ENP Newswire -
Release date- 30072014 -
Key results include:
Total revenues increased 11 percent to
Adjusted EPS grew 25 percent to
The Company generated
GAAP EPS were
'Robust growth through the first half of 2014 affirms the underlying strength of our business,' said
Product Sales Performance
Total product sales increased 8 percent for the second quarter of 2014 versus the second quarter of 2013. The increase was mainly driven by ENBREL, Kyprolis, Prolia and XGEVA. Product sales in the second quarter of 2013 included a positive adjustment of
Enbrel sales increased 7 percent year-over-year for the second quarter driven mainly by price. ENBREL continues to benefit from strong underlying demand and segment growth.
Kyprolis sales for the second quarter of 2014 were
Prolia sales increased 40 percent year-over-year for the second quarter driven by higher unit demand from share growth.
XGEVA sales increased 20 percent year-over-year for the second quarter driven by higher unit demand. XGEVA continues to capture share in a growing market despite competition from generic zoledronic acid.
Combined Neulasta (pegfilgrastim) and NEUPOGEN (filgrastim) sales declined year-over-year by 1 percent for the second quarter.
Global Neulasta sales increased 1 percent year-over-year for the second quarter driven by price offset partially by the prior year positive
Global NEUPOGEN sales decreased 9 percent year-over-year for the second quarter due to the prior year positive
Underlying demand was slightly impacted by short- and long-acting competition in the U.S. and
Aranesp (darbepoetin alfa) sales decreased 1 percent year-over-year for the second quarter mainly due to the prior year positive
EPOGEN (epoetin alfa) sales increased 2 percent year-over-year for the second quarter driven by price, offset partially by the prior year positive
Sensipar/Mimpara (cinacalcet) sales increased 15 percent year-over-year for the second quarter driven primarily by higher unit demand growth across all regions and price increases in the U.S.
Vectibix (panitumumab) increased 42 percent year-over-year for the second quarter driven by higher unit demand across all regions.
Nplate (romiplostim) increased 12 percent year-over-year for the second quarter driven mainly by higher unit demand and strong market growth across all regions.
Operating Expense and Tax Rate Analysis, on an Adjusted Basis
Cost of Sales margin, excluding the impact of the
Research & Development (R&D) expenses increased 4 percent in the second quarter of 2014 driven by the addition of Onyx programs offset partially by reduced expenses associated with marketed product support.
Selling, General & Administrative (SG&A) expenses decreased 12 percent in the second quarter of 2014 driven primarily by the end of the ENBREL profit share, offset partially by the addition of Onyx.
The Company generated
The Company's second quarter 2014 dividend of
Reallocating Resources to Drive Growth
The Company announced a restructuring plan today to invest in continuing innovation and the launch of its new pipeline molecules, while improving its cost structure. Initial efforts include streamlining the organization, reducing layers of management, increasing managerial spans of responsibility and beginning implementation of a revised geographic site plan.
As a first step, the Company will reduce staff by 2,400-2,900, beginning later this year and continuing through 2015, predominantly in the U.S. This represents approximately 12 percent to 15 percent of
'The talented staff members at these locations have made enormous contributions to advancing biotechnology over the years and the surrounding communities have been very supportive, so it is with great reluctance that we acknowledge the need to exit,' continued Bradway. 'At each site, we are actively engaging in discussions with third-parties about potential future use of the facilities.'
The Company will expand its presence in the biotechnology hubs of
Company-wide, these actions will result in an approximate 23 percent reduction in the Company's facilities footprint.
These actions will result in pre-tax accounting charges in the range of
As a next step, the Company is evaluating additional efficiency initiatives, particularly in the area of shared services and other external expense categories to support its growth objectives.
The Company plans to review these initiatives, together with an estimate of resulting cost savings, pipeline progress and commercial plans, and performance against its strategic priorities during a business review meeting in the fourth quarter.
For the full year 2014, the Company expects:
Total Revenues to be in the range of
Adjusted tax rate to be in the range of 15 percent to 16 percent. This assumes the federal R&D credit will be extended for 2014 and also includes the impact of the foreign tax credit associated with the
Capital expenditures to be approximately
The Company announced that it expects to submit a Biologics License Application in the U.S. and a Marketing Authorization Application in the EU during Q3 2014 for dyslipidemia.
The Company announced that it has submitted a New Drug Application for chronic heart failure in the U.S.
The Company stated that the event driven interim analysis of the ASPIRE study and the event driven final analysis of the FOCUS study are expected in Q3 2014.
The Company announced that enrollment has completed for the ENDEAVOR study in patients with relapsed multiple myeloma.
The Company announced that it has submitted a Biologics License Application in the U.S. and that it expects to submit a Marketing Authorization Application in the EU during Q3 2014 for regionally and distantly metastatic melanoma.
