- 2Q20 total revenues of $1,444.6 million, a 20% increase over
2Q19
- 2Q20 GAAP diluted EPS of $(4.84); non-GAAP diluted EPS of
$3.11
- Achieved goal of establishing ULTOMIRIS® (ravulizumab-cwvz) as
new standard of care in PNH with more than 70% patient conversion
from SOLIRIS® (eculizumab) in U.S.
- Diversified commercial-stage portfolio with acquisition of
Portola and addition of ANDEXXA® [coagulation factor Xa
(recombinant), inactivated-zhzo]
- Received EU approval for ULTOMIRIS in atypical hemolytic uremic
syndrome (aHUS) & announced positive Phase 3 data for weekly
subcutaneous ULTOMIRIS formulation
- Updated capital allocation strategy with commitment to return
$500-$550 million in 2020 & at least 1/3 average annual free
cash flow to shareholders from 2021-2023
- Increased revenue and non-GAAP EPS guidance to reflect momentum
of the business; GAAP EPS guidance negatively impacted by
impairment charges
Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) today announced
financial results for the second quarter of 2020. Total revenues in
the second quarter were $1,444.6 million, a 20 percent increase
compared to the same period in 2019. The negative impact of foreign
currency on total revenues year-over-year was 1 percent, or $15.9
million, inclusive of hedging activities. On a GAAP basis, diluted
EPS in the quarter was $(4.84), compared to $2.04 in the prior
year. The second quarter of 2020 includes impairment charges of
$2,053.3 million primarily relating to the KANUMA intangible asset
as a result of the Company's revised strategic view of KANUMA.
Non-GAAP diluted EPS for the second quarter of 2020 was $3.11, an
18 percent increase versus the second quarter of 2019.
"Our teams have demonstrated remarkable resilience and agility
in their successful navigation of the uncertain COVID-19 pandemic
environment. Despite these challenges, we have delivered another
strong quarter and continue to advance our LEAD-EXPAND-DIVERSIFY
strategy for long-term value creation," said Ludwig Hantson, Ph.D.,
Chief Executive Officer of Alexion. "As a result of execution and
delivery against our objectives, we have entered a new phase of
company growth and diversification, which enables us to adjust our
capital allocation priorities and return value to shareholders
through an expanded stock buyback program. I am incredibly proud of
what we have accomplished so far and am confident that we are well
positioned to build on this momentum in the second half of the
year."
Second Quarter 2020 Financial
Highlights
- Net product sales were $1,444.5 million in the second quarter
of 2020, compared to $1,202.5 million in the second quarter of
2019.
- SOLIRIS net product sales were $975.5 million, compared to
$980.8 million in the second quarter of 2019.
- ULTOMIRIS net product sales were $251.1 million, compared to
$54.2 million in the second quarter of 2019, representing a 363
percent increase.
- STRENSIQ net product sales were $184.3 million, compared to
$141.3 million in the second quarter of 2019, representing a 30
percent increase.
- KANUMA net product sales were $33.6 million, compared to $26.2
million in the second quarter of 2019, representing a 28 percent
increase.
- GAAP cost of sales was $144.9 million, compared to $99.2
million in the second quarter of 2019. Non-GAAP cost of sales was
$141.8 million, compared to $95.7 million in the second quarter of
2019.
- GAAP R&D expense was $221.1 million, compared to $187.6
million in the second quarter of 2019. Non-GAAP R&D expense was
$204.6 million, compared to $148.7 million in the second quarter of
2019.
- GAAP SG&A expense was $301.4 million, compared to $299.3
million in the second quarter of 2019. Non-GAAP SG&A expense
was $253.6 million, compared to $255.8 million in the second
quarter of 2019.
- GAAP impairment of intangible assets was $2,053.3 million
primarily related to an impairment charge recorded during the
second quarter 2020 related to the KANUMA intangible asset.
- GAAP income tax benefit was $284.0 million, compared to income
tax expense of $39.7 million in the second quarter of 2019. GAAP
income tax benefit for the second quarter 2020 includes a deferred
tax benefit of $377.3 million associated with the impairment charge
related to the KANUMA intangible asset. Non-GAAP income tax expense
was $125.5 million, compared to $90.2 million in the second quarter
of 2019.
- GAAP diluted EPS was $(4.84), inclusive of impairment charges
of $2,053.3 million primarily relating to the KANUMA intangible
asset, compared to $2.04 in the second quarter of 2019. Non-GAAP
diluted EPS was $3.11, compared to $2.64 in the second quarter of
2019.
COVID-19
We continue to take steps to proactively respond to the evolving
COVID-19 pandemic and to plan for related uncertainties. We remain
focused on continuing to serve patients, protecting the health and
safety of our employees and the communities in which we live and
work, and supporting patients in clinical trials. We are also
focused on minimizing potential interactions that could contribute
to the spread of the virus and put additional strain on healthcare
systems through the use of innovative virtual means where
possible.
