The Medicines Company Reports Second Quarter 2009 Financial Results

29 Jul 2009
Achieves First Quarter of Net Sales in Excess of $100 Million
PARSIPPANY, NJ, Jul 29, 2009 (MARKETWIRE via COMTEX) -- The Medicines Company (NASDAQ: MDCO) today announced its financial results for the second quarter of 2009.

Highlights for the second quarter of 2009:

--  Net revenue increased by 20% to $104.2 million for the second quarter
    of 2009 from $86.7 million for the second quarter of 2008.
        --  Angiomax U.S. sales increased by 17% to $98.8 million in the
            second quarter of 2009 compared to $84.5 million in the second
            quarter of 2008.
        --  Angiomax/Angiox international net revenue in the second quarter
            of 2009 increased by 96% to $4.5 million compared to $2.3
            million in the second quarter of 2008.
        --  Cleviprex has now been accepted by more than 240 hospital
            formularies and has been purchased by more than 300 hospitals
            in the United States. Net revenue in the second quarter of 2009
            was $0.9M, up from $0.5M in the first quarter.
--  Net income for the second quarter of 2009 was $3.8 million, or $0.07
    per share, compared to net income of $4.1 million, or $0.08 per share,
    for the second quarter of 2008.
--  Non-GAAP net income for the second quarter of 2009 was $12.3 million,
    or $0.24 per share, compared to non-GAAP net income of $14.5 million,
    or $0.28 per share, for the second 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.

John Kelley, President and Chief Operating Officer, stated, "The core business, Angiomax and Angiox, is strong and growing. Cleviprex is becoming accepted by more and more hospitals, initial use has been in a wide range of patients, and we continue to view this product as an important and substantial opportunity."

Financial highlights for the first six months of 2009:

--  Net revenue increased by 22% to $203.4 million for the first six months
    of 2009 from $166.2 million for the same period in 2008.
        --  Angiomax U.S. sales increased by 21% to $194.3 million for the
            first six months of 2009 from $161.3 million for the first six
            months of 2008.
        --  Angiomax/Angiox international net revenue in the first six
            months of 2009 increased by 83% to $7.7 million compared to
            $4.2 million in the first six months of 2008.
        --  Cleviprex net revenue in the first six months of 2009 was
            $1.4M.
--  Net income for the first six months of 2009 was $0.5 million, or $0.01
    per share, and includes costs for Targanta acquisition, compared to net
    income of $8.9 million, or $0.17 per share, in the first six months of
    2008.
--  The Company reported non-GAAP net income of $15.5 million, or $0.29 per
    share, for the first six months of 2009, compared to non-GAAP net
    income of $26.9 million, or $0.51 per share, for the first six months
    of 2008. Non-GAAP net income excludes the Targanta acquisition,
    stock-based compensation expense and non-cash income taxes.

The following table provides reconciliations between GAAP and non-GAAP net (loss) income for the second quarter (Q2) and first six months (6M) 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
(in           (Loss)    Transaction  Compensation  for Income  Non-GAAP Net
 millions)    Income       Costs        Expense      Taxes      Income (1)
           ------------ ------------ ------------ -----------  ------------
 Q2 2009   $        3.8 $        0.3 $        5.4 $       2.8  $       12.3
           ------------ ------------ ------------ -----------  ------------
 Q2 2008   $        4.1            - $        6.9 $       3.6  $       14.5
           ------------ ------------ ------------ -----------  ------------
 6M 2009   $        0.5 $        4.3 $       10.9 $      (0.2) $       15.5
           ------------ ------------ ------------ -----------  ------------
 6M 2008   $        8.9            - $       11.4 $       6.6  $       26.9
           ------------ ------------ ------------ -----------  ------------
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 second quarter (Q2) and first six months (6M) of 2009 and 2008 are provided in the following table:

             Reported                  FAS 123R     Non-Cash
            GAAP (Loss)   Targanta    Stock-Based  Provision
             Earnings   Transaction  Compensation  for Income    Non-GAAP
(per share) Per Share      Costs        Expense      Taxes        EPS (1)
           ------------ ------------ ------------ -----------  ------------
 Q2 2009   $       0.07 $       0.01 $       0.10 $       0.05 $       0.24
           ------------ ------------ ------------ ------------ ------------
 Q2 2008   $       0.08            - $       0.13 $       0.07 $       0.28
           ------------ ------------ ------------ ------------ ------------
 6M 2009   $       0.01 $       0.08 $       0.21            - $       0.29
           ------------ ------------ ------------ ------------ ------------
 6M 2008   $       0.17            - $       0.22 $       0.13 $       0.51
           ------------ ------------ ------------ ------------ ------------
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.

