Continued Strong Uptake of Soliris(R) in U.S. and Europe
First GAAP Profit; Sales Guidance Revised Upward
Two-For-One Stock Split Announced
Oncology and Kidney Transplantation Clinical Studies Progress
Second Quarter 2008 Financial Highlights:
- Soliris(R) (eculizumab) net product sales were $59.6 million in Q2
2008, an increase of 31 percent compared to $45.5 million in Q1 2008.
Net product sales of Soliris were $9.8 million in the Q2 2007 initial
launch quarter.
- Q2 GAAP net income was $2.4 million, or $0.06 per diluted share,
compared to a GAAP net loss of $27.2 million, or $0.75 per share, in Q2
2007.
- Q2 non-GAAP net income was $8.4 million, or $0.20 per diluted share,
compared to a non-GAAP net loss of $21.8 million, or $0.61 per share,
in Q2 2007.
CHESHIRE, Conn., July 29 /PRNewswire-FirstCall/ -- Alexion
Pharmaceuticals, Inc. (Nasdaq: ALXN) today announced financial results for
the quarter ended June 30, 2008.
Second Quarter 2008 Financial Results:
For the three months ended June 30, 2008, Alexion Pharmaceuticals, Inc.
("Alexion" or the "Company") reported total revenues of $59.6 million
compared to total revenues of $9.8 million for the same period in 2007. Net
product sales of Soliris accounted for all revenues in both periods.
Soliris, approved by the U.S. Food and Drug Administration (FDA) in March
2007 and the European Commission (EC) in June 2007, is the only drug
specifically indicated for the treatment of patients with paroxysmal
nocturnal hemoglobinuria ("PNH"), a rare, debilitating and life-threatening
blood disease. Total revenues in Q2 2008 increased by 31 percent compared
to total revenues of $45.6 million in the prior quarter, Q1 2008.
The Company reports both GAAP operating results and non-GAAP operating
results. Non-GAAP operating results are equal to GAAP operating results
excluding the impact of share-based compensation. The following summary
table is provided for investors' convenience. A further reconciliation and
explanation of the GAAP to non-GAAP figures appears at the end of this
announcement.
(Millions of U.S. dollars, except per-share data)
Quarter Ended June 30,
2008 2007
Net Product Sales $ 59.6 $ 9.8
-------- --------
Total Revenues $ 59.6 $ 9.8
-------- --------
GAAP Net Income (Loss) $ 2.4 $(27.2)
Share-Based Compensation $ 6.0 $ 5.3
-------- --------
Non-GAAP Net Income (Loss) $ 8.4 $(21.8)
GAAP Net Income (Loss) Per
Share - Diluted $ 0.06 $(0.75)
Non-GAAP Net Income (Loss)
Per Share - Diluted $ 0.20 $(0.61)
Second Quarter 2008 (Q2 2008) Non-GAAP Financial Results
The Company reported non-GAAP net income for Q2 2008 of $8.4 million,
or $0.20 per diluted share, compared to a non-GAAP net loss of $21.8
million, or $0.61 per share, in the year-ago quarter, Q2 2007. Alexion
reported non-GAAP net income of $1.6 million, or $0.04 per diluted share,
in the prior quarter, Q1 2008.
Alexion's non-GAAP operating expenses for Q2 2008 were $43.7 million,
compared to $32.6 million for Q2 2007. Non-GAAP research and development
("R&D") expenses for Q2 2008 were $15.3 million, compared to $12.9 million
for the year-ago quarter. The increase in R&D costs in Q2 2008 was
primarily the result of the Company's investments in drug development
programs associated with the AEGIS study in Japan, additional indications
for Soliris, and its anti-CD200 monoclonal antibody, as well as expenses
for its EXPLORE trial. Non-GAAP selling, general, and administrative
("SG&A") expenses for Q2 2008 were $28.4 million, compared to $19.8 million
for Q2 2007. The increase in non-GAAP SG&A expenses primarily reflected
costs associated with the expansion of the Company's commercial operations
in the U.S. and Europe to support the ongoing commercial launch of Soliris.
Second Quarter 2008 GAAP Financial Results
Alexion reported GAAP net income for the second quarter of 2008 of $2.4
million, or $0.06 per diluted share, compared to a GAAP net loss of $27.2
million, or $0.75 per share, for Q2 2007 and a GAAP net loss of $4.2
million, or $0.11 per share, in the prior quarter, Q1 2008.
