Horizon Therapeutics plc (Nasdaq: HZNP) today announced record third-quarter 2020 financial results and increased both its full-year 2020 net sales and adjusted EBITDA guidance.
“We are proud of the fact that in just eight months TEPEZZA has made such a dramatic difference in the lives of so many patients, resulting in one of the most successful rare disease medicine launches ever,” said Tim Walbert, chairman, president and chief executive officer, Horizon. “We are now pursuing our global strategy to provide TEPEZZA to patients with Thyroid Eye Disease in other parts of the world. Furthermore, we are significantly increasing our investment in TEPEZZA to drive additional awareness of Thyroid Eye Disease and support the continued strong demand for this important medicine.”
Walbert continued, “During the third quarter we also saw a return to growth for KRYSTEXXA, our biologic for the treatment of uncontrolled gout and a key growth driver for the Company. With our substantial progress this year, including the improvements we have made to our capital structure and investments in our clinical programs, we are well positioned for continued growth.”
Financial Highlights |
|||||||||||||||||
(in millions except for per share amounts and percentages) | Q3 20 |
Q3 19 |
%
|
YTD 20 |
YTD 19 |
%
|
|||||||||||
Net sales | $ |
636.4 |
$ |
335.5 |
90 |
$ |
1,455.1 |
$ |
936.5 |
|
55 |
||||||
Net income (loss) |
|
292.8 |
|
18.2 |
NM |
|
199.2 |
|
(19.7 |
) |
NM |
||||||
Non-GAAP net income |
|
392.2 |
|
124.1 |
216 |
|
559.2 |
|
273.6 |
|
104 |
||||||
Adjusted EBITDA |
|
329.8 |
|
130.4 |
153 |
|
627.7 |
|
342.9 |
|
83 |
||||||
Earnings (Loss) per share - diluted |
|
1.31 |
|
0.09 |
NM |
|
0.95 |
|
(0.11 |
) |
NM |
||||||
Non-GAAP earnings per share - diluted |
|
1.74 |
|
0.64 |
172 |
|
2.58 |
|
1.44 |
|
79 |
Third-Quarter and Recent Company Highlights
Key Research and Development Programs
Third-Quarter Financial Results
Note: For additional detail and reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures, please refer to the tables at the end of this release.
Third-Quarter Segment Results
Management uses net sales and segment operating income to evaluate the performance of the Company’s two segments, the orphan segment and the inflammation segment. While segment operating income contains certain adjustments to the directly comparable GAAP figures in the Company’s consolidated financial results, it is considered to be prepared in accordance with GAAP for purposes of presenting the Company’s segment operating results.
Orphan Segment |
||||||||||||||||||
(in millions except for percentages) | Q3 20 | Q3 19 | % Change |
YTD 20 | YTD 19 | % Change |
||||||||||||
TEPEZZA® |
|
286.9 |
|
- |
NM |
|
|
476.3 |
|
- |
NM |
|
||||||
KRYSTEXXA® |
|
108.5 |
|
99.6 |
9 |
|
|
276.9 |
|
231.6 |
20 |
|
||||||
RAVICTI® |
|
64.6 |
|
60.0 |
8 |
|
|
191.4 |
|
160.3 |
19 |
|
||||||
PROCYSBI® |
|
43.1 |
|
40.4 |
7 |
|
|
122.8 |
|
121.1 |
1 |
|
||||||
ACTIMMUNE® |
|
28.3 |
|
27.9 |
2 |
|
|
83.1 |
|
78.9 |
5 |
|
||||||
BUPHENYL® |
|
3.2 |
|
3.0 |
6 |
|
|
8.4 |
|
8.2 |
3 |
|
||||||
QUINSAIRTM |
|
0.2 |
|
0.2 |
(23 |
) |
|
0.5 |
|
0.6 |
(9 |
) |
||||||
Orphan Net Sales | $ |
534.8 |
$ |
231.1 |
131 |
|
$ |
1,159.4 |
$ |
600.7 |
93 |
|
||||||
Orphan Segment Operating Income | $ |
274.7 |
$ |
79.7 |
245 |
|
$ |
480.6 |
$ |
180.1 |
167 |
|
Inflammation Segment |
||||||||||||||||||
(in millions except for percentages) | Q3 20 | Q3 19 | % Change |
YTD 20 | YTD 19 | % Change |
||||||||||||
PENNSAID 2%® |
|
50.3 |
|
42.1 |
20 |
|
|
126.9 |
|
143.7 |
(12 |
) |
||||||
DUEXIS® |
|
27.9 |
|
29.9 |
(7 |
) |
|
87.1 |
|
89.4 |
(3 |
) |
||||||
RAYOS® |
|
18.1 |
|
19.3 |
(6 |
) |
|
50.8 |
|
59.1 |
(14 |
) |
||||||
VIMOVO®(1) |
|
5.3 |
|
13.1 |
(60 |
) |
|
30.9 |
|
41.8 |
(26 |
) |
||||||
MIGERGOT®(2) |
|
- |
|
- |
NM |
|
|
- |
|
1.8 |
NM |
|
||||||
Inflammation Net Sales | $ |
101.6 |
$ |
104.4 |
(3 |
) |
$ |
295.7 |
$ |
335.8 |
(12 |
) |
||||||
Inflammation Segment Operating Income | $ |
55.1 |
$ |
49.8 |
11 |
|
$ |
145.1 |
$ |
161.7 |
(10 |
) |
(1) |
On Feb. 27, 2020, Dr. Reddy’s Laboratory initiated an at-risk launch of generic VIMOVO in the United States. |
|
(2) |
In June 2019, the Company divested the rights to MIGERGOT. |
Cash Flow Statement and Balance Sheet Highlights
Revised 2020 Guidance
The Company now expects full-year 2020 net sales to range between $2.12 billion and $2.14 billion, an increase from the previous guidance range of $1.85 billion to $1.90 billion. The Company now expects TEPEZZA full-year 2020 net sales of greater than $800 million, compared to the previous guidance of greater than $650 million, and low double-digit KRYSTEXXA full-year 2020 net sales growth. Full-year 2020 adjusted EBITDA is now expected to range between $920 million and $940 million, an increase from the previous guidance range of $725 million to $775 million.
Webcast
At 8 a.m. EST / 1 p.m. IST today, the Company will host a live webcast to review its financial and operating results and provide a general business update. The live webcast and a replay may be accessed at http://ir.horizontherapeutics.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 webcast will be available approximately two hours after the live webcast.
About Horizon
Horizon is focused on researching, developing and commercializing medicines that address critical needs for people impacted by rare and rheumatic diseases. Our pipeline is purposeful: we apply scientific expertise and courage to bring clinically meaningful therapies to patients. We believe science and compassion must work together to transform lives. For more information on how we go to incredible lengths to impact lives, please visit www.horizontherapeutics.com and follow us on Twitter, LinkedIn, Instagram and Facebook.
