-- Second-Quarter 2017 Net Sales of $289.5
Million; Up 12 Percent, Above Expectations ---- Second-Quarter 2017
Net Loss of $209.5 Million; Adjusted EBITDA of $127.0
Million, Above Expectations ---- Second-Quarter 2017 GAAP
Operating Cash Flow of $47.9 Million; Non-GAAP Operating Cash
Flow of $86.4 Million ---- Second-Quarter 2017 Net Sales of Rare
Disease Medicines Increased 70 Percent ---- Completed Acquisition
of River Vision Development Corp., Adding Late-Stage Development
Biologic Teprotumumab ---- Completed Sale of EMEA Marketing Rights
for PROCYSBI® and QUINSAIRTM ---- Increasing Full-Year 2017 Net
Sales Guidance Range to $1.010 Billion to $1.045
Billion; Increasing Full-Year 2017 Adjusted EBITDA Guidance
Range to $340 Million to $375 Million --
Horizon Pharma plc (NASDAQ:HZNP), a biopharmaceutical company
focused on improving patients’ lives by identifying, developing,
acquiring and commercializing differentiated and accessible
medicines that address unmet medical needs, announced its
second-quarter and year-to-date 2017 financial results today and
increased its full-year 2017 net sales and adjusted EBITDA
guidance.
“Our rare disease medicines generated another quarter of strong
performance, increasing 70 percent versus a year ago,” said Timothy
P. Walbert, chairman, president and chief executive officer,
Horizon Pharma plc. “As a result of strong second-quarter
performance across our business units, we are raising our full-year
sales and adjusted EBITDA guidance.”
Mr. Walbert added, “We also made multiple advancements during
the quarter, positioning Horizon Pharma as a sustainable
biopharmaceutical company focused on rare disease medicines,
including the addition of teprotumumab, a biologic in late-stage
development for thyroid eye disease, a rare eye disease, which
represents an important step in building our development pipeline
to drive long-term growth.”
Financial Highlights
(in millions except for
per share amounts and percentages) |
|
Q2 17 |
|
Q2 16 |
|
% Change |
|
YTD 17 |
|
YTD 16 |
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$289.5 |
|
$257.4 |
|
12 |
|
$510.4 |
|
$462.1 |
|
10 |
|
Net (loss) income |
|
(209.5) |
|
15.0 |
|
NM |
|
(300.1) |
|
(30.4) |
|
886 |
|
Non-GAAP net
income |
|
68.3 |
|
91.3 |
|
(25) |
|
103.3 |
|
132.6 |
|
(22) |
|
Adjusted EBITDA |
|
127.0 |
|
121.1 |
|
5 |
|
178.9 |
|
193.1 |
|
(7) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) earnings per
share - diluted |
|
(1.29) |
|
0.09 |
|
NM |
|
(1.85) |
|
(0.19) |
|
874 |
|
Non-GAAP earnings per
share - diluted |
|
0.41 |
|
0.56 |
|
(27) |
|
0.63 |
|
0.81 |
|
(22) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company Highlights
- Second-quarter net sales were $289.5 million, an increase of 12
percent compared to the second quarter of 2016, driven by continued
strong growth from the Company’s orphan and rheumatology business
units.
- Second-quarter net sales of Horizon Pharma’s medicines for rare
diseases, which include RAVICTI®, PROCYSBI®, KRYSTEXXA®,
ACTIMMUNE®, BUPHENYL® and QUINSAIR™, increased 70 percent compared
to the second quarter of 2016. Net sales of the Company’s
rare disease medicines represented 55 percent of total net sales
compared to 36 percent in the second quarter of 2016.
- The Company completed the acquisition of River Vision and its
biologic, teprotumumab, on May 8, 2017.
Teprotumumab is in late-stage development to treat thyroid eye
disease (TED), a rare, debilitating and painful condition with no
FDA-approved therapy. With a significant unmet treatment need
for TED, the Company anticipates a potential peak annual net sales
opportunity for teprotumumab, if approved, of more than $250
million in the United States. The acquisition marks an
important first step toward assembling a portfolio of
development-stage, rare disease medicines.
- The Company completed the sale of the marketing rights for
PROCYSBI and QUINSAIR in the Europe, the Middle East and Africa
(EMEA) regions to Chiesi Farmaceutici S.p.A. on June 23,
2017.
- Health Canada approved PROCYSBI for use in Canada on June 19,
2017. PROCYSBI is the only cystine-depleting agent approved
in Canada for the treatment of nephropathic cystinosis and is
expected to launch by the end of the year.
- Four new KRYSTEXXA data analyses were presented at the 2017
Annual European Congress of Rheumatology (EULAR) in evaluating the
use of KRYSTEXXA in patients with refractory chronic gout. A
new study underscoring the burden of gout on patients and the
healthcare system was also presented at EULAR. The study
findings showed that U.S. gout-related hospitalizations have
increased 410 percent since 1993, and that hospitalizations in
patients with gout resulted in costs in 2014 of more than $42.6
billion. These presentations support the Company’s continued
efforts to address the lack of awareness and understanding
regarding refractory chronic gout and the benefits of
KRYSTEXXA.
- The Company received approval from the U.S. Food and Drug
Administration (FDA) for a supplemental New Drug Application (sNDA)
for RAVICTI on April 28, 2017. The sNDA expands the age range
for chronic management of urea cycle disorders (UCDs) in patients
to two months of age and older, from the previous age range of two
years of age and older.
- Two intellectual property-related developments of note occurred
during the second quarter. In May, the U.S. District Court for the
District of New Jersey upheld the validity of a patent covering
PENNSAID® 2% that expires in 2027. In June, the U.S. District
Court for the District of New Jersey upheld the validity of two
Horizon Pharma patents covering VIMOVO® that expire in 2022 and
2023. Both medicines have numerous Orange Book-listed patents
that extend out to 2030 and beyond.
Second-Quarter and Year-to-Date 2017 Business Unit Net
Sales Results
(in millions except for percentages) |
Q2 17 |
|
Q2 16 |
|
% Change |
|
YTD 17 |
|
YTD 16 |
|
% Change |
|
|
Orphan |
$ |
120.4 |
|
$ |
73.5 |
|
64 |
|
|
$ |
232.9 |
|
$ |
139.8 |
|
67 |
|
|
|
RAVICTI® |
|
47.2 |
|
|
39.4 |
|
20 |
|
|
|
91.1 |
|
|
76.4 |
|
19 |
|
|
|
PROCYSBI®(1)(2) |
|
|
36.7 |
|
|
- |
|
NM |
|
|
|
71.0 |
|
|
- |
|
NM |
|
|
|
ACTIMMUNE® |
|
28.8 |
|
|
30.0 |
|
(4 |
) |
|
|
55.0 |
|
|
55.6 |
|
(1 |
) |
|
|
BUPHENYL® |
|
|
6.3 |
|
|
4.1 |
|
54 |
|
|
|
12.6 |
|
|
7.8 |
|
61 |
|
|
|
QUINSAIRTM(1)(2) |
|
|
1.4 |
|
|
- |
|
NM |
|
|
|
3.2 |
|
|
- |
|
NM |
|
|
|
Rheumatology |
|
51.7 |
|
|
33.2 |
|
56 |
|
|
|
94.5 |
|
|
60.6 |
|
56 |
|
|
|
KRYSTEXXA® |
|
38.3 |
|
|
19.9 |
|
93 |
|
|
|
69.9 |
|
|
36.0 |
|
94 |
|
|
|
RAYOS® |
|
11.6 |
|
|
12.1 |
|
(4 |
) |
|
|
21.9 |
|
|
22.7 |
|
(3 |
) |
|
|
LODOTRA® |
|
1.8 |
|
|
1.2 |
|
51 |
|
|
|
2.7 |
|
|
1.9 |
|
41 |
|
|
|
Primary Care |
|
117.4 |
|
|
150.7 |
|
(22 |
) |
|
|
183.0 |
|
|
261.7 |
|
(30 |
) |
|
|
PENNSAID® 2% |
|
51.2 |
|
|
72.7 |
|
(30 |
) |
|
|
92.8 |
|
|
127.6 |
|
(27 |
) |
|
|
DUEXIS® |
|
43.6 |
|
|
45.5 |
|
(4 |
) |
|
|
61.3 |
|
|
75.2 |
|
(18 |
) |
|
|
VIMOVO® |
|
21.1 |
|
|
31.4 |
|
(33 |
) |
|
|
26.0 |
|
|
56.9 |
|
(54 |
) |
|
|
MIGERGOT® |
|
1.5 |
|
|
1.1 |
|
26 |
|
|
|
2.9 |
|
|
2.0 |
|
40 |
|
|
|
Total net sales |
$ |
289.5 |
|
$ |
257.4 |
|
12 |
|
|
$ |
510.4 |
|
$ |
462.1 |
|
10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)PROCYSBI and QUINSAIR were acquired on Oct. 25, 2016. Q2
16 pre-acquisition net sales of PROCYSBI and QUINSAIR were $31.4
million and $0.7 million respectively. |
|
|
(2)On June 23, 2017, Horizon Pharma completed the divestiture of a
European subsidiary that owns the marketing rights to PROCSYBI and
QUINSAIR in Europe, the Middle East and Africa to Chiesi
Farmaceutici S.p.A. Horizon Pharma retains marketing rights
for the two medicines in the U.S., Canada, Latin America and
Asia. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Orphan Business Unit: Second-quarter net
sales for the orphan business unit increased 64 percent compared to
the second quarter of 2016. Driving the results were strong
net sales performance of RAVICTI and PROCYSBI. RAVICTI
net sales in the second quarter of 2017 were $47.2 million, an
increase of 20 percent compared to the second quarter of 2016,
driven by continued conversion from older-generation
nitrogen-scavenger therapies, as well as the addition of
treatment-naïve patients, in part resulting from the FDA approval
of the sNDA for RAVICTI on April 28, 2017. The Company
continues to expect RAVICTI to be launched in Europe in the second
half of 2017 in partnership with Swedish Orphan Biovitrum AB
(SOBI). PROCYSBI net sales in the second quarter of
2017 were $36.7 million, an increase of 17 percent compared to
pre-acquisition net sales of $31.4 million in the second
quarter of 2016, driven by demand from both patients converting
from older-generation therapy as well as from treatment-naïve
patients. The differentiated profile of PROCYSBI was
highlighted in July at the Cystinosis Research Network 2017 Family
Conference in a presentation that demonstrated that patients
receiving PROCYSBI had a 26 percent reduction in a metabolite
associated with halitosis (i.e., bad breath) compared to those
receiving immediate-release cysteamine. This is an important
consideration for people living with cystinosis.
