Alexion Reports Fourth Quarter And Full Year 2012 Results

This news release contains forward-looking statements, including statements related to guidance regarding anticipated financial results for 2013, assessment of the Company's financial position and commercialization efforts, medical benefits and commercial potential for Soliris for PNH and aHUS and other potential indications, expansion of clinical and commercial operations to additional countries, medical and commercial potential of Alexion's complement-inhibition technology and other technologies, plans for clinical programs for each of our product candidates and progress in developing commercial infrastructure. Forward-looking statements are subject to factors that may cause Alexion's results and plans to differ from those expected, including for example, decisions of regulatory authorities regarding marketing approval or material limitations on the marketing of Soliris for PNH and aHUS and other potential indications, delays in arranging satisfactory manufacturing capabilities and establishing commercial infrastructure, the possibility that results of clinical trials are not predictive of safety and efficacy results of Soliris in broader patient populations in the disease studied or other diseases, the risk that acquisitions will not result in short-term or long-term benefits, the possibility that current results of commercialization are not predictive of future rates of adoption of Soliris in PNH, aHUS or other diseases, the risk that third parties will not agree to license any necessary intellectual property to Alexion on reasonable terms or at all, the risk that third party payors (including governmental agencies) will not reimburse or continue to reimburse for the use of Soliris at acceptable rates or at all, the risk that estimates regarding the number of patients with PNH, aHUS or other disorders are inaccurate, and a variety of other risks set forth from time to time in Alexion's filings with the US Securities and Exchange Commission, including but not limited to the risks discussed in Alexion's Quarterly Report on Form 10-Q for the three and nine-month periods ended September 30, 2012 and in our other filings with the US Securities and Exchange Commission. Alexion does not intend to update any of these forward-looking statements to reflect events or circumstances after the date hereof, except when a duty arises under law.

In addition to financial information prepared in accordance with GAAP, this news release also contains non-GAAP financial measures that we believe, when considered together with the GAAP information, provide investors and management with supplemental information relating to performance, trends and prospects that promote a more complete understanding of our operating results and financial position during different periods. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for, or superior to, the financial measures prepared and presented in accordance with GAAP and should be reviewed in conjunction with the relevant GAAP financial measures. Please refer to the attached Reconciliation of GAAP to Non-GAAP Net Income for explanations of the amounts adjusted to arrive at non-GAAP net income and non-GAAP earnings per share amounts for the three and twelve month periods ended December 31, 2012 and 2011.

(Tables Follow)

ALEXION PHARMACEUTICALS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (unaudited)
				Three months ended										Twelve months ended
				December 31										December 31
				2012					2011					2012					2011
Net product sales				$	320,526				$	227,559				$	1,134,114				$	783,431
Cost of sales					33,147					28,798					126,214					93,140
Gain on intellectual property settlement					-					-					(53,377	)				-
Total cost of sales					33,147					28,798					72,837					93,140
Research and development					63,409					34,398					222,732					137,421
Selling, general and administrative					112,624					86,567					384,678					308,176
Impairment of intangible asset					-					-					26,300					-
Acquisition-related costs					3,365					2,322					22,812					13,486
Amortization of purchased intangible assets					105					104					417					382
Total operating expenses					179,503					123,391					656,939					459,465
Operating income					107,876					75,370					404,338					230,826
Interest and other expense					606					1,292					6,772					1,158
Income before income taxes					107,270					74,078					397,566					229,668
Income tax provision					26,298					25,908					142,744					54,353
Net income				$	80,972				$	48,170				$	254,822				$	175,315
Earnings per common share
Basic				$	0.42				$	0.26				$	1.34				$	0.96
Diluted				$	0.40				$	0.25				$	1.28				$	0.91
Shares used in computing earnings per common share
Basic					194,141					184,452					190,461					183,220
Diluted					201,061					193,370					198,501					191,806

