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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Date: April 27, 2017 | ALEXION PHARMACEUTICALS, INC. |
By: /s/ Michael V. Greco | |
Name: Michael V. Greco | |
Title: Senior Vice President of Law and Corporate Secretary | |
• | 1Q17 Total Revenues of $870 Million, a 24% Increase and 26% Volume Increase Year-Over-Year |
• | Revenue Growth Benefited from Continued Strong Volume Growth of Soliris® In Core Markets |
• | Strensiq® Revenue Driven by Steady Addition of New Patients Starting Treatment |
• | Applications Filed in U.S., Europe and Japan for Soliris in Patients with Refractory gMG |
• | Enrollment in ALXN1210 Phase 3 Studies Advanced in Patients with PNH and aHUS |
• | New Phase 1 Data Support Advancing Development of ALXN1210 Subcutaneous Formulation |
• | Reiterating 2017 Revenue Guidance of $3.4 to $3.5 Billion and Increasing GAAP EPS Guidance to $2.80 to $3.20 per share and Non-GAAP EPS Guidance to $5.10 to $5.30 per share |
• | Soliris® (eculizumab) net product sales were $783 million, including a benefit of $29 million from a change in revenue recognition in 2017 for certain non-U.S. markets, compared to $665 million in the first quarter of 2016. Starting in the first quarter of 2017, Alexion is recording revenue shipped to certain distributors earlier as the Company has sufficient sales data to estimate returns. The $29 million benefit is composed of approximately $21 million from bulk orders in Latin America and the remaining $8 million from deferred sales in other non-U.S. markets. |
• | Strensiq® (asfotase alfa) net product sales were $74 million, compared to $33 million in the first quarter of 2016. |
• | Kanuma® (sebelipase alfa) net product sales were $12 million, compared to $2 million in the first quarter of 2016. |
• | GAAP R&D expense was $219 million, compared to $176 million in the same quarter last year. Non-GAAP R&D expense was $194 million, compared to $158 million in the same quarter last year. |
• | GAAP SG&A expense was $262 million, compared to $233 million in the same quarter last year. Non-GAAP SG&A expense was $226 million, compared to $194 million in the same quarter last year. |
• | GAAP diluted EPS was $0.75 per share, compared to $0.41 per share in the same quarter last year. Non-GAAP diluted EPS was $1.38 per share. Non-GAAP diluted EPS was $0.99 per share in the first quarter of 2016, reflecting a reduction of $0.12 per share to conform to the current non-GAAP income tax expense definition. |
• | Eculizumab- Refractory Generalized Myasthenia Gravis (gMG): Alexion has submitted applications in the U.S., EU and Japan to extend the indication for eculizumab as a potential treatment for patients with refractory gMG who are AChR-positive. The applications have been accepted for review by the U.S. Food and Drug Administration (FDA) and validated by the European Medicines Agency (EMA). |
• | Eculizumab- Relapsing Neuromyelitis Optica Spectrum Disorder (NMOSD): Alexion expects to complete enrollment in the PREVENT study, a single, multinational, placebo-controlled Phase 3 trial of eculizumab in patients with relapsing NMOSD, in 2017. |
• | ALXN1210- PNH: Patients are being dosed in a Phase 3 trial comparing ALXN1210 administered intravenously every eight weeks to Soliris in complement inhibitor treatment-naive patients with PNH. In the second quarter of 2017, Alexion plans to initiate a Phase 3 PNH Switch study of ALXN1210 administered intravenously every eight weeks compared to patients currently treated with Soliris. The Company expects to complete enrollment in both studies in 2017. |
• | ALXN1210- aHUS: Patients are being dosed in a Phase 3 trial with ALXN1210 administered intravenously every eight weeks in complement inhibitor treatment-naive adolescent and adult patients with aHUS. Enrollment is expected to be complete in 2017. Alexion expects to initiate a Phase 3 trial of ALXN1210 in pediatric patients with aHUS in the second quarter of 2017. |
