The Medicines Company (NASDAQ:MDCO) today reported its financial
results for the second quarter ended June 30, 2017, and provided an
update on its clinical and operational activities.
Second Quarter 2017 Highlights and Projected
Milestones
Meropenem-Vaborbactam
- The Company announced positive results
from a planned, interim analysis of the TANGO-2 trial of its
fixed-dose, investigational antibiotic combination,
meropenem-vaborbactam, versus best available therapy. Randomization
in the trial was stopped early, following a recommendation by the
TANGO-2 independent Data and Safety Monitoring Board (DSMB) based
on an analysis of 72 patients, including 43 patients with
microbiologically evaluable carbapenem-resistant Enterobacteriaceae
(CRE) infections of blood, lung, urinary tract and abdominal
organs. The DSMB concluded that a risk-benefit analysis of
available data no longer supported randomization of additional
patients to the best available therapy comparator arm. In the
interim analysis, when compared to best available therapy,
meropenem-vaborbactam demonstrated higher clinical cure rates at
test-of-cure and end-of-therapy among microbiologically evaluable
CRE patients; higher clinical cure rates across all infection
types; lower all-cause mortality, particularly in high-risk
situations (e.g., HABP-VABP and bacteremia); and a superior safety
profile, including fewer serious treatment emergent adverse events
and lower rates of renal toxicity. The Company will continue to
enroll patients into an amended, single-arm study protocol for
treatment with meropenem-vaborbactam at selected study
centers.
- The Company announced that it selected,
and both U.S. and European regulatory authorities accepted,
Vabomere™ as the U.S. and European trade name for
meropenem-vaborbactam, assuming marketing applications are
approved.
- The PDUFA action date for
meropenem-vaborbactam is August 29, 2017. The Company is currently
completing pre-launch activities and, if Vabomere is approved by
the U.S. Food and Drug Administration (FDA), will leverage its
fully-integrated, dedicated sales and marketing infrastructure to
launch Vabomere in the United States.
- The European Medicines Agency (EMA) has
validated the Company’s Marketing Authorization Application (MAA)
for meropenem-vaborbactam, which confirms that the MAA submission
is complete and initiates the Centralized Review process by the
EMA’s Committee for Medicinal Products for Human Use. The MAA
submission will be reviewed under the Centralized Procedure and, if
authorized, will provide a marketing authorization for Vabomere
which is valid in all European Economic Area member states.
Inclisiran (PCSK9 synthesis
inhibitor)
- The Company came to agreement with the
FDA and received Scientific Advice from the EMA on plans for the
Phase III clinical program for inclisiran, which is designed to
support the submission of an initial New Drug Application (NDA) and
a MAA for an LDL-C lowering indication. The Phase III program will
comprise clinical trials in patients with atherosclerotic
cardiovascular disease (ASCVD), ASCVD risk-equivalent and familial
hypercholesterolemia (FH), and will collectively enroll a total of
3,400 subjects – 1,700 subjects randomized to inclisiran and 1,700
subjects randomized to placebo. The primary endpoint will be
percentage change in LDL-C from baseline at Day-510 and the studies
will have an 18-month observation period.
- The Company announced that, although
not part of the initial NDA, it will perform a cardiovascular
outcomes trial in approximately 14,000 patients with ASCVD and/or
risk equivalents, such as diabetes, to determine the effects of
inclisiran on reducing cardiovascular outcomes. The Company also
came to agreement with the FDA and received Scientific Advice from
the EMA on the design of the outcomes trial. The primary efficacy
endpoint of the trial will be a composite, including coronary heart
disease, death, non-fatal myocardial infarction and fatal and
non-fatal ischemic stroke. As has been demonstrated in previous,
similar outcomes trials, these endpoints are modifiable by LDL-C
lowering.
- Significant preparation work for the
inclisiran Phase III LDL-C lowering program and the cardiovascular
outcomes trial has been completed. All Phase III LDL-C lowering
trials are expected to commence before year-end. The Company
expects to read out final data from the Phase III LDL-C lowering
trials in the second half of 2019. The cardiovascular outcomes
trial will commence concurrently with the Phase III LDL-C lowering
program. The duration of the outcomes trial will be long enough to
maximize the clinical effect size associated with LDL-C lowering
and to minimize the number-needed-to-treat (NNT) result.
- The Company will present new, one-year
follow-up data on inclisiran from the ORION-1 study at the upcoming
ESC Congress 2017, organized by the European Society of Cardiology,
being held August 26 through August 30 in Barcelona, Spain.