On a GAAP basis, operating expenses for Q2 2008 were $49.7 million,
compared to $38.0 million for Q2 2007. R&D expenses for Q2 2008 were $16.8
million, compared to $15.2 million for the year-ago quarter. The increase
in R&D costs in Q2 2008 was primarily the result of the Company's
investments in drug development programs associated with the AEGIS study in
Japan, additional indications for Soliris, and its anti-CD200 monoclonal
antibody, as well as expenses for its EXPLORE trial. SG&A expenses were
$32.9 million for Q2 2008, compared to $22.8 million for Q2 2007. The
increase in GAAP SG&A expenses primarily reflected costs associated with
the expansion of the Company's commercial operations in the U.S. and Europe
to support the ongoing commercial launch of Soliris. Operating expenses for
Q2 2008 included $6.0 million of share-based compensation expense, compared
to $5.3 million in Q2 2007.
Balance Sheet:
As of June 30, 2008, the Company had $108.3 million in cash, cash
equivalents, restricted cash, and marketable securities, compared to $106.7
million at December 31, 2007. At the end of the quarter, the outstanding
balance on the Company's revolving credit facility was $5 million, compared
to $18 million at the end of Q1.
"In the second quarter, significant numbers of new patients with PNH in
the U.S. and European countries joined those who were already receiving the
benefits of Soliris therapy," said Leonard Bell, M.D., Chief Executive
Officer of Alexion. "Our commitment is unwavering as we drive to make
Soliris available to more patients with PNH, and as we begin additional
development programs to help individuals suffering with other severe and
life-threatening rare diseases."
Stock Split:
Alexion's Board of Directors has approved a two-for-one stock split to
be effected in the form of a 100 percent stock dividend. Shareholders of
record as of the close of trading on August 12, 2008 will receive one
additional share of Alexion common stock for each share they hold on that
date. The payment date will be at the close of trading on August 22, 2008.
Research and Development:
Soliris as a Treatment for Patients with PNH
During the second quarter, Alexion completed the 12-week patient dosing
in its AEGIS study, a single registration study to evaluate the safety,
efficacy and pharmacology of Soliris as a treatment for Japanese patients
with PNH.
Soliris as a Treatment for Patients with Other Rare and Severe Diseases
With the FDA approval of Soliris as a treatment for PNH in 2007,
Alexion became the first company to discover and develop a terminal
complement inhibitor into a commercial product. The Company is currently
developing clinical programs to investigate the use of Soliris as a
treatment for patients with other complement-mediated disorders, including
three hematologic disorders: catastrophic anti-phospholipid syndrome
("CAPS"), atypical hemolytic uremic syndrome ("aHUS") and cold
hemagglutinin disease ("CHAD").
Further, with FDA authorization during the quarter of an
Investigational New Drug application ("IND") for Soliris in myasthenia
gravis ("MG"), a rare, disabling and sometimes life-threatening
complement-mediated neurologic disorder, Alexion is now preparing to
initiate clinical studies of Soliris as a treatment for patients with
severe MG. In addition, the Company is aware that dosing with Soliris has
commenced in an investigator-sponsored clinical trial evaluating the use of
Soliris in a population of kidney transplant patients who are known to have
a higher risk of organ rejection.
Oncology Program
Alexion is developing its novel, first-in-class anti-CD200 monoclonal
antibody, which is designed to enhance the immune response to several types
of malignant tumors. In the second quarter, initial patient dosing
commenced in a study of this antibody in patients with chronic lymphocytic
leukemia ("CLL").
Q2 2008 Soliris Commercial Update:
In the second quarter, the Company continued to add significant numbers
of newly identified patients in the U.S. and in European countries and to
transition clinical trial patients to full commercial status.
"Our focus on educating physicians on the natural history and clinical
consequences of PNH and the benefits of Soliris therapy resulted in
continued strong additions of new patients in the U.S. and Europe," said
David Keiser, President and Chief Operating Officer of Alexion.
"Additionally, we also observed an increase in the number of patients
tested for PNH, as more physicians adopted standardized diagnostic
pathways. These measures are helping more patients with PNH to avoid the
years of suffering that have been typical with this disease. We remain
focused on our objective that every patient who can benefit from Soliris
will have access to it."
2008 Financial Guidance:
Alexion is revising upward its previously announced guidance for
worldwide Soliris net product sales, from a range of $215 to $225 million
to a range of $235 to $245 million for full-year 2008. Guidance for the
cost of sales, including royalties, remains unchanged at 12 percent to 14
percent of net product sales.
Full-year 2008 financial guidance for R&D has been narrowed from the
previously announced range of $65 to $75 million to a range of $65 to $70
million. Guidance with respect to SG&A expenses is being maintained in a
range of $115 to $125 million. Thus, total operating expenses for 2008 are
now expected to be within a range of $180 to $195 million, which is within
the previously issued guidance of $180 to $200 million. This guidance for
R&D and SG&A expenses excludes share-based compensation expenses, which
have been revised downward from a range of $26 to $28 million to $24 to $26
million for the year.
