Second-Quarter 2023
Results: -- Net Sales of $945.0 Million, Representing
Year-Over-Year Growth of 11% Excluding Inflammation Medicines -- --
GAAP Net Income of $127.1 Million; Adjusted EBITDA of $320.4
Million -- -- TEPEZZA® (teprotumumab-trbw) Net Sales of $445.5
Million -- -- KRYSTEXXA® (pegloticase injection) Net Sales of
$244.3 Million -- -- UPLIZNA® (inebilizumab-cdon) Net Sales of
$68.1 Million -- -- Cash Position of $2.5 Billion as of June 30,
2023 --
Second-Quarter and
Recent Company Highlights: -- Announced Positive Topline
Data from TEPEZZA Phase 4 Clinical Trial in Patients with
Chronic/Low Clinical Activity Score (CAS) Thyroid Eye Disease (TED)
-- -- Obtained U.S. FDA Approval for Updated TEPEZZA Indication to
Specify Treatment of TED Patients Regardless of Disease Activity or
Duration -- -- Announced Positive Topline Data from TEPEZZA Phase 3
Clinical Trial (OPTIC-J) in Japanese Patients -- -- Received
Approval for TEPEZZA in Brazil for the Treatment of TED; First
Country Outside the U.S. to Approve TEPEZZA -- -- Announced
Initiation of TEPEZZA Phase 3 Clinical Trial in Chronic/Low CAS TED
in Japan and Daxdilimab Phase 2 Clinical Trial in Lupus Nephritis
-- -- Presented New Data from Dazodalibep Phase 2 Clinical Trial in
Sj�gren’s Syndrome and KRYSTEXXA MIRROR Randomized Controlled Trial
at EULAR European Congress of Rheumatology -- -- Continue to Expect
Amgen Transaction to Close by Mid-December, Assuming the Federal
Trade Commission’s Request for a Preliminary Injunction Is Denied
-- -- Named One of Fortune’s 100 Best Companies to Work For® and
Ranked as Top Biotechnology/Pharmaceutical Company, Both for Third
Consecutive Year -- -- Ranked First in Overall Corporate Reputation
by U.S. Patient Advocacy Groups --
Horizon Therapeutics plc (Nasdaq: HZNP) today announced
second-quarter 2023 financial results.
“We delivered strong growth in the second quarter, with
double-digit year-over-year growth in our core business and
mid-teens growth sequentially,” said Tim Walbert, chairman,
president and chief executive officer, Horizon. “This performance
was driven by exceptional 46% year-over-year KRYSTEXXA sales growth
as a result of strong commercial execution and the success of our
immunomodulation strategy, in addition to positive and consistent
trends we are generating for TEPEZZA, which reflects the success of
our expansion efforts to further penetrate the TED market and reach
new prescribers. We delivered impressive 76% year-over-year UPLIZNA
sales growth and see a long runway ahead as we progress our two
Phase 3 programs in IgG4-RD and MG. We also announced several
important clinical milestones for TEPEZZA, including strong data in
low CAS and long-duration TED and data from our Phase 3 clinical
trial in Japan, both of which we expect to contribute to the future
growth of this medicine.”
Financial Highlights
(in millions except for per share amounts and percentages)
Q2 23
Q2 22
% Change
YTD 23
YTD 22
% Change
Net sales
$
945.0
$
876.4
8
$
1,777.0
$
1,761.7
1
Net income
127.1
61.0
108
181.8
265.2
(31
)
Non-GAAP net income
280.1
253.8
10
474.4
569.6
(17
)
Adjusted EBITDA
320.4
306.6
4
553.3
677.8
(18
)
Earnings per share - diluted
0.54
0.26
108
0.78
1.12
(30
)
Non-GAAP earnings per share - diluted
1.20
1.07
12
2.03
2.41
(16
)
Second-Quarter and Year-to-Date 2023
Net Sales Results
(in millions except for percentages)
Q2 23 Q2
22 %Change YTD 23 YTD 22 %Change
TEPEZZA®
$
445.5
$
479.8
(7
)
$
850.8
$
981.3
(13
)
KRYSTEXXA®
244.3
167.8
46
431.3
308.5
40
RAVICTI®
88.4
75.7
17
178.7
154.1
16
UPLIZNA®(1)
68.1
38.6
76
121.9
69.1
76
PROCYSBI®
53.1
47.7
11
103.6
97.3
7
ACTIMMUNE®
29.0
30.0
(3
)
58.2
61.3
(5
)
PENNSAID 2%®(2)
7.0
23.6
(70
)
16.1
59.0
(72
)
RAYOS®
8.0
11.1
(28
)
13.0
24.6
(47
)
BUPHENYL®
1.3
1.4
(10
)
2.6
3.5
(25
)
QUINSAIRTM
0.3
0.3
3
0.6
0.6
1
DUEXIS®
-
0.1
(100
)
0.1
1.2
(91
)
VIMOVO®
-
0.3
(100
)
0.1
1.2
(91
)
Total Net Sales(3)
$
945.0
$
876.4
8
$
1,777.0
$
1,761.7
1
(1)
Second-quarter and year-to-date 2023
UPLIZNA net sales included $15.4 million and $22.0 million,
respectively, in international net sales. Second-quarter and
year-to-date 2022 UPLIZNA net sales included $8.6 million and $13.8
million, respectively, in international net sales.
