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The Medicines Company Reports Second Quarter and First Half 2012 Financial Results

Jul 25, 2012 (Marketwire via COMTEX) --The Medicines Company (NASDAQ: MDCO), a global pharmaceutical company focused on advancing the treatment of critical care patients through the delivery of innovative, cost-effective medicines, today announced second quarter and first half financial results for 2012. 

Financial highlights for the second quarter of 2012:

  • Net revenue increased by 13.5% to $135.7 million for the second quarter of 2012 from $119.6 million in the second quarter of 2011.
    • Angiomax U.S. sales increased by 8.2% to $121.2 million in the second quarter of 2012 compared to $112.0 million in the second quarter of 2011.
    • Angiomax/Angiox international net revenue in the second quarter of 2012 increased by 63.6% to $11.9 million compared with $7.3 million in the second quarter of 2011.
  • Net income for the second quarter of 2012 was $13.8 million, or $0.25 per share, compared with net income of $11.4 million, or $0.21 per share, for the second quarter of 2011.
  • Non-GAAP net income for the second quarter of 2012 was $25.7 million, or $0.46 per share, compared to non-GAAP net income of $13.2 million, or $0.24 per share for the second quarter 2011. Non-GAAP net income excludes stock-based compensation expense, non-cash interest expense and non-cash income taxes.

Financial highlights for the first half of 2012:

  • Net revenue increased by 13.2% to $262.3 million for the first half of 2012 from $231.7 million in the first half of 2011.
    • Angiomax U.S. sales increased by 9.1% to $236.7 million in the first half of 2012 compared with $217.0 million in the first half of 2011.
    • Angiomax/Angiox international net revenue in the first half of 2012 increased by 56.2% to $22.6 million compared with $14.4 million in the first half of 2011.
  • Net income for the first half of 2012 was $21.3 million, or $0.38 per share, compared with net income of $35.7 million, or $0.66 per share, for the first half of 2011. 
  • Non-GAAP net income for the first half of 2012 was $40.9 million, or $0.74 per share, compared with non-GAAP net income of $47.7 million, or $0.88 per share for the first half of 2011. Non-GAAP net income excludes stock-based compensation expense, non-cash interest expense and non-cash income taxes.

Glenn Sblendorio, President and Chief Financial Officer, stated, "For the first half of 2012, revenue growth has been robust with Europe a particular bright spot -- while we have kept worldwide SG&A costs stable. Since 2010, we have been realizing the operating leverage we anticipated. Our R&D projects are moving forward aggressively to drive toward answers on our critical Phase 3 trials of oritavancin and cangrelor."

The following table provides reconciliations between GAAP and non-GAAP net income for the second quarter (Q2) and first half (1H) of 2012 and 2011. Non-GAAP net income excludes the transaction charges related to stock-based compensation expense, non-cash interest expense and non-cash income taxes:

(millions)   Reported GAAP Net Income   Stock-Based Compensation Expense   Non-cash Interest Expense   Non-cash Provision (Benefit) for Income Taxes     Non-GAAP Net Income (1)
                                 
Q2 2012   $ 13.8   $ 4.2   $ 0.6   $ 7.2     $ 25.7
                                 
Q2 2011   $ 11.4   $ 3.2   $ -   $ (1.4 )   $ 13.2
                                 
1H 2012   $ 21.3   $ 7.3   $ 0.6   $ 11.7     $ 40.9
                                 
1H 2011   $ 35.7   $ 5.4   $ -   $ 6.6     $ 47.7
                     
Note: Amounts may not sum due to rounding.
(1)Excluding stock-based compensation expense, non-cash interest expense and the non-cash provision (benefit) for income taxes
                   

Reconciliations between GAAP and non-GAAP fully diluted earnings per share (EPS) for Q2 and 1H of 2012 and 2011 are provided in the following table:

(per share)   Reported GAAP EPS   Stock-Based Compensation Expense   Non-cash Interest Expense   Non-cash Provision (Benefit) for Income Taxes     Non-GAAP EPS (1)
                                 
Q2 2012   $ 0.25   $ 0.08   $ 0.01   $ 0.13     $ 0.46
                                 
Q2 2011   $ 0.21   $ 0.06   $ -   $ (0.03 )   $ 0.24
                                 
1H 2012   $ 0.38   $ 0.13   $ 0.01   $ 0.21     $ 0.74
                                 
1H 2011   $ 0.66   $ 0.10   $ -   $ 0.12     $ 0.88
                     
Note: Amounts may not sum due to rounding.
(1)Excluding stock-based compensation expense, non-cash interest expense and the non-cash provision (benefit) for income taxes
                   

The Company believes that presenting the non-GAAP information contained in the financial tables and in this press release assists investors and others in gaining a better understanding of the Company's core operating results and future prospects, expected growth rates or forecasted guidance, particularly as related to stock-based compensation expense and non-cash income taxes. Management uses this non-GAAP information, in addition to the GAAP information, as the basis for measuring the Company's core operating performance and comparing such performance to that of prior periods and to the performance of its competitors. Such measures are also used by management in its financial and operating decision-making. Non-GAAP information is not meant to be considered superior to or a substitute for the Company's results of operations prepared in accordance with GAAP. A reconciliation of GAAP results with non-GAAP results may also be found in the attached financial tables.

