Attached files
| file | filename |
|---|---|
| 8-K - 8-K - MEDICINES CO /DE | a16-3224_18k.htm |
| EX-2.1 - EX-2.1 - MEDICINES CO /DE | a16-3224_1ex2d1.htm |
| EX-99.1 - EX-99.1 - MEDICINES CO /DE | a16-3224_1ex99d1.htm |
Exhibit 99.2
UNAUDITED PRO FORMA FINANCIAL INFORMATION
On February 1, 2016, the Medicines Company (the “Company”) completed the previously announced sale of its hemostasis business, consisting of the Company’s PreveLeak™, Raplixa™ and Recothrom® products (the “Hemostasis Business”), to wholly owned subsidiaries of Mallinckrodt plc (collectively, “Mallinckrodt”) pursuant to the Purchase and Sale Agreement dated December 18, 2015 (the “Purchase and Sale Agreement”) between the Company and Mallinckrodt. At the completion of the sale, the Company received $174.1 million in cash from Mallinckrodt, and may receive up to an additional $235.0 million in the aggregate following the achievement of certain specified calendar year net sales milestones with respect to net sales of PreveLeak™ and Raplixa™.
The unaudited pro forma consolidated balance sheet as of September 30, 2015 has been prepared to give effect to the sale of the Hemostasis Business as if it occurred on September 30, 2015. The unaudited pro forma consolidated statements of operations for the nine months ended September 30, 2015 and the years ended December 31, 2014, 2013 and 2012 have been prepared to give effect to the sale of the Hemostasis Business as if it occurred on January 1, 2012. The Hemostasis Business began with our license of Recothrom in the first quarter of 2013, therefore there are no pro forma adjustments for the year ended December 31, 2012.
The unaudited pro forma financial information was prepared utilizing our historical financial data derived from the interim consolidated financial statements included in our Quarterly Report on Form 10-Q filed with the SEC on November 9, 2015 and from the audited consolidated financial statements for the year ended December 31, 2014 included in our Annual Report on Form 10-K filed with the SEC on March 2, 2015. The pro forma adjustments are described in the notes to the unaudited pro forma information and are based upon available information and assumptions that we believe are reasonable.
The unaudited pro forma financial information included herein is for informational purposes only and is not necessarily indicative of what our financial performance and financial position would have been had the transaction been completed on the dates assumed nor is such unaudited pro forma financial information necessarily indicative of the results to be expected in any future period. Actual results may differ significantly from those reflected herein the unaudited pro forma financial statements for various reasons, including but not limited to, the differences between the assumptions used to prepare the unaudited pro forma consolidated financial statements and actual results.
THE MEDICINES COMPANY
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 2015
(in thousands)
|