ACTIMMUNE net sales in the second quarter of 2017 were $28.8
million, a decrease of 4 percent versus the second quarter of 2016
and an increase of 10 percent sequentially from the first quarter
of 2017. This increase was in part due to the Company’s
evolved strategy to establish the role of ACTIMMUNE in a broader
range of chronic granulomatous disease patients. The
investigator-initiated Fox Chase Cancer Center Phase 1
dose-escalation trial, which is evaluating ACTIMMUNE as part of a
combination therapy in solid tumors for certain cancers, continues
to advance. In addition, a National Cancer Institute Phase 2
study evaluating a different cancer combination therapy using
ACTIMMUNE remains on track to begin later in 2017. A third
cancer combination study is also underway with the Moffitt Cancer
and Research Institute evaluating ACTIMMUNE and other cancer
therapies in certain advanced breast cancer patients. The
second-quarter acquisition of teprotumumab expands and diversifies
the Company’s rare disease medicine pipeline. The recently
completed Phase 2 clinical trial of teprotumumab demonstrated
unprecedented clinical efficacy in the treatment of TED. The
results of the multicenter, double-blind, randomized
placebo-controlled trial, which lasted 24 weeks and involved
88 patients, were published in The New England Journal of
Medicine in May. In the intention-to-treat population, 29 of
42 patients who received teprotumumab (69 percent), as compared
with 9 of 45 patients who received placebo (20 percent), had a
response at week 24 (p<0.001). The primary end point was
the response in the study eye; this response was defined as a
reduction of 2 points or more in the Clinical Activity Score
(scores range from 0 to 7, with a score of ≥3 indicating active
thyroid eye disease) and a reduction of 2 mm or more in proptosis
at week 24. The Company remains on track to begin the
confirmatory Phase 3 trial by year end.
- Rheumatology Business Unit:
Second-quarter net sales for the rheumatology
business unit were $51.7 million, an increase of 56 percent
compared to the second quarter of 2016, driven by KRYSTEXXA.
KRYSTEXXA net sales in the second quarter of 2017 were $38.3
million, an increase of 93 percent compared to the second
quarter of 2016, driven in part by continued strong year-over-year
vial demand. The Company announced during the second
quarter that, based on the continued increase in uptake of
KRYSTEXXA and the clear unmet need for thousands of refractory
chronic gout sufferers, the Company is significantly increasing its
commercial infrastructure and investment in the medicine.
This is in support of the Company’s expectation for annual peak net
sales for KRYSTEXXA of more than $400 million versus the previous
estimate of more than $250 million. During the second
quarter, the Company began its initiative to expand its
rheumatology business unit’s commercial organization to nearly 200
employees from more than 100, with the objective of reaching more
physicians and increasing awareness of refractory chronic gout
among physicians and patients. The expansion is expected to
be complete by the end of the year.
- Primary Care Business Unit: Total
second-quarter net sales for the primary care business unit were
$117.4 million, a decrease of 22 percent compared to the second
quarter of 2016, due to the implementation of the new contracting
model with pharmacy benefit managers. Second-quarter 2017 net
sales improved sequentially over first-quarter 2017 net sales as a
result of higher average net realized price (ANRP) and improved
prescription demand.
Second-Quarter 2017 Financial
ResultsNote: For additional detail and
reconciliation of non-GAAP financial measures to the most directly
comparable GAAP financial measures, please refer to the tables at
the end of this release.
- Gross Profit: Under U.S. GAAP in the
second quarter of 2017, the gross profit ratio was 55.0
percent compared to 68.5 percent in the second quarter of
2016. The non-GAAP gross profit ratio in the second quarter
of 2017 was 90.6 percent compared to 92.0 percent in the second
quarter of 2016.
- Operating Expenses: On a GAAP basis in
the second quarter of 2017, total operating expenses, which
included $148.6 million related to the River Vision acquisition,
were 119.2 percent of net sales. Non-GAAP total operating
expenses in the second quarter of 2017 were 46.7 percent of net
sales. Research and development (R&D) expenses were
56.3 percent of net sales; and selling, general and
administrative (SG&A) expenses were 62.8 percent of net
sales. Non-GAAP R&D expenses were 4.4 percent of net
sales, and non-GAAP SG&A expenses were 42.3 percent of net
sales.
- Income Tax Rate: The income tax rate in
the second quarter of 2017 on a GAAP basis was 0.8 percent and
on a non-GAAP basis was 32.2 percent.
- Net (Loss) Income: On a GAAP basis in
the second quarter of 2017, net loss was $209.5 million.
Non-GAAP net income was $68.3 million for the second
quarter.
- Adjusted EBITDA: Adjusted EBITDA in the
second quarter of 2017 was $127.0 million.
- Earnings (Loss) per Share: On a GAAP
basis in the second quarter of 2017, diluted loss per share was
$1.29, compared with diluted earnings per share of $0.09 in the
second quarter of 2016. Non-GAAP diluted earnings per share in the
second quarter of 2017 and 2016 were $0.41 and $0.56,
respectively. Weighted average shares outstanding used for
calculating GAAP diluted loss per share and non-GAAP diluted
earnings per share in the second quarter of 2017 were 162.9 million
and 165.0 million, respectively.
Cash Flow Statement and Balance Sheet
Highlights
- On a GAAP basis in the second quarter of 2017, operating cash
flow was $47.9 million. Non-GAAP operating cash flow was
$86.4 million in the second quarter of 2017.
- The Company had cash and cash equivalents of $554.3 million as
of June 30, 2017.
- Total principal amount of debt outstanding as of June 30, 2017,
was $2.023 billion, which was composed of $848 million in
senior secured term loans due 2024; $475 million senior notes due
2023; $300 million senior notes due 2024; and $400 million
exchangeable senior notes due 2022. As of June 30, 2017, net
debt was $1.469 billion.
Full-Year 2017 Guidance
The Company increased its full-year 2017 net sales guidance
range to $1.010 billion to $1.045 billion from $985 million to
$1.020 billion and increased its full-year 2017 adjusted EBITDA
guidance to $340 million to $375 million from $315 million to $350
million.
Conference Call
At 8 a.m. EST / 1 p.m. IST today, the Company will host a live
conference call and webcast to review its financial and operating
results and provide a general business update.
U.S. Dial-In Number: +1 888.338.8373 International Dial-In
Number: +1 973.872.3000 Passcode: 45942068
The live webcast and a replay may be accessed at
http://ir.horizon-pharma.com. Please connect to the Company's
website at least 15 minutes prior to the live webcast to ensure
adequate time for any software download that may be needed to
access the webcast.