• | ALXN1210- Subcutaneous: Alexion has completed enrollment in a Phase 1 study of a new formulation of ALXN1210 administered subcutaneously in healthy volunteers. Initial pharmacokinetic and tolerability data from the Phase I study support progressing the development of this subcutaneous formulation of ALXN1210. |
• | 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): Alexion has initiated a Phase 1 study of samalizumab, a first-in-class immunomodulatory humanized monoclonal antibody that blocks the key immune checkpoint protein, CD200, in patients with advanced solid tumors. Patients are also being dosed in The Leukemia and Lymphoma Society's BEAT AML Master Trial, a multi-arm clinical trial, which is evaluating samalizumab as well as other potential therapies for the treatment of acute myeloid leukemia (AML). |
Updated GAAP Guidance | Prior GAAP Guidance | Updated Non-GAAP Guidance | Prior Non-GAAP Guidance | ||||
Total revenues | $3,400 to $3,500 million | $3,400 to $3,500 million | $3,400 to $3,500 million | $3,400 to $3,500 million | |||
Soliris revenues | $3,025 to $3,100 million | $3,025 to $3,100 million | $3,025 to $3,100 million | $3,025 to $3,100 million | |||
Metabolic revenues | $375 to $400 million | $375 to $400 million | $375 to $400 million | $375 to $400 million | |||
R&D (% total revenues) | 24% to 26% | 24% to 27% | 22% to 23% | 22% to 23% | |||
SG&A (% total revenues) | 28% to 30% | 29% to 30% | 25% to 26% | 25% to 26% | |||
Operating margin | 25% to 28% | 25% to 28% | 43% to 44% | 43% to 44% | |||
Earnings per share | $2.80 to $3.20 | $2.55 to $3.05 | $5.10 to $5.30 | $5.00 to $5.25 |
Three months ended | |||||||
March 31 | |||||||
2017 | 2016 | ||||||
Net product sales | $ | 869 | $ | 700 | |||
Other revenue | 1 | 1 | |||||
Total revenues | 870 | 701 | |||||
Cost of sales | 69 | 59 | |||||
Operating expenses: | |||||||
Research and development | 219 | 176 | |||||
Selling, general and administrative | 262 | 233 | |||||
Amortization of purchased intangible assets | 80 | 80 | |||||
Change in fair value of contingent consideration | 4 | (15 | ) | ||||
Acquisition-related costs | — | 1 | |||||
Restructuring expenses | 24 | 1 | |||||
Total operating expenses | 589 | 476 | |||||
Operating income | 212 | 166 | |||||
Other income and expense: | |||||||
Investment income | 4 | 1 | |||||
Interest expense | (24 | ) | (24 | ) | |||
Other income | 2 | — | |||||
Income before income taxes | 194 | 143 | |||||
Income tax expense | 24 | 51 | |||||
Net income | $ | 170 | $ | 92 | |||
Earnings per common share | |||||||
Basic | $ | 0.76 | $ | 0.41 | |||
Diluted | $ | 0.75 | $ | 0.41 | |||
Shares used in computing earnings per common share | |||||||
Basic | 224 | 225 | |||||
Diluted | 226 | 227 |
Three months ended | |||||||
March 31 | |||||||
2017 | 2016 | ||||||
GAAP net income | $ | 170 | $ | 92 | |||
Before tax adjustments: | |||||||
Cost of sales: | |||||||
Share-based compensation | 2 | 3 | |||||
Fair value adjustment in inventory acquired (1) | 2 | 1 | |||||
Research and development expense: | |||||||
Share-based compensation | 16 | 15 | |||||
Upfront and milestone payments related to licenses and collaborations | 9 | 3 | |||||
Selling, general and administrative expense: | |||||||
Share-based compensation | 36 | 38 | |||||
Amortization of purchased intangible assets | 80 | 80 | |||||
Change in fair value of contingent consideration | 4 | (15 | ) | ||||
Acquisition-related costs | — | 1 | |||||
Restructuring expenses (2) | 24 | 1 | |||||
Adjustments to income tax expense (3) (4) | (27 | ) | 8 | ||||
Non-GAAP net income | $ | 316 | $ | 227 | |||
GAAP earnings per common share - diluted | $ | 0.75 | $ | 0.41 | |||
Non-GAAP earnings per common share - diluted (4) | $ | 1.38 | $ | 0.99 | |||
Shares used in computing diluted earnings per common share (GAAP) | 226 | 227 | |||||
