EX-99.1 2 a09-3622_1ex99d1.htm EX-99.1

EXHIBIT 99.1

 

Contacts:

 

Cubist Pharmaceuticals, Inc.

Weber Shandwick

Eileen C. McIntyre

Tara Murphy

Senior Director, Corporate Communications

(617) 520-7045

(781) 860-8533

tmurphy@webershandwick.com

eileen.mcintyre@cubist.com

 

 

CUBIST PHARMACEUTICALS REPORTS GAAP DILUTED NET INCOME

 OF $1.82 PER SHARE IN FOURTH QUARTER 2008 AND GAAP DILUTED NET INCOME OF $2.56

PER SHARE FOR FULL YEAR 2008

 

REVERSAL OF CUBIST’S VALUATION ALLOWANCE FOR DEFERRED TAX ASSETS

BENEFITS TAX EXPENSE BY APPROXIMATELY $127.8 MILLION

 

2008 NON-GAAP DILUTED NET INCOME OF $1.86 PER SHARE

 

Earnings Conference Call & Webcast Today (With Slides) at 5:00 p.m. ET

 

Lexington, MA, January 22, 2009 — Cubist Pharmaceuticals, Inc. (NASDAQ: CBST) today reported results for the fourth quarter and year ended December 31, 2008. Total net revenues for the fourth quarter of 2008 increased 53% to $131.2 million from $85.6 million in the fourth quarter of 2007. This increase was attributable primarily to Cubist’s net sales of CUBICIN® (daptomycin for injection) in the United States, which increased 43% to $120.1 million in the fourth quarter of 2008 from $83.9 million in the fourth quarter of 2007.

 

For the year ended December 31, 2008, total net revenues increased 47% to $433.6 million from $294.6 million for the year ended December 31, 2007. This increase in revenues was primarily attributable to Cubist’s net sales of CUBICIN in the United States, which increased 45% to $414.7 million for the year ended December 31, 2008, from $285.1 million for the year ended December 31, 2007. Full year 2008 international net product revenues were $7.4 million, which represents an increase of $2.1 million from full year 2007 international product revenues. Additionally, the full year 2008 total net revenues includes $9.4 million of service revenue relating to Cubist’s exclusive agreement with AstraZeneca to sell and provide other support in the United States for MERREM® I.V. (meropenem for injection).

 

Net income for the fourth quarter ended December 31, 2008, on a GAAP basis, was $123.0 million, or $2.15 and $1.82 per basic and diluted share, respectively, as compared to $8.0 million, or $0.14 per basic and diluted share, for the fourth quarter ended December 31, 2007. Included in fourth quarter 2008 results is a tax benefit related to a reversal of Cubist’s valuation allowance for deferred tax assets, which resulted in a benefit to tax expense of approximately $127.8 million. Also included in the results for the fourth quarter of 2008 is an other-than-temporary impairment charge of $49.2 million related to our investment in auction rate securities. Cubist’s non-GAAP net income for the fourth quarter ended December 31, 2008, excluding the tax benefit and the other-than-temporary impairment charge as well as $3.0 million of stock-compensation expense, was $47.4 million, or $0.83 and $0.71 per basic and diluted share, respectively.

 

Net income for the year ended December 31, 2008, on a GAAP basis, was $169.8 million, or $3.00 and $2.56 per basic and diluted share, respectively, as compared to net income of $48.1

 


 

million, or $0.87 and $0.83 per basic and diluted share, respectively, for the year ended December 31, 2007. GAAP net income for full year 2008 includes $11.8 million of stock-based compensation expense, $2.3 million of assets disposed of in the first quarter of 2008 to build new laboratory space at 65 Hayden Avenue, and $17.5 million of expense related to upfront and milestone payments for the 2008 in-licensing from Dyax Corporation of ecallantide for surgical indications. In addition, included in full year 2008 results is both an other-than-temporary impairment charge of $49.2 million related to our investment in auction rate securities and a tax benefit of $127.8 million related to the reversal of Cubist’s valuation allowance for deferred tax assets.  Non-GAAP net income for the year ended December 31, 2008, excluding the tax benefit and charges mentioned above, was $122.9 million, or $2.17 and $1.86 per basic and diluted share, respectively.

 

As of December 31, 2008, Cubist had $417.9 million in cash, cash equivalents and long-term investments. The total number of Cubist’s common shares outstanding as of December 31, 2008, was 57,430,200.

