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8-K - FORM 8-K - HUMAN GENOME SCIENCES INC | c23638e8vk.htm |
Exhibit 99
PRESS RELEASE |
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Media Contacts:
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Investor Contacts: | |
Susannah Budington
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Claudine Prowse, Ph.D. | |
Director, Corporate Public Relations
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Executive Director, Investor Relations | |
301-545-1062
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301-315-1785 | |
Jerry Parrott
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Peter Vozzo | |
Vice President, Corporate Communications
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Senior Director, Investor Relations | |
301-315-2777
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301-251-6003 |
HUMAN GENOME SCIENCES ANNOUNCES THIRD QUARTER 2011 FINANCIAL RESULTS AND KEY DEVELOPMENTS
| BENLYSTA® U.S. gross sales $21.3 million; net sales $18.8 million |
| BENLYSTA launched in Germany, Canada, Austria, Denmark, Finland, Hungary, Norway and
Sweden |
| BENLYSTA receives approval for public fund reimbursement in Spain earlier than expected |
ROCKVILLE, Maryland October 25, 2011 Human Genome Sciences, Inc. (Nasdaq: HGSI) today
announced financial results for the quarter ended September 30, 2011, and provided highlights of
recent key developments.
We are seeing solid progress in the trial and adoption of BENLYSTA treatment for systemic lupus by
rheumatologists in the United States, said H. Thomas Watkins, President and Chief Executive
Officer. The number of key accounts that have begun to order BENLYSTA has increased
substantially. The number of countries in which BENLYSTA is available continues to increase. We
and GSK look forward to making BENLYSTA available around the world.
FINANCIAL RESULTS
HGS reported revenues for the quarter ended September 30, 2011 of $34.0 million, compared with
revenues of $50.8 million for the same period in 2010. Revenues included $18.8 million recognized
from net sales of BENLYSTA and $12.0 million recognized from sales and deliveries of raxibacumab to
the U.S. Strategic National Stockpile. The decrease in revenues reflected $36.1 million in upfront
and milestone payments recognized from the ZALBIN agreement with Novartis in the quarter ended
September 30, 2010.
The Company reported a net loss for the third quarter of 2011 of $88.4 million ($0.45 per share),
compared with a net loss of $40.9 million ($0.22 per share) for the third quarter of 2010. The
increased net loss for the current quarter, compared with the same quarter last year, is primarily
due to the absence of revenue recognized in 2011 from the ZALBIN agreement with Novartis, increased
selling, general and administrative expenses and increased commercial collaboration expenses
related to the commercialization of BENLYSTA, partially offset by higher product revenue and lower
research and development expenses.
For the first nine months of 2011, HGS reported revenues of $85.5 million, compared with revenues
of $136.1 million for the same period of the previous year. Revenues included $26.6 million
recognized from sales of BENLYSTA, $38.9 million recognized from sales and deliveries of
raxibacumab to the U.S. Strategic National Stockpile, and $16.8 million recognized from
manufacturing and development services other than raxibacumab. The decrease in revenues reflected
$82.8 million recognized from the ZALBIN agreement with Novartis in the nine months ended September
30, 2010.
The Company reported a net loss of $300.1 million ($1.56 per share) for the nine months ended
September 30, 2011, compared with a net loss of $145.6 million ($0.78 per share) for the same
period of the previous year. The increased net loss for the current nine months, compared with the
same period last year, is primarily due to lower revenue recognized in 2011 from research and
development collaborative agreements, a $50.0 million upfront license fee paid in the first quarter
of 2011 to FivePrime Therapeutics, Inc., and increased selling, general and administrative expenses
related to the commercialization of BENLYSTA, partially offset by higher product revenue.
During the three months ended September 30, 2011, HGS issued 7,614,000 shares of common stock in
several separate transactions in exchange for $116.6 million principal amount (net of an
unamortized discount of $1.2 million) of the Companys 21/4%
Convertible Subordinated Notes due October 2011. The remaining $78.0 million principal amount of
these notes matured on October 15, 2011 and was repaid in cash.
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As of September 30, 2011, cash and investments totaled $619.7 million, of which $539.8 million was
unrestricted and available for operations. This compares with cash and investments totaling $933.4
million as of December 31, 2010, of which $853.9 million was unrestricted and available for
operations.