MDCO-700
- The Company recently completed studies
to characterize the central nervous system effects of our
investigational anesthetic agent, MDCO-700, in dogs. During those
studies, we observed seizures in some animals, although the
mechanism remains unclear. Seizures have not been observed in
humans and these dog findings may be species-specific.
Nevertheless, these findings do not support the target profile
required to initiate Phase III development of MDCO-700. Therefore,
the Company has discontinued development of, and ceased all further
investment in, the product.
Second Quarter 2017 Financial Summary from Continuing
Operations
Worldwide net revenue was $18.7 million in the second quarter of
2017 compared to $54.7 million in the second quarter of 2016.
Included in total net revenue for the second quarter of 2017 and
2016 were $10.7 million and $40.2 million, respectively, of total
Angiomax revenue, including both royalty revenues derived from the
gross profit on authorized generic sales of Angiomax® (bivalirudin)
by Sandoz, Inc. and worldwide Angiomax®/Angiox® (bivalirudin) net
product sales. Other products, including Minocin® (minocycline) for
Injection and Orbactiv® (oritavancin), recorded aggregate sales of
$8.0 million in the second quarter of 2017 compared to $6.3 million
in the second quarter of 2016. The second quarter of 2016 also
included $8.2 million of sales related to the divested non-core
cardiovascular products.
On a GAAP basis, net loss from continuing operations in the
second quarter of 2017 was $397.3 million, or $5.52 per share,
compared to net income from continuing operations of $181.8
million, or $2.51 per share, in the second quarter of 2016.
Included in the net loss from continuing operations for the second
quarter of 2017 were net charges of approximately $277.0 million
($268.1 million non-cash) associated with the discontinuation and
market withdrawal of Ionsys® (fentanyl iontophoretic transdermal
system) in the U.S. market, and $27.3 million (non-cash) associated
with the discontinuation of the clinical development program for
MDCO-700, our investigational anesthetic agent. On a non-GAAP
basis, adjusted net loss (1) from continuing operations in the
second quarter of 2017 was $73.5 million, or $1.02(1) per share,
compared to $48.2 million, or $0.69(1) per share, in the second
quarter of 2016.
Second Quarter 2016 Financial Summary from Discontinued
Operations
In the first quarter of 2016, the Company completed the
divestiture of its hemostasis products for an upfront payment of
$174.1 million, and potential milestone payments of up to an
additional $235.0 million in the aggregate following the
achievement of certain specified net sales milestones. Net income
from discontinued operations in the second quarter of 2016 was $0.6
million, or $0.01 per share.
First Half 2017 Financial Summary from Continuing
Operations
Worldwide net revenue was $43.0 million in the first half of
2017 compared to $105.0 million in the first half of 2016. Included
in total net revenue for the first half of 2017 and 2016 were $28
million and $76 million, respectively, of total Angiomax revenue,
including both royalty revenues derived from the gross profit on
authorized generic sales of Angiomax (bivalirudin) by Sandoz, Inc.
and worldwide Angiomax/Angiox (bivalirudin) net product sales.
Other products, including Minocin (minocycline) for Injection and
Orbactiv (oritavancin), recorded aggregate sales of $15.0 million
in the first half of 2017 compared to $10.6 million in the first
half of 2016. The first half of 2016 also included $18.4 million of
sales related to the divested non-core cardiovascular products.
On a GAAP basis, net loss from continuing operations in the
first half of 2017 was $499.9 million, or $6.99 per share, compared
to net income from continuing operations of $91.5 million, or $1.27
per share, in the first half of 2016. Included in net loss from
continuing operations for the first half of 2017 were net charges
of approximately $277.0 million associated with the discontinuation
and market withdrawal of Ionsys (fentanyl iontophoretic transdermal
system) in the U.S. market, and $27.3 million associated with the
discontinuation of the clinical development program for MDCO-700,
our investigational anesthetic agent. On a non-GAAP basis, adjusted
net loss (1) from continuing operations in the first half of 2017
was $148.2 million, or $2.07(1) per share, compared to $119.4
million, or $1.72(1) per share, in the first half of 2016.
First Half 2016 Financial Summary from Discontinued
Operations
Net loss from discontinued operations in the first half of 2016
was $1.5 million, or $0.02 per share.
(1) Adjusted net loss and adjusted loss per share from
continuing operations are non-GAAP financial performance measures
with no standardized definitions under U.S. GAAP. For further
information and a detailed reconciliation, refer to the “Non-GAAP
Financial Performance Measures” and “Reconciliations of GAAP to
Adjusted Net Loss and Adjusted Loss per Share” sections of this
press release.
At June 30, 2017, the Company had a total of $334.0 million in
cash and cash equivalents and available for sale securities.
