Delaware | 0-27756 | 13-3648318 |
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(State or other jurisdiction of of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) |
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¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Date: October 27, 2016 | ALEXION PHARMACEUTICALS, INC. |
By: /s/ Michael V. Greco | |
Name: Michael V. Greco | |
Title: Senior Vice President of Law and Corporate Secretary | |
• | Soliris® (eculizumab) net product sales were $729 million, compared to $665 million in Q3 2015. |
• | Strensiq® (asfotase alfa) net product sales were $61 million. |
• | Kanuma® (sebelipase alfa) net product sales were $9 million. |
• | GAAP R&D expense was $196 million, compared to $166 million in the same quarter last year. Non-GAAP R&D expense was $180 million, compared to $147 million in the same quarter last year. |
• | GAAP SG&A expense was $230 million, compared to $213 million in the same quarter last year. Non-GAAP SG&A expense was $201 million, compared to $182 million in the same quarter last year. |
• | GAAP diluted EPS was $0.42 per share, compared to a loss of $0.81 per share in the same quarter last year. Non-GAAP diluted EPS was $1.23 per share. Non-GAAP diluted EPS was $1.08 per share in the third quarter of 2015, reflecting a reduction of $0.08 per share to conform to the current non-GAAP income tax expense definition. |
• | Eculizumab- Refractory Generalized Myasthenia Gravis (gMG): Alexion plans to file for regulatory submissions for eculizumab for the treatment of patients with refractory gMG in both the United States and Europe in the first quarter of 2017. |
• | Eculizumab- Relapsing Neuromyelitis Optica Spectrum Disorder (NMOSD): The PREVENT study, a single, multinational, placebo-controlled registration trial of eculizumab in patients with relapsing NMOSD is on-going, with data expected in 2017. |
• | Eculizumab- Delayed Graft Function (DGF): Data from the PROTECT study, a single, multinational, placebo-controlled registration trial of eculizumab in the prevention of DGF, are expected during the fourth quarter of 2016. |
• | ALXN1210- PNH: Alexion has initiated a PNH registration trial of ALXN1210 administered intravenously every eight weeks. Enrollment is expected to begin in the fourth quarter of 2016. |
• | ALXN1210- aHUS: Alexion has initiated an aHUS registration trial with ALXN1210 administered intravenously every eight weeks. Enrollment is expected to begin in the fourth quarter of 2016. |
• | ALXN1210- Subcutaneous: Alexion has commenced dosing of a new formulation of ALXN1210 administered subcutaneously in healthy volunteers in a Phase I study. |
• | ALXN1007: Alexion is evaluating higher doses of ALXN1007, a complement inhibitor that targets C5a, in a Phase 2 study of patients with graft-versus-host disease involving the lower |
• | SBC-103: A Phase 1/2 study of SBC-103, a recombinant form of the NAGLU enzyme, in patients with mucopolysaccharidosis IIIB, or MPS IIIB, is on-going. Alexion has completed the planned dose escalation, with all patients now randomized to either a 5 mg/kg or 10 mg/kg dose. A natural history study to characterize the course of disease progression in patients with MPS IIIB is also ongoing. |
• | cPMP Replacement Therapy (ALXN1101): Alexion is enrolling patients in a pivotal study to evaluate ALXN1101 in neonates with Molybdenum Cofactor Deficiency (MoCD) Type A. |
• | Samalizumab (ALXN6000): Samalizumab is a first-in-class immunomodulatory humanized monoclonal antibody that blocks the key immune checkpoint protein, CD200. The Leukemia and Lymphoma Society announced the BEAT AML Master Trial, a multi-arm clinical trial in acute myeloid leukemia (AML), which will evaluate samalizumab as well as other potential therapies for the treatment of AML. |
• | Alexion has more than 30 diverse preclinical programs across a range of therapeutic modalities. |
Updated GAAP Guidance | Prior GAAP Guidance | Updated Non-GAAP Guidance | Prior Non-GAAP Guidance | ||||
Total revenues | Upper end of $3,050 to $3,100 million | $3,050 to $3,100 million | Upper end of $3,050 to $3,100 million | $3,050 to $3,100 million | |||
Soliris revenues | $2,835 to $2,875 million | $2,835 to $2,875 million | $2,835 to $2,875 million | $2,835 to $2,875 million | |||
Metabolic revenues | $225 to $235 million | $200 to $220 million | $225 to $235 million | $200 to $220 million | |||