A replay of the conference call will be available approximately
two hours after the call and accessible through one of the
following telephone numbers, using the passcode below:
Replay U.S. Dial-In Number: +1 855.859.2056 Replay
International Dial-In Number: +1 404.537.3406 Passcode:
45942068
About Horizon Pharma plc Horizon Pharma plc is
a biopharmaceutical company focused on improving patients' lives by
identifying, developing, acquiring and commercializing
differentiated and accessible medicines that address unmet medical
needs. The Company markets 11 medicines through its orphan,
rheumatology and primary care business units. For more
information, please visit www.horizonpharma.com. Follow
@HZNPplc on Twitter or view careers on our LinkedIn page.
Note Regarding Use of Non-GAAP Financial
Measures EBITDA, or earnings before interest, taxes,
depreciation and amortization, and adjusted EBITDA are used and
provided by Horizon Pharma as non-GAAP financial measures.
Horizon Pharma provides certain other financial measures such as
non-GAAP net income, non-GAAP diluted earnings per share, non-GAAP
gross profit and gross profit ratio, non-GAAP operating expenses,
non-GAAP tax rate and non-GAAP operating cash flow, each of which
include adjustments to GAAP figures. These non-GAAP measures
are intended to provide additional information on Horizon Pharma’s
performance, operations, expenses, profitability and cash
flows. Adjustments to Horizon Pharma's GAAP figures as well
as EBITDA exclude acquisition-related expenses, charges related to
the discontinuation of ACTIMMUNE development for Friedreich’s
ataxia, gain from divestiture, an upfront fee for a license of a
patent, a litigation settlement, loss on debt extinguishment, loss
on sale of long-term investments, costs of debt refinancing, drug
manufacturing harmonization costs, as well as non-cash items such
as share-based compensation, depreciation and amortization, royalty
accretion, non-cash interest expense, intangible and other
non-current asset impairment charges, and other non-cash
adjustments. Certain other special items or substantive
events may also be included in the non-GAAP adjustments
periodically when their magnitude is significant within the periods
incurred. Horizon maintains an established non-GAAP cost
policy that guides the determination of what costs will be excluded
in non-GAAP measures. Horizon Pharma believes that these
non-GAAP financial measures, when considered together with the GAAP
figures, can enhance an overall understanding of Horizon Pharma's
financial and operating performance. The non-GAAP financial
measures are included with the intent of providing investors with a
more complete understanding of the Company’s historical and
expected 2017 financial results and trends and to facilitate
comparisons between periods and with respect to projected
information. In addition, these non-GAAP financial measures
are among the indicators Horizon Pharma's management uses for
planning and forecasting purposes and measuring the Company's
performance. For example, adjusted EBITDA is used by Horizon
Pharma as one measure of management performance under certain
incentive compensation arrangements. These non-GAAP financial
measures should be considered in addition to, and not as a
substitute for, or superior to, financial measures calculated in
accordance with GAAP. The non-GAAP financial measures used by
the Company may be calculated differently from, and therefore may
not be comparable to, non-GAAP financial measures used by other
companies. Horizon Pharma has not provided a reconciliation
of its full-year 2017 adjusted EBITDA outlook to an expected net
income (loss) outlook because certain items such as
acquisition-related expenses and share-based compensation that are
a component of net income (loss) cannot be reasonably projected due
to the significant impact of changes in Horizon Pharma's stock
price, the variability associated with the size or timing of
acquisitions and other factors. These components of net
income (loss) could significantly impact Horizon Pharma’s actual
net income (loss).
Forward-Looking StatementsThis press release
contains forward-looking statements, including, but not limited to,
statements related to Horizon Pharma's full-year 2017 net sales and
adjusted EBITDA guidance, expected peak annual sales of KRYSEXXA
and teprotumumab, expected financial performance in future periods,
expected timing of clinical, regulatory and commercial events,
including the planned Phase 3 clinical trial of teprotumumab and
anticipated additional clinical trials of ACTIMMUNE in cancer
indications, the potential benefits of Horizon Pharma’s acquisition
of River Vision, increases in R&D investment and KRYSTEXXA
commercialization spending, the impact of Horizon Pharma’s primary
care business unit PBM contracting commercial model, the expected
launch of RAVICTI in Europe and PROCYSBI in Canada, potential
market opportunity for Horizon Pharma’s medicines in approved and
potential additional indications, potential growth of Horizon
Pharma’s medicines and business and other statements that are not
historical facts. These forward-looking statements are based
on Horizon Pharma's current expectations and inherently involve
significant risks and uncertainties. Actual results and the
timing of events could differ materially from those anticipated in
such forward-looking statements as a result of these risks and
uncertainties, which include, without limitation, risks that
Horizon Pharma’s actual future financial and operating results may
differ from its expectations or goals; Horizon Pharma’s ability to
grow net sales from existing products; the availability of coverage
and adequate reimbursement and pricing from government and
third-party payers and risks relating to Horizon Pharma’s ability
to successfully implement its business strategies; whether Horizon
Pharma is able to realize expected benefits from arrangements with
PBMs; risks related to acquisition integration and achieving
projected benefits; risks associated with clinical development and
regulatory approvals; risks in the ability to recruit, train and
retain qualified personnel; competition, including potential
generic competition; the ability to protect intellectual property
and defend patents; regulatory obligations and oversight, including
any changes in the legal and regulatory environment in which
Horizon Pharma operates and those risks detailed from time-to-time
under the caption "Risk Factors" and elsewhere in Horizon Pharma's
filings and reports with the SEC. Horizon Pharma undertakes
no duty or obligation to update any forward-looking statements
contained in this presentation as a result of new
information.
Horizon Pharma plc |
|
Condensed Consolidated Statements of
Operations (Unaudited) |
|
(in thousands, except share and per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June
30, |
|
Six Months Ended June
30, |
|
|
|
|
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
|
|
$ |
289,507 |
|
$ |
257,378 |
|
$ |
510,366 |
|
$ |
462,068 |
|
Cost of
goods sold |
|
|
|
130,150 |
|
|
81,126 |
|
|
269,266 |
|
|
158,359 |
|
Gross
profit |
|
|
|
|
159,357 |
|
|
176,252 |
|
|
241,100 |
|
|
303,709 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
|
163,101 |
|
|
11,210 |
|
|
176,162 |
|
|
23,932 |
|
Selling, general and administrative |
|
|
181,923 |
|
|
133,575 |
|
|
355,988 |
|
|
275,514 |
|
Total operating expenses |
|
|
345,024 |
|
|
144,785 |
|
|
532,150 |
|
|
299,446 |
|
Operating
