Cubist Increases Revenue 30% To $231 Million In The Second Quarter

Cubist Pharmaceuticals, Inc. (NASDAQ: CBST) today announced results for the second quarter ended June 30, 2012. The Company will host a conference call and webcast today at 5:00 p.m. ET (details below).

Financial Highlights for the Second Quarter of 2012 (unaudited)
  • For the second consecutive quarter, total net revenues grew 30% over the same period in 2011. Q2 2012 total net revenues were $230.6 million, compared to $176.8 million in Q2 2011.
  • U.S. CUBICIN® (daptomycin for injection) net product revenues increased 19% to $200.2 million from $168.6 million in Q2 2011; CUBICIN international revenues increased 47% to $11.4 million, compared to $7.7 million in Q2 2011.
  • Non-GAAP diluted earnings per share (EPS) increased 28% to $0.68, compared to $0.53 in Q2 2011; GAAP diluted EPS was $0.58, compared to a loss of $0.34 per share in Q2 2011.
  • Non-GAAP adjusted operating income increased 23% to $71.1 million, compared to $57.7 million in Q2 2011; GAAP operating income was $61.5 million, compared to an operating loss of $24.2 million in Q2 2011.

Michael Bonney, CEO of Cubist, said, “With another strong quarter, driven by revenue growth of 30% and a marked increase in bottom line growth, we are very pleased with the first half of 2012. We’re off to a strong start as we drive toward our Building Blocks of Growth five-year goals, and we look forward to a promising second half of 2012 as we continue to focus on creating long-term shareholder value.”

Cubist recorded a $5 million bonus from Optimer Pharmaceuticals, Inc. in the second quarter of 2012, for achieving the first year revenue target, bringing DIFICID® (fidaxomicin) service revenues for the quarter to $8.7 million. ENTEREG® (alvimopan), acquired through our acquisition of Adolor Corporation in December 2011, net product revenues were $9.7 million in Q2 2012.

As of June 30, 2012, Cubist had $854 million in cash, cash equivalents and investments. The total number of Cubist’s common shares outstanding as of June 30, 2012 was 63,751,433.

Recent Company Highlights
  • On July 12, 2012, Cubist announced the initiation of its pivotal Phase 3 studies evaluating the efficacy and safety of CB-315 in patients with Clostridium difficile-associated diarrhea, or CDAD, with enrollment of a patient in the first of two planned identical global trials.
  • On July 2, 2012, Cubist announced the promotion of Robert J. Perez, former Executive Vice President and Chief Operating Officer (COO), to President and COO; the promotion of Michael Tomsicek, former Vice President of Corporate Finance, to Senior Vice President and Deputy Chief Financial Officer; and the appointment of Thomas Rollins, former Senior Vice President of Program Management and R&D Planning at Sunovian Pharmaceutical Inc., to Senior Vice President of Program and Portfolio Management.
  • On June 11, 2012, Cubist announced a five-year strategic roadmap, Building Blocks of Growth, which focuses on driving top- and bottom-line growth, future pipeline developments, and cultural enhancements that will position Cubist to deliver long-term, sustainable growth.
  • In May 2012, at two scientific meetings, Cubist presented the results from Phase 2 studies of CB-5945 in patients with chronic non-cancer pain and opioid-induced constipation (OIC). The studies each met the primary endpoint of change from baseline in the number of spontaneous bowel movements (SBMs). Phase 3 studies are planned to begin by the end of 2012.
  • On April 17, 2012, Cubist announced that its Phase 4 study of ENTEREG in patients undergoing radical cystectomy met its primary endpoint of time to achieve recovery of both upper and lower GI function. Additionally, all secondary endpoints, including length of hospital stay, achieved statistical significance. Cubist expects to submit a supplemental New Drug Application (sNDA) with the U.S. Food and Drug Administration (FDA) by the end of 2012.

“As we look to build on our tremendous momentum as a growing leader in the acute care/hospital environment, our Building Blocks of Growth will help us to sharpen our focus and measure our future success,” said Michael Bonney. “The next five years present many exciting opportunities for Cubist, and we have already taken important steps to capture them, including making key senior executive promotions and new hires that enhance our existing team. Together, we look forward to delivering important new medicines for patients and driving long-term value for our customers and shareholders.”

Use of Non-GAAP Financial MeasuresNon-GAAP net income, non-GAAP EPS and non-GAAP adjusted operating income exclude non-operational activities. As a result, Cubist uses these measures to assess and analyze its operational results and trends and to make financial and operational decisions. Cubist also believes these non-GAAP financial measures are useful to investors because they provide greater transparency regarding Cubist’s operating performance. These non-GAAP financial measures should not be considered an alternative to measurements required by GAAP, such as operating income, net income and EPS, and should not be considered measures of Cubist’s liquidity. In addition, these non-GAAP financial measures are unlikely to be comparable with non-GAAP information provided by other companies. Reconciliations between non-GAAP financial measures and GAAP financial measures are included in the tables accompanying this press release after the unaudited condensed consolidated financial statements.

