On February 21, 2018 bluebird bio, Inc. (Nasdaq: BLUE), a clinical-stage company committed to developing potentially transformative gene therapies for severe genetic diseases and T cell-based immunotherapies for cancer, reported business highlights and financial results for the fourth quarter and full year ended December 31, 2017 (Press release, bluebird bio, FEB 21, 2018, View Source [SID1234524091]).

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"We ended 2017 in a tremendously strong position with compelling data and progress across all four of our clinical programs. This progress brings us closer to potentially providing transformative therapies to a broader population of patients that we urgently seek to serve," said Nick Leschly, chief bluebird. "We have an aggressive plan to file three programs with regulatory authorities in the next two years: LentiGlobin in TDT in 2018, Lenti-D in CALD in 2019 and, with our partners at Celgene, bb2121 in multiple myeloma, also in 2019. The potential impact that our gene and cell therapies can bring to patients drives our commitment to execute on our strategy which is focused on operating with discipline, expanding our capabilities for commercial success, and levering our product engine to continue to grow and advance our pipeline."

Recent Highlights

FINAL PATIENT INFUSED IN CRB-401 – In February 2018, the final patient to be enrolled in CRB-401, the Phase 1 study of bb2121 investigational anti-BCMA CAR T therapy in patients with relapsed/refractory multiple myeloma, was infused. A total of 43 patients (21 in the dose escalation phase and 22 in the expansion phase) have been treated in this study.
FIRST PATIENT TREATED IN KARMMA – In February 2018, the first patient was infused in KarMMa, a registration-enabling study of bb2121 in patients with relapsed/refractory multiple myeloma. This study is being run by Celgene, bluebird’s partner in the development of anti-BCMA CAR T therapies.
CHIEF COMMERCIAL OFFICER APPOINTED – In February 2018, bluebird appointed Alison Finger as Chief Commercial Officer. In this role, Alison will be responsible for shaping and delivering an integrated global commercial strategy to make bluebird’s gene therapies broadly accessible to patients. She will oversee all commercial strategy and operations, access management, including pricing, reimbursement and health outcomes, as well as patient operations. Alison joined bluebird as senior vice president, marketing and product launch in August of 2015.
ASH PRESENTATIONS – At the American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting, bluebird provided compelling clinical updates across its ongoing studies of LentiGlobin in TDT and severe sickle cell disease (SCD), and bb2121 anti-BCMA CAR T therapy. These data can be found here (HGB-204 and HGB-207 studies of LentiGlobin in TDT), here (HGB-206 study of LentiGlobin in SCD), here (HGB-205 single center study of LentiGlobin in patients with TDT or SCD) and here (bb2121). All data in these linked press releases are as of the respective data cut-off dates described in the press releases.
COLLABORATION WITH TC BIOPHARM – In December 2017, bluebird and immunotherapy company TC BioPharm, Ltd., or TCB, announced the execution of a strategic collaboration and license agreement focused on gamma delta CAR T cells. Under the terms of the agreement, bluebird and TCB will collaborate to discover and develop CAR-engineered gamma delta T cells, which has the potential to be a powerful new platform for CAR T cell therapies in cancer, with potential applicability for both allogeneic and autologous therapies across liquid and solid tumors. TCB is responsible for development of all programs through Phase 1/2, at which point bluebird has the exclusive option to assume sole responsibility for further clinical development and commercialization on a global basis.
MANUFACTURING SITE ACQUISITION AND AGREEMENTS – In November 2017, bluebird announced its acquisition of a 125,000 square foot manufacturing facility in Durham, North Carolina. Once construction and validation is complete, the site will produce lentiviral vector for the company’s gene and cell therapies. In addition, bluebird also entered into multi-year agreements with three manufacturing partners in the United States and Europe: Brammer Bio (Cambridge, MA), Novasep (Gosselies, Belgium) and MilliporeSigma, the Life Science business of Merck KGaA (Carlsbad, CA). Each of these partners is collaborating with bluebird on production of lentiviral vector across all programs. bluebird also partners with Lonza (Houston, TX) and apceth Biopharma (Munich, Germany) to produce drug product for its product candidates.
BB2121 BREAKTHROUGH AND PRIME DESIGNATIONS – In November 2017, bluebird and Celgene announced that bb2121 had been granted Breakthrough Therapy Designation (BTD) by the U.S. Food and Drug Administration (FDA) and PRIority MEdicines (PRIME) eligibility by the European Medicines Agency (EMA). BTD is designed to expedite the development and review of drugs that are intended to treat serious or life-threatening conditions. PRIME is a program launched by the EMA to enhance support for the development of medicines that target an unmet medical need.
FIRST PATIENT TREATED IN NORTHSTAR-3 (HGB-212) – In November 2017, the first patient was infused with LentiGlobin drug product in Northstar-3, bluebird’s Phase 3, global, multi-center study designed to evaluate the safety and efficacy of LentiGlobin in patients with TDT and the β0/β0 genotype. The target enrollment of the study is 15 adult, adolescent or pediatric patients.
STRENGTHENED BALANCE SHEET – In December 2017, bluebird raised $569.8 million in net proceeds through a public equity offering. In January 2018, bluebird raised an additional $48.6 million in net proceeds pursuant to the partial exercise of the underwriters’ over-allotment option in connection with this public equity offering. bluebird anticipates that its cash, cash equivalents and marketable securities as of December 31, 2017 will be sufficient to fund operations into 2021 based on the company’s current business plan.
2018 Anticipated Milestones

