Cubist Pharmaceuticals Inc. (CBST, Financial) filed Quarterly Report for the period ended 2009-06-30.
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 $1.11 billion; its shares were traded at around $19.3 with a P/E ratio of 11.8 and P/S ratio of 2.6.
Our net income for the six months ended June 30, 2009, was $31.6 million, or $0.55 and $0.54 per basic and diluted share, respectively. Our net income for the six months ended June 30, 2008, was $8.5 million, or $0.15 per basic and diluted share. As of June 30, 2009, we had an accumulated deficit of $287.0 million.
Cubists net revenues from sales of CUBICIN, which consists of U.S. product revenues, net, and international product revenues, were $128.8 million in the three months ended June 30, 2009, and $101.4 million in the three months ended June 30, 2008, an increase of $27.5 million, or 27%. Gross U.S. revenues from sales of CUBICIN totaled $134.9 million and $107.0 million for the three months ended June 30, 2009 and 2008, respectively. The $27.9 million 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 $18.4 million, as well as a 7.0% price increase for CUBICIN in October 2008, which resulted in $9.5 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 $8.8 million and $7.6 million for the three months ended June 30, 2009 and 2008, respectively. The increase in allowances against gross product revenue was primarily driven by increases in chargebacks and Medicaid rebates due to increased U.S. sales of CUBICIN, as well as the price increase described above. International product revenues of $2.7 million and $2.0 million for the three months ended June 30, 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, or Novartis, our EU partner for CUBICIN.
Total research and development expense in the three months ended June 30, 2009, was $32.4 million as compared to $45.2 million in the three months ended June 30, 2008, a decrease of $12.8 million, or 28%. The decrease in research and development expenses was due primarily to a decrease of $17.5 million as a result of the upfront and milestone payments made during the three months ended June 30, 2008, pursuant to our agreement with Dyax, and a decrease of $3.4 million in process development activities and testing initiated in 2008 for our pre-clinical compounds. These decreases were offset by (i) an increase of $2.8 million in collaboration expense primarily related to our agreement with Alnylam; (ii) an increase of $2.4 million in salaries and other employee benefits due to an increase in headcount; and (iii) an increase of $2.1 million in clinical trial expenses due to the higher number of studies that we are conducting.
Interest expense in the three months ended June 30, 2009, was $5.2 million as compared to $4.9 million in the three months ended June 30, 2008, an increase of $0.3 million, or 6%. In January 2009, we adopted FSP APB 14-1. The adoption of FSP APB 14-1 required 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 June 30, 2009 and 2008, included $3.3 million and $3.0 million, respectively, 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.
For the three months ended June 30, 2009, our provision for income taxes was $7.8 million on income before income taxes of $31.6 million, resulting in an effective income tax rate of 24.7%. The difference between the effective tax rate and the U.S. federal statutory income tax rate of 35% is primarily the result of a $3.0 million net income tax benefit for discrete items related to the termination of the development of the HCV compound acquired from Illumigen Biosciences, Inc., or Illumigen. Included in this net benefit was the impact of writing off Illumigens federal net operating loss carryforwards, net of the related unrecognized benefit of $2.3 million. In addition, the effective tax rate is impacted by federal and state research and development credits, and state income taxes net of federal benefit.
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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 $1.11 billion; its shares were traded at around $19.3 with a P/E ratio of 11.8 and P/S ratio of 2.6.
Highlight of Business Operations:
was $23.8 million, or $0.41 and $0.40 per basic and diluted share, respectively. Our net loss for the three months ended June 30, 2008, was $1.3 million, or $(0.02) per basic and diluted share.Our net income for the six months ended June 30, 2009, was $31.6 million, or $0.55 and $0.54 per basic and diluted share, respectively. Our net income for the six months ended June 30, 2008, was $8.5 million, or $0.15 per basic and diluted share. As of June 30, 2009, we had an accumulated deficit of $287.0 million.
Cubists net revenues from sales of CUBICIN, which consists of U.S. product revenues, net, and international product revenues, were $128.8 million in the three months ended June 30, 2009, and $101.4 million in the three months ended June 30, 2008, an increase of $27.5 million, or 27%. Gross U.S. revenues from sales of CUBICIN totaled $134.9 million and $107.0 million for the three months ended June 30, 2009 and 2008, respectively. The $27.9 million 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 $18.4 million, as well as a 7.0% price increase for CUBICIN in October 2008, which resulted in $9.5 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 $8.8 million and $7.6 million for the three months ended June 30, 2009 and 2008, respectively. The increase in allowances against gross product revenue was primarily driven by increases in chargebacks and Medicaid rebates due to increased U.S. sales of CUBICIN, as well as the price increase described above. International product revenues of $2.7 million and $2.0 million for the three months ended June 30, 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, or Novartis, our EU partner for CUBICIN.
Total research and development expense in the three months ended June 30, 2009, was $32.4 million as compared to $45.2 million in the three months ended June 30, 2008, a decrease of $12.8 million, or 28%. The decrease in research and development expenses was due primarily to a decrease of $17.5 million as a result of the upfront and milestone payments made during the three months ended June 30, 2008, pursuant to our agreement with Dyax, and a decrease of $3.4 million in process development activities and testing initiated in 2008 for our pre-clinical compounds. These decreases were offset by (i) an increase of $2.8 million in collaboration expense primarily related to our agreement with Alnylam; (ii) an increase of $2.4 million in salaries and other employee benefits due to an increase in headcount; and (iii) an increase of $2.1 million in clinical trial expenses due to the higher number of studies that we are conducting.
Interest expense in the three months ended June 30, 2009, was $5.2 million as compared to $4.9 million in the three months ended June 30, 2008, an increase of $0.3 million, or 6%. In January 2009, we adopted FSP APB 14-1. The adoption of FSP APB 14-1 required 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 June 30, 2009 and 2008, included $3.3 million and $3.0 million, respectively, 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.
For the three months ended June 30, 2009, our provision for income taxes was $7.8 million on income before income taxes of $31.6 million, resulting in an effective income tax rate of 24.7%. The difference between the effective tax rate and the U.S. federal statutory income tax rate of 35% is primarily the result of a $3.0 million net income tax benefit for discrete items related to the termination of the development of the HCV compound acquired from Illumigen Biosciences, Inc., or Illumigen. Included in this net benefit was the impact of writing off Illumigens federal net operating loss carryforwards, net of the related unrecognized benefit of $2.3 million. In addition, the effective tax rate is impacted by federal and state research and development credits, and state income taxes net of federal benefit.
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