DUBLIN--(BUSINESS WIRE)--Horizon Therapeutics plc (Nasdaq: HZNP) today announced its third-quarter 2019 financial results and raised the midpoint of its full-year 2019 adjusted EBITDA guidance.
“Our third-quarter performance underscores the strength of our commercial and R&D organizations,” said Timothy Walbert, chairman, president and chief executive officer, Horizon. “We generated record quarterly net sales in our orphan and rheumatology segment – including a record quarter for net sales of KRYSTEXXA, our medicine for uncontrolled gout – and the U.S. FDA also granted Priority Review of our BLA for teprotumumab, our biologic candidate for the treatment of active thyroid eye disease. We made great progress on all fronts during the quarter, including our market education activities related to teprotumumab, and remain excited about the prospect of being able to address the significant unmet need for patients living with active thyroid eye disease.”
Financial Highlights
| (in millions except for per share amounts and percentages) | Q3 19 | Q3 18 | % Change | YTD 19 | YTD 18 | % Change | |||||||||||||
| Net sales | $ |
335.5 |
$ |
325.3 |
3 |
|
$ |
936.5 |
|
$ |
852.0 |
|
10 |
||||||
| Net income (loss) |
|
18.2 |
|
33.4 |
(45 |
) |
|
(19.7 |
) |
|
(140.0 |
) |
86 |
||||||
| Non-GAAP net income |
|
124.1 |
|
112.6 |
10 |
|
|
273.6 |
|
|
197.9 |
|
38 |
||||||
| Adjusted EBITDA |
|
130.4 |
|
149.9 |
(13 |
) |
|
342.9 |
|
|
300.3 |
|
14 |
||||||
| Earnings (Loss) per share - diluted |
|
0.09 |
|
0.19 |
(53 |
) |
|
(0.11 |
) |
|
(0.84 |
) |
87 |
||||||
| Non-GAAP earnings per share - diluted |
|
0.64 |
|
0.65 |
(2 |
) |
|
1.44 |
|
|
1.16 |
|
24 |
||||||
Third-Quarter and Recent Company Highlights
- Granted Priority Review of Teprotumumab BLA: In September, the Company announced the U.S. Food and Drug Administration (FDA) accepted the Biologics License Application (BLA) for its investigational medicine teprotumumab for the treatment of active TED and granted it Priority Review designation, with a March 8, 2020, Prescription Drug User Fee Act (PDUFA) date. If approved, teprotumumab would be the first and only approved treatment for active TED.
- Presented Additional Teprotumumab Phase 3 Data: The Company recently presented additional data from the Phase 3 OPTIC confirmatory clinical trial showing that teprotumumab provided significant benefit on several devastating effects of active TED compared with placebo, including diplopia (double vision), quality of life (QoL) and clinical activity score (CAS). At Week 24, 68 percent of teprotumumab patients had a change from baseline of at least 1 grade in diplopia, compared to 29 percent of placebo patients (p=0.001). On the Graves' Ophthalmopathy Quality of Life (GO-QoL) scale, a change of 6 points is considered clinically significant, and teprotumumab patients had a mean change of 13.79 compared to 4.43 for placebo patients (p<0.001). At Week 24, 59 percent of teprotumumab patients achieved a CAS value of 0 or 1 compared to 21 percent of placebo patients (p<0.001). These data were presented during the American Society of Ophthalmic Plastic and Reconstructive Surgery (ASOPRS) 50th Anniversary 2019 Fall Scientific Symposium in San Francisco, and build upon data presented earlier in the year that demonstrated the significant benefit of teprotumumab on proptosis.
- Announced Teprotumumab Expanded Access Program (EAP): In August, the Company announced an EAP for teprotumumab while the FDA reviews the BLA. The EAP provides access to teprotumumab for patients with active TED who meet protocol criteria, who may have otherwise progressed to the inactive stage of the debilitating disease before the BLA review process is completed.
- Initiated PROTECT Trial Evaluating KRYSTEXXA to Improve Management of Uncontrolled Gout for Adults with a Kidney Transplant: In October, the Company initiated its open-label PROTECT clinical trial evaluating the use of KRYSTEXXA in adults with uncontrolled gout who have undergone a kidney transplant. The objective of the trial is to demonstrate that KRYSTEXXA provides effective disease control without burdening the kidneys. The randomized multicenter open-label trial is expected to enroll 20 adults with uncontrolled gout who have received a kidney transplant.
- Further Improved the Company’s Capital Structure: In July, the Company issued $600 million of 5.5 percent Senior Notes due 2027 and used the proceeds together with cash on hand to repay $625 million of its outstanding debt. These actions reduced interest expense and extended the maturity of the debt, furthering the Company’s strategy to improve its capital structure. The Company has reduced its gross debt by $575 million in the year-to-date period ended Sept. 30, 2019.
- Intellectual Property Update: In October, the Federal Circuit Court of Appeals issued a decision in favor of the Company regarding an appeal of the 2017 decision by the United States District Court for the District of New Jersey upholding the validity of a PENNSAID® 2% patent that expires in 2027.
- Gender and Ethnicity Pay Equity Demonstrated; Received Best Medium Workplace Award: A recent study conducted by Aon, a leading compensation consulting firm, showed that Horizon demonstrates both gender and ethnicity pay equity, ranking in the top five of the roughly 100 companies Aon has studied in this regard, and in line with the value the Company places on diversity. In addition, the Company was selected to FORTUNE Magazine’s 2019 “Best Medium Workplaces” list for the fourth consecutive year, ranking eighth out of 100 other medium sized companies.
- Appointed Sue Mahony to the Board of Directors: In August, the Company appointed Sue Mahony, Ph.D., MBA, to its board of directors. Dr. Mahony brings more than 30 years of diverse industry experience to the board, including an 18-year tenure at Eli Lilly and Company, where she served in a variety of global and domestic leadership roles of increasing responsibility, including helping oversee the development of an innovative pipeline. Before Lilly, Dr. Mahony spent five years at Bristol-Myers Squibb Company.
- Named Andy Pasternak Executive Vice President, Chief Business Officer: In August, the Company named Andy Pasternak executive vice president, chief business officer, effective Nov. 1. Pasternak leads business development, mergers and acquisitions, corporate strategy, commercial development and portfolio management.
Research and Development Programs
Orphan Disease Candidate and Program:
- Teprotumumab: Teprotumumab is a fully human monoclonal antibody insulin-like growth factor-1 receptor (IGF-1R) inhibitor candidate for the treatment of active TED. TED is a serious, progressive, vision-threatening autoimmune disease in which the muscles and fatty tissue behind the eye become inflamed and expand, which can lead to proptosis (eye bulging) and diplopia (double vision) and impact activities of daily living and quality of life. The development program for teprotumumab in TED includes positive results from the confirmatory Phase 3 OPTIC clinical trial, announced in February 2019, as well as positive Phase 2 results published in The New England Journal of Medicine in May 2017. The OPTIC study met its primary endpoint of a ≥2 mm reduction in proptosis (p<0.001), the main cause of morbidity in TED, with 82.9 percent of patients treated with teprotumumab demonstrating a significant improvement in proptosis compared to 9.5 percent of placebo patients. In addition, all secondary endpoints were met (p≤0.001), and the safety profile was consistent with the Phase 2 study.
Rheumatology Pipeline Candidates and Programs:
- KRYSTEXXA MIRROR Immunomodulation Trial: The Company is evaluating the use of methotrexate to increase the response rate with KRYSTEXXA. This evaluation was initiated through the small open-label MIRROR pilot study, followed by the larger MIRROR registrational clinical trial. Methotrexate is the immunomodulator most used by rheumatologists, and has been shown to reduce anti-drug antibody formation to biologic therapies when used in conjunction with these therapies. The MIRROR registrational trial commenced in June.
- KRYSTEXXA PROTECT Trial in Kidney Transplant Patients with Uncontrolled Gout: In October, the Company initiated PROTECT, its clinical trial evaluating the effect of KRYSTEXXA on serum uric acid levels in kidney transplant patients with uncontrolled gout. Kidney transplant patients have more than a tenfold increase in the prevalence of gout when compared to the general population, and literature suggests that persistently high serum uric acid levels can be associated with organ rejection. Managing uncontrolled gout is one of the most common and significant unmet needs of kidney transplant patients.
- Next-generation Programs for Uncontrolled Gout: The Company is pursuing early-stage development programs for next-generation biologics for uncontrolled gout to support and sustain the Company’s market leadership in this area. These include HZN-003 and HZN-007, as well as a collaboration with HemoShear Therapeutics, LLC (HemoShear) to discover new targets for gout.
Third-Quarter Financial Results
Note: 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.
- Net Sales: Third-quarter 2019 net sales were $335.5 million, an increase of 3 percent.
- Gross Profit: Under U.S. GAAP, the third-quarter 2019 gross profit ratio was 73.2 percent compared to 72.0 percent in the third quarter of 2018. The non-GAAP gross profit ratio in the third quarter of 2019 was 90.7 percent compared to 91.2 percent in the third quarter of 2018.
