Cubist Pharmaceuticals Reports Second Quarter 2013 Financial Results

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Cubist Pharmaceuticals Reports Second Quarter 2013 Financial Results

  • Total Net Revenues of $258.8 Million, Up 12.2% Over Q2 2012; U.S. CUBICIN Net Revenues of $227.1 Million, Up 13.5% Over Q2 2012
  • Non-GAAP Diluted EPS of $0.42; GAAP Diluted EPS of $0.23
  • Non-GAAP Adjusted Operating Income of $51.3 Million; GAAP Operating Income of $28.1 Million

LEXINGTON, Mass.--(BUSINESS WIRE)-- Cubist Pharmaceuticals, Inc. (NAS: CBST) today announced results for the second quarter ended June 30, 2013. The Company will host a conference call and webcast today at 5:00 p.m. ET (details below).

Financial Highlights for the Second Quarter of 2013 (unaudited)

  • Total net revenues were up 12.2% over the same period in 2012. Q2 2013 total net revenues were $258.8 million compared to $230.6 million in Q2 2012.
  • U.S. CUBICIN® (daptomycin for injection) net product revenues increased 13.5% to $227.1 million from $200.2 million in Q2 2012. CUBICIN international revenues were $15.0 million compared to $11.4 million in Q2 2012.
  • Non-GAAP adjusted operating income was $51.3 million compared to $71.1 million in the second quarter of 2012. GAAP operating income was $28.1 million compared to $61.5 million in the second quarter of 2012.
  • Non-GAAP diluted earnings per share (EPS) was $0.42 compared to $0.56 in the second quarter of 2012. GAAP diluted EPS was $0.23 compared to $0.58 in the second quarter of 2012.

"We made important progress across the company this quarter, highlighted by continued strong top-line growth and advancement of our exciting late-stage pipeline," said Michael Bonney, CEO of Cubist. "We are pleased to have now secured Fast-Track status from the FDA for ceftolozane/tazobactam in all three of its potential indications, and we look forward to reporting top-line Phase 3 data from the cUTI and cIAI trials later this year. We are making progress against our Building Blocks of Growth goalsand continue to enhance our leadership in the acute care environment."

Second quarter ENTEREG® (alvimopan) net product revenues were $12.4 million, up 27.6% compared to $9.7 million in the second quarter of 2012. Service revenues for the Company's co-promote of DIFICID® (fidaxomicin) for the second quarter were $3.7 million. This will be the final quarter reflecting the full service fee from Cubist's agreement with Optimer, which concludes in July.

As of June 30, 2013, Cubist had $1.0 billion in cash, cash equivalents and investments. The total number of Cubist's common shares outstanding as of June 30, 2013, was 66,013,909.

Pipeline Update

Cubist also announced the initiation of a randomized, open-label study evaluating the efficacy and safety of ceftolozane/tazobactam (formerly CXA-201) in patients with ventilator-associated bacterial pneumonia (VABP). Ceftolozane/tazobactam is an antibacterial consisting of a novel anti-pseudomonal cephalosporin, with tazobactam, a well-established β-lactamase inhibitor. The primary endpoint of this study is to compare the clinical cure rates of ceftolozane/tazobactam to piperacillin/tazobactam.

The Company will provide an update on all of its pipeline activity, including its Phase 3 program for ceftolozane/tazobactam, on today's second quarter earnings call.

Recent Company Highlights

  • In May, the FDA granted the Company's late-stage antibiotic candidate, ceftolozane/tazobactam, Fast Track status in the previously granted Qualified Infectious Disease Product (QIDP) indications, hospital-acquired bacterial pneumonia (HABP)/VABP and complicated urinary tract infections (cUTI). The FDA previously granted Fast Track status for ceftolozane/tazobactam in complicated intra-abdominal infections (cIAI) in February 2013.
  • Dr. Lorianne Masuoka joined Cubist as Chief Medical Officer and Senior Vice President, Clinical Development and Medical Affairs. She was previously Senior Vice President/Chief Medical Officer at Nektar Therapeutics.
  • For the fifth consecutive year, Cubist was named to the Globe 100, the Boston Globe's annual ranking of the 100 top-performing public companies headquartered in Massachusetts. Cubist was ranked number six overall and was named the top performing biotech company.

