The Medicines Company Reports Third Quarter 2009 Financial Results

28 Oct 2009
Total Sales in Third Quarter Up 12%, Year to Date Up 19%, Despite Economic Pressures on U.S. Hospitals and Reduced PCI Volume
PARSIPPANY, NJ, Oct 28, 2009 (MARKETWIRE via COMTEX) -- The Medicines Company (NASDAQ: MDCO) today announced its financial results for the third quarter of 2009.

Financial highlights for the third quarter of 2009:

--  Net revenue increased by 12% to $98.8 million for the third quarter of
    2009 from $88.1 million for the third quarter of 2008.
    --  Angiomax U.S. sales increased by 9% to $92.2 million in the third
        quarter of 2009 compared to $85.0 million in the third quarter of
        2008.
    --  Angiomax/Angiox international net revenue in the third quarter of
        2009 increased by 74% to $5.5 million compared to $3.1 million in
        the third quarter of 2008.
    --  Cleviprex has now been accepted by more than 345 hospital
        formularies and has been purchased by more than 400 hospitals in
        the United States. Net revenue in the third quarter of 2009 was
        $1.1 million, up from $0.9 million in the second quarter.
--  Net loss for the third quarter of 2009 was ($3.2) million, or ($0.06)
    per share, compared to a net loss of ($13.2) million, or ($0.25) per
    share, for the third quarter of 2008.
--  Non-GAAP net income for the third quarter of 2009 was $5.1 million, or
    $0.10 per share, compared to non-GAAP net income of $8.5 million, or
    $0.16 per share, for the third quarter of 2008.  Non-GAAP net income
    excludes the transaction costs associated with the Targanta and
    Curacyte acquisitions, stock-based compensation expense and non-cash
    income taxes.

Clive Meanwell, Chairman and Chief Executive Officer, stated, "This was a challenging quarter in terms of market dynamics. We estimate that inpatient PCI volume declined 9% year on year, including a dramatic 17 % reduction in elective PCIs, set against a 4% increase in emergent or urgent procedures. Despite this, we grew U.S. Angiomax volume and year on year, net sales worldwide are up 19%. Angiox and Cleviprex are beginning to make meaningful contributions to our top line. Our development programs are making progress."

Recent operational highlights:

--  HORIZONS-AMI one-year trial results were published in The Lancet. The
    trial showed that Angiomax reduced cardiac-related death by 43 percent (p
    equals 0.005), improved overall survival by 27 percent (p equals 0.037) and
    reduced major bleeding complications by 39 percent (p is less than 0.0001)
    compared with heparin plus a GP IIb/IIIa inhibitor. Angiomax showed an
    absolute reduction of 1.7 percent in cardiac-related death and 1.3 percent
    in all-cause death at one year.

--  The United States Patent and Trademark Office issued 2 new patents
    relating to a more consistent and improved Angiomax drug product, which
    were listed in the U.S. Food and Drug Administration's publication
    "Approved Drug Products with Therapeutic Equivalence Evaluations," which is
    commonly known as the Orange Book, for Angiomax.

--  The Company entered into a license agreement with Eagle
    Pharmaceuticals, Inc. under which The Medicines Company will have rights in
    the United States and Canada to an innovative, ready-to-use formulation of
    Argatroban, which is currently under review by the U.S. Food and Drug
    Administration (FDA).

--  The Committee for Medicinal Products for Human Use (CHMP) granted a
    positive opinion applicable to all Member States of the European
    Union/European Economic Area that will extend the use of Angiox to include
    patients with heart attacks (so-called ST segment elevation myocardial
    infarction (STEMI)) undergoing emergency heart procedures called primary
    percutaneous coronary intervention (PCI).


Financial highlights for the first nine months of 2009:

--  Net revenue increased by 19% to $302.2 million for the first nine
    months of 2009 from $254.3 million for the same period in 2008.
    --  Angiomax U.S. sales increased by 16% to $286.6 million for the
        first nine months of 2009 from $246.3 million for the first nine
        months of 2008.
    --  Angiomax/Angiox international net revenue in the first nine months
        of 2009 increased by 64% to $13.1 million compared to $8.0 million
        in the first nine months of 2008.
    --  Cleviprex net revenue in the first nine months of 2009 was
        $2.5 million.
--  Net loss for the first nine months of 2009 was ($2.7) million, or
    ($0.05) per share, and includes costs for the Targanta acquisition,
    compared to net loss of ($4.3) million, or ($0.08) per share, in the
    first nine months of 2008.
--  The Company reported non-GAAP net income of $20.9 million, or $0.40 per
    share, for the first nine months of 2009, compared to non-GAAP net
    income of $35.4 million, or $0.68 per share, for the first nine months
    of 2008. Non-GAAP net income excludes the Targanta and Curacyte
    acquisitions, stock-based compensation expense and non-cash income
    taxes.