Note Regarding Use of Non-GAAP Financial Measures
EBITDA, or earnings before interest, taxes, depreciation and amortization, and adjusted EBITDA are used and provided by Horizon as non-GAAP financial measures. Horizon provides certain other financial measures such as non-GAAP net income, non-GAAP diluted earnings per share, non-GAAP gross profit and gross profit ratio, non-GAAP operating expenses, non-GAAP operating income, non-GAAP tax rate and non-GAAP operating cash flow, each of which include adjustments to GAAP figures. These non-GAAP measures are intended to provide additional information on Horizon’s performance, operations, expenses, profitability and cash flows. Adjustments to Horizon’s GAAP figures as well as EBITDA exclude acquisition and/or divestiture-related expenses, charges related to the discontinuation of ACTIMMUNE development for Friedreich’s ataxia, gain or loss from divestiture, gain or loss from sale of assets, upfront, progress and milestone payments related to license and collaboration agreements, litigation settlements, loss on debt extinguishment, costs of debt refinancing, drug manufacturing harmonization costs, restructuring and realignment costs, the income tax effect on pre-tax non-GAAP adjustments and other non-GAAP income tax adjustments, as well as non-cash items such as share-based compensation, depreciation and amortization, non-cash interest expense, long-lived asset impairment charges and other non-cash adjustments. Certain other special items or substantive events may also be included in the non-GAAP adjustments periodically when their magnitude is significant within the periods incurred. Horizon maintains an established non-GAAP cost policy that guides the determination of what costs will be excluded in non-GAAP measures. Horizon believes that these non-GAAP financial measures, when considered together with the GAAP figures, can enhance an overall understanding of Horizon’s financial and operating performance. The non-GAAP financial measures are included with the intent of providing investors with a more complete understanding of the Company’s historical and expected 2020 financial results and trends and to facilitate comparisons between periods and with respect to projected information. In addition, these non-GAAP financial measures are among the indicators Horizon’s management uses for planning and forecasting purposes and measuring the Company's performance. For example, adjusted EBITDA is used by Horizon as one measure of management performance under certain incentive compensation arrangements. These non-GAAP financial measures should be considered in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, non-GAAP financial measures used by other companies. Horizon has not provided a reconciliation of its full-year 2020 adjusted EBITDA outlook to an expected net income (loss) outlook because certain items such as acquisition/divestiture-related expenses and share-based compensation that are a component of net income (loss) cannot be reasonably projected due to the significant impact of changes in Horizon’s stock price, the variability associated with the size or timing of acquisitions/divestitures and other factors. These components of net income (loss) could significantly impact Horizon’s actual net income (loss).
Forward-Looking Statements
This press release contains forward-looking statements, including, but not limited to, statements related to Horizon’s full-year 2020 net sales and adjusted EBITDA guidance; expected financial performance and operating results in future periods, including potential growth in net sales of certain of Horizon’s medicines; development and commercialization plans; expected timing of clinical trials, studies and regulatory submissions; potential market opportunity for and benefits of Horizon’s medicines and medicine candidates; and business and other statements that are not historical facts. These forward-looking statements are based on Horizon’s current expectations and inherently involve significant risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks that Horizon’s actual future financial and operating results may differ from its expectations or goals; Horizon’s ability to grow net sales from existing medicines; impacts of the COVID-19 pandemic and actions taken to slow its spread, including impacts on net sales of Horizon’s medicines and potential delays in clinical trials; the availability of coverage and adequate reimbursement and pricing from government and third-party payers; risks relating to Horizon’s ability to successfully implement its business strategies; risks inherent in developing novel medicine candidates and existing medicines for new indications; risks associated with regulatory approvals; risks in the ability to recruit, train and retain qualified personnel; competition, including potential generic competition; the ability to protect intellectual property and defend patents; regulatory obligations and oversight, including any changes in the legal and regulatory environment in which Horizon operates and those risks detailed from time-to-time under the caption "Risk Factors" and elsewhere in Horizon’s filings and reports with the SEC. Horizon undertakes no duty or obligation to update any forward-looking statements contained in this press release as a result of new information.
Horizon Therapeutics plc |
||||||||||||||||
Condensed Consolidated Statements of Operations (Unaudited) |
||||||||||||||||
(in thousands, except share and per share data) |
||||||||||||||||
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
Net sales | $ |
636,427 |
|
$ |
335,466 |
|
$ |
1,455,115 |
|
$ |
936,484 |
|
||||
Cost of goods sold |
|
151,475 |
|
|
89,949 |
|
|
370,406 |
|
|
267,254 |
|
||||
Gross profit |
|
484,952 |
|
|
245,517 |
|
|
1,084,709 |
|
|
669,230 |
|
||||
OPERATING EXPENSES: | ||||||||||||||||
Research and development |
|
30,206 |
|
|
24,572 |
|
|
138,483 |
|
|
74,611 |
|
||||
Selling, general and administrative |
|
226,164 |
|
|
172,326 |
|
|
696,271 |
|
|
511,720 |
|
||||
Loss on sale of assets |
|
- |
|
|
- |
|
|
- |
|
|
10,963 |
|
||||
Total operating expenses |
|
256,370 |
|
|
196,898 |
|
|
834,754 |
|
|
597,294 |
|
||||
Operating income |
|
228,582 |
|
|
48,619 |
|
|
249,955 |
|
|
71,936 |
|
||||
OTHER EXPENSE, NET: | ||||||||||||||||
Loss on debt extinguishment |
|
(14,602 |
) |
|
(41,371 |
) |
|
(31,856 |
) |
|
(58,835 |
) |
||||
Interest expense, net |
|
(12,185 |
) |
|