(2)
On May 6, 2022, Apotex Inc. initiated an
at-risk launch of generic PENNSAID 2% in the United States.
(3)
Excluding the Company’s inflammation
business unit (RAYOS, PENNSAID 2%, DUEXIS and VIMOVO), which was
wound down at the end of 2022 due to generic competition,
second-quarter year-over-year net sales growth was 11%.
Key Growth Drivers
TEPEZZA: TEPEZZA net sales in the second quarter were
$446 million, representing a 10% sequential increase compared to
the first quarter of 2023 and a 7% year-over-year decline compared
to the second quarter of 2022. The TEPEZZA field-force expansion
initiated late in 2022 continues to drive consistent and positive
momentum in the business, including increases in new prescribers,
patient enrollment forms and patient starts. Through the first half
of 2023, as a result of the field-force expansion, the Company
expanded its reach to new physician targets, which led to a 50%
year-over-year increase in the number of ophthalmologists and
endocrinologists prescribing TEPEZZA. In line with the Company’s
expansion strategy, prescriber growth has largely come from
ophthalmologists, with continued strong referral volume from
endocrinologists.
In April 2023, the Company announced positive topline results
from its TEPEZZA Phase 4 clinical trial in patients with low CAS
and long-duration TED and received FDA approval for an update to
the indication for TEPEZZA that supports its potential benefit in
TED, regardless of disease activity or duration. The Company is
executing on its payer strategy to educate key stakeholders and
ease the access burden so all eligible patients can benefit from
TEPEZZA. As a result of this process, large national and regional
payers are beginning the process of updating their access
requirements. To date, the Company has obtained favorable policy
changes for greater than 20% of U.S. covered lives, which are
expected to take effect in the second half of 2023. The Company
expects these strategies and initiatives to further develop the TED
market and impact net sales in 2024.
In addition, the Company made significant advancements in its
global expansion strategy by announcing the positive topline
results from its TEPEZZA Phase 3 clinical trial in Japanese
patients, as well as the approval of TEPEZZA in Brazil for patients
with TED. There are no medicines approved for the treatment of TED
in Brazil or Japan, representing a significant unmet need in both
markets. These accomplishments, which are expected to impact net
sales beginning in 2025, are important milestones in the Company’s
global expansion strategy to bring TEPEZZA to more patients
worldwide.
KRYSTEXXA: KRYSTEXXA net sales in the second quarter were
a record $244 million, representing a 31% sequential increase
compared to the first quarter of 2023 and a 46% year-over-year
increase compared to the second quarter of 2022. KRYSTEXXA net
sales are now annualizing at a nearly one-billion-dollar run rate.
The second-quarter results were driven by execution across all
phases of the patient journey – demand generation, stakeholder
education and adherence to treatment. The Company continued to see
significant uptake from both its rheumatology and nephrology market
segments in the quarter, with KRYSTEXXA with immunomodulation usage
now at more than 70% of new patient starts. The Company’s efforts
to educate physicians and key stakeholders continues to lead to
strong patient growth from both new and existing prescribers across
both market segments.
UPLIZNA: UPLIZNA net sales in the second quarter were a
record $68 million, representing a 27% sequential increase compared
to the first quarter of 2023 and a 76% year-over-year increase
compared to the second quarter of 2022. Net sales in the U.S. were
$53 million, an increase of 76% year-over-year, driven by strong
commercial execution. The second-quarter results were driven by
robust demand generation and new patient starts, increased depth
among the Company’s existing prescribers and strong adherence to
maintenance treatment. The Company continues to drive uptake among
both patients naïve to biologics as well as patients switching from
competitive biologic therapies, establishing UPLIZNA as the
fastest-growing biologic in neuromyelitis optica spectrum disorder
(NMOSD) year-to-date by market share. The Company expects to
advance its global expansion strategy, with multiple planned
international launches in 2023. The Company also continues to make
progress on its two Phase 3 programs in IgG4-related disease
(IgG4-RD) and myasthenia gravis (MG).
Conference Call
In light of the announced agreement to be acquired by Amgen Inc.
and applicable securities laws, the Company will not be hosting a
conference call to discuss its financial results. This earnings
press release, investor deck and the related Quarterly Report on
Form 10-Q for the quarter ended June 30, 2023 are publicly
available in the Investor Relations section of the Company’s
website at https://ir.horizontherapeutics.com.
About Horizon
Horizon is a global biotechnology company focused on the
discovery, development and commercialization of medicines that
address critical needs for people impacted by rare, autoimmune and
severe inflammatory 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, visit
www.horizontherapeutics.com and follow us on Twitter, LinkedIn,
Instagram and Facebook.
