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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 |
-- Third-Quarter 2019 Net Sales of $335.5 Million Increased 3 Percent; Third-Quarter 2019 GAAP Net Income of $18.2 Million; Adjusted EBITDA of $130.4 Million -- -- Record Quarterly Orphan and Rheumatology Segment Net Sales of $250.4 Million, an Increase of 14 Percent; Segment Represents Approximately 75 Percent of Total Company Net Sales; KRYSTEXXA® Third-Quarter 2019 Net Sales of $99.6 Million Increased 42 Percent -- -- Maintaining Full-Year 2019 Net Sales Guidance Range of $1.28 to $1.30 Billion; Raising Midpoint of Full-Year 2019 Adjusted EBITDA Guidance; Range is Now $465 Million to $475 Million; KRYSTEXXA Full-Year 2019 Net Sales Growth Expected to Be Greater Than 25 Percent -- -- Granted U.S. FDA Priority Review of Teprotumumab with March 8, 2020, PDUFA Date -- -- Initiated PROTECT Trial Evaluating KRYSTEXXA to Improve Management of Uncontrolled Gout for Adults with a Kidney Transplant -- -- Presented Phase 3 Teprotumumab Secondary Endpoint Data Demonstrating Significantly Reduced Double Vision and Improved Quality of Life for Active Thyroid Eye Disease (TED) Patients -- -- Cash Position of $884 Million; Net Leverage of 1.1 Times as of Sept. 30, 2019 --
Horizon Therapeutics plc (Nasdaq: HZNP) today announced its third-quarter 2019 financial results and raised the midpoint of its full-year 2019 adjusted EBITDA guidance.
“Our third-quarter performance underscores the strength of our commercial and R&D organizations,” said Timothy Walbert, chairman, president and chief executive officer, Horizon. “We generated record quarterly net sales in our orphan and rheumatology segment – including a record quarter for net sales of KRYSTEXXA, our medicine for uncontrolled gout – and the U.S. FDA also granted Priority Review of our BLA for teprotumumab, our biologic candidate for the treatment of active thyroid eye disease. We made great progress on all fronts during the quarter, including our market education activities related to teprotumumab, and remain excited about the prospect of being able to address the significant unmet need for patients living with active thyroid eye disease.”
Financial Highlights
(in millions except for per share amounts and percentages) Q3 19 Q3 18 % Change YTD 19 YTD 18 % Change Net sales$
335.5
$
325.3
3
$
936.5
$
852.0
10
Net income (loss)
18.2
33.4
(45
)
(19.7
)
(140.0
)
86
Non-GAAP net income
124.1
112.6
10
273.6
197.9
38
Adjusted EBITDA
130.4
149.9
(13
)
342.9
300.3
14
Earnings (Loss) per share - diluted
0.09
0.19
(53
)
(0.11
)
(0.84
)
87
Non-GAAP earnings per share - diluted
0.64
0.65
(2
)
1.44
1.16
24
Third-Quarter and Recent Company Highlights
Research and Development Programs
Orphan Disease Candidate and Program:
Rheumatology Pipeline Candidates and 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. 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 and Rheumatology Segment
(in millions except for percentages) Q3 19 Q3 18 % Change YTD 19 YTD 18 % Change KRYSTEXXA
99.6
70.2
42
231.6
175.6
32
RAVICTI®(1)
60.0
60.4
(1
)
160.3
166.5
(4
)
PROCYSBI®
40.4
41.4
(2
)
121.1
114.7
6
ACTIMMUNE®
27.9
25.8
8
78.9
78.1
1
RAYOS®
19.3
17.2
13
59.1
41.3
43
BUPHENYL®(1)
3.0
4.4
(30
)
8.2
15.3
(47
)
QUINSAIRTM
0.2
0.1
67
0.6
0.3
59
LODOTRA®(1)
-
0.4
NM
-
2.0
NM
Orphan and Rheumatology Net Sales
$
250.4
$
219.9
14
$
659.8
$
593.8
11
Orphan and Rheumatology Segment Operating Income
$
89.8
$
91.5
(2
)
$
211.0
$
205.3
3
(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) Q3 19 Q3 18 % Change YTD 19 YTD 18 % Change PENNSAID 2%
42.1
51.5
(18
)
143.7
125.9
14
DUEXIS®
29.9
34.2
(13
)
89.4
80.6
11
VIMOVO®
13.1
18.6
(30
)
41.8
48.9
(15
)
MIGERGOT®(1)
-
1.1
NM
1.8
2.8
(34
)
Inflammation Net Sales$
85.1
$
105.4
(19
)
$
276.7
$
258.2
7
Inflammation Segment Operating Income
$
39.6
$
58.0
(32
)
$
130.8
$
94.3
39
(1)
In June 2019, the Company divested the rights to MIGERGOT.
