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The Medicines Company Reports First-Quarter 2019 Financial Results and Significant Progress with the Inclisiran Clinical Development Program

Share:
  • Inclisiran's unique profile, vast global market opportunity and
    long-dated exclusivity set the stage for potentially significant
    shareholder value creation
  • Independent Data Monitoring Committee recommends continuation of
    inclisiran Phase 3 clinical trials after sixth un-blinded data review
  • Results from ORION-1, 2 and 7 studies, and interim results from the
    ongoing ORION-3 study, to be presented in May
  • Pivotal Phase 3 readouts expected in the third quarter

The Medicines Company (NASDAQ:MDCO) today reported financial results for
the first quarter that ended March 31, 2019. The first quarter was
marked by significant progress with the inclisiran clinical development
program.

"We are relentlessly focused on the successful completion of Phase 3
studies for inclisiran, so that we can ultimately bring forward the
first cholesterol-lowering siRNA medicine with the potential to
fundamentally change the treatment of atherosclerotic cardiovascular
disease (ASCVD), through potent, durable, and consistent lowering of
LDL-C levels via twice-a-year dosing," said Mark Timney, Chief Executive
Officer of The Medicines Company. "We continue to make steady progress
during this momentous year for The Medicines Company, moving closer to
our goal of realizing the intrinsic value of inclisiran."

Clinical Development Highlights

The Independent Data Monitoring Committee (IDMC) for inclisiran's
pivotal Phase 3 trials (ORION-9, ORION-10 and ORION-11) recently
completed its sixth planned review of un-blinded safety and efficacy
data. The committee again recommended that the trials continue as
designed and conducted, without modification. The ORION Phase 3 studies,
with 18-months treatment and follow-up, randomized a total of 3,660
patients, receiving either inclisiran or placebo, across ORION-9 (482
patients), ORION-10 (1,561 patients) and ORION-11 (1,617 patients).

At the time of the sixth IDMC review, substantially all randomized
patients had been treated with three doses and completed a follow-up
visit 60-days after the third dose (of four doses) of study medication,
and more than 1,600 subjects had received a fourth dose of inclisiran or
placebo. To date, more than 3,000 patient-years of inclisiran safety
data have been accumulated in the ORION program.

"The IDMC's latest recommendation is another important milestone on our
path toward expected Phase 3 data readouts in the third quarter and
subsequent NDA and MAA submissions," said Peter Wijngaard, Ph.D., Chief
Development Officer of The Medicines Company. "We are now building on
this outstanding progress by enrolling patients into ORION-8 as they
complete their respective Phase 3 studies."

ORION-8 is an open-label, long-term extension study where patients
completing ORION-9, ORION-10 and ORION-11 will receive inclisiran for
three years to evaluate the efficacy, safety and tolerability of
long-term dosing of inclisiran.

Upcoming Presentations of Clinical Data

The Medicines Company will present interim results on long-term safety
and efficacy of inclisiran from the ongoing ORION-3 study during a
late-breaking clinical trial session at the National Lipid Association
Scientific Sessions in Miami, Florida on May 18, 2019.

  • ORION-3 is an open-label Phase 2, extension study (of ORION-1) to
    assess the efficacy, safety, and tolerability of long-term dosing of
    inclisiran. The study also evaluates safety and efficacy of switching
    patients treated with evolocumab to inclisiran. Follow up for this
    latter group is still ongoing and will be presented at a later date.

During the 87th European Atherosclerosis Society Congress in Maastricht,
Netherlands, the company will present a combined analysis of data in
renal-impaired patients from ORION-1 and ORION-7 during an oral abstract
session on May 27, 2019. Data in homozygous familial
hypercholesterolemia patients from ORION-2 will be presented during a
late-breaking abstract session on the same day.

