I'm not sure if MLNM beat or missed widely. By GAAP, due restructuring & amortization expenses, they missed widely. I don't think the analysts have those expenses in the models on which their estimates are based, however, in which case, the 2 cent loss beats handily. They certainly made the high end of the revenue range:
>>CAMBRIDGE, Mass., Oct. 26 /PRNewswire-FirstCall/ -- Millennium Pharmaceuticals, Inc. (Nasdaq: MLNM - News) today reported strong financial results for the third quarter ended September 30, 2005, with VELCADE sales up 35 percent and combined research and development (R&D) and sales, general and administration (SG&A) expenses down 16 percent over the third quarter of 2004. The Company also announced a refined strategy focused on advancing key growth assets, including VELCADE, its clinical pipeline of seven novel oncology and inflammation molecules and its oncology-focused discovery organization. As a result, the Company is substantially reducing inflammation discovery programs and resources and increasing the proportion of R&D investment dedicated to its clinical pipeline. Based on this announcement and a number of other actions taken over the course of the year, the Company expects to reduce total R&D and SG&A expenses by approximately 30 percent in 2006 from 2004, including headcount reductions from 1,500 at the end of 2004 to approximately 1,100 by year end 2005.
"By refining our strategy and focusing investment on areas with the highest growth potential, we are well-positioned to grow revenue, support R&D innovation and achieve our long-term goal of delivering products that change outcomes for patients with cancer and inflammatory diseases while creating value for our shareholders," said Deborah Dunsire, M.D., president and chief executive officer. "The steps that we have taken firmly enable us to achieve non-GAAP profitability in 2006."
2005 Third Quarter Results
* Total revenue for the third quarter of 2005 was $201.7 million compared
to $110.0 million in the third quarter of 2004.
-- Net product sales of VELCADE in the U.S. for the quarter increased by
35 percent to $50.9 million from $37.7 million in the third quarter
of 2004.
-- As a result of the restructured relationship with Schering-Plough for
INTEGRILIN® (eptifibatide) Injection, as of September 1, 2005,
Millennium no longer reports co-promotion revenue for INTEGRILIN and
began recording royalties as a separate line item on the statement
of operations.
* For the first two months of the third quarter of 2005, co-promotion
revenue for INTEGRILIN was $33.0 million.
* Royalty revenue for September 2005 was $12.5 million and primarily
included royalties from Schering-Plough for product sales of
INTEGRILIN in the U.S. and other territories around the world and
from Ortho Biotech Products, L.P., a member of the Johnson &
Johnson Family of Companies, for sales of VELCADE outside the U.S.
* Revenue under strategic alliances was $105.2 million. This result
included the one-time sale of INTEGRILIN inventory on September 1,
2005, per the transfer of U.S. commercialization rights of INTEGRILIN
to Schering-Plough, of $71.4 million, which was offset largely by a
corresponding increase in cost of sales.
* R&D expenses for the third quarter of 2005 decreased by 19 percent to
$80.6 million from $99.0 million in the third quarter of 2004. The
decrease was driven by reduced spending in discovery and a decrease in
development costs for VELCADE compared to the higher level of spending
in 2004 associated with the preparation of the sNDA filing for VELCADE
in the multiple myeloma second-line treatment setting.
* SG&A expenses for the third quarter of 2005 decreased by 12 percent to
$40.6 million from $45.9 million for the third quarter of 2004. This
decrease is primarily attributable to reduced sales and marketing
expenses resulting from the transfer of U.S. commercialization rights
of INTEGRILIN to Schering-Plough.
* Net loss on a GAAP basis for the third quarter of 2005 was $73.8
million, or $0.24 per share, compared to $63.1 million, or $0.21 per
share, for the third quarter of 2004.
* Excluding restructuring and amortization, non-GAAP net loss for the
third quarter of 2005 was $6.5 million, or $0.02 per share, compared to
$55.1 million, or $0.18 per share, for the third quarter of 2004. This
decrease was primarily the result of increased revenue from U.S. net
product sales of VELCADE and from the Company's strategic alliances,
including several one-time payments from collaborators, and reductions
in R&D expense, as detailed previously.
* The Company recorded restructuring charges of $58.8 million in the third
quarter of 2005. The charges consisted of $30.6 million associated
with the Company's 2003 restructuring reflecting revised sublease
estimates. Also included in the charges this quarter were $28.2
million from the Company's 2005 strategy refinement including
consolidation of Cambridge, Mass. facilities and employee termination
benefits relating to the transfer of U.S. commercialization rights of
INTEGRILIN to Schering-Plough.
