Cubist Pharmaceuticals total net revenues for second-quarter 2010 increase 29%

Jul 16 2010

Cubist Pharmaceuticals, Inc. (NASDAQ: CBST) today announced results for the second quarter ended June 30, 2010.

Second Quarter 2010 Highlights:

• GAAP Basic and Diluted Net Income of $0.48 and $0.45 per share, respectively, for 2Q10
• NON-GAAP Basic and Diluted Net Income of $0.85 and $0.74 per share, respectively, for 2Q10
• Earnings' conference call & webcast today (with slides) at 5:00 p.m. ET

Cubist's total net revenues for the second quarter of 2010 increased 29% to $168.5 million from $130.8 million in the second quarter of 2009. This increase was attributable primarily to Cubist's net sales of CUBICIN® (daptomycin for injection) in the United States, which increased 23% to $155.0 million in the second quarter of 2010 from $126.1 million in the second quarter of 2009. Cubist's net product revenues from international sales of CUBICIN for the second quarter of 2010 were $6.6 million, an increase of 141% over the second quarter of 2009. Additionally, $6.5 million of service revenue was recognized in the second quarter of 2010 relating to Cubist's exclusive agreement with AstraZeneca, which ended on June 30, 2010, to promote and provide other support in the United States for MERREM® I.V. (meropenem for injection).

Net income for the second quarter of 2010, on a GAAP basis, was $28.1 million, or $0.48 and $0.45 per basic and diluted share, respectively, as compared to $23.8 million, or $0.41 and $0.40 per basic and diluted share, respectively, for the second quarter of 2009.

Cubist's non-GAAP net income for the second quarter of 2010, was $50.0 million, or $0.85 and $0.74 per basic and diluted share, respectively, which represents an increase of $15.4 million in non-GAAP net income compared to the same period in 2009. A reconciliation between GAAP and non-GAAP net income is provided in the Condensed Consolidated Statements of Income Non-GAAP table included with this release.

As of June 30, 2010, Cubist had $562.8 million in cash, cash equivalents and investments. The total number of Cubist's common shares outstanding as of June 30, 2010, was 58,854,222.

Use of Non-GAAP Financial Measures

Non-GAAP net income and non-GAAP net income per share exclude non-operational activities. Cubist uses these measures to assess and analyze its operational results and trends and to make financial and operational decisions. Cubist believes these non-GAAP financial measures are useful to investors because they provide greater transparency regarding Cubist's operating performance. These non-GAAP financial measures should not be considered an alternative to measurements required by GAAP, such as net income and net income per share, and should not be considered measures of Cubist's liquidity. In addition, these non-GAAP financial measures are unlikely to be comparable with non-GAAP information provided by other companies. A reconciliation between non-GAAP financial measures and GAAP financial measures is included in the tables accompanying this press release after the unaudited condensed consolidated financial statements.

Q2 Clinical Pipeline Update

CXA-201 Program: Cubist acquired rights to develop and commercialize CXA-201 worldwide except in select Asia-Pacific and Middle East territories through Cubist's purchase of Calixa Therapeutics Inc. in December 2009. CXA-201 is the combination of a novel cephalosporin (CXA-101) with the beta-lactamase inhibitor tazobactam. Cubist is developing CXA-201 as a first-line intravenous therapy for the treatment of certain serious Gram-negative bacterial infections in the hospital, including those caused by multi-drug resistant Pseudomonas aeruginosa. CXA-201 has demonstrated potency against P. aeruginosa in in vitro studies, and Cubist believes that this is predictive of a highly differentiated profile versus marketed antibiotics.

• cIAI Phase 2 trial underway: As announced on June 30, Cubist has begun a Phase 2 study in patients with complicated intra-abdominal Infections (cIAI) with CXA-201 versus an active comparator. This international study is expected to enroll 120 patients.
• cUTI Phase 2 for CXA-101: As announced on June 29, the Phase 2 study comparing CXA-101 to ceftazidime for the treatment of complicated urinary tract infections (cUTI) in adults met its objectives, assessing safety and efficacy versus the comparator. CXA-101 additionally demonstrated favorable microbiological and clinical outcomes at the Test of Cure Visit, 6 - 9 days after end of therapy, which were the primary and secondary outcome measures in this study, respectively.

CB-183,315: As announced on April 8, Cubist has begun a Phase 2 study of CB-183,315, an antibacterial drug candidate intended to treat patients with a severe and sometimes life-threatening diarrhea caused by Clostridium difficile known as C. difficile-associated diarrhea, or CDAD. The study is expected to enroll more than 200 subjects at 28 sites in the United States and Canada.

CB-182,804: CB-182,804 is in Phase 1 clinical trials for the treatment of multi-drug resistant (MDR) Gram-negative infections and, as announced in our April call, Cubist expects to make a Go/No-Go decision for Phase 2 later this summer. CB-182,804 is a novel, proprietary, I.V. administered Gram-negative antibiotic that has demonstrated in vitro efficacy and rapid bactericidal activity against the key MDR Gram-negative pathogens, including P. aeruginosa, Escherichia coli, Klebsiella pnuemoniae, and Acinetobacter baumannii.