 

Use of Non-GAAP Financial Measures

 

Cubist uses non-GAAP net income and non-GAAP net income per share data to improve its analysis of operational results and trends. Cubist’s management also uses these non-GAAP figures to make financial and operational decisions as these numbers exclude non-operational activities and because management believes these measures are useful to investors because they provide greater transparency regarding Cubist’s operating performance. These measures should not be considered an alternative to measurements required by GAAP, such as net income and net income per share, and should not be considered measures of our liquidity. In addition, these non-GAAP measures are unlikely to be comparable with non-GAAP information provided by other companies. A reconciliation between non-GAAP financial measures and GAAP financial measures are included in the tables accompanying this press release after the unaudited condensed consolidated financial statements.

 

******************CONFERENCE CALL & WEBCAST INFORMATION******************

Cubist will host a conference call and live audio webcast to discuss its fourth quarter and

full year 2008 financial results, business activities and financial outlook.

 

WHEN: Thursday, January 22, 2009 at 5:00 p.m. ET

 

LIVE DOMESTIC & CANADA CALL-IN: 877-407-0778

LIVE INTERNATIONAL CALL-IN: 201-689-8565

 

24-HOUR REPLAY DOMESTIC & CANADA: 877-660-6853

24-HOUR REPLAY INTERNATIONAL: 201-612-7415

REPLAY PASSCODES (BOTH REQUIRED FOR PLAYBACK):

ACCOUNT #: 286 , CONFERENCE ID #: 302882

 

CALL WILL ALSO BE BROADCAST LIVE, LISTEN ONLY, VIA THE WEB AT:

www.cubist.com

Replay will be available for 30 days at www.cubist.com

*********************************************************************************

 


 

About Cubist

 

Cubist Pharmaceuticals, Inc. is a biopharmaceutical company focused on the research, development, and commercialization of pharmaceutical products that address unmet medical needs in the acute care environment.  In the U.S., Cubist markets CUBICIN® (daptomycin for injection), the first antibiotic in a new class of anti-infectives called lipopeptides.  Cubist has entered into an agreement with AstraZeneca to promote their established broad spectrum antibiotic, MERREM I.V.® (meropenem for injection) in U.S. hospitals.  The Cubist product pipeline includes ecallantide, a recombinant human protein in Phase 2 clinical trials for the prevention of blood loss during cardiothoracic surgery; two programs with recently submitted INDs that address unmet medical needs to treat Gram-negative infections and CDAD (Clostridium difficile-associated diarrhea); and a program to develop a therapy to treat respiratory syncitial virus (RSV) infection in collaboration with Alnylam Pharmaceuticals, Inc.  Cubist is headquartered in Lexington, MA.  Additional information can be found at Cubist’s web site at www.cubist.com

 

Cubist and CUBICIN are registered trademarks of Cubist Pharmaceuticals, Inc.

AstraZeneca and MERREM are registered trademarks of the AstraZeneca group of companies.

 

###

 

Tables to follow

 


 

CUBIST PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

UNAUDITED

(in thousands)

 

 

 

December 31,

 

December 31,

 

 

 

2008

 

2007

 

ASSETS

 

 

 

 

 

Cash, cash equivalents and long-term investments

 

$

417,945

 

$

398,184

 

Accounts receivable, net

 

43,162

 

29,075

 

Inventory

 

21,958

 

18,733

 

Property and equipment, net

 

66,819

 

50,150

 

Deferred tax assets, net

 

127,792

 

—

 

Other assets

 

38,916

 

38,373

 

 

 

 

 

 

 

Total assets

 

$

716,592

 

$

534,515

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Accounts payable and accrued expenses

 

$

79,584

 

$

65,299

 

Deferred revenue

 

21,340

 

17,816

 

Debt and other long-term liabilities

 

303,696

 

352,698

 

Total liabilities

 

404,620

 

435,813

 

 

 

 

 

 

 

Total stockholders’ equity

 

311,972

 

98,702

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

716,592

 

$

534,515

 

 


 

CUBIST PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

UNAUDITED

(in thousands, except share and per share data)

 

 

 

Three months ended

 

Twelve months ended

 

 

 

December 31,

 

December 31,

 

 

 

2008

 

2007

 

2008

 

2007

 

Revenues:

 

 

 

 

 

 

 

 

 

U.S. product revenues, net

 

$

120,058

 

$

83,875

 