Cash Flow Statement and Balance Sheet Highlights
2019 Guidance
The Company continues to expect full-year 2019 net sales to range between $1.28 billion and $1.30 billion. The Company now expects full-year 2019 adjusted EBITDA to range between $465 million and $475 million, versus the previous guidance range of $460 million to $475 million.
Webcast
At 8 a.m. EDT / 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, 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 2019 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 2019 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 2019 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; expected impact of refinancing transactions; expected timing of clinical trials and regulatory submissions and decisions, including related to the BLA for teprotumumab; 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, such as teprotumumab, 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 September 30, Nine Months Ended September 30,
2019
2018
2019
2018
Net sales
$
335,466
$
325,311
$
936,484
$
852,027
Cost of goods sold
89,949
91,077
267,254
292,702
Gross profit
245,517
234,234
669,230
559,325
OPERATING EXPENSES: Research and development
24,572
21,169
74,611
63,079
Selling, general and administrative
172,326
161,585
511,720
517,858
(Gain)/Loss on sale of assets
-
(12,303
)
10,963
(12,303
)
Impairment of long-lived assets
-
1,603
-
35,249
Total operating expenses
196,898
172,054
597,294
603,883
Operating income (loss)
48,619
62,180
71,936
(44,558
)
OTHER EXPENSE, NET: Interest expense, net
(20,428
)
(30,437
)
(69,991
)
(91,921
)
Loss on debt extinguishment
(41,371
)
-
(58,835
)
-
Foreign exchange (loss) gain
(40
)
35
(25
)
(81
)
Other income (expense), net
890
337
(193
)
834
Total other expense, net
(60,949
)
(30,065
)
(129,044
)
(91,168
)
(Loss) Income before (benefit) expense for income taxes
(12,330
)
32,115
(57,108
)
(135,726
)
(Benefit) expense for income taxes
(30,564
)
(1,266
)
(37,359
)
4,301
Net income (loss)
$
18,234
$
33,381
$
(19,749
)
$
(140,027
)
Earnings (Loss) per ordinary share - basic$
0.10
$
0.20
$
(0.11
)
$
(0.84
)
Weighted average ordinary shares outstanding - basic
186,470,141
167,047,104
181,949,838
166,018,603
Earnings (Loss) per ordinary share - diluted
$
0.09
$
0.19
$
(0.11
)
$
(0.84
)
Weighted average ordinary shares outstanding - diluted
194,171,967
172,485,757
181,949,838
166,018,603
Horizon Therapeutics plc Condensed Consolidated Balance Sheets (Unaudited) (in thousands, except share data) As of September 30,2019 December 31,2018 ASSETS CURRENT ASSETS: Cash and cash equivalents
$
883,964
$
958,712
Restricted cash
3,746
3,405
Accounts receivable, net
396,626
464,730
Inventories, net
58,505
50,751
Prepaid expenses and other current assets
135,963
68,218
Total current assets
1,478,804
1,545,816
Property and equipment, net
26,202
20,101
Developed technology, net
1,756,493
1,945,639
Other intangible assets, net
4,024
4,630
Goodwill
413,669
413,669
Deferred tax assets, net
45
3,148
Other assets
42,185
8,959
Total assets
$
3,721,422
$
3,941,962
LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable
$
26,906
$
30,284
Accrued expenses
204,164
215,739
Accrued trade discounts and rebates
