The Medicines Company Reports Third Quarter 2011 Results

26 Oct 2011
Quarterly Net Revenues Rise 14% to $121 Million

PARSIPPANY, NJ, Oct 26, 2011 (MARKETWIRE via COMTEX) --

The Medicines Company (NASDAQ: MDCO), a global pharmaceutical company focused on advancing the treatment of critical care patients through the delivery of innovative, cost-effective medicines, today announced results for the third quarter of 2011. Highlights include:

--  A 14% increase in net revenues in the third quarter of 2011 to $120.8
    million from $105.7 million in the comparable 2010 period.


--  The Company reinstated approximately $66 million of deferred tax
    assets during the quarter, as the Company expects sustained profits on
    an ongoing basis. Net income for the third quarter of 2011 was $72.6
    million, or $1.34 per share, compared with net income of $21.2
    million, or $0.40 per share, for the third quarter of 2010.


--  The Company increased its cash and available for sale securities
    balance by $24 million during the quarter, bringing its cash balance
    to $308 million at September 30, 2011, compared with $284 million at
    June 30, 2011.


--  During the quarter, the Company settled lawsuits it had filed in the
    U.S. District Court for the District of Delaware relating to the
    Abbreviated New Drug Applications (ANDAs) filed by Teva Parenteral
    Medicines, Inc. and its affiliate, Pliva Hrvatska d.o.o., for generic
    versions of Angiomax(R) (bivalirudin for injection).



Clive Meanwell, Chairman and Chief Executive Officer, stated, "Third quarter 2011 results again show that we can grow revenue organically, invest in our R&D portfolio and generate significant positive cash flow at the same time."

R&D portfolio highlights for the third quarter included presentation of detailed data from a positive Phase IIa clinical trial of MDCO-2010 at the ANESTHESIOLOGY 2011 conference. Upcoming presentations at major medical conferences for the portfolio in the fourth quarter include:

--  Cangrelor: BRIDGE trial studying a prolonged infusion
--  Angiomax: BRAVO program, first data of Angiomax use in structural
    heart disease
--  MDCO-216: pre-clinical results from key mode-of-action and toxicology
    studies

The Company also continued enrollment in Phase III trials of oritavancin and cangrelor and continued technology transfer of MDCO-157, an intravenous formulation of clopidogrel.

Revenue highlights for the third quarter of 2011:

--  Net revenue increased by 14% to $120.8 million for the third quarter
    of 2011 from $105.7 million in the third quarter of 2010.


    --  Angiomax U.S. sales increased by 11% to $111.1 million in the
        third quarter of 2011 compared with $100.2 million in the third
        quarter of 2010.


    --  Angiomax/Angiox international net revenue in the third quarter of
        2011 increased by 67% to $9.2 million compared with $5.5 million
        in the third quarter of 2010.



Revenue highlights for the first nine months of 2011:

--  Net revenue increased by 11% to $352.5 million for the first nine
    months of 2011 from $318.0 million for same period of 2010.


    --  Angiomax U.S. sales increased by 9% to $328.1 million in the first
        nine months of 2011 compared with $300.3 million for same period
        of 2010.


    --  Angiomax/Angiox international net revenue in the first nine months
        of 2011 increased by 40% to $23.7 million compared with $16.9
        million for same period of 2010.



The following table provides reconciliations between GAAP and non-GAAP net income for third quarter (Q3) and nine months (9M) of 2011 and 2010. Non-GAAP net income excludes the transaction charges related to stock-based compensation expense and non-cash income taxes:

                                                   Non-cash
                                   Stock-Based    (Benefit)
                    Reported GAAP  Compensation Provision for   Non-GAAP Net
(in millions)         Net Income     Expense     Income Taxes    Income(1)
                    ------------- ------------- -------------  -------------

Q3 2011             $        72.6 $         2.9 $       (66.3) $         9.2

Q3 2010             $        21.2 $         1.8 $        (0.2) $        22.8

9M 2011             $       108.3 $         8.4 $       (59.8) $        56.9

9M 2010             $        46.1 $         6.8 $         0.7  $        53.6

Note: Amounts may not sum due to rounding.
(1) Excluding stock-based compensation expense and the non-cash (benefit)
 provision for income taxes.