(20,428 |
) |
|
(48,100 |
) |
|
(69,991 |
) |
||||
Foreign exchange (loss) gain |
|
(753 |
) |
|
(40 |
) |
|
306 |
|
|
(25 |
) |
||||
Other income (expense), net |
|
717 |
|
|
890 |
|
|
1,791 |
|
|
(193 |
) |
||||
Total other expense, net |
|
(26,823 |
) |
|
(60,949 |
) |
|
(77,859 |
) |
|
(129,044 |
) |
||||
Income (Loss) before benefit for income taxes |
|
201,759 |
|
|
(12,330 |
) |
|
172,096 |
|
|
(57,108 |
) |
||||
Benefit for income taxes |
|
(91,081 |
) |
|
(30,564 |
) |
|
(27,143 |
) |
|
(37,359 |
) |
||||
Net income (loss) | $ |
292,840 |
|
$ |
18,234 |
|
$ |
199,239 |
|
$ |
(19,749 |
) |
||||
Net income (loss) per ordinary share - basic | $ |
1.38 |
|
$ |
0.10 |
|
$ |
1.00 |
|
$ |
(0.11 |
) |
||||
Weighted average ordinary shares outstanding - basic |
|
212,320,219 |
|
|
186,470,141 |
|
|
198,413,779 |
|
|
181,949,838 |
|
||||
Net income (loss) per ordinary share - diluted | $ |
1.31 |
|
$ |
0.09 |
|
$ |
0.95 |
|
$ |
(0.11 |
) |
||||
Weighted average ordinary shares outstanding - diluted |
|
223,743,903 |
|
|
194,171,967 |
|
|
208,678,460 |
|
|
181,949,838 |
|
||||
Horizon Therapeutics plc |
||||||||
Condensed Consolidated Balance Sheets (Unaudited) |
||||||||
(in thousands, except share data) |
||||||||
As of | ||||||||
September 30, 2020 |
December 31, 2019 |
|||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ |
1,725,403 |
|
$ |
1,076,287 |
|
||
Restricted cash |
|
3,573 |
|
|
3,752 |
|
||
Accounts receivable, net |
|
705,898 |
|
|
408,685 |
|
||
Inventories, net |
|
77,104 |
|
|
53,802 |
|
||
Prepaid expenses and other current assets |
|
220,341 |
|
|
143,577 |
|
||
Total current assets |
|
2,732,319 |
|
|
1,686,103 |
|
||
Property and equipment, net |
|
156,287 |
|
|
30,159 |
|
||
Developed technology and other intangible assets, net |
|
1,847,880 |
|
|
1,702,628 |
|
||
Goodwill |
|
413,669 |
|
|
413,669 |
|
||
Deferred tax assets, net |
|
566,605 |
|
|
555,165 |
|
||
Other assets |
|
50,115 |
|
|
48,310 |
|
||
Total assets | $ |
5,766,875 |
|
$ |
4,436,034 |
|
||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable | $ |
38,978 |
|
$ |
21,514 |
|
||
Accrued expenses |
|
421,827 |
|
|
235,234 |
|
||
Accrued trade discounts and rebates |
|
322,798 |
|
|
466,421 |
|
||
Total current liabilities |
|
783,603 |
|
|
723,169 |
|
||
LONG-TERM LIABILITIES: | ||||||||
Exchangeable Senior Notes, net |
|
- |
|
|
351,533 |
|
||
Long-term debt, net |
|
1,002,846 |
|
|
1,001,308 |
|
||
Deferred tax liabilities, net |
|
97,647 |
|
|
94,247 |
|
||
Other long-term liabilities |
|
85,968 |
|
|
80,328 |
|
||
Total long-term liabilities |
|
1,186,461 |
|
|
1,527,416 |
|
||
COMMITMENTS AND CONTINGENCIES | ||||||||
SHAREHOLDERS' EQUITY: | ||||||||
Ordinary shares, $0.0001 nominal value; 600,000,000 shares | ||||||||
authorized at September 30, 2020 and December 31, 2019; | ||||||||
220,995,108 and 188,402,040 shares issued at September 30, 2020 | ||||||||
and December 31, 2019, respectively, and 220,610,742 and 188,017,674 shares | ||||||||
outstanding at September 30, 2020 and December 31, 2019, respectively |
|
22 |
|
|
19 |
|
||
Treasury stock, 384,366 ordinary shares at September 30, 2020 and December 31, 2019 |
|
(4,585 |
) |
|
(4,585 |
) |
||
Additional paid-in capital |
|
4,208,845 |
|
|
2,797,602 |
|
||
Accumulated other comprehensive loss |
|
(1,028 |
) |
|
(1,905 |
) |
||
Accumulated deficit |
|
(406,443 |
) |
|
(605,682 |
) |
||
Total shareholders' equity |
|
3,796,811 |
|
|
2,185,449 |
|
||
Total liabilities and shareholders' equity | $ |
5,766,875 |
|
$ |
4,436,034 |
|
||
Horizon Therapeutics plc |
||||||||||||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) |
||||||||||||||||
(in thousands) |
||||||||||||||||
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||
Net income (loss) | $ |
292,840 |
|
$ |
18,234 |
|
$ |
199,239 |
|
$ |
(19,749 |
) |
||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization expense |
|
70,510 |
|
|
59,319 |
|
|
209,906 |
|
|
177,336 |
|
||||
Equity-settled share-based compensation |
|
30,356 |
|
|
18,151 |
|
|
113,834 |
|
|
67,066 |
|
||||
Acquired in-process research and development expense |
|
- |
|
|
- |
|
|
47,517 |
|
|
- |
|
||||
Loss on debt extinguishment |
|
14,602 |
|
|
41,371 |
|
|
31,856 |
|
|
58,835 |
|
||||
Amortization of debt discount and deferred financing costs |
|
1,208 |
|
|
5,447 |
|
|
12,025 |
|
|
17,069 |
|
||||
Loss on sale of assets |
|
- |
|
|
- |
|
|
- |
|
|
10,963 |
|
||||
Deferred income taxes |
|
(3,480 |
) |
|
9,559 |
|
|
(8,041 |
) |
|
8,302 |
|
||||
Foreign exchange and other adjustments |
|
423 |
|
|
77 |
|
|
1,084 |
|
|
572 |
|
||||
Changes in operating assets and liabilities: | ||||||||||||||||
Accounts receivable |
|
(162,267 |
) |
|
(1,625 |
) |
|
(297,392 |
) |
|
68,162 |
|
||||
Inventories |
|
(10,986 |
) |
|
(7,500 |
) |
|
(23,329 |
) |
|
(8,004 |
) |
||||
Prepaid expenses and other current assets |
|
(62,816 |
) |
|
(54,358 |
) |
|
(83,226 |
) |
|
(72,055 |
) |
||||
Accounts payable |
|
(65,846 |
) |
|
(14,892 |
) |
|
17,709 |
|
|
(3,338 |
) |
||||
Accrued trade discounts and rebates |
|
34,170 |
|
|
5,910 |
|
|
(143,551 |
) |
|
(53,241 |
) |
||||
Accrued expenses |
|
(24,675 |
) |
|
17,481 |
|
|
56,830 |
|
|
(10,591 |
) |
||||
Deferred revenues |
|
- |
|
|
(7,311 |
) |
|
- |
|
|
(4,901 |
) |
||||
Other non-current assets and liabilities |
|
(5,176 |
) |
|
(2,347 |
) |
|
11,410 |
|
|
(1,474 |
) |
||||
Net cash provided by operating activities |
|
108,863 |
|
|
87,516 |
|
|
145,871 |
|
|
234,952 |
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||
Purchases of property and equipment |
|
(13,429 |
) |
|
(4,467 |
) |
|
(133,399 |
) |
|
(11,325 |
) |
||||
Payments for long-term investments |
|
(8,937 |
) |
|
- |
|
|
(8,937 |
) |
|
- |
|
||||
Proceeds from sale of assets |
|
- |
|
|
- |
|
|
- |
|
|
6,000 |
|
||||
Payments for acquisitions |
|
- |
|
|
- |
|
|
(262,305 |
) |
|
- |
|
||||
Change in escrow deposit for property purchase |
|
- |
|
|
- |
|
|
6,000 |
|
|
- |
|
||||
Net cash used in investing activites |
|
(22,366 |
) |
|
(4,467 |
) |
|
(398,641 |
) |
|
(5,325 |
) |
||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||
Net proceeds from issuance of senior notes |
|
- |
|
|
590,057 |
|
|
- |
|
|
590,057 |
|
||||
Repayment of senior notes |
|
(1,739 |
) |
|
(556,138 |
) |
|
(1,739 |
) |
|
(814,420 |
) |
||||
Net proceeds from the issuance of ordinary shares |
|
919,995 |
|
|
- |
|
|
919,995 |
|
|
326,793 |
|
||||
Repayment of term loans |
|
- |
|
|
(100,155 |
) |
|
- |
|