- Clinical Trials: We have implemented a pandemic response
business continuity plan designed to protect patients and site
staff safety while continuing our clinical trials with limited
interruption to the extent we are able. While the COVID-19 impact
varies by study and program, so far, we have seen little timing
impact on fully-enrolled trials and a timing shift of at least
three months on trials that are enrolling patients and activating
sites, or have not yet started to do so. We are working to
re-initiate healthy volunteer studies that had been temporarily
paused, pending local dynamics where these studies are being
conducted.
- Business Impact: We continue to take proactive measures
designed to mitigate the risk of potential interruptions in supply
and/or access to patients' customary site-of-care locations. As
anticipated, we have seen accelerated conversion from SOLIRIS to
ULTOMIRIS. Treatment compliance rates across all our medicines have
remained strong and continue to be consistent with pre-pandemic
compliance rates. We have also seen the predicted slowing of new
patient initiations and delays in treatment starts, and we are
continuing to closely monitor this environment as the pandemic
continues.
Research and Development
PHASE 3/4
- SOLIRIS - Neuromyelitis Optica Spectrum Disorder
(NMOSD): Alexion plans to initiate a Phase 2/3 study in
children and adolescents with NMOSD in the second half of
2020.
- SOLIRIS - Generalized Myasthenia Gravis (gMG): A Phase 3
study of SOLIRIS in children and adolescents with gMG is
underway.
- SOLIRIS - Guillain-Barre syndrome (GBS): In June 2020,
Japan's Ministry of Health, Labour and Welfare granted SAKIGAKE
designation for SOLIRIS in GBS. Alexion plans to initiate a Phase 3
study of SOLIRIS in GBS in Japan in 2021, pending regulatory
feedback.
- ULTOMIRIS - Severe COVID-19: A Phase 3 randomized
controlled trial of ULTOMIRIS in adults with COVID-19 who are
hospitalized with severe pneumonia or acute respiratory distress
syndrome is underway.
- ULTOMIRIS - Paroxysmal Nocturnal Hemoglobinuria (PNH): A
Phase 3 study of ULTOMIRIS in children and adolescents with PNH is
underway.
- ULTOMIRIS - Atypical Hemolytic Uremic Syndrome (aHUS):
In June 2020, the European Commission approved ULTOMIRIS for adults
and children with aHUS. An application for approval of ULTOMIRIS
for aHUS is also under review in Japan. A Phase 3 study of
ULTOMIRIS in children and adolescents with aHUS is underway.
- ULTOMIRIS - 100mg/mL: Applications for approval of
ULTOMIRIS 100mg/mL formulation are under review in the EU and U.S.
The FDA has set a Prescription Drug User Fee Act target action date
of October 11, 2020. This higher concentration formulation is
designed to reduce infusion time by more than 50 percent to
approximately 45 minutes. Alexion plans to file for regulatory
approval of this formulation in Japan in the third quarter of
2020.
- ULTOMIRIS - Subcutaneous: In June 2020, Alexion
announced that the Phase 3 study of weekly subcutaneous (SC)
ULTOMIRIS demonstrated PK-based non-inferiority versus intravenous
ULTOMIRIS. Pending collection of 12-month safety and drug-device
combination data, Alexion plans to file for approval in the U.S.
and EU for the ULTOMIRIS SC formulation and device combination in
PNH and aHUS in the third quarter of 2021.
- ULTOMIRIS - gMG: A Phase 3 study of ULTOMIRIS in adults
with gMG is underway.
- ULTOMIRIS - NMOSD: A Phase 3 study of ULTOMIRIS in NMOSD
is underway.
- ULTOMIRIS - Amyotrophic Lateral Sclerosis (ALS):
A Phase 3 study of ULTOMIRIS in ALS is underway.
- ULTOMIRIS - Hematopoietic Stem Cell Transplant-Associated
Thrombotic Microangiopathy (HSCT-TMA): Alexion plans to
initiate limited dose-ranging studies of ULTOMIRIS in HSCT-TMA in
the second half of 2020, followed by Phase 3 trials in 2021,
pending regulatory feedback.
- ULTOMIRIS - Complement Mediated Thrombotic Microangiopathy
(CM-TMA): Alexion plans to initiate a Phase 3 study of
ULTOMIRIS in CM-TMA in the first half of 2021, pending regulatory
feedback.
- ALXN1840 (WTX101) - Wilson Disease: Enrollment is
complete in a Phase 3 study of ALXN1840 in Wilson disease. Study
results are expected in the first half of 2021.
- CAEL-101 - Caelum Biosciences: Alexion is collaborating
with Caelum Biosciences to develop CAEL-101, which has the
potential to be a first-in-class therapy targeting amyloid deposits
in patients with light chain (AL) amyloidosis. A pivotal Phase 2/3
program is underway to investigate CAEL-101 as an add-on to current
standard-of-care therapy. Dosing is complete in the Phase 2 dose
selection portion of the program; the Phase 3 portion of the
program is planned to begin in the third quarter of 2020, pending
dose selection.
