Horizon Pharma plc Announces Record Second Quarter 2015 Financial Results
DUBLIN, IRELAND -- (Marketwired) -- 08/07/15 -- Horizon Pharma plc (NASDAQ: HZNP), a biopharmaceutical company focused on improving patients' lives by identifying, developing, acquiring and commercializing differentiated and accessible medicines that address unmet medical needs, announced its second-quarter 2015 financial results today.
Quarterly Financial Highlights
(in millions except for per
share amounts and % %
percentages) Q2 15 Q2 14 Change 1H 15 1H 14 Change
------- ------- ------ ------- ------- ------
Net sales $ 172.8 $ 66.1 161 $ 286.0 $ 118.0 142
Net income (loss) 31.8 (27.8) NM 12.3 (234.0) NM
Adjusted non-GAAP net income 61.9 19.8 213 86.4 26.8 222
Adjusted EBITDA 76.1 21.5 254 108.5 30.2 259
Earnings (loss) per share -
basic $ 0.21 $ (0.38) NM $ 0.09 $ (3.34) NM
Adjusted non-GAAP earnings
per share - basic 0.41 0.27 52 0.62 0.38 63
Earnings (loss) per share -
diluted 0.20 (0.38) NM 0.08 (3.34) NM
Adjusted non-GAAP earnings
per share - diluted 0.39 0.20 95 0.60 0.29 107
"We delivered exceptionally strong performance in the second quarter and through the first half of the year," said Timothy P. Walbert, chairman, president and chief executive officer, Horizon Pharma plc. "Our results significantly beat expectations on net sales, adjusted EBITDA and adjusted diluted earnings per share. In addition, we're generating strong adjusted operating cash flow and we're well positioned to deliver on our recently raised full-year 2015 net sales and adjusted EBITDA guidance."
Second-Quarter and First-Half 2015 Net Sales Results
(in millions except for % %
percentages) Q2 15 Q2 14 Change 1H 15 1H 14 Change
------- ------- ------ ------- ------- ------
Primary Care $ 113.4 $ 60.2 88 $ 193.5 $ 108.1 79
DUEXIS� 44.2 17.8 148 73.1 31.7 131
VIMOVO� 39.8 42.4 -6 72.8 76.4 -5
PENNSAID� 2% (1) 29.4 - NM 47.6 - NM
Orphan 48.7 - NM 73.6 - NM
ACTIMMUNE� (2) 25.8 - NM 50.7 - NM
RAVICTI� (3) 19.0 - NM 19.0 - NM
BUPHENYL� (3) 3.9 - NM 3.9 - NM
Specialty 10.7 5.9 81 18.9 9.9 91
RAYOS�/LODOTRA� 10.7 5.9 81 18.9 9.9 91
------- ------- ------ ------- ------- ------
Total net sales $ 172.8 $ 66.1 161 $ 286.0 $ 118.0 142
(1) PENNSAID 2% was acquired on October 17, 2014.
(2) ACTIMMUNE was acquired on September 19, 2014.
(3) RAVICTI and BUPHENYL were acquired on May 7, 2015.
- Second-quarter 2015 net sales of $172.8 million increased 161 percent. This was driven by strong growth in each of Horizon's business units: primary care, orphan and specialty, as well as the addition of new medicines to the primary care and orphan business units.
- Primary Care Business Unit: Second-quarter DUEXIS sales of $44.2 million increased 148 percent as compared to the second quarter of 2014, driven by accelerating prescription growth. In the second quarter, VIMOVO sales were $39.8 million and PENNSAID 2% sales were $29.4 million. Total prescriptions accelerated across all three medicines in the primary care business unit driven by their differentiated clinical benefits, strong sales and marketing execution and increased access to Horizon's Prescriptions-Made-Easy", or PME, program. Total prescriptions for DUEXIS, VIMOVO and PENNSAID 2% increased 68 percent, 52 percent and 142 percent, respectively, as compared to the first quarter of 2015.
- Orphan Business Unit: ACTIMMUNE sales were $25.8 million in the quarter, representing a 4 percent sequential increase versus the first quarter of 2015. The commercial organization continues to drive awareness of ACTIMMUNE with both patients and physicians as new patients continue to be steadily added to the therapy each quarter. The Hyperion acquisition was completed on May 7, 2015, and approximately two months of sales were recorded for RAVICTI and BUPHENYL in the second quarter, which were $19.0 million and $3.9 million, respectively.
- Specialty Business Unit: RAYOS/LODOTRA sales in the second quarter were $10.7 million, increasing 81 percent versus the second quarter of 2014. In April, a comprehensive effort was initiated to provide more patients access to RAYOS through the PME program, which resulted in total prescription growth versus the first quarter of 2015 of nearly 90 percent.
Second-Quarter 2015 Financial Results Note: For additional detail and reconciliation of these amounts and growth rates to the most directly comparable GAAP financial measures, please refer to the summary table below, as well as the detailed tables at the end of this release.
Q2 2015 Q2 2014
----------------------------- -----------------------------
(in millions,
except per U.S. Non- U.S. Non-
share amounts) GAAP Adjustments GAAP GAAP Adjustments GAAP
------- ----------- ------- ------- ----------- -------
Net sales $ 172.8 $ - $ 172.8 $ 66.1 $ - $ 66.1
Gross profit 111.0 46.5 157.5 41.3 18.8 60.1
Research and
development 8.9 (2.2) 6.7 3.5 (0.5) 3.0
Sales and
marketing 58.1 (5.9) 52.2 27.1 (1.0) 26.1
General and
administrative 77.2 (54.9) 22.3 17.7 (8.7) 9.0
Total operating
expenses 144.2 (63.0) 81.2 48.3 (10.2) 38.1
Interest
expense, net 19.4 (5.6) 13.8 4.2 (2.3) 1.9
Loss on induced
debt conversion
and debt
extinguishment 67.1 (67.1) - - - -
Loss on
derivative fair
value - - - 11.0 (11.0) -
Other expense,
net 9.1 (9.0) 0.1 4.3 (4.3) -
(Benefit)
expense for
income taxes (160.7) 161.1 0.4 0.9 (0.9) -
Net income
(loss) 31.8 30.1 61.9 (27.8) 47.6 19.8
EBITDA (1) (69.8) 145.9 76.1 (14.5) 36.0 21.5
Earnings (loss)
per share -
basic $ 0.21 $ 0.20 $ 0.41 $ (0.38) $ 0.65 $ 0.27
Earnings (loss)
per share -
diluted $ 0.20 $ 0.19 $ 0.39 $ (0.38) $ 0.58 $ 0.20
(1) EBITDA is a non-GAAP measure.
