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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Horizon Therapeutics Public Limited Company | NASDAQ:HZNP | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 116.30 | 116.31 | 116.30 | 0 | 01:00:00 |
-- Record Fourth-Quarter 2019 Net Sales of $363.5 Million Driven by 14 Percent Growth in the Orphan and Rheumatology Segment; Fourth-Quarter 2019 GAAP Net Income of $592.8 Million; Adjusted EBITDA of $139.9 Million --
-- Record Full-Year 2019 Net Sales of $1.30 Billion Driven by 32 Percent Growth in KRYSTEXXA®; Full-Year 2019 GAAP Net Income of $573.0 Million; Record Adjusted EBITDA of $482.8 Million --
-- Full-Year 2020 Net Sales Guidance of $1.40 Billion to $1.42 Billion; Full-Year 2020 Adjusted EBITDA Guidance of $485 Million to $500 Million, Reflecting Significant Investment in U.S. Launch of TEPEZZA™ and R&D Pipeline Programs to Drive Long-Term Growth --
-- TEPEZZA Approved for the Treatment of Thyroid Eye Disease (TED) on Jan. 21, 2020 --
-- Announced KRYSTEXXA Immunomodulation MIRROR Open-Label Trial Top-line Data; 79 Percent of Patients Achieved a Complete Response, Supporting KRYSTEXXA Immunomodulation Strategy to Optimize Treatment Outcomes --
-- Increased Peak U.S. Annual Net Sales Expectations for Growth Drivers KRYSTEXXA and TEPEZZA to More Than $1 Billion Each --
-- Cash Position of $1.076 Billion; Net Leverage of 0.7 Times as of Dec. 31, 2019 --
Horizon Therapeutics plc (Nasdaq: HZNP) today announced its fourth-quarter and full-year 2019 financial results and provided its full-year 2020 net sales and adjusted EBITDA guidance.
“The fourth quarter capped off another year of tremendous progress at Horizon, marked by the achievement of several important milestones,” said Timothy Walbert, chairman, president and chief executive officer, Horizon. “We are in our strongest position ever as a company, entering 2020 with FDA approval of TEPEZZA, the first and only medicine approved for the treatment of thyroid eye disease. We continue to see strong growth for KRYSTEXXA, the only approved medicine for uncontrolled gout, particularly following the significantly higher complete response rate demonstrated when used in combination with methotrexate. With the excellent growth potential we see for both TEPEZZA and KRYSTEXXA, we recently increased our peak U.S. net sales expectations to more than $1 billion for each medicine. We remain focused on optimizing the benefits our medicines provide patients and driving value for our shareholders.”
Financial Highlights
(in millions except for per share amounts and percentages) Q4 19 Q4 18 %Change FY 19 FY 18 %Change Net sales$
363.5
$
355.5
2
$
1,300.0
$
1,207.6
8
Net income (loss)
592.8
101.6
483
573.0
(38.4
)
NM
Non-GAAP net income
116.6
116.8
-
390.2
314.7
24
Adjusted EBITDA
139.9
151.1
(7
)
482.8
451.4
7
Earnings (Loss) per share - diluted
2.84
0.58
390
2.90
(0.23
)
NM
Non-GAAP earnings per share - diluted
0.56
0.67
(16
)
1.94
1.83
6
Fourth-Quarter and Recent Company Highlights
Research and Development Programs
Fourth-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.
Fourth-Quarter Segment Results
Management uses net sales and segment operating income to evaluate the performance of the Company’s two segments, the orphan and rheumatology 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. Beginning with the first quarter of 2020, the Company is moving its medicine RAYOS®, which is not an orphan medicine, to the inflammation segment, and the orphan and rheumatology segment is being renamed the orphan segment.