***********************CONFERENCE CALL & WEBCAST INFORMATION***********************

CUBIST 2Q 2012 FINANCIAL RESULTSThursday, July 19, 2012 at 5:00 p.m. ET

U.S./Canada Attendee Dial-in: (855) 319-7654International Attendee Dial-in: (484) 756-4327Attendee Passcode: 13972921

24-HOUR REPLAY U.S./CANADA: (855) 859-205624-HOUR REPLAY INTERNATIONAL: (404) 537-3406

CALL WILL ALSO BE BROADCAST LIVE, LISTEN ONLY, VIA THE WEB AT: www.tinyurl.com/cubist2Q12Attendee Password: 071912

Replay will be available for 90 days via the Internet at www.cubist.com*********************************************************************************

About CubistCubist Pharmaceuticals, Inc. is a 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, Mass. Additional information can be found at Cubist’s web site at www.cubist.com.

Cubist Safe Harbor Statement

This press release includes forward-looking statements, including, without limitation, statements regarding: (i) the favorable results of our Phase 2 clinical studies of CB-5945 and our expectations on the anticipated timing of our Phase 3 clinical studies for CB-5945; and (ii) our expectations regarding the submission of an sNDA for the use of ENTEREG by the end of 2012. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statement. Applicable risks and uncertainties include, among others: (i) our ability to successfully develop CB-5945 on the timelines that we expect; (ii) the timing and outcome of discussions with regulatory agencies, including the FDA, regarding ENTEREG, the timing of our submission of an sNDA, if any, and the actual safety and efficacy of ENTEREG for the indications in which it is being studied; and (iii) those additional factors discussed under the caption "Risk Factors" in our recent periodic filings 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, CUBICIN and ENTEREG are registered trademarks of Cubist Pharmaceuticals, Inc.

DIFICID is a registered trademark of Optimer Pharmaceuticals, Inc.

 
 
CUBIST PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
UNAUDITED
(in thousands)
               
June 30,2012 December 31,2011
 
ASSETS
Cash, cash equivalents and investments $ 854,418 $ 867,695
Accounts receivable, net 90,126 87,800
Inventory 72,422 70,000
Property and equipment, net 168,763 168,425
Deferred tax assets, net 14,384 16,189
In-process research and development 311,400 311,400
Other assets   349,145   365,946
 
Total assets $ 1,860,658 $ 1,887,455
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses $ 156,621 $ 177,378
Deferred tax liabilities, net 132,226 143,177
Deferred revenue 37,242 31,524
Contingent consideration 223,757 248,234
Debt and other liabilities, net   424,564   487,285
Total liabilities   974,410   1,087,598
 
Total stockholders' equity   886,248   799,857
 
Total liabilities and stockholders' equity $ 1,860,658 $ 1,887,455
 
 
CUBIST PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED
(in thousands, except share and per share data)
               
Three months endedJune 30, Six months endedJune 30,
  2012     2011     2012     2011  
 
Revenues:
U.S. CUBICIN product revenues, net $ 200,180 $ 168,575 $ 384,887 $ 322,291
U.S. ENTEREG product revenues, net   9,706     -     19,148     -  
Total U.S. product revenues, net 209,886 168,575 404,035 322,291
International product revenues 11,363 7,747 24,017 16,047
Service revenues 8,665 - 12,329 -
Other revenues   653     516     1,878     1,031  
Total revenues, net   230,567     176,838     442,259     339,369  
 
Costs and expenses:
Cost of product revenues 58,891 38,976 112,843 75,553
Research and development 67,206 41,871 118,378 82,287
Contingent consideration 2,694 81,816 5,523 82,914
Selling, general and administrative   40,255     38,341     84,035     78,505  
Total costs and expenses   169,046     201,004     320,779     319,259  
 
Operating income (loss) 61,521 (24,166 ) 121,480 20,110
 
Other income (expense), net (11,273 ) (6,961 ) (19,786 ) (13,768 )
       
Income (loss) before income taxes 50,248 (31,127 ) 101,694 6,342
 
Provision (benefit) for income taxes 7,125 (10,512 ) 25,777 4,372
       
Net income (loss) $ 43,123   $ (20,615 ) $ 75,917   $ 1,970  
 
Basic earnings (loss) per share 0.68 (0.34 ) 1.20 0.03
Diluted earnings (loss) per share 0.58