There will be a conference call with management today at 8:30 a.m. Eastern Time to discuss second quarter 2012 financial results and operational developments. The conference call will be available via phone and webcast. The webcast can be accessed at The Medicines Company website at www.themedicinescompany.com.

The dial in information is listed below:
Domestic Dial In: 800-659-2032
International Dial In: 617-614-2712
Passcode for both dial in numbers: 69019146

Replay is available from 10:30 a.m. Eastern Time following the conference call through August 8, 2012. To hear a replay of the call dial 888-286-8010 (domestic) and 617-801-6888 (international). Passcode for both dial in numbers is 72155180.

About The Medicines Company
The Medicines Company (NASDAQ: MDCO) provides medical solutions to improve health outcomes for patients in acute and intensive care hospitals worldwide. These solutions comprise medicines and knowledge that directly impact the survival and well being of critically ill patients. The Medicines Company's website is www.themedicinescompany.com.

Statements contained in this press release about The Medicines Company that are not purely historical, and all other statements 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" and "expects" and similar expressions, including the Company's preliminary revenue 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 the extent of the commercial success of Angiomax, the Company's ability to develop its global operations and penetrate foreign markets, whether the Company's products will advance in the clinical trials process on a timely basis or at all, 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 physicians, patients and other key decision makers will accept clinical trial results, risks associated with the establishment of international operations, whether the Company is able to obtain or maintain patent protection for the intellectual property relating to the Company's products; 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 on May 10, 2012, which are incorporated herein by reference. The Company specifically disclaims any obligation to update these forward-looking statements. 

The Medicines Company  
Condensed Consolidated Statements of Operations  
(unaudited)  
(in thousands, except per share data)   Three months ended June 30,  
    2012     2011  
         
Net revenue   $ 135,702     $ 119,591  
Operating expenses:                
  Cost of revenue     42,681       37,830  
  Research and development     32,962       26,536  
  Selling, general and administrative     40,467       41,420  
    Total operating expenses     116,110       105,786  
Income from operations     19,592       13,805  
  Co-promotion income     2,500       -  
  Interest expense     (784 )     -  
  Other income     697       61  
Income before income taxes     22,005       13,866  
Provision for income taxes     (8,251 )     (2,426 )
                 
Net income     13,754       11,440  
Net loss attributable to non-controlling interest     1       -  
Net income attributable to The Medicines Company   $ 13,755     $ 11,440  
                 
Basic earnings per common share attributable to The Medicines Company   $ 0.25     $ 0.21  
Shares used in computing basic earnings per common share     54,035       53,441  
                 
Diluted earnings per common share attributable to The Medicines Company   $ 0.25     $ 0.21  
Shares used in computing diluted earnings per common share     55,556       54,314  
                 
                 
                 
             
The Medicines Company  
Condensed Consolidated Statements of Operations  
(unaudited)  
             
(in thousands, except per share data)   Year to Date June 30,  
    2012     2011  
Net revenue   $ 262,312     $ 231,728  
Operating expenses:                
  Cost of revenue     81,344       73,400  
  Research and development     65,740       50,328  
  Selling, general and administrative     83,653       79,348  
    Total operating expenses     230,737       203,076  
Income from operations     31,575       28,652  
  Legal settlement     -       17,984  
  Co-promotion income     2,500       -  
  Interest expense     (784 )     -  
  Other income     759       872  
Income before income taxes     34,050       47,508  
Provision for income taxes     (12,725 )     (11,827 )
Net income     21,325       35,681  
Net loss attributable to non-controlling interest     1       -  
Net income attributable to The Medicines Company   $ 21,326     $ 35,681  
                 
Basic earnings per common share attributable to The Medicines Company   $ 0.39     $ 0.67  
Shares used in computing basic earnings per common share     54,036       53,343  
                 
Diluted earnings per common share attributable to The Medicines Company   $ 0.38     $ 0.66  
Shares used in computing diluted earnings per common share     55,614       54,223  
                 
                 
                 
           
  The Medicines Company
  Condensed Consolidated Balance Sheets
   
           
      June 30,   December 31,
  (in thousands)   2012   2011
      (unaudited)    
  ASSETS            
  Cash, cash equivalents and available for sales securities   $ 517,485   $ 340,512
  Accrued interest receivable     300     374
  Accounts receivable, net     65,664     74,559
  Inventory     47,202     45,145
  Deferred tax assets     9,395     9,395
  Prepaid expenses and other current assets     12,406     11,738
    Total current assets     652,452     481,723
               