Orphan and Rheumatology Segment
(in millions except for percentages) Q4 19 Q4 18 %Change FY 19 FY 18 %Change KRYSTEXXA
110.7
83.3
33
342.4
258.9
32
RAVICTI®(1)
68.5
60.2
14
228.8
226.6
1
PROCYSBI®
40.8
40.1
2
161.9
154.9
5
ACTIMMUNE®
28.4
27.5
3
107.3
105.6
2
RAYOS®
19.5
19.8
(1
)
78.6
61.1
29
BUPHENYL®(1)
1.6
6.4
(75
)
9.8
21.8
(55
)
QUINSAIR™
0.3
0.2
68
0.8
0.5
62
LODOTRA®(1)
-
0.1
NM
-
2.1
NM
Orphan and Rheumatology Net Sales
$
269.8
$
237.6
14
$
929.6
$
831.5
12
Orphan and Rheumatology Segment Operating Income
$
95.4
$
84.8
13
$
306.3
$
290.0
6
(1)
Beginning in 2019, the Company no longer recognizes revenue from RAVICTI and AMMONAPS sales outside of North America and Japan, nor from sales of LODOTRA. On Dec. 28, 2018, the Company divested the rights to RAVICTI and AMMONAPS outside of North America and Japan. AMMONAPS is known as BUPHENYL in the United States. In addition, effective Jan. 1, 2019, the RAYOS and LODOTRA license and supply agreements were amended, including the transfer of LODOTRA to Vectura Group plc. LODOTRA is known as RAYOS in the United States.
Inflammation Segment
(in millions except for percentages) Q4 19 Q4 18 %Change FY 19 FY 18 %Change PENNSAID 2%57.0
64.3
(11)
200.8
190.2
6
DUEXIS®26.3
34.0
(23)
115.7
114.7
1
VIMOVO®10.4
18.8
(45)
52.1
67.6
(23)
MIGERGOT®(1)-
0.8
NM
1.8
3.6
(49)
Inflammation Net Sales$ 93.7
$ 117.9
(21)
$ 370.4
$ 376.1
(2)
Inflammation Segment Operating Income$ 44.0
$ 66.2
(33)
$ 174.9
$ 160.4
9
(1)
In June 2019, the Company divested the rights to MIGERGOT.
Cash Flow Statement and Balance Sheet Highlights
2020 Guidance
The Company expects full‐year 2020 net sales to range between $1.40 billion and $1.42 billion, reflecting KRYSTEXXA full-year net sales growth of more than 25 percent and TEPEZZA full-year net sales of $30 million to $40 million. Full-year 2020 adjusted EBITDA is expected to range between $485 million and $500 million, reflecting significant investment in the U.S. launch of TEPEZZA and R&D pipeline programs to drive long-term growth.
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, follow us @HorizonNews on Twitter, like us on Facebook or explore career opportunities on LinkedIn.
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, non-GAAP operating cash flow, net leverage ratio and net debt, 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 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 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; 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.
Contacts:
Investors:
U.S. Media:
Tina Ventura
Geoff Curtis
Senior Vice President,
Executive Vice President,
Investor Relations
Corporate Affairs & Chief Communications Officer
investor-relations@horizontherapeutics.com
media@horizontherapeutics.com
Ruth Venning
Ireland Media:
Executive Director,
Ray Gordon
Investor Relations
Gordon MRM
investor-relations@horizontherapeutics.com
ray@gordonmrm.ie
Horizon Therapeutics plc
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except share and per share data)
Three Months Ended December 31,
Twelve Months Ended December 31,
2019
2018
2019
2018
(Unaudited) Net sales$
363,545
$
355,543
$
1,300,029
$
1,207,570
Cost of goods sold
94,921
98,599
362,175
391,301
Gross profit
268,624
256,944
937,854
816,269
OPERATING EXPENSES: Research and development
28,558
19,683
103,169
82,762
Selling, general and administrative
185,391
174,628
697,111
692,485
(Gain)/Loss on sale of assets
-
(30,682
)
10,963
(42,985
)
Impairment of long-lived assets
-
10,847
-
46,096
Total operating expenses
213,949
174,476
811,243
778,358
Operating income