Filing for European approval of LentiGlobin in patients with TDT and non-β0/β0 genotypes in the second half of 2018
Update on the clinical development plan and registration strategy for LentiGlobin in SCD by year end 2018
Initiation of an investigator-led Phase 1 clinical study of a lentiviral gene therapy targeting BCL11a suppression and fetal hemoglobin upregulation in patients with SCD
Initiation by Celgene of a Phase 3 clinical study of bb2121 in third line multiple myeloma
Presentation of bb2121 clinical data from the CRB-401 study at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting
Presentation of LentiGlobin clinical data from the Northstar-2 (HGB-207) clinical study in patients with TDT and non- β0/β0 genotypes at the European Hematology Association (EHA) (Free EHA Whitepaper) Annual Meeting
Presentation of LentiGlobin clinical data from the HGB-206 clinical study in patients with SCD at the ASH (Free ASH Whitepaper) Annual Meeting
Presentation of LentiGlobin clinical data from the Northstar-3 (HGB-212) clinical study in patients with TDT and the β0/β0 genotype at the ASH (Free ASH Whitepaper) Annual Meeting
Presentation of bb21217 clinical data from the CRB-402 clinical study in patients with relapsed/refractory multiple myeloma at the ASH (Free ASH Whitepaper) Annual Meeting
Presentation of Lenti-D clinical data from the ongoing Starbeam clinical study in patients with CALD by the end of 2018
Fourth Quarter and Full Year 2017 Financial Results

Cash Position: Cash, cash equivalents and marketable securities as of December 31, 2017 were $1.6 billion, compared to $884.8 million as of December 31, 2016, an increase of $729.5 million, which was primarily driven by the company’s June and December 2017 public equity offerings.
Revenues: Total revenues were $4.2 million for the fourth quarter of 2017 compared to $1.6 million for fourth quarter of 2016, and $35.4 million for the year ended December 31, 2017 compared to $6.2 million for the year ended December 31, 2016. The increase is primarily attributable to the commencement of revenue recognition for the bb2121 license and manufacturing services under the company’s agreement with Celgene and revenue recognized from the company’s out-licensing agreement with Novartis Pharma AG (Novartis).
R&D Expenses: Research and development expenses were $92.6 million for the fourth quarter of 2017 compared to $57.1 million for the fourth quarter of 2016, and $273.0 million for the year ended December 31, 2017 compared to $204.8 million for the year ended December 31, 2016. The increase in research and development expenses was driven by costs incurred to advance and expand the company’s pipeline and is attributable to increased clinical trial-related costs and manufacturing costs for our development programs, as well as increased employee-related costs due to headcount growth supporting overall research and development activities. When comparing the fourth quarter of 2017 to the fourth quarter of 2016, the increase in research and development expense was also attributable to license milestones and fees, primarily related to the company’s strategic collaboration and license agreement with TCB.
G&A Expenses: General and administrative expenses were $29.1 million for the fourth quarter of 2017 compared to $16.2 million for the fourth quarter of 2016, and $93.6 million for the year ended December 31, 2017 compared to $65.1 million for the year ended December 31, 2016. The increase in general and administrative expenses was attributable to increases in employee-related costs due to headcount to support overall growth, commercial-readiness activities, and facility-related expenses.
Cost of License and Royalty Revenue: Cost of license and royalty revenue was less than $0.1 million for the fourth quarter of 2017 and $1.5 million for the year ended December 31, 2017 and is primarily composed of amounts payable to third party licensors in connection with amounts received under our out-license arrangement with Novartis. No similar costs were incurred during 2016.
Net Loss: Net loss was $117.2 million for the fourth quarter of 2017 compared to $71.4 million for the fourth quarter of 2016, and $335.6 million for the year ended December 31, 2017 compared to $263.5 million for the year ended December 31, 2016.
About bluebird bio, Inc.
With its lentiviral-based gene therapies, T cell immunotherapy expertise and gene editing capabilities, bluebird bio has built an integrated product platform with broad potential application to severe genetic diseases and cancer. bluebird bio’s gene therapy clinical programs include its Lenti-D product candidate for the treatment of cerebral adrenoleukodystrophy, and its LentiGlobin product candidate for the treatment of transfusion-dependent β-thalassemia, also known as β-thalassemia major, and severe sickle cell disease. bluebird bio’s oncology pipeline is built upon the company’s leadership in lentiviral gene delivery and T cell engineering, with a focus on developing novel T cell-based immunotherapies, including chimeric antigen receptor (CAR T) and T cell receptor (TCR) therapies. bluebird bio’s lead oncology programs, bb2121 and bb21217, are anti-BCMA CAR T programs partnered with Celgene. bluebird bio also has discovery research programs utilizing megaTAL/homing endonuclease gene editing technologies with the potential for use across the company’s pipeline.

