[April 22, 2014] |
|
Cubist Pharmaceuticals Reports First Quarter 2014 Financial Results
LEXINGTON, Mass. --(Business Wire)--
Cubist
Pharmaceuticals, Inc. (NASDAQ: CBST) today announced results for the
first quarter ended March 31, 2014. The Company will host a conference
call and webcast today at 5:00 p.m. ET (details below).
Financial highlights for the first quarter of 2014 (unaudited):
-
Q1 2014 total net revenues were $261.2 million, up 14% compared to
$229.9 million in Q1 2013.
-
U.S. CUBICIN® (daptomycin for injection) net product
revenues increased 5% to $212.2 million from $202.0 million in Q1
2013. CUBICIN international revenues were $16.4 million compared to
$12.4 million in Q1 2013.
-
Non-GAAP adjusted operating income was $18.8 million compared to $42.2
million in the first quarter of 2013. GAAP operating income was $28.3
million compared to $9.8 million in the first quarter of 2013.
-
Non-GAAP diluted earnings per share (EPS) was $0.10 compared to $0.34
in the first quarter of 2013. GAAP diluted EPS was $0.30 compared to
$0.09 in the first quarter of 2013.
"As we focus this year on executing against several important regulatory
milestones and corporate initiatives, we were very pleased with the FDA
Advisory Committee's unanimous recommendation for the approval of
SIVEXTRO," said Michael Bonney, CEO of Cubist. "We have submitted our
new drug application to the FDA for ceftolozane/tazobactam in
complicated urinary tract infections and complicated intra-abdominal
infections and now have the potential for two promising antibiotic
candidates to be approved in the U.S. this year. We have also made great
progress on the build-out of our European commercial organization. We
have never been more committed, nor better positioned, to arm physicians
and their patients across the globe with new treatment options to fight
the rising tide of serious and life-threatening pathogens."
First quarter ENTEREG® (alvimopan) net product revenues were
$13.9 million, up 24% compared to $11.2 million in the first quarter of
2013. First quarter U.S. DIFICID® (fidaxomicin) net product
revenues were $14.4 million, compared to $16.6 million in the same
period last year, which were recorded by Optimer Pharmaceuticals, Inc.
(Optimer) prior to Cubist's acquisition of Optimer in October 2013.
As of March 31, 2014, Cubist had $566.0 million in cash, cash
equivalents and investments. The total number of Cubist's common shares
outstanding as of March 31, 2014, was 75,260,018.
Recent Pipeline and Corporate Highlights
-
On April 21, Cubist submitted a New Drug Application (NDA) to the U.S.
Food and Drug Administration (FDA) for approval of its investigational
antibiotic ceftolozane/tazobactam in complicated urinary tract and
complicated intra-abdominal infections. In the second half of 2014,
the Company plans to submit a Marketing Authorization Application
(MAA) to the European Medicines Agency (EMA) in these indications.
Ceftolozane/tazobactam is being developed to treat certain
Gram-negative infections, including those caused by Pseudomonas
aeruginosa, as well as extended-spectrum beta-lactamase
(ESBL)-producing Escherichia coli (E. coli), Klebsiella
pneumoniae, and other Enterobacteriaceae. Detailed Phase 3 data
will be presented at the European Congress of Clinical Microbiology
and Infectious Diseases to be held in May 2014.
-
On April 1, Cubist appointed Robert J. Perez, President and Chief
Operating Officer of Cubist, to its Board of Directors and announced
that in accordance with its Corporate Governance Guidelines regarding
term limits, three Board members, Dr. Michael B. Wood, Dr. Martin
Rosenberg, and J. Matthew Singleton, notified the Company of their
intent to retire from the Board effective at the Company's 2014 Annual
Meeting of Stockholders.