Cost of sales | 8% to 9% | 8% to 9% | 8% to 9% | 8% to 9% | |||
Research and development expense | $740 to $781 million | $708 to $779 million | $680 to $690 million | High end of $650 to $680 million | |||
Selling, general and administrative expense | $913 to $955 million | $883 to $935 million | $790 to $810 million | High end of $760 to $790 million | |||
Interest expense | $100 million | $100 million | $100 million | $100 million | |||
Effective tax rate | 32% to 34% | 32% to 34% | 15.5% to 16.5% | 15.5% to 16.5% | |||
Earnings per share | $1.79 to $2.09 | $1.91 to $2.26 | Upper end of $4.50 to $4.65 | $4.50 to $4.65 | |||
Diluted shares outstanding | 228 million | 228 million | 230 million | 230 million |
Three months ended | Nine months ended | ||||||||||||||
September 30 | September 30 | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net product sales | $ | 798,524 | $ | 665,791 | $ | 2,251,495 | $ | 1,902,107 | |||||||
Other revenue | 582 | 846 | 1,765 | 1,073 | |||||||||||
Total revenues | 799,106 | 666,637 | 2,253,260 | 1,903,180 | |||||||||||
Cost of sales | 71,095 | 54,057 | 190,708 | 175,463 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 195,687 | 165,664 | 551,288 | 518,437 | |||||||||||
Selling, general and administrative | 230,128 | 212,520 | 694,491 | 621,019 | |||||||||||
Amortization of purchased intangible assets | 82,036 | 36,608 | 242,185 | 36,608 | |||||||||||
Change in fair value of contingent consideration | 40,290 | 29,684 | 30,676 | 45,707 | |||||||||||
Acquisition-related costs | — | 6,075 | 2,313 | 35,852 | |||||||||||
Restructuring expenses | 564 | 7,461 | 1,741 | 30,737 | |||||||||||
Total operating expenses | 548,705 | 458,012 | 1,522,694 | 1,288,360 | |||||||||||
Operating income | 179,306 | 154,568 | 539,858 | 439,357 | |||||||||||
Other income and expense: | |||||||||||||||
Investment income | 4,626 | 1,967 | 8,049 | 7,077 | |||||||||||
Interest expense | (24,807 | ) | (19,971 | ) | (72,490 | ) | (24,593 | ) | |||||||
Foreign currency (loss) gain | (1,011 | ) | 2,795 | (3,740 | ) | 1,755 | |||||||||
Income before income taxes | 158,114 | 139,359 | 471,677 | 423,596 | |||||||||||
Income tax expense | 63,776 | 323,116 | 165,113 | 345,815 | |||||||||||
Net income (loss) | $ | 94,338 | $ | (183,757 | ) | $ | 306,564 | $ | 77,781 | ||||||
Earnings (loss) per common share | |||||||||||||||
Basic | $ | 0.42 | $ | (0.81 | ) | $ | 1.37 | $ | 0.37 | ||||||
Diluted | $ | 0.42 | $ | (0.81 | ) | $ | 1.35 | $ | 0.37 | ||||||
Shares used in computing earnings per common share | |||||||||||||||
Basic | 224,180 | 226,228 | 224,454 | 209,373 | |||||||||||
Diluted | 226,088 | 226,228 | 226,560 | 211,808 |
Three months ended | Nine months ended | ||||||||||||||
September 30 | September 30 | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
GAAP net income (loss) | $ | 94,338 | $ | (183,757 | ) | $ | 306,564 | $ | 77,781 | ||||||
Before tax adjustments: | |||||||||||||||
Cost of sales: | |||||||||||||||
Share-based compensation | 2,704 | 1,470 | 8,185 | 4,223 | |||||||||||
Fair value adjustment in inventory acquired (1) | 6,585 | — | 8,442 | — | |||||||||||
Research and development expense: | |||||||||||||||
Share-based compensation | 14,232 | 19,087 | 43,811 | 43,500 | |||||||||||
Upfront and milestone payments related to licenses and collaborations | 1,489 | — | 4,539 | 114,250 | |||||||||||
Selling, general and administrative expense: | |||||||||||||||
Share-based compensation | 29,405 | 30,499 | 99,213 | 113,130 | |||||||||||
Amortization of purchased intangible assets (2) | 82,036 | 36,608 | 242,185 | 36,608 | |||||||||||
Change in fair value of contingent consideration | 40,290 | 29,684 | 30,676 | 45,707 | |||||||||||
Acquisition-related costs (3) | — | 6,075 | 2,313 | 35,852 | |||||||||||
Restructuring expenses | 564 | 7,461 | 1,741 | 30,737 | |||||||||||
Adjustments to income tax expense (4) (5) | 9,660 | 302,244 | 19,042 | 274,363 | |||||||||||
Non-GAAP net income | $ | 281,303 | $ | 249,371 | $ | 766,711 | $ | 776,151 | |||||||
GAAP earnings (loss) per share - diluted | $ | 0.42 | $ | (0.81 | ) | $ | 1.35 | $ | 0.37 | ||||||
Non-GAAP earnings per share - diluted (5) | $ | 1.23 | $ | 1.08 | $ | 3.36 | $ | 3.62 | |||||||
Shares used in computing diluted earnings per share (GAAP) | 226,088 | 226,228 | 226,560 | 211,808 | |||||||||||
Shares used in computing diluted earnings per share (non-GAAP) | 228,008 | 230,875 | 228,464 | 214,146 |
