- Total Revenues of
$3.084 Billion , an 18% Increase Over 2015 and 22% Volume Increase - Global Soliris® Revenue Growth Driven by Steady Number of New Patients with PNH and aHUS
- Strensiq® and Kanuma® Global Launches Progress With New Patients Starting on Treatment
- Filed Regulatory Submissions for Soliris in Patients with Refractory gMG in the
U.S. andEurope - ALXN1210 Phase 3 Studies Underway in Patients with PNH and aHUS
Alexion Board Increases Authorized Share Repurchase to a Total of$1 Billion
Total revenues in the fourth quarter grew to
"In 2016 the global
Full Year 2016 Financial Highlights
- Soliris® (eculizumab) net product sales were
$2,843 million , compared to$2,591 million in 2015. - Strensiq® (asfotase alfa) net product sales were
$210 million , compared to$12 million in 2015. - Kanuma® (sebelipase alfa) net product sales were
$29 million . - GAAP R&D expense was
$757 million , compared to$709 million in 2015. Non-GAAP R&D expense was$690 million , compared to$515 million in 2015. - GAAP SG&A expense was
$954 million , compared to$863 million in 2015. Non-GAAP SG&A expense was$830 million , compared to$707 million in 2015. - GAAP diluted EPS was
$1.76 per share, compared to$0.67 per share in 2015. Non-GAAP diluted EPS was$4.62 per share. Non-GAAP diluted EPS was$4.65 per share in 2015, reflecting a reduction of$0.34 per share to conform to the current non-GAAP income tax expense definition.
Fourth Quarter 2016 Financial Highlights
- Soliris® net product sales were
$749 million , compared to$689 million in the fourth quarter of 2015. - Strensiq® net product sales were
$71 million , compared to$12 million in the fourth quarter of 2015. - Kanuma® net product sales were
$11 million . - GAAP R&D expense was
$206 million , compared to$191 million in the same quarter last year. Non-GAAP R&D expense was$186 million , compared to$155 million in the same quarter last year. - GAAP SG&A expense was
$259 million , compared to$242 million in the same quarter last year. Non-GAAP SG&A expense was$234 million , compared to$198 million in the same quarter last year. - GAAP diluted EPS was
$0.41 per share, compared to$0.29 per share in the same quarter last year. Non-GAAP diluted EPS was$1.26 per share. Non-GAAP diluted EPS was$1.04 per share in the fourth quarter of 2015, reflecting a reduction of$0.09 per share to conform to the current non-GAAP income tax expense definition. - During the fourth quarter, the Company recognized an impairment charge of
$85 million related to SBC-103, an early stage, clinical indefinite-lived intangible asset from the Synageva acquisition. This charge was taken as a result of a strategic evaluation of the asset, increases in the development and commercial timelines, and updated cash flows. InFebruary 2017 ,Alexion decided to reduce its investment in SBC-103. Patients currently enrolled in the Phase 1/2 trial will continue to receive SBC-103, and no additionalAlexion studies are planned.Alexion will reassess the value of this asset on a go forward basis.
Share Repurchase Authorization
The Company also announced that its Board of Directors has increased the size of the Company's share repurchase authorization to a total of
Product and Pipeline Updates
Complement Portfolio
- Eculizumab- Refractory Generalized Myasthenia Gravis (gMG):
Alexion has filed regulatory submissions for eculizumab for the treatment of patients with refractory gMG in boththe United States andEurope . - 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. - Eculizumab- Delayed Graft Function (DGF): In
December 2016 ,Alexion announced that the PROTECT study, a single, multinational, placebo-controlled trial of eculizumab in the prevention of DGF, did not meet its primary endpoint. - 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. To broaden the PNH program,
Alexion is also initiating a Phase 3 PNH switch study of ALXN1210 administered intravenously every eight weeks compared to patients currently treated with Soliris.Alexion expects to complete enrollment in both studies in 2017. - ALXN1210- aHUS: Recruitment is underway 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.
Metabolic Portfolio
- SBC-103: In
February 2017 ,Alexion decided to reduce its investment in SBC-103, a recombinant form of the NAGLU enzyme being evaluated in patients with mucopolysaccharidosis IIIB, or MPS IIIB. Patients currently enrolled in the Phase 1/2 study will continue to receive SBC-103, and no additionalAlexion studies are planned. - cPMP Replacement Therapy (ALXN1101):
Alexion is enrolling patients in a pivotal study to evaluate ALXN1101 in neonates with Molybdenum Cofactor Deficiency (MoCD) Type A.
Immuno-Oncology Program
- Samalizumab (ALXN6000): Samalizumab is a first-in-class immunomodulatory humanized monoclonal antibody that blocks the key immune checkpoint protein, CD200.
Alexion has initiated a Phase 1 study of samalizumab in patients with advanced solid tumors. Patients are also being dosed inThe 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).