-
On March 31, Cubist announced that the FDA Anti-Infective Drugs
Advisory Committee (AIDAC) recommended by a vote of 14-0 approval of
the Company's investigational antibiotic SIVEXTRO™ (tedizolid
phosphate) for the treatment of acute bacterial skin and skin
structure infections. The AIDAC recommendation is not binding on the
FDA, but will help inform the FDA as it completes its Priority Review
of the New Drug Application for SIVEXTRO, which has an assigned action
date of June 20, 2014. Additionally, the European Medicines Agency
accepted for review Cubist's Marketing Authorization Application for
SIVEXTRO for the treatment of complicated skin and soft tissue
infections. A decision from the European Commission is expected during
the first half of 2015.
-
On January 14, Cubist received approval from the Dutch Competent
Authority and Ethics Committee to initiate a first-in-human study of
CB-618. CB-618 is a novel, broad-spectrum beta-lactamase inhibitor
(BLI) investigational compound. Cubist plans to conduct a
first-in-human study of CB-618 in the Netherlands during the first
half of 2014. Part of a research approach by Cubist to identify new
BLIs to combat multidrug resistance in Gram-negative pathogens,
CB-618, assuming clinical and regulatory success, could help combat
resistance to certain beta-lactam antibiotics and treat serious
infections, such as those caused by carbapenem-resistant bacteria,
including carbapenem-resistant Enterobacteriaceae (CRE).
Use of Non-GAAP Financial Measures Cubist has presented
certain non-GAAP financial measures, including non-GAAP adjusted
operating income, non-GAAP net income, non-GAAP diluted earnings per
share, non-GAAP cost of product revenues, non-GAAP R&D expenses,
non-GAAP SG&A expenses, non-GAAP other income (expense) and non-GAAP
provision for income taxes. These non-GAAP financial measures exclude
certain amounts, expenses or income, from the corresponding financial
measures determined in accordance with accounting principles generally
accepted in the U.S. (GAAP). Management believes this non-GAAP
information is useful for investors, taken in conjunction with Cubist's
GAAP financial statements, because it provides greater transparency
regarding Cubist's operating performance. Management uses these
measures, among other factors, to assess and analyze operational results
and trends and to make financial and operational decisions. Non-GAAP
information is not prepared under a comprehensive set of accounting
rules and should only be used to supplement an understanding of Cubist's
operating results as reported under GAAP, not as a substitute for GAAP.
In addition, these non-GAAP financial measures are unlikely to be
comparable with non-GAAP information provided by other companies. The
determination of the amounts that are excluded from non-GAAP financial
measures is a matter of management judgment and depends upon, among
other factors, the nature of the underlying expense or income amounts.
Reconciliations between these non-GAAP financial measures and the most
comparable GAAP financial measures are included in the tables
accompanying this press release after the unaudited condensed
consolidated financial statements.
***********************CONFERENCE CALL & WEBCAST
INFORMATION***********************
CUBIST Q1 2014 FINANCIAL RESULTS Tuesday, April 22, 2014 at 5:00 pm
ET
U.S./Canada Attendee Dial-in: (855) 319-7654 International Attendee
Dial-in: (484) 756-4327 Conference ID: 12504774
24-HOUR REPLAY U.S./CANADA: (855) 859-2056 24-HOUR REPLAY
INTERNATIONAL: (404) 537-3406 Conference ID: 12504774
CALL WILL ALSO BE BROADCAST LIVE, LISTEN ONLY, VIA THE WEB AT: https://cubist.webex.com/cubist/onstage/g.php?t=a&d=629311873 Attendee
Password: 04222014
Replay will be available for 90 days at www.cubist.com
*********************************************************************************
About Cubist Cubist Pharmaceuticals, Inc. is a global
biopharmaceutical company focused on the research, development, and
commercialization of pharmaceutical products that address significant
unmet medical needs in the acute care environment. Cubist is
headquartered in Lexington, Massachusetts, with a central international
office located in Zurich, Switzerland. Additional information can be
found at Cubist's web site at www.cubist.com.
Also, connect with Cubist on Twitter @cubistbiopharma
and @cubistcareers,
LinkedIn,
or YouTube.