54,675
82,468
126,611
37,911
OTHER EXPENSE, NET: Interest expense, net
(17,098
)
(29,771
)
(87,089
)
(121,692
)
Loss on debt extinguishment
-
-
(58,835
)
-
Foreign exchange gain (loss)
58
(111
)
33
(192
)
Other (expense) income , net
(751
)
8
(944
)
841
Total other expense, net
(17,791
)
(29,874
)
(146,835
)
(121,043
)
Income (Loss) before benefit for income taxes
36,884
52,594
(20,224
)
(83,132
)
Benefit for income taxes
(555,885
)
(49,054
)
(593,244
)
(44,752
)
Net income (loss)$
592,769
$
101,648
$
573,020
$
(38,380
)
Earnings (Loss) per ordinary share - basic$
3.16
$
0.60
$
3.13
$
(0.23
)
Weighted average ordinary shares outstanding - basic
187,421,561
168,126,924
182,930,109
166,155,405
Earnings (Loss) per ordinary share - diluted
$
2.84
$
0.58
$
2.90
$
(0.23
)
Weighted average ordinary shares outstanding - diluted
210,953,579
174,230,711
205,224,221
166,155,405
Horizon Therapeutics plc
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands, except share data)
As of December 31,2019 December 31,2018 ASSETS CURRENT ASSETS: Cash and cash equivalents$
1,076,287
$
958,712
Restricted cash
3,752
3,405
Accounts receivable, net
408,685
464,730
Inventories, net
53,802
50,751
Prepaid expenses and other current assets
143,577
68,218
Total current assets
1,686,103
1,545,816
Property and equipment, net
30,159
20,101
Developed technology, net
1,698,808
1,945,639
Other intangible assets, net
3,820
4,630
Goodwill
413,669
413,669
Deferred tax assets, net
555,165
3,148
Other assets
48,310
8,959
Total assets
$
4,436,034
$
3,941,962
LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable
$
21,514
$
30,284
Accrued expenses
235,234
215,739
Accrued trade discounts and rebates
466,421
457,763
Deferred revenues, current portion
-
4,901
Total current liabilities
723,169
708,687
LONG-TERM LIABILITIES: Exchangeable notes, net
351,533
332,199
Long-term debt, net of current
1,001,308
1,564,485
Deferred tax liabilities, net
94,247
107,768
Other long-term liabilities
80,328
38,717
Total long-term liabilities
1,527,416
2,043,169
COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY: Ordinary shares, $0.0001 nominal value; 600,000,000 and 300,000,000 shares authorized at December 31, 2019 and December 31, 2018, respectively 188,402,040 and 169,244,520 shares issued at December 31, 2019 and December 31, 2018, respectively, and 188,017,674 and 168,860,154 shares outstanding at December 31, 2019 and December 31, 2018, respectively
19
17
Treasury stock, 384,366 ordinary shares at December 31, 2019 and December 31, 2018
(4,585
)
(4,585
)
Additional paid-in capital
2,797,602
2,374,966
Accumulated other comprehensive loss
(1,905
)
(1,523
)
Accumulated deficit
(605,682
)
(1,178,769
)
Total shareholders' equity
2,185,449
1,190,106
Total liabilities and shareholders' equity
$
4,436,034
$
3,941,962
Horizon Therapeutics plc
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
Three Months Ended December 31,
Twelve Months Ended December 31,
2019
2018
2019
2018
(Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss)$
592,769
$
101,648
$
573,020
$
(38,380
)
Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization expense
59,821
62,624
237,157
249,759
Equity-settled share-based compensation
24,149
27,878
91,215
114,860
Impairment of long-lived assets
-
10,847
-
46,096
Loss on debt extinguishment
-
-
58,835
-
Amortization of debt discount and deferred financing costs
5,533
5,872
22,602
22,751
(Gain)/Loss on sale of assets
-
(30,682
)
10,963
(42,985
)
Deferred income taxes
(573,840
)
(66,136
)
(565,537
)
(64,491
)
Foreign exchange and other adjustments