2017 Financial Guidance
GAAP Guidance | Non-GAAP Guidance | |||
Total revenues | ||||
Soliris revenues | ||||
Metabolic revenues | ||||
Research and development expense (% total revenues) | 24% to 27% | 22% to 23% | ||
Selling, general and administrative expense (% total revenues) | 29% to 30% | 25% to 26% | ||
Operating margin |
25% to 28% | 43% to 44% | ||
Earnings per share |
Alexion's 2017 financial guidance is based on current foreign exchange rates net of hedging activities and does not include the effect of business combinations, license and collaboration agreements, asset acquisitions, intangible asset impairments, changes in fair value of contingent consideration or restructuring activity that may occur after the day prior to the date of this press release.
Conference Call/Webcast Information:
About
[ALXN-E]
This press release contains forward-looking statements, including statements related to guidance regarding anticipated financial results for 2017, assessment of the Company's commercialization efforts and commercial potential for Soliris, Strensiq and Kanuma, medical and commercial potential of each of
In addition to financial information prepared in accordance with GAAP, this press release also contains non-GAAP financial measures that
(Tables Follow)
TABLE 1: CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
(in millions, except per share amounts) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three months ended | Twelve months ended | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Net product sales | $ | 831 | $ | 701 | $ | 3,082 | $ | 2,603 | ||||||||
Other revenue | - | - | 2 | 1 | ||||||||||||
Total revenues | 831 | 701 | 3,084 | 2,604 | ||||||||||||
Cost of sales | 68 | 58 | 258 | 233 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 206 | 191 | 757 | 709 | ||||||||||||
Selling, general and administrative | 259 | 242 | 954 | 863 | ||||||||||||
Amortization of purchased intangible assets | 80 | 80 | 322 | 117 | ||||||||||||
Change in fair value of contingent consideration | 5 | 19 | 36 | 64 | ||||||||||||
Acquisition-related costs | - | 3 | 2 | 39 | ||||||||||||
Restructuring expenses | 1 | 11 | 3 | 42 | ||||||||||||
Impairment of intangible assets | 85 | - | 85 | - | ||||||||||||
Total operating expenses | 636 | 546 | 2,159 | 1,834 | ||||||||||||
Operating income | 127 | 97 | 667 | 537 | ||||||||||||
Other income and expense: | ||||||||||||||||
Investment income | 3 | 1 | 11 | 8 | ||||||||||||
Interest expense | (25 | ) | (23 | ) | (97 | ) | (48 | ) | ||||||||
Foreign currency (loss) gain | (1 | ) | (1 | ) | (5 | ) | 1 | |||||||||
Income before income taxes | 104 | 74 | 576 | 498 | ||||||||||||
Income tax expense | 11 | 7 | 177 | 354 | ||||||||||||
Net income | $ | 93 | $ | 67 | $ | 399 | $ | 144 | ||||||||
Earnings per common share | ||||||||||||||||
Basic | $ | 0.41 | $ | 0.30 | $ | 1.78 | $ | 0.68 | ||||||||
Diluted | $ | 0.41 | $ | 0.29 | $ | 1.76 | $ | 0.67 | ||||||||
Shares used in computing earnings per common share | ||||||||||||||||
Basic | 225 | 225 | 224 | 213 | ||||||||||||
Diluted | 226 | 228 | 227 | 216 |
TABLE 2: RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS | |||||||||||||||||
(in millions, except per share amounts) | |||||||||||||||||
(unaudited) | |||||||||||||||||
Three months ended | Twelve months ended | ||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
GAAP net income | $ | 93 | $ | 67 | $ | 399 | $ | 144 | |||||||||
Before tax adjustments: | |||||||||||||||||
Cost of sales: | |||||||||||||||||
Share-based compensation | 3 | 3 | 11 | 7 | |||||||||||||
Fair value adjustment of inventory acquired (1) | 2 | - | 11 | - | |||||||||||||
Research and development expense: | |||||||||||||||||
Share-based compensation | 14 | 21 | 57 | 64 | |||||||||||||
Upfront and milestone payments related to license and collaboration agreements | 6 | 15 | 10 | 130 | |||||||||||||
Selling, general and administrative expense: | |||||||||||||||||
Share-based compensation | 25 | 44 | 124 | 156 | |||||||||||||
Amortization of purchased intangible assets (2) | 80 | 80 | 322 | 117 | |||||||||||||
Change in fair value of contingent consideration | 5 | 18 | 36 | 64 | |||||||||||||
Acquisition-related costs (3) | - | 3 | 2 | 39 | |||||||||||||
Restructuring expenses | 1 | 12 | 3 | 42 | |||||||||||||
Impairment of intangible assets (4) | 85 | - | 85 | - | |||||||||||||
Adjustments to income tax expense (5) (6) | (27 | ) | (23 | ) | (6 | ) | 251 | ||||||||||
Non-GAAP net income | $ | 287 | $ | 240 | $ | 1,054 | $ | 1,014 | |||||||||
GAAP earnings per share - diluted | $ | 0.41 | $ | 0.29 | $ | 1.76 | $ | 0.67 | |||||||||
Non-GAAP earnings per share - diluted (6) | $ | 1.26 | $ | 1.04 | $ | 4.62 | $ | 4.65 | |||||||||