- Operating Expenses: Research and development (R&D) expenses were 7.3 percent of net sales and selling, general and administrative (SG&A) expenses were 51.4 percent of net sales. Non-GAAP R&D expenses were 5.8 percent of net sales, and non-GAAP SG&A expenses were 46.2 percent of net sales.
- Income Tax Rate: In the third quarter of 2019, the income tax rates on a GAAP and non-GAAP basis were 247.9 percent and negative 7.5 percent, respectively.
- Net Income: On a GAAP basis in the third quarter of 2019, net income was $18.2 million. Third-quarter 2019 non-GAAP net income was $124.1 million.
- Adjusted EBITDA: Third-quarter 2019 adjusted EBITDA was $130.4 million.
- Earnings per Share: On a GAAP basis, diluted earnings per share in the third quarter of 2019 and 2018 were $0.09 and $0.19, respectively. Non-GAAP diluted earnings per share in the third quarter of 2019 and 2018 were $0.64 and $0.65, respectively. Weighted average shares outstanding used for calculating GAAP and non-GAAP diluted earnings per share in the third quarter of 2019 were 194.2 million.
Third-Quarter Segment Results
Management uses net sales and segment operating income to evaluate the performance of the Company’s two segments. While segment operating income contains certain adjustments to the directly comparable GAAP figures in the Company’s consolidated financial results, it is considered to be prepared in accordance with GAAP for purposes of presenting the Company’s segment operating results.
Orphan and Rheumatology Segment
| (in millions except for percentages) | Q3 19 | Q3 18 | % Change | YTD 19 | YTD 18 | % Change | |||||||||||||
| KRYSTEXXA |
|
99.6 |
|
70.2 |
42 |
|
|
231.6 |
|
175.6 |
32 |
|
|||||||
| RAVICTI®(1) |
|
60.0 |
|
60.4 |
(1 |
) |
|
160.3 |
|
166.5 |
(4 |
) |
|||||||
| PROCYSBI® |
|
40.4 |
|
41.4 |
(2 |
) |
|
121.1 |
|
114.7 |
6 |
|
|||||||
| ACTIMMUNE® |
|
27.9 |
|
25.8 |
8 |
|
|
78.9 |
|
78.1 |
1 |
|
|||||||
| RAYOS® |
|
19.3 |
|
17.2 |
13 |
|
|
59.1 |
|
41.3 |
43 |
|
|||||||
| BUPHENYL®(1) |
|
3.0 |
|
4.4 |
(30 |
) |
|
8.2 |
|
15.3 |
(47 |
) |
|||||||
| QUINSAIRTM |
|
0.2 |
|
0.1 |
67 |
|
|
0.6 |
|
0.3 |
59 |
|
|||||||
| LODOTRA®(1) |
|
- |
|
0.4 |
NM |
|
|
- |
|
2.0 |
NM |
|
|||||||
| Orphan and Rheumatology Net Sales | $ |
250.4 |
$ |
219.9 |
14 |
|
$ |
659.8 |
$ |
593.8 |
11 |
|
|||||||
| Orphan and Rheumatology Segment Operating Income | $ |
89.8 |
$ |
91.5 |
(2 |
) |
$ |
211.0 |
$ |
205.3 |
3 |
|
|||||||
(1) |
Beginning in 2019, the Company no longer recognizes revenue from RAVICTI and AMMONAPS sales outside of North America and Japan, nor from sales of LODOTRA. On Dec. 28, 2018, the Company divested the rights to RAVICTI and AMMONAPS outside of North America and Japan. AMMONAPS is known as BUPHENYL in the United States. In addition, effective Jan. 1, 2019, the RAYOS and LODOTRA license and supply agreements were amended, including the transfer of LODOTRA to Vectura Group plc. LODOTRA is known as RAYOS in the United States. |
- Third-quarter 2019 net sales of the orphan and rheumatology segment, the Company’s strategic growth segment, were $250.4 million, an increase of 14 percent over the prior year’s quarter, driven by growth of KRYSTEXXA, ACTIMMUNE and RAYOS. The orphan and rheumatology segment represents approximately 75 percent of total Company net sales.
- Third-quarter 2019 orphan and rheumatology segment operating income was $89.8 million, which includes the impact of investment in teprotumumab pre-launch activities.
Inflammation Segment
| (in millions except for percentages) | Q3 19 | Q3 18 | % Change | YTD 19 | YTD 18 | % Change | ||||||||||||
| PENNSAID 2% |
|
42.1 |
|
51.5 |
(18 |
) |
|
143.7 |
|
125.9 |
14 |
|
||||||
| DUEXIS® |
|
29.9 |
|
34.2 |
(13 |
) |
|
89.4 |
|
80.6 |
11 |
|
||||||
| VIMOVO® |
|
13.1 |
|
18.6 |
(30 |
) |
|
41.8 |
|
48.9 |
(15 |
) |
||||||
| MIGERGOT®(1) |
|
- |
|
1.1 |
NM |
|
|
1.8 |
|
2.8 |
(34 |
) |
||||||
| Inflammation Net Sales | $ |
85.1 |
$ |
105.4 |
(19 |
) |
$ |
276.7 |
$ |
258.2 |
7 |
|
||||||
| Inflammation Segment Operating Income | $ |
39.6 |
$ |
58.0 |
(32 |
) |
$ |
130.8 |
$ |
94.3 |
39 |
|
||||||
(1) |
In June 2019, the Company divested the rights to MIGERGOT. |
- Third-quarter 2019 net sales of the inflammation segment were $85.1 million and segment operating income was $39.6 million.
Cash Flow Statement and Balance Sheet Highlights
- On a GAAP basis in the third quarter of 2019, operating cash flow was $87.5 million. Non-GAAP operating cash flow was $96.5 million.
- The Company had cash and cash equivalents of $884.0 million as of Sept. 30, 2019.
-
In July, the Company issued $600 million of 5.5 percent Senior Notes due 2027 and used the proceeds along with cash on hand to repay $625 million of its outstanding debt.
As of Sept. 30, 2019, the total principal amount of debt outstanding was $1.418 billion, consisting of $418 million in senior secured term loans due 2026, $600 million of Senior Notes due 2027 and $400 million of Exchangeable Senior Notes due 2022. As of Sept. 30, 2019, net debt was $534.1 million and net-debt-to-last-12-months adjusted EBITDA leverage ratio was 1.1 times, compared to 2.9 times at Sept. 30, 2018.
2019 Guidance
The Company continues to expect full-year 2019 net sales to range between $1.28 billion and $1.30 billion. The Company now expects full-year 2019 adjusted EBITDA to range between $465 million and $475 million, versus the previous guidance range of $460 million to $475 million.
Webcast
At 8 a.m. EDT / 1 p.m. IST today, the Company will host a live webcast to review its financial and operating results and provide a general business update. The live webcast and a replay may be accessed at http://ir.horizontherapeutics.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 webcast will be available approximately two hours after the live webcast.
About Horizon
Horizon is focused on researching, developing and commercializing medicines that address critical needs for people impacted by rare and rheumatic diseases. Our pipeline is purposeful: we apply scientific expertise and courage to bring clinically meaningful therapies to patients. We believe science and compassion must work together to transform lives. For more information on how we go to incredible lengths to impact lives, please visit www.horizontherapeutics.com, follow us @HorizonNews on Twitter, like us on Facebook or explore career opportunities on LinkedIn.
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 as non-GAAP financial measures. Horizon 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 operating income, non-GAAP tax rate, non-GAAP operating cash flow, net leverage ratio and net debt, each of which include adjustments to GAAP figures. These non-GAAP measures are intended to provide additional information on Horizon’s performance, operations, expenses, profitability and cash flows. Adjustments to Horizon’s GAAP figures as well as EBITDA exclude acquisition and/or divestiture-related expenses, charges related to the discontinuation of ACTIMMUNE development for Friedreich’s ataxia, gain or loss from sale of assets, upfront, progress and milestone payments related to license and collaboration agreements, litigation settlements, loss on debt extinguishment, costs of debt refinancing, drug manufacturing harmonization costs, restructuring and realignment costs, as well as non-cash items such as share-based compensation, depreciation and amortization, non-cash interest expense, long-lived 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 believes that these non-GAAP financial measures, when considered together with the GAAP figures, can enhance an overall understanding of Horizon’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 2019 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’s management uses for planning and forecasting purposes and measuring the Company's performance. For example, adjusted EBITDA is used by Horizon 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 has not provided a reconciliation of its full-year 2019 adjusted EBITDA outlook to an expected net income (loss) outlook because certain items such as acquisition/divestiture-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’s stock price, the variability associated with the size or timing of acquisitions/divestitures and other factors. These components of net income (loss) could significantly impact Horizon’s actual net income (loss).