(loss) income |
|
|
|
(185,667) |
|
|
31,467 |
|
|
(291,050) |
|
|
4,263 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER EXPENSE, NET: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
|
(31,608) |
|
|
(19,228) |
|
|
(63,591) |
|
|
(38,686) |
|
Foreign exchange gain (loss) |
|
|
|
151 |
|
|
15 |
|
|
(108) |
|
|
(158) |
|
Gain on divestiture |
|
|
|
5,856 |
|
|
- |
|
|
5,856 |
|
|
- |
|
Loss on debt extinguishment |
|
|
|
- |
|
|
- |
|
|
(533) |
|
|
- |
|
Other expense, net |
|
|
|
(35) |
|
|
(26) |
|
|
- |
|
|
(40) |
|
Total other expense, net |
|
|
(25,636) |
|
|
(19,239) |
|
|
(58,376) |
|
|
(38,884) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)
income before benefit for income taxes |
|
|
(211,303) |
|
|
12,228 |
|
|
(349,426) |
|
|
(34,621) |
|
BENEFIT FOR INCOME TAXES |
|
|
|
(1,767) |
|
|
(2,756) |
|
|
(49,320) |
|
|
(4,199) |
|
NET
(LOSS) INCOME |
|
|
$ |
(209,536) |
|
$ |
14,984 |
|
$ |
(300,106) |
|
$ |
(30,422) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) earnings per
ordinary share - basic |
|
|
|
|
$ |
(1.29) |
|
$ |
0.09 |
|
$ |
(1.85) |
|
$ |
(0.19) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average ordinary shares outstanding - basic |
|
|
162,931,930 |
|
|
160,468,146 |
|
|
162,486,946 |
|
|
160,186,270 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
earnings per ordinary share - diluted |
|
$ |
(1.29) |
|
$ |
0.09 |
|
$ |
(1.85) |
|
$ |
(0.19) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average ordinary shares outstanding - diluted |
|
|
162,931,930 |
|
|
163,920,581 |
|
|
162,486,946 |
|
|
160,186,270 |
|
Horizon Pharma plc |
|
Condensed Consolidated Balance Sheets
(Unaudited) |
|
(in thousands, except share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of |
|
|
|
|
|
|
|
June 30, 2017 |
|
December 31,
2016 |
|
ASSETS |
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
554,269 |
|
|
$ |
509,055 |
|
|
|
Restricted
cash |
|
|
7,266 |
|
|
|
7,095 |
|
|
|
Accounts
receivable, net |
|
|
390,844 |
|
|
|
305,725 |
|
|
|
Inventories, net |
|
|
102,244 |
|
|
|
174,788 |
|
|
|
Prepaid
expenses and other current assets |
|
|
45,988 |
|
|
|
49,619 |
|
|
|
|
Total
current assets |
|
|
1,100,611 |
|
|
|
1,046,282 |
|
|
Property
and equipment, net |
|
|
22,657 |
|
|
|
23,484 |
|
|
Developed
technology, net |
|
|
2,580,875 |
|
|
|
2,767,184 |
|
|
Other
intangible assets, net |
|
|
5,846 |
|
|
|
6,251 |
|
|
Goodwill |
|
|
|
427,944 |
|
|
|
445,579 |
|
|
Deferred
tax assets, net |
|
|
2,163 |
|
|
|
911 |
|
|
Other
assets |
|
|
29,845 |
|
|
|
2,368 |
|
|
TOTAL ASSETS |
|
$ |
4,169,941 |
|
|
$ |
4,292,059 |
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
|
|
Long-term
debt—current portion |
|
$ |
8,500 |
|
|
$ |
7,750 |
|
|
|
Accounts
payable |
|
|
81,884 |
|
|
|
52,479 |
|
|
|
Accrued
expenses |
|
|
112,452 |
|
|
|
182,765 |
|
|
|
Accrued
trade discounts and rebates |
|
|
413,201 |
|
|
|
297,556 |
|
|
|
Accrued
royalties—current portion |
|
|
61,575 |
|
|
|
61,981 |
|
|
|
Deferred
revenues—current portion |
|
|
4,254 |
|
|
|
3,321 |
|
|
|
|
Total
current liabilities |
|
|
681,866 |
|
|
|
605,852 |
|
|
|
|
|
|
|
|
|
|
|
|
LONG-TERM LIABILITIES: |
|
|
|
|
|
|
Exchangeable notes, net |
|
|
306,022 |
|
|
|
298,002 |
|
|
|
Long-term
debt, net, net of current |
|
|
1,577,822 |
|
|
|
1,501,741 |
|
|
|
Accrued
royalties, net of current |
|
|
268,144 |
|
|
|
272,293 |
|
|
|
Deferred
revenues, net of current |
|
|
7,856 |
|
|
|
7,763 |
|
|
|
Deferred
tax liabilities, net |
|
|
210,821 |
|
|
|
296,568 |
|
|
|
Other
long-term liabilities |
|
|
88,642 |
|
|
|
46,061 |
|
|
|
|
Total
long-term liabilities |
|
|
2,459,307 |
|
|
|
2,422,428 |
|
|
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
SHAREHOLDERS' EQUITY: |
|
|
|
|
|
|
Ordinary
shares, $0.0001 nominal value; 300,000,000 shares
authorized; 163,698,457 and 162,004,956
issued at June 30, 2017 and December 31, 2016,
respectively, and 163,314,091 and 161,620,590
outstanding at June 30, 2017 and
December 31, 2016, respectively |
|
|
16 |
|
|
|
16 |
|
|
|
Treasury
stock, 384,366 ordinary shares at June 30, 2017 and December 31,
2016 |
|
|
(4,585 |
) |
|
|
(4,585 |
) |
|
|
Additional
paid-in capital |
|
|
2,177,377 |
|
|
|
2,119,455 |
|
|
|
Accumulated
other comprehensive loss |
|
|
(2,132 |
) |
|
|
(3,086 |
) |
|
|
Accumulated
deficit |
|
|
(1,141,908 |
) |
|
|
(848,021 |
) |
|
|
|
Total
shareholders' equity |
|
|
1,028,768 |
|
|
|
1,263,779 |
|
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
|
$ |
4,169,941 |
|
|
$ |
4,292,059 |
|
|
|
|
|
|
|
|
|
|
|
|
Horizon Pharma plc |
|
Condensed Consolidated Statements of Cash
Flows (Unaudited) |
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June
30, |
|
Six Months Ended June
30, |
|
|
|
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
Net (loss)
income |
|
$ |
(209,536 |
) |
|
$ |
14,984 |
|
|
$ |
(300,106 |
) |
|
$ |
(30,422 |
) |
|
Adjustments to reconcile net loss to net cash provided
by operating activities |
|
|
|
|
|
|
|
|
|
Depreciation and amortization expense |
|
|
71,531 |
|
|
|
51,883 |
|
|
|
143,014 |
|
|
|
102,525 |
|
|
Equity-settled share-based compensation |
|
|
29,123 |
|
|
|
27,673 |
|
|
|
57,960 |
|
|
|
55,418 |
|
|
Royalty accretion |
|
|
12,735 |
|
|
|
9,669 |
|
|
|
25,694 |
|
|
|
19,028 |
|
|
Royalty liability remeasurement |
|
|
- |
|
|
|
- |
|
|
|
(2,944 |
) |
|
|
- |
|
|
Acquired in-process research and development expense |
|
|
148,609 |
|
|
|
- |
|
|
|
148,609 |
|
|
|
- |
|
|
Impairment of non-current asset |
|
|
|
|
22,270 |
|
|
|
- |
|
|
|
22,270 |
|
|
|
- |
|
|
Loss on debt extinguishment |
|
|
- |
|
|
|
- |
|
|
|
388 |
|
|
|
- |
|
|
Payments related to term loan refinancing |
|
|
|
|
- |
|
|
|
- |
|
|
|
(3,940 |
) |
|
|
- |
|
|
Amortization of debt discount and deferred financing costs |
|
|
5,206 |
|
|
|
4,507 |
|
|
|
10,629 |
|
|
|
8,932 |
|
|
Gain on divestiture |
|
|
(2,635 |
) |
|
|
- |
|
|
|
(2,635 |
) |
|
|
- |
|
|
Deferred income taxes |
|
|
|
|
(31,791 |
) |
|
|
(2,705 |
) |
|
|
(79,486 |
) |
|
|
(5,362 |
) |
|
Foreign exchange and other adjustments |
|
|
(174 |
) |
|
|
(14 |
) |
|
|
613 |
|
|
|
159 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
5,735 |
|
|
|
(14,094 |
) |
|
|
(85,323 |
) |
|
|
(83,932 |
) |
|
Inventories |
|
|
30,686 |
|
|
|
6,460 |
|
|
|
67,736 |
|
|
|
13,777 |
|
|
Prepaid expenses and other current assets |
|
|
4,879 |
|
|
|
(16,384 |
) |
|
|
2,434 |
|
|
|
(16,626 |
) |
|
Accounts payable |
|
|
(6,255 |
) |
|
|
(10,578 |
) |
|
|
29,823 |
|
|
|
42,278 |
|
|
Accrued trade discounts and rebates |
|
|
871 |
|
|
|
(5,121 |
) |
|
|
116,950 |
|
|
|
35,480 |
|
|
Accrued expenses and accrued royalties |
|
|
(48,820 |
) |
|
|
(20,006 |
) |
|
|
(98,179 |
) |
|
|
(43,527 |
) |
|
Deferred revenues |
|
|
1,002 |
|
|
|
80 |
|
|
|
384 |
|
|
|
(418 |
) |
|
Other non-current assets and liabilities |
|
|
14,489 |
|
|
|
949 |
|
|
|
14,755 |
|
|
|
4,174 |
|
|
Net cash provided by operating activities |
|
|
47,925 |
|
|
|
47,303 |
|
|
|
68,646 |
|
|
|
101,484 |
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
Payments
for acquisitions, net of cash acquired |
|
|
(167,850 |
) |
|
|
(5,591 |
) |
|
|
(167,850 |
) |
|
|
(520,405 |
) |
|
Proceeds
from divestiture, net of cash divested |
|
|
69,072 |
|
|
|
- |
|
|
|
69,072 |
|
|
|
- |
|
|
Change in restricted cash |
|
|
(274 |
) |
|
|
(391 |
) |
|
|
(170 |
) |
|
|
(1,309 |
) |
|
Purchases of property and equipment |
|
|
(1,207 |
) |
|
|
(5,251 |
) |
|
|
(2,628 |
) |
|
|
(12,776 |
) |
|
Net cash used in investing activities |
|
|
(100,259 |
) |
|
|
