Horizon Pharma (HZNP) Increases Sales 202% In 3rd. Quarter


DUBLIN, IRELAND — (Marketwired) — 11/06/15 — Horizon Pharma plc (HZNP) (NASDAQ (NBI): HZNP), a biopharmaceutical company focused on improving patients’ lives by identifying, developing, acquiring and commercializing differentiated and accessible medicines that address unmet medical needs, announced its third-quarter 2015 financial results today.

Quarterly Financial Highlights
 

(in millions except
 for per share
 amounts and                               %                            %
 percentages)         Q3 15     Q3 14    Change   9M 15     9M 14     Change
                    --------- --------- ------- --------- ---------  -------

Net sales           $   226.5 $    75.1     202 $   512.5 $   193.1      165
Net income (loss)         3.3       2.1      57      15.5    (232.0)      NM
Adjusted non-GAAP
 net income             117.0      19.4     503     203.4      46.2      340
Adjusted EBITDA         131.1      22.1     493     239.7      52.3      358

Earnings (loss) per
 share - basic      $    0.02 $    0.03     -33 $    0.11 $   (3.17)      NM
Adjusted non-GAAP
 earnings per share
 - basic                 0.74      0.25     196      1.40      0.63      122
Earnings (loss) per
 share - diluted         0.02      0.02       -      0.10     (3.17)      NM
Adjusted non-GAAP
 earnings per share
 - diluted               0.70      0.19     268      1.32      0.48      175

“Our business fundamentals have never been better, we significantly exceeded expectations on net sales, adjusted EBITDA and adjusted diluted earnings per share and our cash flow generation continues to be very strong,” said Timothy P. Walbert, chairman, president and chief executive officer, Horizon Pharma plc. “As a result, we are significantly raising our full-year 2015 net sales and adjusted EBITDA guidance. Additionally, our Phase 3 trial for ACTIMMUNE in Friedreich’s ataxia is more than 30 percent enrolled, on track to complete enrollment in the second quarter of 2016 and we continue to expect results by the end of 2016.”

Horizon Pharma Increases 2015 Full-Year Guidance

                         Prior Guidance            New Guidance
                      --------------------     --------------------
Net sales             $660 to $680 million     $750 to $760 million
Adjusted EBITDA       $265 to $280 million     $350 to $360 million

Third-Quarter and Nine-Month 2015 Net Sales Results

(in millions
 except for                              %                              %
 percentages)     Q3 15      Q3 14     Change    9M 15      9M 14     Change
                ---------  ---------  -------  ---------  ---------  -------
Primary Care    $   147.6  $    66.0      124  $   341.2  $   174.1       96
  DUEXIS®            56.9       22.8      150      130.0       54.5      139
  VIMOVO®            46.8       43.2        8      119.6      119.6        -
  PENNSAID® 2%
   (1)               43.9          -       NM       91.6          -       NM
Orphan               66.1        2.7     2343      139.6        2.7       NM
  ACTIMMUNE® (2)     28.7        2.7      962       79.4        2.7       NM
  RAVICTI® (3)       33.4          -       NM       52.4          -       NM
  BUPHENYL® (3)       4.0          -       NM        7.8          -       NM
Specialty            12.8        6.4       98       31.7       16.3       94
  RAYOS®             11.7        5.7      106       29.2       12.9      126
  LODOTRA®            1.1        0.7       36        2.5        3.4      -27
                ---------  ---------  -------  ---------  ---------  -------
Total net sales $   226.5  $    75.1      202  $   512.5  $   193.1      165
(1) PENNSAID 2% was acquired on October 17, 2014. (2) ACTIMMUNE was acquired
    on September 19, 2014. (3) RAVICTI and BUPHENYL were acquired on May 7,
    2015.