Cubist Safe Harbor Statement This
press release contains forward-looking statements. Any statements
contained herein which do not describe historical facts, including but
not limited to, statements regarding: our expected first quarter 2014
financial results; our execution against our short term milestones and
initiatives; our progress expanding our international operations; the
FDA's final review of and decision on our SIVEXTRO NDA submission,
including that the AIDAC recommendation will help inform the FDA's
review; the expected timing of the FDA's action date for our SIVEXTRO
NDA submission and for the European Commission (EC) reaching a decision
on our MAA for SIVEXTRO; the potential for two of our antibiotic
candidates to be approved in the U.S. in 2014; the expected timing for
submitting an MAA for ceftolozane/tazobactam to the EMA and for
presenting detailed ceftolozane/tazobactam Phase 3 data in Europe; the
therapeutic potential of our product candidates, including SIVEXTRO,
ceftolozane/tazobactam and CB-618; and the expected timing for
commencing our planned clinical study of CB-618, are forward-looking
statements which involve risks and uncertainties that could cause actual
results to differ materially from those discussed in such
forward-looking statements. Such risks and uncertainties include, among
others: the risk that our final first quarter 2014 financial results
will differ materially from our expected results disclosed in this
release; that the FDA's review and decision on our SIVEXTRO NDA
submission may be affected by issues not discussed by the AIDAC and the
FDA is not bound by and may not agree with the AIDAC's recommendation;
regulatory developments in the U.S. and Europe, including the risk that
the FDA, EMA, EC and other foreign regulatory authorities may not agree
with our interpretation of the results from the clinical studies of
SIVEXTRO and/or ceftolozane/tazobactam, may not approve on a timely
basis or at all, our marketing authorization applications for SIVEXTRO
and/or ceftolozane/tazobactam or may require additional data, analysis,
information or further studies that may not be clinically feasible or
financially practicable; our ability to achieve our strategic milestones
and initiatives, including as a result of our ability to continue to
grow revenues from the sale of CUBICIN, DIFICID and ENTEREG, generic and
other competition, manufacturing issues, our ability to successfully
develop, gain marketing approval for and commercially launch our product
candidates for their planned indications and on their expected
timelines, and our ability to discover, in-license or acquire new
products and product candidates; any marketing approval for SIVEXTRO
and/or ceftolozane/tazobactam may impose significant limitations on its
use and additional post-marketing requirements; our ability to obtain
adequate pricing and reimbursement levels for SIVEXTRO and/or
ceftolozane/tazobactam; our ability to successfully commercialize
SIVEXTRO and/or ceftolozane/tazobactam; competitive risks from current
and future therapeutic alternatives to SIVEXTRO and/or
ceftolozane/tazobactam; our ability to maintain and enforce intellectual
property protection for SIVEXTRO, ceftolozane/tazobactam and/or CB-618;
additional clinical trials of SIVEXTRO, ceftolozane/tazobactam and/or
CB-618, may produce negative or inconclusive results or may not be
initiated or conducted in a timely manner; technical difficulties or
excessive costs relating to the manufacture or supply of SIVEXTRO,
ceftolozane/tazobactam and/or CB-618, including our ability to work with
our third party contract manufacturers that manufacture and supply these
product candidates on our behalf; our ability to work with, and the
performance of our third party contract research organizations that help
us conduct our clinical trials; we may encounter other unanticipated or
unexpected risks with respect to the development or manufacture of
SIVEXTRO, ceftolozane/tazobactam and/or CB-618; the fact that drug
discovery and development is complex, time consuming, expensive and
fraught with a high risk of failure; and those additional factors
discussed in our most recent Annual Report on Form 10-K with the
Securities and Exchange Commission. We caution investors not to place
considerable reliance on the forward-looking statements contained in
this press release. These forward-looking statements speak only as of
the date of this document, and we undertake no obligation to update or
revise any of these statements.
|
|
CUBIST PHARMACEUTICALS, INC.