1

 
(0.34 ) 1.04

1

 
0.03
 
Shares used in calculating:
Basic earnings (loss) per share 63,498,953 60,517,553 63,250,165 59,991,068
Diluted earnings (loss) per share 81,166,329 60,517,553 81,001,476 61,828,807
 
1 Includes add back of interest expense, debt issuance costs and debt discount amortization on 2.50% notes to income, net of tax effect
 
 
CUBIST PHARMACEUTICALS, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
UNAUDITED
(in thousands, except share and per share data)
             

Reconciliation of GAAP net income (loss) to non-GAAP proforma net income
Three months endedJune 30, Six months endedJune 30,
  2012     2011     2012     2011  
 
GAAP net income (loss) $ 43,123 $ (20,615 ) $ 75,917 $ 1,970
 
Non-cash debt discount amortization 4,654 4,569 9,481 9,054
 
Loss on partial extinguishment of 2.25% Notes 3,728

 
-

 
3,728

 
-

 
 
ENTEREG intangible asset amortization 4,589 - 9,177 -
 
ENTEREG inventory step-up 834 - 1,369 -
 
Expenses related to the acquisition of Adolor 1,448 - 5,037 -
 
Contingent consideration 2,694 81,816 5,523 82,914
 
Reversal of reserve for uncertain tax positions (10,961 ) - (10,961 ) -
 
Non-cash tax adjustment 4,825 (24,228 ) 21,974 (11,189 )
       
Non-GAAP proforma net income $ 54,934   $ 41,542   $ 121,245   $ 82,749  
 
Non-GAAP basic earnings per share $ 0.87 $ 0.69 $ 1.92 $ 1.38
Non-GAAP diluted earnings per share $ 0.68

1

 
$ 0.53

1

 
$ 1.50

1

 
$ 1.08

1
 
Shares used in calculating:
Non-GAAP basic earnings per share 63,498,953 60,517,553 63,250,165 59,991,068
Non-GAAP diluted earnings per share 84,076,269 81,961,313 84,231,134 80,802,339
 
 
1 Includes add back of interest expense and debt issuance costs on 2.25% notes and 2.50% notes to income, net of tax effect
                                     

Reconciliation of GAAP operating income (loss) to non-GAAP adjusted operating income
Three months endedJune 30, Six months endedJune 30,
  2012   2011     2012   2011
 
Operating income (loss) $ 61,521 $ (24,166 ) $ 121,480 $ 20,110
 
ENTEREG intangible asset amortization 4,589 - 9,177 -
 
ENTEREG inventory step-up 834 - 1,369 -
 
Expenses related to the acquisition of Adolor 1,448 - 5,037 -
 
Contingent consideration 2,694 81,816 5,523 82,914
       
Non-GAAP adjusted operating income $ 71,086 $ 57,650   $ 142,586 $ 103,024
 
 
CUBIST PHARMACEUTICALS, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
UNAUDITED
(in thousands, except share and per share data)
                   
 
Three months endedJune 30, Six months endedJune 30,
  2012   2011     2012   2011

Reconciliation of GAAP basic earnings (loss) per share to non-GAAP basic earnings per share
Non-GAAP basic net income - from table above $ 54,934 $ 41,542   $ 121,245 $ 82,749
 
GAAP and Non-GAAP basic shares   63,498,953   60,517,553     63,250,165   59,991,068
 
GAAP basic earnings (loss) per share $ 0.68 $ (0.34 ) $ 1.20 $ 0.03
Non-GAAP adjustments - from table above   0.19   1.03     0.72   1.35
Non-GAAP basic earnings per share $ 0.87 $ 0.69   $ 1.92 $ 1.38
 

Reconciliation of GAAP diluted earnings (loss) per share to non-GAAP diluted earnings per share
Non-GAAP basic net income - from table above $ 54,934 $ 41,542 $ 121,245 $ 82,749
Non-GAAP dilutive adjustments   2,417

1
  1,969  

1
  4,906

1
  4,119

1
Non-GAAP diluted net income $ 57,351 $ 43,511   $ 126,151 $ 86,868
 
GAAP diluted shares 81,166,329 60,517,553 81,001,476 61,828,807
Non-GAAP dilutive adjustments   2,909,940

2
  21,443,760  

2
  3,229,658

2
  18,973,532

2
Non-GAAP diluted shares   84,076,269   81,961,313     84,231,134   80,802,339
 
GAAP diluted earnings (loss) per share $ 0.58 $ (0.34 ) $ 1.04 $ 0.03
Non-GAAP dilutive adjustments   0.10   0.87     0.46   1.05
Non-GAAP diluted earnings per share $ 0.68 $ 0.53   $ 1.50 $ 1.08
 
 
1 Includes add back of interest expense and debt issuance costs on 2.25% notes and 2.50% notes to income, net of tax effect
2 Weighted average shares issued on full conversion

Copyright Business Wire 2010

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