- Under U.S. generally accepted accounting principles (GAAP) in the second quarter of 2015, the gross profit ratio was 64.2 percent. The adjusted gross profit ratio in the second quarter of 2015 was 91.1 percent, compared to 90.9 percent in the second quarter of 2014.
- On a GAAP basis in the second quarter of 2015, total operating expenses were 83.5 percent of sales, research & development (R&D) expenses were 5.2 percent of sales, sales & marketing (S&M) expenses were 33.6 percent of sales and general & administration (G&A) expenses were 44.7 percent of sales. Adjusted total operating expenses in the second quarter of 2015 were 47.0 percent of sales, adjusted R&D expenses were 3.9 percent of sales, adjusted S&M expenses were 30.2 percent of sales and adjusted G&A expenses were 12.9 percent of sales. Adjusted total operating expenses in the second quarter of 2014 were 57.6 percent of sales.
- On a GAAP basis in the second quarter of 2015, net income was $31.8 million. Adjusted net income in the second quarter of 2015 was $61.9 million, or 35.8 percent of sales, compared to $19.8 million, or 30.0 percent of sales, in the second quarter of 2014.
- On an unadjusted basis in the second quarter of 2015, EBITDA was a $69.8 million loss. Adjusted EBITDA in the second quarter of 2015 was $76.1 million, or 44.0 percent of sales, compared to $21.5 million, or 32.5 percent of sales, in the second quarter of 2014.
- On a GAAP basis in the second quarter of 2015, diluted earnings per share were $0.20. Adjusted diluted earnings per share in the second quarter of 2015 were $0.39, representing growth of 95.0 percent compared to the second quarter of 2014 diluted earnings per share of $0.20. Weighted average shares outstanding used for calculating earnings per share in the second quarter of 2015 were 150.8 million and 159.8 million for basic and diluted earnings per share, respectively.
Cash Flow Statement and Balance Sheet Highlights
- On a GAAP basis in the second quarter of 2015, operating cash flow was $41.6 million. Adjusted operating cash flow in the second quarter of 2015 was $129.6 million, which excludes the payment of accrued excise taxes from the Vidara acquisition, debt extinguishment costs and Hyperion transaction costs.
- The Company had cash and cash equivalents of $667.1 million as of June 30, 2015, an increase of $122.9 million from March 31, 2015. The net cash flows related to the Hyperion acquisition were $3.0 million. Please see the description of Hyperion acquisition-related cash flows in the tables at the end of this release.
- Total principal amount of debt outstanding was $1.275 billion as of June 30, 2015, compared to total principal amount of debt outstanding of $728 million as of March 31, 2015. The $1.275 billion is comprised of $475 million in 6.625 percent senior notes, $400 million in senior secured term loans, and $400 million of 2.5 percent exchangeable senior notes.
Update on Offer to Acquire Depomed, Inc.
- On August 3, 2015, Horizon Pharma issued a news release announcing it submitted a written request to Depomed, Inc. to set a record date to determine shareholders eligible to request a special shareholders meeting. Additionally, Horizon Pharma filed a lawsuit challenging the legality of Depomed's poison pill and certain of the bylaw amendments announced by Depomed's board of directors on July 13, 2015. On July 20, the Company increased its offer to acquire Depomed, Inc. to $33.00 from $29.25 per share in an all-stock transaction.
Horizon Pharma Confirms 2015 Full-Year Guidance as Provided on July 20, 2015
Guidance
--------------------
Net sales $660 to $680 million
Adjusted EBITDA $265 to $280 million
Recent Major Events
- On July 31, 2015, the U.S. Patent and Trademark Office (USPTO) issued a Notice of Allowance with claims covering PENNSAID 2%. Also, since April, the company received three additional Notices of Allowance from the USPTO with claims covering PENNSAID 2% and one Notice of Allowance each from the USPTO with claims covering RAVICTI and RAYOS.
- On July 27, 2015, Horizon Pharma announced a collaboration with Fox Chase Cancer Center to study ACTIMMUNE (interferon gamma-1b) in combination with PD-1/PD-L1 inhibitors in various forms of cancer.
- On July 6, 2015, Horizon Pharma filed patent infringement lawsuits against five companies for filing Abbreviated New Drug Applications for PENNSAID 2%.
- On June 5, 2015, the company initiated a Phase 3 trial of ACTIMMUNE for the treatment of Friedreich's ataxia, a degenerative neuromuscular disorder, following the receipt of U.S. Food and Drug Administration Fast Track Designation in April.
- On May 8, 2015, the company announced the settlement of PENNSAID 2% patent litigation with Perrigo Company plc and its subsidiary Paddock Laboratories, LLC, collectively (Perrigo).
- On May 7, 2015, Horizon Pharma completed the acquisition of Hyperion for $1.1 billion in cash and an enterprise value of $958 million.
Conference Call At 8 a.m. EDT / 1 p.m. IST today, the Company will host a live conference call and webcast to review its financial and operating results and provide a general business update.
U.S. Dial-In Number: +1 888.338.8373 International Dial-In Number: +1 973.872.3000 Passcode: 87670328
The live webcast and a replay may be accessed by visiting Horizon's website at http://ir.horizon-pharma.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 conference call will be available approximately two hours after the call and accessible through one of the following telephone numbers, using the passcode below:
Replay U.S. Dial-In Number: +1 855.859.2056 Replay International Dial-In Number: +1 404.537.3406 Passcode: 87670328
About Horizon Pharma plc Horizon Pharma plc is a biopharmaceutical company focused on improving patients' lives by identifying, developing, acquiring and commercializing differentiated and accessible medicines that address unmet medical needs. The Company markets seven medicines through its orphan, primary care and specialty business units. Horizon's global headquarters are in Dublin, Ireland. For more information, please visit www.horizonpharma.com. Follow @HZNPplc on Twitter or view careers on our LinkedIn page.