Three months ended | Nine months ended | ||||||||||||||
September 30 | September 30 | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Acquisition-related costs: | |||||||||||||||
Transaction costs | $ | — | $ | — | $ | 375 | $ | 26,799 | |||||||
Integration costs | — | 6,075 | 1,938 | 9,053 | |||||||||||
$ | — | $ | 6,075 | $ | 2,313 | $ | 35,852 |
(4) | Alexion's non-GAAP income tax expense definition excludes the tax effect of pre-tax adjustments to GAAP net income and intercompany transactions with our captive foreign partnership which would become due and payable only upon liquidation of a substantial portion of our non-US business interests. |
(5) | Previously reported non-GAAP tax expense and diluted EPS have been modified to conform to the current non-GAAP income tax definition adopted in Q2 2016. Previously reported non-GAAP EPS was $1.16 and $3.87 for the three and nine months ended September 30, 2015, respectively. |
Twelve months ended December 31 2016 | |||||||
Low | High | ||||||
GAAP net income | $ | 408 | $ | 477 | |||
Before tax adjustments: | |||||||
Cost of sales: | |||||||
Share-based compensation | 12 | 10 | |||||
Fair value adjustment in inventory acquired | 12 | 10 | |||||
Research and development expense: | |||||||
Share-based compensation | 65 | 55 | |||||
Upfront and milestone payments related to licenses and collaborations | 26 | 5 | |||||
Selling, general and administrative expense: | |||||||
Share-based compensation | 145 | 123 | |||||
Amortization of purchased intangible assets | 322 | 322 | |||||
Change in fair value of contingent consideration | 36 | 36 | |||||
Acquisition-related costs | 2 | 2 | |||||
Restructuring expenses | 2 | 2 | |||||
Adjustments to income tax expense | 5 | 28 | |||||
Non-GAAP net income | $ | 1,035 | $ | 1,070 | |||
Diluted GAAP earnings per share | $ | 1.79 | $ | 2.09 | |||
Diluted Non-GAAP earnings per share | $ | 4.50 | $ | 4.65 | |||
Shares used in computing diluted earnings per share (GAAP) | 228 | 228 | |||||
Shares used in computing diluted earnings per share (non-GAAP) | 230 | 230 |
Twelve months ended December 31 2016 | |||||
Low | High | ||||
GAAP income tax expense as a percentage of GAAP pre-tax income | 34 | % | 32 | % | |
Tax effect of pre-tax adjustments to GAAP net income | (6.5 | %) | (4.5 | %) | |
Tax effect of intercompany transactions | (11.0 | %) | (12.0 | %) | |
Non-GAAP income tax expenses as a percentage of non-GAAP pre-tax income | 16.5 | % | 15.5 | % |
Three months ended | Nine months ended | ||||||||||||||
September 30 | September 30 | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Soliris | $ | 728,851 | $ | 665,404 | $ | 2,094,516 | $ | 1,901,720 | |||||||
Strensiq | 60,531 | 357 | 138,914 | 357 | |||||||||||
Kanuma | 9,142 | 30 | 18,065 | 30 | |||||||||||
Total net product sales | 798,524 | 665,791 | 2,251,495 | 1,902,107 | |||||||||||
Royalty revenue | 582 | 846 | 1,765 | 1,073 | |||||||||||
Total other revenue | 582 | 846 | 1,765 | 1,073 | |||||||||||
Total revenues | $ | 799,106 | $ | 666,637 | $ | 2,253,260 | $ | 1,903,180 |
September 30, | December 31, | ||||||
2016 | 2015 | ||||||
Cash and cash equivalents | $ | 761,989 | $ | 1,010,111 | |||
Marketable securities | 550,882 | 374,904 | |||||
Trade accounts receivable, net | 676,837 | 532,832 | |||||
Inventories | 363,058 | 289,874 | |||||
Prepaid expenses and other current assets | 241,768 | 208,993 | |||||
Property, plant and equipment, net | 931,060 | 697,025 | |||||
Intangible assets, net | 4,467,726 | 4,707,914 | |||||
Goodwill | 5,037,444 | 5,047,885 | |||||
Other assets | 262,698 | 228,343 | |||||
Total assets | $ | 13,293,462 | $ | 13,097,881 | |||
Accounts payable and accrued expenses | $ | 530,083 | $ | 460,708 | |||
Deferred revenue | 63,402 | 20,504 | |||||
Current portion of long-term debt | 122,942 | 166,365 | |||||
Other current liabilities | 36,066 | 6,234 | |||||
Current portion of contingent consideration | 81,848 | 55,804 | |||||
Long-term debt, less current portion | 3,129,384 | 3,254,536 | |||||
Facility lease obligation | 224,442 | 151,307 | |||||
Contingent consideration | 126,056 | 121,424 | |||||
Deferred tax liabilities (1) | 343,794 | 528,990 | |||||
Other liabilities | 131,342 | 73,393 | |||||
Total liabilities | 4,789,359 | 4,839,265 | |||||
Total stockholders' equity (1) | 8,504,103 | 8,258,616 | |||||
Total liabilities and stockholders' equity | $ | 13,293,462 | $ | 13,097,881 |