“We are pleased with our second quarter operating and financial
results, which demonstrate our continued focus on progressing
assets, reducing expenses and managing our cash position,” said
Clive Meanwell, M.D., Ph.D., Chief Executive Officer of The
Medicines Company. “During the quarter, we delivered important
clinical and operational advances for Vabomere and inclisiran. We
expect to announce shortly that we will host an investor/analyst
day during which the Company’s senior management team will provide
a detailed review of the Company’s product portfolio and strategy,
including a detailed discussion of inclisiran, its development plan
and related financial strategy, as well as an evaluation of the
competitive landscape. Key outside experts who are members of the
ORION Project coalition will join us for the inclisiran
review.”
Second Quarter 2017 Conference Call and Webcast
Information
The Company will host a conference call and webcast today,
August 9, 2017, at 8:30 a.m., Eastern Daylight Time, to discuss its
second quarter 2017 financial results and provide clinical,
operational and strategic updates. The dial-in information to
access the call is as follows:
U.S./Canada: (877) 359-9508 International: (224) 357-2393
Conference ID: 58233884
A taped replay of the conference call will be available from
11:30 a.m., Eastern Daylight Time, today until 11:30 a.m., Eastern
Daylight Time, on August 16, 2017. The replay may be accessed as
follows:
U.S./Canada: (855) 859-2056 International: (404) 537-3406
Conference ID: 58233884
The webcast can be accessed in the Investors section of The
Medicines Company website. A replay of the webcast will also be
available.
About The Medicines Company
The Medicines Company is a biopharmaceutical company driven by
an overriding purpose – to save lives, alleviate suffering and
contribute to the economics of healthcare. The Company’s mission is
to create transformational solutions to address the most pressing
healthcare needs facing patients, physicians and providers in three
critical therapeutic areas: serious infectious disease care,
cardiovascular care and surgery and perioperative care. The Company
is headquartered in Parsippany, New Jersey, with global innovation
centers in California and Switzerland.
Forward-Looking Statements
Statements contained in this press release that are not purely
historical may be deemed to be forward-looking statements for
purposes of the safe harbor provisions under The Private Securities
Litigation Reform Act of 1995. Without limiting the foregoing, the
words "believes," "anticipates," "plans," "expects" and similar
expressions, including the Company's preliminary financial results,
are intended to identify forward-looking statements. These
forward-looking statements involve known and unknown risks and
uncertainties that may cause the Company's actual results, levels
of activity, performance or achievements to be materially different
from those expressed or implied by these forward-looking
statements. Important factors that may cause or contribute to such
differences include whether the Company's product candidates will
advance in the clinical trials process on a timely basis or at all,
or succeed in achieving their specified endpoints; whether the
Company will make regulatory submissions for product candidates on
a timely basis; whether its regulatory submissions will receive
approvals from regulatory agencies on a timely basis or at all;
whether the Company’s ongoing and planned commercial launches will
be successful; the extent of the commercial success of our
products; the Company's ability to penetrate foreign markets;
whether physicians, patients and other key decision makers will
accept clinical trial results; whether the Company can protect its
intellectual property; whether the Company will be able to raise
additional capital on favorable terms or at all when needed; and
such other factors as are set forth in the risk factors detailed
from time to time in the Company's periodic reports and
registration statements filed with the Securities and Exchange
Commission, including, without limitation, the risk factors
detailed in the Company's Quarterly Report on Form 10-Q filed with
the SEC on August 9, 2017, which are incorporated herein by
reference. The Company specifically disclaims any obligation to
update these forward-looking statements.
NON-GAAP FINANCIAL PERFORMANCE MEASURES
In addition to financial information prepared in accordance with
U.S. GAAP, this press release also contains adjusted net loss and
adjusted loss per share from continuing operations attributable to
The Medicines Company. The Company believes these measures provide
investors and management with supplemental information relating to
operating performance and trends that facilitate comparisons
between periods and with respect to projected information.
Adjusted net loss from continuing operations excludes
share-based compensation expense, amortization of acquired
intangible assets, asset impairment charges, inventory adjustments,
restructuring charges, charges associated with product
discontinuance, milestone payments, changes in contingent purchase
price, expenses incurred for certain transactions, non-cash
interest expense, gain on sale of assets, loss on repurchase of
debt and net loss tax adjustments. The Company believes these
non-GAAP financial measures help indicate underlying trends in the
Company’s business and are important in comparing current results
with prior period results and understanding projected operating
performance. Non-GAAP financial measures provide the Company and
its investors with an indication of the Company’s baseline
performance before items that are considered by the Company not to
be reflective of the Company’s ongoing results. See the attached
Reconciliations of GAAP to Adjusted Net Loss and Adjusted Loss per
Share for explanations of the amounts excluded and included to
arrive at adjusted net loss and adjusted loss per share amounts for
the three- and six-month periods ended June 30, 2017 and 2016.