ALEXION PHARMACEUTICALS, INC. RECONCILIATION OF GAAP TO NON-GAAP NET INCOME (in thousands, except per share amounts) (unaudited)
					Three months ended								Twelve months ended
					December 31								December 31
					2012				2011				2012					2011
GAAP net income					$	80,972			$	48,170			$	254,822				$	175,315
Share-based compensation expense (1)						13,691				10,337				54,013					44,763
Acquisition-related costs (2)						3,365				2,322				22,812					13,486
Amortization of purchased intangible assets						105				104				417					382
Non-cash taxes (3)						24,158				19,547				98,364					32,155
Tax related to acquisition structuring (4)						-				-				21,812					-
Gain on intellectual property settlement (5)						-				-				(53,377	)				-
Impairment of intangible asset (6)						-				-				26,300					-
Non-GAAP net income					$	122,291			$	80,480			$	425,163				$	266,101
Shares used in computing diluted earnings per share (GAAP)						201,061				193,370				198,501					191,806
Shares used in computing diluted earnings per share (non-GAAP)						202,249				194,732				199,787					193,539
GAAP earnings per share - diluted					$	0.40			$	0.25			$	1.28				$	0.91
Non-GAAP earnings per share - diluted					$	0.60			$	0.41			$	2.13				$	1.38

(1)		The following table summarizes the share-based compensation expense for each expense category in our condensed consolidated statements of operations:

							Three months ended								Twelve months ended
							December 31								December 31
							2012				2011				2012				2011
			Share-based compensation expense:
			Cost of sales				$	876			$	613			$	2,815			$	2,375
			Research and development					3,466				2,270				13,839				9,759
			Selling, general and administrative					9,349				7,454				37,359				32,629
							$	13,691			$	10,337			$	54,013			$	44,763
(2	)		The following table summarizes acquisition-related costs:
							Three months ended								Twelve months ended
							December 31								December 31
							2012				2011				2012				2011
			Acquisition-related costs:
			Separately-identifiable employee costs				$	117			$	-			$	3,669			$	6,597
			Professional fees					1,031				2,039				12,593				5,489
			Changes in fair value of contingent consideration					2,217				283				6,550				1,400
							$	3,365			$	2,322			$	22,812			$	13,486

(3)		Non-cash taxes represents the adjustment from GAAP tax expense to the amount of taxes that are payable in cash. The adjustment includes tax amounts that are not currently payable in cash due to the continued utilization of our US net operating losses and credits.
		In the third quarter of 2011, we elected to claim foreign tax and orphan drug credits resulting in a tax benefit of $16,300. The non-cash tax adjustment for the twelve months ended December 31, 2011 include these tax benefits which were recognized in the GAAP tax provision and were not received in cash.
(4)		The tax provision for the twelve months ended December 31, 2012 includes tax expense of $21,812 related to the structuring of the Enobia acquisition.
(5)		In October 2012, we entered into a settlement and license agreement which included an upfront payment. The Company recognized a gain of $53,377 in cost of sales during the three months ended September 30, 2012, which was the result of a reversal of a portion of the accrued liability, net of the effect of the upfront payment.
(6)		During the three months ended September 30, 2012, we recorded an impairment of an acquired in-process research and development asset of $26,300 related to a preclinical AMD program.

ALEXION PHARMACEUTICALS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited)
					December 31				December 31,
					2012				2011
Cash and cash equivalents					$	989,501			$	540,865
Trade accounts receivable, net						295,598				244,288
Inventories, net						94,521				81,386
Deferred tax assets, current						26,086				19,132
Other current assets						89,894				55,599
Property, plant and equipment, net						165,629				165,852
Deferred tax assets, noncurrent						13,954				103,868
Intangible assets, net						646,678				91,604
Goodwill						253,645				79,639
Other noncurrent assets						38,054				12,518
Total assets					$	2,613,560			$	1,394,751
Accounts payable and accrued expenses					$	271,275			$	199,653
Current portion of long-term debt						48,000				-
Other current liabilities						40,814				28,132
Long-term debt						101,000				-
Contingent consideration						139,002				18,120
Other noncurrent liabilities						42,619				14,354
Total liabilities						642,710				260,259
Total stockholders' equity						1,970,850				1,134,492
Total liabilities and stockholders' equity					$	2,613,560			$	1,394,751

« First ‹ Previous 1 2 3 4 5 6 Next › Last »