Note Regarding Use of Non-GAAP Financial Measures
Horizon provides certain non-GAAP financial measures, including
EBITDA, or earnings before interest, taxes, depreciation and
amortization, adjusted EBITDA, 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 benefit (expense) and tax rate, non-GAAP operating
cash flow and certain other non-GAAP income statement line items,
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 exclude, as
applicable, acquisition and/or divestiture-related costs, costs
associated with our pending transaction with Amgen Inc., including
responding to a second request review of the transaction by the
United States Federal Trade Commission (the “FTC”) and subsequent
lawsuit seeking to enjoin the transaction, manufacturing facility
start-up costs, restructuring and realignment costs and gain on
sale of asset, as well as non-cash items such as share-based
compensation, inventory step-up expense, depreciation and
amortization, non-cash interest expense, goodwill and long-lived
assets impairment charges, gain (loss) on equity security
investments 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 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. 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.
Forward-Looking Statements
This press release contains forward-looking statements,
including, but not limited to, statements related to the pending
transaction with Amgen Inc., development, manufacturing and
commercialization plans; expected timing of clinical trials and
commercial launches; expected future milestones, pipeline
expansions and regulatory approvals; potential market opportunities
for, and benefits of, Horizon’s medicines and medicine candidates;
expected impact of commercial strategies, clinical trial results
and product label updates; 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, whether the
pending transaction with Amgen Inc. will be completed in a timely
manner or at all, including whether the district court grants or
denies the FTC’s request for a preliminary injunction; the parties’
ability to satisfy (or willingness to waive) the conditions to the
consummation of the pending transaction with Amgen Inc., including
with respect to the absence of orders preventing the consummation
of the transaction; the effect of the pending transaction with
Amgen Inc. on Horizon’s business relationships, operating results
and business generally; risks that Horizon’s actual future
financial and operating results may differ from its expectations or
goals; Horizon’s ability to grow net sales from existing medicines;
impacts of the on-going war between Russia and Ukraine; changes in
inflation, interest rates and general economic conditions; the
availability of coverage and adequate reimbursement and pricing
from government and third-party payers; Horizon’s ability to
successfully implement its business strategies, including the risks
that its medicine growth and global expansion initiatives and
strategies may not be successful and that new challenges to growth
may arise in the future; risks inherent in developing novel
medicine candidates and existing medicines for new indications;
whether additional clinical trial results or data analyses will be
consistent with preliminary results, results from other trials or
Horizon’s expectations; risks associated with regulatory approvals;
risks in the ability to recruit, train and retain qualified
personnel; competition, including generic competition; the ability
to protect intellectual property and defend patents; regulatory
obligations and oversight, including any changes in the legal and
regulatory environment in which Horizon operates and those risks
detailed from time-to-time under the caption "Risk Factors" and
elsewhere in Horizon’s filings and reports with the SEC. Horizon
undertakes no duty or obligation to update any forward-looking
statements contained in this press release as a result of new
information.
Horizon Therapeutics
plc
Condensed Consolidated
Statements of Operations (Unaudited)
(in thousands, except share
and per share data)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Net sales
$
944,959
$
876,411
$
1,777,018
$
1,761,656
Cost of goods sold
219,958
230,216
428,521
445,278
Gross profit
725,001
646,195
1,348,497
1,316,378
OPERATING EXPENSES: Research and development (1)
150,035
103,246
284,183
206,378
Selling, general and administrative
434,125
398,221
887,479
770,955
Impairment of goodwill
-
56,171
-
56,171
Gain on sale of asset
(2,000
)
-
(2,000
)
-
Total operating expenses
582,160
557,638
1,169,662
1,033,504
Operating income
142,841
88,557
178,835
282,874
OTHER EXPENSE, NET: Interest expense, net
(12,098
)
(21,409
)
(27,638
)
(42,665
)
Foreign exchange gain
326
28
417
448
Other income (expense), net
4,183
(2,389
)
2,840
(3,131
)
Total other expense, net
(7,589
)
(23,770
)
(24,381
)
(45,348
)
Income before expense (benefit) for income taxes
135,252
64,787
154,454
237,526
Expense (benefit) for income taxes
8,181
3,813
(27,301
)
(27,709
)
Net income
$
127,071
$
60,974
$
181,755
$
265,235
Net income per ordinary share - basic
$
0.56
$
0.27
$
0.80
$
1.16
Weighted average ordinary shares outstanding - basic
228,743,143
230,020,004
228,571,356
229,559,715
Net income per ordinary share - diluted
$
0.54
$
0.26
$
0.78
$
1.12
Weighted average ordinary shares outstanding - diluted
233,935,591
236,166,384
233,938,149
236,077,147
(1)
Beginning with the third quarter of 2022,
the Company is separately presenting upfront, milestone, and
similar payments pursuant to collaborations, licenses of
third-party technologies, and asset acquisitions as “Acquired
in-process research and development and milestones” expenses in the
condensed consolidated statement of comprehensive income. Amounts
recorded in this line item would have historically been recorded to
research and development (“R&D”) expenses. The Company believes
the new classification assists users of the financial statements in
better understanding the payments incurred to acquired in-process
research and development, or IPR&D. Prior period consolidated
statements of comprehensive income have been reclassified to
conform with the new classification. There were no acquired
IPR&D and milestones expenses during the three and six months
ended June 30, 2023 and 2022.