The following table provides reconciliations between GAAP and non-GAAP net (loss) income for the third quarter (Q3) and first nine months (9M) of 2009 and 2008. Non-GAAP net income excludes the transaction charges related to the Targanta and Curacyte acquisitions, stock-based compensation expense and non-cash income taxes:

                                              FAS 123R   Non-Cash
                                                Stock-  (Benefit)
               Reported   Targanta  Curacyte    Based   Provision
               GAAP Net    Trans-    Acquisi-  Compen-     for    Non-GAAP
                (Loss)     action     tion     sation    Income      Net
(in millions)   Income      Costs     Costs    Expense    Taxes   Income(1)
                --------  --------- --------- --------- --------- ---------
Q3 2009         ($   3.2)         -         - $     4.4 $     3.8 $     5.1
                --------  --------- --------- --------- --------- ---------
Q3 2008         ($  13.2)         - $    13.2 $     6.0 $     2.5 $     8.5
                --------  --------- --------- --------- --------- ---------
9M 2009         ($   2.7) $     4.3         - $    15.3 $     4.0 $    20.9
                --------  --------- --------- --------- --------- ---------
9M 2008         ($   4.3)         - $    13.2 $    17.4 $     9.1 $    35.4
                --------  --------- --------- --------- --------- ---------

Note: Amounts may not sum due to rounding.

(1) Excluding the transaction charges related to the Targanta and Curacyte acquisitions, stock-based compensation expense and non-cash income taxes.

Reconciliations between GAAP and non-GAAP fully diluted (loss) earnings per share (EPS) for the third quarter (Q3) and first nine months (9M) of 2009 and 2008 are provided in the following table:

                                              FAS 123R   Non-Cash
                Reported                        Stock-  (Benefit)
                  GAAP    Targanta  Curacyte    Based   Provision
                 (Loss)    Trans-    Acquisi-  Compen-     for
                Earnings   action     tion     sation    Income   Non-GAAP
(in millions)  Per Share    Costs     Costs    Expense    Taxes     EPS(1)
                --------  --------- --------- --------- --------- ---------
Q3 2009         ($  0.06)         -         - $    0.09 $    0.07 $    0.10
                --------  --------- --------- --------- --------- ---------
Q3 2008         ($  0.25)         - $    0.25 $    0.11 $    0.05 $    0.16
                --------  --------- --------- --------- --------- ---------
9M 2009         ($  0.05) $    0.08         - $    0.29 $    0.08 $    0.40
                --------  --------- --------- --------- --------- ---------
9M 2008         ($  0.08)         - $    0.25 $    0.34 $    0.18 $    0.68
                --------  --------- --------- --------- --------- ---------

Note: Amounts may not sum due to rounding.

(1) Excluding the transaction charges related to the Targanta and Curacyte acquisitions, 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)

The Medicines Company is changing guidance for fiscal year 2009 as follows:

                       April 28, 2009     July 29, 2009   October 28, 2009
                          Guidance           Guidance         Guidance
                                            Changes(1)       Changes(1)
                      ----------------  ----------------- ----------------
Net Sales
  US Angiomax         $      395-$ 405
  International
   Angiox             $        30-$ 40
Total Angiomax /
 Angiox               $      425-$ 445  $       425-$ 445
   US Cleviprex       $        10-$ 19  $          5-$ 10
Total Net Sales       $      435-$ 464  $       430-$ 455 $    395-$ 405(3)
Cost of Revenue                     28%
R&D (GAAP)            $       97-$ 102                    $      102-$ 105
                      ----------------  ----------------- ----------------
        (w/o 123R)    $        93-$ 98                    $       98-$ 101
                      ----------------  ----------------- ----------------
SG&A (GAAP)           $      194-$ 201
                      ----------------  ----------------- ----------------
          (w/o 123R)  $      178-$ 183
                      ----------------  ----------------- ----------------
Stock Based Comp
 -123R (2)            $        20-$ 22                    $        19-$ 20
Investment Income     $          3-$ 5                    $          2-$ 4
Effective Tax Rate              45%-50%                          15%-25%(4)
Net Income (loss) -
 GAAP                 $        13-$ 18                    ($     13)-($ 10)
                      ----------------  ----------------- ----------------
   - Non GAAP         $        47-$ 59                    $         8-$ 13
                      ----------------  ----------------- ----------------
EPS - GAAP            $    0.24-$ 0.34                    ($ 0.25)-($ 0.19)
                      ----------------  ----------------- ----------------
EPS - Non GAAP        $    0.88-$ 1.10                    $    0.14-$ 0.24
                      ----------------  ----------------- ----------------
(1) Where no changes are indicated, previous guidance is reiterated.
(2) Note that GAAP reporting of R&D and SG&A include stock based
    compensation expense
(3) Updated guidance is provided for combined sales globally only.
(4) Rate represents a benefit.