bluebird bio has operations in Cambridge, Massachusetts, Seattle, Washington, Durham, North Carolina and Zug, Switzerland.

LentiGlobin and Lenti-D are trademarks of bluebird bio, Inc.

Forward-Looking Statements
This release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the Company’s financial condition, results of operations and sufficiency of its cash, cash equivalents and marketable securities to fund its planned operations, as well as statements regarding the anticipated development and regulatory milestones and plans for to the Company’s product candidates and clinical studies and statements regarding the Company’s plans to provide updates on the development of its product candidates.Any forward-looking statements are based on management’s current expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially and adversely from those set forth in or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, risks that the preliminary results from our clinical trials will not continue or be repeated in our ongoing clinical trials, the risk of cessation or delay of any of the ongoing or planned clinical studies and/or our development of our product candidates, the risk of a delay in the enrollment of patients in our clinical studies, risks that the current or planned clinical trials of the LentiGlobin, Lenti-D or bb2121 product candidates will be insufficient to support regulatory submissions or marketing approval in the United States and European Union, the risk that our collaborations, including the collaboration with Celgene, will not continue or will not be successful, and the risk that any one or more of our product candidates will not be successfully developed, approved or commercialized. For a discussion of other risks and uncertainties, and other important factors, any of which could cause our actual results to differ from those contained in the forward-looking statements, see the section entitled "Risk Factors" in our annual report on Form 10-K, as well as discussions of potential risks, uncertainties, and other important factors in our subsequent filings with the Securities and Exchange Commission. Guidance as to the sufficiency of our cash, cash equivalents and marketable securities to fund our planned operations is based on current assumptions as of the date hereof and does not include the effect of any future potential license and collaboration agreements, business combinations or asset acquisitions.All information in this press release is as of the date of the release, and bluebird bio undertakes no duty to update this information unless required by law.

bluebird bio, Inc.

Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

Three Months Ended
December 31, Year Ended
December 31,
2017 2016 2017 2016
Revenue:
Collaboration revenue $ 4,018 $ 1,552 $ 22,207 $ 6,155
License and royalty revenue 150 — 13,220 —
Total revenues 4,168 1,552 35,427 6,155
Operating expenses:
Research and development 92,576 57,133 273,040 204,775
General and administrative 29,087 16,178 93,550 65,119
Cost of license and royalty revenue 7 — 1,527 —
Change in fair value of contingent consideration (730 ) 576 (525 ) 4,091
Total operating expenses 120,940 73,887 367,592 273,985
Loss from operations (116,772 ) (72,335 ) (332,165 ) (267,830 )
Interest (expense) income, net (159 ) 914 (2,001 ) 3,782
Other (expense) income, net (87 ) (6 ) (1,267 ) (71 )
Loss before income taxes (117,018 ) (71,427 ) (335,433 ) (264,119 )
Income tax benefit (expense) (210 ) 63 (210 ) 612
Net loss $ (117,228 ) $ (71,364 ) $ (335,643 ) $ (263,507 )
Net loss per share – basic and diluted: $ (2.52 ) $ (1.88 ) $ (7.71 ) $ (7.07 )
Weighted-average number of
common shares used in computing
net loss per share – basic and diluted

46,534 38,051 43,535 37,284

bluebird bio, Inc.