Shares used in computing diluted earnings per common share (non-GAAP) | 229 | 229 |
(2) | Restructuring expenses of $24 million are related to the company-wide restructuring initiated in the first quarter 2017. |
(3) | 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. |
(4) | Previously reported non-GAAP tax expense and diluted EPS have been modified to conform to the current non-GAAP income tax expense definition adopted in Q2 2016. Previously reported non-GAAP EPS was $1.11 for the three months ended March 31, 2016. |
Twelve months ended | ||||||||
December 31, 2017 | ||||||||
Low | High | |||||||
GAAP net income | $ | 635 | $ | 726 | ||||
Before tax adjustments: | ||||||||
Share-based compensation | 230 | 197 | ||||||
Fair value adjustment in inventory acquired | 5 | 5 | ||||||
Upfront and milestone payments related to licenses and collaborations | 16 | 9 | ||||||
Amortization of purchased intangible assets | 320 | 320 | ||||||
Change in fair value of contingent consideration | 14 | 14 | ||||||
Restructuring expenses | 34 | 24 | ||||||
Adjustments to income tax expense | (86 | ) | (81 | ) | ||||
Non-GAAP net income | $ | 1,168 | $ | 1,214 | ||||
Diluted GAAP earnings per share | $ | 2.80 | $ | 3.20 | ||||
Diluted Non-GAAP earnings per share | $ | 5.10 | $ | 5.30 |
Operating expense and margin (% total revenues) | ||||||
GAAP research and development expense | 26 | % | 24 | % | ||
Share-based compensation | (2 | )% | (2 | )% | ||
Upfront and milestone payments related to licenses and collaborations | (1 | )% | 0 | % | ||
Non-GAAP research and development expense | 23 | % | 22 | % | ||
GAAP selling, general and administrative expense | 30 | % | 28 | % | ||
Share-based compensation | (4 | )% | (3 | )% | ||
Non-GAAP selling, general and administrative expense | 26 | % | 25 | % | ||
GAAP operating margin | 25 | % | 28 | % | ||
Share-based compensation | 7 | % | 6 | % | ||
Fair value adjustment in inventory acquired | 0 | % | 0 | % | ||
Upfront and milestone payments related to licenses and collaborations | 1 | % | 0 | % | ||
Amortization of purchased intangible assets | 9 | % | 9 | % | ||
Change in fair value of contingent consideration | 0 | % | 0 | % | ||
Restructuring expenses | 1 | % | 1 | % | ||
Non-GAAP operating margin | 43 | % | 44 | % |
Three months ended | ||||||||
March 31 | ||||||||
2017 | 2016 | |||||||
Soliris | $ | 783 | $ | 665 | ||||
Strensiq | 74 | 33 | ||||||
Kanuma | 12 | 2 | ||||||
Total net product sales | $ | 869 | $ | 700 |
Three months ended | ||||||||
March 31 | ||||||||
2017 | 2016 | |||||||
United States | $ | 360 | $ | 265 | ||||
Europe | 248 | 227 | ||||||
Asia-Pacific | 83 | 72 | ||||||
Rest of World | 178 | 136 | ||||||
Total net product sales | $ | 869 | $ | 700 |
March 31 | December 31 | ||||||
2017 | 2016 | ||||||
Cash and cash equivalents | $ | 713 | $ | 966 | |||
Marketable securities | 749 | 327 | |||||
Trade accounts receivable, net | 660 | 650 | |||||
Inventories | 396 | 375 | |||||
Prepaid expenses and other current assets (1) | 215 | 260 | |||||
Property, plant and equipment, net | 1,138 | 1,036 | |||||
Intangible assets, net | 4,223 | 4,303 | |||||
Goodwill | 5,037 | 5,037 | |||||
Other assets | 304 | 299 | |||||
Total assets | $ | 13,435 | $ | 13,253 | |||
Accounts payable and accrued expenses | $ | 607 | $ | 572 | |||
Deferred revenue | 16 | 37 | |||||
Current portion of long-term debt | 167 | 167 | |||||
Current portion of contingent consideration | 25 | 24 | |||||
Other current liabilities | 22 | 23 | |||||
Long-term debt, less current portion | 2,846 | 2,888 | |||||
Contingent consideration | 132 | 129 | |||||
Facility lease obligation | 270 | 233 | |||||
Deferred tax liabilities | 384 | 396 | |||||
Other liabilities | 110 | 90 | |||||
Total liabilities | 4,579 | 4,559 | |||||
Total stockholders' equity (1) | 8,856 | 8,694 | |||||
Total liabilities and stockholders' equity | $ | 13,435 | $ | 13,253 |