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
UNAUDITED
|
(in thousands)
|
|
|
|
|
|
March 31, 2014
|
|
|
December 31, 2013
|
ASSETS
|
Cash, cash equivalents and investments
|
|
|
|
$
|
566,011
|
|
|
|
$
|
578,558
|
Accounts receivable, net
|
|
|
|
101,172
|
|
|
|
123,155
|
Inventory
|
|
|
|
124,210
|
|
|
|
116,829
|
Property and equipment, net
|
|
|
|
176,963
|
|
|
|
177,544
|
Deferred tax assets, net
|
|
|
|
84,574
|
|
|
|
52,108
|
In-process research and development
|
|
|
|
896,400
|
|
|
|
896,400
|
Goodwill
|
|
|
|
383,018
|
|
|
|
383,018
|
Other intangible assets, net
|
|
|
|
704,881
|
|
|
|
721,066
|
Other assets
|
|
|
|
95,200
|
|
|
|
97,143
|
Total assets
|
|
|
|
$
|
3,132,429
|
|
|
|
$
|
3,145,821
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
Accounts payable and accrued liabilities
|
|
|
|
$
|
210,379
|
|
|
|
$
|
276,955
|
Deferred tax liabilities, net
|
|
|
|
383,716
|
|
|
|
357,802
|
Deferred revenue
|
|
|
|
36,354
|
|
|
|
37,421
|
Contingent consideration
|
|
|
|
190,004
|
|
|
|
223,322
|
Debt and other liabilities, net
|
|
|
|
864,601
|
|
|
|
856,590
|
Total liabilities
|
|
|
|
1,685,054
|
|
|
|
1,752,090
|
Total stockholders' equity
|
|
|
|
1,447,375
|
|
|
|
1,393,731
|
Total liabilities and stockholders' equity
|
|
|
|
$
|
3,132,429
|
|
|
|
$
|
3,145,821
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CUBIST PHARMACEUTICALS, INC.
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
UNAUDITED
|
(in thousands, expect share and per share data)
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
2014
|
|
|
2013
|
Revenues:
|
|
|
|
|
|
|
|
U.S. CUBICIN product revenues, net
|
|
|
|
$
|
212,184
|
|
|
|
$
|
202,045
|
|
U.S. DIFICID product revenues, net
|
|
|
|
14,353
|
|
|
|
-
|
|
U.S. ENTEREG product revenues, net
|
|
|
|
13,921
|
|
|
|
11,203
|
|
Total U.S. product revenues, net
|
|
|
|
240,458
|
|
|
|
213,248
|
|
International product revenues
|
|
|
|
17,027
|
|
|
|
12,403
|
|
Service revenues
|
|
|
|
-
|
|
|
|
3,624
|
|
Other revenues
|
|
|
|
3,748
|
|
|
|
654
|
|
Total revenues, net
|
|
|
|
261,233
|
|
|
|
229,929
|
|
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
Cost of product revenues
|
|
|
|
73,541
|
|
|
|
55,675
|
|
Research and development expense
|
|
|
|
120,603
|
|
|
|
114,209
|
|
Contingent consideration (income) expense
|
|
|
|
(33,318
|
)
|
|
|
2,053
|
|
Selling, general and administrative expense
|
|
|
|
69,662
|
|
|
|
48,201
|
|
Restructuring charges
|
|
|
|
2,439
|
|
|
|
-
|
|
Total costs and expenses
|
|
|
|
232,927
|
|
|
|
220,138
|
|
Operating income
|
|
|
|
28,306
|
|
|
|
9,791
|
|
Total other expense (income), net
|
|
|
|
14,087
|
|
|
|
6,202
|
|
Income before income taxes
|
|
|
|
14,219
|
|
|
|
3,589
|
|
Benefit from income taxes
|
|
|
|
(10,014
|
)
|
|
|
(2,499
|
)
|
Net income
|
|
|
|
$
|
24,233
|
|
|
|
$
|
6,088
|
|
|
|
|
|
|
|
|
|
Basic net income per common share
|
|
|
|
$
|
0.32
|
|
|
|
$
|
0.09
|
|
Diluted net income per common share
|
|
|
|
$
|
0.30
|
|
|
|
$
|
0.09
|
|
|
|
|
|
|
|
|
|
Shares used in calculating:
|
|
|
|
|
|
|
|
Basic net income per common share
|
|
|
|
74,934,776
|
|
|
|
64,935,601
|
|
Diluted net income per common share
|
|
|
|
85,596,348
|
|
|
|
67,034,457
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CUBIST PHARMACEUTICALS, INC.
