- Total Net Revenues of $261.2 Million,
Up 14% Over Q1 2013; U.S. CUBICIN Net Revenues of $212.2 Million,
Up 5% Over Q1 2013
- Non-GAAP Adjusted Operating Income of
$18.8 Million; GAAP Operating Income of $28.3 Million
- Non-GAAP Diluted EPS of $0.10; GAAP
Diluted EPS of $0.30
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 MeasuresCubist 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 RESULTSTuesday, April
22, 2014 at 5:00 pm ET
U.S./Canada Attendee Dial-in: (855)
319-7654International Attendee Dial-in: (484) 756-4327Conference
ID: 12504774
24-HOUR REPLAY U.S./CANADA: (855)
859-205624-HOUR REPLAY INTERNATIONAL: (404) 537-3406Conference 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=629311873Attendee
Password: 04222014
Replay will be available for 90 days at
www.cubist.com
*********************************************************************************
About CubistCubist 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 StatementThis
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 effect2. Additional dilutive weighted average shares issuable
upon exercise or vesting of Cubist’s outstanding equity awards3.
Additional dilutive weighted average shares issuable upon
conversion of Cubist’s outstanding convertible notes and exercise
or vesting of Cubist’s outstanding equity awards
Cubist Pharmaceuticals, Inc.INVESTORS:Eileen C. McIntyre,
781-860-8533Vice President, Investor
Relationseileen.mcintyre@cubist.comorMEDIA:Julie DiCarlo,
781-860-8777Senior Director, Corporate
Communicationsjulie.dicarlo@cubist.com