Forward-Looking Statements
This press release contains forward-looking statements, including, but not limited to, statements related to Horizon’s full-year 2019 net sales and adjusted EBITDA guidance; expected financial performance and operating results in future periods, including potential growth in net sales of certain of Horizon’s medicines; expected impact of refinancing transactions; expected timing of clinical trials and regulatory submissions and decisions, including related to the BLA for teprotumumab; potential market opportunity for and benefits of Horizon’s medicines and medicine candidates; and business and other statements that are not historical facts. These forward-looking statements are based on Horizon’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’s actual future financial and operating results may differ from its expectations or goals; Horizon’s ability to grow net sales from existing medicines; the availability of coverage and adequate reimbursement and pricing from government and third-party payers; risks relating to Horizon’s ability to successfully implement its business strategies; risks inherent in developing novel medicine candidates, such as teprotumumab, and existing medicines for new indications; risks associated with 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 operates and those risks detailed from time-to-time under the caption "Risk Factors" and elsewhere in Horizon’s filings and reports with the SEC. Horizon undertakes no duty or obligation to update any forward-looking statements contained in this press release as a result of new information.
Contacts: |
|
|
|
|
|
Investors: |
U.S. Media: |
|
Tina Ventura |
Geoff Curtis |
|
Senior Vice President, |
Executive Vice President, |
|
Investor Relations |
Corporate Affairs & Chief Communications Officer |
|
|
|
|
Ruth Venning |
Ireland Media: |
|
Executive Director, |
Ray Gordon |
|
Investor Relations |
Gordon MRM |
|
| Horizon Therapeutics plc | ||||||||||||||||||||
| Condensed Consolidated Statements of Operations (Unaudited) | ||||||||||||||||||||
| (in thousands, except share and per share data) | ||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
||||||
| Net sales | $ |
335,466 |
|
$ |
325,311 |
|
$ |
936,484 |
|
$ |
852,027 |
|
||||||||
| Cost of goods sold |
|
89,949 |
|
|
91,077 |
|
|
267,254 |
|
|
292,702 |
|
||||||||
| Gross profit |
|
245,517 |
|
|
234,234 |
|
|
669,230 |
|
|
559,325 |
|
||||||||
| OPERATING EXPENSES: | ||||||||||||||||||||
| Research and development |
|
24,572 |
|
|
21,169 |
|
|
74,611 |
|
|
63,079 |
|
||||||||
| Selling, general and administrative |
|
172,326 |
|
|
161,585 |
|
|
511,720 |
|
|
517,858 |
|
||||||||
| (Gain)/Loss on sale of assets |
|
- |
|
|
(12,303 |
) |
|
10,963 |
|
|
(12,303 |
) |
||||||||
| Impairment of long-lived assets |
|
- |
|
|
1,603 |
|
|
- |
|
|
35,249 |
|
||||||||
| Total operating expenses |
|
196,898 |
|
|
172,054 |
|
|
597,294 |
|
|
603,883 |
|
||||||||
| Operating income (loss) |
|
48,619 |
|
|
62,180 |
|
|
71,936 |
|
|
(44,558 |
) |
||||||||
| OTHER EXPENSE, NET: | ||||||||||||||||||||
| Interest expense, net |
|
(20,428 |
) |
|
(30,437 |
) |
|
(69,991 |
) |
|
(91,921 |
) |
||||||||
| Loss on debt extinguishment |
|
(41,371 |
) |
|
- |
|
|
(58,835 |
) |
|
- |
|
||||||||
| Foreign exchange (loss) gain |
|
(40 |
) |
|
35 |
|
|
(25 |
) |
|
(81 |
) |
||||||||
| Other income (expense), net |
|
890 |
|
|
337 |
|
|
(193 |
) |
|
834 |
|
||||||||
| Total other expense, net |
|
(60,949 |
) |
|
(30,065 |
) |
|
(129,044 |
) |
|
(91,168 |
) |
||||||||
| (Loss) Income before (benefit) expense for income taxes |
|
(12,330 |
) |
|
32,115 |
|
|
(57,108 |
) |
|
(135,726 |
) |
||||||||
| (Benefit) expense for income taxes |
|
(30,564 |
) |
|
(1,266 |
) |
|
(37,359 |
) |
|
4,301 |
|
||||||||
| Net income (loss) | $ |
18,234 |
|
$ |
33,381 |
|
$ |
(19,749 |
) |
$ |
(140,027 |
) |
||||||||
| Earnings (Loss) per ordinary share - basic | $ |
0.10 |
|
$ |
0.20 |
|
$ |
(0.11 |
) |
$ |
(0.84 |
) |
||||||||
| Weighted average ordinary shares outstanding - basic |
|
186,470,141 |
|
|
167,047,104 |
|
|
181,949,838 |
|
|
166,018,603 |
|
||||||||
| Earnings (Loss) per ordinary share - diluted | $ |
0.09 |
|
$ |
0.19 |
|
$ |
(0.11 |
) |
$ |
(0.84 |
) |
||||||||
| Weighted average ordinary shares outstanding - diluted |
|
194,171,967 |
|
|
172,485,757 |
|
|
181,949,838 |
|
|
166,018,603 |
|
||||||||
| Horizon Therapeutics plc | |||||||||||||
| Condensed Consolidated Balance Sheets (Unaudited) | |||||||||||||
| (in thousands, except share data) | |||||||||||||
| As of | |||||||||||||
| September 30, 2019 |
December 31, 2018 |
||||||||||||
| ASSETS | |||||||||||||
| CURRENT ASSETS: | |||||||||||||
| Cash and cash equivalents | $ |
883,964 |
|
$ |
958,712 |
|
|||||||
| Restricted cash |
|
3,746 |
|
|
3,405 |
|
|||||||
| Accounts receivable, net |
|
396,626 |
|
|
464,730 |
|
|||||||
| Inventories, net |
|
58,505 |
|
|
50,751 |
|
|||||||
| Prepaid expenses and other current assets |
|
135,963 |
|
|
68,218 |
|
|||||||
| Total current assets |
|
1,478,804 |
|
|
1,545,816 |
|
|||||||
| Property and equipment, net |
|
26,202 |
|
|
20,101 |
|
|||||||
| Developed technology, net |
|
1,756,493 |
|
|
1,945,639 |
|
|||||||
| Other intangible assets, net |
|
4,024 |
|
|
4,630 |
|
|||||||
| Goodwill |
|
413,669 |
|
|
413,669 |
|
|||||||
| Deferred tax assets, net |
|
45 |
|
|
3,148 |
|
|||||||
| Other assets |
|
42,185 |
|
|
8,959 |
|
|||||||
| Total assets | $ |
3,721,422 |
|
$ |
3,941,962 |
|
|||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||
| CURRENT LIABILITIES: | |||||||||||||
| Accounts payable | $ |
26,906 |
|
$ |
30,284 |
|
|||||||
| Accrued expenses |
|
204,164 |
|
|
215,739 |
|
|||||||
| Accrued trade discounts and rebates |
|
404,544 |
|
|
457,763 |
|
|||||||
| Deferred revenues, current portion |
|
- |
|
|
4,901 |
|
|||||||
| Total current liabilities |
|
635,614 |
|
|
708,687 |
|
|||||||
| LONG-TERM LIABILITIES: | |||||||||||||
| Exchangeable notes, net |
|
346,541 |
|
|
332,199 |
|
|||||||
| Long-term debt, net |
|
1,000,819 |
|
|
1,564,485 |
|
|||||||
| Deferred tax liabilities, net |
|
112,968 |
|
|
107,768 |
|
|||||||
| Other long-term liabilities |
|
69,907 |
|
|
38,717 |
|
|||||||
| Total long-term liabilities |
|
1,530,235 |
|
|
2,043,169 |
|
|||||||
| COMMITMENTS AND CONTINGENCIES | |||||||||||||
| SHAREHOLDERS' EQUITY: | |||||||||||||
| Ordinary shares, $0.0001 nominal value; 600,000,000 and 300,000,000 shares | |||||||||||||
| authorized at September 30, 2019 and December 31, 2018, respectively; | |||||||||||||
| 187,174,795 and 169,244,520 shares issued at September 30, 2019 and | |||||||||||||
| December 31, 2018, respectively, and 186,790,429 and 168,860,154 shares | |||||||||||||
| outstanding at September 30, 2019 and December 31, 2018, respectively |
|
19 |
|
|
17 |
|
|||||||
| Treasury stock, 384,366 ordinary shares at September 30, 2019 and December 31, 2018 |
|
(4,585 |
) |
|
(4,585 |
) |
|||||||
| Additional paid-in capital |
|
2,761,068 |
|
|
2,374,966 |
|
|||||||
| Accumulated other comprehensive loss |
|
(2,475 |
) |
|
(1,523 |
) |
|||||||
| Accumulated deficit |
|
(1,198,454 |
) |
|
(1,178,769 |
) |
|||||||
| Total shareholders' equity |
|
1,555,573 |
|
|
1,190,106 |
|
|||||||
| Total liabilities and shareholders' equity | $ |