|
(918,181 |
) |
||||
Net proceeds from term loans |
|
- |
|
|
- |
|
|
- |
|
|
517,378 |
|
||||
Contingent consideration proceeds from divestiture |
|
- |
|
|
3,297 |
|
|
- |
|
|
3,297 |
|
||||
Proceeds from the issuance of ordinary shares in conjunction with ESPP program |
|
- |
|
|
3 |
|
|
7,979 |
|
|
5,468 |
|
||||
Proceeds from the issuance of ordinary shares in connection with stock option exercises |
|
8,112 |
|
|
4,207 |
|
|
33,999 |
|
|
16,236 |
|
||||
Payment of employee withholding taxes relating to share-based awards |
|
(6,743 |
) |
|
(5,086 |
) |
|
(59,752 |
) |
|
(29,460 |
) |
||||
Net cash provided by (used in) financing activities |
|
919,625 |
|
|
(63,815 |
) |
|
900,482 |
|
|
(302,832 |
) |
||||
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash |
|
1,166 |
|
|
(1,260 |
) |
|
1,225 |
|
|
(1,202 |
) |
||||
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
1,007,288 |
|
|
17,974 |
|
|
648,937 |
|
|
(74,407 |
) |
||||
Cash, cash equivalents and restricted cash, beginning of the period(1) |
|
721,688 |
|
|
869,736 |
|
|
1,080,039 |
|
|
962,117 |
|
||||
Cash, cash equivalents and restricted cash, end of the period(1) | $ |
1,728,976 |
|
$ |
887,710 |
|
$ |
1,728,976 |
|
$ |
887,710 |
|
(1) |
Amounts include restricted cash balance in accordance with ASU No. 2016-18. Cash and cash equivalents excluding restricted cash are shown on the balance sheet. |
|
Horizon Therapeutics plc |
||||||||||||||||
GAAP to Non-GAAP Reconciliations |
||||||||||||||||
Net Income and Earnings Per Share (Unaudited) |
||||||||||||||||
(in thousands, except share and per share data) |
||||||||||||||||
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
GAAP net income (loss) | $ |
292,840 |
|
$ |
18,234 |
|
$ |
199,239 |
|
$ |
(19,749 |
) |
||||
Non-GAAP adjustments: | ||||||||||||||||
Acquisition/divestiture-related costs |
|
199 |
|
|
67 |
|
|
47,296 |
|
|
2,613 |
|
||||
Restructuring and realignment costs |
|
- |
|
|
- |
|
|
- |
|
|
33 |
|
||||
Amortization and step-up: | ||||||||||||||||
Intangible amortization expense |
|
65,353 |
|
|
57,662 |
|
|
190,677 |
|
|
172,762 |
|
||||
Inventory step-up expense |
|
- |
|
|
- |
|
|
- |
|
|
90 |
|
||||
Amortization of debt discount and deferred financing costs |
|
1,208 |
|
|
5,447 |
|
|
12,025 |
|
|
17,069 |
|
||||
Impairment of long-lived assets |
|
- |
|
|
- |
|
|
1,072 |
|
|
- |
|
||||
Loss on sale of assets |
|
- |
|
|
- |
|
|
- |
|
|
10,963 |
|
||||
Share-based compensation |
|
30,356 |
|
|
18,151 |
|
|
113,834 |
|
|
67,066 |
|
||||
Depreciation |
|
5,157 |
|
|
1,658 |
|
|
19,229 |
|
|
4,574 |
|
||||
Litigation settlements |
|
- |
|
|
- |
|
|
- |
|
|
1,000 |
|
||||
Upfront, progress and milestone payments related to | ||||||||||||||||
license and collaboration agreements |
|
- |
|
|
3,073 |
|
|
3,000 |
|
|
9,073 |
|
||||
Fees related to refinancing activities |
|
- |
|
|
262 |
|
|
54 |
|
|
1,437 |
|
||||
Loss on debt extinguishment |
|
14,602 |
|
|
41,371 |
|
|
31,856 |
|
|
58,835 |
|
||||
Drug substance harmonization costs |
|
193 |
|
|
80 |
|
|
483 |
|
|
394 |
|
||||
Charges relating to discontinuation of Friedreich's ataxia program |
|
- |
|
|
- |
|
|
- |
|
|
1,221 |
|
||||
Total of pre-tax non-GAAP adjustments |
|
117,068 |
|
|
127,771 |
|
|
419,526 |
|
|
347,130 |
|
||||
Income tax effect of pre-tax non-GAAP adjustments |
|
(23,063 |
) |
|
(21,919 |
) |
|
(80,122 |
) |
|
(52,291 |
) |
||||
Other non-GAAP income tax adjustments |
|
5,331 |
|
|
- |
|
|
20,541 |
|
|
(1,452 |
) |
||||
Total of non-GAAP adjustments |
|
99,336 |
|
|
105,852 |
|
|
359,945 |
|
|
293,387 |
|
||||
Non-GAAP Net Income | $ |
392,176 |
|
$ |
124,086 |
|
$ |
559,184 |
|
$ |
273,638 |
|
||||
Non-GAAP Earnings Per Share: | ||||||||||||||||
Weighted average ordinary shares - Basic |
|
212,320,219 |
|
|
186,470,141 |
|
|
198,413,779 |
|
|
181,949,838 |
|
||||
Non-GAAP Earnings Per Share - Basic: | ||||||||||||||||
GAAP loss per share - Basic | $ |
1.38 |
|
$ |
0.10 |
|
$ |
1.00 |
|
$ |
(0.11 |
) |
||||
Non-GAAP adjustments |
|
0.47 |
|
|
0.57 |
|
|
1.82 |
|
|
1.61 |
|
||||
Non-GAAP earnings per share - Basic | $ |
1.85 |
|
$ |
0.67 |
|
$ |
2.82 |
|
$ |
1.50 |
|
||||
Non-GAAP Net Income | $ |
392,176 |
|
$ |
124,086 |
|
$ |
559,184 |
|
$ |
273,638 |
|
||||
Effect of assumed exchange of Exchangeable Senior Notes, net of tax |
|
223 |
|
|
- |
|
|
3,789 |
|
|
- |
|
||||
Numerator - non-GAAP Net Income | $ |
392,399 |
|
$ |
124,086 |
|
$ |
562,973 |
|
$ |
273,638 |
|
||||
Weighted average ordinary shares - Diluted | ||||||||||||||||
Weighted average ordinary shares - Basic |
|
212,320,219 |
|
|
186,470,141 |
|
|
198,413,779 |
|
|
181,949,838 |
|
||||
Ordinary share equivalents |
|
12,959,618 |
|
|
7,701,826 |
|
|
19,431,212 |
|
|
7,747,931 |
|
||||
Denominator - weighted average ordinary shares – Diluted |
|
225,279,837 |
|
|
194,171,967 |
|
|
217,844,991 |
|
|
189,697,769 |
|
||||
Non-GAAP Earnings Per Share - Diluted | ||||||||||||||||
GAAP loss per share - Diluted | $ |
1.31 |
|
$ |
0.09 |
|
$ |
0.95 |
|
$ |
(0.11 |
) |
||||
Non-GAAP adjustments |
|
0.43 |
|
|
0.55 |
|
|
1.63 |
|
|
1.61 |
|
||||
Diluted earnings per share effect of ordinary share equivalents |
|
- |
|
|
- |
|
|
- |
|
|
(0.06 |
) |
||||
Non-GAAP earnings per share - Diluted | $ |
1.74 |
|
$ |
0.64 |
|
$ |
2.58 |
|
$ |
1.44 |
|
||||
Horizon Therapeutics plc |
||||||||||||||||
GAAP to Non-GAAP Reconciliations |
||||||||||||||||
EBITDA (Unaudited) |
||||||||||||||||
(in thousands) |
||||||||||||||||
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
|
|
|
|
|
|
|
||||||||||
GAAP net income (loss) | $ |
292,840 |
|
$ |
18,234 |
|
$ |
199,239 |
|
$ |
(19,749 |
) |
||||
Depreciation |
|
5,157 |
|
|
1,658 |
|
|
19,229 |
|
|
4,574 |
|
||||
Amortization and step-up: | ||||||||||||||||
Intangible amortization expense |
|
65,353 |
|
|
57,662 |
|
|
190,677 |
|
|
172,762 |
|
||||
Inventory step-up expense |
|
- |
|
|
- |
|
|
- |
|
|
90 |
|
||||
Interest expense, net (including amortization of debt discount and deferred financing costs) |
|
12,185 |
|
|
20,428 |
|
|
48,100 |
|
|
69,991 |
|
||||
Benefit for income taxes |
|
(91,081 |
) |
|
(30,564 |
) |
|
(27,143 |
) |
|
(37,359 |
) |
||||
EBITDA | $ |
284,454 |
|
$ |
67,418 |
|
$ |
430,102 |
|
$ |
190,309 |
|
||||
Other non-GAAP adjustments: | ||||||||||||||||
Acquisition/divestiture-related costs |
|
199 |
|
|
67 |
|
|
47,296 |
|
|
2,613 |
|
||||
Restructuring and realignment costs |
|
- |
|
|
- |
|
|
- |
|
|
33 |
|
||||
Impairment of long-lived assets |