(11,233 |
) |
|
|
(101,576 |
) |
|
|
(534,490 |
) |
|
CASH FLOWS FROM FINANCING
ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
Net
proceeds from term loans |
|
|
- |
|
|
|
- |
|
|
|
847,768 |
|
|
|
- |
|
|
Repayment
of term loans |
|
|
(2,125 |
) |
|
|
(1,000 |
) |
|
|
(770,790 |
) |
|
|
(2,000 |
) |
|
Proceeds
from the issuance of ordinary shares in connection with warrant
exercises |
|
|
11 |
|
|
|
- |
|
|
|
11 |
|
|
|
- |
|
|
Proceeds
from the issuance of ordinary shares through ESPP programs |
|
|
4,029 |
|
|
|
3,235 |
|
|
|
3,856 |
|
|
|
3,235 |
|
|
Proceeds
from the issuance of ordinary shares in connection with stock
option exercises |
|
|
753 |
|
|
|
739 |
|
|
|
1,297 |
|
|
|
1,658 |
|
|
Payment of
employee withholding taxes relating to share-based awards |
|
|
(925 |
) |
|
|
(549 |
) |
|
|
(5,202 |
) |
|
|
(4,734 |
) |
|
Repurchase
of ordinary shares |
|
|
(992 |
) |
|
|
- |
|
|
|
(992 |
) |
|
|
- |
|
|
Net cash provided by (used in) financing
activities |
|
|
751 |
|
|
|
2,425 |
|
|
|
75,948 |
|
|
|
(1,841 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of
foreign exchange rate changes on cash and cash equivalents |
|
|
2,494 |
|
|
|
177 |
|
|
|
2,196 |
|
|
|
(244 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS |
|
|
(49,089 |
) |
|
|
38,672 |
|
|
|
45,214 |
|
|
|
(435,091 |
) |
|
CASH AND CASH EQUIVALENTS, beginning of the
period |
|
|
603,358 |
|
|
|
385,853 |
|
|
|
509,055 |
|
|
|
859,616 |
|
|
CASH AND CASH EQUIVALENTS, end of the period |
|
$ |
554,269 |
|
|
$ |
424,525 |
|
|
$ |
554,269 |
|
|
$ |
424,525 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Horizon Pharma plc |
GAAP to Non-GAAP Reconciliations |
Net Income and Earnings Per Share
(Unaudited) |
(in thousands, except share and per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June
30, |
|
Six Months Ended June
30, |
|
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net (loss) income |
$ |
(209,536 |
) |
|
$ |
14,984 |
|
|
$ |
(300,106 |
) |
|
$ |
(30,422 |
) |
|
Non-GAAP
adjustments: |
|
|
|
|
|
|
|
|
Remeasurement of royalties for medicines acquired through
business combinations |
|
- |
|
|
|
- |
|
|
|
(2,944 |
) |
|
|
- |
|
|
Acquisition-related costs |
|
153,385 |
|
|
|
281 |
|
|
|
163,424 |
|
|
|
11,297 |
|
|
Upfront fee for license of global patent |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,000 |
|
|
Fees related to term loan refinancing |
|
(45 |
) |
|
|
- |
|
|
|
4,098 |
|
|
|
- |
|
|
Primary Care business unit realignment costs |
|
5,193 |
|
|
|
- |
|
|
|
5,193 |
|
|
|
- |
|
|
Gain on divestiture |
|
(5,856 |
) |
|
|
- |
|
|
|
(5,856 |
) |
|
|
- |
|
|
Loss on debt extinguishment |
|
- |
|
|
|
- |
|
|
|
533 |
|
|
|
- |
|
|
Amortization, accretion and step-up: |
|
|
|
|
|
|
|
|
Intangible amortization expense |
|
69,776 |
|
|
|
50,792 |
|
|
|
139,453 |
|
|
|
100,442 |
|
|
Amortization of debt discount and deferred financing
costs |
|
5,206 |
|
|
|
4,507 |
|
|
|
10,629 |
|
|
|
8,932 |
|
|
Accretion of royalty liabilities |
|
12,735 |
|
|
|
9,669 |
|
|
|
25,694 |
|
|
|
19,028 |
|
|
Inventory step-up expense |
|
33,895 |
|
|
|
9,102 |
|
|
|
74,490 |
|
|
|
16,548 |
|
|
Share-based compensation |
|
|
27,768 |
|
|
|
27,997 |
|
|
|
56,237 |
|
|
|
55,609 |
|
|
Depreciation expense |
|
|
1,755 |
|
|
|
1,091 |
|
|
|
3,561 |
|
|
|
2,083 |
|
|
Charges relating to discontinuation of Friedreich's
ataxia program |
|
19,167 |
|
|
|
- |
|
|
|
19,167 |
|
|
|
- |
|
|
Drug substance harmonization costs |
|
745 |
|
|
|
- |
|
|
|
5,044 |
|
|
|
- |
|
|
Royalties for medicines acquired through business
combinations |
|
|
(11,622 |
) |
|
|
(9,095 |
) |
|
|
(22,939 |
) |
|
|
(17,595 |
) |
|
Total of pre-tax non-GAAP adjustments |
|
312,102 |
|
|
|
94,344 |
|
|
|
475,784 |
|
|
|
198,344 |
|
|
Income tax effect of pre-tax non-GAAP adjustments |
|
|
(34,272 |
) |
|
|
(18,064 |
) |
|
|
(72,375 |
) |
|
|
(35,338 |
) |
|
Total of non-GAAP adjustments |
|
277,830 |
|
|
|
76,280 |
|
|
|
403,409 |
|
|
|
163,006 |
|
|
Non-GAAP Net Income |
|
|
$ |
68,294 |
|
|
$ |
91,264 |
|
|
$ |
103,303 |
|
|
$ |
132,584 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Earnings Per Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares -
Basic |
|
|
|
162,931,930 |
|
|
|
160,468,146 |
|
|
|
162,486,946 |
|
|
|
160,186,270 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Earnings Per Share -
Basic: |
|
|
|
|
|
|
|
|
|
|
GAAP (loss) earnings per share -
Basic |
|
|
(1.29 |
) |
|
|
0.09 |
|
|
|
(1.85 |
) |
|
|
(0.19 |
) |
|
Non-GAAP adjustments |
|
|
1.71 |
|
|
|
0.48 |
|
|
|
2.49 |
|
|
|
1.02 |
|
|
Non-GAAP earnings per share -
Basic |
|
|
0.42 |
|
|
|
0.57 |
|
|
|
0.64 |
|
|
|
0.83 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares -
Diluted |
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares - Basic |
|
|
162,931,930 |
|
|
|
160,468,146 |
|
|
|
162,486,946 |
|
|
|
160,186,270 |
|
|
Ordinary share equivalents |
|
|
2,033,141 |
|
|
|
3,452,435 |
|
|
|
2,499,409 |
|
|
|
3,630,429 |
|
|
Weighted average shares -
Diluted |
|
|
164,965,071 |
|
|
|
163,920,581 |
|
|
|
164,986,355 |
|
|
|
163,816,699 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Earnings Per Share -
Diluted |
|
|
|
|
|
|
|
|
|
GAAP (loss)
earnings per share - Diluted |
|
|
(1.29 |
) |
|
|
0.09 |
|
|
|
(1.85 |
) |
|
|
(0.19 |
) |
|
Non-GAAP adjustments |
|
|
1.71 |
|
|
|
0.47 |
|
|
|
2.49 |
|
|
|
1.02 |
|
|
Diluted earnings per share effect of ordinary share
equivalents |
|
|
(0.01 |
) |
|
|
- |
|
|
|
(0.01 |
) |
|
|
(0.02 |
) |
|
Non-GAAP earnings per share -
Diluted |
|
|
0.41 |
|
|
|
0.56 |
|
|
|
0.63 |
|
|
|
0.81 |
|
|
|
|
|
|
|
|
|
|
|
|
Horizon Pharma plc |
GAAP to Non-GAAP Reconciliations |
EBITDA, Gross Profit and Operating Cash Flow
(Unaudited) |
(in thousands, except
percentages) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June
30, |
|
Six Months Ended June
30, |
|
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
EBITDA and Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net (loss) income |
$ |
(209,536 |
) |
|
$ |
14,984 |
|
|
$ |
(300,106 |
) |
|
$ |
(30,422 |
) |
Depreciation |
|
1,755 |
|
|
|
1,091 |
|
|
|
3,561 |
|
|
|
2,083 |
|
Amortization, accretion and step-up: |
|
|
|
|
|
|
|
|
|
Intangible amortization expense |
|
69,776 |
|
|
|
50,792 |
|
|
|
139,453 |
|
|
|
100,442 |
|
Accretion of royalty liabilities |
|
|
12,735 |
|
|
|
9,669 |
|
|
|
25,694 |
|
|
|
19,028 |
|
Amortization of deferred revenue |
|
|
(207 |
) |
|
|
(213 |
) |
|
|
(411 |
) |
|
|
(419 |
) |
Inventory step-up expense |
|
|
33,895 |
|
|
|
9,102 |
|
|
|
74,490 |
|
|
|
16,548 |
|
Interest expense, net (including amortization of |
|
|
|
|
|
|
|
|
|
debt discount and deferred financing costs) |
|
|
31,608 |
|
|
|
19,228 |
|
|
|
63,591 |
|
|
|
38,686 |
|
Benefit for income taxes |
|
|
|
(1,767 |
) |
|
|
(2,756 |
) |
|
|
(49,320 |
) |
|
|
(4,199 |
) |
EBITDA |
|
|
$ |
(61,741 |
) |
|
$ |
101,897 |
|
|
$ |
(43,048 |
) |
|
$ |
141,747 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
Remeasurement of royalties for medicines acquired through
business combinations |
|
- |
|
|
|
- |
|
|
|
(2,944 |
) |
|
|
- |
|
Acquisition-related costs |
|
|
153,385 |
|
|
|
281 |
|
|
|
163,424 |
|
|
|
11,297 |
|
Upfront fee for license of global patent |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,000 |
|
Primary Care business unit realignment costs |
|
|
5,193 |
|
|
|
- |
|
|
|
5,193 |
|
|
|
- |
|
Gain on divestiture |
|
(5,856 |
) |
|
|
- |
|
|
|
(5,856 |
) |
|
|
- |
|
Loss on debt extinguishment |
|
|
- |
|
|
|
- |
|
|
|
533 |
|
|
|
- |
|
