Cubist Pharmaceuticals Inc. (CBST, Financial) filed Quarterly Report for the period ended 2009-03-31.
Cubist Pharmaceuticals Inc. is a biopharmaceutical company focused on the research development and commercialization of pharmaceutical products that address unmet medical needs in the acute care environment. In the U.S. Cubist markets CUBICIN the first antibiotic in a new class of antiinfectives called lipopeptides. The Cubist product pipeline includes our lipopeptide program and our natural products screening program. Cubist is headquartered in Lexington MA. Cubist Pharmaceuticals Inc. has a market cap of $947.7 million; its shares were traded at around $16.47 with a P/E ratio of 10.4 and P/S ratio of 2.1.
the three months ended March 31, 2008, an increase of $26.8 million, or 30%. The increase in net product revenues is primarily due to an increase in U.S. gross product revenues, partially offset by an increase in allowances and reserves against product revenues. Gross U.S. revenues from sales of CUBICIN totaled $120.9 million and $92.1 million for the three months ended March 31, 2009 and 2008, respectively. The increase in gross U.S. revenues was primarily due to increased vial sales of CUBICIN in the U.S., which resulted in higher gross revenues of $20.6 million, as well as a 7.0% price increase for CUBICIN in October 2008, which resulted in $8.2 million of additional gross U.S. revenues. Gross U.S. product revenues are offset by allowances for sales returns, Medicaid rebates, chargebacks, discounts and wholesaler management fees of $8.5 million and $6.0 million, for the three months ended March 31, 2009 and 2008, respectively, an increase of $2.5 million or 40%. The increase in allowances against gross product revenue was primarily driven by increases in chargebacks and pricing discounts due to increased U.S. sales of CUBICIN, as well as the price increases described above. International product revenues of $2.2 million and $1.8 million for the three months ended March 31, 2009 and 2008, respectively, consisted primarily of CUBICIN product sales to, and royalty payments based on CUBICIN net sales in the EU from, Novartis AG, our EU partner for CUBICIN.
Total research and development expense in the three months ended March 31, 2009, was $50.5 million as compared to $22.4 million in the three months ended March 31, 2008, an increase of $28.2 million, or 126%. The increase in research and development expenses was due primarily to (i) an increase of $22.9 million in license and collaboration expenses primarily due to $20.0 million of upfront payments related to the Alnylam license and collaboration agreement which we entered into in January 2009; (ii) an increase of $3.1 million in payroll, benefits, travel and other employee related expenses due to an increase in headcount; (iii) an increase of $2.2 million in clinical and non-clinical studies due to the higher number of studies that we are conducting; and (iv) an increase of $1.2 million in facilities expense related to additional laboratory space. These increases were offset by a decrease in expense related to a one-time charge in the three months ended March 31, 2008, of $1.8 million due to the write-off of property that was demolished at 65 Hayden Avenue in Lexington, Massachusetts.
General and administrative expense in the three months ended March 31, 2009, was $10.9 million, as compared $11.4 million in the three months ended March 31, 2008, a decrease of $0.5 million, or 4%. This decrease is primarily due to an additional $1.2 million of facilities expense allocated from general and administrative expense to research and development expense related to additional laboratory space and a one-time charge in the three months ended March 31, 2008, of $0.5 million in expense related to the write-off of property that was demolished at 65 Hayden Avenue in Lexington, Massachusetts. These decreases were partially offset by an increase of $0.5 million in legal costs associated with the patent infringement litigation with Teva and its affiliates and an increase in expense of
Interest income in the three months ended March 31, 2009, was $1.1 million as compared to $3.3 million in the three months ended March 31, 2008, a decrease of $2.2 million, or 68%. The decrease in interest income is due primarily to a decrease of $2.7 million related to lower rates of return on our investments, offset by a $0.5 million increase related to a higher average cash and cash equivalents balance in 2009 than in 2008.
Interest expense in the three months ended March 31, 2009, was $5.1 million as compared to $6.2 million in the three months ended March 31, 2008, a decrease of $1.1 million, or 17%. The decrease in interest expense is due to a lower debt balance in the three months ended March 31, 2009, as a result of the repurchase of $50.0 million of our convertible subordinated notes due June 2013, or the 2.25% Notes, in February 2008, offset by the write-off of approximately $0.8 million of debt issuance costs related to the repurchase of the 2.25% Notes. In January 2009, we adopted the provisions of Financial Accounting Standards Board, or FASB, Staff Position No. APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement), or FSP APB 14-1. The adoption of FSP APB 14-1 requires us to adjust prior periods as if FSP APB 14-1 had been in effect in prior periods. Interest expense for the three months ended March 31, 2009 and 2008, included $3.2 million and $3.4 million of interest expense relating to the amortization of a debt discount as a result of the application of FSP APB 14-1. The adoption of FSP APB 14-1 is discussed in Note F., Debt in the accompanying notes to the condensed consolidated financial statements. The table below summarizes our interest expense for the three months ended March 31, 2009 and 2008, following the adoption of FSP APB 14-1:
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Cubist Pharmaceuticals Inc. is a biopharmaceutical company focused on the research development and commercialization of pharmaceutical products that address unmet medical needs in the acute care environment. In the U.S. Cubist markets CUBICIN the first antibiotic in a new class of antiinfectives called lipopeptides. The Cubist product pipeline includes our lipopeptide program and our natural products screening program. Cubist is headquartered in Lexington MA. Cubist Pharmaceuticals Inc. has a market cap of $947.7 million; its shares were traded at around $16.47 with a P/E ratio of 10.4 and P/S ratio of 2.1.