404,544
457,763
Deferred revenues, current portion
-
4,901
Total current liabilities
635,614
708,687
LONG-TERM LIABILITIES: Exchangeable notes, net
346,541
332,199
Long-term debt, net
1,000,819
1,564,485
Deferred tax liabilities, net
112,968
107,768
Other long-term liabilities
69,907
38,717
Total long-term liabilities
1,530,235
2,043,169
COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY: Ordinary shares, $0.0001 nominal value; 600,000,000 and 300,000,000 shares authorized at September 30, 2019 and December 31, 2018, respectively; 187,174,795 and 169,244,520 shares issued at September 30, 2019 and December 31, 2018, respectively, and 186,790,429 and 168,860,154 shares outstanding at September 30, 2019 and December 31, 2018, respectively
19
17
Treasury stock, 384,366 ordinary shares at September 30, 2019 and December 31, 2018
(4,585
)
(4,585
)
Additional paid-in capital
2,761,068
2,374,966
Accumulated other comprehensive loss
(2,475
)
(1,523
)
Accumulated deficit
(1,198,454
)
(1,178,769
)
Total shareholders' equity
1,555,573
1,190,106
Total liabilities and shareholders' equity
$
3,721,422
$
3,941,962
Horizon Therapeutics plc Condensed Consolidated Statements of Cash Flows (Unaudited) (in thousands) Three Months Ended September 30, Nine Months Ended September 30,
2019
2018
2019
2018
CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss)
$
18,234
$
33,381
$
(19,749
)
$
(140,027
)
Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization expense
59,319
62,668
177,336
187,135
Equity-settled share-based compensation
18,151
28,428
67,066
86,981
Impairment of long-lived assets
-
1,603
-
35,249
Loss on debt extinguishment
41,371
-
58,835
-
Amortization of debt discount and deferred financing costs
5,447
5,694
17,069
16,879
(Gain)/Loss on sale of assets
-
(12,303
)
10,963
(12,303
)
Deferred income taxes
9,559
3,398
8,302
1,645
Foreign exchange and other adjustments
77
(219
)
572
243
Changes in operating assets and liabilities: Accounts receivable
(1,625
)
12,318
68,162
14,060
Inventories
(7,500
)
(3,647
)
(8,004
)
7,902
Prepaid expenses and other current assets
(54,358
)
(13,788
)
(72,055
)
(35,526
)
Accounts payable
(14,892
)
33,711
(3,338
)
30,119
Accrued trade discounts and rebates
5,910
(90,026
)
(53,241
)
(142,164
)
Accrued expenses
17,481
21,926
(10,591
)
35,581
Deferred revenues
(7,311
)
1,130
(4,901
)
1,462
Other non-current assets and liabilities
(2,347
)
586
(1,474
)
(1,401
)
Net cash provided by operating activities
87,516
84,860
234,952
85,835
CASH FLOWS FROM INVESTING ACTIVITIES: Payment related to license agreement
-
-
-
(12,000
)
Proceeds from sale of assets
-
9,424
6,000
9,424
Purchases of property and equipment
(4,467
)
(120
)
(11,325
)
(881
)
Net cash (used in) provided by investing activities
(4,467
)
9,304
(5,325
)
(3,457
)
CASH FLOWS FROM FINANCING ACTIVITIES: Net proceeds from issuance of senior notes
590,057
-
590,057
-
Repayment of senior notes
(556,138
)
-
(814,420
)
-
Net proceeds from the issuance of ordinary shares
-
-
326,793
-
Repayment of term loans
(100,155
)
-
(918,181
)
(27,723
)
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
(23
)
5,468
4,711
Proceeds from the issuance of ordinary shares in connection with stock option exercises
