The Medicines Company Reports First Quarter 2009 Financial Results

29 Apr 2009
Operations Continue to Enable Aggressive Investment in New Products and Global Capabilities
PARSIPPANY, NJ, Apr 29, 2009 (MARKET WIRE via COMTEX) -- The Medicines Company (NASDAQ: MDCO) today announced its financial results for the first quarter of 2009.

Financial highlights for the first quarter of 2009:

--  Net revenue increased by 25% to $99.2 million for the first quarter of
    2009 from $79.4 million for the first quarter of 2008.

--  Including one-time transaction costs of $4.0 million related to the
    Targanta Therapeutics Corporation ("Targanta") acquisition, net loss for
    the first quarter of 2009, was $3.3 million, or $0.06 per share, compared
    to net income of $4.9 million, or $0.09 per share, for the first quarter of
    2008.

--  Non-GAAP net income for the first quarter of 2009 was $3.5 million, or
    $0.07 per share, compared to non-GAAP net income of $12.4 million, or $0.24
    per share, for the first quarter of 2008. Non-GAAP net income excludes the
    transaction costs associated with the Targanta acquisition, stock-based
    compensation expense and non-cash income taxes.



Clive Meanwell, Chief Executive Officer, stated, "We continue to invest aggressively in the acquisition of new products such as oritavancin, and in the development of our global capabilities as evidenced by our European expansion. These investments will help us deliver sustainable growth far into the future."

Operating highlights for the first quarter of 2009:

--  Achieved 24% growth in Angiomax demand versus first quarter of 2008;
    market share in STEMI patients at an all time high of 22%

--  Exceeded 170 cumulative formulary wins for Cleviprex; now growing at a
    rate of approximately 1 per day; submitted Cleviprex Marketing
    Authorization Application in Europe

--  Deployed fully staffed teams of medical science, sales and marketing
    associates in the United Kingdom, France, and Scandinavia

--  Continued to enroll patients in the Phase 3 cangrelor trials;
    projected to complete planned enrollment over the summer

--  Completed the acquisition and integration of Targanta


John Kelley, President and Chief Operating Officer, stated, "Angiomax continues to grow in both volume and market share and we are making progress with Angiox in Europe. The Cleviprex launch is progressing, winning formularies, and beginning to see pull through from customers. This is a solid start to 2009 and we are on track to achieve our 2009 top line guidance."

The following table provides reconciliations between GAAP and non-GAAP net (loss) income for the first quarter (Q1) of 2009 and 2008. Non-GAAP net income excludes the transaction charges related to the Targanta acquisition, stock-based compensation expense and non-cash income taxes:

                                                    Non-Cash
             Reported                  FAS 123R    (Benefit)
             GAAP Net     Targanta    Stock-Based  Provision     Non-GAAP
(in           (Loss)    Transaction  Compensation  for Income      Net
 millions)    Income       Costs        Expense      Taxes      Income (1)
           -----------  ------------ ------------ -----------  ------------
Q1 2009    $      (3.3) $        4.0 $        5.5 $      (2.6) $        3.5
           -----------  ------------ ------------ -----------  ------------
Q1 2008    $       4.9             - $        4.6 $       3.0  $       12.4
           -----------  ------------ ------------ -----------  ------------
Note: Amounts may not sum due to rounding.
(1) Excluding the transaction charges related to the Targanta acquisition,
    stock-based compensation expense and non-cash income taxes.

Reconciliations between GAAP and non-GAAP fully diluted (loss) earnings per share (EPS) for the first quarter (Q1) of 2009 and 2008 are provided in the following table:

             Reported
            GAAP (Loss)                FAS 123R     Non-Cash
             Earnings     Targanta    Stock-Based  Provision
               Per      Transaction  Compensation  for Income    Non-GAAP
(per share)   Share        Costs        Expense      Taxes        EPS (1)
           -----------  ------------ ------------ -----------  ------------
Q1 2009    $     (0.06) $       0.08 $       0.10 $     (0.05) $       0.07
           -----------  ------------ ------------ -----------  ------------
Q1 2008    $      0.09             - $       0.09 $      0.06  $       0.24
           -----------  ------------ ------------ -----------  ------------
Note: Amounts may not sum due to rounding.
(1) Excluding the transaction charges related to the Targanta acquisition,
    stock-based compensation expense and non-cash income taxes.

The Company believes that presenting the non-GAAP information contained in the financial tables and in this press release assists investors and others in gaining a better understanding of the Company's core operating results and future prospects, expected growth rates or forecasted guidance, particularly as related to transaction charges associated with the Targanta acquisition, stock-based compensation expense and non-cash income taxes. Management uses this non-GAAP information, in addition to the GAAP information, as the basis for measuring the Company's core operating performance and comparing such performance to that of prior periods and to the performance of its competitors. Such measures are also used by management in its financial and operating decision-making. Non-GAAP information is not meant to be considered superior to or a substitute for the Company's results of operations prepared in accordance with GAAP. A reconciliation of GAAP results with non-GAAP results may also be found in the attached financial tables.