- AG10 - Eidos: Alexion holds an exclusive license to
develop and commercialize AG10 in Japan. Eidos is currently
evaluating AG10 in a Phase 3 study in the U.S. and Europe for ATTR
cardiomyopathy (ATTR-CM) and plans to begin a Phase 3 study in ATTR
polyneuropathy (ATTR-PN) in the second half of 2020. Alexion plans
to expand the AG10 program into Japan in 2020, pending regulatory
feedback.
- ALXN2040 (Danicopan/ACH-4471) - PNH with Extravascular
Hemolysis (EVH): Alexion plans to initiate a Phase 3 study of
ALXN2040 as an add-on therapy for PNH patients with EVH by the end
of 2020.
- ANDEXXA - Acute Intracranial Hemorrhage (ICH): In July
2020, Alexion announced the completion of its acquisition of
Portola. The acquisition added ANDEXXA to the company's commercial
and development portfolios. ANDEXXA has conditional approval in the
U.S. and EU (marketed as ONDEXXYA in the EU) for the reversal of
anticoagulation in patients experiencing life-threatening or
uncontrolled bleeding who are treated with rivaroxaban or apixaban.
The Phase 4 ANNEXA-I study - designed to provide clinical data
supporting full approval - is underway to assess ANDEXXA compared
to usual standard of care in patients presenting with acute
intracranial hemorrhage while taking an oral Factor Xa
inhibitor.
PHASE 1/2
- ULTOMIRIS - Renal Diseases: Alexion plans to initiate a
proof-of-concept trial of ULTOMIRIS in patients with various renal
diseases in 2020.
- ALXN1830 (SYNT001): Due to COVID-19, Alexion
discontinued the Phase 2 study of ALXN1830, administered
intravenously, in warm autoimmune hemolytic anemia (WAIHA) and
paused the Phase 1 study of a subcutaneous formulation of ALXN1830
in healthy volunteers. The paused Phase 1 study and new Phase 2
studies of subcutaneous ALXN1830 in gMG and WAIHA are planned to
begin in 2021.
- ALXN2040 - C3 Glomerulopathy (C3G): Interim data from
two Phase 2 studies of ALXN2040 in C3G suggest that inhibition of
Factor D is a promising potential target for treating the cause of
C3G. However, the study showed that the clinical response with
ALXN2040 was suboptimal, due to insufficient PK/PD response and
incomplete inhibition of the alternative pathway. As a result,
development of ALXN2040 in C3G will be discontinued, but potential
future development options with ALXN2050, a more potent Factor D
inhibitor, are being assessed.
- ALXN2050 (ACH-5228) - PNH: A Phase 2 study of ALXN2050
monotherapy in PNH is underway.
- ALXN2050 - Renal Diseases: Alexion plans to initiate a
proof-of-concept trial of ALXN2050 in patients with various renal
diseases in 2021.
- ALXN1720: Seven of nine cohorts are complete in a Phase
1 healthy volunteer study of ALXN1720, a novel anti-C5
albumin-binding bi-specific mini-body that binds and prevents
activation of human C5. Due to COVID-19, the study was temporarily
paused but is planned to restart in the third quarter of this
year.
- ANDEXXA - Urgent Surgery: ANDEXXA is currently being
evaluated in a single-arm, open-label study in patients taking
apixaban, rivaroxaban, edoxaban, or enoxaparin who require urgent
surgery. The results of this study will inform the design of a
randomized controlled clinical trial to expand the label in this
population.
- Cerdulatinib: Acquired as part of the Portola
acquisition, cedulatinib is a dual spleen tyrosine kinase and janus
kinase (SYK/JAK) inhibitor being evaluated in a Phase 1/2a study in
patients with relapsed/refractory chronic lymphocytic leukemia or
B-cell or T-cell non-Hodgkin lymphoma.
2020 Financial Guidance
Alexion is increasing total revenues and non-GAAP EPS guidance
and decreasing operating margin guidance. GAAP EPS guidance is
negatively impacted by the impairment charges recorded during the
second quarter 2020. Full guidance updates are outlined below.