3,721,422 |
|
$ |
3,941,962 |
|
|||||||
| Horizon Therapeutics plc | ||||||||||||||||||
| Condensed Consolidated Statements of Cash Flows (Unaudited) | ||||||||||||||||||
| (in thousands) | ||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||||
| Net income (loss) | $ |
18,234 |
|
$ |
33,381 |
|
$ |
(19,749 |
) |
$ |
(140,027 |
) |
||||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||||||
| Depreciation and amortization expense |
|
59,319 |
|
|
62,668 |
|
|
177,336 |
|
|
187,135 |
|
||||||
| Equity-settled share-based compensation |
|
18,151 |
|
|
28,428 |
|
|
67,066 |
|
|
86,981 |
|
||||||
| Impairment of long-lived assets |
|
- |
|
|
1,603 |
|
|
- |
|
|
35,249 |
|
||||||
| Loss on debt extinguishment |
|
41,371 |
|
|
- |
|
|
58,835 |
|
|
- |
|
||||||
| Amortization of debt discount and deferred financing costs |
|
5,447 |
|
|
5,694 |
|
|
17,069 |
|
|
16,879 |
|
||||||
| (Gain)/Loss on sale of assets |
|
- |
|
|
(12,303 |
) |
|
10,963 |
|
|
(12,303 |
) |
||||||
| Deferred income taxes |
|
9,559 |
|
|
3,398 |
|
|
8,302 |
|
|
1,645 |
|
||||||
| Foreign exchange and other adjustments |
|
77 |
|
|
(219 |
) |
|
572 |
|
|
243 |
|
||||||
| Changes in operating assets and liabilities: | ||||||||||||||||||
| Accounts receivable |
|
(1,625 |
) |
|
12,318 |
|
|
68,162 |
|
|
14,060 |
|
||||||
| Inventories |
|
(7,500 |
) |
|
(3,647 |
) |
|
(8,004 |
) |
|
7,902 |
|
||||||
| Prepaid expenses and other current assets |
|
(54,358 |
) |
|
(13,788 |
) |
|
(72,055 |
) |
|
(35,526 |
) |
||||||
| Accounts payable |
|
(14,892 |
) |
|
33,711 |
|
|
(3,338 |
) |
|
30,119 |
|
||||||
| Accrued trade discounts and rebates |
|
5,910 |
|
|
(90,026 |
) |
|
(53,241 |
) |
|
(142,164 |
) |
||||||
| Accrued expenses |
|
17,481 |
|
|
21,926 |
|
|
(10,591 |
) |
|
35,581 |
|
||||||
| Deferred revenues |
|
(7,311 |
) |
|
1,130 |
|
|
(4,901 |
) |
|
1,462 |
|
||||||
| Other non-current assets and liabilities |
|
(2,347 |
) |
|
586 |
|
|
(1,474 |
) |
|
(1,401 |
) |
||||||
| Net cash provided by operating activities |
|
87,516 |
|
|
84,860 |
|
|
234,952 |
|
|
85,835 |
|
||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||
| Payment related to license agreement |
|
- |
|
|
- |
|
|
- |
|
|
(12,000 |
) |
||||||
| Proceeds from sale of assets |
|
- |
|
|
9,424 |
|
|
6,000 |
|
|
9,424 |
|
||||||
| Purchases of property and equipment |
|
(4,467 |
) |
|
(120 |
) |
|
(11,325 |
) |
|
(881 |
) |
||||||
| Net cash (used in) provided by investing activities |
|
(4,467 |
) |
|
9,304 |
|
|
(5,325 |
) |
|
(3,457 |
) |
||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||
| Net proceeds from issuance of senior notes |
|
590,057 |
|
|
- |
|
|
590,057 |
|
|
- |
|
||||||
| Repayment of senior notes |
|
(556,138 |
) |
|
- |
|
|
(814,420 |
) |
|
- |
|
||||||
| Net proceeds from the issuance of ordinary shares |
|
- |
|
|
- |
|
|
326,793 |
|
|
- |
|
||||||
| Repayment of term loans |
|
(100,155 |
) |
|
- |
|
|
(918,181 |
) |
|
(27,723 |
) |
||||||
| Net proceeds from term loans |
|
- |
|
|
- |
|
|
517,378 |
|
|
- |
|
||||||
| Contingent consideration proceeds from divestiture |
|
3,297 |
|
|
- |
|
|
3,297 |
|
|
- |
|
||||||
| Proceeds from the issuance of ordinary shares in conjunction with ESPP program |
|
3 |
|
|
(23 |
) |
|
5,468 |
|
|
4,711 |
|
||||||
| Proceeds from the issuance of ordinary shares in connection with stock option exercises |
|
4,207 |
|
|
6,081 |
|
|
16,236 |
|
|
9,753 |
|
||||||
| Payment of employee withholding taxes relating to share-based awards |
|
(5,086 |
) |
|
(3,697 |
) |
|
(29,460 |
) |
|
(12,882 |
) |
||||||
| Net cash (used in) provided by financing activities |
|
(63,815 |
) |
|
2,361 |
|
|
(302,832 |
) |
|
(26,141 |
) |
||||||
| Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash |
|
(1,260 |
) |
|
316 |
|
|
(1,202 |
) |
|
(688 |
) |
||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash |
|
17,974 |
|
|
96,841 |
|
|
(74,407 |
) |
|
55,549 |
|
||||||
| Cash, cash equivalents and restricted cash, beginning of the period(1) |
|
869,736 |
|
|
716,605 |
|
|
962,117 |
|
|
757,897 |
|
||||||
| Cash, cash equivalents and restricted cash, end of the period(1) | $ |
887,710 |
|
$ |
813,446 |
|
$ |
887,710 |
|
$ |
813,446 |
|
||||||
| (1) Amounts include restricted cash balance in accordance with ASU No. 2016-18. Cash and cash equivalents excluding restricted cash are shown on the balance sheet. | ||||||||||||||||||
| Horizon Therapeutics plc | ||||||||||||||||||
| GAAP to Non-GAAP Reconciliations | ||||||||||||||||||
| Net Income and Earnings Per Share (Unaudited) | ||||||||||||||||||
| (in thousands, except share and per share data) | ||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|||||||
| GAAP net income (loss) | $ |
18,234 |
|
$ |
33,381 |
|
$ |
(19,749 |
) |
$ |
(140,027 |
) |
||||||
| Non-GAAP adjustments: | ||||||||||||||||||
| Acquisition/divestiture-related costs |
|
67 |
|
|
302 |
|
|
2,613 |
|
|
6,179 |
|
||||||
| Restructuring and realignment costs |
|
- |
|
|
4,582 |
|
|
33 |
|
|
14,815 |
|
||||||
| Amortization and step-up: | ||||||||||||||||||
| Intangible amortization expense |
|
57,662 |
|
|
61,144 |
|
|
172,762 |
|
|
182,508 |
|
||||||
| Inventory step-up expense |
|
- |
|
|
83 |
|
|
90 |
|
|
17,212 |
|
||||||
| Amortization of debt discount and deferred financing costs |
|
5,447 |
|
|
5,694 |
|
|
17,069 |
|
|
16,880 |
|
||||||
| Impairment of long-lived assets |
|
- |
|
|
1,603 |
|
|
- |
|
|
35,249 |
|
||||||
| (Gain)/Loss on sale of assets |
|
- |
|
|
(12,303 |
) |
|
10,963 |
|
|
(12,303 |
) |
||||||
| Share-based compensation |
|
18,151 |
|
|
28,428 |
|
|
67,066 |
|
|
86,981 |
|
||||||
| Depreciation |
|
1,658 |
|
|
1,523 |
|
|
4,574 |
|
|
4,627 |
|
||||||
| Litigation settlements |
|
- |
|
|
1,500 |
|
|
1,000 |
|
|
5,750 |
|
||||||
| Upfront, progress and milestone payments related to | ||||||||||||||||||
| license and collaboration agreements |
|
3,073 |
|
|
(100 |
) |
|
9,073 |
|
|
(10 |
) |
||||||
| Fees related to refinancing activities |
|
262 |
|
|
40 |
|
|
1,437 |
|
|
82 |
|
||||||
| Loss on debt extinguishment |
|
41,371 |
|
|
- |
|
|
58,835 |
|
|
- |
|
||||||
| Drug substance harmonization costs |
|
80 |
|
|
301 |
|
|
394 |
|
|
1,579 |
|
||||||
| Charges relating to discontinuation of Friedreich's ataxia program |
|
- |
|
|
254 |
|
|
1,221 |
|
|
1,476 |
|
||||||
| Total of pre-tax non-GAAP adjustments |
|
127,771 |
|
|
93,051 |
|
|
347,130 |
|
|
361,025 |
|
||||||
| Income tax effect of pre-tax non-GAAP adjustments |
|
(21,919 |
) |
|
(13,865 |
) |
|
(52,291 |
) |
|
12,774 |
|
||||||
| Other non-GAAP income tax adjustments |
|
- |
|
|
- |
|
|
(1,452 |
) |
|
(35,893 |
) |
||||||
| Total of non-GAAP adjustments |
|
105,852 |
|
|
79,186 |
|
|
293,387 |
|
|
337,906 |
|
||||||
| Non-GAAP Net Income | $ |
124,086 |
|
$ |
112,567 |
|
$ |
273,638 |
|
$ |
197,879 |
|
||||||
| Non-GAAP Earnings Per Share: | ||||||||||||||||||
| Weighted average ordinary shares - Basic |
|
186,470,141 |
|
|
167,047,104 |
|
|
181,949,838 |
|
|
166,018,603 |
|
||||||
| Non-GAAP Earnings Per Share - Basic: | ||||||||||||||||||
| GAAP earnings (loss) per share - Basic | $ |
0.10 |
|
$ |
0.20 |
|
$ |
(0.11 |
) |
$ |
(0.84 |
) |
||||||
| Non-GAAP adjustments |
|
0.57 |
|
|
0.47 |
|
|
1.61 |
|
|
2.03 |
|
||||||
| Non-GAAP earnings per share - Basic | $ |
0.67 |
|
$ |
0.67 |
|
$ |
1.50 |
