Cubist Pharmaceuticals Reports Second Quarter 2013 Financial Results
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***********************
CUBIST Q2 2013 FINANCIAL RESULTS
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
24-HOUR REPLAY INTERNATIONAL: (404) 537-3406
Conference ID: 96695003
CALL WILL ALSO BE BROADCAST LIVE, LISTEN ONLY, VIA THE WEB AT:
https://cubist.webex.com/cubist/onstage/g.php?t=a&d=625133922
Attendee Password: 071813
Replay will be available for 90 days at www.cubist.com
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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 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.
CUBIST PHARMACEUTICALS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS UNAUDITED (in thousands) | ||||||||||
June 30, | December 31, | |||||||||
ASSETS | ||||||||||
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 | ||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
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 | ||||||
CUBIST PHARMACEUTICALS, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME UNAUDITED (in thousands, expect share and per share data) | ||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||
Revenues: | ||||||||||||||||||||
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
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 net income | Three Months Ended | Six Months Ended | ||||||||||||||||||
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 | ||||||||||||||