Fees related to term loan refinancing |
|
|
(45 |
) |
|
|
- |
|
|
|
4,098 |
|
|
|
- |
|
Share-based compensation |
|
|
27,768 |
|
|
|
27,997 |
|
|
|
56,237 |
|
|
|
55,609 |
|
Charges relating to discontinuation of Friedreich's ataxia
program |
|
19,167 |
|
|
|
- |
|
|
|
19,167 |
|
|
|
- |
|
Drug substance harmonization costs |
|
|
745 |
|
|
|
- |
|
|
|
5,044 |
|
|
|
- |
|
Royalties for medicines acquired through business
combinations |
|
(11,622 |
) |
|
|
(9,095 |
) |
|
|
(22,939 |
) |
|
|
(17,595 |
) |
Total of Non-GAAP adjustments |
|
|
|
188,735 |
|
|
|
19,183 |
|
|
|
221,957 |
|
|
|
51,311 |
|
Adjusted EBITDA |
|
|
$ |
126,994 |
|
|
$ |
121,080 |
|
|
$ |
178,909 |
|
|
$ |
193,058 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Gross Profit: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross profit |
|
$ |
159,357 |
|
|
$ |
176,252 |
|
|
$ |
241,100 |
|
|
$ |
303,709 |
|
Non-GAAP gross profit adjustments: |
|
|
|
|
|
|
|
|
Acquisition-related costs |
|
|
(48 |
) |
|
|
296 |
|
|
|
32 |
|
|
|
411 |
|
Share-based compensation |
|
|
573 |
|
|
|
- |
|
|
|
1,001 |
|
|
|
- |
|
Remeasurement of royalties for medicines acquired through
business combinations |
|
|
- |
|
|
|
- |
|
|
|
(2,944 |
) |
|
|
- |
|
Intangible amortization expense (COGS
only) |
|
|
69,574 |
|
|
|
50,590 |
|
|
|
139,048 |
|
|
|
100,037 |
|
Accretion of royalty liabilities |
|
|
12,735 |
|
|
|
9,669 |
|
|
|
25,694 |
|
|
|
19,028 |
|
Inventory step-up expense |
|
|
33,895 |
|
|
|
9,102 |
|
|
|
74,490 |
|
|
|
16,548 |
|
Depreciation (COGS only) |
|
|
183 |
|
|
|
100 |
|
|
|
366 |
|
|
|
220 |
|
Charges relating to discontinuation of
Friedreich's ataxia program |
|
(3,103 |
) |
|
|
- |
|
|
|
(3,103 |
) |
|
|
- |
|
Drug substance harmonization
costs |
|
|
745 |
|
|
|
|
|
5,044 |
|
|
|
- |
|
Royalties for medicines acquired
through business combinations |
|
|
(11,622 |
) |
|
|
(9,095 |
) |
|
|
(22,939 |
) |
|
|
(17,595 |
) |
Total of
Non-GAAP adjustments |
|
|
102,932 |
|
|
|
60,662 |
|
|
|
216,689 |
|
|
|
118,649 |
|
Non-GAAP gross
profit |
|
$ |
262,289 |
|
|
$ |
236,914 |
|
|
$ |
457,789 |
|
|
$ |
422,358 |
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross profit % |
|
|
55.0 |
% |
|
|
68.5 |
% |
|
|
47.2 |
% |
|
|
65.7 |
% |
Non-GAAP gross profit
% |
|
|
90.6 |
% |
|
|
92.0 |
% |
|
|
89.7 |
% |
|
|
91.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating cash
flow: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP cash provided by operating
activities |
|
$ |
47,925 |
|
|
$ |
47,303 |
|
|
$ |
68,646 |
|
|
$ |
101,484 |
|
Cash
payments for acquisition-related costs |
|
|
12,620 |
|
|
|
10,883 |
|
|
|
33,012 |
|
|
|
22,577 |
|
Cash
payment for litigation settlement |
|
|
16,250 |
|
|
|
- |
|
|
|
32,500 |
|
|
|
- |
|
Upfront fee for license of global patent |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,000 |
|
Drug
substance harmonization costs |
|
5,006 |
|
|
|
- |
|
|
|
5,006 |
|
|
|
- |
|
Cash
payments for clinical trial wind-down costs |
|
|
718 |
|
|
|
- |
|
|
|
1,200 |
|
|
|
- |
|
Cash
payments for charges relating to discontinuation of Friedreich's
ataxia program |
|
|
1,801 |
|
|
|
- |
|
|
|
1,801 |
|
|
|
- |
|
Cash
payment for debt extinguishment |
|
|
- |
|
|
|
- |
|
|
|
145 |
|
|
|
- |
|
Cash
payments relating to term loan refinancing |
|
|
455 |
|
|
|
- |
|
|
|
7,707 |
|
|
|
- |
|
Cash
payments for Primary Care business unit realignment |
|
|
1,664 |
|
|
|
- |
|
|
|
1,664 |
|
|
|
- |
|
Non-GAAP operating cash
flow |
|
$ |
86,439 |
|
|
$ |
58,186 |
|
|
$ |
151,681 |
|
|
$ |
126,061 |
|
|
|
|
|
|
|
|
|
|
|
|
Horizon Pharma
plc |
|
GAAP to Non-GAAP Tax Rate Reconciliation
(Unaudited) |
|
(in millions, except
percentages) |
|
|
|
|
|
|
|
|
|
|
|
|
Q2 2017 |
|
|
|
Pre-tax Net (Loss) Income |
|
Income Tax (Benefit)
Expense |
Tax Rate |
|
Net (Loss) Income |
Diluted (Loss) Earnings Per Share |
|
As reported -
GAAP |
$ |
(211.3) |
$ |
(1.8) |
0.8% |
$ |
(209.5) |
$ |
(1.29) |
|
Non-GAAP
adjustments |
|
312.1 |
|
34.3 |
|
|
277.8 |
|
|
Non-GAAP |
$ |
100.8 |
$ |
32.5 |
32.5% |
$ |
68.3 |
$ |
0.41 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2 2016 |
|
|
|
Pre-tax Net Income |
|
Income Tax (Benefit)
Expense |
Tax Rate |
|
Net Income |
Diluted Earnings Per Share |
|
As reported -
GAAP |
$ |
12.2 |
$ |
(2.8) |
-22.5% |
$ |
15.0 |
$ |
0.09 |
|
Non-GAAP
adjustments |
|
94.3 |
|
18.1 |
|
|
76.2 |
|
|
Non-GAAP |
$ |
106.5 |
$ |
15.3 |
14.4% |
$ |
91.2 |
$ |
0.56 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD 2017 |
|
|
|
Pre-tax Net (Loss) Income |
|
Income Tax (Benefit)
Expense |
Tax Rate |
|
Net (Loss) Income |
Diluted (Loss) Earnings Per Share |
|
As reported -
GAAP |
$ |
(349.4) |
$ |
(49.3) |
14.1% |
$ |
(300.1) |
$ |
(1.85) |
|
Non-GAAP
adjustments |
|
475.8 |
|
72.4 |
|
|
403.4 |
|
|
Non-GAAP |
$ |
126.4 |
$ |
23.1 |
18.2% |
$ |
103.3 |
$ |
0.63 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD 2016 |
|
|
|
Pre-tax Net (Loss)Income |
|
Income Tax (Benefit)
Expense |
Tax Rate |
|
Net (Loss) Income |
Diluted (Loss) Earnings Per Share |
|
As reported -
GAAP |
$ |
(34.6) |
$ |
(4.2) |
12.1% |
$ |
(30.4) |
$ |
(0.19) |
|
Non-GAAP
adjustments |
|
198.3 |
|
35.3 |
|
|
163.0 |
|
|
Non-GAAP |
$ |
163.7 |
$ |
31.1 |
19.0% |
$ |
132.6 |
$ |
0.81 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Horizon Pharma plc |
|
|
|
|
|
Certain Income Statement Line Items - Non-GAAP
Adjusted |
|
|
|
|
|
For the Three Months Ended June 30,
2017 |
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COGS |
Research & Development |
Selling, General & Administrative |
Interest Expense |
Gain on Divestiture |
Income Tax Benefit(Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP as reported |
$ |
(130,150 |
) |
$ |
(163,101 |
) |
$ |
(181,923 |
) |
$ |
(31,608 |
) |
$ |
5,856 |
|
$ |
1,767 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Adjustments (in thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related costs(1) |
|
(48 |
) |
|
148,080 |
|
|
5,353 |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
Fees related to term
loan refinancing(2) |
|
|
- |
|
|
- |
|
|
(45 |
) |
|
- |
|
|
- |
|
|
- |
|
|
|
|
Primary Care business
unit realignment costs(3) |
|
|
- |
|
|
- |
|
|
5,193 |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
Gain on
divestiture(4) |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(5,856 |
) |
|
- |
|
|
|
|
Amortization, accretion and step-up: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible amortization expense(5) |
|
69,574 |
|
|
- |
|
|
202 |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
Amortization of debt discount and deferred financing
costs(6) |
|
- |
|
|
- |
|
|
- |
|
|
5,206 |
|
|
- |
|
|
- |
|
|
|
|
Accretion of royalty liability(7) |
|
12,735 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
Inventory step-up expense(8) |
|
33,895 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
Share-based
compensation(9) |
|
573 |
|
|
2,313 |
|
|
24,882 |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
Depreciation expense(10) |
|
183 |
|
|
- |
|
|
1,572 |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
Charges relating to
discontinuation of Friedreich's ataxia program(11) |
|
|
(3,103 |
) |
|
- |
|
|
22,270 |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
Drug substance
harmonization costs(12) |
|
|
745 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
Royalties
for medicines acquired through business combinations(13) |
|
(11,622 |
) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
Income tax