* As of September 30, 2005, the Company had $655.2 million of cash, cash
equivalents and marketable securities and $105.5 million outstanding
principal amount of convertible debt, of which $5.9 million is
classified as short term.
"Millennium had a strong quarter with VELCADE U.S. net product sales up over the previous quarter and a substantial narrowing in our non-GAAP net loss due to revenue growth and aggressive expense management," said Marsha Fanucci, senior vice president and chief financial officer. "These results, coupled with our refined strategy to focus investment on the Company's key growth areas, position Millennium to narrow its original 2005 non-GAAP net loss guidance."
2005 Strategy Refinement and Restructuring
Throughout 2005, Millennium has taken and continues to take a series of actions, which in the aggregate are projected to reduce operating expenses by approximately 30 percent for the full year 2006 compared to the full year results of 2004. Steps include:
* Substantially reducing the Company's effort in inflammation discovery;
* Reducing the workforce from 1,500 at the end of 2004 to approximately
1,100 by the end of 2005, by managing attrition, eliminating INTEGRILIN
sales and marketing positions, reducing the number of positions in
inflammation discovery and reducing the number of positions in business
support groups;
* Consolidating further the Company's Cambridge-based facilities; and
* Realizing operating efficiencies and continuing to manage expenses.
The Company's priorities are:
* Expanding the commercial organization in order to maximize the revenue
potential of VELCADE;
* Strengthening development investment to advance molecules in the
oncology and inflammation clinical pipeline; and
* Building a leading oncology-focused discovery organization.
This announcement builds on the restructured relationship with Schering- Plough for INTEGRILIN, effective September 1, 2005, and the natural conclusion of the successful small molecule inflammation research collaboration with sanofi-aventis, which is expected to end October 31, 2005. Millennium and sanofi-aventis will continue to co-develop several molecules as part of the development and commercialization collaboration. These molecules include MLN3897, MLN3701 and MLN0415 (pre-clinical). The Company will also continue to develop its proprietary molecules in inflammation (MLN02 and MLN1202) and in oncology (MLN518, MLN2704 and MLN8054).
Millennium currently expects to incur total restructuring charges of between $75 million to $85 million related to this 2005 strategy refinement, consisting primarily of facilities costs and employee termination benefits. The majority of these charges will be spread over 2005 and 2006. The Company recorded $28.2 million of restructuring charges for this effort in the third quarter of 2005.
2005 Financial Guidance
Millennium is updating its full-year financial guidance for 2005, initially outlined in January 2005:
* VELCADE U.S. net product sales guidance is narrowing to the range of
$190 million to $195 million from the range of $185 million to $195
million;
* Non-GAAP net loss guidance is narrowing to between $85 million to $95
million from less than $100 million;
* GAAP net loss is increasing to between $200 million to $215 million from
less than $155 million. The Company now expects to record
restructuring charges in the range of $80 million to $85 million in
2005 from the 2003 restructuring and the 2005 strategy refinement. The
difference between GAAP and non-GAAP net loss is attributable to
restructuring and amortization charges; and
* Cash, cash equivalents, and marketable securities guidance is increasing
to greater than $600 million at year end. The original cash guidance
was set at greater than $500 million.
As a result of the agreement with Schering-Plough effective September 1, 2005, the Company will no longer provide guidance for INTEGRILIN U.S. ex- factory sales.
Third Quarter Conference Call and Analyst & Investor Day 2005 Reminder
In conjunction with this news release, Millennium will host a live webcast of its conference call tomorrow, Thursday, October 27, 2005 at 8:30 AM ET. In addition, Millennium management will discuss the Company's refined strategy at its Analyst & Investor Day beginning at 9:00 AM on Wednesday, November 2, 2005 from Le Parker Meridien Hotel in New York City. Webcasts of both the third quarter conference call and the Company's Analyst Day can be accessed by visiting the Investors section of millennium.com. The webcasts will be archived for 30 days.<<
snip
Guidance seems OK. After hours should tell the tale. I'm out for a week, and won't be able to check the CC. So Sales, I know you'll be on this, and let me be the first to thank you for the notes.
Edit: Starting AH up slightly.
Cheers, Tuck |