The Company discussed the recent
The Company discussed the recent
The Company announced that the primary analysis of the event-driven overall survival secondary endpoint from the ongoing pivotal Phase 3 study in recurrent ovarian cancer (TRINOVA-1) is projected to occur in Q4 2014.
The Company discussed positive results from the Phase 3 placebo controlled study in patients with moderate to severe psoriasis. Results from two Phase 3 ustekinumab controlled studies in patients with moderate to severe psoriasis are expected in Q4 2014.
AMG 416 (formerly known as velcalcetide)
The Company discussed positive results from a Phase 3 placebo controlled study for the treatment of secondary hyperparathyroidism in patients with chronic kidney disease receiving hemodialysis. Results from a second placebo controlled Phase 3 study are expected in Q3 2014.
Non-GAAP Financial Measures
In this news release, management has presented its operating results for the second quarters of 2014 and 2013 in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and on an adjusted (or non-GAAP) basis. In addition, management has presented its full year 2014 EPS and tax rate guidance in accordance with GAAP and on an adjusted (or non-GAAP) basis. These non-GAAP financial measures are computed by excluding certain items related to acquisitions, cost-savings initiatives and certain other items from the related GAAP financial measures.
Management has also presented Free Cash Flow (FCF), which is a non-GAAP financial measure, for the second quarters of 2014 and 2013. FCF is computed by subtracting capital expenditures from operating cash flow, each as determined in accordance with GAAP. Reconciliations for these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the news release.
The Company believes that its presentation of non-GAAP financial measures provides useful supplementary information to and facilitates additional analysis by investors. The Company uses certain non-GAAP financial measures to enhance an investor's overall understanding of the financial performance and prospects for the future of the Company's core business activities by facilitating comparisons of results of core business operations among current, past and future periods.
In addition, the Company believes that excluding the non-cash amortization of intangible assets, including developed product technology rights, acquired in business combinations treats those assets as if the Company had developed them internally in the past, and thus provides a supplemental measure of profitability in which the Company's acquired intellectual property is treated in a comparable manner to its internally developed intellectual property. The Company believes that FCF provides a further measure of the Company's liquidity.
The Company uses the non-GAAP financial measures set forth in the news release in connection with its own budgeting and financial planning. The non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.
This news release contains forward-looking statements that involve significant risks and uncertainties, including those discussed below and others that can be found in our Form 10-K for the year ended
Reference is made in particular to forward-looking statements regarding product sales, revenue, expenses, earnings per share, tax rates, clinical trial results, regulatory filings and actions, Company strategy, restructuring charges, staff reductions and facility closures/dispositions and trends. We are providing this information as of the date of this news release and do not undertake any obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.
No forward-looking statement can be guaranteed and actual results may differ materially from those we project. Our results may be affected by our ability to successfully market both new and existing products domestically and internationally, clinical and regulatory developments (domestic or foreign) involving current and future products, sales growth of recently launched products, competition from other products (domestic or foreign), and difficulties or delays in manufacturing our products.
In addition, sales of our products are affected by reimbursement policies imposed by third-party payors, including governments, private insurance plans and managed care providers and may be affected by regulatory, clinical and guideline developments and domestic and international trends toward managed care and healthcare cost containment as well as U.S. legislation affecting pharmaceutical pricing and reimbursement. Government and others' regulations and reimbursement policies may affect the development, usage and pricing of our products.
Furthermore, our research, testing, pricing, marketing and other operations are subject to extensive regulation by domestic and foreign government regulatory authorities. We or others could identify safety, side effects or manufacturing problems with our products after they are on the market. Our business may be impacted by government investigations, litigation and product liability claims. If we fail to meet the compliance obligations in the corporate integrity agreement between us and the U.S. government, we could become subject to significant sanctions.
Further, while we routinely obtain patents for our products and technology, the protection offered by our patents and patent applications may be challenged, invalidated or circumvented by our competitors. We depend on third parties for a significant portion of our manufacturing capacity for the supply of certain of our current and future products and limits on supply may constrain sales of certain of our current products and product candidate development.
In addition, we compete with other companies with respect to some of our marketed products as well as for the discovery and development of new products. Discovery or identification of new product candidates cannot be guaranteed and movement from concept to product is uncertain; consequently, there can be no guarantee that any particular product candidate will be successful and become a commercial product.
Further, some raw materials, medical devices and component parts for our products are supplied by sole third-party suppliers. Our efforts to integrate the operations of companies we have acquired may not be successful. Cost saving initiatives may result in us incurring impairment or other related charges on our assets.
We may experience difficulties, delays or unexpected costs and not achieve anticipated cost savings from our recently announced restructuring plans. Our business performance could affect or limit the ability of our Board of Directors to declare a dividend or our ability to pay a dividend or repurchase our common stock.
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