Reconciliations between GAAP and non-GAAP fully diluted earnings per share (EPS) for the third quarter and nine months of 2011 and 2010 are provided in the following table:

                                                   Non-cash
                                   Stock-Based    (Benefit)
                    Reported GAAP  Compensation Provision for   Non-GAAP EPS
(per share)              EPS         Expense     Income Taxes       (1)
                    ------------- ------------- -------------  -------------
Q3 2011             $        1.34 $        0.05 $       (1.22) $        0.17

Q3 2010             $        0.40 $        0.03 $           -  $        0.43

9M 2011             $        2.00 $        0.15 $       (1.10) $        1.05

9M 2010             $        0.87 $        0.13 $        0.01  $        1.01

Note: Amounts may not sum due to rounding.
(1) Excluding stock-based compensation expense and the non-cash (benefit)
 provision for 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, 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 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: 866-700-7101 International Dial In: 617-213-8837 Passcode for both dial in numbers: 25392199

Replay is available from 11:30 a.m. Eastern Time following the conference call through November 11, 2011. To hear a replay of the call dial 888-286-8010 (domestic) and 617-801-6888 (international). Passcode for both dial in numbers is 31428239.

About The Medicines Company The Medicines Company (NASDAQ: MDCO) provides medical solutions to improve health outcomes for patients in acute and intensive care hospitals worldwide. These solutions comprise medicines and knowledge that directly impact the survival and well-being of critically ill patients. 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 the Company's preliminary revenue results, 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, the Company's ability to develop its 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, August 2, 2011, 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)
                                                        Three months ended
(in thousands, except per share data)                     September 30,
                                                      ---------------------
                                                         2011       2010
                                                      ---------- ----------

Net revenue                                           $  120,773 $  105,743

Operating expenses:
  Cost of revenue                                         39,459     31,568
  Research and development                                26,550     16,676
  Selling, general and administrative                     45,353     35,788
                                                      ---------- ----------
    Total operating expenses                             111,362     84,032
                                                      ---------- ----------

Income from operations                                     9,411     21,711
  Other income                                               578        483
                                                      ---------- ----------
Income before income taxes                                 9,989     22,194
Benefit (provision) for income taxes                      62,625       (989)
                                                      ---------- ----------
Net income                                            $   72,614 $   21,205
                                                      ========== ==========

Basic earnings per common share                       $     1.36 $     0.40
                                                      ========== ==========
Shares used in computing basic earnings per common
 share                                                    53,534     52,991
                                                      ========== ==========

Diluted earnings per common share                     $     1.34 $     0.40
                                                      ========== ==========
Shares used in computing diluted earnings per common
 share                                                    54,260     53,359
                                                      ========== ==========

                           The Medicines Company
              Condensed Consolidated Statements of Operations
                                (unaudited)

                                                           Year to Date
(in thousands, except per share data)                     September 30,
                                                      ---------------------
                                                         2011       2010
                                                      ---------- ----------
Net revenue                                           $  352,501 $  317,966
Operating expenses:
  Cost of revenue                                        112,859     93,905
  Research and development                                76,878     54,128
  Selling, general and administrative                    124,701    121,318
                                                      ---------- ----------
    Total operating expenses                             314,438    269,351
                                                      ---------- ----------

Income from operations                                    38,063     48,615
  Legal settlement                                        17,984          -
  Other income                                             1,450         55
                                                      ---------- ----------
Income before income taxes                                57,497     48,670
Benefit (provision) for income taxes                      50,798     (2,607)
                                                      ---------- ----------
Net income                                            $  108,295 $   46,063
                                                      ========== ==========

Basic earnings per common share                       $     2.03 $     0.87
                                                      ========== ==========
Shares used in computing basic earnings per common
 share                                                    53,414     52,773
                                                      ========== ==========

Diluted earnings per common share                     $     2.00 $     0.87
                                                      ========== ==========
Shares used in computing diluted earnings per common
 share                                                    54,242     53,005
                                                      ========== ==========

                            The Medicines Company
                    Condensed Consolidated Balance Sheets


                                                 September 30,  December 31,
(in thousands)                                        2011          2010
                                                 ------------- -------------
                                                  (unaudited)
                     ASSETS
Cash, cash equivalents and available for sales
 securities                                      $     307,774 $     246,644
Accrued interest receivable                                443         1,279
Accounts receivable, net                                72,725        46,551
Inventory                                               30,426        25,343
Prepaid expenses and other current assets                7,452         4,804
                                                 ------------- -------------
  Total current assets                                 418,820       324,621

Fixed assets, net                                       18,528        20,662
Intangible assets, net                                  86,147        82,925
Restricted cash                                          4,626         5,778
Deferred tax assets                                     93,582        25,197
Goodwill                                                14,671        14,671
Other assets                                               289           270
                                                 ------------- -------------
  Total assets                                   $     636,663 $     474,124
                                                 ============= =============