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 adjusted net income, adjusted net income per share, adjusted gross profit and gross profit ratio, adjusted operating and other expenses and adjusted cash from operations, each of which include adjustments to GAAP figures. Adjustments to Horizon's GAAP figures as well as EBITDA exclude acquisition transaction related expenses, loss on debt extinguishment, as well as non-cash items such as share-based compensation, depreciation and amortization, royalty accretion, non-cash interest expense, 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 believes that these non-GAAP financial measures, when considered together with the GAAP figures, can enhance an overall understanding of Horizon's financial 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 2015 financial results and trends. 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. Horizon has not provided reconciliation of an expected adjusted EBITDA outlook to an expected net income (loss) outlook because certain items that are a component of net income (loss) cannot be reasonably projected, either due to the significant impact of changes in Horizon's stock price on share-based compensation, the variability associated with acquisition related expenses due to timing and other factors.
Forward-Looking Statements This press release contains forward-looking statements, including, but not limited to, statements related to Horizon's expected full-year 2015 net sales and adjusted EBITDA guidance 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 full-year 2015 financial and operating results may differ from its expectations; Horizon Pharma's ability to grow sales and revenues from existing products; the availability of coverage and adequate reimbursement and pricing from government and third party payers and risks relating to the success of Horizon's Prescriptions-Made-Easy or PME specialty pharmacy program; competition, including potential generic competition; the ability to protect intellectual property and defend patents; regulatory obligations and oversight; and those risks detailed from time-to-time under the caption "Risk Factors" and elsewhere in Horizon's filings and reports with the U.S. Securities and Exchange Commission ("SEC"). Horizon Pharma undertakes no duty or obligation to update any forward-looking statements contained in this presentation as a result of new information.
Additional Information This press release does not constitute an offer to buy or solicitation of any offer to sell or vote securities. This press release contains certain information related to a solicitation by Horizon Pharma of Depomed's shareholders to call a special shareholders meeting to consider certain matters in connection with a proposal which Horizon Pharma has made for a business combination transaction with Depomed. Subject to future developments, Horizon Pharma and Depomed may file one or more solicitation statements, proxy statements or other documents with the SEC in connection with such special shareholders meeting, and Horizon Pharma (and, if a negotiated transaction is agreed upon, Depomed) may file one or more registration statements, prospectuses, proxy statements or other documents with the SEC in connection with the proposed transaction. This communication is not a substitute for any solicitation statement, proxy statement or other document filed with the SEC in connection with such special shareholders meeting or any registration statement, prospectus, proxy statement or other document Horizon Pharma and/or Depomed may file with the SEC in connection with the proposed transaction. Horizon Pharma has filed a preliminary proxy statement and accompanying WHITE proxy card with the SEC with respect to the solicitation of proxies to call a special meeting of shareholders. INVESTORS AND SECURITY HOLDERS OF HORIZON PHARMA AND DEPOMED ARE URGED TO READ CAREFULLY THE SOLICITATION STATEMENT, (INCLUDING ANY AMENDMENTS AND SUPPLEMENTS), THE ACCOMPANYING WHITE PROXY CARD AND OTHER PROXY STATEMENTS AND DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE SPECIAL SHAREHOLDERS MEETING AND ANY REGISTRATION STATEMENTS, PROSPECTUSES, PROXY STATEMENTS AND OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT HORIZON PHARMA, DEPOMED, THE SPECIAL SHAREHOLDERS MEETING AND THE PROPOSED TRANSACTION, AS APPLICABLE. Investors and security holders may obtain free copies of these documents (when they are available) and other related documents filed with the SEC at the SEC's web site at www.sec.gov or by directing a request to Horizon Pharma's Investor Relations department at Horizon Pharma, Inc., Attention: Investor Relations, 520 Lake Cook Road, Suite 520, Deerfield, IL 60015 or to Horizon Pharma's Investor Relations department at 224-383-3400 or by email to [email protected]. Investors and security holders may obtain free copies of the documents filed with the SEC on Horizon Pharma's website at www.horizonpharma.com under the heading "Investors" and then under the heading "SEC Filings."
Certain Information Regarding Participants Horizon Pharma and/or Depomed and their respective directors, executive officers and certain other employees may be deemed participants in a solicitation of proxies in connection with the request to call the special shareholders meeting and in connection with the proposed transaction. You can find information about Horizon Pharma's directors, executive officers and such certain other employees in Horizon Pharma's Annual Report on Form 10-K for the year ended December 31, 2014, which was filed with the SEC on February 27, 2015, Horizon Pharma's definitive proxy statement filed with the SEC on May 6, 2015, and in Horizon Pharma's Current Report on Form 8-K/A filed with the SEC on July 27, 2015, and in such solicitation statements, proxy statements or other documents that would be filed with the SEC in connection with the special shareholders meeting and the proposed transaction. You can find information about Depomed's directors, executive officers and its employees who are participants in such solicitation in Depomed's definitive proxy statement filed with the SEC on April 16, 2015, and in such solicitation statements, proxy statements or other documents that would be filed with the SEC in connection with the special shareholders meeting and the proposed transaction. These documents are available free of charge at the SEC's web site at www.sec.gov and, with respect to Horizon Pharma, from Investor Relations at Horizon Pharma as described above. Additional information regarding the interests of such potential participants will be included in one or more registration statements, proxy statements or other documents filed with the SEC if and when they become available.