2
92
574
332
Changes in operating assets and liabilities: Accounts receivable
(11,996
)
(73,757
)
56,166
(59,697
)
Inventories
4,737
2,378
(3,268
)
10,280
Prepaid expenses and other current assets
(708
)
10,213
(72,763
)
(25,313
)
Accounts payable
(5,385
)
(34,712
)
(8,723
)
(4,593
)
Accrued trade discounts and rebates
61,832
98,136
8,591
(44,028
)
Accrued expenses
30,379
5,202
19,788
40,787
Deferred revenues
-
(1,858
)
(4,901
)
(395
)
Other non-current assets and liabilities
4,087
(9,038
)
2,613
(10,440
)
Net cash provided by operating activities
191,380
108,707
426,332
194,543
CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment
(6,532
)
(3,890
)
(17,857
)
(4,771
)
Change in escrow deposit for property purchase
(6,000
)
-
(6,000
)
-
Proceeds from sale of assets
-
35,000
6,000
44,424
Payment related to license agreement
-
-
-
(12,000
)
Net cash (used in) provided by investing activities
(12,532
)
31,110
(17,857
)
27,653
CASH FLOWS FROM FINANCING ACTIVITIES: Net proceeds from issuance of senior notes
-
-
590,057
-
Repayment of senior notes
-
-
(814,420
)
-
Net proceeds from the issuance of ordinary shares
-
-
326,793
-
Repayment of term loans
(418,026
)
(818,026
)
(1,336,207
)
(845,749
)
Net proceeds from term loans
418,026
818,026
935,404
818,026
Contingent consideration proceeds from divestiture
-
-
3,297
-
Proceeds from the issuance of ordinary shares in conjunction with ESPP program
5,849
3,900
11,317
8,610
Proceeds from the issuance of ordinary shares in connection with stock option exercises
8,646
7,219
24,882
16,972
Payment of employee withholding taxes relating to share-based awards
(2,109
)
(1,573
)
(31,569
)
(14,455
)
Net cash provided by (used in) financing activities
12,386
9,546
(290,446
)
(16,596
)
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash
1,095
(692
)
(107
)
(1,380
)
Net increase in cash, cash equivalents and restricted cash
192,329
148,671
117,922
204,220
Cash, cash equivalents and restricted cash, beginning of the period(1)
887,710
813,446
962,117
757,897
Cash, cash equivalents and restricted cash, end of the period(1)
$
1,080,039
$
962,117
$
1,080,039
$
962,117
(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 December 31,
Twelve Months Ended December 31,
2019
2018
2019
2018
GAAP net income (loss)$
592,769
$
101,648
$
573,020
$
(38,380
)
Non-GAAP adjustments: Acquisition/divestiture-related costs
942
(1,710
)
3,556
4,396
Restructuring and realignment costs
204
462
237
15,350
Amortization and step-up: Intangible amortization expense
57,662
61,125
230,424
243,634
Inventory step-up expense
-
99
89
17,312
Amortization of debt discount and deferred financing costs
5,533
5,872
22,602
22,752
Impairment of long-lived assets
-
10,847
-
46,096
(Gain)/Loss on sale of assets
-
(30,682
)
10,963
(42,985
)
Share-based compensation
24,149
27,878
91,215
114,860
Depreciation
2,159
1,499
6,733
6,126
Litigation settlements
-
-
1,000
5,750
Upfront, progress and milestone payments related to license and collaboration agreements
-
-
9,073
(10
)
Fees related to refinancing activities
855
854
2,292
937
Loss on debt extinguishment
-
-
58,835
-
Drug substance harmonization costs
63
1,275
457
2,855
Charges relating to discontinuation of Friedreich's ataxia program
(145
)
(2,940
)
1,076
(1,464
)
Total of pre-tax non-GAAP adjustments
91,422
74,579
438,552
435,609
Income tax effect of pre-tax non-GAAP adjustments
(14,277
)
(57,961
)
(66,568
)
(45,186
)
Other non-GAAP income tax adjustments
(553,334
)
(1,499
)
(554,786
)
(37,392
)
Total of non-GAAP adjustments
(476,189
)
15,119
(182,802
)
353,031
Non-GAAP Net Income