Condensed Consolidated Balance Sheet Data

(in thousands)

(unaudited)

As of December 31,
2017 2016
Cash, cash equivalents and marketable securities $ 1,614,302 $ 884,830
Total assets $ 1,900,567 $ 1,118,122
Total liabilities $ 277,135 $ 248,682
Total stockholders’ equity $ 1,623,432 $ 869,440

On February 21, 2018 Apricus Biosciences, Inc. (Nasdaq:APRI), a biopharmaceutical company advancing innovative medicines in urology and rheumatology, reported that the Company’s fourth quarter and full year 2017 financial results will be released on Thursday, March 1, 2018 at 4:01 p.m. Eastern Time (Press release, Apricus Biosciences, FEB 21, 2018, View Source;p=RssLanding&cat=news&id=2333607 [SID1234524089]). Company management will host a conference call on Thursday, March 1, 2018, at 4:30 p.m. Eastern Time to discuss the financial results and its plans for addressing the Vitaros Complete Response with the FDA.

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To participate by telephone, please dial (855) 780-7196 (Domestic) or (631) 485-4867 (International). The conference ID number is 3687726. The live audio webcast can be accessed via the Investor Relations’ section of the Company’s website at www.apricusbio.com. Please log in approximately 5-10 minutes before the event to ensure a timely connection. The archived webcast will remain available for 30 days following the live call.

On February 21, 2018 Advaxis presented Investor Presentation (Presentation, Advaxis, FEB 21, 2018, View Source [SID1234524088]).

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On February 21, 2018 United Therapeutics Corporation (NASDAQ: UTHR) reported its financial results for the fourth quarter and year ended December 31, 2017 (Press release, United Therapeutics, FEB 21, 2018, View Source [SID1234524084]).

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"Our fourth quarter net revenues reached $465 million and our annual net revenues reached $1.7 billion, our highest quarterly and annual net revenues ever," said Martine Rothblatt, Ph.D., United Therapeutics Chairman and Chief Executive Officer. "Orenitram’s fourth quarter net revenues grew by 25%, as compared to the same period in the prior year, representing our third consecutive quarter of greater than 20% net revenue growth for this therapy and confirming our belief in the organic growth opportunity for Orenitram, which is the only true oral prostacyclin analogue therapy for the large and increasing number of pulmonary arterial hypertension (PAH) patients. These financial results strengthen our ability to develop and advance our growing product pipeline, which currently includes seven phase III programs and multiple next-generation treprostinil drug delivery systems as well as investigative regenerative medicine and organ manufacturing programs, which we hope will ultimately provide a cure for PAH and other end-stage organ diseases."

Key financial highlights include (in millions, except per share data):

Three Months Ended
December 31,

Year Ended
December 31,

2017

2016

2017

2016

Revenues

$

464.7

$

409.0

$

1,725.3

$

1,598.8

Net income

$

19.0

$

110.3

$

417.9

$

713.7

Non-GAAP earnings(1)

$

170.2

$

184.3

$

741.3

$

726.0

Net income, per diluted share

$

0.43

$

2.43

$

9.31

$

15.25

Non-GAAP earnings, per diluted share(1)

$

3.89

$

4.06

$

16.51

$

15.51

(1) See definition of non-GAAP earnings, a non-GAAP financial measure, and a reconciliation of net income to non-GAAP earnings below.