  Fixed assets, net     16,916     17,979
  Intangible assets, net     121,835     87,329
  Restricted cash     2,697     4,714
  Deferred tax assets     74,547     78,441
  Goodwill     14,671     14,671
  Other assets     7,766     7,790
    Total assets   $ 890,884   $ 692,647
               
  LIABILITIES AND STOCKHOLDERS' EQUITY            
  Current liabilities   $ 116,365   $ 154,635
  Contingent purchase price     21,568     20,431
  Convertible senior notes (due 2017)     221,322     -
  Other Long Term Liabilities     6,028     5,939
  Stockholders' equity     525,601     511,642
    Total liabilities and stockholders' equity   $ 890,884   $ 692,647
                 
                 
                 
   
The Medicines Company  
Reconciliation of GAAP to non-GAAP Measures  
(All amounts in thousands, except per share amounts)  
(Unaudited)  
                                 
    Three Months Ended June 30  
    2012  
    GAAP(1)     Stock-Based Compensation       Non-cash
Interest Expense
    Non-cash
Tax Provision
    Non-GAAP(5)
As Adjusted
 
Net revenue   $ 135,702     $ -       $ -     $ -     $ 135,702  
                                           
Operating expenses:                                          
  Cost of revenue     42,681       (38 ) (2 )   -       -       42,643  
  Research and development     32,962       (480 ) (2 )   -       -       32,482  
  Selling, general and administrative     40,467       (3,663 ) (2 )   -       -       36,804  
    Total operating expenses     116,110       (4,181 )       -       -       111,929  
                                           
Income loss from operations     19,592       4,181         -       -       23,773  
  Co-promotion income     2,500       -         -       -       2,500  
  Interest expense     (784 )     -         577 (3 )   -       (207 )
  Other income     697       -         -       -       697  
Income before income taxes     22,005       4,181         577       -       26,763  
  (Provision) benefit for income taxes     (8,251 )     -         -       7,232 (4 )   (1,019 )
Net income     13,754       4,181         577       7,232       25,744  
Net loss attributable to non-controlling interest     1       -         -       -       1  
Net income attributable to The Medicines Company   $ 13,755     $ 4,181       $ 577     $ 7,232     $ 25,745  
                                           
Basic earnings per common share attributable to The Medicines Company   $ 0.25     $ 0.08       $ 0.01     $ 0.13     $ 0.48  
                                           
Shares used in computing basic earnings per common share     54,035       54,035         54,035       54,035       54,035  
                                           
Diluted earnings per common share attributable to The Medicines Company   $ 0.25     $ 0.08       $ 0.01     $ 0.13     $ 0.46  
                                           
Shares used in computing diluted earnings per common share     55,556       55,556         55,556       55,556       55,556  
                                           
Note: Amounts may not sum due to rounding.                                
(1) GAAP Results          
(2) Non-cash stock compensation expense          
(3) Non-cash interest expense          
(4) Non-cash income taxes          
(5) Non-GAAP Results          
           
                                 
                                 
The Medicines Company  
Reconciliation of GAAP to non-GAAP Measures  
(All amounts in thousands, except per share amounts)  
(Unaudited)  
                                 
    Six Months Ended June 30  
    2012  
    GAAP(1)     Stock-Based Compensation       Non-cash
Interest Expense
    Non-cash
Tax Provision
    Non-GAAP(5)
As Adjusted
 
Net revenue   $ 262,312     $ -       $ -     $ -     $ 262,312  
                                           
Operating expenses:                                          
  Cost of revenue     81,344       (73 ) (2 )   -       -       81,271  
  Research and development     65,740       (1,026 ) (2 )   -       -       64,714  
  Selling, general and administrative     83,653       (6,196 ) (2 )   -       -       77,457  
    Total operating expenses     230,737       (7,295 )       -       -       223,442  
                                           
Income from operations     31,575       7,295         -       -       38,870  
  Co-promotion income     2,500       -         -       -       2,500  
  Interest expense     (784 )     -         577 (3 )   -       (207 )
  Other income     759       -         -       -       759  
Income before income taxes     34,050       7,295         577       -       41,922  
  (Provision) benefit for income taxes     (12,725 )     -         -       11,706 (4 )   (1,019 )
Net income     21,325       7,295         577       11,706       40,903  
Net loss attributable to non-controlling interest     1       -         -       -       1  
Net income attributable to The Medicines Company   $ 21,326     $ 7,295       $ 577     $ 11,706     $ 40,904  
                                           
Basic earnings per common share attributable to The Medicines Company   $ 0.39     $ 0.14       $ 0.01     $ 0.22     $ 0.76  
                                           
