Delaware | 0-27756 | 13-3648318 |
------------------ | ------------------ | --------------- |
(State or other jurisdiction of of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): | |
¨ | 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)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). | |
¨ | Emerging growth company |
Date: July 27, 2017 | ALEXION PHARMACEUTICALS, INC. |
By: /s/ Michael V. Greco | |
Name: Michael V. Greco | |
Title: Senior Vice President of Law and Corporate Secretary | |
• | 2Q17 Total Revenues of $912 Million, a 21 Percent Increase Over 2Q16 |
• | 2Q17 GAAP EPS of $0.73 Per Share, a 38 Percent Increase Year-Over-Year and Non-GAAP EPS of $1.56 Per Share, a 38 Percent Increase Year-Over-Year |
• | Positive CHMP Opinion Received for Soliris in Patients with Refractory gMG in the EU |
• | Completed Enrollment in the ALXN1210 Phase 3 PNH Study in Complement Inhibitor Treatment-Naive Patients |
• | Increasing 2017 Revenue Guidance to $3.450 to $3.525 Billion; Narrowing GAAP EPS Guidance to $2.82 to $3.12 Per Share and Increasing Non-GAAP EPS Guidance to $5.40 to $5.55 Per Share |
• | Alexion to Provide Strategy Update on Conference Call |
• | Soliris® (eculizumab) net product sales were $814 million, compared to $701 million in the second quarter of 2016, representing a 16 percent increase. Soliris volume increased 18 percent year-over-year. |
• | Strensiq® (asfotase alfa) net product sales were $83 million, compared to $45 million in the second quarter of 2016, representing an 84 percent increase. |
• | Kanuma® (sebelipase alfa) net product sales were $15 million, compared to $7 million in the second quarter of 2016, representing a 114 percent increase. |
• | GAAP R&D expense was $199 million, compared to $180 million in the same quarter last year. Non-GAAP R&D expense was $179 million, compared to $165 million in the same quarter last year. |
• | GAAP SG&A expense was $265 million, compared to $232 million in the same quarter last year. Non-GAAP SG&A expense was $227 million, compared to $200 million in the same quarter last year. |
• | GAAP diluted EPS was $0.73 per share, compared to $0.53 per share in the same quarter last year. Non-GAAP diluted EPS was $1.56 per share, compared to $1.13 per share in the second quarter of 2016. |
• | 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. Alexion received a positive opinion from the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) in the second quarter and a final decision from the European Commission (EC) is anticipated in the third quarter of 2017. Alexion's application in the U.S. |
• | 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 and to report data in 2018. |
• | ALXN1210- PNH: Enrollment is complete in a Phase 3 trial comparing ALXN1210 administered intravenously every eight weeks to Soliris in complement inhibitor treatment-naive patients with PNH. Alexion expects to report data from this study in the second quarter of 2018. Alexion initiated a Phase 3 PNH Switch study of ALXN1210 administered intravenously every eight weeks compared to patients currently treated with Soliris in the second quarter of 2017. The Company expects to complete enrollment in this study in the third quarter of 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 early 2018. Alexion expects to initiate a Phase 3 trial of ALXN1210 in pediatric patients with aHUS in the third quarter of 2017. |
• | ALXN1210- Subcutaneous: Initial pharmacokinetic and tolerability data from the Phase I study in healthy volunteers support progressing the development of a subcutaneous formulation of ALXN1210. |
Updated GAAP Guidance | Prior GAAP Guidance | Updated Non-GAAP Guidance | Prior Non-GAAP Guidance | ||||
Total revenues | $3,450 to $3,525 million | $3,400 to $3,500 million | $3,450 to $3,525 million | $3,400 to $3,500 million | |||
Soliris revenues | $3,075 to $3,125 million | $3,025 to $3,100 million | $3,075 to $3,125 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) | 23% to 25% | 24% to 26% | 21% to 22% | 22% to 23% | |||