Previous
Updated
Total revenues
$5,230 to $5,330 million
$5,550 to $5,600 million
SOLIRIS/ULTOMIRIS revenues
$4,495 to $4,570 million
$4,725 to $4,755 million
Metabolic revenues
$735 to $760 million
$785 to $800 million
ANDEXXA/ONDEXXYA revenues
—
$40 to $45 million
R&D (% total revenues)
GAAP
17.5% to 18.6%
18.1% to 19.2%
Non-GAAP
16.0% to 17.0%
16.5% to 17.5%
SG&A (% total revenues)
GAAP
22.2% to 23.5%
24.5% to 25.7%
Non-GAAP
18.5% to 19.5%
21.0% to 22.0%
Operating margin
GAAP
42.4% to 43.8%
3.8% to 5.4%
Non-GAAP
55.0% to 56.0%
53.0% to 54.0%
Earnings per share
GAAP
$8.14 to $8.47
$0.96 to $1.30
Non-GAAP
$10.45 to $10.75
$10.65 to $10.95
Updated 2020 financial guidance assumes a GAAP effective tax
rate of (27.0) to (26.0) percent and a non-GAAP effective tax rate
of 15.5 to 16.5 percent. The 2020 GAAP and non-GAAP tax rates do
not benefit from one-time events that benefited the tax rates in
2019.
Updated 2020 financial guidance includes the impact of the July
2, 2020 acquisition of Portola but excludes the impact of certain
GAAP-only purchase accounting items related to the Portola
acquisition, including amortization of purchased intangible assets,
fair value adjustment of inventory acquired and the related tax
effects.
Alexion’s financial guidance is based on current foreign
exchange rates net of hedging activities and does not include the
effect of acquisitions, license and other strategic agreements,
intangible asset impairments, litigation charges, changes in fair
value of contingent consideration, gains or losses related to
strategic equity investments or restructuring and related activity
outside of the previously announced activities that may occur after
the issuance of this press release.
Conference Call/Webcast Information:
Alexion will host a conference call/audio webcast to discuss the
second quarter 2020 results today at 8:00 a.m. Eastern Time. To
participate in the call, dial 866-762-3111 (USA) or 210-874-7712
(International), conference ID 6053185 shortly before 8:00 a.m.
Eastern Time. A replay of the call will be available for a limited
period following the call. The audio webcast can be accessed on the
Investor page of Alexion’s website at: http://ir.alexion.com.
About Alexion
Alexion is a global biopharmaceutical company focused on serving
patients and families affected by rare diseases and devastating
conditions through the discovery, development and commercialization
of life-changing medicines. As a leader in rare diseases for more
than 25 years, Alexion has developed and commercializes two
approved complement inhibitors to treat patients with paroxysmal
nocturnal hemoglobinuria (PNH) and atypical hemolytic uremic
syndrome (aHUS), as well as the first and only approved complement
inhibitor to treat anti-acetylcholine receptor (AchR)
antibody-positive generalized myasthenia gravis (gMG) and
neuromyelitis optica spectrum disorder (NMOSD). Alexion also has
two highly innovative enzyme replacement therapies for patients
with life-threatening and ultra-rare metabolic disorders,
hypophosphatasia (HPP) and lysosomal acid lipase deficiency (LAL-D)
as well as the first and only approved Factor Xa inhibitor reversal
agent. In addition, the company is developing several
mid-to-late-stage therapies, including a copper-binding agent for
Wilson disease, an anti-neonatal Fc receptor (FcRn) antibody for
rare Immunoglobulin G (IgG)-mediated diseases and an oral Factor D
inhibitor as well as several early-stage therapies, including one
for light chain (AL) amyloidosis, a second oral Factor D inhibitor
and a third complement inhibitor. Alexion focuses its research
efforts on novel molecules and targets in the complement cascade
and its development efforts on the core therapeutic areas of
hematology, nephrology, neurology, metabolic disorders and
cardiology. Headquartered in Boston, Massachusetts, Alexion has
offices around the globe and serves patients in more than 50
countries. This press release and further information about Alexion
can be found at: www.alexion.com.
[ALXN-E]
Forward-Looking Statement
This press release contains forward-looking statements,
including statements related to: guidance regarding anticipated
financial results for 2020 (and the assumptions related to such
guidance); our expectations regarding the affects COVID-19 will
have on our business and operations, including clinical trials and
product supply; the strength of our business and continued growth;
the Company's capital allocation strategy; plans to expand the
Company's pipeline; future plans for, and the timing for, the
commencement of future clinical trials and the expected timing of
the receipt of results of certain clinical trials and studies,
including clinical programs for ULTOMIRIS, a higher concentration
formulation of ULTOMIRIS, a subcutaneous administration of
ULTOMIRIS, SOLIRIS, ALXN1840, CAEL-101, AG10, ALXN2040, ALXN2050,
ALXN1720, ALXN1830, ANDEXXA and CERDULATINIB; potential benefits of
current products and products under development and in clinical
trials; plans for development programs with third parties; and
Alexion's future clinical, regulatory, and commercial plans for
ULTOMIRIS and other products and product candidates.