|
|
The |
|
Sale of |
|
Pro Forma |
| |||
|
ASSETS |
|
|
|
|
|
|
| |||
|
Current assets: |
|
|
|
|
|
|
| |||
|
Cash and cash equivalents |
|
$ |
508,808 |
|
$ |
174,068 |
(a) |
$ |
682,876 |
|
|
Accounts receivable, net |
|
39,715 |
|
— |
|
39,715 |
| |||
|
Inventory, net |
|
114,265 |
|
(57,956 |
) (a) |
56,309 |
| |||
|
Prepaid expenses and other current assets |
|
24,501 |
|
(1,235 |
) (a) |
23,266 |
| |||
|
Total current assets |
|
687,289 |
|
114,877 |
|
802,166 |
| |||
|
Fixed assets, net |
|
37,946 |
|
(2,134 |
) (a) |
35,812 |
| |||
|
Intangible assets, net |
|
1,020,433 |
|
(377,946 |
) (a) |
642,487 |
| |||
|
Goodwill |
|
313,165 |
|
(24,247 |
) (a) |
288,918 |
| |||
|
Contingent asset from sale of Hemostasis business |
|
— |
|
78,000 |
(a) (b) |
78,000 |
| |||
|
Restricted cash |
|
1,442 |
|
— |
|
1,442 |
| |||
|
Other assets |
|
12,816 |
|
— |
|
12,816 |
| |||
|
Total assets |
|
$ |
2,073,091 |
|
$ |
(211,450 |
) |
$ |
1,861,641 |
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
| |||
|
Current liabilities: |
|
|
|
|
|
|
| |||
|
Accounts payable |
|
$ |
17,649 |
|
$ |
— |
|
$ |
17,649 |
|
|
Accrued expenses |
|
152,301 |
|
7,202 |
(a) |
159,503 |
| |||
|
Current portion of contingent purchase price |
|
68,400 |
|
— |
|
68,400 |
| |||
|
Convertible senior notes |
|
255,047 |
|
— |
|
255,047 |
| |||
|
Deferred revenue |
|
36,651 |
|
— |
|
36,651 |
| |||
|
Total current liabilities |
|
530,048 |
|
7,202 |
|
537,250 |
| |||
|
Contingent purchase price |
|
135,907 |
|
(28,100 |
) (a) |
107,807 |
| |||
|
Deferred tax liabilities |
|
138,807 |
|
(47,433 |
) (a) |
91,374 |
| |||
|
Convertible senior notes |
|
318,464 |
|
— |
|
318,464 |
| |||
|
Other liabilities |
|
7,600 |
|
— |
|
7,600 |
| |||
|
Total liabilities |
|
1,130,826 |
|
(68,331 |
) |
1,062,495 |
| |||
|
Equity component of currently redeemable convertible senior notes |
|
19,953 |
|
— |
|
19,953 |
| |||
|
Stockholders’ equity: |
|
|
|
|
|
|
| |||
|
Preferred stock, $1.00 par value per share, 5,000,000 shares authorized; no shares issued and outstanding |
|
— |
|
— |
|
— |
| |||
|
Common stock, $0.001 par value per share, 187,500,000 shares authorized; 71,565,394 issued and 69,372,412 outstanding at September 30, 2015 |
|
72 |
|
— |
|
72 |
| |||
|
Additional paid-in capital |
|
1,193,113 |
|
— |
|
1,193,113 |
| |||
|
Treasury stock, at cost; 2,192,982 shares at September 30, 2015 |
|
(50,000 |
) |
— |
|
(50,000 |
) | |||
|
Accumulated deficit |
|
(223,801 |
) |
(132,349 |
) (a) |
(356,150 |
) | |||
|
Accumulated other comprehensive income (loss) |
|
3,387 |
|
(10,770 |
) (a) (c) |
(7,383 |
) | |||
|
Total The Medicines Company stockholders’ equity |
|
922,771 |
|
(143,119 |
) |
779,652 |
| |||
|
Non-controlling interest in joint venture |
|
(459 |
) |
— |
|
(459 |
) | |||
|
Total stockholders’ equity |
|
922,312 |
|
(143,119 |
) |
779,193 |
| |||
|
Total liabilities and stockholders’ equity |
|
$ |
2,073,091 |
|
$ |
(211,450 |
) |
$ |
1,861,641 |
|
See accompanying notes to unaudited pro forma financial information.
