Cubist Pharmaceuticals 2nd Quarter Total Net Revenues Up 28%

Thursday, July 16, 2009 4:01 PM

Total Net Revenues $130.8 Million; Net Product Revenues $128.8 Million

Earnings Conference Call & Webcast Today (With Slides) at 5:00 pm ET

Cubist Pharmaceuticals, Inc. (NASDAQ: CBST) today announced results for the second quarter ended June 30, 2009.

Second Quarter 2009 Highlights:

Earnings per share on a diluted basis increased to $0.40, up from $(0.02) in second quarter 2008.
Total net revenues for the second quarter of 2009 increased 28% to $130.8 million from $101.8 million in the second quarter of 2008. This increase was attributable primarily to net sales of CUBICIN^® (daptomycin for injection) in the United States, which increased 27% to $126.1 million in the second quarter of 2009, from $99.4 million in the second quarter of 2008.
Cubist also is confirming that it expects 2009 CUBICIN net U.S. revenue to be $520-540 million, which is unchanged from the guidance Cubist previously provided.

“In a time of continued economic uncertainty, Cubist has again delivered a quarter of strong performance, and made further progress against our strategic goals,” said Michael Bonney, President and CEO of Cubist. “CUBICIN has now been used in the treatment of more than an estimated 750,000 patients with serious and sometimes life-threatening infections. Our continued success with CUBICIN also is enabling us to progress four clinical candidates addressing unmet medical need for seriously ill patients.”

Net Income

Net income for the second quarter ended June 30, 2009, on a GAAP basis, was $23.8 million, or $0.41 and $0.40 per basic and diluted share, respectively, as compared to a net loss of $1.3 million, or $(0.02) per basic and diluted share, for the second quarter ended June 30, 2008.

Cubist’s non-GAAP net income for the second quarter ended June 30, 2009, was $34.6 million, or $0.60 and $0.53 per basic and diluted share, respectively, which represents an increase of $12.3 million in non-GAAP net income compared to the same period in 2008. A reconciliation between GAAP and non-GAAP net income is provided in the Condensed Consolidated Statement of Operations - Non-GAAP table included with this release.

As of June 30, 2009, Cubist had $474.4 million in cash, cash equivalents and investments. The total number of Cubist’s common shares outstanding as of June 30, 2009, was 57,665,576.

Pipeline Update

Ecallantide (in development to reduce bleeding in on-pump cardiac surgery): Cubist is continuing enrollment in the CONSERV™-1 dose-ranging trial in the US and remains confident that the trial will fully enroll patients by the end of the year. The key objective is to generate data to support the selection of the optimum ecallantide dose for Phase 3.

In addition, as recently announced, enrollment of the ecallantide CONSERV-2 trial being conducted in Europe has begun. This trial will generate outcomes data for a patient population with a higher risk of bleeding, who will be dosed at the highest dose of ecallantide being studied in the dose-ranging trial. Together, the CONSERV trials are expected to provide clinical data on approximately 650 patients. Along with results from Phase 1 and Phase 2 trials conducted by Dyax Corp. in the past, the CONSERV program data is expected to form the basis of a robust end of Phase 2 meeting with the FDA in mid-2010.

RSV Program: In the co-development Respiratory Syncytial Virus (RSV) program with Alnylam Pharmaceuticals, Inc., in the second quarter, Cubist and Alnylam reported that, based on initial 30-day data, a Phase 2 trial with RSV-ALN01 met its primary endpoint of demonstrating safety and tolerability of aerosol ALN-RSV01 in adult lung transplant patients naturally infected with RSV.

Antibiotic Candidates: Phase 1 programs are progressing with single ascending dose studies well underway for both Cubist’s oral antibiotic in development for treatment of Clostridium difficile associated diarrhea, and IV antibiotic in development as a novel therapy for infections caused by multi-drug-resistant Gram-negative bacteria. Completion of both single- and multiple-ascending dose trials for both of these programs is expected by early next year.