effect on pre-tax non-GAAP adjustments(14) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(34,272 |
) |
|
|
|
Total of non-GAAP adjustments |
|
102,932 |
|
|
150,393 |
|
|
59,427 |
|
|
5,206 |
|
|
(5,856 |
) |
|
(34,272 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP |
$ |
(27,218 |
) |
$ |
(12,708 |
) |
$ |
(122,496 |
) |
$ |
(26,402 |
) |
$ |
- |
|
$ |
(32,505 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Horizon Pharma plc |
|
|
|
|
|
Certain Income Statement Line Items - Non-GAAP
Adjusted |
|
|
|
|
|
For the Three Months Ended June 30,
2016 |
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COGS |
Research & Development |
Selling, General &
Administrative |
Interest Expense |
Income Tax Benefit (Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP as reported |
$ |
(81,126 |
) |
$ |
(11,210 |
) |
$ |
(133,575 |
) |
$ |
(19,228 |
) |
$ |
2,756 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Adjustments (in thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related costs(1) |
|
296 |
|
|
506 |
|
|
(521 |
) |
|
- |
|
|
- |
|
|
|
|
|
Amortization, accretion and step-up: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible amortization expense(5) |
|
50,590 |
|
|
- |
|
|
202 |
|
|
- |
|
|
- |
|
|
|
|
|
Amortization of debt discount and deferred financing
costs(6) |
|
- |
|
|
- |
|
|
- |
|
|
4,507 |
|
|
- |
|
|
|
|
|
Accretion of royalty liability(7) |
|
9,669 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
|
Inventory step-up expense(8) |
|
9,102 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
|
Share-based
compensation(9) |
|
- |
|
|
2,238 |
|
|
25,759 |
|
|
- |
|
|
- |
|
|
|
|
|
Depreciation expense(10) |
|
100 |
|
|
- |
|
|
991 |
|
|
- |
|
|
- |
|
|
|
|
|
Royalties
for medicines acquired through business combinations(13) |
|
(9,095 |
) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
|
Income tax
effect on pre-tax non-GAAP adjustments(14) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(18,064 |
) |
|
|
|
|
Total of non-GAAP adjustments |
|
60,662 |
|
|
2,744 |
|
|
26,431 |
|
|
4,507 |
|
|
(18,064 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP |
$ |
(20,464 |
) |
$ |
(8,466 |
) |
$ |
(107,144 |
) |
$ |
(14,721 |
) |
$ |
(15,308 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Horizon Pharma plc |
|
|
|
|
Certain Income Statement Line Items - Non-GAAP
Adjusted |
|
|
|
|
For the Six Months Ended June 30,
2017 |
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COGS |
Research & Development |
Selling, General &
Administrative |
Interest Expense |
Gain on Divestiture |
Loss on Debt Extinguishment |
Income Tax Benefit (Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP as reported |
$ |
(269,266 |
) |
$ |
(176,162 |
) |
$ |
(355,988 |
) |
$ |
(63,591 |
) |
$ |
5,856 |
|
$ |
(533) |
$ |
49,320 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Adjustments (in thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related costs(1) |
|
32 |
|
|
148,257 |
|
|
15,135 |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
|
|
|
Fees
related to term loan refinancing(2) |
|
- |
|
|
- |
|
|
4,098 |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
|
|
|
Loss on
debt extinguishment(15) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
533 |
|
- |
|
|
|
|
Primary
Care business unit realignment costs(3) |
|
- |
|
|
- |
|
|
5,193 |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
|
|
|
Gain on
divestiture(4) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(5,856 |
) |
|
- |
|
- |
|
|
|
|
Amortization, accretion and step-up: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible amortization expense(5) |
|
139,048 |
|
|
- |
|
|
405 |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
|
|
|
Amortization of debt discount and deferred financing
costs(6) |
|
- |
|
|
- |
|
|
- |
|
|
10,629 |
|
|
- |
|
|
- |
|
- |
|
|
|
|
Accretion of royalty liability(7) |
|
25,694 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
|
|
|
Inventory step-up expense(8) |
|
74,490 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
|
|
|
Remeasurement of royalties for products acquired through
business combinations(16) |
|
(2,944 |
) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
|
|
|
Share-based
compensation(9) |
|
1,001 |
|
|
4,362 |
|
|
50,874 |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
|
|
|
Depreciation expense(10) |
|
366 |
|
|
- |
|
|
3,195 |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
|
|
|
Charges
relating to discontinuation of Friedreich's ataxia
program(11) |
|
(3,103 |
) |
|
- |
|
|
22,270 |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
|
|
|
Drug
substance harmonization costs(12) |
|
5,044 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
|
|
|
Royalties
for medicines acquired through business combinations(13) |
|
(22,939 |
) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
|
|
|
Income tax
effect on pre-tax non-GAAP adjustments(14) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
(72,375 |
) |
|
|
|
Total of non-GAAP adjustments |
|
216,689 |
|
|
152,619 |
|
|
101,170 |
|
|
10,629 |
|
|
(5,856 |
) |
|
533 |
|
(72,375 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP |
$ |
(52,577 |
) |
$ |
(23,543 |
) |
$ |
(254,818 |
) |
$ |
(52,962 |
) |
$ |
- |
|
$ |
- |
$ |
(23,055 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Horizon Pharma plc |
|
|
|
|
Certain Income Statement Line Items - Non-GAAP
Adjusted |
|
|
|
|
For the Six Months Ended June 30,
2016 |
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COGS |
Research & Development |
Selling, General &
Administrative |
Interest Expense |
Income Tax Benefit (Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP as reported |
$ |
(158,359 |
) |
$ |
(23,932 |
) |
$ |
(275,514 |
) |
$ |
(38,686 |
) |
$ |
4,199 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Adjustments (in thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related costs(1) |
|
411 |
|
|
538 |
|
|
10,348 |
|
|
- |
|
|
- |
|
|
|
|
|
|
|
Upfront fee
for license of global patent(17) |
|
- |
|
|
2,000 |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
|
|
|
Amortization, accretion and step-up: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible amortization
expense(5) |
|
100,037 |
|
|
- |
|
|
405 |
|
|
- |
|
|
- |
|
|
|
|
|
|
|
|
Amortization of debt
discount and deferred financing costs(6) |
|
- |
|
|
- |
|
|
- |
|
|
8,932 |
|
|
- |
|
|
|
|
|
|
|
|
Accretion of royalty
liability(7) |
|
19,028 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
|
|
|
|
Inventory step-up
expense(8) |
|
16,548 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
|
|
|
Share-based
compensation(9) |
|
- |
|
|
4,363 |
|
|
51,246 |
|
|
- |
|
|
- |
|
|
|
|
|
|
|
Depreciation expense(10) |
|
220 |
|
|
- |
|
|
1,863 |
|
|
- |
|
|
- |
|
|
|
|
|
|
|
Royalties
for medicines acquired through business combinations(13) |
|
(17,595 |
) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
|
|
|
Income tax
effect on pre-tax non-GAAP adjustments(14) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(35,338 |
) |
|
|
|
|
|
|
|
Total of non-GAAP
adjustments |
|
118,649 |
|
|
6,901 |
|
|
63,862 |
|
|
8,932 |
|
|
(35,338 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP |
$ |
(39,710 |
) |
$ |
(17,031 |
) |
$ |
(211,652 |
) |
$ |
(29,754 |
) |
$ |
(31,139 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTES FOR CERTAIN INCOME STATEMENT LINE ITEMS -
NON-GAAP |
(in thousands) |
|
(1 |
) |
|
Expenses,
including legal and consulting fees, incurred in connection with
the Company’s acquisitions of River Vision Development Corp.