Forward-looking statements are subject to factors that may cause
Alexion's results and plans to differ materially from those
forward-looking statements, including for example: our dependence
on sales from our principal product (SOLIRIS); our ability to
facilitate the timely conversion from SOLIRIS to ULTOMIRIS; payer,
physician and patient acceptance of ULTOMIRIS as an alternative to
SOLIRIS; the impact of the COVID-19 pandemic on Alexion’s business,
including its sales, clinical trials, operations and supply chain;
appropriate pricing for ULTOMIRIS; future competition from
biosimilars and novel products; decisions of regulatory authorities
regarding the adequacy of our research, marketing approval or
material limitations on the marketing of our products; delays or
failure of product candidates to obtain regulatory approval; delays
or the inability to launch product candidates due to regulatory
restrictions, anticipated expense or other matters; interruptions
or failures in the manufacture and supply of our products and our
product candidates; failure to satisfactorily address matters
raised by the FDA and other regulatory agencies; results in early
stage clinical trials may not be indicative of full results or
results from later stage or larger clinical trials (or broader
patient populations) and do not ensure regulatory approval; the
possibility that results of clinical trials are not predictive of
safety and efficacy and potency of our products (or we fail to
adequately operate or manage our clinical trials) which could cause
us to halt trials, delay or prevent us from making regulatory
approval filings or result in denial of approval of our product
candidates; unexpected delays in clinical trials; unexpected
concerns that may arise from additional data or analysis obtained
during clinical trials; future product improvements may not be
realized due to expense or feasibility or other factors;
uncertainty of long-term success in developing, licensing or
acquiring other product candidates or additional indications for
existing products; inability to complete planned acquisitions due
to failure of regulatory approval or material changes in target or
otherwise; inability to complete acquisitions and investments due
to increased competition for technology; the possibility that
current rates of adoption of our products are not sustained; the
adequacy of our pharmacovigilance and drug safety reporting
processes; failure to protect and enforce our data, intellectual
property and proprietary rights and the risks and uncertainties
relating to intellectual property claims, lawsuits and challenges
against us (including intellectual property lawsuits relating to
ULTOMIRIS brought by third parties against Alexion and inter partes
review petitions submitted by third parties); the risk that third
party payors (including governmental agencies) will not reimburse
or continue to reimburse for the use of our products at acceptable
rates or at all; failure to realize the benefits and potential of
investments, collaborations, licenses and acquisitions, including
the acquisition of Portola Pharmaceuticals, Inc.; the possibility
that expected tax benefits will not be realized; assessment of
impact of recent accounting pronouncements; potential declines in
sovereign credit ratings or sovereign defaults in countries where
we sell our products; delay of collection or reduction in
reimbursement due to adverse economic conditions or changes in
government and private insurer regulations and approaches to
reimbursement; uncertainties surrounding legal proceedings, company
investigations and government investigations; the risk that
estimates regarding the number of patients with PNH, aHUS, gMG,
NMOSD, HPP and LAL-D and other indications we are pursuing are
inaccurate; the risks of changing foreign exchange rates; risks
relating to the potential effects of the Company's restructuring;
risks related to the acquisition of companies and co-development
and collaboration efforts; and a variety of other risks set forth
from time to time in Alexion's filings with the SEC, including but
not limited to the risks discussed in Alexion's Quarterly Report on
Form 10-Q for the period ended March 31, 2020 and in our other
filings with the SEC. Alexion disclaims any obligation to update
any of these forward-looking statements to reflect events or
circumstances after the date hereof, except when a duty arises
under law.
In addition to financial information prepared in accordance with
GAAP, this press release also contains non-GAAP financial measures
that Alexion believes, when considered together with the GAAP
information, provide investors and management with supplemental
information relating to performance, trends and prospects that
promote a more complete understanding of our operating results and
financial position during different periods. Alexion also uses
these non-GAAP financial measures to establish budgets, set
operational goals and to evaluate the performance of the business.
The non-GAAP results, determined in accordance with our internal
policies, exclude the impact of the following GAAP items (see
reconciliation tables below for additional information):
share-based compensation expense, fair value adjustment of
inventory acquired, amortization of purchased intangible assets,
changes in fair value of contingent consideration, restructuring
and related expenses, upfront payments related to licenses and
other strategic agreements, acquired in-process research and
development, impairment of purchased intangible assets, gains and
losses related to strategic equity investments, litigation charges,
gain or loss on sale of a business or asset, gain or loss related
to purchase options, contingent milestone payments associated with
acquisitions of legal entities accounted for as asset acquisitions,
acquisition-related costs and certain adjustments to income tax
expense. These non-GAAP financial measures are not intended to be
considered in isolation or as a substitute for, or superior to, the
financial measures prepared and presented in accordance with GAAP,
and should be reviewed in conjunction with the relevant GAAP
financial measures. Please refer to the attached Reconciliations of
GAAP to non-GAAP Financial Results and GAAP to non-GAAP 2020
Financial Guidance for explanations of the amounts adjusted to
arrive at non-GAAP net income and non-GAAP earnings per share
amounts for the three and six month periods ended June 30, 2020 and
2019 and projected twelve months ending December 31, 2020.
(Tables Follow)
ALEXION PHARMACEUTICALS,
INC.
