus on CXA-201, as well as on CUBICIN.
  • In September 2012, at the 52nd Annual Interscience Conference on Antimicrobial Agents and Chemotherapy (ICAAC), Cubist presented posters on CXA-201 and CB-315, as well as CUBICIN.
  • On September 4, 2012, Cubist announced the appointment of Patrick Vink, M.D., as Senior Vice President and General Manager of its International Business.

"There exists growing recognition of the imperative need for important new medicines to treat patients in the acute care/hospital setting," said Bonney. "With Cubist's outstanding late-stage pipeline and significant experience and insights into the market, we are well positioned to make meaningful improvements in the lives of patients."

Use of Non-GAAP Financial Measures

Non-GAAP net income, non-GAAP EPS and non-GAAP adjusted operating income exclude non-cash or non-operational activities. As a result, Cubist uses these measures to assess and analyze its operational results and trends and to make financial and operational decisions. Cubist also believes these non-GAAP financial measures are 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 operating income, net income and EPS, 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 2012 FINANCIAL RESULTS
Thursday, October 18, 2012 at 5:00 p.m. ET

U.S./Canada Attendee Dial-in: (855) 319-7654
International Attendee Dial-in: (484) 756-4327
Attendee Passcode: 13972921

24-HOUR REPLAY U.S./CANADA: (855) 859-2056
24-HOUR REPLAY INTERNATIONAL: (404) 537-3406
Conference ID: 31041929

CALL WILL ALSO BE BROADCAST LIVE, LISTEN ONLY, VIA THE WEB AT:
www.tinyurl.com/cubist3Q12
Attendee Password: 101812

Replay will be available for 90 days via the Internet at www.cubist.com

*********************************************************************************

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 includes forward-looking statements, including, without limitation, statements regarding: (i) the expected timing of a response from the FDA on our applications for QDIP and the anticipated impact of a favorable result on CXA-201 (ceftolozane/tazobactam) and CB-315; and (ii) our belief that 2012 has positioned us well to drive toward our Building Blocks of Growth five-year goals. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statement. Applicable risks and uncertainties include, among others: the timing and outcome of a response from the FDA to our applications for QDIP and those additional factors discussed in Item 1A of our quarterly report on Form 10-Q for the period ended June 30, 2012 under the caption "Risk Factors" as filed with the Securities and Exchange Commission on August 7, 2012. 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, CUBICIN and ENTEREG are registered trademarks of Cubist Pharmaceuticals, Inc.

DIFICID is a registered trademark of Optimer Pharmaceuticals, Inc.

    
 
CUBIST PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
UNAUDITED
(in thousands)
 

September 30,
2012

December 31,
2011

 
ASSETS
Cash, cash equivalents and investments$911,385$867,695
Accounts receivable, net94,36187,800
Inventory71,43670,000
Property and equipment, net164,826168,425
Deferred tax assets, net15,55616,189
In-process research and development311,400311,400
Other assets 342,660 365,946
 
Total assets$1,911,624$1,887,455
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses$143,680$177,378
Deferred tax liabilities, net127,383143,177
Deferred revenue37,71131,524
Contingent consideration225,230248,234
Debt and other liabilities, net 427,960 487,285
Total liabilities 961,964 1,087,598
 
Total stockholders' equity 949,660 799,857
 
Total liabilities and stockholders' equity$1,911,624$1,887,455
        
 
CUBIST PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED
(in thousands, except share and per share data)
 
Three months ended
September 30,
Nine months ended
September 30,
 2012  2011  2012  2011 
 
Revenues:
U.S. CUBICIN product revenues, net$208,272$186,433$593,159$508,724
U.S. ENTEREG product revenues, net 10,082  -  29,230  - 
Total U.S. product revenues, net218,354186,433622,389508,724
International product revenues11,9599,77835,97625,825
Service revenues7,2153,02019,5443,020
Other revenues 653  2,467  2,531  3,498 
Total revenues, net 238,181  201,698  680,440  541,067 
 
Costs and expenses:
Cost of product revenues55,74048,380168,583123,933
Research and development70,19746,171188,575128,458
Contingent consideration1,4732,0696,99684,983
Selling, general and administrative 40,420  35,949  124,455  114,454 
Total costs and expenses 167,830  132,569  488,609  451,828 
 
Operating income70,35169,129191,83189,239
 
Other income (expense), net(10,171)(6,813)(29,957)(20,581)
    
Income before income taxes60,18062,316161,87468,658
 
Provision for income taxes19,85938,08145,63642,453
    
Net income$40,321 $24,235 $116,238 $26,205 
 
Basic earnings per share$0.63$0.40$1.83$0.43
Diluted earnings per share$0.55

1

 

$0.33

1

 

$1.59

2

 

$0.41

2

 

 
Shares used in calculating:
Basic earnings per share64,048,67361,238,13163,521,49160,411,324
Diluted earnings per share82,856,91282,528,89381,251,07477,834,805
 
1 Includes add back of interest expense, debt issuance costs and debt discount amortization on 2.50% notes and 2.25% notes to income, net of tax effect
2 Includes add back of interest expense, debt issuance costs and debt discount amortization on 2.50% 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)
 

Reconciliation of GAAP net income to non-GAAP
proforma net income

Three months ended
September 30,
Nine months ended
September 30,
 2012  2011 2012  2011
 
GAAP net income$40,321$24,235$116,238$26,205
 
Non-cash debt discount amortization3,9634,65313,44413,707
 
Loss on partial extinguishment of 2.25% Notes-

 

-

 

3,728

 

-

 

 
Loss on disposal of property and equipment3,248-3,248-
 
ENTEREG intangible asset amortization4,589-13,766-
 
ENTEREG inventory step-up960-2,329-
 
Expenses related to the acquisition of Adolor356 Read Full Story

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