$
116,580
$
116,767
$
390,218
$
314,651
Non-GAAP Earnings Per Share: Weighted average ordinary shares - Basic
187,421,561
168,126,924
182,930,109
166,155,405
Non-GAAP Earnings Per Share - Basic: GAAP earnings (loss) per share - Basic
$
3.16
$
0.60
$
3.13
$
(0.23
)
Non-GAAP adjustments
(2.54
)
0.09
(1.00
)
2.12
Non-GAAP earnings per share - Basic
$
0.62
$
0.69
$
2.13
$
1.89
Non-GAAP Net Income
$
116,580
$
116,767
$
390,218
$
314,651
Effect of assumed conversion of Exchangeable Senior Notes, net of tax
1,875
-
7,500
-
Numerator - non-GAAP Net Income
$
118,455
$
116,767
$
397,718
$
314,651
Weighted average ordinary shares - Diluted Weighted average ordinary shares - Basic
187,421,561
168,126,924
182,930,109
166,155,405
Ordinary share equivalents
23,532,018
6,103,787
22,294,112
5,393,514
Denominator - Weighted average ordinary shares - Diluted
210,953,579
174,230,711
205,224,221
171,548,919
Non-GAAP Earnings Per Share - Diluted GAAP earnings (loss) per share - Diluted
$
2.84
$
0.58
$
2.90
$
(0.23
)
Non-GAAP adjustments
(2.28
)
0.09
(0.96
)
2.12
Diluted earnings per share effect of ordinary share equivalents
-
-
-
(0.06
)
Non-GAAP earnings per share - Diluted$
0.56
$
0.67
$
1.94
$
1.83
Horizon Therapeutics plc
GAAP to Non-GAAP Reconciliations
EBITDA (Unaudited)
(in thousands)
Three Months Ended December 31,
Twelve Months Ended December 31,
2019
2018
2019
2018
GAAP net income (loss)$
592,769
$
101,648
$
573,020
$
(38,380
)
Depreciation
2,159
1,499
6,733
6,126
Amortization and step-up: Intangible amortization expense
57,662
61,125
230,424
243,634
Amortization of deferred revenue
-
-
-
-
Inventory step-up expense
-
99
89
17,312
Interest expense, net (including amortization of debt discount and deferred financing costs)
17,098
29,771
87,089
121,692
Benefit for income taxes
(555,885
)
(49,054
)
(593,244
)
(44,752
)
EBITDA$
113,803
$
145,088
$
304,111
$
305,632
Other non-GAAP adjustments: Acquisition/divestiture-related costs
942
(1,710
)
3,556
4,396
Restructuring and realignment costs
204
462
237
15,350
Impairment of long-lived assets
-
10,847
-
46,096
(Gain)/Loss on sale of assets
-
(30,682
)
10,963
(42,985
)
Share-based compensation
24,149
27,878
91,215
114,860
Litigation settlements
-
-
1,000
5,750
Upfront, progress and milestone payments related to license and collaboration agreements
-
-
9,073
(10
)
Fees related to refinancing activities
855
854
2,292
937
Loss on debt extinguishment
-
-
58,835
-
Drug substance harmonization costs
63
1,275
457
2,855
Charges relating to discontinuation of Friedreich's ataxia program
(145
)
(2,940
)
1,076
(1,464
)
Total of other non-GAAP adjustments
26,068
5,984
178,704
145,785
Adjusted EBITDA
$
139,871
$
151,072
$
482,815
$
451,417
Horizon Therapeutics plc
GAAP to Non-GAAP Reconciliations
Operating Income (Unaudited)
(in thousands)
Three Months Ended December 31,
Twelve Months Ended December 31,
2019
2018
2019
2018
GAAP operating income$
54,675
$
82,468
$
126,611
$
37,911
Non-GAAP adjustments: Acquisition/divestiture-related costs
(200
)
(1,972
)
1,032
3,989
Restructuring and realignment costs
204
462
237
15,350
Amortization and step-up: Intangible amortization expense
57,662
61,125
230,424
243,634
Inventory step-up expense
-
99
89
17,312
Impairment of long-lived assets
-
10,847
-
46,096
(Gain)/Loss on sale of assets
-
(30,682
)
10,963
(42,985
)
Share-based compensation
24,149
27,878
91,215
114,860
Depreciation
2,159
1,499
6,733
6,126
Litigation settlements
-
-
1,000
5,750
Upfront, progress and milestone payments related to license and collaboration agreements
-
-
9,073
90
Fees related to refinancing activities