THE MEDICINES COMPANY
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015
(in thousands, except per share amounts)
|
|
|
The |
|
Sale of |
|
Pro Forma |
| |||
|
Net product revenues |
|
$ |
265,163 |
|
$ |
(47,826 |
) (d) |
$ |
217,337 |
|
|
Royalty revenues |
|
24,503 |
|
— |
(d) |
24,503 |
| |||
|
Total net revenues |
|
289,666 |
|
(47,826 |
) |
241,840 |
| |||
|
Operating expenses: |
|
|
|
|
|
|
| |||
|
Cost of product revenue |
|
157,706 |
|
(63,216 |
) (d) |
94,490 |
| |||
|
Research and development |
|
90,290 |
|
(6,871 |
) (d) |
83,419 |
| |||
|
Selling, general and administrative |
|
259,257 |
|
1,553 |
(d) |
260,810 |
| |||
|
Total operating expenses |
|
507,253 |
|
(68,534 |
) |
438,719 |
| |||
|
Loss from operations |
|
(217,587 |
) |
20,708 |
|
(196,879 |
) | |||
|
Co-promotion and license income |
|
10,011 |
|
— |
|
10,011 |
| |||
|
Gain on remeasurement of equity investment |
|
22,741 |
|
— |
|
22,741 |
| |||
|
Gain on sale of investment |
|
19,773 |
|
— |
|
19,773 |
| |||
|
Loss in equity investment |
|
(144 |
) |
— |
|
(144 |
) | |||
|
Legal settlement |
|
5,000 |
|
— |
|
5,000 |
| |||
|
Interest expense |
|
(27,502 |
) |
— |
|
(27,502 |
) | |||
|
Other income (expense) |
|
66 |
|
538 |
(d) |
604 |
| |||
|
Loss before income taxes |
|
(187,642 |
) |
21,246 |
|
(166,396 |
) | |||
|
Benefit for income taxes |
|
40,968 |
|
(7,649 |
) (d) |
33,319 |
| |||
|
Net loss |
|
(146,674 |
) |
13,597 |
|
(133,077 |
) | |||
|
Net income attributable to non-controlling interest |
|
(16 |
) |
— |
|
(16 |
) | |||
|
Net loss attributable to The Medicines Company |
|
$ |
(146,690 |
) |
$ |
13,597 |
|
$ |
(133,093 |
) |
|
|
|
|
|
|
|
|
| |||
|
Earnings per common share attributable to The Medicines Company: |
|
|
|
|
|
|
| |||
|
Basic |
|
$ |
(2.22 |
) |
|
|
$ |
(2.02 |
) | |
|
Diluted |
|
$ |
(2.22 |
) |
|
|
$ |
(2.02 |
) | |
|
|
|
|
|
|
|
|
| |||
|
Weighted average number of common shares outstanding: |
|
|
|
|
|
|
| |||
|
Basic |
|
66,079 |
|
|
|
66,079 |
| |||
|
Diluted |
|
66,079 |
|
|
|
66,079 |
| |||
See accompanying notes to unaudited pro forma financial information.
THE MEDICINES COMPANY
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2014
(in thousands, except per share amounts)
|
|
|
The |
|
Sale of |
|
Pro Forma |
| |||
|
Net product revenues |
|
$ |
724,408 |
|
$ |
(64,718 |
) (d) |
$ |
659,690 |
|
|
Operating expenses: |
|
|
|
|
|
|
| |||
|
Cost of revenue |
|
287,630 |
|
(54,300 |
) (d) |
233,330 |
| |||
|
Research and development |
|
159,181 |
|
(19,669 |
) (d) |
139,512 |
| |||
|
Selling, general and administrative |
|
342,164 |
|
(27,210 |
) (d) |
314,954 |
| |||
|
Total operating expenses |
|
788,975 |
|
(101,179 |
) |
687,796 |
| |||
|
Loss from operations |
|
(64,567 |
) |
36,461 |
|
(28,106 |
) | |||
|
Settlement |
|
25,736 |
|
— |
|
25,736 |
| |||
|
Co-promotion and profit share income |
|
24,236 |
|
— |
|
24,236 |
| |||
|
Loss in equity investment |
|
(1,711 |
) |
— |
|
(1,711 |
) | |||
|
Interest expense |
|
(15,701 |
) |
— |
|
(15,701 |
) | |||
|
Investment impairment |
|
(7,500 |
) |
— |
|
(7,500 |
) | |||
|
Other income (expense) |
|
322 |
|
596 |
(d) |
918 |
| |||
|
Loss before income taxes |
|
(39,185 |
) |
37,057 |
|
(2,128 |
) | |||
|
Benefit (provision) for income taxes |
|
6,837 |
|
(13,341 |
) (d) |
(6,504 |
) | |||
|
Net loss |
|
(32,348 |
) |
23,716 |
|
(8,632 |
) | |||
|
Net loss attributable to non-controlling interest |
|
138 |
|
— |
|
138 |
| |||
|
Net loss attributable to The Medicines Company |
|
$ |
(32,210 |
) |
$ |
23,716 |
|
$ |
(8,494 |
) |
|
|
|
|
|
|
|
|
| |||
|
Loss per common share attributable to The Medicines Company: |
|
|
|
|
|
|
| |||
|
Basic |
|
$ |
(0.50 |
) |
|
|
$ |
(0.13 |
) | |
|
Diluted |
|
$ |
(0.50 |
) |
|
|
$ |
(0.13 |
) | |
|
|
|
|
|
|
|
|
| |||
|
Weighted average number of common shares outstanding: |
|
|
|
|
|
|
| |||
|
Basic |
|
64,473 |
|
|
|
64,473 |
| |||
|
Diluted |
|
64,473 |
|
|
|
64,473 |
| |||
See accompanying notes to unaudited pro forma financial information.