The Company maintains its forecast of a non-GAAP profit for the full
year 2008, and additionally, now expects to report a GAAP profit for the
third and fourth quarters of 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, July 29, 2008,
at 10:00 a.m., Eastern Time. To participate in this call, dial
719-325-4774, confirmation code 6410566, 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 today. The replay number is
719-457-0820, confirmation code 6410566. The audio webcast can be accessed
at http://www.alexionpharma.com.
About Soliris
Soliris is the first product approved for the treatment of patients
with PNH in the U.S. and Europe. PNH is a rare, debilitating, and
life-threatening blood disorder defined by the destruction of red blood
cells, or hemolysis. In patients with PNH, hemolysis can cause
life-threatening thromboses, recurrent pain, kidney disease, disabling
fatigue, impaired quality of life, severe anemia, pulmonary hypertension,
shortness of breath and intermittent episodes of dark-colored urine
(hemoglobinuria). Soliris, or eculizumab, is the only treatment that blocks
this hemolysis.
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. The Company 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 diseases, cancer and autoimmune disorders. In March 2007, the
FDA granted marketing approval for the Company's first product, Soliris for
all patients with PNH. In June 2007, the European Commission granted
marketing approval for Soliris in the European Union for all patients with
PNH. The Company is evaluating other potential indications for Soliris as
well as other formulations of eculizumab for additional clinical
indications. In addition, Alexion is pursuing development of an anti-CD200
monoclonal antibody as a treatment for patients with cancer, and evaluating
development of other antibody product candidates in early stages of
development. This press release and further information about Alexion
Pharmaceuticals, Inc. can be found at: http://www.alexionpharma.com.
This press release includes certain non-GAAP financial measures that
involve adjustments to GAAP figures. Alexion believes that these non-GAAP
financial measures, when considered together with the GAAP figures, can
enhance an overall understanding of Alexion's past financial performance
and its prospects for the future. The non-GAAP financial measures are
included with the intent of providing both management and investors with a
more complete understanding of underlying operational results and trends.
In addition, these non-GAAP financial measures are among the primary
indicators Alexion management uses for planning and forecasting purposes
and measuring the company's performance. These non-GAAP financial measures
are not intended to be considered in isolation or as a substitute for GAAP
figures. A reconciliation of the non-GAAP to GAAP figures follows this
press release.
[ALXN-E]
This news release contains forward-looking statements, including
statements related to guidance regarding anticipated financial results for
2008, potential benefits and commercial potential for Soliris, timing and
effect of sales of Soliris in the United States and various European
markets, status of reimbursement, price approval and funding processes in
Europe, progress in developing commercial infrastructure, interest
regarding Soliris in the patient, physician and payor communities and
expectations about commencement of clinical trials and studies for Soliris
in PNH and non-PNH indications, and other products. 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
capability and establishing commercial infrastructure, delays in developing
or adverse changes in commercial relationships, the possibility that
results of clinical trials of Soliris are not predictive of safety and
efficacy and Soliris is found to be less safe or effective when utilized in
broader patient populations, within the studied disease or other diseases,
the possibility that initial results of commercialization are not
predictive of future rates of adoption of Soliris, the risk that third
parties won't agree to license any necessary intellectual property to us 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
PNH patients are inaccurate, the risk that ongoing litigation may be
resolved adversely, 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 March 31, 2008 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.
(Financial Tables Follow)
ALEXION PHARMACEUTICALS, INC.