Horizon Pharma plc
Consolidated Statements of Operations
(in thousands, except share and per share data)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------- --------------------------
2015 2014 2015 2014
------------ ------------ ------------ ------------
REVENUES:
Net sales $ 172,821 $ 66,062 $ 285,962 $ 117,988
Cost of goods sold 61,826 24,810 90,679 32,429
------------ ------------ ------------ ------------
Gross profit 110,995 41,252 195,283 85,559
------------ ------------ ------------ ------------
OPERATING EXPENSES:
Research and
development 8,922 3,545 15,103 6,378
Sales and
marketing 58,056 27,126 105,119 55,821
General and
administrative 77,190 17,681 103,470 28,873
------------ ------------ ------------ ------------
Total operating
expenses 144,168 48,352 223,692 91,072
------------ ------------ ------------ ------------
Operating loss (33,173) (7,100) (28,409) (5,513)
------------ ------------ ------------ ------------
OTHER EXPENSE, NET:
Interest expense,
net (19,448) (4,207) (29,480) (8,414)
Foreign exchange
loss (87) (284) (924) (322)
Loss on derivative
fair value - (10,965) - (214,995)
Loss on induced
conversion of
debt and debt
extinguishment (67,080) - (77,624) -
Other, net (9,078) (4,333) (10,069) (5,000)
------------ ------------ ------------ ------------
Total other
expense, net (95,693) (19,789) (118,097) (228,731)
------------ ------------ ------------ ------------
Loss before
(benefit) expense
for income taxes (128,866) (26,889) (146,506) (234,244)
(BENEFIT) EXPENSE
FOR INCOME TAXES (160,680) 880 (158,767) (225)
------------ ------------ ------------ ------------
NET INCOME (LOSS) $ 31,814 $ (27,769) $ 12,261 $ (234,019)
------------ ------------ ------------ ------------
Earnings (loss) per
share - basic $ 0.21 $ (0.38) $ 0.09 $ (3.34)
------------ ------------ ------------ ------------
Weighted average
shares outstanding
- basic 150,771,902 73,384,801 138,369,537 70,164,267
------------ ------------ ------------ ------------
Earnings (loss) per
share - diluted $ 0.20 $ (0.38) $ 0.08 $ (3.34)
------------ ------------ ------------ ------------
Weighted average
shares outstanding
- diluted 159,797,319 73,384,801 145,031,882 70,164,267
------------ ------------ ------------ ------------
Horizon Pharma plc
Consolidated Balance Sheets
(in thousands, except share data)
As of
----------------------------
June 30, December 31,
2015 2014
------------- -------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 667,057 $ 218,807
Restricted cash 600 738
Accounts receivable, net 182,868 73,915
Inventories, net 20,299 16,865
Prepaid expenses and other current assets 11,620 14,370
Deferred tax assets, net 15,767 1,530
------------- -------------
Total current assets 898,211 326,225
------------- -------------
Property and equipment, net 9,773 7,241
Developed technology, net 1,692,057 696,963
In-process research and development 66,000 66,000
Other intangible assets, net 7,466 7,870
Goodwill 259,565 -
Deferred tax assets, net, non-current - 18,761
Other assets 9,615 11,564
------------- -------------
TOTAL ASSETS $ 2,942,687 $ 1,134,624
------------- -------------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Convertible debt, net $ - $ 48,334
Long-term debt, current portion 4,000 -
Accounts payable 26,224 21,011
Accrued trade discounts and rebates 136,836 76,115
Accrued expenses 79,246 46,625
Accrued royalties, current portion 42,574 25,325
Deferred revenues, current portion 2,019 1,261
Deferred tax liabilities, net - 721
------------- -------------
Total current liabilities 290,899 219,392
------------- -------------
LONG-TERM LIABILITIES:
Exchangeable notes, net 274,305 -
Long-term debt, net 858,593 297,169
Accrued royalties, net of current 128,913 48,887
Deferred revenues, net of current 10,004 8,144
Deferred tax liabilities, net, non-current 121,039 19,570
Other-long term liabilities 4,967 1,258
------------- -------------
Total long-term liabilities 1,397,821 375,028
------------- -------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Ordinary shares, $0.0001 nominal value per
share; 300,000,000 shares authorized;
158,732,528 and 124,425,853 issued at June
30, 2015 and December 31, 2014
respectively, and 158,348,162 and
124,041,487 outstanding at June 30, 2015
and December 31, 2014, respectively. 16 13
Treasury stock, 384,366 ordinary shares at
March 31, 2015 and December 31, 2014 (4,585) (4,585)
Additional paid-in capital 1,969,750 1,269,858
Accumulated other comprehensive loss (2,756) (4,363)
Accumulated deficit (708,458) (720,719)
------------- -------------
Total shareholders' equity 1,253,967 540,204
------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 2,942,687 $ 1,134,624
------------- -------------
Horizon Pharma plc
Consolidated Statements of Cash Flows
(in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ ------------------------
2015 2014 2015 2014
----------- ----------- ----------- -----------
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net income (loss) $ 31,814 $ (27,769) $ 12,261 $ (234,019)
Adjustments to reconcile
net income (loss) to
net cash provided by
(used in) operating
activities:
Depreciation and
intangible
amortization
expense 32,408 5,433 50,743 10,836
Share-based
compensation 24,665 4,160 31,339 6,087
Royalty accretion 3,977 2,953 7,021 2,953
Royalty liability
remeasurement 14,277 13,033 14,277 13,033
Loss on derivative
revaluation - 10,965 - 214,995
Loss on induced
conversions of debt
and debt
extinguishment 16,733 - 21,581 -
Amortization of debt
discount and
deferred financing
costs 5,622 2,333 7,828 4,666
Foreign exchange
loss 87 284 924 322
Other (3) - 99 -
Changes in operating
assets and
liabilities:
Accounts
receivable (43,724) (11,693) (97,167) (35,835)
Inventories 7,467 219 10,555 (510)