HIGHLIGHTS OF RECENT PROGRESS
BENLYSTA: U.S. Launch Continues to Progress Well; BENLYSTA Now Available in Germany, Several Other
European Countries and Canada
BENLYSTA gross sales for the third quarter totaled $21.3 million before gross-to-net adjustments of
$2.5 million. Net sales of BENLYSTA for the quarter totaled $18.8 million, compared with $7.8
million in the second quarter. During the third quarter, BENLYSTA average weekly gross sales for
the last four weeks of September were $2.0 million, compared with $1.7 million and $1.4 million for
the preceding four-week periods, respectively.
The number of accounts ordering BENLYSTA continues to increase. HGS sales data suggest that
approximately 30% of key accounts have initiated treatment of at least one patient with BENLYSTA as
of the end of September 2011, compared with less than 10% at the end of the second quarter and
approximately 20% in August. Among the community-based accounts that are the largest infusing
practices, more than 40% have begun to purchase BENLYSTA. Among key hospital accounts, which are
hospitals with very large lupus cohorts, approximately 35% have begun to purchase BENLYSTA.
Steadily increasing formulary acceptances are enabling increased account penetration among
hospitals.
BENLYSTA received marketing authorization from the European Commission on July 13, 2011. BENLYSTA
is now available in Canada and several European countries, including Germany, Austria, Denmark,
Finland, Hungary, Norway and Sweden.
Earlier than expected, the Spanish Ministry of Health has announced on its website that it intends
to approve the inclusion of BENLYSTA in the public fund system for reimbursement. HGS and GSK
expect to launch BENLYSTA in Spain later this quarter.
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2011 FINANCIAL GUIDANCE
In previous guidance, originally provided in February 2011, HGS expected cash and investments at
year-end 2011 to total between $550 million and $650 million. The Company now expects cash and
investments at year-end 2011 to total between $440 million and $470 million, net of $79 million
principal amount and interest paid upon maturity of the 2011 convertible debt. Cash and
investments were $933.4 million at year-end 2010. The Companys guidance for 2011 SG&A and R&D
expense has not changed; consistent with that guidance, SG&A expense is expected to total between
$150 million and $170 million, and R&D expense is expected to total between $180 million and $220
million.
CONFERENCE CALL
HGS management will hold a conference call to discuss this announcement today at 4:30 PM Eastern.
Investors may listen to the call by dialing 800-390-5360 or 719-785-1752, passcode 1497735, five to
10 minutes before the start of the call. A replay of the conference call will be available within
a few hours after the call ends. Investors may listen to the replay by dialing 888-203-1112 or
719-457-0820, confirmation code 1497735. Todays conference call also will be webcast and can be
accessed at www.hgsi.com. It is recommended that investors interested in listening to the live
webcast log on before the start of the call to download any software required. Both the audio
replay and the archive of the conference call webcast will remain available for several days.
ABOUT HUMAN GENOME SCIENCES
Human Genome Sciences exists to place new therapies into the hands of those battling serious
disease.
For more information about HGS, please visit the Companys web site at www.hgsi.com. Health
professionals and patients interested in clinical trials of HGS products may inquire via e-mail to
medinfo@hgsi.com or by calling HGS at (877) 822-8472.
HGS, Human Genome Sciences and BENLYSTA are trademarks of Human Genome Sciences, Inc. Other
trademarks referenced are the property of their respective owners.
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SAFE HARBOR STATEMENT
This announcement includes statements that are forward-looking within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements include those regarding
our expectations for BENLYSTA and our financial guidance, among others. These forward-looking
statements are based on our current intentions, beliefs and expectations regarding future events.
We cannot guarantee that any forward-looking statement will be accurate. Investors should realize
that if underlying assumptions prove inaccurate or unknown risks or uncertainties materialize,
actual results could differ materially from our expectations. Investors are, therefore, cautioned
not to place undue reliance on any forward-looking statement. Any forward-looking statement speaks
only as of the date of this announcement, and, except as required by law, we do not undertake to
update any forward-looking statement to reflect new information, events or circumstances.
Some important factors that could cause our actual results to differ from our expectations in these
forward-looking statements include: our lack of commercial experience and dependence on the sales
growth of BENLYSTA; any failure to commercialize BENLYSTA successfully; the occurrence of adverse
safety events with our products; changes in the availability of reimbursement for BENLYSTA; the
inherent uncertainty of the timing, success of, and expense associated with, research, development,
regulatory approval and commercialization of our pipeline products and new indications for existing
products; substantial competition in our industry, including from branded and generic products; the
highly regulated nature of our business; uncertainty regarding our intellectual property rights and
those of others; the ability to manufacture at appropriate scale, and in compliance with regulatory
requirements, to meet market demand for our products; our substantial indebtedness and lease
obligations; our dependence on collaborations over which we may not always have full control;
foreign exchange rate valuations and fluctuations; the impact of our acquisitions and strategic
transactions; changes in the health care industry in the U.S. and other countries, including
government laws and regulations relating to sales and promotion, reimbursement and pricing
generally; significant litigation adverse to the Company, including product liability and patent
infringement claims; our ability to attract and retain key personnel; and increased scrutiny of the
health care industry by government agencies and state attorneys general resulting in investigations
and prosecutions.