Highlight of Business Operations:
We had a total of $405.9 million in cash and cash equivalents and long-term investments as of March 31, 2009, as compared to $417.9 million in cash and cash equivalents and long-term investments as of December 31, 2008. Our net income for the three months ended March 31, 2009, was $7.8 million, or $0.14 and $0.13 per basic and diluted share, respectively. Our net income for the three months ended March 31, 2008, was $9.7 million, or $0.17 per basic and diluted share. As of March 31, 2009, we had an accumulated deficit of $319.6 million.the three months ended March 31, 2008, an increase of $26.8 million, or 30%. The increase in net product revenues is primarily due to an increase in U.S. gross product revenues, partially offset by an increase in allowances and reserves against product revenues. Gross U.S. revenues from sales of CUBICIN totaled $120.9 million and $92.1 million for the three months ended March 31, 2009 and 2008, respectively. The increase in gross U.S. revenues was primarily due to increased vial sales of CUBICIN in the U.S., which resulted in higher gross revenues of $20.6 million, as well as a 7.0% price increase for CUBICIN in October 2008, which resulted in $8.2 million of additional gross U.S. revenues. Gross U.S. product revenues are offset by allowances for sales returns, Medicaid rebates, chargebacks, discounts and wholesaler management fees of $8.5 million and $6.0 million, for the three months ended March 31, 2009 and 2008, respectively, an increase of $2.5 million or 40%. The increase in allowances against gross product revenue was primarily driven by increases in chargebacks and pricing discounts due to increased U.S. sales of CUBICIN, as well as the price increases described above. International product revenues of $2.2 million and $1.8 million for the three months ended March 31, 2009 and 2008, respectively, consisted primarily of CUBICIN product sales to, and royalty payments based on CUBICIN net sales in the EU from, Novartis AG, our EU partner for CUBICIN.
Total research and development expense in the three months ended March 31, 2009, was $50.5 million as compared to $22.4 million in the three months ended March 31, 2008, an increase of $28.2 million, or 126%. The increase in research and development expenses was due primarily to (i) an increase of $22.9 million in license and collaboration expenses primarily due to $20.0 million of upfront payments related to the Alnylam license and collaboration agreement which we entered into in January 2009; (ii) an increase of $3.1 million in payroll, benefits, travel and other employee related expenses due to an increase in headcount; (iii) an increase of $2.2 million in clinical and non-clinical studies due to the higher number of studies that we are conducting; and (iv) an increase of $1.2 million in facilities expense related to additional laboratory space. These increases were offset by a decrease in expense related to a one-time charge in the three months ended March 31, 2008, of $1.8 million due to the write-off of property that was demolished at 65 Hayden Avenue in Lexington, Massachusetts.
General and administrative expense in the three months ended March 31, 2009, was $10.9 million, as compared $11.4 million in the three months ended March 31, 2008, a decrease of $0.5 million, or 4%. This decrease is primarily due to an additional $1.2 million of facilities expense allocated from general and administrative expense to research and development expense related to additional laboratory space and a one-time charge in the three months ended March 31, 2008, of $0.5 million in expense related to the write-off of property that was demolished at 65 Hayden Avenue in Lexington, Massachusetts. These decreases were partially offset by an increase of $0.5 million in legal costs associated with the patent infringement litigation with Teva and its affiliates and an increase in expense of
Interest income in the three months ended March 31, 2009, was $1.1 million as compared to $3.3 million in the three months ended March 31, 2008, a decrease of $2.2 million, or 68%. The decrease in interest income is due primarily to a decrease of $2.7 million related to lower rates of return on our investments, offset by a $0.5 million increase related to a higher average cash and cash equivalents balance in 2009 than in 2008.
Interest expense in the three months ended March 31, 2009, was $5.1 million as compared to $6.2 million in the three months ended March 31, 2008, a decrease of $1.1 million, or 17%. The decrease in interest expense is due to a lower debt balance in the three months ended March 31, 2009, as a result of the repurchase of $50.0 million of our convertible subordinated notes due June 2013, or the 2.25% Notes, in February 2008, offset by the write-off of approximately $0.8 million of debt issuance costs related to the repurchase of the 2.25% Notes. In January 2009, we adopted the provisions of Financial Accounting Standards Board, or FASB, Staff Position No. APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement), or FSP APB 14-1. The adoption of FSP APB 14-1 requires us to adjust prior periods as if FSP APB 14-1 had been in effect in prior periods. Interest expense for the three months ended March 31, 2009 and 2008, included $3.2 million and $3.4 million of interest expense relating to the amortization of a debt discount as a result of the application of FSP APB 14-1. The adoption of FSP APB 14-1 is discussed in Note F., Debt in the accompanying notes to the condensed consolidated financial statements. The table below summarizes our interest expense for the three months ended March 31, 2009 and 2008, following the adoption of FSP APB 14-1:
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