      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities                              $     125,270 $      85,370
Contingent purchase price                               28,204        25,387
Other long term liabilities                              5,896         5,769
Stockholders' equity                                   477,293       357,598
                                                 ------------- -------------
  Total liabilities and stockholders' equity     $     636,663 $     474,124
                                                 ============= =============

The Medicines Company
Reconciliation of GAAP to non-GAAP Measures
(All amounts in thousands, except per share amounts)
(Unaudited)

                                 Three Months Ended September 30,
                       ----------------------------------------------------
                                               2011
                       ----------------------------------------------------
                                                                     Non-
                                                   Non-cash        GAAP(4)
                                  Stock-Based         Tax             As
                        GAAP(1)  Compensation      Provision       Adjusted
                       --------- ------------      ---------      ---------
Net revenue            $ 120,773 $          -      $       -      $ 120,773

Operating expenses:
  Cost of revenue         39,459          (21) (2)         -         39,438
  Research and
   development            26,550         (527) (2)         -         26,023
  Selling, general and
   administrative         45,353       (2,353) (2)         -         43,000
                       --------- ------------      ---------      ---------
    Total operating
     expenses            111,362       (2,901)             -        108,461
                       --------- ------------      ---------      ---------

Income from operations     9,411        2,901              -         12,312

  Legal settlement             -            -              -              -
  Other income               578            -              -            578
                       --------- ------------      ---------      ---------
Income before income
 taxes                     9,989        2,901              -         12,890
  Benefit (provision)
   for income taxes       62,625            -        (66,296) (3)    (3,671)
                       --------- ------------      ---------      ---------
Net income             $  72,614 $      2,901      $ (66,296)     $   9,219
                       ========= ============      =========      =========

Basic earnings per
 common share          $    1.36 $       0.05      $   (1.24)     $    0.17
                       ========= ============      =========      =========

Shares used in
 computing basic
 earnings per common
 share                    53,534       53,534         53,534         53,534
                       ========= ============      =========      =========

Diluted earnings per
 common share          $    1.34 $       0.05      $   (1.22)     $    0.17
                       ========= ============      =========      =========

Shares used in
 computing diluted
 earnings per common
 share                    54,260       54,260         54,260         54,260
                       ========= ============      =========      =========

Note: Amounts may not sum due to rounding.
(1) GAAP Results
(2) Non-cash stock compensation expense
(3) Non-cash income taxes
(4) Non-GAAP Results

The Medicines Company
Reconciliation of GAAP to non-GAAP Measures
(All amounts in thousands, except per share amounts)
(Unaudited)

                                 Three Months Ended September 30,
                      -----------------------------------------------------
                                               2010
                      -----------------------------------------------------
                                                                   Non-GAAP
                                                   Non-cash          (4)
                                  Stock-Based         Tax             As
                       GAAP(1)   Compensation      Provision       Adjusted
                      ---------  ------------      ---------      ---------
Net revenue           $ 105,743  $          -      $       -      $ 105,743

Operating expenses:
  Cost of revenue        31,568           (57) (2)         -         31,511
  Research and
   development           16,676          (331) (2)         -         16,345
  Selling, general
   and administrative    35,788        (1,387) (2)         -         34,401
                      ---------  ------------      ---------      ---------
    Total operating
     expenses            84,032        (1,775)             -         82,257
                      ---------  ------------      ---------      ---------

Income from
 operations              21,711         1,775              -         23,486

  Other income              483             -              -            483
                      ---------  ------------      ---------      ---------
  Income before
   income taxes          22,194         1,775              -         23,969
  (Provision) benefit
   for income taxes        (989)            -           (148) (3)    (1,137)
                      ---------  ------------      ---------      ---------
Net income            $  21,205  $      1,775      $    (148)     $  22,832
                      =========  ============      =========      =========

Basic earnings per
 common share         $    0.40  $       0.03      $       -      $    0.43
                      =========  ============      =========      =========

Shares used in
 computing basic
 earnings per common
 share                   52,991        52,991         52,991         52,991
                      =========  ============      =========      =========

Diluted earnings per
 common share         $    0.40  $       0.03      $       -      $    0.43
                      =========  ============      =========      =========

Shares used in
 computing diluted
 earnings per common
 share                   53,359        53,359         53,359         53,359
                      =========  ============      =========      =========