|
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
|
UNAUDITED
|
(in thousands)
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
Operating income reconciliation: 1
|
|
|
|
|
|
|
|
GAAP operating income
|
|
|
|
$
|
28,306
|
|
|
|
$
|
9,791
|
Cost of product revenues adjustments 1
|
|
|
|
15,984
|
|
|
|
5,387
|
Research and development expense adjustments 1
|
|
|
|
4,722
|
|
|
|
25,000
|
Contingent consideration (income) expense
|
|
|
|
(33,318
|
)
|
|
|
2,053
|
Selling, general and administrative expense adjustments 1
|
|
|
|
661
|
|
|
|
-
|
Restructuring charges
|
|
|
|
2,439
|
|
|
|
-
|
Non-GAAP adjusted operating income
|
|
|
|
$
|
18,794
|
|
|
|
$
|
42,231
|
Non-GAAP other expense (income) 2
|
|
|
|
5,664
|
|
|
|
2,595
|
Non-GAAP provision for income taxes 2
|
|
|
|
5,329
|
|
|
|
13,465
|
Non-GAAP net income
|
|
|
|
$
|
7,801
|
|
|
|
$
|
26,171
|
|
|
|
|
|
|
|
|
|
|
|
1 Detail on the adjustments included herein is provided in
the tables below. 2 A reconciliation to the most
comparable GAAP financial measure is included in the tables below.
|
|
CUBIST PHARMACEUTICALS, INC.
|
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
|
UNAUDITED
|
(in thousands, except percentages)
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
2014
|
|
|
2013
|
Cost of product revenues reconciliation:
|
|
|
|
|
|
|
|
GAAP cost of product revenues
|
|
|
|
$
|
73,541
|
|
|
|
$
|
55,675
|
|
Intangible asset amortization
|
|
|
|
(14,738
|
)
|
|
|
(4,424
|
)
|
Inventory fair value step-up
|
|
|
|
(1,246
|
)
|
|
|
(963
|
)
|
Non-GAAP cost of product revenues
|
|
|
|
$
|
57,557
|
|
|
|
$
|
50,288
|
|
|
|
|
|
|
|
|
|
Product gross margin reconciliation:
|
|
|
|
|
|
|
|
GAAP product gross margin
|
|
|
|
71.4
|
%
|
|
|
75.3
|
%
|
Intangible asset amortization
|
|
|
|
5.7
|
%
|
|
|
2.0
|
%
|
Inventory fair value step-up
|
|
|
|
0.5
|
%
|
|
|
0.4
|
%
|
Non-GAAP product gross margin
|
|
|
|
77.6
|
%
|
|
|
77.7
|
%
|
|
|
|
|
|
|
|
|
Research and development expenses reconciliation:
|
|
|
|
|
|
|
|
GAAP research and development expenses
|
|
|
|
$
|
120,603
|
|
|
|
$
|
114,209
|
|
Acquisition-related expenses
|
|
|
|
(3,905
|
)
|
|
|
-
|
|
Intangible asset amortization
|
|
|
|
(817
|
)
|
|
|
-
|
|
Upfront license fees
|
|
|
|
-
|
|
|
|
(25,000
|
)
|
Non-GAAP research and development expenses
|
|
|
|
$
|
115,881
|
|
|
|
$
|
89,209
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses reconciliation:
|
|
|
|
|
|
|
|
GAAP selling, general and administrative expenses
|
|
|
|
$
|
69,662
|
|
|
|
$
|
48,201
|
|
Acquisition-related expenses
|
|
|
|
(661
|
)
|
|
|
-
|
|
Non-GAAP selling, general and administrative expenses
|
|
|
|
$
|
69,001
|
|
|
|
$
|
48,201
|
|
|
|
|
|
|
|
|
|
Other (income) expense reconciliation:
|
|
|
|
|
|
|
|