Horizon Therapeutics plcCondensed Consolidated Balance
Sheets (Unaudited)(in thousands, except share data)
As of June 30,2023 December 31,2022
ASSETS CURRENT ASSETS: Cash and cash equivalents
$
2,464,623
$
2,352,833
Restricted cash
4,791
4,755
Accounts receivable, net
717,417
676,347
Inventories, net
170,325
169,559
Prepaid expenses and other current assets
564,808
449,349
Total current assets
3,921,964
3,652,843
Property, plant and equipment, net
362,326
340,509
Developed technology and other intangible assets, net
2,486,565
2,664,777
In-process research and development
810,000
810,000
Goodwill
1,010,538
1,010,538
Deferred tax assets, net
444,306
431,814
Other long-term assets
263,042
204,135
Total assets
$
9,298,741
$
9,114,616
LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT
LIABILITIES: Accounts payable
$
85,543
$
155,800
Accrued expenses and other current liabilities
496,669
457,557
Accrued trade discounts and rebates
319,469
319,780
Long-term debt—current portion
16,000
16,000
Total current liabilities
917,681
949,137
LONG-TERM LIABILITIES: Long-term debt, net
2,541,458
2,546,837
Deferred tax liabilities, net
264,815
342,017
Other long-term liabilities
263,828
204,451
Total long-term liabilities
3,070,101
3,093,305
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Ordinary shares, $0.0001 nominal value; 600,000,000 shares
authorized at June 30, 2023 and December 31, 2022; 229,323,393 and
227,625,913 shares issued at June 30, 2023 and December 31, 2022,
respectively; and 228,939,027 and 227,241,547 shares outstanding at
June 30, 2023 and December 31, 2022, respectively
23
23
Treasury stock, 384,366 ordinary shares at June 30, 2023 and
December 31, 2022
(4,585
)
(4,585
)
Additional paid-in capital
4,522,145
4,474,199
Accumulated other comprehensive income
21,612
12,528
Retained earnings
771,764
590,009
Total shareholders' equity
5,310,959
5,072,174
Total liabilities and shareholders' equity
$
9,298,741
$
9,114,616
Horizon Therapeutics plcCondensed Consolidated Statements
of Cash Flows (Unaudited)(in thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
CASH FLOWS FROM OPERATING ACTIVITIES: Net income
$
127,071
$
60,974
$
181,755
$
265,235
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization expense
96,285
97,426
191,145
192,538
Equity-settled share-based compensation
60,271
45,149
118,391
92,449
Impairment of goodwill
-
56,171
-
56,171
Amortization of debt discount and deferred financing costs
1,308
2,327
2,779
3,904
Gain on sale of asset
(2,000
)
-
(2,000
)
-
Deferred income taxes
(4,642
)
30,864
(91,952
)
(3,032
)
Foreign exchange and other adjustments
(5,708
)
7,376
(6,143
)
10,566
Changes in operating assets and liabilities: Accounts receivable
(92,670
)
11,152
(41,140
)
(40,513
)
Inventories
(5,833
)
22,818
(766
)
22,033
Prepaid expenses and other current assets
(60,191
)
(38,373
)
(108,816
)
(71,578
)
Accounts payable
7,807
(48,047
)
(70,233
)
(11,980
)
Accrued trade discounts and rebates
9,386
(27,047
)
(552
)
20,232
Accrued expenses and other current liabilities
20,532
36,874
63,390
(76,901
)
Other non-current assets and liabilities
9,851
(8,468
)
11,931
5,863
Net cash provided by operating activities
161,467
249,196
247,789
464,987
CASH FLOWS FROM INVESTING ACTIVITIES: Payments for
acquisitions, net of cash acquired
-
-
-
(3,122
)
Purchases of property, plant and equipment
(18,466
)
(10,154
)
(42,594
)
(24,352
)
Payments for long-term investments
(1,560
)
(6,443
)
(4,183
)
(4,847
)
Receipts from long-term investments
-
4,416
-
4,416
Payments related to license and collaboration agreements
-
-
(15,000
)
(25,000
)
Net cash used in investing activities
(20,026
)
(12,181
)
(61,777
)
(52,905
)
CASH FLOWS FROM FINANCING ACTIVITIES: Repayment of term
loans
(4,000
)
(4,000
)
(8,000
)
(8,000
)
Proceeds from the issuance of ordinary shares in conjunction with
ESPP program
14,912
13,884
14,912
13,884
Proceeds from the issuance of ordinary shares in connection with
stock option exercises
2,628
12,951
6,049
22,022
Payment of employee withholding taxes relating to share-based
awards
(4,506
)
(5,419
)
(92,055
)
(120,527
)
Net cash provided by (used in) financing activities