2009 Guidance (in millions, except percentages and per share data)

Following the completion of the Targanta acquisition, The Medicines Company is reissuing guidance as follows:

                               February 18, 2009          April 28, 2009
                        --------------------------------  --------------
                           Guidance          Targanta        Guidance
                                           Acquisition       Including
                                              Impact         Targanta
                        ---------------  ---------------  ---------------
Net Sales
  US Angiomax           $  395 - $  405
  International Angiox  $   30 - $   40
  US Cleviprex          $   10 - $   19
Total Net Sales         $  435 - $  464
Cost of Revenue               28%
R&D (GAAP)              $   79 - $   84  $   15 - $   20  $   97 - $  102
                        ---------------  ---------------  ---------------
   (w/o 123R)           $   75 - $   80                   $   93 - $   98
                        ---------------  ---------------  ---------------
SG&A (GAAP)             $  186 - $  193  $   10 - $   12  $  194 - $  201
                        ---------------  ---------------  ---------------
   (w/o 123R)           $  170 - $  175                   $  178 - $  183
                        ---------------  ---------------  ---------------
Stock Based Comp
 - 123R (1)             $   20 - $   22
Investment Income       $    3 - $    5
Effective Tax Rate         45% - 50%
Net Income (loss)
 - GAAP                 $   26 - $   31                   $   13 - $   18
                        ---------------  ---------------  ---------------
 - Non GAAP             $   66 - $   78                   $   47 - $   59
                        ---------------  ---------------  ---------------
EPS - GAAP              $ 0.47 - $ 0.57                   $ 0.24 - $ 0.34
                        ---------------  ---------------  ---------------
EPS - Non GAAP          $ 1.22 - $ 1.44                   $ 0.88 - $ 1.10
                        ---------------  ---------------  ---------------
(1) Note that GAAP reporting of R&D and SG&A include stock based
    compensation expense

There will be a conference call with management today at 8:30 a.m. Eastern Time to discuss first quarter 2009 financial results and operational developments. The conference call will be available via phone and webcast. The webcast can be accessed at The Medicines Company website at velhartice.info.

The dial in information is listed below:

Domestic Dial In:                    800-706-7745
International Dial In:               617-614-3472
Passcode for both dial in numbers:   34239136

Replay is available from 11:30 a.m. Eastern Time following the conference call through May 13, 2009. To hear a replay of the call dial 888-286-8010 (domestic) and 617-801-6888 (international). Passcode for both dial in numbers is 33236910.

About The Medicines Company: The Medicines Company (NASDAQ: MDCO) is focused on advancing the treatment of critical care patients through the delivery of innovative, cost-effective medicines to the worldwide hospital marketplace. The Company markets Angiomax(R) (bivalirudin) in the United States and other countries for use in patients undergoing coronary angioplasty, and Cleviprex(R) (clevidipine butyrate) injectable emulsion in the United States for the reduction of blood pressure when oral therapy is not feasible or not desirable. The Company also has an investigational antiplatelet agent, cangrelor, in late-stage development and a serine protease inhibitor, CU-2010, in early-stage development. Through the acquisition of Targanta, The Medicines Company's pipeline also includes oritavancin, a semi-synthetic lipoglycopeptide antibiotic currently awaiting EU regulatory approval. The Medicines Company's website is velhartice.info.

Statements contained in this press release about The Medicines Company that are not purely historical, and all other statements that are not purely historical, may be deemed to be forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Without limiting the foregoing, the words "believes," "anticipates" and "expects" and similar expressions, including our 2009 guidance, are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties that may cause the Company's actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by these forward-looking statements. Important factors that may cause or contribute to such differences include the extent of the commercial success of Angiomax, whether the Company's products will advance in the clinical trials process on a timely basis or at all, whether the Company will make regulatory submissions for product candidates on a timely basis, whether its regulatory submissions will receive approvals from regulatory agencies on a timely basis or at all, whether physicians, patients and other key decision makers will accept clinical trial results, risks associated with the establishment of international operations, and such other factors as are set forth in the risk factors detailed from time to time in the Company's periodic reports and registration statements filed with the Securities and Exchange Commission including, without limitation, the risk factors detailed in the Company's Annual Report on Form 10-K filed on March 2, 2009, which are incorporated herein by reference. The Company specifically disclaims any obligation to update these forward-looking statements.