|
- |
|
|
- |
|
|
1,072 |
|
|
- |
|
||||
Loss on sale of assets |
|
- |
|
|
- |
|
|
- |
|
|
10,963 |
|
||||
Share-based compensation |
|
30,356 |
|
|
18,151 |
|
|
113,834 |
|
|
67,066 |
|
||||
Litigation settlements |
|
- |
|
|
- |
|
|
- |
|
|
1,000 |
|
||||
Upfront, progress and milestone payments related to license and collaboration agreements |
|
- |
|
|
3,073 |
|
|
3,000 |
|
|
9,073 |
|
||||
Fees related to refinancing activities |
|
- |
|
|
262 |
|
|
54 |
|
|
1,437 |
|
||||
Loss on debt extinguishment |
|
14,602 |
|
|
41,371 |
|
|
31,856 |
|
|
58,835 |
|
||||
Drug substance harmonization costs |
|
193 |
|
|
80 |
|
|
483 |
|
|
394 |
|
||||
Charges relating to discontinuation of Friedreich's ataxia program |
|
- |
|
|
- |
|
|
- |
|
|
1,221 |
|
||||
Total of other non-GAAP adjustments |
|
45,350 |
|
|
63,004 |
|
|
197,595 |
|
|
152,635 |
|
||||
Adjusted EBITDA | $ |
329,804 |
|
$ |
130,422 |
|
$ |
627,697 |
|
$ |
342,944 |
|
||||
Horizon Therapeutics plc |
|||||||||||||||
GAAP to Non-GAAP Reconciliations |
|||||||||||||||
Operating Income (Unaudited) |
|||||||||||||||
(in thousands) |
|||||||||||||||
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|||||||||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||
GAAP operating income | $ |
228,582 |
|
$ |
48,619 |
|
$ |
249,955 |
$ |
71,936 |
|
||||
Non-GAAP adjustments: | |||||||||||||||
Acquisition/divestiture-related costs |
|
144 |
|
|
(44 |
) |
|
47,416 |
|
1,231 |
|
||||
Restructuring and realignment costs |
|
- |
|
|
- |
|
|
- |
|
33 |
|
||||
Amortization and step-up: | |||||||||||||||
Intangible amortization expense |
|
65,353 |
|
|
57,662 |
|
|
190,677 |
|
172,762 |
|
||||
Inventory step-up expense |
|
- |
|
|
- |
|
|
- |
|
90 |
|
||||
Impairment of long-lived assets |
|
- |
|
|
- |
|
|
1,072 |
|
- |
|
||||
Loss on sale of assets |
|
- |
|
|
- |
|
|
- |
|
10,963 |
|
||||
Share-based compensation |
|
30,356 |
|
|
18,151 |
|
|
113,834 |
|
67,066 |
|
||||
Depreciation |
|
5,157 |
|
|
1,658 |
|
|
19,229 |
|
4,574 |
|
||||
Litigation settlements |
|
- |
|
|
- |
|
|
- |
|
1,000 |
|
||||
Upfront, progress and milestone payments related to license and collaboration agreements |
|
- |
|
|
3,073 |
|
|
3,000 |
|
9,073 |
|
||||
Fees related to refinancing activities |
|
- |
|
|
262 |
|
|
54 |
|
1,437 |
|
||||
Drug substance harmonization costs |
|
193 |
|
|
80 |
|
|
483 |
|
394 |
|
||||
Charges relating to discontinuation of Friedreich's ataxia program |
|
- |
|
|
- |
|
|
- |
|
1,221 |
|
||||
Total of non-GAAP adjustments |
|
101,203 |
|
|
80,842 |
|
|
375,765 |
|
269,844 |
|
||||
Non-GAAP operating income | $ |
329,785 |
|
$ |
129,461 |
|
$ |
625,720 |
$ |
341,780 |
|
||||
Orphan segment operating income |
|
274,687 |
|
|
79,695 |
|
|
480,584 |
|
180,095 |
|
||||
Inflammation segment operating income |
|
55,098 |
|
|
49,766 |
|
|
145,136 |
|
161,685 |
|
||||
Total segment operating income | $ |
329,785 |
|
$ |
129,461 |
|
$ |
625,720 |
$ |
341,780 |
|
||||
Foreign exchange (loss)/gain |
|
(753 |
) |
|
(40 |
) |
|
306 |
|
(25 |
) |
||||
Other income, net |
|
772 |
|
|
1,001 |
|
|
1,671 |
|
1,189 |
|
||||
Adjusted EBITDA | $ |
329,804 |
|
$ |
130,422 |
|
$ |
627,697 |
$ |
342,944 |
|
||||
Horizon Therapeutics plc |
||||||||||||||||
GAAP to Non-GAAP Reconciliations |
||||||||||||||||
Gross Profit and Operating Cash Flow (Unaudited) |
||||||||||||||||
(in thousands, except percentages) |
||||||||||||||||
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
Non-GAAP Gross Profit: | ||||||||||||||||
GAAP gross profit | $ |
484,952 |
|
$ |
245,517 |
|
$ |
1,084,709 |
|
$ |
669,230 |
|
||||
Non-GAAP gross profit adjustments: | ||||||||||||||||
Acquisition/divestiture-related costs |
|
- |
|
|
- |
|
|
- |
|
|
1,114 |
|
||||
Intangible amortization expense |
|
65,149 |
|
|
57,458 |
|
|
190,070 |
|
|
172,156 |
|
||||
Inventory step-up expense |
|
- |
|
|
- |
|
|
- |
|
|
90 |
|
||||
Share-based compensation |
|
1,566 |
|
|
901 |
|
|
5,543 |
|
|
2,891 |
|
||||
Depreciation |
|
17 |
|
|
158 |
|
|
435 |
|
|
475 |
|
||||
Drug substance harmonization costs |
|
193 |
|
|
80 |
|
|
483 |
|
|
394 |
|
||||
Charges relating to discontinuation of Friedreich's ataxia program |
|
- |
|
|
- |
|
|
- |
|
|
1,221 |
|
||||
Total of Non-GAAP adjustments |
|
66,925 |
|
|
58,597 |
|
|
196,531 |
|
|
178,341 |
|
||||
Non-GAAP gross profit | $ |
551,877 |
|
$ |
304,114 |
|
$ |
1,281,240 |
|
$ |
847,571 |
|
||||
GAAP gross profit % |
|
76.2 |
% |
|
73.2 |
% |
|
74.5 |
% |
|
71.5 |
% |
||||
Non-GAAP gross profit % |
|
86.7 |
% |
|
90.7 |
% |
|
88.1 |
% |
|
90.5 |
% |
||||
GAAP cash provided by operating activities | $ |
108,863 |
|
$ |
87,516 |
|
$ |
145,871 |
|
$ |
234,952 |
|
||||
Cash payments for acquisition/divestiture-related costs |
|
97 |
|
|
88 |
|
|
80 |
|
|
583 |
|
||||
Cash payments for restructuring and realignment costs |
|
- |
|
|
382 |
|
|
189 |
|
|
3,264 |
|
||||
Cash payments for litigation settlements |
|
- |
|
|
1,000 |
|
|
- |
|
|
1,000 |
|
||||
Cash payments for upfront, progress and milestone payments related to license and collaboration agreement |
|
- |
|
|
7,073 |
|
|
- |
|
|
9,073 |
|
||||
Cash payments drug substance harmonization costs |
|
- |
|
|
313 |
|
|
290 |
|
|
985 |
|
||||
Cash payments for discontinuation of Friedreich's ataxia program |
|
- |
|
|
- |
|
|
- |
|
|
2,589 |
|
||||
Cash payments relating to refinancing activities |
|
- |
|
|
112 |
|
|
73 |
|
|
1,918 |
|
||||
Non-GAAP operating cash flow | $ |
108,960 |
|
$ |
96,484 |
|
$ |
146,503 |
|
$ |
254,364 |
|
||||
Horizon Pharma plc |
||||
GAAP to Non-GAAP Reconciliations |
||||
EBITDA (Unaudited) - 2019 |
||||
(in thousands) |
||||
|
|
Twelve Months
|
||
|
|
2019 |
||
GAAP net income | $ |
573,020 |
|
|
Depreciation |
|
6,733 |
|
|
Amortization and step-up: | ||||
Intangible amortization expense |
|
230,424 |
|
|
Inventory step-up expense |
|
89 |
|
|
Interest expense, net (including amortization of debt discount and deferred financing costs) |
|
87,089 |
|
|
Benefit for income taxes |
|
(593,244 |
) |
|
EBITDA | $ |
304,111 |
|
|
Other non-GAAP adjustments: | ||||
Acquisition/divestiture-related costs |
|
3,556 |
|
|
Restructuring and realignment costs |
|
237 |
|
|
Share-based compensation |
|
91,215 |
|
|
Litigation settlements |
|
1,000 |
|
|
Upfront, progress and milestone payments related to license and collaboration agreements |
|
9,073 |
|
|
Fees related to refinancing activities |
|
2,292 |
|
|
Loss on debt extinguishment |
|
58,835 |
|
|