9,034
17,416
(79,094
)
(92,621
)
Effect of foreign exchange rate changes on cash, cash
equivalents and restricted cash
2,539
(4,396
)
4,908
(6,317
)
Net increase in cash, cash equivalents and restricted cash
153,014
250,035
111,826
313,144
Cash, cash equivalents and restricted cash, beginning of the
period(1)
2,316,400
1,647,265
2,357,588
1,584,156
Cash, cash equivalents and restricted cash, end of the
period(1)
$
2,469,414
$
1,897,300
$
2,469,414
$
1,897,300
(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 June
30,
Six Months Ended June
30,
2023
2022
2023
2022
GAAP net income
$
127,071
$
60,974
$
181,755
$
265,235
Non-GAAP adjustments: Acquisition/divestiture-related costs
52
1,023
733
2,612
Transaction-related costs
16,539
-
26,323
-
(Gain) loss on equity security investments
(2,437
)
438
(2,789
)
5,084
Restructuring and realignment costs
854
1,253
2,676
1,790
Manufacturing facility start-up costs
1,896
1,582
5,372
2,389
Amortization and step-up: Intangible amortization expense
89,598
91,335
178,212
180,595
Inventory step-up expense
1,572
17,362
31,315
44,563
Amortization of debt discount and deferred financing costs
1,308
2,327
2,779
3,904
Impairment of goodwill
-
56,171
-
56,171
Gain on sale of asset
(2,000
)
-
(2,000
)
-
Share-based compensation
60,271
45,149
118,391
92,449
Depreciation
6,687
6,091
12,933
11,943
Total of pre-tax non-GAAP adjustments
174,340
222,731
373,945
401,500
Income tax effect of pre-tax non-GAAP adjustments
(21,354
)
(29,919
)
(81,297
)
(97,131
)
Total of non-GAAP adjustments
152,986
192,812
292,648
304,369
Non-GAAP net income
$
280,057
$
253,786
$
474,403
$
569,604
Non-GAAP Earnings Per Share: Weighted
average ordinary shares - Basic
228,743,143
230,020,004
228,571,356
229,559,715
Non-GAAP Earnings Per Share - Basic: GAAP earnings
per share - Basic
$
0.56
$
0.27
$
0.80
$
1.16
Non-GAAP adjustments
0.66
0.83
1.28
1.32
Non-GAAP earnings per share - Basic
$
1.22
$
1.10
$
2.08
$
2.48
Weighted average ordinary shares - Diluted Weighted
average ordinary shares - Basic
228,743,143
230,020,004
228,571,356
229,559,715
Ordinary share equivalents
5,192,448
6,146,380
5,366,793
6,517,432
Weighted average ordinary shares - Diluted
233,935,591
236,166,384
233,938,149
236,077,147
Non-GAAP Earnings Per Share - Diluted GAAP
earnings per share - Diluted
$
0.54
$
0.26
$
0.78
$
1.12
Non-GAAP adjustments
0.66
0.81
1.25
1.29
Non-GAAP earnings per share - Diluted
$
1.20
$
1.07
$
2.03
$
2.41
Horizon Therapeutics plcGAAP to Non-GAAP
ReconciliationsEBITDA and Adjusted EBITDA
(Unaudited)(in thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
GAAP net income
$
127,071
$
60,974
$
181,755
$
265,235
Depreciation
6,687
6,091
12,933
11,943
Amortization and step-up: Intangible amortization expense
89,598
91,335
178,212
180,595
Inventory step-up expense
1,572
17,362
31,315
44,563
Interest expense, net (including amortization of debt discount and
deferred financing costs)
12,098
21,409
27,638
42,665
Expense (benefit) for income taxes
8,181
3,813
(27,301
)
(27,709
)
EBITDA
$
245,207
$
200,984
$
404,552
$
517,292
Other non-GAAP adjustments: Share-based compensation
60,271
45,149
118,391
92,449
(Gain) loss on equity security investments
(2,437
)
438
(2,789
)
5,084
Impairment of goodwill
-
56,171
-
56,171
Gain on sale of asset
(2,000
)
-
(2,000
)
-
Acquisition/divestiture-related costs
52
1,023
733
2,612
Transaction-related costs
16,539
-
26,323
-
Manufacturing facility start-up costs
1,896
1,582
5,372
2,389
Restructuring and realignment costs
854
1,253
2,676
1,790
Total of other non-GAAP adjustments
75,175
105,616
148,706
160,495
Adjusted EBITDA
$
320,382
$
306,600
$
553,258
$
677,787
Horizon Therapeutics plcGAAP to Non-GAAP
ReconciliationsOperating Income (Unaudited)(in
thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
GAAP operating income
$
142,841
$
88,557
$
178,835
$
282,874
Non-GAAP adjustments: Acquisition/divestiture-related costs
52
1,023
733
2,612
Transaction-related costs
16,539
-
26,323
-
Restructuring and realignment costs
854
1,253
2,676
1,790
Manufacturing facility start-up costs
1,896
1,582
5,372
2,389
Amortization and step-up: Intangible amortization expense