THE MEDICINES COMPANY
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2013
(in thousands, except per share amounts)
|
|
|
The |
|
Sale of |
|
Pro Forma |
| |||
|
Net product revenues |
|
$ |
687,864 |
|
$ |
(63,256 |
) (d) |
$ |
624,608 |
|
|
Operating expenses: |
|
|
|
|
|
|
| |||
|
Cost of revenue |
|
262,785 |
|
(46,149 |
) (d) |
216,636 |
| |||
|
Research and development |
|
146,930 |
|
(8,670 |
) (d) |
138,260 |
| |||
|
Selling, general and administrative |
|
264,958 |
|
(17,135 |
) (d) |
247,823 |
| |||
|
Total operating expenses |
|
674,673 |
|
(71,954 |
) |
602,719 |
| |||
|
Income (loss) from operations |
|
13,191 |
|
8,698 |
|
21,889 |
| |||
|
Co-promotion and profit share income |
|
17,383 |
|
— |
|
17,383 |
| |||
|
Interest expense |
|
(15,531 |
) |
— |
|
(15,531 |
) | |||
|
Other income |
|
1,577 |
|
(157 |
) (d) |
1,420 |
| |||
|
Income (loss) before income taxes |
|
16,620 |
|
8,541 |
|
25,161 |
| |||
|
Provision (benefit) for income taxes |
|
(1,360 |
) |
(3,075 |
) (d) |
(4,435 |
) | |||
|
Net income (loss) |
|
15,260 |
|
5,466 |
|
20,726 |
| |||
|
Net loss attributable to non-controlling interest |
|
252 |
|
— |
|
252 |
| |||
|
Net income (loss) attributable to The Medicines Company |
|
$ |
15,512 |
|
$ |
5,466 |
|
$ |
20,978 |
|
|
|
|
|
|
|
|
|
| |||
|
Earnings per common share attributable to The Medicines Company: |
|
|
|
|
|
|
| |||
|
Basic |
|
$ |
0.27 |
|
|
|
$ |
0.36 |
| |
|
Diluted |
|
$ |
0.25 |
|
|
|
$ |
0.33 |
| |
|
|
|
|
|
|
|
|
| |||
|
Weighted average number of common shares outstanding: |
|
|
|
|
|
|
| |||
|
Basic |
|
58,096 |
|
|
|
58,096 |
| |||
|
Diluted |
|
62,652 |
|
|
|
62,652 |
| |||
See accompanying notes to unaudited pro forma financial information.