855
854
2,292
937
Drug substance harmonization costs
63
1,275
457
2,855
Charges relating to discontinuation of Friedreich's ataxia program
(145
)
(2,940
)
1,076
(1,464
)
Total of non-GAAP adjustments
84,747
68,445
354,591
412,550
Non-GAAP operating income
$
139,422
$
150,913
$
481,202
$
450,461
Orphan and Rheumatology segment operating income
95,388
84,761
306,333
290,014
Inflammation segment operating income
44,034
66,152
174,869
160,447
Total segment operating income
$
139,422
$
150,913
$
481,202
$
450,461
Foreign exchange (loss)/gain
58
(111
)
33
(192
)
Other income, net
391
270
1,580
1,148
Adjusted EBITDA
$
139,871
$
151,072
$
482,815
$
451,417
Horizon Therapeutics plc
GAAP to Non-GAAP Reconciliations
Gross Profit and Operating Cash Flow (Unaudited)
(in thousands, except percentages)
Three Months Ended December 31,
Twelve Months Ended December 31,
2019
2018
2019
2018
Non-GAAP Gross Profit: GAAP gross profit$
268,624
$
256,944
$
937,854
$
816,269
Non-GAAP gross profit adjustments: Acquisition/divestiture-related costs
-
(728
)
1,115
(900
)
Intangible amortization expense
57,458
60,921
229,614
242,823
Inventory step-up expense
-
99
89
17,312
Share-based compensation
927
932
3,818
3,699
Depreciation
155
171
630
700
Drug substance harmonization costs
63
1,275
457
2,855
Charges relating to discontinuation of Friedreich's ataxia program
(145
)
(2,940
)
1,076
(1,551
)
Total of Non-GAAP adjustments
58,458
59,730
236,799
264,938
Non-GAAP gross profit
$
327,082
$
316,674
$
1,174,653
$
1,081,207
GAAP gross profit %
73.9
%
72.3
%
72.1
%
67.6
%
Non-GAAP gross profit %
90.0
%
89.1
%
90.4
%
89.5
%
GAAP cash provided by operating activities$
191,380
$
108,707
$
426,332
$
194,543
Cash payments for acquisition/divestiture-related costs
-
1,065
583
8,918
Cash payments for restructuring and realignment costs
200
2,767
3,464
11,801
Cash payments for litigation settlements
-
-
1,000
5,750
Cash payments for upfront, progress and milestone payments related to license and collaboration agreement
-
-
9,073
175
Cash payments drug substance harmonization costs
67
1,718
1,052
7,661
Cash payments for discontinuation of Friedreich's ataxia program
-
-
2,589
3,399
Cash payments relating to refinancing activities
369
883
2,287
941
Non-GAAP operating cash flow
$
192,016
$
115,140
$
446,380
$
233,188
Horizon Therapeutics plc
Net Debt Reconciliation (Unaudited)
(in thousands)
As of December 31,2019 December 31,2018 Long-term debt, net of current$
1,001,308
$
1,564,485
Exchangeable notes, net
351,533
332,199
Total Debt
1,352,841
1,896,684
Debt discount
59,922
87,038
Deferred financing fees
5,263
9,304
Total Principal Amount of Debt
1,418,026
1,993,026
Less: cash and cash equivalents
1,076,287
958,712
Net Debt$
341,739
$
1,034,314
Horizon Therapeutics plc
GAAP to Non-GAAP Tax Rate Reconciliation (Unaudited)
(in millions, except percentages and per share amounts)
Q4 2019Pre-tax Net (Loss) Income
Income Tax (Benefit) Expense
Tax Rate
Net Income (Loss)
Diluted Earnings (Loss) Per Share
As reported - GAAP$
36.9
$
(555.9
)
(1507.0
)%
$
592.8
$
2.84
Non-GAAP adjustments
91.4
567.6
(476.2
)
Non-GAAP$
128.3
$
11.7
9.1
%
$
116.6
$
0.56
Q4 2018
Pre-tax Net (Loss) Income
Income Tax (Benefit) Expense
Tax Rate
Net Income (Loss)
Diluted Earnings (Loss) Per Share
As reported - GAAP$
52.6
$
(49.1
)
(93.3
)%
$
101.7
$
0.58
Non-GAAP adjustments
74.6
59.5
15.1
Non-GAAP
$
127.2
$
10.4
8.2
%
$
116.8
$
0.67
FY 2019
Pre-tax Net (Loss) Income
Income Tax (Benefit) Expense
Tax Rate
Net Income (Loss)
Diluted Earnings (Loss) Per Share
As reported - GAAP$
(20.2
)
$
(593.2
