Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN) today announced financial results for the quarter and year ended December 31, 2009. For the three months ended December 31, 2009, Alexion Pharmaceuticals, Inc. ("Alexion" or, the "Company") reported net product sales of Soliris® (eculizumab) of $110.6 million, reflecting strong additions of new patients, compared to $77.4 million for the same period in 2008. Net product sales in Q4 2009 increased 8 percent, compared to $102.6 million in Q3 2009, despite a previously anticipated negative impact of approximately $3 million from Euro hedging rates set at lower levels.
“Our global team executed consistently as it focused on patients’ needs, enabling us to exceed our operational, clinical and financial objectives for 2009”
Soliris, approved by the U.S. Food and Drug Administration (FDA) in March 2007 and the European Commission (EC) in June 2007, is the only drug specifically indicated for the treatment of all patients with paroxysmal nocturnal hemoglobinuria (PNH), a rare, debilitating and life-threatening blood disease.
Recognition of Tax Benefit and Reversal of Valuation Allowance
At December 31, 2009, Alexion had U.S. net operating losses (NOLs) of $665 million and research tax credits of $33 million. During Q4 2009, as a result of its sustained profitability and forecasts for future taxable earnings, and in accordance with GAAP, Alexion released the valuation allowance on a substantial portion of its deferred tax assets. The valuation release resulted in the recognition of a non-recurring tax benefit of $215.5 million, which is reflected in the Company’s GAAP results for the fourth quarter. In order to provide comparable information about its earnings, Alexion reported taxes on a cash tax liability basis in Q4 2009 for non-GAAP purposes and will continue to do so during 2010.
Historically, Alexion’s non-GAAP operating results have been equal to GAAP operating results less only the impact of share-based compensation. Additionally, taxes that are not payable in cash (non-cash taxes) are now excluded from non-GAAP results. The following summary table is provided for investors' convenience. A complete reconciliation of the GAAP to non-GAAP figures appears below.
(Thousands of U.S. dollars, except per-share data)
Fourth Quarter Non-GAAP Financial Results:
The Company reported non-GAAP net income of $28.5 million, or $0.31 per share, for the fourth quarter of 2009, compared to non-GAAP net income of $21.1 million, or $0.23 per share, in the fourth quarter of 2008.
Alexion's non-GAAP operating expenses for Q4 2009 were $68.2 million, compared to $48.3 million for Q4 2008. Non-GAAP R&D expenses for Q4 2009 were $20.3 million, compared to $13.6 million for Q4 2008. The increase in R&D expenses primarily reflected the expansion of the Company’s clinical trial programs. Non-GAAP selling, general and administrative (SG&A) expenses for Q4 2009 were $47.9 million, compared to $34.7 million for Q4 2008. The increase in non-GAAP SG&A expenses primarily reflected costs associated with the expansion of the Company's commercial operations in new geographies, particularly Japan, as well as costs associated with an expanded presence at medical conferences.
Fourth Quarter GAAP Financial Results:
Alexion reported GAAP net income of $237.1 million, or $2.59 per share, for the fourth quarter of 2009, including $215.5 million from recognizing the release of the valuation allowance on its deferred tax assets. Excluding the tax benefit, Q4 2009 net income was $21.6 million, or $0.24 per share.
On a GAAP basis, operating expenses for Q4 2009 were $75.1 million, compared to $54.1 million for Q4 2008. GAAP R&D expenses for Q4 2009 were $23.2 million, compared to $15.3 million for Q4 2008. GAAP SG&A expenses were $51.9 million for Q4 2009, compared to $38.8 million for Q4 2008.
Full Year 2009 Non-GAAP Financial Results:
For the year ended December 31, 2009, the Company reported net product sales of Soliris of $386.8 million, an increase of 49% compared to $259.0 million in 2008.
Alexion's non-GAAP operating expenses for the full year 2009 were $225.9 million, compared to $172.4 million for 2008. Non-GAAP R&D expenses for 2009 were $72.9 million, compared to $56.5 million for the prior year. The increase in R&D expenses primarily reflected the expansion of the Company’s clinical trial programs. Non-GAAP SG&A expenses for 2009 were $153.1 million, compared to $115.9 million in 2008. The increase in non-GAAP SG&A expenses primarily reflected costs associated with the expansion of the Company's commercial operations in the U.S., Europe, Japan, Canada, Latin America and Asia-Pacific.
The Company reported non-GAAP net income of $108.4 million in 2009, or $1.18 per share, compared to non-GAAP net income of $56.8 million, or $0.64 per share, in 2008.
Full Year 2009 GAAP Financial Results:
Alexion reported GAAP net income of $295.2 million, or $3.26 per share in 2009, including $215.5 million from the release of the valuation allowance on deferred tax assets. Excluding the tax benefit, 2009 net income was $79.7 million, or $0.88 per share.
On a GAAP basis, operating expenses for 2009 were $254.7 million, compared to $196.1 million for the prior year. GAAP R&D expenses for 2009 were $81.9 million, compared to $62.6 million in 2008. GAAP SG&A expenses were $172.8 million in 2009, compared to $133.5 million for the prior year.
“Our global team executed consistently as it focused on patients’ needs, enabling us to exceed our operational, clinical and financial objectives for 2009,” said Leonard Bell, M.D., Chief Executive Officer of Alexion. “We ended the year with strong momentum to continue achieving our three central growth initiatives: serving more patients in existing countries, expanding into new territories, and advancing our development programs for Soliris.”
Balance Sheet:
As of December 31, 2009, the Company had $176.2 million in cash, cash equivalents and marketable securities compared to $138.0 million at December 31, 2008.
Q4 Research and Development Progress:
During 2009, Alexion made significant progress on advancing the development of Soliris as a treatment for patients suffering from additional rare and severe complement-mediated disorders. There are currently 12 clinical trials underway with Soliris in eight such conditions, with increasing focus in the two lead areas of nephrology and transplant.
Nephrology: Atypical Hemolytic Uremic Syndrome (aHUS)