  • Third-quarter 2015 net sales of $226.5 million increased 202 percent compared to the third quarter of 2014 and 31 percent sequentially compared to the second quarter of 2015. This was driven by strong growth in each of Horizon’s business units: primary care, orphan and specialty, as well as the addition of new medicines to the orphan and primary care business units.
  • Orphan Business Unit: ACTIMMUNE sales of $28.7 million increased 11 percent sequentially compared to the second quarter of 2015. RAVICTI and BUPHENYL sales in the third quarter were $33.4 million and $4.0 million, respectively. The European Medicines Agency (EMA) adopted a positive opinion in September recommending a centralized marketing authorization for RAVICTI for use as an adjunctive therapy for Urea Cycle Disorders (UCDs). Horizon expects European approval for RAVICTI by the end of 2015 with the commercial launch expected in 2017. The orphan commercial organization continues to drive awareness of ACTIMMUNE and RAVICTI with both patients and physicians, and new patients continue to be steadily added to each medicine. In addition, enrollment in the STEADFAST Phase 3 trial for ACTIMMUNE in Friedreich’s ataxia is more than 30 percent completed, and trial results are expected by the end of 2016.
  • Primary Care Business Unit: DUEXIS sales of $56.9 million increased 150 percent compared to the third quarter of 2014 and 29 percent sequentially compared to the second quarter of 2015. VIMOVO sales of $46.8 million increased 8 percent compared to the third quarter of 2014 and 18 percent sequentially compared to the second quarter of 2015. PENNSAID 2% sales of $43.9 million increased 49 percent sequentially compared to second quarter 2015. Total prescriptions for the primary care business unit increased double digits sequentially compared to the second quarter of 2015, driven by differentiated clinical benefits and strong sales and marketing execution.
  • Specialty Business Unit: RAYOS sales of $11.7 million increased 106 percent compared to the third quarter of 2014 and 13 percent sequentially compared to the second quarter of 2015, as total prescriptions continue to accelerate. LODOTRA sales of $1.1 million increased 36 percent compared to the third quarter of 2014.

 

Third-Quarter 2015 Financial Results 

Note: For additional detail and reconciliation of these non-GAAP amounts to the most directly comparable GAAP financial measures, please refer to the detailed tables at the end of this release.

                               Q3 2015                     Q3 2014
                     --------------------------  ---------------------------
(in millions, except  U.S.                Non-    U.S.                 Non-
 per share amounts)   GAAP  Adjustments   GAAP    GAAP   Adjustments   GAAP
                     ------ -----------  ------  ------  -----------  ------

Net sales            $226.5 $         -  $226.5  $ 75.1  $         -  $ 75.1
Gross profit          165.3        43.4   208.7    61.5          4.3    65.8
Research and
 development           13.1        (4.2)    8.9     4.2         (0.4)    3.8
Sales and marketing    52.0        (7.2)   44.8    31.1         (1.7)   29.4
General and
 administrative        54.5       (31.2)   23.3    38.1        (30.6)    7.5
Total operating
 expenses             119.6       (42.6)   77.0    73.4        (32.7)   40.7
Interest expense, net  20.3        (5.5)   14.8     5.2         (2.4)    2.8
Bargain purchase gain     -           -       -    22.2        (22.2)      -
Other expense, net      0.1           -     0.1     3.2         (3.2)      -
Expense (benefit) for
 income taxes          22.0       (22.2)   (0.2)   (3.0)         3.0       -
Net income              3.3       113.7   117.0     2.1         17.3    19.4
EBITDA (1)             99.0        32.1   131.1    15.1          7.0    22.1

Earnings per share -
 basic               $ 0.02 $      0.72  $ 0.74  $ 0.03  $      0.22  $ 0.25
Earnings per share -
 diluted             $ 0.02 $      0.68  $ 0.70  $ 0.02  $      0.17  $ 0.19

(1) EBITDA is a non-GAAP measure.