)
2933.0
%
$
573.0
$
2.90
Non-GAAP adjustments
438.6
621.4
(182.8
)
Non-GAAP$
418.3
$
28.2
6.7
%
$
390.2
$
1.94
FY 2018
Pre-tax Net (Loss) Income
Income Tax (Benefit) Expense
Tax Rate
Net Income (Loss)
Diluted Earnings (Loss) Per Share
As reported - GAAP$
(83.1
)
$
(44.8
)
53.8
%
$
(38.3
)
$
(0.23
)
Non-GAAP adjustments
435.6
82.6
353.0
Non-GAAP
$
352.5
$
37.8
10.7
%
$
314.7
$
1.83
Horizon Therapeutics plc
Certain Income Statement Line Items - Non-GAAP Adjusted
For the Three Months Ended December 31, 2019
(Unaudited)
COGS Research &Development Selling, General& Administrative Loss on DebtExtinguishment InterestExpense OtherExpense Income TaxBenefit(Expense) GAAP as reported$
(94,921
)
$
(28,558
)
$
(185,391
)
$
-
$
(17,098
)
$
(751
)
$
555,885
Non-GAAP Adjustments (in thousands): Acquisition/divestiture-related costs(1)
-
(184
)
(19
)
-
-
1,145
-
Restructuring and realignment costs(2)
-
-
204
-
-
-
-
Amortization and step-up: Intangible amortization expense(3)
57,458
-
204
-
-
-
-
Amortization of debt discount and deferred financing costs(4)
-
-
-
-
5,533
-
-
Share-based compensation(5)
927
2,186
21,036
-
-
-
-
Depreciation(6)
155
13
1,991
-
-
-
-
Fees related to refinancing activities (7)
-
-
855
-
-
-
-
Drug substance harmonization costs(8)
63
-
-
-
-
-
-
Charges relating to discontinuation of Friedreich's ataxia program(9)
(145
)
-
-
-
-
-
-
Income tax effect on pre-tax non-GAAP adjustments(10)
-
-
-
-
-
-
(14,277
)
Other non-GAAP income tax adjustments(11)
-
-
-
-
-
-
(553,334
)
Total of non-GAAP adjustments
58,458
2,015
24,271
-
5,533
1,145
(567,611
)
Non-GAAP$
(36,463
)
$
(26,543
)
$
(161,120
)
$
-
$
(11,565
)
$
394
$
(11,726
)
Horizon Therapeutics plc Certain Income Statement Line Items - Non-GAAP Adjusted For the Three Months Ended December 31, 2018 (Unaudited) COGSResearch &Development Selling, General& Administrative Impairment ofLong-Lived Assets Loss/(Gain) onSale of Assets InterestExpense OtherIncome, net Income TaxBenefit(Expense) GAAP as reported
$
(98,599
)
$
(19,683
)
$
(174,628
)
$
(10,847
)
$
30,682
$
(29,771
)
$
8
$
49,054
Non-GAAP Adjustments (in thousands): Acquisition/divestiture-related costs(1)
(728
)
(1,206
)
(38
)
-
-
-
262
-
Restructuring and realignment costs(2)
-
-
462
-
-
-
-
-
Amortization and step-up: Intangible amortization expense(3)
60,921
-
204
-
-
-
-
-
Inventory step-up expense(12)
99
-
-
-
-
-
-
-
Amortization of debt discount and deferred financing costs(4)
-
-
-
-
-
5,872
-
Impairment of long lived assets(13)
-
-
-
10,847
-
-
-
-
(Gain)/Loss on sale of assets(14)
-
-
-
-
(30,682
)
-
-
-
Share-based compensation(5)
932
2,182
24,764
-
-
-
-
-
Depreciation(6)
171
-
1,328
-
-
-
-
-
Fees related to refinancing activities (7)
-
-
854
-
-
-
-
-
Drug substance harmonization costs(8)
1,275
-
-
-
-
-
-
-
Charges relating to discontinuation of Friedreich's ataxia program(9)
(2,940
)
-
-
-
-
-
-
-
Income tax effect on pre-tax non-GAAP adjustments(10)
-
-
-
-
-
-
-
(57,961
)
Other non-GAAP income tax adjustments(11)
-
-
-
-
-
-
-
(1,499
)
Total of non-GAAP adjustments
59,730
976
27,574
10,847
(30,682
)
5,872
262
(59,460
)
Non-GAAP$
(38,869
)
$
(18,707
)
$
(147,054
)
-
-
$
(23,899
)
$
270
$
(10,406
)
Horizon Therapeutics plc
Certain Income Statement Line Items - Non-GAAP Adjusted
For the Twelve Months Ended December 31, 2019
(Unaudited)
COGS Research &Development Selling, General& Administrative Loss/(Gain) onSale of Assets InterestExpense OtherExpense Loss on DebtExtinguishment Income TaxBenefit(Expense) GAAP as reported$
(362,175
)
$
(103,169
)
$
(697,111
)
$
(10,963
)
$
(87,089
)
$
(944
)
$