89,598
91,335
178,212
180,595
Inventory step-up expense
1,572
17,362
31,315
44,563
Impairment of goodwill
-
56,171
-
56,171
Gain on sale of asset
(2,000
)
-
(2,000
)
-
Share-based compensation
60,271
45,149
118,391
92,449
Depreciation
6,687
6,091
12,933
11,943
Total of non-GAAP adjustments
175,469
219,966
373,955
392,512
Non-GAAP operating income
$
318,310
$
308,523
$
552,790
$
675,386
Foreign exchange gain
326
28
417
448
Other income (expense), net
1,746
(1,951
)
51
1,953
Adjusted EBITDA
$
320,382
$
306,600
$
553,258
$
677,787
Horizon Therapeutics plcGAAP to Non-GAAP
ReconciliationsGross Profit and Operating Cash Flow
(Unaudited)(in thousands, except percentages)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Non-GAAP Gross Profit: GAAP gross
profit
$
725,001
$
646,195
$
1,348,497
$
1,316,378
Non-GAAP gross profit adjustments: Acquisition/divestiture-related
costs
52
(119
)
20
(1,423
)
Intangible amortization expense
89,259
90,439
177,537
179,164
Inventory step-up expense
1,572
17,362
31,315
44,563
Share-based compensation
3,141
2,294
5,803
4,471
Depreciation
130
55
178
111
Total of Non-GAAP adjustments
94,154
110,031
214,853
226,886
Non-GAAP gross profit
$
819,155
$
756,226
$
1,563,350
$
1,543,264
GAAP gross profit %
76.7
%
73.7
%
75.9
%
74.7
%
Non-GAAP gross profit %
86.7
%
86.3
%
88.0
%
87.6
%
GAAP cash provided by operating
activities
$
161,467
$
249,196
$
247,789
$
464,987
Cash payments for acquisition/divestiture-related costs
11
748
51
5,196
Cash payments for restructuring and realignment costs
931
570
5,572
1,144
Cash payments for manufacturing facility start-up costs
2,116
895
5,910
2,663
Cash payments for transaction-related costs
14,074
-
20,668
-
Non-GAAP operating cash flow
$
178,599
$
251,409
$
279,990
$
473,990
Horizon Therapeutics
plc
GAAP to Non-GAAP Tax Rate
Reconciliation (Unaudited)
(in millions, except
percentages and per share amounts)
Q2 2023 Pre-tax Net Income Income Tax
Expense Tax Rate Net Income Diluted Earnings
Per Share As reported - GAAP
$
135.3
$
8.2
6.0
%
$
127.1
$
0.54
Non-GAAP adjustments
174.3
21.4
153.0
Non-GAAP
$
309.6
$
29.5
9.5
%
$
280.1
$
1.20
Q2 2022 Pre-tax Net Income Income
Tax Expense Tax Rate Net Income Diluted
Earnings Per Share As reported - GAAP
$
64.8
$
3.8
5.9
%
$
61.0
$
0.26
Non-GAAP adjustments
222.7
29.9
192.8
Non-GAAP
$
287.5
$
33.7
11.7
%
$
253.8
$
1.07
YTD 2023
Pre-tax Net Income
Income Tax (Benefit)
Expense
Tax Rate
Net Income
Diluted Earnings Per
Share
As reported - GAAP
$
154.5
$
(27.3
)
(17.7
)%
$
181.8
$
0.78
Non-GAAP adjustments
373.9
81.3
292.6
Non-GAAP
$
528.4
$
54.0
10.2
%
$
474.4
$
2.03
YTD 2022
Pre-tax Net Income
Income Tax (Benefit)
Expense
Tax Rate
Net Income
Diluted Earnings Per
Share
As reported - GAAP
$
237.5
$
(27.7
)
(11.7
)%
$
265.2
$
1.12
Non-GAAP adjustments
401.5
97.1
304.4
Non-GAAP
$
639.0
$
69.4
10.9
%
$
569.6
$
2.41
Horizon Therapeutics
plc
Certain Income Statement Line
Items - Non-GAAP Adjusted
For the Three Months Ended
June 30, 2023 (Unaudited)
(in thousands)
Cost of Goods Research & Selling, General Gain on
sale Interest Other Income Income Tax Sold Development &
Administrative of asset Expense, net (Expense), net Expense
GAAP as reported
$
(219,958
)
$
(150,035
)
$
(434,125
)
$
2,000
$
(12,098
)
$
4,183
$
(8,181
)
Non-GAAP Adjustments:
Acquisition/divestiture-related costs(1)
52
-
-
-
-
-
-
Transaction-related costs(2)
-
-
16,539
-
-
-
-
Gain on equity security investments(3)
-
-
-
-
-
(2,437
)
-
Restructuring and realignment costs(4)
-
253
601
-
-
-
-
Manufacturing facility start-up costs(5)
-
-
1,896
-
-
-
-
Amortization and step-up: Intangible amortization expense(6)
89,259
-
339
-
-
-
-
Inventory step-up expense(7)
1,572
-
-
-
-
-
-
Amortization of debt discount and deferred financing costs(8)
-
-
-
-
1,308
-
-
Gain on sale of asset(9)
-
-
-
(2,000
)
-
-
-
Share-based compensation(10)
3,141
9,395
47,735
-
-
-
-
Depreciation(11)
130
588
5,969
-
-
-
-
Income tax effect on pre-tax non-GAAP adjustments(12)
-
-
-
-
-
-
(21,354
)
Total of non-GAAP adjustments
94,154
10,236
73,079
(2,000
)
1,308
(2,437
)
(21,354
)
Non-GAAP
$
(125,804
)
$
(139,799
)
$
(361,046
)
$
-
$