There will be a conference call with management today at 8:30 a.m. Eastern Time to discuss second 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:                   800-884-5695
International Dial In:              617-786-2960
Passcode for both dial in numbers:  64853162

Replay is available from 11:30 a.m. Eastern Time following the conference call through August 12, 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 37428278.

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 two products in late stage development, cangrelor, an investigational antiplatelet agent and oritavancin, a semi-synthetic lipoglycopeptide antibiotic currently under review by the EU regulatory agency. The Company's pipeline also includes a serine protease inhibitor, CU2010, in early-stage development. 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, our ability to develop our global operations and penetrate foreign markets, 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 Quarterly Report on Form 10-Q filed on May 11, 2009, which are incorporated herein by reference. The Company specifically disclaims any obligation to update these forward-looking statements.

                          The Medicines Company
              Condensed Consolidated Statements of Operations
                                (unaudited)
(in thousands, except per share data)           Three Months Ended June 30,
                                                --------------------------
                                                    2009          2008
                                                ------------  ------------
Net revenue                                        $ 104,175  $     86,731
Operating expenses:
  Cost of revenue                                     30,353        21,939
  Research and development                            21,784        19,781
  Selling, general and administrative                 45,910        38,789
                                                ------------  ------------
    Total operating expenses                          98,047        80,509
                                                ------------  ------------
Income (loss) from operations                          6,128         6,222
Other income                                             734         1,805
                                                ------------  ------------
Income (loss) before income taxes                      6,862         8,027
Benefit (provision) for income taxes                  (3,051)       (3,971)
                                                ------------  ------------
Net income (loss)                               $      3,811  $      4,056
                                                ============  ============
Basic earnings (loss) per common share          $       0.07  $       0.08
                                                ============  ============
Shares used in computing basic earnings
 (loss) per common share                              52,232        51,834
                                                ============  ============
Diluted earnings (loss) per common share        $       0.07  $       0.08
                                                ============  ============
Shares used in computing diluted earnings
 (loss) per common share                              52,533        52,441
                                                ============  ============
                          The Medicines Company
              Condensed Consolidated Statements of Operations
                                (unaudited)
(in thousands, except per share data)           Six Months Ended June 30,
                                                --------------------------
                                                    2009          2008
                                                ------------  ------------
Net revenue                                     $    203,392  $    166,159
Operating expenses:
  Cost of revenue                                     58,650        41,032
  Research and development                            46,221        38,443
  Selling, general and administrative                 99,504        74,139
                                                ------------  ------------
    Total operating expenses                         204,375       153,614
                                                ------------  ------------
Income (loss) from operations                           (983)       12,545
Other income                                           1,903         4,186
                                                ------------  ------------
Income (loss) before income taxes                        920        16,731
Provision for income taxes                              (458)       (7,821)
                                                ------------  ------------
Net income (loss)                               $        462  $      8,910
Basic earnings (loss) per common share          $       0.01  $       0.17
                                                ============  ============
Shares used in computing basic earnings
 (loss) per common share                              52,187        51,792
                                                ============  ============
Diluted earnings (loss) per common share        $       0.01  $       0.17
                                                ============  ============
Shares used in computing diluted earnings
 (loss) per common share                              52,534        52,361
                                                ============  ============
                          The Medicines Company
                  Condensed Consolidated Balance Sheets
                                                  June 30,    December 31,
(in thousands)                                      2009          2008
                                                ------------  ------------
                    ASSETS
Cash, cash equivalents and available
 for sales securities                           $    185,774  $    216,206
Accrued interest receivable                              932         1,336
Accounts receivable, net                              30,590        33,657
Inventory                                             25,578        28,229
Prepaid expenses and other current assets             17,969        16,402
                                                ------------  ------------
    Total current assets                             260,843       295,830
                                                ------------  ------------