Shares used in computing diluted earnings per share (GAAP) | 226 | 228 | 227 | 216 | |||||||||||||
Shares used in computing diluted earnings per share (non-GAAP) | 228 | 230 | 228 | 218 | |||||||||||||
(1) | Inventory fair value adjustment associated with the amortization of Kanuma inventory step-up related to the purchase accounting for Synageva. | ||||||||||||||||
(2) | In the third quarter of 2015, the Company initiated amortization of its purchased intangible assets due to the regulatory approvals for Strensiq and Kanuma. | ||||||||||||||||
(3) | The following table summarizes acquisition-related costs: | ||||||||||||||||
Three months ended | Twelve months ended | ||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
Acquisition-related costs: | |||||||||||||||||
Transaction costs | $ | - | $ | - | $ | - | $ | 27 | |||||||||
Integration costs | - | 3 | 2 | 12 | |||||||||||||
$ | - | $ | 3 | $ | 2 | $ | 39 | ||||||||||
(4) | During the fourth quarter of 2016, the Company recognized an impairment charge related to SBC-103, an early stage, clinical indefinite-lived intangible asset related to the Synageva acquisition. | ||||||||||||||||
(5) | |||||||||||||||||
(6) | 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 |
TABLE 3: RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL GUIDANCE | ||||||||
(in millions, except per share amounts and percentages) | ||||||||
(unaudited) | ||||||||
Twelve months ended | ||||||||
Low | High | |||||||
GAAP net income | $ | 578 | $ | 692 | ||||
Before tax adjustments: | ||||||||
Share-based compensation | 231 | 207 | ||||||
Fair value adjustment in inventory acquired | 5 | 5 | ||||||
Upfront and milestone payments related to licenses and collaborations | 51 | — | ||||||
Amortization of purchased intangible assets | 320 | 320 | ||||||
Change in fair value of contingent consideration | 14 | 14 | ||||||
Adjustments to income tax expense | (54 | ) | (36 | ) | ||||
Non-GAAP net income | $ | 1,145 | $ | 1,202 | ||||
Diluted GAAP earnings per share | $ | 2.55 | $ | 3.05 | ||||
Diluted Non-GAAP earnings per share | $ | 5.00 | $ | 5.25 | ||||
Operating expense and margin (% total revenues) | ||||||||
GAAP research and development expense | 27 | % | 24 | % | ||||
Share-based compensation | (3 | )% | (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 | % | 29 | % | ||||
Share-based compensation | (4 | )% | (4 | )% | ||||
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 | 2 | % | 0 | % | ||||
Amortization of purchased intangible assets | 9 | % | 9 | % | ||||
Change in fair value of contingent consideration | 0 | % | 1 | % | ||||
Non-GAAP operating margin | 43 | % | 44 | % |
TABLE 4: NET PRODUCT SALES | ||||||||||||
(in millions) | ||||||||||||
(unaudited) | ||||||||||||
Three months ended | Twelve months ended | |||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||
Soliris | $ | 749 | $ | 689 | $ | 2,843 | $ | 2,591 | ||||
Strensiq | 71 | 12 | 210 | 12 | ||||||||
Kanuma | 11 | — | 29 | — | ||||||||
Total net product sales | $ | 831 | $ | 701 | $ | 3,082 | $ | 2,603 | ||||
TABLE 5: NET PRODUCT SALES BY GEOGRAPHY | ||||||||||||
(in millions) | ||||||||||||
(unaudited) | ||||||||||||
Three months ended | Twelve months ended | |||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||
$ | 354 | $ | 273 | $ | 1,257 | $ | 951 | |||||
244 | 222 | 961 | 841 | |||||||||
85 | 73 | 318 | 276 | |||||||||
Rest of World | 148 | 133 | 546 | 535 | ||||||||
Total net product sales | $ | 831 | $ | 701 | $ | 3,082 | $ | 2,603 |
TABLE 6: CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
(in millions) | ||||
(unaudited) | ||||
2016 | 2015 | |||
Cash and cash equivalents | ||||
Marketable securities | 327 | 375 | ||
Trade accounts receivable, net | 650 | 533 | ||
Inventories | 375 | 290 | ||
Prepaid expenses and other current assets | 260 | 208 | ||
Property, plant and equipment, net | 1,036 | 697 | ||
Intangible assets, net | 4,303 | 4,708 | ||
5,037 | 5,048 | |||
Other assets | 299 | 228 | ||
Total assets | ||||
Accounts payable and accrued expenses | ||||
Deferred revenue | 37 | 21 | ||
Current portion of long-term debt | 167 | 166 | ||
Other current liabilities | 23 | 6 | ||
Current portion of contingent consideration | 24 | 56 | ||
Long-term debt, less current portion | 2,888 | 3,254 | ||
Facility lease obligation | 233 | 151 | ||
Contingent consideration | 129 | 121 | ||
Deferred tax liabilities (1) | 396 | 529 | ||
Other liabilities | 90 | 74 | ||
Total liabilities | 4,559 | 4,838 | ||
Total stockholders' equity (1) | 8,694 | 8,259 | ||
Total liabilities and stockholders' equity |
(1) | In |
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