(10,790
)
$
1,746
$
(29,535
)
Horizon Therapeutics
plc
Certain Income Statement Line
Items - Non-GAAP Adjusted
For the Three Months Ended
June 30, 2022 (Unaudited)
(in thousands)
Cost of Goods
Research &
Selling, General
Impairment of
Interest
Other (Expense)
Income Tax
Sold
Development
& Administrative
goodwill
Expense, net
Income, net
Expense
GAAP as reported
$
(230,216
)
$
(103,246
)
$
(398,221
)
$
(56,171
)
$
(21,409
)
$
(2,389
)
$
(3,813
)
Non-GAAP Adjustments:
Acquisition/divestiture-related costs(1)
(119
)
-
1,142
-
-
-
-
Loss on equity security investments(3)
-
-
-
-
-
438
-
Restructuring and realignment costs(4)
-
804
449
-
-
-
-
Manufacturing facility start-up costs(5)
-
-
1,582
-
-
-
-
Amortization and step-up: Intangible amortization expense(6)
90,439
-
896
-
-
-
-
Inventory step-up expense(7)
17,362
-
-
-
-
-
-
Amortization of debt discount and deferred financing costs(8)
-
-
-
-
2,327
-
-
Share-based compensation(10)
2,294
6,742
36,113
-
-
-
-
Depreciation(11)
55
267
5,769
-
-
-
-
Impairment of goodwill(13)
-
-
-
56,171
-
-
-
Income tax effect on pre-tax non-GAAP adjustments(12)
-
-
-
-
-
-
(29,919
)
Total of non-GAAP adjustments
110,031
7,813
45,951
56,171
2,327
438
(29,919
)
Non-GAAP
$
(120,185
)
$
(95,433
)
$
(352,270
)
$
-
$
(19,082
)
$
(1,951
)
$
(33,732
)
Horizon Therapeutics plc Certain Income Statement
Line Items - Non-GAAP Adjusted For the Six Months Ended June
30, 2023 (Unaudited) (in thousands) Income
Tax Cost of Goods Research & Selling, General Gain on sale
Interest Other Income Benefit Sold Development & Administrative
of asset Expense, net (Expense), net (Expense)
GAAP as
reported
$
(428,521
)
$
(284,183
)
$
(887,479
)
$
2,000
$
(27,638
)
$
2,840
$
27,301
Non-GAAP Adjustments:
Acquisition/divestiture-related costs(1)
20
-
713
-
-
-
-
Transaction-related costs(2)
-
-
26,323
-
-
-
-
Gain on equity security investments(3)
-
-
-
-
-
(2,789
)
-
Restructuring and realignment costs(4)
-
50
2,626
-
-
-
-
Manufacturing facility start-up costs(5)
-
-
5,372
-
-
-
-
Amortization and step-up: Intangible amortization expense(6)
177,537
-
675
-
-
-
-
Inventory step-up expense(7)
31,315
-
-
-
-
-
-
Amortization of debt discount and deferred financing costs(8)
-
-
-
-
2,779
-
-
Gain on sale of asset(9)
-
-
-
(2,000
)
-
-
-
Share-based compensation(10)
5,803
18,561
94,027
-
-
-
-
Depreciation(11)
178
971
11,784
-
-
-
-
Income tax effect on pre-tax non-GAAP adjustments(12)
-
-
-
-
-
-
(81,297
)
Total of non-GAAP adjustments
214,853
19,582
141,520
(2,000
)
2,779
(2,789
)
(81,297
)
Non-GAAP
$
(213,668
)
$
(264,601
)
$
(745,959
)
$
-
$
(24,859
)
$
51
$
(53,996
)
Horizon Therapeutics plc Certain Income Statement
Line Items - Non-GAAP Adjusted For the Six Months Ended June
30, 2022 (Unaudited) (in thousands) Income
Tax Cost of Goods Research & Selling, General Impairment of
Interest Other (Expense) Benefit Sold Development &
Administrative goodwill Expense, net Income, net (Expense)
GAAP as reported
$
(445,278
)
$
(206,378
)
$
(770,955
)
$
(56,171
)
$
(42,665
)
(3,131
)
$
27,709
Non-GAAP Adjustments:
Acquisition/divestiture-related costs(1)
(1,423
)
2,000
2,035
-
-
-
-
Loss on equity security investments(3)
-
-
-
-
-
5,084
-
Restructuring and realignment costs(4)
-
804
986
-
-
-
-
Manufacturing facility start-up costs(5)
-
-
2,389
-
-
-
-
Amortization and step-up: Intangible amortization expense(6)
179,164
-
1,431
-
-
-
-
Inventory step-up expense(7)
44,563
-
-
-
-
-
-
Amortization of debt discount and deferred financing costs(8)
-
-
-
-
3,904
-
-
Impairment of goodwill(13)
-
-
-
56,171
-
-
-
Share-based compensation(10)
4,471
15,720
72,258
-
-
-
-
Depreciation(11)
111
493
11,339
-
-
-
-
Income tax effect on pre-tax non-GAAP adjustments(12)
-
-
-
-
-
-
(97,131
)
Total of non-GAAP adjustments
226,886
19,017
90,438
56,171
3,904
5,084
(97,131
)
Non-GAAP
$
(218,392
)
$
(187,361
)
$
(680,517
)
$
-
$
(38,761
)
$
1,953
$
(69,422
)
NOTES FOR CERTAIN INCOME STATEMENT LINE
ITEMS - NON-GAAP
- Primarily represents transaction and integration costs,
including, advisory, legal, consulting and certain employee-related
costs, incurred in connection with our acquisitions and
divestitures.