Revenues

The table below summarizes the components of total revenues (dollars in millions):

Three Months Ended
December 31,

Percentage

Year Ended
December 31,

Percentage

2017

2016

Change

2017

2016

Change

Net product sales:

Remodulin

$

180.1

$

151.2

19.1

%

$

670.9

$

602.3

11.4

%

Tyvaso

92.4

93.6

(1.3

)%

372.9

404.6

(7.8

)%

Adcirca

119.3

112.7

5.9

%

419.7

372.2

12.8

%

Orenitram

48.0

38.3

25.3

%

185.8

157.2

18.2

%

Unituxin

24.9

13.2

88.6

%

76.0

62.5

21.6

%

Total revenues

$

464.7

$

409.0

13.6

%

$

1,725.3

$

1,598.8

7.9

%

1

Revenues for the quarter ended December 31, 2017 increased by $55.7 million as compared to the same period in 2016. The growth in revenues primarily resulted from: (1) a $28.9 million increase in Remodulin net product sales; (2) an $11.7 million increase in Unituxin net product sales; (3) a $9.7 million increase in Orenitram net product sales; and (4) a $6.6 million increase in Adcirca net product sales, partially offset by a $1.2 million decrease in Tyvaso net product sales.

Revenues for the year ended December 31, 2017 increased by $126.5 million as compared to the same period in 2016. The growth in revenues primarily resulted from the following: (1) a $68.6 million increase in Remodulin net product sales; (2) a $47.5 million increase in Adcirca net product sales; (3) a $28.6 million increase in Orenitram net product sales; and (4) a $13.5 million increase in Unituxin net product sales, partially offset by a $31.7 million decrease in Tyvaso net product sales.

Expenses

Cost of product sales. The table below summarizes cost of product sales by major category (dollars in millions):

Three Months Ended
December 31,

Percentage

Year Ended
December 31,

Percentage

2017

2016

Change

2017

2016

Change

Category:

Cost of product sales

$

46.7

$

19.5

139.5

%

$

103.1

$

72.1

43.0

%

Share-based compensation expense(1)

6.3

8.9

(29.2

)%

2.6

0.6

333.3

%

Total cost of product sales

$

53.0

$

28.4

86.6

%

$

105.7

$

72.7

45.4

%

(1) Refer to Share-based compensation expense below for discussion.

Cost of product sales, excluding share-based compensation. The increases in cost of product sales of $27.2 million and $31.0 million, respectively, for the quarter and year ended December 31, 2017 as compared to the same periods in 2016, were primarily attributable to a $21.9 million increase in royalty expense for Adcirca. Our amended license agreement with Eli Lilly and Company resulted in our royalty rate on net product sales of Adcirca increasing from five percent to an effective rate of approximately 42.5 percent beginning December 1, 2017. The remaining increase in cost of product sales was primarily attributable to an increase in sales.

Research and development expense. The table below summarizes research and development expense by major category (dollars in millions):

Three Months Ended
December 31,

Percentage

Year Ended
December 31,

Percentage

2017

2016

Change

2017

2016

Change

Project and non-project:

Research and development expense

$

91.5

$

46.6

96.4

%

$

256.4

$

157.6

62.7

%

Share-based compensation expense (benefit)(1)

22.1

20.3

8.9

%

8.2

(10.0

)

182.0

%

Total research and development expense

$

113.6

$

66.9

69.8

%

$

264.6

$

147.6

79.3

%

(1) Refer to Share-based compensation expense below for discussion.

Research and development expense, excluding share-based compensation. The increases in research and development expense of $44.9 million and $98.8 million, respectively, for the quarter and year ended December 31, 2017 as compared to the same periods in 2016, were driven by the expansion of our pipeline programs to treat cardiopulmonary disease and cancer and to develop organ manufacturing technologies.

2

Selling, general and administrative expense. The table below summarizes selling, general and administrative expense by major category (dollars in millions):

Three Months Ended
December 31,

Percentage

Year Ended
December 31,

Percentage

2017

2016

Change

2017

2016

Change

Category:

General and administrative

$

51.4

$

45.9

12.0

%

$

203.1

$

210.7

(3.6

)%

Sales and marketing

17.6

17.5

0.6

%

64.3

84.6

(24.0

)%

Share-based compensation expense(1)

90.1

76.1

18.4

%

62.7

21.5

191.6

%

Total selling, general and administrative expense

$

159.1

$

139.5

14.1

%

$

330.1

$

316.8

4.2

%

(1) Refer to Share-based compensation expense below for discussion.

General and administrative, excluding share-based compensation. The decrease in general and administrative expenses of $7.6 million for the year ended December 31, 2017, as compared to the same period in 2016, primarily resulted from: (1) a $32.0 million decrease in grants to non-affiliated, non-profit organizations that provide financial assistance to patients with PAH; and (2) a $9.3 million decrease of expenses in connection with the disposition and write down of various properties in 2016. The decrease was partially offset by: (1) a $9.4 million increase in legal fees incurred in connection with intellectual property litigation and the Department of Justice (DOJ) investigation of our support of 501(c)(3) organizations that provide financial assistance to patients; (2) a $9.2 million increase in compensation due to an increase in staffing; and (3) a $6.5 million increase in consulting expenses.