|
$ |
1.19 |
|
||||||
| Weighted average ordinary shares - Diluted | ||||||||||||||||||
| Weighted average ordinary shares - Basic |
|
186,470,141 |
|
|
167,047,104 |
|
|
181,949,838 |
|
|
166,018,603 |
|
||||||
| Ordinary share equivalents |
|
7,701,826 |
|
|
5,438,653 |
|
|
7,747,931 |
|
|
4,621,407 |
|
||||||
| Weighted average shares - Diluted |
|
194,171,967 |
|
|
172,485,757 |
|
|
189,697,769 |
|
|
170,640,010 |
|
||||||
| Non-GAAP Earnings Per Share - Diluted | ||||||||||||||||||
| GAAP earnings (loss) per share - Diluted | $ |
0.09 |
|
$ |
0.19 |
|
$ |
(0.11 |
) |
$ |
(0.84 |
) |
||||||
| Non-GAAP adjustments |
|
0.55 |
|
|
0.46 |
|
|
1.61 |
|
|
2.03 |
|
||||||
| Diluted earnings per share effect of ordinary share equivalents |
|
- |
|
|
- |
|
|
(0.06 |
) |
|
(0.03 |
) |
||||||
| Non-GAAP earnings per share - Diluted | $ |
0.64 |
|
$ |
0.65 |
|
$ |
1.44 |
|
$ |
1.16 |
|
||||||
| Horizon Therapeutics plc | ||||||||||||||||||
| GAAP to Non-GAAP Reconciliations | ||||||||||||||||||
| GAAP Net Income to Adjusted EBITDA (Unaudited) | ||||||||||||||||||
| (in thousands) | ||||||||||||||||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|||||||
| GAAP net income (loss) | $ |
18,234 |
|
$ |
33,381 |
|
$ |
(19,749 |
) |
$ |
(140,027 |
) |
||||||
| Depreciation |
|
1,658 |
|
|
1,523 |
|
|
4,574 |
|
|
4,627 |
|
||||||
| Amortization and step-up: | ||||||||||||||||||
| Intangible amortization expense |
|
57,662 |
|
|
61,144 |
|
|
172,762 |
|
|
182,508 |
|
||||||
| Inventory step-up expense |
|
- |
|
|
83 |
|
|
90 |
|
|
17,212 |
|
||||||
| Interest expense, net (including amortization of | ||||||||||||||||||
| debt discount and deferred financing costs) |
|
20,428 |
|
|
30,437 |
|
|
69,991 |
|
|
91,921 |
|
||||||
| (Benefit) expense for income taxes |
|
(30,564 |
) |
|
(1,266 |
) |
|
(37,359 |
) |
|
4,301 |
|
||||||
| EBITDA | $ |
67,418 |
|
$ |
125,302 |
|
$ |
190,309 |
|
$ |
160,542 |
|
||||||
| Other non-GAAP adjustments: | ||||||||||||||||||
| Acquisition/divestiture-related costs |
|
67 |
|
|
302 |
|
|
2,613 |
|
|
6,179 |
|
||||||
| Restructuring and realignment costs |
|
- |
|
|
4,582 |
|
|
33 |
|
|
14,815 |
|
||||||
| Impairment of long-lived assets |
|
- |
|
|
1,603 |
|
|
- |
|
|
35,249 |
|
||||||
| (Gain)/Loss on sale of assets |
|
- |
|
|
(12,303 |
) |
|
10,963 |
|
|
(12,303 |
) |
||||||
| Share-based compensation |
|
18,151 |
|
|
28,428 |
|
|
67,066 |
|
|
86,981 |
|
||||||
| Litigation settlements |
|
- |
|
|
1,500 |
|
|
1,000 |
|
|
5,750 |
|
||||||
| Upfront, progress and milestone payments related to | ||||||||||||||||||
| license and collaboration agreements |
|
3,073 |
|
|
(100 |
) |
|
9,073 |
|
|
(10 |
) |
||||||
| Fees related to refinancing activities |
|
262 |
|
|
40 |
|
|
1,437 |
|
|
82 |
|
||||||
| Loss on debt extinguishment |
|
41,371 |
|
|
- |
|
|
58,835 |
|
|
- |
|
||||||
| Drug substance harmonization costs |
|
80 |
|
|
301 |
|
|
394 |
|
|
1,579 |
|
||||||
| Charges relating to discontinuation of Friedreich's ataxia program |
|
- |
|
|
254 |
|
|
1,221 |
|
|
1,476 |
|
||||||
| Total of other non-GAAP adjustments |
|
63,004 |
|
|
24,607 |
|
|
152,635 |
|
|
139,798 |
|
||||||
| Adjusted EBITDA | $ |
130,422 |
|
$ |
149,909 |
|
$ |
342,944 |
|
$ |
300,340 |
|
||||||
Horizon Pharma plc |
||||||||
GAAP to Non-GAAP Reconciliations |
||||||||
EBITDA (Unaudited) - 2018 |
||||||||
(in thousands) |
||||||||
Twelve Months
|
||||||||
|
2018 |
|
||||||
| GAAP net loss | $ |
(38,380 |
) |
|||||
| Depreciation |
|
6,126 |
|
|||||
| Amortization and step-up: | ||||||||
| Intangible amortization expense |
|
243,634 |
|
|||||
| Inventory step-up expense |
|
17,312 |
|
|||||
| Interest expense, net (including amortization of debt discount and deferred financing costs) |
|
121,692 |
|
|||||
| Benefit for income taxes |
|
(44,752 |
) |
|||||
| EBITDA | $ |
305,632 |
|
|||||
| Other non-GAAP adjustments: | ||||||||
| Acquisition/divestiture-related costs |
|
4,396 |
|
|||||
| Restructuring and realignment costs |
|
15,350 |
|
|||||
| Share-based compensation |
|
114,860 |
|
|||||
| Impairment of long-lived assets |
|
46,096 |
|
|||||
| Litigation settlements |
|
5,750 |
|
|||||
| Upfront, progress and milestone payments related to | ||||||||
| license and collaboration agreements |
|
(10 |
) |
|||||
| Fees related to refinancing activities |
|
937 |
|
|||||
| Drug substance harmonization costs |
|
2,855 |
|
|||||
| Charges relating to discontinuation of Friedreich's ataxia program |
|
(1,464 |
) |
|||||
| Gain on sale of assets |
|
(42,985 |
) |
|||||
| Total of other non-GAAP adjustments |
|
145,785 |
|
|||||
| Adjusted EBITDA | $ |
451,417 |
|
|||||
| Horizon Therapeutics plc | ||||||||||||||||||
| GAAP to Non-GAAP Reconciliations | ||||||||||||||||||
| Operating Income (Unaudited) | ||||||||||||||||||
| (in thousands) | ||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|||||||
| GAAP operating income (loss) | $ |
48,619 |
|
$ |
62,180 |
|
$ |
71,936 |
|
$ |
(44,558 |
) |
||||||
| Non-GAAP adjustments: | ||||||||||||||||||
| Acquisition/divestiture-related costs |
|
(44 |
) |
|
186 |
|
|
1,231 |
|
|
6,035 |
|
||||||
| Restructuring and realignment costs |
|
- |
|
|
4,582 |
|
|
33 |
|
|
14,815 |
|
||||||
| Amortization and step-up: | ||||||||||||||||||
| Intangible amortization expense |
|
57,662 |
|
|
61,144 |
|
|
172,762 |
|
|
182,508 |
|
||||||
| Inventory step-up expense |
|
- |
|
|
83 |
|
|
90 |
|
|
17,212 |
|
||||||
| Impairment of long-lived assets |
|
- |
|
|
1,603 |
|
|
- |
|
|
35,249 |
|
||||||
| (Gain)/Loss on sale of assets |
|
- |
|
|
(12,303 |
) |
|
10,963 |
|
|
(12,303 |
) |
||||||
| Share-based compensation |
|
18,151 |
|
|
28,428 |
|
|
67,066 |
|
|
86,981 |
|
||||||
| Depreciation |
|
1,658 |
|
|
1,523 |
|
|
4,574 |
|
|
4,627 |
|
||||||
| Litigation settlements |
|
- |
|
|
1,500 |
|
|
1,000 |
|
|
5,750 |
|
||||||
| Upfront, progress and milestone payments related to | ||||||||||||||||||
| license and collaboration agreements |
|
3,073 |
|
|
- |
|
|
9,073 |
|
|
90 |
|
||||||
| Fees related to refinancing activities |
|
262 |
|
|
40 |
|
|
1,437 |
|
|
82 |
|
||||||
| Drug substance harmonization costs |
|
80 |
|
|
301 |
|
|
394 |
|
|
1,579 |
|
||||||
| Charges relating to discontinuation of Friedreich's ataxia program |
|
- |
|
|
254 |
|
|
1,221 |
|
|
1,476 |
|
||||||
| Total of non-GAAP adjustments |
|
80,842 |
|
|
87,341 |
|
|
269,844 |
|
|
344,101 |
|
||||||
| Non-GAAP operating income | $ |
129,461 |
|
$ |
149,521 |
|
$ |
341,780 |
|
$ |
299,543 |
|
||||||
| Orphan and Rheumatology segment operating income |
|
89,823 |
|
|
91,537 |
|
|
211,003 |
|
|
205,249 |
|
||||||
| Inflammation segment operating income |
|
39,638 |
|
|
57,984 |
|
|
130,777 |
|
|
94,294 |
|
||||||
| Total segment operating income | $ |
129,461 |
|
$ |
149,521 |
|
$ |
341,780 |
|
$ |
299,543 |
|
||||||
| Foreign exchange (loss)/gain |
|
(40 |
) |
|
35 |
|
|
(25 |
) |
|
(81 |
) |
||||||
| Other income, net |
|
1,001 |
|
|
353 |
|
|
1,189 |
|
|
878 |
|
||||||
| Adjusted EBITDA | $ |
130,422 |
|
$ |
149,909 |
|
$ |
342,944 |
|
$ |
300,340 |
|
||||||
| Horizon Therapeutics plc | |||||||||||||||||
| GAAP to Non-GAAP Reconciliations | |||||||||||||||||
| Gross Profit and Operating Cash Flow (Unaudited) | |||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||
| Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||||
| Non-GAAP Gross Profit: | |||||||||||||||||
| GAAP gross profit | $ |
245,517 |
|
$ |
234,234 |
|
$ |
669,230 |
|
$ |
559,325 |
|
|||||
| Non-GAAP gross profit adjustments: | |||||||||||||||||
| Acquisition/divestiture-related costs |
|
- |
|
|
(239 |
) |
|
1,114 |
|
|
(171 |
) |
|||||
| Intangible amortization expense |
|
57,458 |
|
|
60,940 |
|
|
172,156 |
|
|
181,902 |
|
|||||
| Inventory step-up expense |
|
- |
|
|
83 |
|
|
90 |
|
|
17,212 |
|
|||||
| Share-based compensation |
|
901 |
|
|
874 |
|
|
2,891 |
|
|
2,767 |
|
|||||
| Depreciation |
|
158 |
|
|
176 |
|
|
475 |
|
|
529 |
|
|||||
| Drug substance harmonization costs |
|
80 |
|
|
301 |
|
|
394 |
|
|
1,579 |
|
|||||
| Charges relating to discontinuation of Friedreich's ataxia program |
|
- |
|
|
254 |
|
|
1,221 |
|
|
1,389 |
|
|||||
| Total of Non-GAAP adjustments |
|
58,597 |
|
|
62,389 |
|
|
178,341 |
|
|
205,207 |
|
|||||
| Non-GAAP gross profit | $ |
304,114 |
|
$ |
296,623 |
|
$ |
847,571 |
|
$ |
764,532 |
|
|||||
| GAAP gross profit % |
|
73.2 |
% |
|
72.0 |
% |
|
71.5 |
% |
|
65.6 |
% |
|||||
| Non-GAAP gross profit % |
|
90.7 |
% |
|
91.2 |
% |
|
90.5 |
% |
|
89.7 |
% |
|||||
| GAAP cash provided by operating activities | $ |
87,516 |
|
$ |
84,860 |
|
$ |
234,952 |
|
$ |
85,835 |
|
|||||
| Cash payments for acquisition/divestiture-related costs |
|
88 |
|
|
2,299 |
|
|
583 |
|
|
7,854 |
|
|||||
| Cash payments for restructuring and realignment costs |
|
382 |
|
|
4,357 |
|
|
3,264 |
|
|
9,034 |
|
|||||
| Cash payments for litigation settlements |
|
1,000 |
|
|
4,250 |
|
|
1,000 |
|
|
5,750 |
|
|||||
| Cash payments for upfront, progress and milestone payments related to | |||||||||||||||||
| license and collaboration agreement |
|
7,073 |
|
|
(100 |
) |
|
9,073 |
|
|
175 |
|
|||||
| Cash payments drug substance harmonization costs |
|
313 |
|
|
(16 |
) |
|
985 |
|
|
5,943 |
|
|||||
| Cash payments for discontinuation of Friedreich's ataxia program |
|
- |
|
|
(108 |
) |
|
2,589 |
|
|
3,399 |
|
|||||
| Cash payments relating to refinancing activities |
|
112 |
|
|
26 |
|
|
1,918 |
|
|
57 |
|
|||||
| Non-GAAP operating cash flow | $ |
96,484 |
|
$ |
95,568 |
|
$ |
254,364 |
|
$ |
118,047 |
|
|||||
Horizon Therapeutics plc |
||||||||||
Net Debt Reconciliation (Unaudited) |
||||||||||
(in thousands) |
||||||||||
| As of | ||||||||||
| September 30, 2019 |
December 31, 2018 |
September 30, 2018 |
||||||||
| Long-term debt, net of current | $ |
1,000,819 |
$ |
1,564,485 |
$ |
1,563,239 |
||||
| Exchangeable notes, net |
|
346,541 |
|
332,199 |
|
327,573 |
||||
| Total Debt |
|
1,347,360 |
|
1,896,684 |
|
1,890,812 |
||||
| Debt discount |
|
65,234 |
|
87,038 |
|
92,473 |
||||
| Deferred financing fees |
|
5,432 |
|
9,304 |
|
9,741 |
||||
| Total Principal Amount of Debt |
|
1,418,026 |
|
1,993,026 |
|
1,993,026 |
||||
| Less: cash and cash equivalents |
|
883,964 |
|
958,712 |
|
807,047 |
||||
| Net Debt | $ |
534,062 |
$ |
1,034,314 |
$ |
1,185,979 |
||||
Horizon Therapeutics plc |
||||||||||||||
GAAP to Non-GAAP Tax Rate Reconciliation (Unaudited) |
||||||||||||||
(in millions, except percentages and per share amounts) |
||||||||||||||
| Q3 2019 | ||||||||||||||
| Pre-tax Net (Loss) Income |
Income Tax (Benefit) Expense |
Tax Rate | Net Income (Loss) |
Diluted Earnings (Loss) Per Share |
||||||||||
| As reported - GAAP | $ |
(12.3 |
) |
$ |
(30.6 |
) |
247.9 |
% |
$ |
18.2 |
|
$ |
0.09 |
|
| Non-GAAP adjustments |
|
127.8 |
|
|
21.9 |
|
|
105.9 |
|
|||||
| Non-GAAP | $ |
115.5 |
|
$ |
(8.7 |
) |
(7.5 |
)% |
$ |
124.1 |
|
$ |
0.64 |
|
| Q3 2018 | ||||||||||||||
| Pre-tax Net (Loss) Income |
Income Tax (Benefit) Expense |
Tax Rate | Net Income (Loss) |
Diluted Earnings (Loss) Per Share |
||||||||||
| As reported - GAAP | $ |
32.1 |
|
$ |
(1.3 |
) |
(3.9 |
)% |
$ |
33.4 |
|
$ |
0.19 |
|
| Non-GAAP adjustments |
|
93.1 |
|
|
13.9 |
|
|
79.2 |
|
|||||
| Non-GAAP | $ |
125.2 |
|
$ |
12.6 |
|
10.1 |
% |
$ |
112.6 |
|
$ |
0.65 |
|
| YTD 2019 | ||||||||||||||
| Pre-tax Net (Loss) Income |
Income Tax (Benefit) Expense |
Tax Rate | Net Income (Loss) |
Diluted Earnings (Loss) Per Share |
||||||||||
| As reported - GAAP | $ |
(57.1 |
) |
$ |
(37.4 |
) |
65.4 |
% |
$ |
(19.7 |
) |
$ |
(0.11 |
) |
| Non-GAAP adjustments |
|
347.1 |
|
|
53.7 |
|
|
293.4 |
|
|||||
| Non-GAAP | $ |
290.0 |
|
$ |
16.3 |
|
5.6 |
% |
$ |
273.7 |
|
$ |
1.44 |
|
| YTD 2018 | ||||||||||||||
| Pre-tax Net (Loss) Income |
Income Tax (Benefit) Expense |
Tax Rate | Net Income (Loss) |
Diluted Earnings (Loss) Per Share |
||||||||||
| As reported - GAAP | $ |
(135.7 |
) |
$ |
4.3 |
|
(3.2 |
)% |
$ |
(140.0 |
) |
$ |
(0.84 |
) |
| Non-GAAP adjustments |
|
361.0 |
|
|
23.1 |
|
|
337.9 |
|
|||||
| Non-GAAP | $ |
225.3 |
|
$ |
27.4 |
|
12.2 |
% |
$ |
197.9 |
|
$ |
1.16 |
|
| Horizon Therapeutics plc | ||||||||||||||||||||||||||
| Certain Income Statement Line Items - Non-GAAP Adjusted | ||||||||||||||||||||||||||
| For the Three Months Ended September 30, 2019 | ||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
|
|
|
|
|
|
Income Tax |
||||||||||||||||||||
|
Research & |
Selling, General |
Loss on Debt |
Interest |
Other |
Benefit |
||||||||||||||||||||
COGS |
Development |
& Administrative |
Extinguishment |
Expense |
Expense |
(Expense) |
||||||||||||||||||||
| GAAP as reported | $ |
(89,949 |
) |
$ |
(24,572 |
) |
$ |
(172,326 |
) |
$ |
(41,371 |
) |
$ |
(20,428 |
) |
$ |
890 |
|
$ |
30,564 |
|
|||||
| Non-GAAP Adjustments (in thousands): | ||||||||||||||||||||||||||
| Acquisition/divestiture-related costs(1) |
|
- |
|
|
- |
|
|
(44 |
) |
|
- |
|
|
- |
|
|
111 |
|
|
- |
|
|||||
| Amortization and step-up: | ||||||||||||||||||||||||||
| Intangible amortization expense(3) |
|
57,458 |
|
|
- |
|
|
204 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|||||
| Amortization of debt discount and deferred financing costs(5) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
5,447 |
|
|
- |
|
|
- |
|
|||||
| Share-based compensation(8) |
|
901 |
|
|
1,953 |
|
|
15,297 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|||||
| Depreciation(9) |
|
158 |
|
|
- |
|
|
1,500 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|||||
| Upfront, progress and milestone payments related to license | ||||||||||||||||||||||||||
| and collaboration agreements(11) |
|
- |
|
|
3,073 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|||||
| Fees related to refinancing activities (12) |
|
- |
|
|
- |
|
|
262 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|||||
| Loss on debt extinguishment(13) |
|
- |
|
|
- |
|
|
- |
|
|
41,371 |
|
|
- |
|
|
- |
|
|
- |
|
|||||
| Drug substance harmonization costs(14) |
|
80 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|||||
| Income tax effect on pre-tax non-GAAP adjustments(16) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(21,919 |
) |
|||||
| Total of non-GAAP adjustments |
|
58,597 |
|
|
5,026 |
|
|
17,219 |
|
|
41,371 |
|
|
5,447 |
|
|
111 |
|
|
(21,919 |
) |
|||||
| Non-GAAP | $ |
(31,352 |
) |
$ |
(19,546 |
) |
$ |
(155,107 |
) |
$ |
- |
|
$ |
(14,981 |
) |
$ |
1,001 |
|
$ |
8,645 |
|
|||||
| Horizon Therapeutics plc | ||||||||||||||||||||||||||
| Certain Income Statement Line Items - Non-GAAP Adjusted | ||||||||||||||||||||||||||