  • ORION-1 is a Phase 2, placebo-controlled, double-blind, randomized
    trial to evaluate the efficacy, safety, and tolerability of inclisiran
    in participants with ASCVD or ASCVD-risk equivalents and elevated
    LDL-C despite maximum tolerated dose of LDL-C lowering therapies.
  • ORION-7 is a Phase 1, single-dose, open-label trial to evaluate the
    safety, tolerability, pharmacokinetics, and pharmacodynamics of
    inclisiran in participants with mild, moderate, and severe renal
    impairment compared to participants with normal renal function.
  • ORION-2 is a Phase 2 pilot study to assess the safety, tolerability,
    and efficacy of inclisiran in participants with homozygous familial
    hypercholesterolemia.

First-Quarter 2019 Financial Summary from Continuing Operations

On a GAAP basis, loss from continuing operations in the first quarter of
2019 was $59.9 million, or $0.80 per share, compared to a loss of $84.8
million, or $1.15 per share, in the first quarter of 2018. On a non-GAAP
basis, adjusted loss1 from continuing operations in the first
quarter of 2019 was $46.0 million, or $0.621 per share,
compared to a loss of $56.4 million, or $0.761 per share, in
the first quarter of 2018.

Net income from discontinued operations in the first quarter of 2018 was
$114.0 million, or $1.54 per share, resulting from the sale of the
Company's infectious disease business.

At March 31, 2019, the Company had $199.7 million in cash and cash
equivalents, compared to $238.3 million at the end of 2018.

1 Adjusted net loss and adjusted loss per share from
continuing operations are non-GAAP financial performance measures with
no standardized definitions under U.S. GAAP. For further information and
a detailed reconciliation, refer to the "Non-GAAP Financial Performance
Measures" and "Reconciliations of GAAP to Adjusted Loss From Continuing
Operations and Adjusted Loss per Share" sections of this press release.

First Quarter 2019 Conference Call and Webcast Information

The Company will host a conference call and webcast today, April 25,
2019 at 8:30 a.m., Eastern Standard Time, to discuss its first-quarter
2019 financial results and provide clinical and operational updates. The
dial-in information to access the call is as follows:
U.S./Canada:
(877) 407-0312
International: (201) 389-0899
Conference ID:
13689751

A taped replay of the conference call will be available after the call
concludes, and may be accessed by telephone as follows:
U.S./Canada:
(877) 660-6853
International: (201) 612-7415
Conference ID:
13689751

A live audio webcast of the conference call may be accessed in the "Investors"
section of The Medicines Company
website. An archived webcast will
be available after the call concludes.

About Inclisiran

Inclisiran is a small interfering RNA (siRNA) therapy being studied to
evaluate its ability to lower low-density lipoprotein (LDL) cholesterol
– also known as LDL-C or bad cholesterol. Inclisiran is designed to
prevent the production of proprotein convertase subtilisin/kexin type 9
(PCSK9) at its source in the liver. Inclisiran is not yet approved for
use by the FDA or any other regulatory authority. The Medicines Company
obtained global rights to develop, manufacture and commercialize
inclisiran under a license and collaboration agreement with Alnylam
Pharmaceuticals.

Commercial Opportunity

In the US alone, 67.5 million individuals are estimated to have
sufficient cardiovascular risk to warrant lipid-lowering therapy.
Approximately 27.5 million of these individuals are at a significantly
elevated risk, either because of confirmed cardiovascular disease or
LDL-C levels above 190 mg/dl. Of this higher-risk group, 15.1 million
people are currently treated with lipid-lowering therapies, but only one
out of five (or 2.4 million) is successfully reaching LDL-C targets with
current therapies. This implies a population of at least 12.7 million
Americans who could benefit from inclisiran, the first
cholesterol-lowering siRNA with the potential to deliver potent, durable
and consistent lowering of LDL-C levels via twice-a-year dosing.

About The Medicines Company

The Medicines Company is a biopharmaceutical company whose purpose is to
halt the deadly progression of atherosclerosis and the cardiovascular
risk created by high levels of LDL-C, or bad cholesterol. Our team is
focused on transformational solutions that address the daily challenges
that patients, physicians and payers confront in cardiovascular care.
The Company is headquartered in Parsippany, New Jersey. For more
information, please visit www.themedicinescompany.com
and follow us on Twitter @MDCONews
and LinkedIn.