The foregoing list sets forth many, but not all, of the factors that could cause actual results to
differ from our expectations in any forward-looking statement. Investors should consider this
cautionary statement, as well as the risk factors identified in our periodic reports filed with the
SEC, when evaluating our forward-looking statements.
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HUMAN GENOME SCIENCES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(in thousands, except share and per share amounts) | ||||||||||||||||
Revenue: |
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Product sales |
$ | 30,833 | $ | 7,295 | $ | 65,587 | $ | 33,963 | ||||||||
Manufacturing and development services |
2,747 | 5,677 | 19,011 | 15,177 | ||||||||||||
Research and development collaborative agreements |
442 | 37,810 | 854 | 86,948 | ||||||||||||
Total revenue |
34,022 | 50,782 | 85,452 | 136,088 | ||||||||||||
Costs and expenses: |
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Cost of product sales |
12,419 | 8,434 | 34,026 | 23,529 | ||||||||||||
Cost of manufacturing and development services |
4,950 | 3,338 | 23,290 | 7,364 | ||||||||||||
Research and development expenses |
38,758 | 42,471 | 156,645 | 151,331 | ||||||||||||
Selling, general and administrative expenses |
42,135 | 26,365 | 116,692 | 68,456 | ||||||||||||
Commercial collaboration expenses |
11,755 | | 17,004 | | ||||||||||||
Facility-related exit credits |
| | (1,717 | ) | | |||||||||||
Total costs and expenses (a) |
110,017 | 80,608 | 345,940 | 250,680 | ||||||||||||
Income (loss) from operations |
(75,995 | ) | (29,826 | ) | (260,488 | ) | (114,592 | ) | ||||||||
Investment income |
2,839 | 3,794 | 9,014 | 13,497 | ||||||||||||
Interest expense |
(14,831 | ) | (14,949 | ) | (45,559 | ) | (44,409 | ) | ||||||||
Other income (expense) |
(442 | ) | 122 | (3,051 | ) | (95 | ) | |||||||||
Income (loss) before taxes |
(88,429 | ) | (40,859 | ) | (300,084 | ) | (145,599 | ) | ||||||||
Provision for income taxes |
| | | | ||||||||||||
Net income (loss) |
$ | (88,429 | ) | $ | (40,859 | ) | $ | (300,084 | ) | $ | (145,599 | ) | ||||
Basic and diluted net income (loss) per share |
$ | (0.45 | ) | $ | (0.22 | ) | $ | (1.56 | ) | $ | (0.78 | ) | ||||
Weighted average shares outstanding,
basic and diluted |
196,462,631 | 188,420,580 | 191,965,763 | 187,418,995 | ||||||||||||
(a) | Includes stock-based compensation expense of $6,950 ($0.04 per basic and diluted share)
and $6,984 ($0.04 per basic and diluted share) for the three months ended September 30,
2011 and 2010, respectively. Includes stock-based compensation expense of $22,000 ($0.11
per basic and diluted share) and $17,803 ($0.09 per basic and diluted share) for the nine
months ended September 2011 and 2010, respectively. |
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CONSOLIDATED BALANCE SHEET DATA: |
As of | As of | |||||||
September 30, 2011 | December 31, 2010 | |||||||
(in thousands) | ||||||||
Cash, cash equivalents and investments (b) |
$ | 619,718 | $ | 933,382 | ||||
Total assets (b) |
1,097,278 | 1,315,029 | ||||||
Convertible subordinated debt (c) |
272,802 | 372,851 | ||||||
Lease financing |
251,744 | 250,516 | ||||||
Total stockholders equity |
448,797 | 585,763 |
(b) | Includes $79,921 and $79,510 in restricted investments at September 30, 2011 and December 31,
2010, respectively. |
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(c) | Convertible subordinated debt is net of unamortized debt discount of $12,282 and $30,989 as
of September 30, 2011 and December 31, 2010, respectively. Convertible subordinated debt at
face value is $285,084 and $403,840 as of September 30, 2011 and December 31, 2010,
respectively. |
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