  • Under U.S. generally accepted accounting principles (GAAP) in the third quarter of 2015, the gross profit ratio was 73.0 percent compared to 81.8 percent in the third quarter of 2014. The adjusted gross profit ratio in the third quarter of 2015 was 92.1 percent compared to 87.6 percent in the third quarter of 2014.
  • On a GAAP basis in the third quarter of 2015, total operating expenses were 52.8 percent of sales, research & development (R&D) expenses were 5.8 percent of sales, sales & marketing (S&M) expenses were 22.9 percent of sales and general & administration (G&A) expenses were 24.1 percent of sales. Adjusted total operating expenses in the third quarter of 2015 were 34.0 percent of sales, adjusted R&D expenses were 3.9 percent of sales, adjusted S&M expenses were 19.8 percent of sales and adjusted G&A expenses were 10.3 percent of sales. S&M expenses are expected to increase in the fourth quarter as the company further expands its sales and marketing efforts to support continued strong growth.
  • On a GAAP basis in the third quarter of 2015, net income was $3.3 million compared to $2.1 million in the third quarter of 2014. Adjusted net income in the third quarter of 2015 was $117.0 million, or 51.7 percent of sales, compared to $19.4 million, or 25.8 percent of sales, in the third quarter of 2014.
  • On an unadjusted basis in the third quarter of 2015, EBITDA was $99.0 million. Adjusted EBITDA in the third quarter of 2015 was $131.1 million, or 57.9 percent of sales, compared to $22.1 million, or 29.4 percent of sales, in the third quarter of 2014.
  • On a GAAP basis in the third quarter of both 2015 and 2014, diluted earnings per share were $0.02. Adjusted diluted earnings per share in the third quarter of 2015 were $0.70, representing growth of 268 percent compared to the third quarter of 2014 diluted earnings per share of $0.19. Weighted average shares outstanding used for calculating earnings per share in the third quarter of 2015 were 159.0 million and 166.8 million for basic and diluted earnings per share, respectively.

 

Cash Flow Statement and Balance Sheet Highlights

  • On a GAAP basis in the third quarter of 2015, operating cash flow was $88.4 million. Adjusted operating cash flow in the third quarter of 2015 was $100.8 million, which excludes cash payments for transaction-related costs.
  • The company had cash and cash equivalents of $684.3 million as of September 30, 2015, an increase of $17.2 million from June 30, 2015. This increase in the cash balance is significantly less than the cash flow from operations during the third quarter primarily due to $71.8 million used to acquire shares of Depomed, Inc. during the quarter.
  • Total principal amount of debt outstanding was $1.274 billion as of September 30, 2015, which is comprised of $475 million in 6.625 percent senior notes due 2023, $399 million in senior secured term loans due 2021, and $400 million of 2.5 percent exchangeable senior notes due 2022.
  • As of September 30, 2015, the company had a total debt to last 12 months (LTM) adjusted EBITDA leverage ratio of 4.6x and a net debt to LTM adjusted EBITDA leverage ratio of 2.1x.

Conference Call 
 
At 8 a.m. EST / 1 p.m. IST today, the Company will host a live conference call and webcast to review its financial and operating results and provide a general business update.
U.S. Dial-In Number: +1 888.338.8373 FREE
International Dial-In Number: +1 973.872.3000
Passcode: 62744788

The live webcast and a replay may be accessed by visiting Horizon’s website at http://ir.horizon-pharma.com. Please connect to the Company’s website at least 15 minutes prior to the live webcast to ensure adequate time for any software download that may be needed to access the webcast.
A replay of the conference call will be available approximately two hours after the call and accessible through one of the following telephone numbers, using the passcode below:
Replay U.S. Dial-In Number: +1 855.859.2056 FREE
Replay International Dial-In Number: +1 404.537.3406
Passcode: 62744788

About Horizon Pharma plc 


Horizon Pharma plc is a biopharmaceutical company focused on improving patients’ lives by identifying, developing, acquiring and commercializing differentiated and accessible medicines that address unmet medical needs. The Company markets seven medicines through its orphan, primary care and specialty business units. Horizon’s global headquarters are in Dublin, Ireland.

For more information, please visit www.horizonpharma.com. Follow @HZNPplc on Twitter or view careers on our LinkedIn page.

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