Forward-Looking Statements

Statements contained in this press release about The Medicines Company
that are not purely historical, and all other statements that are not
purely historical, may be deemed to be forward-looking statements for
purposes of the safe harbor provisions under The Private Securities
Litigation Reform Act of 1995. Without limiting the foregoing, the words
"believes," "anticipates," "plans," "expects," "should," and
"potential," and similar expressions, are intended to identify
forward-looking statements. These forward-looking statements involve
known and unknown risks and uncertainties that may cause the Company's
actual results, levels of activity, performance or achievements to be
materially different from those expressed or implied by these
forward-looking statements. Important factors that may cause or
contribute to such differences include the ability of the Company to
effectively develop inclisiran; whether inclisiran will advance in the
clinical trials process on a timely basis or at all, or succeed in
achieving its specified endpoints; whether the Company will make
regulatory submissions for inclisiran on a timely basis; whether its
regulatory submissions will receive approvals from regulatory agencies
on a timely basis or at all; the extent of the commercial success of
inclisiran, if approved; the strength, durability and life of the
Company's patent protection for inclisiran and whether the Company will
be successful in extending exclusivity; and such other factors as are
set forth in the risk factors detailed from time to time in the
Company's periodic reports and registration statements filed with the
Securities and Exchange Commission (SEC), including, without limitation,
the risk factors detailed in the Company's Annual Report on Form 10-K
filed with the SEC on February 27, 2019, which are incorporated herein
by reference. The Company specifically disclaims any obligation to
update these forward-looking statements.

NON-GAAP FINANCIAL PERFORMANCE MEASURES

In addition to financial information prepared in accordance with U.S.
GAAP, this press release also contains adjusted loss from continuing
operations and adjusted loss per share from continuing operations
attributable to The Medicines Company. The Company believes these
measures provide investors and management with supplemental information
relating to operating performance and trends that facilitate comparisons
between periods and with respect to projected information.

Adjusted loss from continuing operations excludes share-based
compensation expense, inventory adjustments, restructuring charges,
changes in contingent purchase price, legal settlements, changes in
short-term investments and non-cash interest expense. The Company
believes these non-GAAP financial measures help indicate underlying
trends in the Company's business and are important in comparing current
results with prior period results and understanding projected operating
performance. Non-GAAP financial measures provide the Company and its
investors with an indication of the Company's baseline performance
before items that are considered by the Company not to be reflective of
the Company's ongoing results. See the attached "Reconciliations of GAAP
to Adjusted Loss from Continuing Operations and Adjusted Loss per Share"
for explanations of the amounts excluded and included to arrive at
adjusted net loss and adjusted loss per share amounts for the three
months ended March 31, 2019 and 2018.

These adjusted measures are non-GAAP and should be considered in
addition to, but not as a substitute for, the information prepared in
accordance with U.S. GAAP. The Company strongly encourages investors to
review its consolidated financial statements and publicly-filed reports
in their entirety and cautions investors that the non-GAAP measures used
by the Company may differ from similar measures used by other companies,
even when similar terms are used to identify such measures.

     
THE MEDICINES COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED

(In thousands, except per share amounts)

 

Three Months Ended
March 31,

2019     2018
Net revenues $ $ 7,771
Operating expenses:
Cost of revenues 2,737
Research and development 27,011 40,366
Selling, general and administrative 16,982   28,951  
Total operating expenses 43,993   72,054  
Loss from operations (43,993 ) (64,283 )
Co-promotion and license income 228
Loss on short-term investment (266 ) (29,989 )
Interest expense (16,024 ) (12,077 )
Other income 421   2,369  
Loss from continuing operations before income taxes (59,862 ) (103,752 )
(Provision) benefit from income taxes (3 ) 18,916  
Loss from continuing operations (59,865 ) (84,836 )
Income from discontinued operations, net of tax   113,985  
Net (loss) income $ (59,865 ) $ 29,149  
 