Shares used in computing basic earnings per common share     54,036       54,036         54,036       54,036       54,036  
                                           
Diluted earnings per common share attributable to The Medicines Company   $ 0.38     $ 0.13       $ 0.01     $ 0.21     $ 0.74  
                                           
Shares used in computing diluted earnings per common share     55,614       55,614         55,614       55,614       55,614  
                                           
Note: Amounts may not sum due to rounding.  
(1) GAAP Results  
(2) Charge of $30,760 due to the termination of pre-existing relationship with Nycomed, offset by a write-off of deferred revenue previously recorded of $2,650  
(2) Non-cash stock compensation expense  
(3) Non-cash interest expense  
(4) Non-cash income taxes  
(5) Non-GAAP Results  
                                           
                                           
                                 
                                 
The Medicines Company  
Reconciliation of GAAP to non-GAAP Measures  
(All amounts in thousands, except per share amounts)  
(Unaudited)  
                                 
    Three Months Ended June 30  
    2011  
    GAAP (1)     Stock-Based Compensation       Non-cash
Interest Expense
  Non-cash
Tax Provision
      Non-GAAP(4)
As Adjusted
 
Net revenue   $ 119,591     $ -       $ -   $ -       $ 119,591  
                                           
Operating expenses:                                          
  Cost of revenue     37,830       (35 ) (2 )   -     -         37,795  
  Research and development     26,536       (531 ) (2 )   -     -         26,005  
  Selling, general and administrative     41,420       (2,648 ) (2 )   -     -         38,772  
    Total operating expenses     105,786       (3,214 )       -     -         102,572  
                                           
Income from operations     13,805       3,214         -     -         17,019  
                                           
  Legal settlement     -       -                         -  
  Other income     61       -         -     -         61  
  Income before income taxes     13,866       3,214         -     -         17,080  
  Provision for income taxes     (2,426 )     -         -     (1,437 ) (3 )   (3,863 )
Net income (loss)   $ 11,440     $ 3,214       $ -   $ (1,437 )     $ 13,217  
                                           
Basic earnings (loss) per common share   $ 0.21     $ 0.06       $ -   $ (0.03 )     $ 0.25  
                                           
Shares used in computing basic earnings (loss) per common share     53,441       53,441         53,441     53,441         53,441  
                                           
Diluted earnings (loss) per common share   $ 0.21     $ 0.06       $ -   $ (0.03 )     $ 0.24  
                                           
Shares used in computing diluted earnings (loss) per common share     54,314       54,314         54,314     54,314         54,314  
                                           
                                           
(1) GAAP Results  
(2) Non-cash stock compensation expense  
(3) Non-cash income taxes  
(4) Non-GAAP Results  
                                           
                                           
                                 
                                 
                                 
The Medicines Company  
Reconciliation of GAAP to non-GAAP Measures  
(All amounts in thousands, except per share amounts)  
(Unaudited)  
                                 
    Six Months Ended June 30  
    2011  
    GAAP(1)
As Reported
    Stock-Based Compensation         Non-cash
Interest Expense
  Non-cash
Tax Provision
    Non-GAAP(4)
As Adjusted
 
Net revenue   $ 231,728     $ -         $ -   $ -     $ 231,728  
                                           
Costs and expenses:                                          
  Cost of revenue     73,400       (78 ) (2 )     -     -       73,322  
  Research and development     50,328       (959 ) (2 )     -     -       49,369  
  Selling, general and administrative     79,348       (4,438 ) (2 )     -     -       74,910  
    Total operating expenses     203,076       (5,475 )         -     -       197,601  
                                           
Income from operations     28,652       5,475           -     -       34,127  
                                           
  Legal settlement     17,984                                 17,984  
  Other income     872       -           -     -       872  
  Income before income taxes     47,508       5,475           -     -       52,983  
  (Provision) benefit for income taxes     (11,827 )     -           -     6,554 (3 )   (5,273 )
Net income   $ 35,681     $ 5,475         $ -   $ 6,554     $ 47,710  
                                           
Basic earnings per common share   $ 0.67     $ 0.10         $ -   $ 0.12     $ 0.89  
                                           
Shares used in computing basic earnings per common share     53,343       53,343           53,343     53,343       53,343  
                                           
Diluted earnings per common share   $ 0.66     $ 0.10         $ -   $ 0.12     $ 0.88  
                                           
Shares used in computing diluted earnings per common share     54,223       54,223           54,223     54,223       54,223  
                                           
                                           
(1) GAAP Results  
(2) Non-cash stock compensation expense  
(3) Non-cash income taxes  
(4) Non-GAAP Results  
Contact:
        Michael Mitchell
        The Medicines Company
        973-290-6000
        investor.relations@themedco.com