(1) GAAP Results
(2) Non-cash stock compensation expense
(3) Non-cash income taxes
(4) Non-GAAP Results

The Medicines Company
Reconciliation of GAAP to non-GAAP Measures
(All amounts in thousands, except per share amounts)
(Unaudited)

                                  Nine Months Ended September 30,
                       ----------------------------------------------------
                                               2011
                       ----------------------------------------------------
                                                                     Non-
                                                   Non-cash        GAAP(4)
                                  Stock-Based         Tax             As
                        GAAP(1)  Compensation      Provision       Adjusted
                       --------- ------------      ---------      ---------
Net revenue            $ 352,501 $          -      $       -      $ 352,501

Operating expenses:
  Cost of revenue        112,859          (98) (2)         -        112,761
  Research and
   development            76,878       (1,486) (2)         -         75,392
  Selling, general and
   administrative        124,701       (6,792) (2)         -        117,909
                       --------- ------------      ---------      ---------
    Total operating
     expenses            314,438       (8,376)             -        306,062
                       --------- ------------      ---------      ---------

Income from operations    38,063        8,376              -         46,439

  Legal settlement        17,984            -              -         17,984
  Other income             1,450            -              -          1,450
                       --------- ------------      ---------      ---------
Income before income
 taxes                    57,497        8,376              -         65,873
  Benefit (provision)
   for income taxes       50,798            -        (59,743) (3)    (8,945)
                       --------- ------------      ---------      ---------
Net income             $ 108,295 $      8,376      $ (59,743)     $  56,928
                       ========= ============      =========      =========

Basic earnings per
 common share          $    2.03 $       0.16      $   (1.12)     $    1.07
                       ========= ============      =========      =========

Shares used in
 computing basic
 earnings per common
 share                    53,414       53,414         53,414         53,414
                       ========= ============      =========      =========

Diluted earnings per
 common share          $    2.00 $       0.15      $   (1.10)     $    1.05
                       ========= ============      =========      =========

Shares used in
 computing diluted
 earnings per common
 share                    54,242       54,242         54,242         54,242
                       ========= ============      =========      =========

Note: Amounts may not sum due to rounding.
(1) GAAP Results
(2) Non-cash stock compensation expense
(3) Non-cash income taxes
(4) Non-GAAP Results

The Medicines Company
Reconciliation of GAAP to non-GAAP Measures
(All amounts in thousands, except per share amounts)
(Unaudited)

                                  Nine Months Ended September 30,
                       ----------------------------------------------------
                                               2010
                       ----------------------------------------------------
                                                                   Non-GAAP
                                                    Non-cash         (4)
                                   Stock-Based         Tax            As
                        GAAP(1)   Compensation      Provision      Adjusted
                       ---------  ------------      ---------     ---------
Net revenue            $ 317,966  $          -      $       -     $ 317,966

Costs and expenses:
  Cost of revenue         93,905          (218) (2)         -        93,687
  Research and
   development            54,128        (1,569) (2)         -        52,559
  Selling, general and
   administrative        121,318        (5,068) (2)         -       116,250
                       ---------  ------------      ---------     ---------
    Total operating
     expenses            269,351        (6,855)             -       262,496
                       ---------  ------------      ---------     ---------

Income from operations    48,615         6,855              -        55,470

  Other income                55             -              -            55
                       ---------  ------------      ---------     ---------
  Income before income
   taxes                  48,670         6,855              -        55,525
  (Provision) benefit
   for income taxes    $  (2,607)            -            710 (3)    (1,897)
                       ---------  ------------      ---------     ---------
Net income             $  46,063  $      6,855      $     710     $  53,628
                       =========  ============      =========     =========

Basic earnings per
 common share          $    0.87  $       0.13      $    0.01     $    1.02
                       =========  ============      =========     =========

Shares used in
 computing basic
 earnings per common
 share                    52,773        52,773         52,773        52,773
                       =========  ============      =========     =========

Diluted earnings per
 common share          $    0.87  $       0.13      $    0.01     $    1.01
                       =========  ============      =========     =========

Shares used in
 computing diluted
 earnings per common
 share                    53,005        53,005         53,005        53,005
                       =========  ============      =========     =========

(1) GAAP Results
(2) Non-cash stock compensation expense
(3) Non-cash income taxes
(4) Non-GAAP Results

Contact:
Michael Mitchell
The Medicines Company
973-290-6000
[email protected]


SOURCE: The Medicines Company

mailto:[email protected]