                          The Medicines Company
                  Consolidated Statements of Operations
                                (unaudited)
                                                       Three Months Ended
(in thousands, except per share data)                      March 31,
                                                       2009        2008
Net revenue                                          $  99,217   $  79,427
Operating expenses:
  Cost of revenue                                       28,297      19,092
  Research and development                              24,436      18,663
  Selling, general and administrative                   53,595      35,350
                                                     ---------   ---------
    Total operating expenses                           106,328      73,105
                                                     ---------   ---------
(Loss) income from operations                           (7,111)      6,322
Other income                                             1,170       2,381
                                                     ---------   ---------
(Loss) income before income taxes                       (5,941)      8,703
Benefit (provision) for income taxes                     2,593      (3,850)
                                                     ---------   ---------
Net (loss) income                                    $  (3,348)  $   4,853
                                                     =========   =========
Basic (loss) income per common share                 $   (0.06)  $    0.09
                                                     =========   =========
Shares used in computing basic (loss)
 income per common share                                52,141      51,749
                                                     =========   =========
Diluted (loss) income per common share               $   (0.06)  $    0.09
                                                     =========   =========
Shares used in computing diluted (loss)
 income per common share                                52,141      52,274
                                                     =========   =========
                          The Medicines Company
                  Condensed Consolidated Balance Sheets
                                (unaudited)
                                                   March 31,   December 31,
(in thousands)                                       2009          2008
                                                 ------------  ------------
                      ASSETS
Cash, cash equivalents and available for sales
 securities                                      $    164,312  $    216,206
Accrued interest receivable                             1,241         1,336
Accounts receivable, net                               34,976        33,657
Inventory                                              24,225        28,229
Prepaid expenses and other current assets              16,423        16,402
                                                 ------------  ------------
  Total current assets                                241,177       295,830
                                                 ------------  ------------
Fixed assets, net                                      27,537        27,331
Intangible assets, net                                 16,056        16,349
In-process research and development                    67,200            --
Goodwill                                               27,154            --
Restricted cash                                         8,004         5,000
Deferred tax assets                                    12,428        37,657
Other assets                                            5,328         5,237
                                                 ------------  ------------
  Total assets                                   $    404,884  $    387,404
                                                 ============  ============
       LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities                              $     77,214  $     83,608
Contingent purchase price                              22,000            --
Other long-term liabilities                             5,627         5,771
Stockholders' equity                                  300,043       298,025
                                                 ------------  ------------
  Total liabilities and stockholders' equity     $    404,884  $    387,404
                                                 ============  ============
The Medicines Company
Reconciliation of GAAP to non-GAAP Measures
(Amounts in thousands, except per share data)
(Unaudited)
                               Three Months Ended March 31,
                ----------------------------------------------------------
                                           2009
                ----------------------------------------------------------
                  GAAP       Targanta                           Non-GAAP
                Reported   Transaction  SFAS 123R   Non-Cash    Adjusted
                   (1)      Costs (2)      (3)      Taxes (4)      (5)
               ----------  ----------- ----------- ----------  -----------
Net revenue    $   99,217  $         - $         - $        -  $    99,217
Operating
 expenses:
  Cost of
   revenue         28,297            -        (221)         -       28,076
  Research and
   development     24,436            -        (986)         -       23,450
  Selling,
   general and
   admini-
   strative        53,595       (3,995)     (4,254)         -       45,346
               ----------  ----------- ----------- ----------  -----------
    Total
     operating
     expenses     106,328       (3,995)     (5,461)         -       96,872
(Loss) income
 from
 operations        (7,111)       3,995       5,461          -        2,345
  Other income      1,170            -           -          -        1,170
               ----------  ----------- ----------- ----------  -----------
(Loss) income
 before income
 taxes             (5,941)       3,995       5,461          -        3,515
  (Provision)
   benefit for
   income taxes     2,593            -           -     (2,633)         (40)
               ----------  ----------- ----------- ----------  -----------
Net (loss)
 income            (3,348)       3,995       5,461     (2,633)       3,475
               ==========  =========== =========== ==========  ===========
Basic (loss)
 earnings
 per common
 share         $    (0.06) $      0.08 $      0.10 $    (0.05) $      0.07
               ==========  =========== =========== ==========  ===========
Shares used in
 computing
 basic
 (loss)
 earnings per
 common share      52,141       52,141      52,141     52,141       52,141
               ==========  =========== =========== ==========  ===========
Diluted (loss)
 earnings
 per common
 share         $    (0.06) $      0.08 $      0.10 $    (0.05) $      0.07
               ==========  =========== =========== ==========  ===========
Shares used in
 computing
 diluted (loss)
 earnings per
 common share      52,141       52,496      52,496     52,496       52,496
               ==========  =========== =========== ==========  ===========
(1) GAAP results
(2) Transaction charges associated with the Targanta acquisition
(3) Non-cash stock compensation expense
(4) Non-cash tax benefit
(5) Non-GAAP results

Contact:
Robyn Brown
Vice President, Investor Relations
The Medicines Company
973-290-6000
Email Contact

SOURCE: The Medicines Company