Prepaid expenses
and other current
assets 38,904 2,007 4,597 (2,211)
Accounts payable 1,622 5,628 1,604 5,980
Accrued trade
discounts and
rebates 45,408 12,326 47,596 29,469
Accrued expenses
and accrued
royalties 22,514 (3,586) 16,492 (27)
Deferred revenues 2,804 250 2,778 362
Deferred income
taxes (160,229) 222 (158,873) (232)
Payment of
original issue
discount upon
repayment of 2014
Term Loan
Facility (3,000) - (3,000) -
Other non-current
assets and
liabilities 238 (4) 190 135
----------- ----------- ----------- -----------
Net cash provided by
(used in) operating
activities 41,584 16,761 (29,155) 16,004
----------- ----------- ----------- -----------
CASH FLOWS FROM
INVESTING ACTIVITIES:
Payments for
acquisitions, net of
cash acquired (1,022,361) - (1,022,361) -
Proceeds from
liquidation of
available-for-sale
investments 64,623 - 64,623 -
Purchase of property
and equipment (704) (543) (2,281) (1,037)
Change in restricted
cash - - 138 -
----------- ----------- ----------- -----------
Net cash used in
investing activities (958,442) (543) (959,881) (1,037)
----------- ----------- ----------- -----------
CASH FLOWS FROM
FINANCING ACTIVITIES:
Proceeds from the
issuance of common
stock in connection
with stock option
exercises 1,358 985 1,932 1,597
Net proceeds from the
issuance of
Exchangable Senior
Notes (819) - 387,181 -
Net proceeds from the
issuance of 2023
Senior Notes 462,340 - 462,340 -
Net proceeds from the
2015 Term Loan
Facility 391,719 - 391,719 -
Net proceeds from the
issuance of ordinary
shares 475,627 - 475,627 -
Proceeds from the
issuance of common
stock through warrant
exercises 4,769 7,628 14,693 31,172
Proceeds from the
issuance of common
stock through ESPP
programs 1,541 649 1,541 649
Repayment of the 2014
Term Loan Facility (297,000) - (297,000) -
----------- ----------- ----------- -----------
Net cash provided by
financing activities 1,039,535 9,262 1,438,033 33,418
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Effect of foreign
exchange rate changes
on cash 169 (3) (747) (14)
----------- ----------- ----------- -----------
NET INCREASE IN CASH AND
CASH EQUIVALENTS 122,846 25,477 448,250 48,371
CASH AND CASH
EQUIVALENTS, beginning
of the year 544,211 103,374 218,807 80,480
----------- ----------- ----------- -----------
CASH AND CASH
EQUIVALENTS, end of the
period $ 667,057 $ 128,851 $ 667,057 $ 128,851
----------- ----------- ----------- -----------
Horizon Pharma plc
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income
(in thousands, except share and per share data)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------- --------------------------
2015 2014 2015 2014
------------ ------------ ------------ ------------
(Unaudited) (Unaudited)
Adjusted Non-GAAP
Net Income:
GAAP Net Income
(Loss) $ 31,814 $ (27,769) $ 12,261 $ (234,019)
Non-GAAP
Adjustments:
Remeasurement of
royalties for
products
acquired
through
business
combinations 14,277 13,033 14,277 13,033
Vidara
acquisition
costs 759 10,125 2,493 14,174
Hyperion
acquisition
costs 45,930 - 47,850 -
Loss on
derivative
revaluation - 10,965 - 214,995
Loss on induced
conversion of
debt and debt
extinguishment 67,080 - 77,624 -
Amortization and
accretion:
Intangible
amortization
expense 31,832 5,029 49,510 10,056
Amortization
of debt
discount and
deferred
financing
costs 5,622 2,333 7,848 4,666
Accretion of
royalty
liabilities 3,977 2,953 7,020 2,953
Amortizaton of
inventory
step-up
adjustment 3,341 - 6,495 -
Share-based
compensation 24,665 4,160 31,339 6,087
Depreciation
expense 576 404 1,230 780
Royalties for
products
acquired
through
business
combinations
(1) (6,840) (2,347) (12,036) (5,696)
------------ ------------ ------------ ------------
Total of pre-
tax non-GAAP
adjustments 191,219 46,655 233,650 261,048
------------ ------------ ------------ ------------
Income tax
adjustments (2) (161,135) 880 (159,506) (225)
------------ ------------ ------------ ------------
Total of non-
GAAP
adjustments 30,084 47,535 74,144 260,823
------------ ------------ ------------ ------------
Adjusted Non-GAAP
Net Income $ 61,898 $ 19,766 $ 86,405 $ 26,804
------------ ------------ ------------ ------------
Adjusted Non-GAAP
Earnings Per Share:
Weighted average
shares - Basic 150,771,902 73,384,801 138,369,537 70,164,267
------------ ------------ ------------ ------------
Adjusted Non-GAAP
Earnings Per
Share - Basic:
GAAP earnings
(loss) per
share - Basic $ 0.21 $ (0.38) $ 0.09 $ (3.34)
Non-GAAP
adjustments 0.20 0.65 0.53 3.72
------------ ------------ ------------ ------------
Adjusted Non-
GAAP earnings
per share -
Basic $ 0.41 $ 0.27 $ 0.62 $ 0.38
------------ ------------ ------------ ------------
Weighted average
shares - Diluted
Weighted average
shares - Basic 150,771,902 73,384,801 138,369,537 70,164,267
Ordinary stock
equivalents 9,025,417 24,689,011 6,662,345 22,955,502
------------ ------------ ------------ ------------
Weighted average
shares -
Diluted 159,797,319 98,073,812 145,031,882 93,119,769
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Adjusted Non-GAAP
Net Income -
Diluted $ 61,898 $ 19,766 $ 86,405 $ 26,804
------------ ------------ ------------ ------------
GAAP earnings
(loss) per
share - Diluted $ 0.20 $ (0.38) $ 0.08 $ (3.34)
Non-GAAP
adjustments 0.19 0.65 0.52 3.72
Diluted earnings
per share
effect of
ordinary share
equivalents - (0.07) - (0.09)
------------ ------------ ------------ ------------
Adjusted Non-
GAAP earnings
per share -
Diluted $ 0.39 $ 0.20 $ 0.60 $ 0.29
------------ ------------ ------------ ------------
(1) Royalties for products acquired through business combinations relate to
VIMOVO, ACTIMMUNE, RAVICTI and BUPHENYL.
(2) Adjustments to convert the income tax benefit/expense to the estimated
amount of taxes that are payable in cash.