4,207
6,081
16,236
9,753
Payment of employee withholding taxes relating to share-based awards
(5,086
)
(3,697
)
(29,460
)
(12,882
)
Net cash (used in) provided by financing activities
(63,815
)
2,361
(302,832
)
(26,141
)
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash
(1,260
)
316
(1,202
)
(688
)
Net increase (decrease) in cash, cash equivalents and restricted cash
17,974
96,841
(74,407
)
55,549
Cash, cash equivalents and restricted cash, beginning of the period(1)
869,736
716,605
962,117
757,897
Cash, cash equivalents and restricted cash, end of the period(1)
$
887,710
$
813,446
$
887,710
$
813,446
(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,
2019
2018
2019
2018
GAAP net income (loss)
$
18,234
$
33,381
$
(19,749
)
$
(140,027
)
Non-GAAP adjustments: Acquisition/divestiture-related costs
67
302
2,613
6,179
Restructuring and realignment costs
-
4,582
33
14,815
Amortization and step-up: Intangible amortization expense
57,662
61,144
172,762
182,508
Inventory step-up expense
-
83
90
17,212
Amortization of debt discount and deferred financing costs
5,447
5,694
17,069
16,880
Impairment of long-lived assets
-
1,603
-
35,249
(Gain)/Loss on sale of assets
-
(12,303
)
10,963
(12,303
)
Share-based compensation
18,151
28,428
67,066
86,981
Depreciation
1,658
1,523
4,574
4,627
Litigation settlements
-
1,500
1,000
5,750
Upfront, progress and milestone payments related to license and collaboration agreements
3,073
(100
)
9,073
(10
)
Fees related to refinancing activities
262
40
1,437
82
Loss on debt extinguishment
41,371
-
58,835
-
Drug substance harmonization costs
80
301
394
1,579
Charges relating to discontinuation of Friedreich's ataxia program
-
254
1,221
1,476
Total of pre-tax non-GAAP adjustments
127,771
93,051
347,130
361,025
Income tax effect of pre-tax non-GAAP adjustments
(21,919
)
(13,865
)
(52,291
)
12,774
Other non-GAAP income tax adjustments
-
-
(1,452
)
(35,893
)
Total of non-GAAP adjustments
105,852
79,186
293,387
337,906
Non-GAAP Net Income
$
124,086
$
112,567
$
273,638
$
197,879
Non-GAAP Earnings Per Share: Weighted average ordinary shares - Basic
186,470,141
167,047,104
181,949,838
166,018,603
Non-GAAP Earnings Per Share - Basic: GAAP earnings (loss) per share - Basic
$
0.10
$
0.20
$
(0.11
)
$
(0.84
)
Non-GAAP adjustments
0.57
0.47
1.61
2.03
Non-GAAP earnings per share - Basic
$
0.67
$
0.67
$
1.50
$
1.19
Weighted average ordinary shares - Diluted Weighted average ordinary shares - Basic
186,470,141
167,047,104
181,949,838
166,018,603
Ordinary share equivalents
7,701,826
5,438,653
7,747,931
4,621,407
Weighted average shares - Diluted
194,171,967
172,485,757
189,697,769
170,640,010
Non-GAAP Earnings Per Share - Diluted GAAP earnings (loss) per share - Diluted
$
0.09
$
0.19
$
(0.11
)
$
(0.84
)
Non-GAAP adjustments
0.55
0.46
1.61
2.03
Diluted earnings per share effect of ordinary share equivalents
-
-
(0.06
)
(0.03
)
Non-GAAP earnings per share - Diluted$
0.64
$
0.65
$
1.44
$
1.16
Horizon Therapeutics plc GAAP to Non-GAAP Reconciliations GAAP Net Income to Adjusted EBITDA (Unaudited) (in thousands)
Three Months Ended September 30,
Nine Months Ended September 30,
2019
2018
2019
2018
GAAP net income (loss)
$
18,234