These adjusted measures are non-GAAP and should be considered in
addition to, but not as a substitute for, the information prepared
in accordance with U.S. GAAP. The Company strongly encourages
investors to review its consolidated financial statements and
publicly-filed reports in their entirety and cautions investors
that the non-GAAP measures used by the Company may differ from
similar measures used by other companies, even when similar terms
are used to identify such measures.
THE MEDICINES COMPANY CONSOLIDATED STATEMENTS OF
OPERATIONS UNAUDITED
(In thousands, except per share
amounts)
Three Months EndedJune
30,
Six Months EndedJune 30, 2017
2016 2017 2016 Net product revenues $
13,355 $ 30,324 $ 27,200 $ 61,699 Royalty revenues 5,387
24,407 15,758 43,338 Total net revenues 18,742
54,731 42,958 105,037 Operating expenses: Cost of product revenues
16,282 15,230 29,835 34,027 Asset impairment charges 329,097 —
329,097 — Research and development 33,072 37,567 71,499 71,058
Selling, general and administrative 49,600 94,158
112,782 173,456 Total operating expenses 428,051
146,955 543,213 278,541 Loss from
operations (409,309 ) (92,224 ) (500,255 ) (173,504 ) Co-promotion
and license income 757 1,341 1,514 2,316 Gain on sale of assets —
288,301 — 288,301 Loss on extinguishment of debt — (5,380 ) —
(5,380 ) Interest expense (12,590 ) (10,363 ) (25,012 ) (20,109 )
Other (loss) income 854 138 845 (124 ) (Loss)
income from continuing operations before income taxes (420,288 )
181,813 (522,908 ) 91,500 Benefit (provision) for income taxes
23,020 (11 ) 22,970 (57 ) Net (loss) income from
continuing operations (397,268 ) 181,802 (499,938 ) 91,443
(Loss) income from discontinued operations, net of tax —
619 — (1,486 ) Net (loss) income (397,268 )
182,421 (499,938 ) 89,957 Net loss attributable to non-controlling
interest — 21 — 37 Net (loss) income
attributable to The Medicines Company $ (397,268 ) $ 182,442
$ (499,938 ) $ 89,994 Amounts attributable to The
Medicines Company: Net (loss) income from continuing operations $
(397,268 ) $ 181,823 $ (499,938 ) $ 91,480 (Loss) income from
discontinued operations, net of tax — 619 —
(1,486 ) Net (loss) income attributable to The Medicines Company $
(397,268 ) $ 182,442 $ (499,938 ) $ 89,994
Basic (loss) earnings per common share attributable to The
Medicines Company: (Loss) earnings from continuing operations $
(5.52 ) $ 2.61 $ (6.99 ) $ 1.32 (Loss) earnings from discontinued
operations — 0.01 — (0.02 ) Basic (loss)
earnings per share $ (5.52 ) $ 2.62 $ (6.99 ) $ 1.30
Diluted (loss) earnings per common share attributable to The
Medicines Company: (Loss) earnings from continuing operations $
(5.52 ) $ 2.51 $ (6.99 ) $ 1.27 (Loss) earnings from discontinued
operations — 0.01 — (0.02 ) Diluted (loss)
earnings per share $ (5.52 ) $ 2.52 $ (6.99 ) $ 1.25
Weighted average number of common shares outstanding: Basic
71,918 69,711 71,498 69,464 Diluted 71,918 72,509 71,498 72,312
THE MEDICINES COMPANY BALANCE SHEET
ITEMS UNAUDITED
(In thousands)
June 30, 2017 December 31, 2016
Cash and cash equivalents $ 202,422 $ 541,835 Available for sale
securities $ 131,545 $ — Total assets $ 1,151,109 $ 1,705,211
Convertible senior notes (due 2022 and 2023) $ 636,154 $ 677,333
The Medicines Company stockholders' equity $ 142,953 $ 652,501
THE MEDICINES COMPANY RECONCILIATIONS OF
GAAP TO ADJUSTED NET LOSS AND ADJUSTED LOSS PER SHARE
UNAUDITED
(In thousands, except per share
amounts)
Three Months EndedJune 30,
Six Months EndedJune 30, 2017
2016 2017 2016 Net loss from continuing
operations attributable to The Medicines Company - GAAP $ (397,268
) $ 181,823 $ (499,938 ) $ 91,480 Before tax adjustments: Cost of
product revenues: Share-based compensation expense (1) 236 281 407
496 Amortization of acquired intangible assets (2) 1,982 6,566
8,451 12,851 Inventory adjustments (3) (2,771 ) (5,213 ) (3,182 )
(5,213 ) Restructuring charges (4) — 275 (66 ) 275 Market
withdrawal of Ionsys (5) 8,458 — 8,458 — Asset impairment charges
Market withdrawal of Ionsys (5) 264,097 — 264,097 — Discontinuance
of MDCO 700 (6) 65,000 — 65,000 — Research and development:
Share-based compensation expense (1) 1,525 1,157 2,556 2,007
Restructuring charges (4) 504 1,360 396 1,360 Milestone payments
(7) — 10,000 — 11,000 Market withdrawal of Ionsys (5) 1,197 — 1,197
— Selling, general and administrative: Share-based compensation
expense (1) 7,796 7,768 13,237 13,706 Restructuring charges (4) (53
) 12,998 (104 ) 12,998 Changes in contingent purchase price (8)
3,394 3,381 11,907 1,953 Market withdrawal of Ionsys (5) 3,269 —
3,269 — Discontinuance of MDCO 700 (6) (14,701 ) (14,701 ) Expenses
incurred for certain transactions (9) — 7,887 — 7,887 Other:
Non-cash interest expense (10) 6,849 6,470 13,822 12,770 Gain on
sale of assets (11) — (288,301 ) — (288,301 ) Loss on
extinguishment of debt (12) — 5,380 — 5,380 Net loss tax
adjustments (13) (22,988 ) (10 ) (22,989 ) (1 ) Net loss
attributable to The Medicines Company - Adjusted $ (73,474 ) $
(48,178 ) $ (148,183 ) $ (119,352 ) Net loss per share
attributable to The Medicines Company - Adjusted Basic $ (1.02 ) $
(0.69 ) $ (2.07 ) $ (1.72 ) Diluted $ (1.02 ) $ (0.69 ) $ (2.07 ) $
(1.72 ) Weighted average number of common shares outstanding: Basic
71,918 69,711 71,498 69,464 Diluted 71,918 69,711 71,498 69,464
Explanation of Adjustments: (1) Excludes
share-based compensation of $9,557 and $9,206 for the three months
ended June 30, 2017 and 2016 and $16,200 and $16,209 for the six
months ended June 30, 2017 and 2016 because these expenses are
substantially dependent on changes in the market price of the
Company's common stock. (2) Excludes amortization of intangible
assets resulting from transactions with Targanta, Incline
Therapeutics and Rempex. (3) Excludes all non-cash inventory
adjustments. Prior year balances revised to reflect all non-cash
inventory adjustments for the respective periods. (4) Excludes
restructuring charges for the workforce reorganization related to
the sale of the non-core ACC products. (5) Excludes charges
associated with the voluntary discontinuation and withdrawal of
Ionsys from the market in the United States and cessation of
related commercial activities. (6) Excludes costs associated with
the decision to discontinue the MDCO-700 program. (7) Excludes
upfront and milestone payments for research and development
collaboration arrangements and manufacturing scale up for MDCO-216.
(8) Excludes changes in fair value of the contingent price related
to the acquisitions of Targanta, Incline Therapeutics, Rempex and
Annovation. (9) Excludes transaction costs related to the sale of
the Non-Core ACC Products. (10) Excludes non-cash interest expense
which is in excess of the actual interest expense paid on the
Convertible Senior Notes. (11) Excludes gain on the sale of the
Non-Core ACC Products. (12) Excludes loss on the repurchase of
$220,000 of 2017 Notes. (13) Net loss tax adjustments reflect the
estimated tax effect of the costs associated with the decision to
discontinue the MDCO-700 program.
In addition to the financial information prepared in accordance
with U.S. GAAP, this press release also contains adjusted financial
measures that the Company believes provide investors and management
with supplemental information relating to operating performance and
trends that facilitate comparisons between periods and with respect
to projected information. These adjusted measures should be
considered in addition to, but not as a substitute for, the
information prepared in accordance with U.S. GAAP. The Company
strongly encourages investors to review its consolidated financial
statements and publicly filed reports in their entirety and
cautions investors that the non-GAAP measures used by the Company
may differ from similar measures used by other companies, even when
similar terms are used to identify such measures.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170809005536/en/
The Medicines CompanyMediaMeg Langan, 973-290-6319Vice
Presidentmargaret.langan@themedco.comorInvestor RelationsKrishna Gorti, M.D.,
973-290-6122Vice President, Investor
Relationskrishna.gorti@themedco.com
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