Drug substance harmonization costs |
|
457 |
|
|
Charges relating to discontinuation of Friedreich's ataxia program |
|
1,076 |
|
|
Gain on sale of assets |
|
10,963 |
|
|
Total of other non-GAAP adjustments |
|
178,704 |
|
|
Adjusted EBITDA | $ |
482,815 |
|
|
Horizon Therapeutics plc |
|||||||||||||||||||
GAAP to Non-GAAP Tax Rate Reconciliation (Unaudited) |
|||||||||||||||||||
(in millions, except percentages and per share amounts) |
|||||||||||||||||||
|
|
Q3 2020 |
|||||||||||||||||
Pre-tax Net
|
|
Income Tax
|
|
Tax Rate |
|
Net Income
|
|
Diluted Earnings
|
|||||||||||
As reported - GAAP | $ |
201.8 |
|
$ |
(91.1 |
) |
(45.1 |
)% |
$ |
292.8 |
|
$ |
1.31 |
|
|||||
Non-GAAP adjustments |
|
117.1 |
|
|
17.7 |
|
|
99.3 |
|
||||||||||
Non-GAAP | $ |
318.8 |
|
$ |
(73.3 |
) |
(23.0 |
)% |
$ |
392.2 |
|
$ |
1.74 |
|
|||||
Q3 2019 |
|||||||||||||||||||
Pre-tax Net
|
|
Income Tax
|
|
Tax Rate |
|
Net Income
|
|
Diluted Earnings
|
|||||||||||
As reported - GAAP | $ |
(12.3 |
) |
$ |
(30.6 |
) |
247.9 |
% |
$ |
18.2 |
|
$ |
0.09 |
|
|||||
Non-GAAP adjustments |
|
127.8 |
|
|
21.9 |
|
|
105.9 |
|
||||||||||
Non-GAAP | $ |
115.4 |
|
$ |
(8.7 |
) |
(7.5 |
)% |
$ |
124.1 |
|
$ |
0.64 |
|
|||||
YTD 2020 |
|||||||||||||||||||
Pre-tax Net
|
|
Income Tax
|
|
Tax Rate |
|
Net Income
|
|
Diluted Earnings
|
|||||||||||
As reported - GAAP | $ |
172.1 |
|
$ |
(27.1 |
) |
(15.8 |
)% |
$ |
199.2 |
|
$ |
0.95 |
|
|||||
Non-GAAP adjustments |
|
419.5 |
|
|
59.6 |
|
|
359.9 |
|
||||||||||
Non-GAAP | $ |
591.6 |
|
$ |
32.4 |
|
5.5 |
% |
$ |
559.2 |
|
$ |
2.58 |
|
|||||
YTD 2019 |
|||||||||||||||||||
Pre-tax Net
|
|
Income Tax
|
|
Tax Rate |
|
Net Income
|
|
Diluted Earnings
|
|||||||||||
As reported - GAAP | $ |
(57.1 |
) |
$ |
(37.4 |
) |
65.4 |
% |
$ |
(19.7 |
) |
$ |
(0.11 |
) |
|||||
Non-GAAP adjustments |
|
347.1 |
|
|
53.7 |
|
|
293.4 |
|
||||||||||
Non-GAAP | $ |
290.0 |
|
$ |
16.3 |
|
5.6 |
% |
$ |
273.7 |
|
$ |
1.44 |
|
|||||
Horizon Therapeutics plc
Certain Income Statement Line Items - Non-GAAP Adjusted
For the Three Months Ended Sept. 30, 2020 and Sept. 30, 2019 (Unaudited)
(in thousands)
Horizon Therapeutics plc |
|||||||||||||||||||||
|
Certain Income Statement Line Items - Non-GAAP Adjusted |
||||||||||||||||||||
|
For the Three Months Ended Sept. 30, 2020 |
||||||||||||||||||||
|
(in thousands) |
||||||||||||||||||||
Income Tax | |||||||||||||||||||||
Research & | Selling, General | Loss on Debt | Interest | Other | Benefit | ||||||||||||||||
COGS | Development | & Administrative | Extinguishment | Expense | Expense | (Expense) | |||||||||||||||
GAAP as reported | $ |
(151,475 |
) |
$ |
(30,206 |
) |
$ |
(226,164 |
) |
$ |
(14,602 |
) |
$ |
(12,185 |
) |
$ |
717 |
$ |
91,081 |
|
|
Non-GAAP Adjustments (in thousands): | |||||||||||||||||||||
Acquisition/divestiture-related costs(1) |
|
- |
|
|
36 |
|
|
108 |
|
|
- |
|
|
- |
|
|
55 |
|
- |
|
|
Amortization and step-up: | |||||||||||||||||||||
Intangible amortization expense(2) |
|
65,149 |
|
|
- |
|
|
204 |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
|
Amortization of debt discount and deferred financing costs(3) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
1,208 |
|
|
- |
|
- |
|
|
Share-based compensation(4) |
|
1,566 |
|
|
2,453 |
|
|
26,337 |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
|
Depreciation(5) |
|
17 |
|
|
29 |
|
|
5,111 |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
|
Loss on debt extinguishment(6) |
|
- |
|
|
- |
|
|
- |
|
|
14,602 |
|
|
- |
|
|
- |
|
- |
|
|
Drug substance harmonization costs(7) |
|
193 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
|
Income tax effect on pre-tax non-GAAP adjustments(8) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
(23,063 |
) |
|
Other non-GAAP income tax adjustments(9) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
5,331 |
|
|
Total of non-GAAP adjustments |
|
66,925 |
|
|
2,518 |
|
|
31,760 |
|
|
14,602 |
|
|
1,208 |
|
|
55 |
|
(17,732 |
) |
|
Non-GAAP | $ |
(84,550 |
) |
$ |
(27,688 |
) |
$ |
(194,404 |
) |
$ |
- |
|
$ |
(10,977 |
) |
$ |
772 |
$ |
73,349 |
|
|
Horizon Therapeutics plc | |||||||||||||||||||||
Certain Income Statement Line Items - Non-GAAP Adjusted | |||||||||||||||||||||
For the Three Months Ended September 30, 2019 | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Income Tax | |||||||||||||||||||||
Research & | Selling, General | Loss on Debt | Interest | Other | Benefit | ||||||||||||||||
COGS | Development | & Administrative | Extinguishment | Expense | Income, net | (Expense) | |||||||||||||||
GAAP as reported | $ |
(89,949 |
) |
$ |
(24,572 |
) |
$ |
(172,326 |
) |
$ |
(41,371 |
) |
$ |
(20,428 |
) |
$ |
890 |
$ |
30,564 |
|
|
Non-GAAP Adjustments (in thousands): | |||||||||||||||||||||
Acquisition/divestiture-related costs(1) |
|
- |
|
|
- |
|
|
(44 |
) |
|
- |
|
|
- |
|
|
111 |
|
- |
|
|
Amortization and step-up: | |||||||||||||||||||||
Intangible amortization expense(2) |
|
57,458 |
|
|
- |
|
|
204 |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
|
Amortization of debt discount and deferred financing costs(3) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
5,447 |
|
|
- |
|
- |
|
|
Share-based compensation(4) |
|
901 |
|
|
1,953 |
|
|
15,297 |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
|
Depreciation(5) |
|
158 |
|
|
- |
|
|
1,500 |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
|
Upfront, progress and milestone payments related to license | |||||||||||||||||||||
and collaboration agreements(10) |
|
- |
|
|
3,073 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
|
Loss on debt extinguishment(6) |
|
- |
|
|
- |
|
|
- |
|
|
41,371 |
|
|
- |
|
|
- |
|
- |
|
|
Fees related to refinancing activities (11) |
|
- |
|
|
- |
|
|
262 |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
|
Drug substance harmonization costs(7) |
|
80 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
|
Income tax effect on pre-tax non-GAAP adjustments(8) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
(21,919 |
) |
|
Total of non-GAAP adjustments |
|
58,597 |
|
|
5,026 |
|
|
17,219 |
|
|
41,371 |
|
|
5,447 |
|
|
111 |
|
(21,919 |
) |
|
Non-GAAP | $ |
(31,352 |
) |
$ |
(19,546 |
) |
$ |
(155,107 |
) |
$ |
- |
|
$ |
(14,981 |
) |
$ |
1,001 |
$ |
8,645 |
|
|
|
- |
|
Horizon Therapeutics plc
Certain Income Statement Line Items - Non-GAAP Adjusted
For the Nine Months Ended Sept. 30, 2020 and Sept. 30, 2019 (Unaudited)
(in thousands)
Horizon Therapeutics plc |
|||||||||||||||||||||||||