Horizon Pharma plc
Additional GAAP to Non-GAAP Reconciliations
EBITDA, Gross Profit and Operating Cash Flow
(in thousands, except percentages)
Three Months Ended June Six Months Ended June
30, 30,
------------------------ ------------------------
2015 2014 2015 2014
----------- ----------- ----------- -----------
(Unaudited) (Unaudited)
EBITDA and Adjusted
EBITDA:
GAAP Net Income (Loss) $ 31,814 $ (27,769) $ 12,261 $ (234,019)
Depreciation 576 404 1,230 780
Amortization and
accretion:
Intangible
amortization
expense 31,832 5,029 49,510 10,056
Accretion of royalty
liabilities 3,977 2,953 7,020 2,953
Amortization of
deferred revenue (129) (161) (263) (322)
Amortizaton of
inventory step-up
adjustment 3,341 - 6,495 -
Interest expense, net
(including
amortization of debt
discount and deferred
financing costs) 19,448 4,207 29,480 8,414
(Benefit) expense for
income taxes (160,680) 880 (158,767) (225)
----------- ----------- ----------- -----------
EBITDA $ (69,821) $ (14,457) $ (53,033) $ (212,363)
----------- ----------- ----------- -----------
Non-GAAP adjustments:
Remeasurement of
royalties for
products acquired
through business
combinations 14,277 13,033 14,277 13,033
Vidara acquisition
costs 759 10,125 2,493 14,174
Hyperion acquisition
costs 45,930 - 47,850 -
Loss on derivative
revaluation - 10,965 - 214,995
Loss on induced
conversion and debt
extinguishment 67,080 - 77,624 -
Share-based
compensation 24,665 4,160 31,339 6,087
Royalties for
products acquired
through business
combinations (1) (6,840) (2,347) (12,036) (5,696)
----------- ----------- ----------- -----------
Total of Non-GAAP
adjustments $ 145,871 $ 35,936 $ 161,547 $ 242,593
----------- ----------- ----------- -----------
Adjusted EBITDA $ 76,050 $ 21,479 $ 108,513 $ 30,230
----------- ----------- ----------- -----------
Non-GAAP Gross Profit:
GAAP net sales $ 172,821 $ 66,062 $ 285,962 $ 117,988
GAAP cost of goods
sold 61,826 24,810 90,679 32,429
----------- ----------- ----------- -----------
GAAP gross profit $ 110,995 $ 41,252 $ 195,283 $ 85,559
----------- ----------- ----------- -----------
GAAP gross profit % 64% 62% 68% 73%
Non-GAAP Gross Profit:
GAAP gross profit $ 110,995 $ 41,252 $ 195,283 $ 85,559
Non-GAAP gross
profit adjustments:
Remeasurement of
royalties for
products acquired
through business
combinations 14,277 13,033 14,277 13,033
Intangible
amortization
expense (COGS
only) 31,628 5,029 49,105 10,056
Accretion of
royalty
liabilities 3,977 2,953 7,020 2,953
Amortizaton of
inventory step-up
adjustment 3,341 - 6,495 -
Depreciation (COGS
only) 74 148 203 180
Royalties for
products acquired
through business
combinations (1) (6,840) (2,347) (12,036) (5,696)
----------- ----------- ----------- -----------
Total of Non-GAAP
adjustments $ 46,458 $ 18,816 $ 65,065 $ 20,526
----------- ----------- ----------- -----------
Non-GAAP gross
profit $ 157,453 $ 60,068 $ 260,347 $ 106,085
----------- ----------- ----------- -----------
Non-GAAP gross
profit % 91% 91% 91% 90%
Non-GAAP Cash Provided
By Operating
Activities:
GAAP cash (used in)
provided by operating
activities $ 41,584 $ 16,761 $ (29,155) $ 16,004
Cash payments of
Vidara acquistion
costs 11,272 3,369 13,092 8,464
Cash payments for
induced debt
conversion 4,776 - 10,472 -
Cash payment for
debt extinguishment 45,367 - 45,367 -
Payment of original
issue discount on
debt extinguishment 3,000 - 3,000 -
Cash payments of
Hyperion acquistion
costs 23,596 - 23,596 -
----------- ----------- ----------- -----------
Non-GAAP cash provided
by operating
activities $ 129,595 $ 20,130 $ 66,372 $ 24,468
----------- ----------- ----------- -----------
(1) Royalties for products acquired through business combinations relate to
VIMOVO, ACTIMMUNE, RAVICTI and BUPHENYL.
Horizon Pharma plc
Certain Income Statement Line Items - Non-GAAP Adjusted
For the Three Months Ended June 30, 2015
(Unaudited)
----- ------- ----------- --------- --------------
Research & Sales & General &
Sales COGS Development Marketing Administrative
----- ------- ----------- --------- --------------
Non-GAAP Adjustments
(in thousands):
Loss on induced
conversion and debt
extinguistment(1) - - - - -
Vidara acquisition
costs(2) - - - - 759
Hyperion acquisition
costs(3) - - - - 36,930
Amortization and
accretion:
Intangible
amortization
expense(4) - 31,628 - 204 -
Amortization of
debt discount and
deferred
financing
costs(5) - - - - -
Accretion of
royalty
liability(6) - 3,977 - - -
Amortization of
inventory step-up
adjustment(7) - 3,341 - - -
Remeasurement of
royalties for
products acquired
through business
combinations(8) - 14,277 - - -
Stock-based
compensation(9) - - 2,212 5,735 16,718
Depreciation
expense(10) - 74 - - 502
Royalties for
products acquired
through business
combinations(11) - (6,840) - - -
Income tax
adjustments(12) - - - - -
----- ------ ----------- --------- --------------
Total of non-GAAP
adjustments - 46,458 2,212 5,939 54,909
===== ====== =========== ========= ==============
-------- -------------- -------- ---------- ---------
Loss on
Induced
Debt Income
Conversion Other Tax
Interest & Debt (Income) (Benefit)
Expense Extinguishment Expense Expense Total
-------- -------------- -------- ---------- ---------
Non-GAAP Adjustments
(in thousands):
Loss on induced
conversion and debt
extinguistment(1) - 67,080 - - 67,080
Vidara acquisition
costs(2) - - - - 759
Hyperion acquisition
costs(3) - - 9,000 - 45,930
Amortization and
accretion:
Intangible
amortization
expense(4) - - - - 31,832
Amortization of
debt discount and
deferred
financing
costs(5) 5,622 - - - 5,622
Accretion of
royalty
liability(6) - - - - 3,977
Amortization of
inventory step-up
adjustment(7) - - - - 3,341
Remeasurement of
royalties for
products acquired
through business
combinations(8) - - - - 14,277
Stock-based
compensation(9) - - - - 24,665
Depreciation
expense(10) - - - - 576
Royalties for
products acquired
through business
combinations(11) - - - - (6,840)
Income tax
adjustments(12) - - - (161,135) (161,135)
-------- -------------- -------- --------- --------
Total of non-GAAP
adjustments 5,622 67,080 9,000 (161,135) 30,084
======== ============== ======== ========= ========
Horizon Pharma plc
Certain Income Statement Line Items - Non-GAAP Adjusted
For the Three Months Ended June 30, 2014
(Unaudited)
----- ------- ----------- --------- --------------
Research & Sales & General &
Sales COGS Development Marketing Administrative
----- ------- ----------- --------- --------------
Non-GAAP Adjustments
(in thousands):
Loss on derivative
revaluation(13) - - - - -
Vidara acquisition
costs(2) - - - - 5,792
Amortization and
accretion:
Intangible
amortization
expense(4) - 5,029 - - -
Amortization of
debt discount and
deferred financing
costs(5) - - - - -
Accretion of
royalty
liability(6) - 2,953 - - -
Remeasurement of