$

414,681

 

$

285,059

 

International product revenues

 

2,167

 

1,245

 

7,400

 

5,347

 

Service revenues

 

8,033

 

—

 

9,451

 

—

 

Other revenues

 

897

 

461

 

2,109

 

4,214

 

Total revenues, net

 

131,155

 

85,581

 

433,641

 

294,620

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

Cost of product revenues

 

24,808

 

19,135

 

90,381

 

68,860

 

Research and development

 

30,484

 

34,270

 

126,670

 

85,175

 

Sales and marketing

 

20,604

 

18,653

 

84,997

 

67,662

 

General and administrative

 

9,409

 

7,493

 

40,704

 

31,485

 

Total costs and expenses

 

85,305

 

79,551

 

342,752

 

253,182

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

45,850

 

6,030

 

90,889

 

41,438

 

 

 

 

 

 

 

 

 

 

 

Other income (expense), net

 

(48,884

)

2,520

 

(44,986

)

8,589

 

 

 

 

 

 

 

 

 

 

 

(Loss) income before income taxes

 

(3,034

)

8,550

 

45,903

 

50,027

 

 

 

 

 

 

 

 

 

 

 

(Benefit) provision for income taxes

 

(126,069

)

517

 

(123,916

)

1,880

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

123,035

 

$

8,033

 

$

169,819

 

$

48,147

 

 

 

 

 

 

 

 

 

 

 

Basic net income per common share

 

$

2.15

 

$

0.14

 

$

3.00

 

$

0.87

 

Diluted net income per common share

 

$

1.82

(1)

$

0.14

(1)

$

2.56

(2)

$

0.83

(1)

 

 

 

 

 

 

 

 

 

 

Shares used in calculating:

 

 

 

 

 

 

 

 

 

Basic net income per common share

 

57,202,892

 

56,070,144

 

56,645,962

 

55,591,775

 

Diluted net income per common share

 

68,320,590

 

57,758,867

 

67,955,061

 

68,822,996

 

 

(1)

 

Includes add back of interest expense and debt issuance costs on 2.25% notes to income, net of tax effect

(2)

 

Includes add back of interest expense, debt issuance costs and net gain on repurchase of 2.25% notes to income, net of tax effect

 


 

CUBIST PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - NON-GAAP

UNAUDITED

(in thousands, except share and per share data)

 

 

 

Three months ended

 

Twelve months ended

 

 

 

December 31,

 

December 31,

 

 

 

2008

 

2007

 

2008

 

2007

 

 

 

 

 

 

 

 

 

 

 

GAAP net income

 

$

123,035

 

$

8,033

 

$

169,819

 

$

48,147

 

 

 

 

 

 

 

 

 

 

 

Add back of tax benefit

 

(127,792

)

—

 

(127,792

)

—

 

 

 

 

 

 

 

 

 

 

 

Other-than-temporary impairment of auction rate securities

 

49,178

 

—

 

49,178

 

—

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense under SFAS 123(R)

 

2,967

 

2,643

 

11,831

 

10,539

 

 

 

 

 

 

 

 

 

 

 

Ecallantide licensing fees

 

—

 

—

 

17,500

 

—

 

 

 

 

 

 

 

 

 

 

 

Write off of assets disposed of to build new lab space

 

—

 

—

 

2,323

 

—

 

 

 

 

 

 

 

 

 

 

 

IPR&D - Illumigen

 

—

 

15,148

 

—

 

15,148

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP proforma net income

 

$

47,388

 

$

25,824

 

$

122,859

 

$

73,834

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP basic net income per common share

 

$

0.83

 

$

0.46

 

$

2.17

 

$

1.33

 

Non-GAAP diluted net income per common share

 

$

0.71

(1)

$

0.41

(1)

$

1.86

(2)

$

1.20

(1)

 

 

 

 

 

 

 

 

 

 

Shares used in calculating:

 

 

 

 

 

 

 

 

 

Non-GAAP basic net income per common share

 

57,202,892

 

56,070,144

 

56,645,962

 

55,591,775

 

Non-GAAP diluted net income per common share

 

68,320,590

 

69,133,202

 

67,955,061

 

68,822,996

 

 

(1)

 

Includes add back of interest expense and debt issuance costs on 2.25% notes to income, net of tax effect

(2)

 

Includes add back of interest expense, debt issuance costs and net gain on repurchase of 2.25% notes to income, net of tax effect