SG&A (% total revenues) | 29% to 30% | 28% to 30% | 25% to 26% | 25% to 26% | |||
Operating margin | 23% to 26% | 25% to 28% | 43% to 44% | 43% to 44% | |||
Earnings per share | $2.82 to $3.12 | $2.80 to $3.20 | $5.40 to $5.55 | $5.10 to $5.30 |
• | Foreign currency headwinds of $40 to $50 million versus prior assumption of $50 to $60 million |
• | Soliris revenue impact of $70 to $100 million from ALXN1210 and other clinical trial recruitments versus prior assumption of $70 to $110 million |
Three months ended | Six months ended | ||||||||||||||
June 30 | June 30 | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net product sales | $ | 912 | $ | 753 | $ | 1,781 | $ | 1,453 | |||||||
Other revenue | — | — | 1 | 1 | |||||||||||
Total revenues | 912 | 753 | 1,782 | 1,454 | |||||||||||
Cost of sales | 84 | 60 | 153 | 119 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 199 | 180 | 418 | 356 | |||||||||||
Selling, general and administrative | 265 | 232 | 527 | 465 | |||||||||||
Amortization of purchased intangible assets | 80 | 80 | 160 | 160 | |||||||||||
Change in fair value of contingent consideration | 24 | 5 | 28 | (10 | ) | ||||||||||
Acquisition-related costs | — | 1 | — | 2 | |||||||||||
Restructuring expenses | 3 | — | 27 | 1 | |||||||||||
Impairment of intangible assets | 31 | — | 31 | — | |||||||||||
Total operating expenses | 602 | 498 | 1,191 | 974 | |||||||||||
Operating income | 226 | 195 | 438 | 361 | |||||||||||
Other income and expense: | |||||||||||||||
Investment income | 4 | 2 | 8 | 3 | |||||||||||
Interest expense | (24 | ) | (24 | ) | (48 | ) | (48 | ) | |||||||
Other income (expense) | — | (3 | ) | 2 | (3 | ) | |||||||||
Income before income taxes | 206 | 170 | 400 | 313 | |||||||||||
Income tax expense (1) | 41 | 50 | 65 | 101 | |||||||||||
Net income | $ | 165 | $ | 120 | $ | 335 | $ | 212 | |||||||
Earnings per common share | |||||||||||||||
Basic | $ | 0.74 | $ | 0.54 | $ | 1.49 | $ | 0.94 | |||||||
Diluted | $ | 0.73 | $ | 0.53 | $ | 1.49 | $ | 0.94 | |||||||
Shares used in computing earnings per common share | |||||||||||||||
Basic | 224 | 224 | 225 | 225 | |||||||||||
Diluted | 225 | 226 | 225 | 226 |
Three months ended | Six months ended | ||||||||||||||
June 30 | June 30 | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
GAAP net income | $ | 165 | $ | 120 | $ | 335 | $ | 212 | |||||||
Before tax adjustments: | |||||||||||||||
Cost of sales: | |||||||||||||||
Share-based compensation | 3 | 2 | 5 | 5 | |||||||||||
Fair value adjustment in inventory acquired | 3 | 1 | 5 | 2 | |||||||||||
Research and development expense: | |||||||||||||||
Share-based compensation | 20 | 15 | 36 | 30 | |||||||||||
Upfront and milestone payments related to licenses and collaborations | — | — | 9 | 3 | |||||||||||
Selling, general and administrative expense: | |||||||||||||||
Share-based compensation | 38 | 32 | 74 | 70 | |||||||||||
Amortization of purchased intangible assets | 80 | 80 | 160 | 160 | |||||||||||
Change in fair value of contingent consideration | 24 | 5 | 28 | (10 | ) | ||||||||||
Acquisition-related costs | — | 1 | — | 2 | |||||||||||
Restructuring expenses (1) | 3 | — | 27 | 1 | |||||||||||
Impairment of intangible assets (2) | 31 | — | 31 | — | |||||||||||
Adjustments to income tax expense | (12 | ) | 2 | (39 | ) | 10 | |||||||||
Non-GAAP net income | $ | 355 | $ | 258 | $ | 671 | $ | 485 | |||||||
GAAP earnings per common share - diluted | $ | 0.73 | $ | 0.53 | $ | 1.49 | $ | 0.94 | |||||||
Non-GAAP earnings per common share - diluted | $ | 1.56 | $ | 1.13 | $ | 2.94 | $ | 2.12 | |||||||
Shares used in computing diluted earnings per common share (GAAP) | 225 | 226 | 225 | 226 | |||||||||||
Shares used in computing diluted earnings per common share (non-GAAP) | 228 | 228 | 228 | 229 |
Twelve months ended | ||||||||
December 31, 2017 | ||||||||
Low | High | |||||||
GAAP net income | $ | 640 | $ | 708 | ||||