(58,835
)
$
593,244
Non-GAAP Adjustments (in thousands): Acquisition/divestiture-related costs(1)
1,115
(184
)
101
-
-
2,524
-
-
Restructuring and realignment costs(2)
-
-
237
-
-
-
-
-
Amortization and step-up: Intangible amortization expense(3)
229,614
-
810
-
-
-
-
-
Inventory step-up expense(12)
89
-
-
-
-
-
-
-
Amortization of debt discount and deferred financing costs(4)
-
-
-
-
22,602
-
-
-
(Gain)/Loss on sale of assets(14)
-
-
-
10,963
-
-
-
-
Share-based compensation(5)
3,818
9,117
78,280
-
-
-
-
-
Depreciation(6)
630
13
6,090
-
-
-
-
-
Litigation settlements(15)
-
-
1,000
-
-
-
-
-
Upfront, progress and milestone payments related to license and collaboration agreements(16)
-
9,073
-
-
-
-
-
-
Fees related to refinancing activities (7)
-
-
2,292
-
-
-
-
-
Loss on debt extinguishment(17)
-
-
-
-
-
-
58,835
-
Drug substance harmonization costs(8)
457
-
-
-
-
-
-
-
Charges relating to discontinuation of Friedreich's ataxia program(9)
1,076
-
-
-
-
-
-
-
Income tax effect on pre-tax non-GAAP adjustments(10)
-
-
-
-
-
-
-
(66,568
)
Other non-GAAP income tax adjustments(11)
-
-
-
-
-
-
-
(554,786
)
Total of non-GAAP adjustments
236,799
18,019
88,810
10,963
22,602
2,524
58,835
(621,354
)
Non-GAAP$
(125,376
)
$
(85,150
)
$
(608,301
)
$
-
$
(64,487
)
$
1,580
$
-
$
(28,110
)
Horizon Therapeutics plc Certain Income Statement Line Items - Non-GAAP Adjusted For the Twelve Months Ended December 31, 2018 (Unaudited) COGS Research &Development Selling, General& Administrative Impairment ofLong-Lived Assets Loss/(Gain) onSale of Assets InterestExpense OtherIncome Income TaxBenefit(Expense) GAAP as reported$
(391,301
)
$
(82,762
)
$
(692,485
)
$
(46,096
)
$
42,985
$
(121,692
)
841
$
44,752
Non-GAAP Adjustments (in thousands): Acquisition/divestiture-related costs(1)
(900
)
459
4,430
-
-
-
407
-
Restructuring and realignment costs(2)
15,350
-
-
-
-
-
Amortization and step-up: Intangible amortization expense(3)
242,823
-
811
-
-
-
-
-
Inventory step-up expense(12)
17,312
-
-
-
-
-
-
-
Amortization of debt discount and deferred financing costs(4)
-
-
-
-
-
22,752
-
Impairment of long lived assets(13)
-
-
-
46,096
-
-
-
-
(Gain)/Loss on sale of assets(14)
-
-
-
-
(42,985
)
-
-
-
Share-based compensation(5)
3,699
8,880
102,281
-
-
-
-
-
Depreciation(6)
700
-
5,426
-
-
-
-
-
Litigation settlements(15)
-
-
5,750
-
-
-
-
-
Upfront, progress and milestone payments related to license and collaboration agreements(16)
-
90
-
-
-
-
(100
)
-
Fees related to refinancing activities (7)
-
-
937
-
-
-
-
-
Drug substance harmonization costs(8)
2,855
-
-
-
-
-
-
-
Charges relating to discontinuation of Friedreich's ataxia program(9)
(1,551
)
87
-
-
-
-
-
-
Income tax effect on pre-tax non-GAAP adjustments(10)
-
-
-
-
-
-
-
(45,186
)
Other non-GAAP income tax adjustments(11)
-
-
-
-
-
-
-
(37,392
)
Total of non-GAAP adjustments
264,938
9,516
134,985
46,096
(42,985
)
22,752
307
(82,578
)
Non-GAAP$
(126,363
)
$
(73,246
)
$
(557,500
)
$
-
$
-
$
(98,940
)
$
1,148
$
(37,826
)
NOTES FOR CERTAIN INCOME STATEMENT LINE ITEMS - NON-GAAP
View source version on businesswire.com: https://www.businesswire.com/news/home/20200226005436/en/
Investors: Tina Ventura Senior Vice President, Investor Relations investor-relations@horizontherapeutics.com
Ruth Venning Executive Director, Investor Relations investor-relations@horizontherapeutics.com
U.S. Media: Geoff Curtis Executive Vice President, Corporate Affairs & Chief Communications Officer media@horizontherapeutics.com
Ireland Media: Ray Gordon Gordon MRM ray@gordonmrm.ie
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