TABLE 1: CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share
amounts)
(unaudited)
Three months ended
Six months ended
June 30,
June 30,
2020
2019
2020
2019
Net product sales
$
1,444.5
$
1,202.5
$
2,889.1
$
2,342.7
Other revenue
0.1
0.8
0.3
1.0
Total revenues
1,444.6
1,203.3
2,889.4
2,343.7
Costs and expenses:
Cost of sales (exclusive of amortization
of purchased intangible assets)
144.9
99.2
256.6
185.0
Research and development
221.1
187.6
422.0
383.5
Selling, general and administrative
301.4
299.3
621.3
580.8
Acquired in-process research and
development
—
(4.1
)
—
(4.1
)
Amortization of purchased intangible
assets
73.7
80.1
147.4
160.1
Change in fair value of contingent
consideration
15.8
6.1
21.6
(22.6
)
Acquisition-related costs
4.6
—
42.7
—
Restructuring expenses
—
2.5
(0.8
)
11.6
Impairment of intangible assets
2,053.3
—
2,053.3
—
Total costs and expenses
2,814.8
670.7
3,564.1
1,294.3
Operating (loss) income
(1,370.2
)
532.6
(674.7
)
1,049.4
Other income and expense:
Investment income (expense)
41.5
(14.9
)
36.3
27.6
Interest expense
(23.6
)
(18.3
)
(49.4
)
(38.2
)
Other income and (expense)
0.2
0.1
(0.7
)
2.5
(Loss) income before income taxes
(1,352.1
)
499.5
(688.5
)
1,041.3
Income tax (benefit) expense
(284.0
)
39.7
(178.0
)
(6.4
)
Net (loss) income
$
(1,068.1
)
$
459.8
$
(510.5
)
$
1,047.7
Earnings (loss) per common share
Basic
$
(4.84
)
$
2.05
$
(2.31
)
$
4.68
Diluted
$
(4.84
)
$
2.04
$
(2.31
)
$
4.64
Shares used in computing earnings (loss)
per common share
Basic
220.6
224.2
221.1
224.0
Diluted
220.6
225.6
221.1
225.7
ALEXION PHARMACEUTICALS,
INC.
TABLE 2: RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL RESULTS
(in millions, except per share
amounts)
(unaudited)
Three months ended
Six months ended
June 30,
June 30,
2020
2019
2020
2019
GAAP net (loss) income
$
(1,068.1
)
$
459.8
$
(510.5
)
$
1,047.7
Before tax adjustments:
Cost of sales:
Share-based compensation
3.1
3.5
6.2
7.3
Research and development expense:
Share-based compensation
16.5
13.9
31.7
29.2
Upfront payments related to licenses and
other strategic agreements (1)
—
25.0
—
46.2
Selling, general and administrative
expense:
Share-based compensation
47.8
43.5
87.1
81.2
Litigation charges (2)
—
—
21.5
0.1
Acquired in-process research and
development
—
(4.1
)
—
(4.1
)
Amortization of purchased intangible
assets
73.7
80.1
147.4
160.1
Change in fair value of contingent
consideration (3)
15.8
6.1
21.6
(22.6
)
Acquisition-related costs (4)
4.6
—
42.7
—
Restructuring expenses
—
2.5
(0.8
)
11.6
Impairment of intangible assets(5)
2,053.3
—
2,053.3
—
Investment income (expense):
(Gains) and losses related to strategic
equity investments
(35.0
)
25.2
(25.8
)
(8.6
)
Other income and (expense):
Adjustments to income tax expense (6)
(409.5
)
(50.5
)
(444.7
)
(197.5
)
Non-GAAP net income
$
702.2
$
605.0
$
1,429.7
$
1,150.6
GAAP earnings (loss) per common share -
diluted
$
(4.84
)
$
2.04
$
(2.31
)
$
4.64
Non-GAAP earnings per common share -
diluted
$
3.11
$
2.64
$
6.33
$
5.04
Shares used in computing diluted earnings
(loss) per common share (GAAP)
220.6
225.6
221.1
225.7
Shares used in computing diluted earnings
per common share (non-GAAP)
225.7
228.9
225.9
228.5
(1) During the three months ended June 30, 2019, we recorded
expense of $25.0 million in connection with an upfront payment on a
strategic agreement that we entered into with Affibody AB
(Affibody). During the six months ended June 30, 2019, we recorded
expense of $46.2 million in connection with upfront payments on
strategic agreements that we entered into with Affibody and Zealand
Pharma A/S.
(2) During the six months ended June 30, 2020, we recorded $21.5
million in litigation charges in connection with legal
proceedings.
(3) Changes in the fair value of contingent consideration
expense for the three and six months ended June 30, 2020 as well as
the six months ended June 30, 2019 include the impact of changes in
the expected timing of achieving contingent milestones, in addition
to the interest component related to the passage of time. For the
three months ended June 30, 2019, changes in fair value of
contingent consideration expense reflected only the interest
component of contingent consideration related to the passage of
time.