Non-GAAP net income (loss) and non-GAAP EPS each exclude expense from the Targanta acquisition, compensation expense relating to SFAS 123R, and non-cash tax provision.

There will be a conference call with management today at 8:30 a.m. Eastern Time to discuss third 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 www.themedicinescompany.com.

The dial in information is listed below:

Domestic Dial In:  866-515-2915
International Dial In:  617-399-5129
Passcode for both dial in numbers:  71064969

Replay is available from 11:30 a.m. Eastern Time following the conference call through November 4, 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 57422848.

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 recently licensed rights in the United States and Canada to an innovative formulation of Argatroban, which is currently under regulatory review in the United States. The Company also has two products in late stage development, cangrelor, an investigational antiplatelet agent and oritavancin, a semi-synthetic lipoglycopeptide antibiotic. The Company's pipeline also includes a serine protease inhibitor, CU2010, in early-stage development. The Medicines Company's website is www.themedicinescompany.com.

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 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 whether we receive regulatory approval for additional indications, whether the Company's products will advance in the clinical trials process on a timely basis or at all, whether clinical trial results will warrant submission of applications for regulatory approval, whether the Company will be able to obtain regulatory approvals, whether physicians, patients and other key decision-makers will accept clinical trial results, 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 10, 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 September 30,
                                          --------------------------------
                                                2009             2008
                                          ---------------  ---------------
Net revenue                               $        98,789  $        88,126
Operating expenses:
  Cost of revenue                                  28,308           22,089
  Research and development                         22,464           44,075
  Selling, general and administrative              47,358           42,865
                                          ---------------  ---------------
     Total operating expenses                      98,130          109,029
                                          ---------------  ---------------
Income (loss) from operations                         659          (20,903)
Other income                                          151            1,070
                                          ---------------  ---------------
Income (loss) before income taxes                     810          (19,833)
(Provision) benefit for income taxes               (4,007)           6,616
                                          ---------------  ---------------
Net (loss) income                         $        (3,197) $       (13,217)
                                          ===============  ===============
Basic (loss) per common share             $        ( 0.06) $         (0.25)
                                          ===============  ===============
Shares used in computing basic (loss)
 per common share                                  52,298           51,941
                                          ===============  ===============
Diluted (loss) per common share           $         (0.06) $         (0.25)
                                          ===============  ===============
Shares used in computing diluted (loss)
 per common share                                  52,298           51,941
                                          ===============  ===============
                          The Medicines Company
              Condensed Consolidated Statements of Operations
                                (unaudited)
(in thousands, except per share data)     Nine Months Ended September 30,
                                          --------------------------------
                                                2009             2008
                                          ---------------  ---------------
Net revenue                               $       302,181  $       254,285
Operating expenses:
  Cost of revenue                                  86,958           63,121
  Research and development                         68,685           82,518
  Selling, general and administrative             146,863          117,004
                                          ---------------  ---------------
     Total operating expenses                     302,506          262,643
                                          ---------------  ---------------
(Loss) from operations                               (325)          (8,358)
Other income                                        2,055            5,256
                                          ---------------  ---------------
Income (loss) before income taxes                   1,730           (3,102)
Provision for income taxes                         (4,465)          (1,205)
                                          ---------------  ---------------
Net (loss)                                $        (2,735) $        (4,307)
Basic (loss) per common share             $         (0.05) $         (0.08)
                                          ===============  ===============
Shares used in computing basic (loss)
 per common share                                  52,225           51,842
                                          ===============  ===============
Diluted (loss) per common share           $         (0.05) $         (0.08)
                                          ===============  ===============
Shares used in computing diluted (loss)
 per common share                                  52,225           51,842
                                          ===============  ===============
                          The Medicines Company
                  Condensed Consolidated Balance Sheets
                                                September 30, December 31,
(in thousands)                                      2009          2008
                                                ------------- -------------
                    ASSETS
Cash, cash equivalents and available for sales
 securities                                     $     172,020 $     216,206
Accrued interest receivable                               868         1,336
Accounts receivable, net                               44,717        33,657