Certain Income Statement Line Items - Non-GAAP Adjusted |
|||||||||||||||||||||||||
For the Nine Months Ended Sept. 30, 2020 |
|||||||||||||||||||||||||
(Unaudited) |
|||||||||||||||||||||||||
Income Tax | |||||||||||||||||||||||||
Research & | Selling, General | Interest | Other | Loss on Debt | Benefit | ||||||||||||||||||||
COGS | Development | & Administrative | Expense | Expense | Extinguishment | (Expense) | |||||||||||||||||||
GAAP as reported | $ |
(370,406 |
) |
$ |
(138,483 |
) |
$ |
(696,271 |
) |
$ |
(48,100 |
) |
$ |
1,791 |
|
$ |
(31,856 |
) |
$ |
27,143 |
|
||||
Non-GAAP Adjustments (in thousands): | |||||||||||||||||||||||||
Acquisition/divestiture-related costs(1) |
|
- |
|
|
47,365 |
|
|
51 |
|
|
- |
|
|
(120 |
) |
|
- |
|
|
- |
|
||||
Amortization and step-up: | |||||||||||||||||||||||||
Intangible amortization expense(2) |
|
190,070 |
|
|
- |
|
|
607 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||||
Amortization of debt discount and deferred financing costs(3) |
|
- |
|
|
- |
|
|
- |
|
|
12,025 |
|
|
- |
|
|
- |
|
|
- |
|
||||
Impairment of long lived assets(12) |
|
- |
|
|
- |
|
|
1,072 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||||
Share-based compensation(4) |
|
5,543 |
|
|
11,381 |
|
|
96,910 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||||
Depreciation(5) |
|
435 |
|
|
72 |
|
|
18,722 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||||
Loss on debt extinguishment(6) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
31,856 |
|
|
- |
|
||||
Upfront, progress and milestone payments related to license | |||||||||||||||||||||||||
and collaboration agreements(10) |
|
- |
|
|
3,000 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||||
Fees related to refinancing activities (11) |
|
- |
|
|
- |
|
|
54 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||||
Drug substance harmonization costs(7) |
|
483 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||||
Income tax effect on pre-tax non-GAAP adjustments(8) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(80,122 |
) |
||||
Other non-GAAP income tax adjustments(9) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
20,541 |
|
||||
Total of non-GAAP adjustments |
|
196,531 |
|
|
61,818 |
|
|
117,416 |
|
|
12,025 |
|
|
(120 |
) |
|
31,856 |
|
|
(59,581 |
) |
||||
Non-GAAP | $ |
(173,875 |
) |
$ |
(76,665 |
) |
$ |
(578,855 |
) |
$ |
(36,075 |
) |
$ |
1,671 |
|
$ |
- |
|
$ |
(32,438 |
) |
||||
Horizon Therapeutics plc | |||||||||||||||||||||||||
Certain Income Statement Line Items - Non-GAAP Adjusted | |||||||||||||||||||||||||
For the Nine Months Ended September 30, 2019 | |||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||
Income Tax | |||||||||||||||||||||||||
Research & | Selling, General | Loss on Debt | Loss/(Gain) on | Interest | Other | Benefit | |||||||||||||||||||
COGS | Development | & Administrative | Extinguishment | Sale of Assets | Expense | Income | (Expense) | ||||||||||||||||||
GAAP as reported | $ |
(267,254 |
) |
$ |
(74,611 |
) |
$ |
(511,720 |
) |
$ |
(58,835 |
) |
$ |
(10,963 |
) |
$ |
(69,991 |
) |
|
(193 |
) |
$ |
37,359 |
|
|
Non-GAAP Adjustments (in thousands): | |||||||||||||||||||||||||
Acquisition/divestiture-related costs(1) |
|
1,114 |
|
|
- |
|
|
119 |
|
|
- |
|
|
- |
|
|
- |
|
|
1,380 |
|
|
- |
|
|
Restructuring and realignment costs(13) |
|
- |
|
|
- |
|
|
33 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
Amortization and step-up: | |||||||||||||||||||||||||
Intangible amortization expense(2) |
|
172,156 |
|
|
- |
|
|
606 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
Inventory step-up expense |
|
90 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
Amortization of debt discount and deferred financing costs(3) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
17,069 |
|
|
- |
|
|
- |
|
|
Impairment of long lived assets(12) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
Loss on sale of assets(14) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
10,963 |
|
|
- |
|
|
- |
|
|
- |
|
|
Share-based compensation(4) |
|
2,891 |
|
|
6,931 |
|
|
57,244 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
Depreciation(5) |
|
475 |
|
|
- |
|
|
4,099 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
Litigation settlements(15) |
|
- |
|
|
- |
|
|
1,000 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
Upfront, progress and milestone payments related to license | |||||||||||||||||||||||||
and collaboration agreements(9) |
|
- |
|
|
9,073 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
Fees related to refinancing activities (11) |
|
- |
|
|
- |
|
|
1,437 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
Loss on debt extinguishment(6) |
|
- |
|
|
- |
|
|
- |
|
|
58,835 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
Drug substance harmonization costs(7) |
|
394 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
Charges relating to discontinuation of Friedreich's ataxia program(16) |
|
1,221 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
Income tax effect on pre-tax non-GAAP adjustments(8) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(52,291 |
) |
|
Other non-GAAP income tax adjustments(9) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(1,452 |
) |
|
Total of non-GAAP adjustments |
|
178,341 |
|
|
16,004 |
|
|
64,538 |
|
|
58,835 |
|
|
10,963 |
|
|
17,069 |
|
|
1,380 |
|
|
(53,743 |
) |
|
Non-GAAP | $ |
(88,913 |
) |
$ |
(58,607 |
) |
$ |
(447,182 |
) |
|
- |
|
|
- |
|
$ |
(52,922 |
) |
$ |
1,186 |
|
$ |
(16,384 |
) |
|
NOTES FOR CERTAIN INCOME STATEMENT LINE ITEMS - NON-GAAP |
|
|
|
1. |
Represents expenses, including legal and consulting fees, incurred in connection with our acquisitions and divestitures. Costs recovered from subleases of acquired facilities and reimbursed expenses incurred under transition arrangements for divestitures are also reflected in this line item. In addition, the nine months ended September 30, 2020 amounts include the Curzion acquisition payment of $45.0 million, which was recorded as a research and development expense. |
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Intangible amortization expenses are associated with our intellectual property rights, developed technology and customer relationships related to TEPEZZA, KRYSTEXXA, RAVICTI, PROCYSBI, ACTIMMUNE, BUPHENYL, RAYOS, PENNSAID 2%, VIMOVO and MIGERGOT. |
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Represents amortization of debt discount and deferred financing costs associated with our debt. |