Conference Call and Webcast Information

Cubist Pharmaceuticals to announce Q209 Financial Results — Thursday, July 16^th, 2009
Earnings Conference Call & Webcast at 5:00 pm ET
Participant Dial-In Numbers:
Live Participant Dial In (Toll Free): 877-407-8289
Live Participant Dial In (International): 201-689-8341
Dial-In # for Replay Access: (Toll Free) 877-660-6853 (International) 201-612-7415
Replay Passcodes (both required for playback): Acct #: 351 Conference ID: 326755
For more information: http://www.investorcalendar.com/IC/CEPage.asp?ID=146838
CALL WILL ALSO BE BROADCAST LIVE, LISTEN ONLY, VIA THE WEB AT: www.cubist.com
Replay will be available for 30 days at www.cubist.com

About Cubist

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^® (daptomycin for injection), the first antibiotic in a new class of anti-infectives called lipopeptides. In July 2008, Cubist began promoting MERREM^® I.V. (meropenem for injection) in the United States. MERREM is an established broad spectrum antibiotic developed by AstraZeneca. The Cubist product pipeline includes ecallantide, a recombinant human protein in Phase 2 clinical trials — CONSERV™-1 and CONSERV™-2 — for the reduction of blood loss during cardiac surgery, and two Phase 1 programs that address unmet medical needs, one in CDAD (Clostridium difficile-associated diarrhea) and the other in multi-drug resistant (MDR) Gram-negative infections. In addition, the Company, in collaboration with Alnylam Pharmaceuticals, Inc. (Cambridge, MA), has a pre-IND and a Phase 2 program underway in novel treatments for respiratory syncytial virus infections using Alnylam’s RNA-interference technology. Cubist is headquartered in Lexington, MA. Additional information can be found at Cubist’s web site at www.cubist.com.

Cubist Safe Harbor Statement

This press release contains forward-looking statements regarding CUBICIN performance and our pipeline programs. There are many factors that could cause actual results to differ materially from those in these forward-looking statements. These factors include the following: the level of acceptance of CUBICIN by physicians, patients, third-party payors and the medical community; any changes in the current or anticipated market demand or medical need for CUBICIN; any unexpected adverse events related to CUBICIN, particularly as CUBICIN is used in the treatment of a growing number of patients around the world; the results of the patent infringement lawsuit that Cubist has filed against Teva Parenteral Medicines, Inc. and its affiliates in response to Teva’s Abbreviated New Drug Application, or ANDA, with the U.S. Food and Drug Administration, or FDA, regarding CUBICIN and any litigation related thereto, and any other litigation that we file to defend and/or assert our patents; whether or not additional third parties may seek to market generic versions of our products by filing ANDAs with the FDA and the results of any litigation that we file to defend and/or assert our patents against such companies; the effectiveness of our sales force and our sales force’s ability to access targeted physicians; competition in the markets in which we and our partners market CUBICIN, including marketing approvals for new products that will be competitive with CUBICIN; the ability of our third party manufacturers, including our single source provider of API, to manufacture sufficient quantities of CUBICIN in accordance with Good Manufacturing Practices and other requirements of the regulatory approvals for CUBICIN and at an acceptable cost; the effect that the results of ongoing or future clinical trials of CUBICIN may have on its acceptance in the medical community; our ability to successfully develop our pipeline product candidates; whether the FDA accepts proposed clinical trial protocols in a timely manner for additional studies of CUBICIN or any other drug candidate we seek to enter into clinical trials; our ability to conduct successful clinical trials in a timely manner; legislative and policy changes in the United States and other jurisdictions where our products are sold that may affect the ease of getting a new product or a new indication approved; changes in government reimbursement for our or our competitors’ products; our dependence upon collaborations with our partners and our partners’ ability to execute on development and regulatory expectations; our ability, and our partners’ ability, to protect the proprietary technologies and intellectual property related to our product candidates; and a variety of risks common to our industry, including ongoing regulatory review, securing adequate supplies of drug product and drug substance of our products and product candidates on a timely basis, public and investment community perception of the industry, legislative or regulatory changes, and our ability to attract and retain talented employees. Drug development involves a high degree of risk. Success in pre-clinical trials or early stage clinical trials does not mean that later stage trials will be successful.

Additional factors that could cause actual results to differ materially from those projected or suggested in any forward-looking statements are contained in Cubist's recent annual and quarterly reports with the Securities and Exchange Commission, including those factors discussed under the caption "Risk Factors" in such filings, which are incorporated in this press release by this reference.

Forward-looking statements speak only as of the date of this release, and Cubist undertakes no obligation to update or revise these statements, except as may be required by law.

Cubist and CUBICIN are registered trademarks of Cubist Pharmaceuticals, Inc.

AstraZeneca and MERREM are registered trademarks of the AstraZeneca group of companies.