GAAP other (income) expense
|
|
|
|
$
|
14,087
|
|
|
|
$
|
6,202
|
|
Non-cash debt discount amortization
|
|
|
|
(8,423
|
)
|
|
|
(3,607
|
)
|
Non-GAAP other (income) expense
|
|
|
|
$
|
5,664
|
|
|
|
$
|
2,595
|
|
|
|
|
|
|
|
|
|
Provision (benefit) for income taxes:
|
|
|
|
|
|
|
|
GAAP benefit for income taxes
|
|
|
|
$
|
(10,014
|
)
|
|
|
$
|
(2,499
|
)
|
Tax adjustment
|
|
|
|
15,343
|
|
|
|
15,964
|
|
Non-GAAP provision for income taxes
|
|
|
|
$
|
5,329
|
|
|
|
$
|
13,465
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CUBIST PHARMACEUTICALS, INC.
|
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
|
UNAUDITED
|
(in thousands, except share and per share amounts)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of non-GAAP net income:
|
|
|
|
|
|
|
|
|
|
GAAP net income
|
|
|
|
$
|
24,233
|
|
|
|
|
$
|
6,088
|
|
|
Non-cash debt discount amortization
|
|
|
|
8,423
|
|
|
|
|
3,607
|
|
|
Intangible asset amortization
|
|
|
|
15,555
|
|
|
|
|
4,424
|
|
|
Inventory fair value step-up
|
|
|
|
1,246
|
|
|
|
|
963
|
|
|
Restructuring charges
|
|
|
|
2,439
|
|
|
|
|
-
|
|
|
Acquisition-related expenses
|
|
|
|
4,566
|
|
|
|
|
-
|
|
|
Upfront license fees
|
|
|
|
-
|
|
|
|
|
25,000
|
|
|
Contingent consideration (income) expense
|
|
|
|
(33,318
|
)
|
|
|
|
2,053
|
|
|
Tax adjustment
|
|
|
|
(15,343
|
)
|
|
|
|
(15,964
|
)
|
|
Non-GAAP net income
|
|
|
|
$
|
7,801
|
|
|
|
|
$
|
26,171
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of diluted earnings per common share:
|
|
|
|
|
|
|
|
|
|
GAAP diluted earnings per common share
|
|
|
|
$
|
0.30
|
|
|
|
|
$
|
0.09
|
|
|
Non-GAAP dilutive adjustments
|
|
|
|
(0.20
|
)
|
1
|
|
|
0.25
|
|
1
|
Non-GAAP diluted earnings per common share
|
|
|
|
$
|
0.10
|
|
|
|
|
$
|
0.34
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of shares used in diluted earnings per common
share calculation:
|
|
|
|
|
|
|
|
|
|
GAAP shares used in diluted earnings per common share
|
|
|
|
74,934,776
|
|
|
|
|
64,935,601
|
|
|
Non-GAAP dilutive share adjustments
|
|
|
|
2,818,629
|
|
2
|
|
|
17,523,008
|
|
3
|
Non-GAAP shares used in diluted earnings per common share
|
|
|
|
77,753,405
|
|
|
|
|
82,458,609
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Includes impact of non-GAAP adjustments from GAAP net
income to non-GAAP net income and add back of interest expense and debt
issuance costs on Cubist's outstanding convertible notes, net of tax
effect 2. Additional dilutive weighted average shares
issuable upon exercise or vesting of Cubist's outstanding equity awards 3.
Additional dilutive weighted average shares issuable upon conversion of
Cubist's outstanding convertible notes and exercise or vesting of
Cubist's outstanding equity awards
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