(4) For the three and six months ended June 30, 2020, we
recorded $4.6 million and $42.7 million, respectively, of
acquisition-related costs in connection with the Achillion
Pharmaceuticals, Inc. and Portola Pharmaceuticals, Inc.
acquisitions. Acquisition-related costs primarily consist of
Achillion and Portola transaction costs, costs associated with the
accelerated vesting of stock options previously granted to
Achillion employees and Achillion restructuring-related costs.
(5) In the second quarter 2020, we recognized impairment charges
of $2,053.3 million, primarily related to our KANUMA intangible
asset.
(6) Alexion's non-GAAP income tax expense for the three and six
months ended June 30, 2020 and 2019 excludes the tax effect of
pre-tax adjustments to GAAP profit. Non-GAAP income tax expense for
the six months ended June 30, 2019 also excludes certain one-time
tax benefits of $95.7 million and $30.3 million associated with a
tax election made with respect to intellectual property of Wilson
and a release of an existing valuation allowance, respectively.
ALEXION PHARMACEUTICALS,
INC.
TABLE 3: RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL GUIDANCE
(in millions, except per share
amounts and percentages)
(unaudited)
Twelve months ending
December 31, 2020
Low
High
GAAP net income
$
214
$
290
Before tax adjustments:
Share-based compensation
295
282
Impairment of intangible assets
2,053
2,053
Amortization of purchased intangible
assets
202
202
Acquisition-related costs
131
131
Change in fair value of contingent
consideration
31
31
Restructuring expenses
(1
)
(1
)
(Gains) and losses related to strategic
equity investments
(26
)
(26
)
Litigation charges
22
22
Adjustments to income tax expense
(519
)
(515
)
Non-GAAP net income
$
2,402
$
2,469
Diluted GAAP earnings per common share
$
0.96
$
1.30
Diluted non-GAAP earnings per common
share
$
10.65
$
10.95
Costs and expenses and margin (% total
revenues)
GAAP research and development expense
19.2
%
18.1
%
Share-based compensation
1.7
%
1.6
%
Restructuring related expenses
0.0
%
0.0
%
Non-GAAP research and development
expense
17.5
%
16.5
%
GAAP selling, general and administrative
expense
25.7
%
24.5
%
Share-based compensation
3.3
%
3.1
%
Restructuring related expenses
0.0
%
0.0
%
Litigation charges
0.4
%
0.4
%
Non-GAAP selling, general and
administrative expense
22.0
%
21.0
%
GAAP operating margin
3.8
%
5.4
%
Share-based compensation
5.3
%
5.0
%
Litigation charges
0.4
%
0.4
%
Impairment of intangible assets
37.0
%
36.7
%
Amortization of purchased intangible
assets
3.6
%
3.6
%
Acquisition-related costs
2.4
%
2.3
%
Change in fair value of contingent
consideration
0.6
%
0.6
%
Restructuring expenses
0.0
%
0.0
%
Non-GAAP operating margin
53.0
%
54.0
%
Income tax expense (% of income before
income taxes)
GAAP income tax expense (benefit)
(26.0
)
%
(27.0
)
%
Tax effect of pre-tax adjustments to GAAP
net income
42.5
%
42.5
%
Non-GAAP income tax expense
16.5
%
15.5
%
Amounts may not foot due to rounding.
ALEXION PHARMACEUTICALS,
INC.
TABLE 4: NET PRODUCT SALES BY
GEOGRAPHY
(in millions)
(unaudited)
Three months ended
Six months ended
June 30,
June 30,
2020
2019
2020
2019
SOLIRIS
United States
$
553.3
$
496.3
$
1,109.5
$
960.0
Europe
247.9
280.2
511.4
544.7
Asia Pacific
82.4
110.3
169.5
211.2
Rest of World
91.9
94.0
208.0
226.9
Total SOLIRIS
$
975.5
$
980.8
$
1,998.4
$
1,942.8
ULTOMIRIS
United States
$
158.1
$
54.2
$
289.6
$
78.8
Europe
32.0
—
65.8
—
Asia Pacific
59.6
—
116.7
—
Rest of World
1.4
—
1.8
—
Total ULTOMIRIS
$
251.1
$
54.2
$
473.9
$
78.8
STRENSIQ
United States
$
140.7
$
106.2
$
268.8
$
205.7
Europe
18.3
19.5
42.3
37.0
Asia Pacific
15.0
12.1
28.6
22.0
Rest of World
10.3
3.5
16.8
6.7
Total STRENSIQ
$
184.3
$
141.3
$
356.5
$
271.4
KANUMA
United States
$
15.4
$
15.3
$
31.8
$
29.1
Europe
8.4
6.8
15.9
13.1
Asia Pacific
0.9
1.3
1.8
2.1
Rest of World
8.9
2.8
10.8
5.4
Total KANUMA
$
33.6
$
26.2
$
60.3
$
49.7
Net Product Sales
United States
$
867.5
$
672.0
$
1,699.7
$
1,273.6
Europe
306.6
306.5
635.4
594.8
Asia Pacific
157.9
123.7
316.6
235.3
Rest of World
112.5
100.3
237.4
239.0
Total Net Product Sales
$
1,444.5
$
1,202.5
$
2,889.1
$
2,342.7
ALEXION PHARMACEUTICALS,
INC.