Fixed assets, net                                     27,200        27,331
Intangible assets, net                                15,763        16,349
Restricted cash                                        8,017         5,000
Deferred tax assets                                    9,624        37,657
In process research & development                     68,400           ---
Goodwill                                              27,135           ---
Other assets                                           5,337         5,237
                                                ------------  ------------
    Total assets                                $    422,319  $    387,404
                                                ============  ============
     LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities                             $     84,846  $     83,608
  Contingent purchase price                           22,701           ---
  Other long term liabilities                          5,650         5,771
Stockholders' equity                                 309,122       298,025
                                                ------------  ------------
    Total liabilities and stockholders' equity  $    422,319  $    387,404
                                                ============  ============
The Medicines Company
Reconciliation of GAAP to non-GAAP Measures
(All amounts in thousands, except per share amounts)
(Unaudited)
                              Three Months Ended June 30, 2009
                 ---------------------------------------------------------
                                                      Non-cash    Non-GAAP
                           Targanta       SFAS          Tax        (5) As
                 GAAP(1)  Acquisition     123R       Provision    Adjusted
                 --------  --------     --------     ---------    --------
Net revenue      $104,175  $      -     $      -     $       -    $104,175
Operating
 expenses:
  Cost of
   revenue         30,353         -         (253)(3)         -      30,100
  Research and
   development     21,784                   (953)(3)         -      20,831
  Selling,
   general and
   administrative  45,910      (286)(2)   (4,240)(3)         -      41,384
                 --------  --------     --------     ---------    --------
Total operating
 expenses          98,047      (286)      (5,445)            -      92,316
Income from
 operations         6,128       286        5,445             -      11,859
Other income          734         -            -             -         734
                 --------  --------     --------     ---------    --------
Income before
 income taxes       6,882       286        5,445             -      12,593
Benefit
 (provision)
 for income
 taxes             (3,051)        -(2)         -         2,795(4)     (256)
                 --------  --------     --------     ---------    --------
Net income          3,811       286        5,445         2,795      12,337
Basic earnings
 per common
 share           $   0.07  $   0.01     $   0.10     $    0.05    $   0.24
                 ========  ========     ========     =========    ========
Shares used
 in computing
 basic earnings
 per common
 share             52,232    52,232       52,232        52,232      52,232
                 ========  ========     ========     =========    ========
Diluted earnings
 per common
 share           $   0.07  $   0.01     $   0.10     $    0.05    $   0.24
                 ========  ========     ========     =========    ========
Shares used
 in computing
 diluted
 earnings per
 common share      52,533    52,496       52,496        52,496      52,496
                 ========  ========     ========     =========    ========
(1) GAAP results
(2) Targanta aquisition
(3) Non-cash compensation expense
(4) Non-cash income taxes
(5) Non-GAAP results
The Medicines Company
Reconciliation of GAAP to non-GAAP Measures
(All amounts in thousands, except per share amounts)
(Unaudited)
                               Six Months Ended June 30, 2009
                 ---------------------------------------------------------
                                                      Non-cash    Non-GAAP
                           Targanta       SFAS          Tax        (5) As
                 GAAP(1)  Acquisition     123R       Provision    Adjusted
                 --------  --------     --------     ---------    --------
Net  revenue     $203,392  $      -     $      -     $      -     $203,392
Operating
 expenses:
  Cost of
   revenue         58,650         -         (474)(3)         -      58,176
  Research and
   development     46,221                 (1,939)(3)         -      44,282
  Selling,
   general and
   administrative  99,504    (4,281)(2)   (8,494)(3)         -      86,730
                 --------  --------     --------     ---------    --------
Total operating
 expenses         204,375    (4,281)     (10,906)            -     189,188
(Loss) income
 from operations     (983)    4,281       10,906             -      14,204
Other income        1,903         -            -             -       1,903
                 --------  --------     --------     ---------    --------
Income before
 income taxes         920     4,281       10,906             -      16,107
 (Provision)
 benefit for
 income taxes        (458)        -(2)         -          (162)(4)    (620)
                 --------  --------     --------     ---------    --------
Net income
 (loss)               462     4,281       10,906          (162)     15,487
Basic earnings
 (loss) per
 common share    $   0.01  $   0.08     $   0.21     $   (0.00)   $   0.30
                 ========  ========     ========     =========    ========
Shares used
 in computing
 basic earnings
 (loss) per
 common share      52,187    52,187       52,187        52,187      52,187
                 ========  ========     ========     =========    ========
Diluted earnings
 (loss) per
 common share    $   0.01  $   0.08     $   0.21     $   (0.00)   $   0.29
                 ========  ========     ========     =========    ========
Shares used
 in computing
 diluted (loss)
 earnings per
 common share      52,534    52,534       52,534        52,534      52,534
                 ========  ========     ========     =========    ========
(1) GAAP results
(2) Targanta aquisition
(3) Non-cash compensation expense
(4) Non-cash income taxes
(5) Non-GAAP results

Contact:
Robyn Brown
Vice President, Investor Relations
The Medicines Company
973-290-6000
[email protected]

SOURCE: The Medicines Company

mailto:[email protected]