Sales and marketing, excluding share-based compensation. The decrease in sales and marketing expenses of $20.3 million for the year ended December 31, 2017, as compared to the same period in 2016, primarily resulted from a $11.3 million decrease in compensation and related costs associated with the 2016 consolidation of our sales and marketing staff.

Share-based compensation expense. The table below summarizes share-based compensation expense (benefit) by major category (dollars in millions):

Three Months Ended
December 31,

Percentage

Year Ended
December 31,

Percentage

2017

2016

Change

2017

2016

Change

Category:

Stock options

$

13.1

$

3.1

322.6

%

$

43.0

$

24.8

73.4

%

Share tracking awards plan

104.6

101.3

3.3

%

27.1

(15.2

)

278.3

%

Other(1)

0.8

0.9

(11.1

)%

3.4

2.5

36.0

%

Total share-based compensation expense

$

118.5

$

105.3

12.5

%

$

73.5

$

12.1

507.4

%

(1) Includes expense related to restricted stock units and our employee stock purchase plan for the periods ended December 31, 2017 and 2016.

Share-based compensation. The increase in share-based compensation expense of $13.2 million during the quarter ended December 31, 2017, as compared to the same period in 2016, was primarily due to a $10.0 million increase in stock option expense due to additional awards outstanding in 2017.

The increase in share-based compensation expense of $61.4 million during the year ended December 31, 2017, as compared to the same period in 2016, was primarily due to: (1) a $42.3 million increase in share tracking awards expense related to an increase in our stock price during 2017 and the continued vesting of outstanding awards; and (2) an $18.2 million increase in stock option expense due to additional awards granted and outstanding in 2017.

Settlement of Loss Contingency

In December 2017, we entered into a civil Settlement Agreement with the U.S. Government to resolve a DOJ investigation related to our support of 501(c)(3) organizations that provide financial assistance to patients. During the second quarter of 2017, we recorded a $210.0 million accrual relating to this matter, and ultimately paid this amount, plus interest, to the U.S. Government upon settlement. This matter is described in more detail in Note 16—Litigation—Department of Justice Subpoena, to our consolidated financial statements included within our Annual Report on Form 10-K for the year ended December 31, 2017.

Impairment of Cost Method Investment

During the year ended December 31, 2017, we recorded $49.6 million of impairment charges related to our cost method investments in privately-held companies. There were no such impairment charges in the year ended December 31, 2016.

3

Income Taxes

The provision for income taxes was $351.6 million for the year ended December 31, 2017, compared to $346.5 million for the same period in 2016. The change in the provision for income taxes was primarily due to a charge for the revaluation of deferred taxes due to the lower corporate tax rate enacted by The Tax Cuts and Jobs Act ("Tax Reform"), which is effective as of January 1, 2018, and increases in nondeductible items, partially offset by a decrease in income before income taxes. For the years ended December 31, 2017 and 2016, the effective tax rates were approximately 46 percent and 33 percent, respectively.

Non-GAAP Earnings

Non-GAAP earnings is defined as net income, adjusted for: (1) share-based compensation expense (including expenses relating to stock options, restricted stock units, share tracking awards, and our employee stock purchase plan); (2) settlement of loss contingency; (3) impairment charges; (4) impact of Tax Reform; and (5) tax impact on non-GAAP earnings adjustments.

A reconciliation of net income to non-GAAP earnings is presented below (in millions, except per share data):

Three Months Ended
December 31,

Year Ended December 31,

2017

2016 (1)

2017

2016 (1)

Net income, as reported

$

19.0

$

110.3

$

417.9

$

713.7

Adjust for the following charges:

Share-based compensation expense(2)

118.5

105.3

73.5

12.1

Settlement of loss contingency(3)

—

—

210.0

—

Impairment of cost method investments(4)

—

—

49.6

—

Other impairment charges(4)

—

4.3

—

4.3

Impact of Tax Reform(5)

71.0

—

71.0

—

Tax benefit(2)(3)

(38.3

)

(35.6

)

(80.7

)

(4.1

)

Non-GAAP earnings

$

170.2

$

184.3

$

741.3

$

726.0

Non-GAAP earnings per share:

Basic

$

3.94

$

4.37

$

16.85

$

16.58

Diluted

$

3.89

$

4.06

$

16.51

$

15.51

Weighted average number of common shares outstanding:

Basic

43.2

42.2

44.0

43.8

Diluted

43.8

45.4

44.9

46.8

(1) We changed the presentation of our non-GAAP earnings in the first quarter of 2017 to exclude adjustments for interest expense and depreciation and amortization. Prior year periods have been conformed to match the current year presentation.