Inventory                                              19,440        28,229
Prepaid expenses and other current assets              15,712        16,402
                                                ------------- -------------
    Total current assets                              252,757       295,830
                                                ------------- -------------
Fixed assets, net                                      26,210        27,331
Intangible assets, net                                 15,471        16,349
Restricted cash                                         7,169         5,000
Deferred tax assets                                     4,958        37,657
In process research & development                      69,500           ---
Goodwill                                               26,035           ---
Other assets                                            7,325         5,237
                                                ------------- -------------
    Total assets                                $     409,425 $     387,404
                                                ============= =============
     LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities                             $      70,697 $      83,608
Contingent purchase price                              22,741           ---
Other long term liabilities                             5,667         5,771
Stockholders' equity                                  310,320       298,025
                                                ------------- -------------
    Total liabilities and stockholders' equity  $     409,425 $     387,404
                                                ============= =============
The Medicines Company
Reconciliation of GAAP to non-GAAP Measures
(All amounts in thousands, except per share amounts)
(Unaudited)
                          Three Months Ended September 30, 2009
              ------------------------------------------------------------
                        Targanta                   Non-cash     Non-GAAP(5)
              GAAP(1)  Acquisition   SFAS 123R   Tax Provision  As Adjusted
              --------  ---------     --------      ---------     --------
Net revenue   $ 98,789  $       -     $      -      $       -     $ 98,789
Operating
 expenses:
  Cost of
   revenue      28,308          -         (223) (3)         -       28,085
  Research
   and
   development  22,464          -         (823) (3)         -       21,641
  Selling,
   general
   and
   admini-
   strative     47,358          - (2)   (3,394) (3)         -       43,964
              --------  ---------     --------      ---------     --------
Total
 operating
 expenses       98,130          -       (4,440)             -       93,690
Income from
 operations        659          -        4,440              -        5,099
Other income       151          -            -              -          151
              --------  ---------     --------      ---------     --------
Income before
 income taxes      810          -        4,440              -        5,250
(Provision)
 benefit for
 income taxes   (4,007)         - (2)        -          3,829 (4)     (178)
              --------  ---------     --------      ---------     --------
Net income      (3,197)         -        4,440          3,829        5,072
Basic (loss)
 earnings per
 common share $  (0.06) $       -     $   0.09      $    0.07     $   0.10
              ========  =========     ========      =========     ========
Shares used
 in computing
 basic (loss)
 earnings per
 common share   52,298     52,298       52,298         52,298       52,298
              ========  =========     ========      =========     ========
Diluted
 (loss)
 earnings per
 common share $  (0.06) $       -     $   0.09      $    0.07     $   0.10
              ========  =========     ========      =========     ========
Shares used
 in computing
 diluted
 (loss)
 earnings per
 common share   52,298     52,298       52,298         52,298       52,298
              ========  =========     ========      =========     ========
(1) GAAP results
(2) Targanta aquisition
(3) Non-cash stock 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)
                          Nine Months Ended September 30, 2009
              ------------------------------------------------------------
                        Targanta                    Non-Cash    Non-GAAP(5)
              GAAP(1)  Acquisition   SFAS 123R   Tax Provision  As Adjusted
              --------  --------      --------      ---------     --------
Net  revenue  $302,181  $      -      $      -      $       -     $302,181
Operating
 expenses:
  Cost of
   revenue      86,958         -          (697) (3)         -       86,261
  Research
   and
   development  68,685                  (2,762) (3)         -       65,923
  Selling,
   general
   and
   admini-
   strative    146,863    (4,281) (2)  (11,888) (3)         -      130,694
              --------  --------      --------      ---------     --------
Total
 operating
 expenses      302,506    (4,281)      (15,347)             -      282,878
(Loss) income
 from
 operations       (325)    4,281        15,347              -       19,303
Other income     2,055         -             -              -        2,055
              --------  --------      --------      ---------     --------
Income before
 income taxes    1,730     4,281        15,347              -       21,358
(Provision)
 benefit for
 income taxes   (4,465)        -  (2)        -          3,972 (4)     (493)
              --------  --------      --------      ---------     --------
Net (loss)
 income         (2,735)    4,281        15,347          3,972       20,865
Basic (loss)
 earnings per
 common share $  (0.05) $   0.08      $   0.29      $    0.08     $   0.40
              ========  ========      ========      =========     ========
Shares used
 in computing
 basic (loss)
 earnings per
 common share   52,225    52,225        52,225         52,225       52,225
              ========  ========      ========      =========     ========
Diluted
 (loss)
 earnings per
 common share $  (0.05) $   0.08      $   0.29      $    0.08     $   0.40
              ========  ========      ========      =========     ========
Shares used
 in computing
 diluted
 (loss)
 earnings per
 common share   52,225    52,225        52,225         52,225       52,225
              ========  ========      ========      =========     ========
(1) GAAP results
(2) Targanta aquisition
(3) Non-cash stock compensation expense
(4) Non-cash income taxes
(5) Non-GAAP results

Contact:
Robyn Brown
Vice President, Investor Relations
The Medicines Company
973-290-6000
investor.relations@themedco.com

SOURCE: The Medicines Company

mailto:investor.relations@themedco.com