$
33,381
$
(19,749
)
$
(140,027
)
Depreciation
1,658
1,523
4,574
4,627
Amortization and step-up: Intangible amortization expense
57,662
61,144
172,762
182,508
Inventory step-up expense
-
83
90
17,212
Interest expense, net (including amortization of debt discount and deferred financing costs)
20,428
30,437
69,991
91,921
(Benefit) expense for income taxes
(30,564
)
(1,266
)
(37,359
)
4,301
EBITDA
$
67,418
$
125,302
$
190,309
$
160,542
Other non-GAAP adjustments: Acquisition/divestiture-related costs
67
302
2,613
6,179
Restructuring and realignment costs
-
4,582
33
14,815
Impairment of long-lived assets
-
1,603
-
35,249
(Gain)/Loss on sale of assets
-
(12,303
)
10,963
(12,303
)
Share-based compensation
18,151
28,428
67,066
86,981
Litigation settlements
-
1,500
1,000
5,750
Upfront, progress and milestone payments related to license and collaboration agreements
3,073
(100
)
9,073
(10
)
Fees related to refinancing activities
262
40
1,437
82
Loss on debt extinguishment
41,371
-
58,835
-
Drug substance harmonization costs
80
301
394
1,579
Charges relating to discontinuation of Friedreich's ataxia program
-
254
1,221
1,476
Total of other non-GAAP adjustments
63,004
24,607
152,635
139,798
Adjusted EBITDA
$
130,422
$
149,909
$
342,944
$
300,340
Horizon Pharma plc
GAAP to Non-GAAP Reconciliations
EBITDA (Unaudited) - 2018
(in thousands)
Twelve Months Ended December 31,
2018
GAAP net loss
$
(38,380
)
Depreciation
6,126
Amortization and step-up: Intangible amortization expense
243,634
Inventory step-up expense
17,312
Interest expense, net (including amortization ofdebt discount and deferred financing costs)
121,692
Benefit for income taxes
(44,752
)
EBITDA$
305,632
Other non-GAAP adjustments: Acquisition/divestiture-related costs
4,396
Restructuring and realignment costs
15,350
Share-based compensation
114,860
Impairment of long-lived assets
46,096
Litigation settlements
5,750
Upfront, progress and milestone payments related to license and collaboration agreements
(10
)
Fees related to refinancing activities
937
Drug substance harmonization costs
2,855
Charges relating to discontinuation of Friedreich's ataxia program
(1,464
)
Gain on sale of assets
(42,985
)
Total of other non-GAAP adjustments
145,785
Adjusted EBITDA
$
451,417
Horizon Therapeutics plc GAAP to Non-GAAP Reconciliations Operating Income (Unaudited) (in thousands) Three Months Ended September 30, Nine Months Ended September 30,
2019
2018
2019
2018
GAAP operating income (loss)
$
48,619
$
62,180
$
71,936
$
(44,558
)
Non-GAAP adjustments: Acquisition/divestiture-related costs
(44
)
186
1,231
6,035
Restructuring and realignment costs
-
4,582
33
14,815
Amortization and step-up: Intangible amortization expense
57,662
61,144
172,762
182,508
Inventory step-up expense
-
83
90
17,212
Impairment of long-lived assets
-
1,603
-
35,249
(Gain)/Loss on sale of assets
-
(12,303
)
10,963
(12,303
)
Share-based compensation
18,151
28,428
67,066
86,981
Depreciation
1,658
1,523
4,574
4,627
Litigation settlements
-
1,500
1,000
5,750
Upfront, progress and milestone payments related to license and collaboration agreements
3,073
-
9,073
90
Fees related to refinancing activities
262
40
1,437
82
Drug substance harmonization costs