royalties for
products acquired
through business
combinations(8) - 13,033 - - -
Stock-based
compensation(9) - - 498 1,040 2,622
Depreciation
expense(10) - 148 - - 256
Royalties for
products acquired
through business
combinations(11) - (2,347) - - -
Income tax
adjustments(12) - - - - -
----- ------ ----------- --------- --------------
Total of non-GAAP
adjustments - 18,816 498 1,040 8,670
===== ====== =========== ========= ==============
-------- -------------- -------- --------- ---------
Income
Other Tax
Interest Derivative (Income) (Benefit)
Expense Loss Expense Expense Total
-------- -------------- -------- --------- ---------
Non-GAAP Adjustments
(in thousands):
Loss on derivative
revaluation(13) - 10,965 - - 10,965
Vidara acquisition
costs(2) - - 4,333 - 10,125
Amortization and
accretion:
Intangible
amortization
expense(4) - - - - 5,029
Amortization of
debt discount and
deferred financing
costs(5) 2,333 - - - 2,333
Accretion of
royalty
liability(6) - - - - 2,953
Remeasurement of
royalties for
products acquired
through business
combinations(8) - - - - 13,033
Stock-based
compensation(9) - - - - 4,160
Depreciation
expense(10) - - - - 404
Royalties for
products acquired
through business
combinations(11) - - - - (2,347)
Income tax
adjustments(12) - - - 880 880
-------- -------------- -------- --------- --------
Total of non-GAAP
adjustments 2,333 10,965 4,333 880 47,535
======== ============== ======== ========= ========
Horizon Pharma plc
Certain Income Statement Line Items - Non-GAAP Adjusted
For the Six Months Ended June 30, 2015
(Unaudited)
----- ------- ----------- --------- --------------
Research & Sales & General &
Sales COGS Development Marketing Administrative
----- ------- ----------- --------- --------------
Non-GAAP Adjustments
(in thousands):
Loss on induced
conversion and debt
extinguistment(1) - - - - -
Vidara acquisition
costs(2) - 23 94 - 2,376
Hyperion acquisition
costs(3) - - - - 37,850
Amortization and
accretion:
Intangible
amortization
expense(4) - 49,104 - 406 -
Amortization of
debt discount and
deferred
financing
costs(5) - - - - -
Accretion of
royalty
liability(6) - 7,020 - - -
Amortization of
inventory step-up
adjustment(7) - 6,495 - - -
Remeasurement of
royalties for
products acquired
through business
combinations(8) - 14,277 - - -
Stock-based
compensation(9) - - 2,670 8,536 20,133
Depreciation
expense(10) - 203 - - 1,027
Royalties for
products acquired
through business (12,03
combinations(11) - 6) - - -
Income tax
adjustments(12) - - - - -
----- ------ ----------- --------- --------------
Total of non-GAAP
adjustments - 65,087 2,764 8,942 61,386
===== ====== =========== ========= ==============
-------- -------------- -------- ---------- ---------
Loss on
Induced
Debt Income
Conversion Other Tax
Interest & Debt (Income) (Benefit)
Expense Extinguishment Expense Expense Total
-------- -------------- -------- ---------- ---------
Non-GAAP Adjustments
(in thousands):
Loss on induced
conversion and debt
extinguistment(1) - 77,624 - - 77,624
Vidara acquisition
costs(2) - - - - 2,493
Hyperion acquisition
costs(3) - - 10,000 - 47,850
Amortization and
accretion:
Intangible
amortization
expense(4) - - - - 49,510
Amortization of
debt discount and
deferred
financing
costs(5) 7,848 - - - 7,848
Accretion of
royalty
liability(6) - - - - 7,020
Amortization of
inventory step-up
adjustment(7) - - - - 6,495
Remeasurement of
royalties for
products acquired
through business
combinations(8) - - - - 14,277
Stock-based
compensation(9) - - - - 31,339
Depreciation
expense(10) - - - - 1,230
Royalties for
products acquired
through business
combinations(11) - - - - (12,036)
Income tax
adjustments(12) - - - (159,506) (159,506)
-------- -------------- -------- --------- --------
Total of non-GAAP
adjustments 7,848 77,624 10,000 (159,506) 74,144
======== ============== ======== ========= ========
Horizon Pharma plc
Certain Income Statement Line Items - Non-GAAP Adjusted
For the Six Months Ended June 30, 2014
(Unaudited)
----- ------- ----------- --------- --------------
Research & Sales & General &
Sales COGS Development Marketing Administrative
----- ------- ----------- --------- --------------
Non-GAAP Adjustments (in
thousands):
Loss on derivative
revaluation(13) - - - - -
Vidara acquisition
costs(2) - - - - 9,174
Amortization and
accretion:
Intangible
amortization
expense(4) - 10,056 - - -
Amortization of debt
discount and
deferred financing
costs(5) - - - - -
Accretion of royalty
liability(6) - 2,953 - - -
Remeasurement of
royalties for products
acquired through
business
combinations(8) - 13,033 - - -
Stock-based
compensation(9) - - 798 1,624 3,665
Depreciation
expense(10) - 180 - - 600
Royalties for products
acquired through
business
combinations(11) - (5,696) - - -
Income tax
adjustments(12) - - - - -
----- ------ ----------- --------- --------------
Total of non-GAAP
adjustments - 20,526 798 1,624 13,439
===== ====== =========== ========= ==============
-------- ---------- -------- ---------- ---------
Income
Other Tax
Interest Derivative (Income) (Benefit)
Expense Loss Expense Expense Total
-------- ---------- -------- ---------- ---------
Non-GAAP Adjustments (in
thousands):
Loss on derivative
revaluation(13) - 214,995 - - 214,995
Vidara acquisition
costs(2) - - 5,000 - 14,174
Amortization and
accretion:
Intangible
amortization
expense(4) - - - - 10,056
Amortization of debt
discount and
deferred financing
costs(5) 4,666 - - - 4,666
Accretion of royalty
liability(6) - - - - 2,953
Remeasurement of
royalties for products
acquired through
business
combinations(8) - - - - 13,033
Stock-based
compensation(9) - - - - 6,087
Depreciation
expense(10) - - - - 780
Royalties for products
acquired through
business
combinations(11) - - - - (5,696)
Income tax
adjustments(12) - - - (225) (225)
-------- ---------- -------- --------- --------
Total of non-GAAP
adjustments 4,666 214,995 5,000 (225) 260,823
======== ========== ======== ========= ========
NOTES FOR CERTAIN INCOME STATEMENT LINE ITEMS - NON-GAAP ADJUSTED
(in thousands)
(1) During the three months ended June 30, 2015, the Company recorded a
loss on induced debt conversions of $67,080, which represented an early
redemption payment of $45,366, the write-down of $16,733 in debt
discount and deferred financing costs, $4,635 in additional exchange
consideration to debt holders and $346 in expenses incurred in
connection with the induced debt conversions. During the six months
ended June 30, 2015, the Company recorded a loss on induced debt
conversions of $77,624, which represented an early redemption payment
of $45,366, the write-down of $21,581 in debt discount and deferred
financing costs, $10,005 in additional exchange consideration to debt
holders and $672 in expenses incurred in connection with the induced
debt conversions.