Before tax adjustments: | ||||||||
Share-based compensation | 246 | 219 | ||||||
Fair value adjustment in inventory acquired | 5 | 5 | ||||||
Upfront and milestone payments related to licenses and collaborations | 10 | 9 | ||||||
Amortization of purchased intangible assets | 320 | 320 | ||||||
Change in fair value of contingent consideration | 36 | 36 | ||||||
Restructuring expenses | 37 | 27 | ||||||
Impairment of intangible assets | 31 | 31 | ||||||
Adjustments to income tax expense | (88 | ) | (84 | ) | ||||
Non-GAAP net income | $ | 1,237 | $ | 1,271 | ||||
Diluted GAAP earnings per common share | $ | 2.82 | $ | 3.12 | ||||
Diluted non-GAAP earnings per common share | $ | 5.40 | $ | 5.55 |
Operating expense and margin (% total revenues) | ||||||
GAAP research and development expense | 25 | % | 23 | % | ||
Share-based compensation | (2 | )% | (2 | )% | ||
Upfront and milestone payments related to licenses and collaborations | (1 | )% | 0 | % | ||
Non-GAAP research and development expense | 22 | % | 21 | % | ||
GAAP selling, general and administrative expense | 30 | % | 29 | % | ||
Share-based compensation | (4 | )% | (4 | )% | ||
Non-GAAP selling, general and administrative expense | 26 | % | 25 | % | ||
GAAP operating margin | 23 | % | 26 | % | ||
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 | 1 | % | 1 | % | ||
Restructuring expenses | 1 | % | 1 | % | ||
Impairment of intangible assets | 1 | % | 1 | % | ||
Non-GAAP operating margin | 43 | % | 44 | % |
Three months ended | Six months ended | |||||||||||||||
June 30 | June 30 | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Soliris | ||||||||||||||||
United States | $ | 318 | $ | 261 | $ | 606 | $ | 498 | ||||||||
Europe | 249 | 239 | 490 | 463 | ||||||||||||
Asia Pacific | 81 | 74 | 160 | 143 | ||||||||||||
Rest of World | 166 | 127 | 341 | 262 | ||||||||||||
Total Soliris | $ | 814 | $ | 701 | $ | 1,597 | $ | 1,366 | ||||||||
Strensiq | ||||||||||||||||
United States | $ | 70 | $ | 40 | $ | 133 | $ | 67 | ||||||||
Europe | 8 | 2 | 14 | 4 | ||||||||||||
Asia Pacific | 4 | 3 | 8 | 6 | ||||||||||||
Rest of World | 1 | — | 2 | 1 | ||||||||||||
Total Strensiq | $ | 83 | $ | 45 | $ | 157 | $ | 78 | ||||||||
Kanuma | ||||||||||||||||
United States | $ | 11 | $ | 5 | $ | 20 | $ | 6 | ||||||||
Europe | 3 | 2 | 5 | 3 | ||||||||||||
Asia Pacific | 1 | — | 1 | — | ||||||||||||
Rest of World | — | — | 1 | — | ||||||||||||
Total Kanuma | $ | 15 | $ | 7 | $ | 27 | $ | 9 | ||||||||
Net Product Sales | ||||||||||||||||
United States | $ | 399 | $ | 306 | $ | 759 | $ | 571 | ||||||||
Europe | 260 | 243 | 509 | 470 | ||||||||||||
Asia Pacific | 86 | 77 | 169 | 149 | ||||||||||||
Rest of World | 167 | 127 | 344 | 263 | ||||||||||||
Total Net Product Sales | $ | 912 | $ | 753 | $ | 1,781 | $ | 1,453 |
June 30 | December 31 | ||||||
2017 | 2016 | ||||||
Cash and cash equivalents | $ | 542 | $ | 966 | |||
Marketable securities | 902 | 327 | |||||
Trade accounts receivable, net | 710 | 650 | |||||
Inventories | 410 | 375 | |||||
Prepaid expenses and other current assets (1) | 225 | 260 | |||||
Property, plant and equipment, net | 1,233 | 1,036 | |||||
Intangible assets, net | 4,112 | 4,303 | |||||
Goodwill | 5,037 | 5,037 | |||||
Other assets | 318 | 299 | |||||
Total assets | $ | 13,489 | $ | 13,253 | |||
Accounts payable and accrued expenses | $ | 613 | $ | 572 | |||
Deferred revenue | 14 | 37 | |||||
Current portion of long-term debt | 167 | 167 | |||||
Current portion of contingent consideration | 25 | 24 | |||||
Other current liabilities | 37 | 23 | |||||
Long-term debt, less current portion | 2,804 | 2,888 | |||||
Contingent consideration | 156 | 129 | |||||
Facility lease obligation | 277 | 233 | |||||
Deferred tax liabilities | 387 | 396 | |||||
Other liabilities | 134 | 90 | |||||
Total liabilities | 4,614 | 4,559 | |||||
Total stockholders' equity (1) | 8,875 | 8,694 | |||||
Total liabilities and stockholders' equity | $ | 13,489 | $ | 13,253 |