- Primarily represents transaction-related costs, including,
advisory, legal, consulting and field-based employee retention
costs, incurred in connection with the transaction with Amgen. The
legal costs include costs incurred in responding to the FTC’s
second request and subsequent lawsuit seeking to enjoin the
transaction.
- We held investments in equity securities with readily
determinable fair values of $9.8 million and $8.1 million as of
June 30, 2023 and 2022, respectively, which are included in other
long-term assets in the condensed consolidated balance sheet. For
the three and six months ended June 30, 2023, we recognized net
unrealized gains of $2.4 million and $2.8 million, respectively,
due to the change in fair value of these securities.
- Primarily represents severance and consulting costs related to
the wind down of our former inflammation business during 2022 and
rent and maintenance charges as a result of vacating the leased
Lake Forest office in the first quarter of 2021.
- During the three months ended June 30, 2023 and 2022, we
recorded $1.9 million and $1.6 million, respectively, and $5.4
million and $2.4 million for the six months ended June 30, 2023 and
2022, respectively, of manufacturing facility start-up costs
related to our drug product biologics manufacturing facility in
Waterford, Ireland.
- Intangible amortization expenses are primarily associated with
our developed technology related to TEPEZZA, KRYSTEXXA, RAVICTI,
UPLIZNA, PROCYSBI, ACTIMMUNE, RAYOS and BUPHENYL.
- During the three and six months ended June 30, 2023, we
recognized in cost of goods sold $1.6 million and $31.3 million,
respectively, for inventory step-up expense related to UPLIZNA
inventory revalued in connection with the Viela Bio, Inc.
acquisition. We recorded $17.4 million and $44.6 million of UPLIZNA
inventory step-up expense in cost of goods sold during the three
and six months ended June 30, 2022, respectively. Because inventory
step-up expense is related to an acquisition, will not continue
indefinitely and has a significant effect on our gross profit,
gross margin percentage and net income for all affected periods, we
exclude inventory step-up expense from our non-GAAP financial
measures.
- Represents amortization of debt discount and deferred financing
costs associated with our debt.
- During the six months ended June 30, 2023, gain on sale of
asset represents a $2.0 million contingent consideration payment
related to the sale of MIGERGOT in 2019. The contingent
consideration payment was triggered during the second quarter of
2023 and it was received in July 2023.
- Represents share-based compensation expense associated with
restricted stock unit and performance stock unit grants to our
employees and non-employee directors, and our employee share
purchase plan.
- Represents depreciation expense related to our property, plant,
equipment, software and leasehold improvements.
- Income tax adjustments on pre-tax non-GAAP adjustments
represent the estimated income tax impact of each pre-tax non-GAAP
adjustment based on the statutory income tax rate of the applicable
jurisdictions for each non-GAAP adjustment.
- Our interim goodwill impairment test in the second quarter of
2022 indicated an impairment which represented the difference
between the estimated fair value of the former inflammation
reporting unit and its carrying value. As a result, we recognized
an impairment charge of $56.2 million in June 2022 representing the
full amount of goodwill for the former inflammation reporting
unit.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230805951260/en/
Investors: Tina Ventura Senior Vice President, Chief
Investor Relations Officer
investor-relations@horizontherapeutics.com
Erin Linnihan 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: Eimear Rigby
media@horizontherapeutics.com
Grafico Azioni Horizon Therapeutics Pub... (NASDAQ:HZNP)
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Da Gen 2025 a Feb 2025
Grafico Azioni Horizon Therapeutics Pub... (NASDAQ:HZNP)
Storico
Da Feb 2024 a Feb 2025