(2) On September 19, 2014, the Company acquired Vidara Therapeutics
International Public Limited Company ("Vidara"), through a reverse
merger for stock and cash ("Vidara Merger"). Expenses, including legal
and consulting fees, incurred in connection with the Vidara Merger,
have been excluded as non-recurring items.
(3) On May 7, 2015, the Company completed its acquisition of Hyperion
Therapeutics, Inc. ("Hyperion") pursuant to which the Company acquired
all of the issued and outstanding shares of Hyperion's common stock for
cash. Expenses, including legal and consulting fees, incurred in
connection with the Hyperion acquisition, have been excluded as non-
recurring items.
(4) Intangible amortization expenses are associated with the Company's
intellectual property rights, developed technology and customer
relationships of VIMOVO, LODOTRA, RAYOS, ACTIMMUNE, RAVICTI and
BUPHENYL.
(5) Represents amortization of debt discount and deferred financing costs
associated with the Company's debt.
(6) Represents accretion expense associated with the ACTIMMUNE, VIMOVO,
RAVICTI and BUPHENYL royalties.
(7) In connection with the Hyperion acquisition, the RAVICTI and BUPHENYL
inventory was stepped up in value to $9,125 and during the three months
ended June 30, 2015, the Company recognized in cost of goods sold
$3,379 of step-up inventory costs related to RAVICTI and BUPHENYL
inventory sold. In connection with the Vidara Merger, the ACTIMMUNE
inventory was stepped up in value to $14,218 and during the first
quarter of 2015, the Company recognized in cost of goods sold the
remaining $3,154 of step-up inventory costs related to ACTIMMUNE.
(8) At the time of the Company's acquisition of the rights to VIMOVO,
ACTIMMUNE, RAVICTI and BUPHENYL, the Company estimated the fair value
of contingent royalties payable to third parties using an income
approach under the discounted cash flow method, which included revenue
projections and other assumptions the Company made to determine the
fair value. If the Company significantly over performs or underperforms
against its original revenue projections or it becomes necessary to
make changes to assumptions as a result of a triggering event, the
Company is required to reassess the fair value of the contingent
royalties payable. Any subsequent adjustments to fair value is recorded
in the period such adjustment is made as either an increase or decrease
to royalties payable, with a corresponding increase or decrease in cost
of goods sold, in accordance with established accounting policies.
During the second quarter of 2015, the Company recorded a charge of
$14,277 to cost of goods sold to increase the amount of the contingent
royalty liabilities relating to VIMOVO and ACTIMMUNE. During the second
quarter of 2014, the Company recorded a charge of $13,033 to cost of
goods sold to increase the amount of the contingent royalty liability
relating to VIMOVO.
(9) Represents share-based compensation expense associated with the
Company's stock option, restricted stock unit, and performance stock
unit grants to its employees and non-employees, its cash-settled long-
term incentive program, and its employee stock purchase plan.
(10) Represents depreciation expense related to the Company's property,
equipment and leasehold improvements.
(11) Royalties of $6,840 and $12,036 were incurred during the three and six
months ended June 30, 2015, respectively, based on each period's net
sales for VIMOVO, ACTIMMUNE, RAVICTI and BUPHENYL, as applicable.
Royalties of $2,347 and $5,696 were incurred during the three and six
months ended June 30, 2014, respectively, based on each period's net
sales for VIMOVO, ACTIMMUNE, RAVICTI and BUPHENYL, as applicable.
(12) Represents adjustments to convert the income tax expense (benefit) to
the estimated amount of taxes that are payable in cash.
(13) During the three and six months ended June 30, 2014, the Company
recorded non-cash charges related to the increase in the fair value of
the embedded derivative associated with its convertible senior notes.
The loss on the derivative revaluation was primarily due to an increase
in the market value of the Company's common stock. The loss on
derivative revaluation was a permanent tax difference and was not
deductible for income tax reporting purposes.
Horizon Pharma plc
Description of Hyperion acquisition related cash flows
For the three months ended June 30, 2015
(in thousands)
Financing cash flows:
Net proceeds from the issuance of 2023 Senior Notes $ 462,340
Net proceeds from the 2015 Term Loan Facility 391,719
Net proceeds from the issuance of ordinary shares 475,627
Repayment of the 2014 Term Loan Facility (297,000)
-----------
Net financing cash inflow 1,032,686
-----------
Operating cash flows:
Cash payment for debt extinguishment (45,367)
Payment of original issue discount upon repayment of 2014 Term
Loan Facility (3,000)
Cash payments for Hyperion acquisition costs (23,596)
-----------
Net operating cash outflow (71,963)
-----------
Investing cash flows:
Payments for acquisitions, net of cash acquired (1,022,361)
Proceeds from liquidation of available-for-sale investments 64,623
-----------
Net Investing cash outflow (Hyperion enterprise value) (957,738)
-----------
-----------
Net cash flows related to Hyperion acquisition $ 2,985
-----------
Investors: John B. Thomas Executive Vice President, Corporate Strategy and Investor Relations Email Contact Tina Ventura Vice President, Investor Relations Email Contact U.S. Media Contact: Geoff Curtis Group Vice President, Corporate Communications Email Contact Ireland Media Contact: Ray Gordon Gordon MRM Email Contact
Source: Horizon Pharma plc