| For the Three Months Ended September 30, 2018 | ||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
Income Tax |
|||||||||||||||||||
|
Research & |
Selling, General |
Impairment of |
Loss/(Gain) on |
Interest |
Other |
Benefit |
|||||||||||||||||||
COGS |
Development |
& Administrative |
Long-Lived Assets |
Sale of Assets |
Expense |
Income, net |
(Expense) |
|||||||||||||||||||
| GAAP as reported | $ |
(91,077 |
) |
$ |
(21,169 |
) |
$ |
(161,585 |
) |
$ |
(1,603 |
) |
$ |
12,303 |
|
$ |
(30,437 |
) |
$ |
337 |
|
$ |
1,266 |
|
||
| Non-GAAP Adjustments (in thousands): | ||||||||||||||||||||||||||
| Acquisition/divestiture-related costs(1) |
|
(239 |
) |
|
- |
|
|
541 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| Restructuring and realignment costs(2) |
|
- |
|
|
- |
|
|
4,582 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| Amortization and step-up: | ||||||||||||||||||||||||||
| Intangible amortization expense(3) |
|
60,940 |
|
|
- |
|
|
204 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| Inventory step-up expense(4) |
|
83 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| Amortization of debt discount and deferred financing costs(5) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
5,694 |
|
|
- |
|
|||||
| Impairment of long lived assets(6) |
|
- |
|
|
- |
|
|
- |
|
|
1,603 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| (Gain)/Loss on sale of assets(7) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(12,303 |
) |
|
- |
|
|
- |
|
|
- |
|
||
| Share-based compensation(8) |
|
874 |
|
|
2,049 |
|
|
25,505 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| Depreciation(9) |
|
176 |
|
|
- |
|
|
1,347 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| Litigation settlements(10) |
|
- |
|
|
- |
|
|
1,500 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| Upfront, progress and milestone payments related to license | ||||||||||||||||||||||||||
| and collaboration agreements(11) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(100 |
) |
|
- |
|
||
| Fees related to refinancing activities (12) |
|
- |
|
|
- |
|
|
40 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| Drug substance harmonization costs(14) |
|
301 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| Charges relating to discontinuation of Friedreich's ataxia program(15) |
|
254 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| Income tax effect on pre-tax non-GAAP adjustments(16) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(13,865 |
) |
||
| Total of non-GAAP adjustments |
|
62,389 |
|
|
2,049 |
|
|
33,719 |
|
|
1,603 |
|
|
(12,303 |
) |
|
5,694 |
|
|
(100 |
) |
|
(13,865 |
) |
||
| Non-GAAP | $ |
(28,688 |
) |
$ |
(19,120 |
) |
$ |
(127,866 |
) |
$ |
- |
|
$ |
- |
|
$ |
(24,743 |
) |
$ |
237 |
|
$ |
(12,599 |
) |
||
| Horizon Therapeutics plc | ||||||||||||||||||||||||||
| Certain Income Statement Line Items - Non-GAAP Adjusted | ||||||||||||||||||||||||||
| For the Nine Months Ended September 30, 2019 | ||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
Income Tax |
|||||||||||||||||||
|
Research & |
Selling, General |
Loss/(Gain) on |
Interest |
Other |
Loss on Debt |
Benefit |
|||||||||||||||||||
COGS |
Development |
& Administrative |
Sale of Assets |
Expense |
Expense |
Extinguishment |
(Expense) |
|||||||||||||||||||
| GAAP as reported | $ |
(267,254 |
) |
$ |
(74,611 |
) |
$ |
(511,720 |
) |
$ |
(10,963 |
) |
$ |
(69,991 |
) |
$ |
(193 |
) |
$ |
(58,835 |
) |
$ |
37,359 |
|
||
| Non-GAAP Adjustments (in thousands): | ||||||||||||||||||||||||||
| Acquisition/divestiture-related costs(1) |
|
1,114 |
|
|
- |
|
|
119 |
|
|
- |
|
|
- |
|
|
1,380 |
|
|
- |
|
|
- |
|
||
| Restructuring and realignment costs(2) |
|
- |
|
|
- |
|
|
33 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| Amortization and step-up: | ||||||||||||||||||||||||||
| Intangible amortization expense(3) |
|
172,156 |
|
|
- |
|
|
606 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| Inventory step-up expense(4) |
|
90 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| Amortization of debt discount and deferred financing costs(5) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
17,069 |
|
|
- |
|
|
- |
|
|
- |
|
||
| (Gain)/Loss on sale of assets(7) |
|
- |
|
|
- |
|
|
- |
|
|
10,963 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| Share-based compensation(8) |
|
2,891 |
|
|
6,931 |
|
|
57,244 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| Depreciation(9) |
|
475 |
|
|
- |
|
|
4,099 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| Litigation settlements(10) |
|
- |
|
|
- |
|
|
1,000 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| Upfront, progress and milestone payments related to license | ||||||||||||||||||||||||||
| and collaboration agreements(11) |
|
- |
|
|
9,073 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| Fees related to refinancing activities (12) |
|
- |
|
|
- |
|
|
1,437 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| Loss on debt extinguishment(13) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
58,835 |
|
|
- |
|
||
| Drug substance harmonization costs(14) |
|
394 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| Charges relating to discontinuation of Friedreich's ataxia program(15) |
|
1,221 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| Income tax effect on pre-tax non-GAAP adjustments(16) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(52,291 |
) |
||
| Other non-GAAP income tax adjustments(17) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(1,452 |
) |
||
| Total of non-GAAP adjustments |
|
178,341 |
|
|
16,004 |
|
|
64,538 |
|
|
10,963 |
|
|
17,069 |
|
|
1,380 |
|
|
58,835 |
|
|
(53,743 |
) |
||
| Non-GAAP | $ |
(88,913 |
) |
$ |
(58,607 |
) |
$ |
(447,182 |
) |
$ |
- |
|
$ |
(52,922 |
) |
$ |
1,186 |
|
$ |
- |
|
$ |
(16,384 |
) |
||
| Horizon Therapeutics plc | ||||||||||||||||||||||||||
| Certain Income Statement Line Items - Non-GAAP Adjusted | ||||||||||||||||||||||||||
| For the Nine Months Ended September 30, 2018 | ||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
Income Tax |
|||||||||||||||||||
|
Research & |
Selling, General |
Impairment of |
Loss/(Gain) on |
Interest |
Other |
Benefit |
|||||||||||||||||||
COGS |
Development |
& Administrative |
Long-Lived Assets |
Sale of Assets |
Expense |
Income |
(Expense) |
|||||||||||||||||||
| GAAP as reported | $ |
(292,702 |
) |
$ |
(63,079 |
) |
$ |
(517,858 |
) |
$ |
(35,249 |
) |
$ |
12,303 |
|
$ |
(91,921 |
) |
|
834 |
|
$ |
(4,301 |
) |
||
| Non-GAAP Adjustments (in thousands): | ||||||||||||||||||||||||||
| Acquisition/divestiture-related costs(1) |
|
(171 |
) |
|
(67 |
) |
|
6,417 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| Restructuring and realignment costs(2) |
|
- |
|
|
1,733 |
|
|
13,082 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| Amortization and step-up: | ||||||||||||||||||||||||||
| Intangible amortization expense(3) |
|
181,902 |
|
|
- |
|
|
606 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| Inventory step-up expense(4) |
|
17,212 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| Amortization of debt discount and deferred financing costs(5) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
16,880 |
|
|
- |
|
|||||
| Impairment of long lived assets(6) |
|
- |
|
|
- |
|
|
- |
|
|