CUBIST PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
UNAUDITED
(in thousands)

	June 30,		December 31,
	2009		2008
			(as adjusted)
ASSETS
Cash, cash equivalents and investments	$	474,454	$	417,945
Accounts receivable, net		49,053		43,162
Inventory		26,421		21,958
Property and equipment, net		69,632		66,819
Deferred tax assets, net		92,195		102,247
Other assets		31,165		37,010

Total assets	$	742,920	$	689,141


LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses	$	76,671	$	79,584
Deferred revenue		23,789		21,340
Debt and other long-term liabilities, net		242,305		235,890
Total liabilities		342,765		336,814

Total stockholders' equity		400,155		352,327

Total liabilities and stockholders' equity	$	742,920	$	689,141



	CUBIST PHARMACEUTICALS, INC.
	CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
	UNAUDITED
	(in thousands, except share and per share data)

		Three months ended						Six months ended
		June 30,						June 30,
		2009			2008			2009			2008
					(as adjusted)						(as adjusted)
	Revenues:
	U.S. product revenues, net	$	126,101		$	99,366		$	238,520		$	185,424
	International product revenues		2,743			2,003			4,949			3,807
	Service revenues		1,500			-			7,550			-
	Other revenues		435			397			870			820
	Total revenues, net		130,779			101,766			251,889			190,051

	Costs and expenses:
	Cost of product revenues		28,184			22,050			52,558			42,050
	Research and development		32,371			45,193			82,913			67,557
	Sales and marketing		21,657			22,187			41,137			42,170
	General and administrative		12,662			10,521			23,589			21,954
	Total costs and expenses		94,874			99,951			200,197			173,731

	Operating income		35,905			1,815			51,692			16,320

	Other income (expense), net		(4,290)			(2,917)			(8,322)			(7,100)

	Income (loss) before income taxes		31,615			(1,102)			43,370			9,220

	Provision for income taxes		7,839			160			11,818			766

	Net income (loss)	$	23,776		$	(1,262)		$	31,552		$	8,454

	Basic net income (loss) per common share	$	0.41		$	(0.02)		$	0.55		$	0.15
	Diluted net income (loss) per common share	$	0.40	¹	$	(0.02)	¹	$	0.54	¹	$	0.15	²

	Shares used in calculating:
	Basic net income (loss) per common share		57,642,460			56,391,804			57,586,980			56,306,256
	Diluted net income (loss) per common share		68,221,269			56,391,804			58,465,385			57,679,009

¹	Includes add back of interest expense, debt issuance costs and debt discount on 2.25% notes to income, net of tax effect
²	Includes add back of interest expense, debt issuance costs, debt discount and net loss on repurchase of 2.25% notes to income, net of tax effect



CUBIST PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - NON-GAAP
UNAUDITED
(in thousands, except share and per share data)

	Three months ended						Six months ended
	June 30,						June 30,
	2009			2008			2009			2008

GAAP net income (loss)	$	23,776		$	(1,262)		$	31,552		$	8,454

Non-cash stock-based compensation expense		3,475			3,071			6,485			5,834

Non-cash debt discount amortization		3,263			3,002			6,458			6,353

Ecallantide licensing fees		-			17,500			-			17,500

Upfront payment related to Alnylam collaboration		-			-			20,000			-

Non-cash tax expense		6,669			-			10,052			-

Non-cash loss on disposal of assets		-			-			-			2,323

Income tax effect of Non-GAAP adjustments		(2,611)			-			(12,768)			-

Non-GAAP proforma net income	$	34,572		$	22,311		$	61,779		$	40,464

Non-GAAP basic net income per common share	$	0.60		$	0.40		$	1.07		$	0.72
Non-GAAP diluted net income per common share	$	0.53	¹	$	0.36	¹	$	0.94	¹	$	0.61	²

Shares used in calculating:
Non-GAAP basic net income per common share		57,642,460			56,391,804			57,586,980			56,306,256
Non-GAAP diluted net income per common share		68,221,269			67,493,290			68,214,815			67,767,705

¹ Includes add back of interest expense and debt issuance costs on 2.25% notes to income, net of tax effect
² Includes add back of interest expense, debt issuance costs and net loss on repurchase of 2.25% notes to income, net of tax effect

Cubist Pharmaceuticals, Inc.
Eileen C. McIntyre, 781-860-8533
Senior Director, Corporate Communications
eileen.mcintyre@cubist.com
or
Weber Shandwick
Tara Murphy, 617520-7045
tara.murphy@webershandwick.com

(Source: Business Wire )

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