80
301
394
1,579
Charges relating to discontinuation of Friedreich's ataxia program
-
254
1,221
1,476
Total of non-GAAP adjustments
80,842
87,341
269,844
344,101
Non-GAAP operating income
$
129,461
$
149,521
$
341,780
$
299,543
Orphan and Rheumatology segment operating income
89,823
91,537
211,003
205,249
Inflammation segment operating income
39,638
57,984
130,777
94,294
Total segment operating income
$
129,461
$
149,521
$
341,780
$
299,543
Foreign exchange (loss)/gain
(40
)
35
(25
)
(81
)
Other income, net
1,001
353
1,189
878
Adjusted EBITDA
$
130,422
$
149,909
$
342,944
$
300,340
Horizon Therapeutics plc GAAP to Non-GAAP Reconciliations Gross Profit and Operating Cash Flow (Unaudited) (in thousands, except percentages) Three Months EndedSeptember 30, Nine Months EndedSeptember 30,
2019
2018
2019
2018
Non-GAAP Gross Profit: GAAP gross profit
$
245,517
$
234,234
$
669,230
$
559,325
Non-GAAP gross profit adjustments: Acquisition/divestiture-related costs
-
(239
)
1,114
(171
)
Intangible amortization expense
57,458
60,940
172,156
181,902
Inventory step-up expense
-
83
90
17,212
Share-based compensation
901
874
2,891
2,767
Depreciation
158
176
475
529
Drug substance harmonization costs
80
301
394
1,579
Charges relating to discontinuation of Friedreich's ataxia program
-
254
1,221
1,389
Total of Non-GAAP adjustments
58,597
62,389
178,341
205,207
Non-GAAP gross profit
$
304,114
$
296,623
$
847,571
$
764,532
GAAP gross profit %
73.2
%
72.0
%
71.5
%
65.6
%
Non-GAAP gross profit %
90.7
%
91.2
%
90.5
%
89.7
%
GAAP cash provided by operating activities$
87,516
$
84,860
$
234,952
$
85,835
Cash payments for acquisition/divestiture-related costs
88
2,299
583
7,854
Cash payments for restructuring and realignment costs
382
4,357
3,264
9,034
Cash payments for litigation settlements
1,000
4,250
1,000
5,750
Cash payments for upfront, progress and milestone payments related to license and collaboration agreement
7,073
(100
)
9,073
175
Cash payments drug substance harmonization costs
313
(16
)
985
5,943
Cash payments for discontinuation of Friedreich's ataxia program
-
(108
)
2,589
3,399
Cash payments relating to refinancing activities
112
26
1,918
57
Non-GAAP operating cash flow
$
96,484
$
95,568
$
254,364
$
118,047
Horizon Therapeutics plc
Net Debt Reconciliation (Unaudited)
(in thousands)
As of September 30,2019 December 31,2018 September 30,2018 Long-term debt, net of current$
1,000,819
$
1,564,485
$
1,563,239
Exchangeable notes, net
346,541
332,199
327,573
Total Debt
1,347,360
1,896,684
1,890,812
Debt discount
65,234
87,038
92,473
Deferred financing fees
5,432
9,304
9,741
Total Principal Amount of Debt
1,418,026
1,993,026
1,993,026
Less: cash and cash equivalents
883,964
958,712
807,047
Net Debt$
534,062
$
1,034,314
$
1,185,979
Horizon Therapeutics plc
GAAP to Non-GAAP Tax Rate Reconciliation (Unaudited)
(in millions, except percentages and per share amounts)
Q3 2019 Pre-tax Net(Loss) Income Income Tax(Benefit) Expense Tax Rate Net Income(Loss) Diluted Earnings(Loss) Per Share As reported - GAAP$
(12.3
)
$
(30.6
)
247.9
%
$
18.2
$
0.09
Non-GAAP adjustments
127.8
21.9
105.9
Non-GAAP
$
115.5
$
(8.7
)
(7.5
)%
$
124.1
$
0.64