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4. |
Represents share-based compensation expense associated with our stock option, restricted stock unit and performance stock unit grants to our employees and non-employee directors, and our employee share purchase plan. |
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5. |
Represents depreciation expense related to our property, equipment, software and leasehold improvements. |
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6. |
During the nine months ended September 30, 2020, we recorded a loss on debt extinguishment of $31.9 million in the condensed consolidated statements of comprehensive income (loss), which reflects the exchange of our Exchangeable Senior Notes. |
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During the nine months ended September 30, 2019, we recorded a loss on debt extinguishment of $58.8 million in the condensed consolidated statements of comprehensive income (loss), which reflected the early redemption premiums and the write-off of the deferred financing fees and debt discount fees related to the prepayment of $775.0 million of our 2023 Senior Notes and 2024 Senior Notes and the write-off of the deferred financing fees and debt discount fees related to the $400.0 million of term loan repayments. |
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During the year ended December 31, 2016, we entered into a definitive agreement to acquire certain rights to interferon gamma-1b, marketed as IMUKIN in an estimated thirty countries primarily in Europe and the Middle East, or the IMUKIN purchase agreement. We already owned the rights to interferon gamma-1b marketed as ACTIMMUNE in the United States, Canada and Japan. In connection with the IMUKIN purchase agreement, we also committed to pay our contract manufacturer certain amounts related to the harmonization of the manufacturing processes for ACTIMMUNE and IMUKIN drug substance, or the harmonization program. At the time we entered into the IMUKIN purchase agreement and the harmonization program commitment was made, we had anticipated achieving certain benefits should the Phase 3 clinical trial evaluating ACTIMMUNE for the treatment of Friedreich’s ataxia, be successful. If the study had been successful and if U.S. marketing approval had subsequently been obtained, we had forecasted significant increases in demand for the medicine and the harmonization program would have resulted in significant benefits for us. Following our discontinuation of the FA program, we determined that certain assets, including an upfront payment related to the IMUKIN purchase agreement, were impaired, and the costs under the harmonization program would no longer have benefit to us and should be expensed as incurred. |
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Income tax adjustments on pre-tax non-GAAP adjustments represent the estimated income tax impact of each pre-tax non-GAAP adjustment based on the statutory income tax rate of the applicable jurisdictions for each non-GAAP adjustment. |
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9. |
During the nine months ended September 30, 2020, following the publication of the Anti-Hybrid Rules on April 8, 2020, we recorded a write off of a deferred tax asset related to certain interest expense accrued to a foreign related party during the year ended December 31, 2019 and recognized a corresponding one-time tax provision, resulting in a non-GAAP tax adjustment of $15.2 million. We also recognized a U.S. federal tax liability on U.S. taxable income generated from an intra-company transfer of intellectual property from a U.S. subsidiary to an Irish subsidiary, which was partially offset by the recognition of a deferred tax asset in the Irish subsidiary, resulting in a non-GAAP tax adjustment of $5.3 million. |
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During the nine months ended September 30, 2019, we released a reserve that was originally established and treated as a non-GAAP adjustment related to an uncertain tax position in connection with an acquisition resulting in a non-GAAP tax adjustment of $1.5 million. |
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During the nine months ended September 30, 2020, we recognized a $3.0 million progress payment in relation to the collaboration agreement with HemoShear Therapeutics, LLC, or HemoShear, which was paid in July 2020. |
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During the nine months ended September 30, 2019, we recorded an upfront, progress and milestone payments related to license and collaboration agreements of $9.1 million which was composed of a $3.0 million milestone payment to Roche relating to the teprotumumab BLA submission to the FDA during the third quarter of 2019, an upfront cash payment of $2.0 million and a progress payment of $4.0 million in relation to the collaboration agreement with HemoShear. |
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11. |
Represents arrangement and other fees relating to our refinancing activities. |
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12. |
During the nine months ended September 30, 2020, we recorded an impairment charge of $1.1 million related to the Novato, California office lease, which was obtained through an acquisition. |
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13. |
Represents expenses, including severance costs and consulting fees, related to restructuring and realignment activities. |
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14. |
During the nine months ended September 30, 2019, we recorded a loss of $11.0 million on the sale of our rights to MIGERGOT. |
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15. |
We recorded $1.0 million of expense during the nine months ended September 30, 2019 for litigation settlements. |
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16. |
Represents expenses incurred relating to discontinuation of Friedreich’s ataxia program and a reduction to previous charges recorded. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20201102005464/en/
Investors:
Tina Ventura
Senior Vice President,
Investor Relations
[email protected]
Ruth Venning
Executive Director,
Investor Relations
[email protected]
U.S. Media:
Geoff Curtis
Executive Vice President,
Corporate Affairs & Chief Communications Officer
[email protected]
Ireland Media:
Ray Gordon
Gordon MRM
[email protected]