35,249 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| (Gain)/Loss on sale of assets(7) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(12,303 |
) |
|
- |
|
|
- |
|
|
- |
|
||
| Share-based compensation(8) |
|
2,767 |
|
|
6,697 |
|
|
77,517 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| Depreciation(9) |
|
529 |
|
|
- |
|
|
4,098 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| Litigation settlements(10) |
|
- |
|
|
- |
|
|
5,750 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| Upfront, progress and milestone payments related to license | ||||||||||||||||||||||||||
| and collaboration agreements(11) |
|
- |
|
|
90 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(100 |
) |
|
- |
|
||
| Fees related to refinancing activities (12) |
|
- |
|
|
- |
|
|
82 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| Drug substance harmonization costs(14) |
|
1,579 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| Charges relating to discontinuation of Friedreich's ataxia program(15) |
|
1,389 |
|
|
87 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| Income tax effect on pre-tax non-GAAP adjustments(16) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
12,774 |
|
||
| Other non-GAAP income tax adjustments(17) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(35,893 |
) |
||
| Total of non-GAAP adjustments |
|
205,207 |
|
|
8,540 |
|
|
107,552 |
|
|
35,249 |
|
|
(12,303 |
) |
|
16,880 |
|
|
(100 |
) |
|
(23,119 |
) |
||
| Non-GAAP | $ |
(87,495 |
) |
$ |
(54,539 |
) |
$ |
(410,306 |
) |
$ |
- |
|
$ |
- |
|
$ |
(75,041 |
) |
$ |
734 |
|
$ |
(27,420 |
) |
||
NOTES FOR CERTAIN INCOME STATEMENT LINE ITEMS - NON-GAAP
-
Represents expenses, including legal and consulting fees, incurred in connection with our acquisitions and divestitures.
-
Represents expenses, including severance costs and consulting fees, related to restructuring and realignment activities.
-
Intangible amortization expenses are associated with our intellectual property rights, developed technology and customer relationships related to ACTIMMUNE, BUPHENYL, KRYSTEXXA, LODOTRA, MIGERGOT, PENNSAID 2%, PROCYSBI, RAVICTI, VIMOVO and RAYOS.
-
During the nine months ended Sept. 30, 2018, we recognized in cost of goods sold $17.2 million for inventory step-up expense primarily related to KRYSTEXXA inventory sold.
-
Represents amortization of debt discount and deferred financing costs associated with our debt.
-
Impairment of long-lived assets during the nine months ended Sept. 30, 2018, relates to the write-off of the book value of developed technology related to PROCYSBI in Canada and Latin America.
-
During the nine months ended Sept. 30, 2019, we recorded a loss of $11.0 million on the sale of our rights to MIGERGOT.
During the nine months ended Sept. 30, 2018, we completed the IMUKIN sale for cash proceeds of $9.5 million, with a potential additional contingent consideration payment and we recorded a gain of $12.3 million on the sale. The contingent consideration payment of €3.0 million ($3.3 million when converted using a Euro-to-Dollar exchange rate at the date of receipt of 1.0991) was received in September 2019.
-
Represents share-based compensation expense associated with our stock option, restricted stock unit and performance stock unit grants to our employees and non-employee directors and our employee share purchase plan.
-
Represents depreciation expense related to our property, equipment, software and leasehold improvements.
-
We recorded $1.0 million and $5.8 million of expense during the nine months ended Sept. 30, 2019 and 2018, respectively, for litigation settlements.
-
During the nine months ended Sept. 30, 2019, we recorded upfront, progress and milestone payments related to license and collaboration agreements of $9.1 million which was composed of a $3.0 million milestone payment to F. Hoffmann-La Roche Ltd relating to the teprotumumab BLA submission to the FDA during the third quarter of 2019, an upfront cash payment of $2.0 million and a progress payment of $4.0 million in relation to the collaboration agreement with HemoShear.
-
Represents arrangement and other fees relating to our refinancing activities.
-
During the nine months ended Sept. 30, 2019, we recorded a loss on debt extinguishment of $58.8 million in the condensed consolidated statements of comprehensive loss, which reflected the early redemption premiums and the write-off of the deferred financing fees and debt discount fees related to the prepayment of $775.0 million of our 2023 Senior Notes and 2024 Senior Notes and the write-off of the deferred financing fees and debt discount fees related to the $400.0 million of term loan repayments.
-
During the year ended Dec. 31, 2016, we entered into a definitive agreement to acquire certain rights to interferon gamma-1b, marketed as IMUKIN in an estimated thirty countries primarily in Europe and the Middle East, or the IMUKIN purchase agreement. We already owned the rights to interferon gamma-1b marketed as ACTIMMUNE in the United States, Canada and Japan. In connection with the IMUKIN purchase agreement, we also committed to pay our contract manufacturer certain amounts related to the harmonization of the manufacturing processes for ACTIMMUNE and IMUKIN drug substance, or the harmonization program. At the time we entered into the IMUKIN purchase agreement and the harmonization program commitment was made, we had anticipated achieving certain benefits should the Phase 3 clinical trial evaluating ACTIMMUNE for the treatment of Friedreich’s ataxia, or FA, be successful. If the study had been successful and if U.S. marketing approval had subsequently been obtained, we had forecasted significant increases in demand for the medicine and the harmonization program would have resulted in significant benefits for us. Following our discontinuation of the FA program, we determined that certain assets, including an upfront payment related to the IMUKIN purchase agreement, were impaired, and the costs under the harmonization program would no longer have benefit to us and should be expensed as incurred.
-
Represents expenses incurred relating to discontinuation of the FA program and a reduction to previous charges recorded.
-
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.
-
Following Notice 2018-28, issued by the U.S. Treasury Department and the U.S. Internal Revenue Service on April 2, 2018 and in accordance with the measurement period provisions under Staff Accounting Bulletin No. 118, or SAB 118, during the nine months ended Sept. 30, 2018 we reinstated the deferred tax asset previously written off during the year ended Dec. 31, 2017, related to our U.S. interest expense carry forwards under Section 163(j) of the Internal Revenue Code of 1986, as amended, based on the revised U.S. federal tax rate of 21 percent. The impact of the deferred tax asset reinstatement in accordance with SAB 118 was a $35.9 million increase to our benefit for income taxes and a corresponding decrease to the U.S. group net deferred tax liability position.
During the nine months ended Sept. 30, 2019 we released a reserve that was originally established and treated as a non-GAAP adjustment related to an uncertain tax position in connection with an acquisition resulting in a non-GAAP tax adjustment of $1.5 million.