Basic (loss) earnings per common share:
Loss from continuing operations $ (0.80 ) $ (1.15 )
Earnings from discontinued operations   1.54  
Basic (loss) earnings per share $ (0.80 ) $ 0.39  
 
Diluted (loss) earnings per common share:
Loss from continuing operations $ (0.80 ) $ (1.15 )
Earnings from discontinued operations   1.54  
Diluted (loss) earnings per share $ (0.80 ) $ 0.39  
 
Weighted average number of common shares outstanding:
Basic 74,463 73,802
Diluted 74,463 73,802
 
         
THE MEDICINES COMPANY
BALANCE SHEET ITEMS
UNAUDITED

(In thousands)

 
March 31, 2019 December 31, 2018
Cash and cash equivalents $ 199,736 $ 238,310
Short-term investment $ 2,353 $ 2,627
Total assets $ 835,853 $ 841,686
Convertible senior notes (due 2022, 2023 and 2024) $ 808,701 $ 792,752
Stockholders' deficit $ (75,389 ) $ (22,264 )
 
     
THE MEDICINES COMPANY
RECONCILIATIONS OF GAAP TO ADJUSTED LOSS FROM CONTINUING
OPERATIONS AND
ADJUSTED LOSS PER SHARE
UNAUDITED

(In thousands, except per share amounts)

 
Three Months Ended
March 31,
2019     2018
Loss from continuing operations $ (59,865 ) $ (84,836 )
Before tax adjustments:
Cost of product revenues:
Share-based compensation expense (1) (6 )
Inventory adjustments (2) (416 )
Restructuring charges (3) 443
Research and development:
Share-based compensation expense (1) 678 984
Restructuring charges (3) (57 ) 326
Selling, general and administrative:
Share-based compensation expense (1) 3,767 3,449
Restructuring charges (3) 53 4,537
Changes in contingent purchase price (4) (264 )
Legal settlements (5) 3,550
Other:
Non-cash interest expense (6) 9,161 6,745
Change in short-term investments (7) 274 28,027
Net loss tax adjustments (8)   (18,916 )
Loss from continuing operations – Adjusted $ (45,989 ) $ (56,377 )
 
Loss from continuing operations per share – Adjusted
Basic $ (0.62 ) $ (0.76 )
Diluted $ (0.62 ) $ (0.76 )
Weighted average number of common shares outstanding:
Basic 74,463 74,463
Diluted 74,463 74,463
 
 
Explanation of Adjustments:
   
(1) Excludes share-based compensation of $4,445 and $4,427 for the three
months ended March 31, 2019 and 2018 because these expenses are
substantially dependent on changes in the market price of the
Company's common stock.
 
(2) Excludes all non-cash inventory adjustments.
 
(3) Excludes restructuring charges related to workforce reorganization
initiated in the first quarter 2018.
 
(4) Excludes changes in fair value of the contingent price related to
the acquisition of Rempex Pharmaceuticals, Inc. that were not
included in the sale to Melinta.
 
(5) Excludes net loss from one-time legal settlements in 2018.
 
(6) Excludes non-cash interest expense, which is in excess of the actual
interest expense paid on the convertible senior notes.
 
(7) Excludes changes in fair value of our investment in Melinta net of
guaranteed payment accretion associated with the sale of our
infectious disease business.
 
(8) Excludes the estimated non-cash tax effect related to adjustments
above.
 

In addition to the financial information prepared in accordance with
U.S. GAAP, this press release also contains adjusted financial measures
that the Company believes provide investors and management with
supplemental information relating to operating performance and trends
that facilitate comparisons between periods and with respect to
projected information.
These adjusted measures should be
considered in addition to, but not as a substitute for, the information
prepared in accordance with U.S. GAAP.
The Company strongly
encourages investors to review its consolidated financial statements and
publicly filed reports in their entirety and cautions investors that the
non-GAAP measures used by the Company may differ from similar measures
used by other companies, even when similar terms are used to identify
such measures.

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