Q3 2018 Pre-tax Net(Loss) Income Income Tax(Benefit) Expense Tax Rate Net Income(Loss) Diluted Earnings(Loss) Per Share As reported - GAAP
$
32.1
$
(1.3
)
(3.9
)%
$
33.4
$
0.19
Non-GAAP adjustments
93.1
13.9
79.2
Non-GAAP
$
125.2
$
12.6
10.1
%
$
112.6
$
0.65
YTD 2019 Pre-tax Net(Loss) Income Income Tax(Benefit) Expense Tax Rate Net Income(Loss) Diluted Earnings(Loss) Per Share 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
YTD 2018 Pre-tax Net(Loss) Income Income Tax(Benefit) Expense Tax Rate Net Income(Loss) Diluted Earnings(Loss) Per Share As reported - GAAP
$
(135.7
)
$
4.3
(3.2
)%
$
(140.0
)
$
(0.84
)
Non-GAAP adjustments
361.0
23.1
337.9
Non-GAAP
$
225.3
$
27.4
12.2
%
$
197.9
$
1.16
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
Expense
(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(3)
57,458
-
204
-
-
-
-
Amortization of debt discount and deferred financing costs(5)
-
-
-
-
5,447
-
-
Share-based compensation(8)
901
1,953
15,297
-
-
-
-
Depreciation(9)
158
-
1,500
-
-
-
-
Upfront, progress and milestone payments related to license and collaboration agreements(11)
-
3,073
-
-
-
-
-
Fees related to refinancing activities (12)
-
-
262
-
-
-
-
Loss on debt extinguishment(13)
-
-
-
41,371
-
-
-
Drug substance harmonization costs(14)
80
-
-
-
-
-
-
Income tax effect on pre-tax non-GAAP adjustments(16)
-
-
-
-
-
-
(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 Three Months Ended September 30, 2018 (Unaudited)
Income Tax
Research &
Selling, General
Impairment of
Loss/(Gain) on
Interest
Other
Benefit
COGS
Development
& Administrative
Long-Lived Assets
Sale of Assets
Expense
Income, net
(Expense)
GAAP as reported$
(91,077
)
$
(21,169
)
$
(161,585
)
$
(1,603
)
$
12,303
$
(30,437
)
$
337
$
1,266
Non-GAAP Adjustments (in thousands): Acquisition/divestiture-related costs(1)
(239
)
-
541
-
-
-
-
-
Restructuring and realignment costs(2)
-
-
4,582
-
-
-
-
-
Amortization and step-up: Intangible amortization expense(3)
60,940
-
204
-
-
-
-
-
Inventory step-up expense(4)
83
-
-
-
-
-
-
-
Amortization of debt discount and deferred financing costs(5)
-
-
-
-
-
5,694
-
Impairment of long lived assets(6)
-
-
-
1,603
-
-
-
-
(Gain)/Loss on sale of assets(7)
-
-
-
-
(12,303
)
-
-
-
Share-based compensation(8)
874
2,049
25,505
-
-
-
-
-
Depreciation(9)
176
-
1,347
-
-
-
-
-
Litigation settlements(10)
-
-
1,500
-
-
-
-
-
Upfront, progress and milestone payments related to license and collaboration agreements(11)
-
-
-
-
-
-
(100
)
-
Fees related to refinancing activities (12)
-
-
40
-
-
-
-
-
Drug substance harmonization costs(14)
301
-
-
-
-
-
-
-
Charges relating to discontinuation of Friedreich's ataxia program(15)
254
-
-
-
-
-
-
-
Income tax effect on pre-tax non-GAAP adjustments(16)
-
-
-
-
-
-
-
(13,865
)
Total of non-GAAP adjustments
62,389
2,049
33,719
1,603
(12,303
)
5,694
(100
)
(13,865
)
Non-GAAP$
(28,688
)
$
(19,120
)
$
(127,866
)
$
-
$
-
$
(24,743
)
$
237
$
(12,599
)
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/(Gain) on
Interest
Other
Loss on Debt
Benefit
COGS
Development
& Administrative
Sale of Assets
Expense
Expense
Extinguishment
(Expense)
GAAP as reported$
(267,254
)
$
(74,611
)
$
(511,720
)
$
(10,963
)
$
(69,991
)
$
(193
)
$
(58,835
)
$
37,359