(“River Vision”), Raptor Pharmaceutical Corp. (“Raptor”) , Crealta
Holdings LLC (“Crealta”), Hyperion Therapeutics, Inc. (“Hyperion”),
Vidara Therapeutics International Public Limited Company
(“Vidara”), its agreement to acquire the worldwide rights to
interferon gamma-1b, and its withdrawn offer to acquire Depomed
Inc. have been excluded. |
|
|
|
|
(2 |
) |
|
Represents
arrangement and other fees relating to the refinancing of the
Company’s term loans during the first quarter of 2017. |
|
|
|
|
(3 |
) |
|
Represents
expenses, including severance costs and consulting fees, related to
the realignment of the Company’s Primary Care business unit. |
|
|
|
|
(4 |
) |
|
On June 23,
2017, the Company completed the divestiture of a European
subsidiary that owns the marketing rights to PROCSYBI and QUINSAIR
in Europe, the Middle East and Africa to Chiesi Farmaceutici
S.p.A. In connection with this divestiture, the Company
recorded a gain of $5,856 in the three and six months ended June
30, 2017. |
|
|
|
|
(5 |
) |
|
Intangible
amortization expenses are associated with the Company’s
intellectual property rights, developed technology and customer
relationships of ACTIMMUNE, BUPHENYL, KRYSTEXXA, LODOTRA, MIGERGOT,
PENNSAID 2%, PROCYSBI, RAVICTI, RAYOS and VIMOVO. |
|
|
|
|
(6 |
) |
|
Represents
amortization of debt discount and deferred financing costs
associated with the Company's debt. |
|
|
|
|
(7 |
) |
|
Represents
accretion expense associated with the ACTIMMUNE, BUPHENYL,
KRYSTEXXA, MIGERGOT, PROCYSBI, RAVICTI and VIMOVO royalties for the
three and six months ended June 30, 2017 and represents accretion
expense associated with the ACTIMMUNE, BUPHENYL, KRYSTEXXA,
MIGERGOT, RAVICTI and VIMOVO royalties for the three and six months
ended June 30, 2016. |
|
|
|
|
(8 |
) |
|
In
connection with the Crealta acquisition, the KRYSTEXXA and MIGERGOT
inventory was stepped up in value by $144,289 and during the three
and six months ended June 30, 2017, the Company recognized in cost
of goods sold, $19,366 and $33,723 respectively, for step-up
inventory expenses related to KRYSTEXXA and MIGERGOT inventory
sold. |
|
|
|
|
|
|
|
During the
three and six months ended June 30, 2016, the Company recognized in
cost of goods sold, $9,102 and $16,548 respectively, for step-up
inventory expenses related to KRYSTEXXA and MIGERGOT inventory
sold. |
|
|
|
|
|
|
|
In
connection with the Raptor acquisition, the PROCYSBI and QUINSAIR
inventory was stepped up in value by $66,950 and during the three
and six months ended June 30, 2017, the Company recognized in cost
of goods sold $14,528 and $40,767 respectively, of step-up
inventory expenses related to PROCYSBI and QUINSAIR inventory
sold. |
|
|
|
|
(9 |
) |
|
Represents
share-based compensation expense associated with the Company's
stock option, restricted stock unit, and performance stock unit
grants to its employees and non-employees, its cash-settled
long-term incentive program and its employee stock purchase
plan. |
|
|
|
|
(10 |
) |
|
Represents
depreciation expense related to the Company’s property, equipment,
software and leasehold improvements. |
|
|
|
|
(11 |
) |
|
Charges
relating to discontinuation of Friedreich’s ataxia program include
$22,270 relating to the impairment of a non-current asset recorded
following payment to Boehringer Ingelheim International for the
acquisition of certain rights to interferon gamma-1b, and a $3,103
reduction in cost of goods sold relating to the renegotiation of a
contract with Boehringer Ingelheim related to the purchase of
additional units of ACTIMMUNE. |
|
|
|
|
(12 |
) |
|
During the
year ended December 31, 2016, the Company committed to spend
$14,900 related to the harmonization of the manufacturing processes
for ACTIMMUNE and IMUKIN drug substance. During the six
months ended June 30, 2017, the Company incurred $6,519 of this
spend, including costs of $5,044 that qualify for exclusion in the
Company’s non-GAAP financial measures under its non-GAAP cost
policy. |
|
|
|
|
(13 |
) |
|
Royalties
of $11,622 and $22,939 were incurred during the three and six
months ended June 30, 2017, respectively, based on the periods’ net
sales for ACTIMMUNE, BUPHENYL, KRYSTEXXA, MIGERGOT, PROCYSBI,
QUINSAIR, RAVICTI and VIMOVO. Royalties of $9,095 and $17,595
were incurred during the three and six months ended June 30, 2016,
respectively, based on the periods’ net sales for ACTIMMUNE,
BUPHENYL, KRYSTEXXA, MIGERGOT, RAVICTI and VIMOVO. |
|
|
|
|
(14 |
) |
|
Income tax
adjustments on pre-tax non-GAAP adjustments represent the estimated
income tax impact of each pre-tax non-GAAP adjustment based on the
statutory income tax rate of the applicable jurisdictions for each
non-GAAP adjustment. |
|
|
|
|
(15 |
) |
|
During the
first quarter of 2017, the Company recorded a loss on debt
extinguishment of $533, which was comprised of the write-off of
$388 in debt discount and deferred financing costs, and an early
redemption payment of $145. |
|
|
|
|
(16 |
) |
|
At the time
of the Company's acquisition of the rights to ACTIMMUNE, BUPHENYL,
KRYSTEXXA, MIGERGOT, PROCYSBI, RAVICTI and VIMOVO, the Company
estimated the fair value of contingent royalties payable to third
parties using an income approach under the discounted cash flow
method, which included revenue projections and other assumptions
the Company made to determine the fair value. If the Company
significantly overperforms or underperforms against its original
revenue projections or it becomes necessary to make changes to
assumptions as a result of a triggering event, the Company is
required to reassess the fair value of the contingent royalties
payable. Any subsequent adjustment to fair value is recorded
in the period such adjustment is made as either an increase or
decrease to royalties payable, with a corresponding increase or
decrease in cost of goods sold, in accordance with established
accounting policies. During the first quarter of 2017, the
Company recorded a net reduction of $2,944 to cost of goods sold to
adjust the amount of the contingent royalty liabilities relating to
VIMOVO and KRYSTEXXA. |
|
|
|
|
(17 |
) |
|
Represents
an upfront fee paid for a license of a global patent. |
|
|
Contacts:
Investors:
Tina Ventura
Senior Vice President,
Investor Relations
investor-relations@horizonpharma.com
Ruth Venning
Executive Director,
Investor Relations
investor-relations@horizonpharma.com
U.S. Media:
Geoff Curtis
Senior Vice President,
Corporate Affairs & Chief Communications Officer
media@horizonpharma.com
Ireland Media:
Ray Gordon
Gordon MRM
ray@gordonmrm.ie
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