TABLE 5: CONDENSED
CONSOLIDATED BALANCE SHEETS
(in millions)
(unaudited)
June 30,
December 31,
2020
2019
Cash and cash equivalents
$
2,825.0
$
2,685.5
Marketable securities
26.8
64.0
Trade accounts receivable, net
1,372.2
1,243.2
Inventories
577.7
627.6
Prepaid expenses and other current
assets
566.2
456.1
Property, plant and equipment, net
1,196.4
1,163.3
Intangible assets, net
2,059.7
3,344.3
Goodwill
5,075.2
5,037.4
Right of use operating assets
209.9
204.0
Deferred tax assets
2,332.4
2,290.2
Other assets
461.7
429.0
Total assets
$
16,703.2
$
17,544.6
Accounts payable and accrued expenses
$
861.6
$
966.7
Current portion of long-term debt
126.8
126.7
Other current liabilities
131.7
100.9
Long-term debt, less current portion
2,311.6
2,375.0
Contingent consideration
374.7
192.4
Deferred tax liabilities
1,946.8
2,081.4
Noncurrent operating lease liabilities
169.4
164.1
Other liabilities
289.8
265.6
Total liabilities
6,212.4
6,272.8
Total stockholders' equity
10,490.8
11,271.8
Total liabilities and stockholders'
equity
$
16,703.2
$
17,544.6
ALEXION PHARMACEUTICALS,
INC.
TABLE 6: CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
(in
millions)(unaudited)
Six months ended June
30,
2020
2019
Cash flows from operating activities:
Net (loss) income
$
(510.5
)
$
1,047.7
Adjustments to reconcile net (loss) income
to net cash flows from operating activities:
Depreciation and amortization
179.1
193.7
Change in fair value of contingent
consideration
21.6
(22.6
)
Share-based compensation expense
125.0
117.6
Deferred taxes (benefit)
(226.6
)
(40.8
)
Unrealized foreign currency loss
(gain)
3.3
(4.1
)
Unrealized (gain) loss on forward
contracts
(11.5
)
11.3
Unrealized gain on strategic equity
investments
(25.8
)
(8.6
)
Inventory obsolescence charge
17.2
—
Impairment of intangible assets
2,053.3
—
Other
10.5
(2.3
)
Changes in operating assets and
liabilities, excluding the effect of acquisitions:
Accounts receivable
(137.6
)
(196.4
)
Inventories
(15.1
)
(24.0
)
Prepaid expenses, right of use operating
assets and other assets
(54.8
)
(126.8
)
Accounts payable, accrued expenses, lease
liabilities and other liabilities
(88.5
)
23.6
Net cash provided by operating
activities
1,339.6
968.3
Cash flows from investing activities:
Purchases of available-for-sale debt
securities
(19.4
)
(41.1
)
Proceeds from maturity or sale of
available-for-sale debt securities
166.3
139.3
Purchases of mutual funds related to
nonqualified deferred compensation plan
(9.5
)
(10.9
)
Proceeds from sale of mutual funds related
to nonqualified deferred compensation plan
5.3
9.0
Purchases of property, plant and
equipment
(18.4
)
(82.8
)
Payment for acquisition of business, net
of cash acquired
(837.7
)
—
Purchases of strategic equity investments
and options
(38.1
)
(43.8
)
Purchase of intangible assets
—
(8.0
)
Other
—
0.2
Net cash used in investing activities
(751.5
)
(38.1
)
Cash flows from financing activities:
Payments on term loan
(65.3
)
(32.7
)
Payments on revolving credit facility
—
(250.0
)
Repurchases of common stock
(360.8
)
(48.9
)
Net proceeds from issuance of common stock
under share-based compensation arrangements
12.9
20.5
Other
(17.5
)
(2.4
)
Net cash used in financing activities
(430.7
)
(313.5
)
Effect of exchange rate changes on cash
and cash equivalents and restricted cash
(8.1
)
0.7
Net change in cash and cash equivalents
and restricted cash
149.3
617.4
Cash and cash equivalents and restricted
cash at beginning of period
2,723.6
1,367.3
Cash and cash equivalents and restricted
cash at end of period
$
2,872.9
$
1,984.7
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200730005199/en/
Alexion: Media Megan
Goulart, 857-338-8634 Executive Director, Corporate
Communications
Investors Chris Stevo, 857-338-9309 Head of Investor
Relations
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