THE MEDICINES COMPANY
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2012
(in thousands, except per share amounts)
|
|
|
The |
|
Sale of |
|
Pro Forma |
| |||
|
Net product revenues |
|
$ |
558,588 |
|
$ |
— |
|
$ |
558,588 |
|
|
Operating expenses: |
|
|
|
|
|
|
| |||
|
Cost of revenue |
|
177,339 |
|
— |
|
177,339 |
| |||
|
Research and development |
|
126,423 |
|
— |
|
126,423 |
| |||
|
Selling, general and administrative |
|
171,753 |
|
— |
|
171,753 |
| |||
|
Total operating expenses |
|
475,515 |
|
— |
|
475,515 |
| |||
|
Income from operations |
|
83,073 |
|
— |
|
83,073 |
| |||
|
Co-promotion and profit share income |
|
10,000 |
|
— |
|
10,000 |
| |||
|
Interest expense |
|
(8,005 |
) |
— |
|
(8,005 |
) | |||
|
Other income |
|
1,140 |
|
— |
|
1,140 |
| |||
|
Income before income taxes |
|
86,208 |
|
— |
|
86,208 |
| |||
|
Provision for income taxes |
|
(35,038 |
) |
— |
|
(35,038 |
) | |||
|
Net income |
|
51,170 |
|
— |
|
51,170 |
| |||
|
Net loss attributable to non-controlling interest |
|
84 |
|
— |
|
84 |
| |||
|
Net income attributable to The Medicines Company |
|
$ |
51,254 |
|
$ |
— |
|
$ |
51,254 |
|
|
|
|
|
|
|
|
|
| |||
|
Earnings per common share attributable to The Medicines Company: |
|
|
|
|
|
|
| |||
|
Basic |
|
$ |
0.96 |
|
|
|
$ |
0.96 |
| |
|
Diluted |
|
$ |
0.93 |
|
|
|
$ |
0.93 |
| |
|
|
|
|
|
|
|
|
| |||
|
Weighted average number of common shares outstanding: |
|
|
|
|
|
|
| |||
|
Basic |
|
53,545 |
|
|
|
53,545 |
| |||
|
Diluted |
|
55,346 |
|
|
|
55,346 |
| |||
See accompanying notes to unaudited pro forma financial information.
THE MEDICINES COMPANY
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
Sale of Hemostasis Business
On February 1, 2016, the Company completed the previously announced sale of the Hemostasis Business to Mallinckrodt pursuant to the Purchase and Sale Agreement. At the completion of the sale, the Company received $174.1 million in cash from Mallinckrodt, and may receive up to an additional $235 million in the aggregate following the achievement of certain specified calendar year net sales milestones with respect to net sales of PreveLeak™ and Raplixa™. The Purchase and Sale Agreement contains customary representations, warranties, covenants and indemnities for a transaction of this nature.
Pro Forma Adjustments
(a) Represents adjustments to reflect the disposition of the assets and liabilities associated with the Hemostasis Business associated with the transaction described above for an estimated $174.1 million (including inventory) in cash and contingent consideration of up to $235 million with an estimated fair value of $78 million. The net assets to be disposed of primarily include developed product rights with a net book value of $377.9 million, inventory of $58.0 million, and goodwill of $24.2 million. The net liabilities to be disposed of primarily consist of deferred tax liabilities of $47.4 million and contingent purchase price liabilities of $28.1 million. The net increase in accumulated deficit of $132.3 represents the estimated after-tax loss on disposal of the Hemostasis Business.
(b) Represents contingent consideration measured at fair value due to the Company from Mallinckrodt upon achievement of certain sales milestones included in the Purchase and Sale Agreement.
(c) Represents currency translation adjustment determined using a foreign exchange rate as of September 30, 2015. Foreign exchange rates are subject to change upon closing of the Purchase and Sale Agreement.
(d) Represents adjustments to eliminate the direct operating results of the Hemostasis Business as if the disposition occurred on January 1, 2012. Adjustments to cost of product revenue, research and development, and selling, general and administrative expenses include amounts that are directly related to the Hemostasis Business and that will be eliminated post-closing of the transaction. Adjustments to the income tax benefit (provision) were based on statutory rates in effect during the periods.