Selected Financial Data
(Unaudited)
(Amounts in thousands, except per share amounts)
Consolidated Statements of
Operations Data: Three Months Ended Six Months Ended
June 30 June 30
------------------ ------------------
2008 2007 2008 2007
-------- -------- -------- --------
Revenues:
Net product sales $ 59,559 $ 9,756 $105,105 $ 10,731
Contract research revenues - - 95 5,343
-------- -------- -------- --------
Total revenues 59,559 9,756 105,200 16,074
Cost of sales 7,142 1,067 12,606 1,152
Operating expenses:
Research and development 16,825 15,195 32,434 36,415
Selling, general and administrative 32,907 22,788 62,688 42,627
-------- -------- -------- --------
Total operating expenses 49,732 37,983 95,122 79,042
-------- -------- -------- --------
Operating income (loss) 2,685 (29,294) (2,528) (64,120)
-------- -------- -------- --------
Other income (expense):
Investment income 604 2,158 1,371 4,928
Interest expense (736) (511) (1,332) (1,211)
Foreign currency gain (loss) (335) 373 368 346
-------- -------- -------- --------
(467) 2,020 407 4,063
-------- -------- -------- --------
Income tax benefit 156 90 246 180
-------- -------- -------- --------
Net income (loss) $ 2,374 $(27,184) $ (1,875) $(59,877)
======== ======== ======== ========
Net income (loss) per share
Basic $ 0.06 $ (0.75) $ (0.05) $ (1.68)
Diluted $ 0.06 $ (0.75) $ (0.05) $ (1.68)
Shares used in computing net income
(loss) per common share
Basic 37,842 36,031 37,679 35,698
Diluted 39,495 36,031 37,679 35,698
Consolidated Balance Sheet Data: As of
------------------------------------
June 30, 2008 December 31, 2007
--------------- -------------------
Cash, cash equivalents
and marketable securities (a) $ 108,281 $ 106,712
Total assets 379,189 334,357
Total stockholders' equity 126,798 101,556
(a) Amount includes restricted cash of $484 and $958 at June 30, 2008 and
December 31, 2007, respectively.
ALEXION PHARMACEUTICALS, INC.
Selected Financial Data
(Unaudited) (Amounts in thousands, except per share amounts)
Non-GAAP financial information is adjusted to exclude the impact of
share-based compensation. The following table represents a reconciliation
of GAAP to non-GAAP financial information for the three and six months
ended June 30, 2008 and 2007, as well as the three months ended March 31,
2008:
Non-GAAP
Reported Share-Based Excluding
GAAP Compensation Share-Based
Amounts Adjustment Compensation
-------- ------------ ------------
Six Months Ended June 30, 2008
Research and development $ 32,434 $ (3,152) $ 29,282
Selling, general and administrative 62,688 (8,739) 53,949
Operating expenses 95,122 (11,891) 83,231
Net income (loss) (1,875) 11,891 10,016
Net income (loss) per share
Basic $ (0.05) $0.32 $ 0.27
Diluted $ (0.05) $0.26 $ 0.25 (a)
Shares used in computing net
income (loss)
Basic 37,679 37,679
Diluted 37,679 44,875
Six Months Ended June 30, 2007
Research and development $ 36,415 $ (4,687) $ 31,728
Selling, general and administrative 42,627 (5,633) 36,994
Operating expenses 79,042 (10,320) 68,722
Net loss (59,877) 10,320 (49,557)
Basic and diluted net loss per share $ (1.68) $0.29 $ (1.39)
Three Months Ended June 30, 2008
Research and development $ 16,825 $ (1,525) $ 15,300
Selling, general and administrative 32,907 (4,479) 28,428
Operating expenses 49,732 (6,004) 43,728
Net income 2,374 6,004 8,378
Net income per share
Basic $ 0.06 $ 0.16 $0.22
Diluted $ 0.06 $ 0.13 $0.20 (a)
Shares used in computing net income
Basic 37,842 37,842
Diluted 39,495 44,984
Three Months Ended June 30, 2007
Research and development $ 15,195 $ (2,302) $ 12,893
Selling, general and administrative 22,788 (3,037) 19,751
Operating expenses 37,983 (5,339) 32,644
Net loss (27,184) 5,339 (21,845)
Basic and diluted net loss per share $ (0.75) $0.15 $ (0.61)
Three Months Ended March 31, 2008
Research and development $ 15,609 $ (1,625) $ 13,984
Selling, general and administrative 29,781 (4,260) 25,521
Operating expenses 45,390 (5,885) 39,505
Net income (loss) (4,249) 5,885 1,636
Basic and diluted net income (loss)
per share $ (0.11) $ 0.16 $ 0.04
(a) In accordance with FAS 128, non-GAAP diluted earnings per share for
the three and six months ended June 30, 2008 includes the dilutive
impact of 4,679 if-converted shares from the Company's convertible
notes. Non-GAAP earnings per share for these periods is calculated by
adding back to net income the interest expense associated with the
convertible notes and by adding the if-converted shares to the shares
used to compute net income per share. The interest expense was $650
and $1,165, respectively, for the three and six months ended June 30,
2008.
SOURCE Alexion Pharmaceuticals, Inc.
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Related links:
http://www.alexionpharma.com
CONTACT:
Irving Adler, Sr. Director, Corporate
Communications of Alexion Pharmaceuticals, Inc., +1-203-271-8210;
or media, Kristie Kuhl of Makovsky & Company, +1-212-508-9642; or
investors, Rhonda Chiger of Rx Communications, +1-917-322-2569
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