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

Thursday, July 18, 2013 at 5:00 pm ET

U.S./Canada Attendee Dial-in: (855) 319-7654
International Attendee Dial-in: (484) 756-4327
Attendee Passcode: 96695003

24-HOUR REPLAY U.S./CANADA: (855) 859-2056
Conference ID: 96695003

Attendee Password: 071813

Replay will be available for 90 days at


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

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 second quarter financial results; the expected timing of clinical trial data readouts for ceftolozane/tazobactam; and our Building Blocks of Growth, 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 second quarter financial results will differ materially from our expected results disclosed in this release; our ability to continue to grow revenues from the sale of CUBICIN and ENTEREG; the ability of our third-party suppliers to produce and deliver adequate amounts of our products and product candidates; the strength of, and our ability to successfully enforce, our intellectual property portfolio protecting our products and product candidates; competition from generic drug companies such as Teva and Hospira; our ability to successfully develop, gain marketing approval for and commercially launch ceftolozane/tazobactam and our other product candidates for their planned indications and on the timelines that we expect; our ability to discover, in-license or acquire new products and product candidates; our ability to achieve and manage our growth in our business; and those additional factors discussed in our most recent Quarterly Report 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.





(in thousands)

June 30,
December 31,
Cash, cash equivalents and investments $ 1,000,599 $ 979,396
Accounts receivable, net 101,609 93,467
Inventory 86,177 79,440
Property and equipment, net 168,404 166,465
Deferred tax assets, net 18,343 14,190
In-process research and development 272,700 272,700
Other assets 334,362   326,727
Total assets $ 1,982,194   $ 1,932,385
Accounts payable and accrued expenses $ 188,030 $ 209,236
Deferred tax liabilities, net 94,486 103,081
Deferred revenue 38,225 40,875
Contingent consideration 193,852 189,213
Debt and other liabilities, net 408,213   399,232
Total liabilities 922,806   941,637
Total stockholders' equity 1,059,388   990,748
Total liabilities and stockholders' equity $ 1,982,194   $ 1,932,385




(in thousands, expect share and per share data)

Three Months Ended
June 30,
Six Months Ended
June 30,
2013   2012 2013   2012
U.S. CUBICIN product revenues, net $ 227,117 $ 200,180 $ 429,162 $ 384,887
U.S. ENTEREG product revenues, net 12,386   9,706   23,589   19,148  
Total U.S. product revenues, net 239,503 209,886 452,751 404,035
International product revenues 14,959 11,363 27,362 24,017
Service revenues 3,665 8,665 7,289 12,329
Other revenues 652   653   1,306   1,878  
Total revenues, net 258,779   230,567   488,708   442,259  
Costs and expenses:
Cost of product revenues 63,041 58,891 118,716 112,843
Research and development 115,190 67,206 229,399 118,378
Contingent consideration 2,586 2,694 4,639 5,523
Selling, general and administrative 49,889   40,255   98,090   84,035  
Total costs and expenses 230,706   169,046   450,844   320,779  
Operating income 28,073 61,521 37,864 121,480
Other income (expense), net (6,678 ) (11,273 ) (12,880 ) (19,786 )
Income before income taxes 21,395 50,248 24,984 101,694
Provision for income taxes 6,153 7,125 3,654 25,777
Net income $ 15,242   $ 43,123   $ 21,330   $ 75,917  
Basic earnings per share $ 0.23 $ 0.68 $ 0.33 $ 1.20
Diluted earnings per share $ 0.23 $ 0.58 1 $ 0.32 $ 1.04 1
Shares used in calculating:
Basic earnings per share 65,558,376 63,498,953 65,248,707 63,250,165
Diluted earnings per share 67,731,976 81,166,329 67,385,141 81,001,476

1 Includes add back of interest expense, debt issuance costs and debt discount amortization on 2.50% notes to income, net of tax effect

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(in thousands, except share and per share data)

Reconciliation of GAAP net income to non-GAAP net income Three Months Ended
June 30,
Six Months Ended
June 30,
2013 2012 2013 2012
GAAP net income $ 15,242 $ 43,123 $ 21,330 $ 75,917
Non-cash debt discount amortization 3,670 4,654 7,277 9,481
Loss on partial extinguishment of 2.25% Notes 3,728 3,728
ENTEREG intangible asset amortization 4,552 4,589 8,977 9,177
ENTEREG inventory step-up 1,059 834 2,022 1,369
Expenses related to the acquisition of Adolor 1,448 5,037
Hydra license fee 15,000 15,000
Acquisition of rights from Astellas 25,000
Contingent consideration 2,586 2,694 4,639 5,523
Tax adjustment1 (9,087 ) (16,805 ) (25,051 ) (22,079 )
Non-GAAP net income $ 33,022   $ 44,265   $ 59,194   $ 88,153  
Non-GAAP basic earnings per share $ 0.50 $ 0.70 $ 0.91 $ 1.39
Non-GAAP diluted earnings per share $ 0.42 2 $ 0.56 3