Non-GAAP Adjustments (in thousands): Acquisition/divestiture-related costs(1)
1,114
-
119
-
-
1,380
-
-
Restructuring and realignment costs(2)
-
-
33
-
-
-
-
-
Amortization and step-up: Intangible amortization expense(3)
172,156
-
606
-
-
-
-
-
Inventory step-up expense(4)
90
-
-
-
-
-
-
-
Amortization of debt discount and deferred financing costs(5)
-
-
-
-
17,069
-
-
-
(Gain)/Loss on sale of assets(7)
-
-
-
10,963
-
-
-
-
Share-based compensation(8)
2,891
6,931
57,244
-
-
-
-
-
Depreciation(9)
475
-
4,099
-
-
-
-
-
Litigation settlements(10)
-
-
1,000
-
-
-
-
-
Upfront, progress and milestone payments related to license and collaboration agreements(11)
-
9,073
-
-
-
-
-
-
Fees related to refinancing activities (12)
-
-
1,437
-
-
-
-
-
Loss on debt extinguishment(13)
-
-
-
-
-
-
58,835
-
Drug substance harmonization costs(14)
394
-
-
-
-
-
-
-
Charges relating to discontinuation of Friedreich's ataxia program(15)
1,221
-
-
-
-
-
-
-
Income tax effect on pre-tax non-GAAP adjustments(16)
-
-
-
-
-
-
-
(52,291
)
Other non-GAAP income tax adjustments(17)
-
-
-
-
-
-
-
(1,452
)
Total of non-GAAP adjustments
178,341
16,004
64,538
10,963
17,069
1,380
58,835
(53,743
)
Non-GAAP$
(88,913
)
$
(58,607
)
$
(447,182
)
$
-
$
(52,922
)
$
1,186
$
-
$
(16,384
)
Horizon Therapeutics plc Certain Income Statement Line Items - Non-GAAP Adjusted For the Nine Months Ended September 30, 2018 (Unaudited)
Income Tax
Research &
Selling, General
Impairment of
Loss/(Gain) on
Interest
Other
Benefit
COGS
Development
& Administrative
Long-Lived Assets
Sale of Assets
Expense
Income
(Expense)
GAAP as reported$
(292,702
)
$
(63,079
)
$
(517,858
)
$
(35,249
)
$
12,303
$
(91,921
)
834
$
(4,301
)
Non-GAAP Adjustments (in thousands): Acquisition/divestiture-related costs(1)
(171
)
(67
)
6,417
-
-
-
-
-
Restructuring and realignment costs(2)
-
1,733
13,082
-
-
-
-
-
Amortization and step-up: Intangible amortization expense(3)
181,902
-
606
-
-
-
-
-
Inventory step-up expense(4)
17,212
-
-
-
-
-
-
-
Amortization of debt discount and deferred financing costs(5)
-
-
-
-
-
16,880
-
Impairment of long lived assets(6)
-
-
-
35,249
-
-
-
-
(Gain)/Loss on sale of assets(7)
-
-
-
-
(12,303
)
-
-
-
Share-based compensation(8)
2,767
6,697
77,517
-
-
-
-
-
Depreciation(9)
529
-
4,098
-
-
-
-
-
Litigation settlements(10)
-
-
5,750
-
-
-
-
-
Upfront, progress and milestone payments related to license and collaboration agreements(11)
-
90
-
-
-
-
(100
)
-
Fees related to refinancing activities (12)
-
-
82
-
-
-
-
-
Drug substance harmonization costs(14)
1,579
-
-
-
-
-
-
-
Charges relating to discontinuation of Friedreich's ataxia program(15)
1,389
87
-
-
-
-
-
-
Income tax effect on pre-tax non-GAAP adjustments(16)
-
-
-
-
-
-
-
12,774
Other non-GAAP income tax adjustments(17)
-
-
-
-
-
-
-
(35,893
)
Total of non-GAAP adjustments
205,207
8,540
107,552
35,249
(12,303
)
16,880
(100
)
(23,119
)
Non-GAAP$
(87,495
)
$
(54,539
)
$
(410,306
)
$
-
$
-
$
(75,041
)
$
734
$
(27,420
)
NOTES FOR CERTAIN INCOME STATEMENT LINE ITEMS - NON-GAAP
View source version on businesswire.com: https://www.businesswire.com/news/home/20191106005491/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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