(2) We calculated the total tax impact of non-discrete quarterly non-GAAP earnings adjustments based on our annual effective tax rates, before considering discrete items, of approximately 32 percent and approximately 34 percent for each of the quarters and years ended December 31, 2017 and 2016, respectively.

(3) The tax benefit for the year ended December 31, 2017 includes $57.0 million of benefit for the estimated loss contingency recognized during the second quarter of 2017 relating to the DOJ investigation of our support of 501(c)(3) organizations that provide financial assistance to patients.

(4) This non-GAAP earnings adjustment is currently not considered tax deductible.

(5) The impact of Tax Reform is a significant and unusual component of tax expense, therefore in the calculation of non-GAAP earnings, it is presented separately from the tax benefit that is derived from the other non-GAAP adjustments.

4

Conference Call

We will host a half-hour teleconference on Wednesday, February 21, 2018, at 9:00 a.m. Eastern Time. The teleconference is accessible by dialing 1-877-351-5881, with international callers dialing 1-970-315-0533. A rebroadcast of the teleconference will be available for one week by dialing 1-855-859-2056, with international callers dialing 1-404-537-3406 and using access code 2296917.

This teleconference is also being webcast and can be accessed via our website at View Source

On February 21, 2018 The Medicines Company (NASDAQ:MDCO) today reported its financial results for the fourth quarter and full year ended December 31, 2017 (Press release, Medicines Company, FEB 21, 2018, View Source;p=RssLanding&cat=news&id=2333597 [SID1234524083]).

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"We have successfully executed our strategic action plan for 2017 by divesting our non-core assets, restructuring our business to focus on inclisiran, and initiating the inclisiran Phase 3 ORION program – recently completing target enrollment ahead of schedule in both ORION 11 and ORION 9 trials," said Clive Meanwell, M.D., Ph.D., Chief Executive Officer of The Medicines Company.

Dr. Meanwell continued, "We expect momentum to continue throughout 2018, including rapid accrual of clinical safety information on inclisiran and manufacturing development. Based on this accelerated and efficient progress, we believe an NDA and MAA submission will be feasible as soon as the second half of 2019."

Fourth-Quarter 2017 Financial Summary from Continuing Operations

Worldwide net revenue was $8.6 million in the fourth-quarter of 2017 compared to $17.4 million in the fourth-quarter of 2016, primarily from Angiomax, including both royalty revenues derived from the gross profit on authorized generic sales of Angiomax (bivalirudin) by Sandoz, Inc. and worldwide Angiomax/Angiox (bivalirudin) net product sales. The fourth quarter of 2016 also included $0.4 million of sales related to the divested non-core cardiovascular products.

On a GAAP basis, loss from continuing operations in the fourth quarter of 2017 was $159.4 million, or $2.19 per share, compared to $82.8 million, or $1.17 per share, in the fourth quarter of 2016. Included in loss from continuing operations for the fourth quarter of 2017 were charges of approximately $63.0 million for the impairment of the contingent purchase price for Raplixa, $20.0 million milestone for the first dosing in phase III inclisiran study and $15.0 million in connection with an obsolescence inventory reserve for Angiomax. On a non-GAAP basis, adjusted loss(1) from continuing operations in the fourth quarter of 2017 was $44.4 million, or $0.61(1) per share, compared to $54.9 million, or $0.78(1) per share, in the fourth quarter of 2016.

Fourth-Quarter 2017 Financial Summary from Discontinued Operations

In the fourth quarter of 2017 the Company entered into a definitive agreement to sell its infectious disease business unit to Melinta Therapeutics, Inc. for $270 million in upfront consideration and guaranteed payments ($215 million of guaranteed cash and $55 million of Melinta common stock), tiered royalty payments of 5% to 25% on worldwide net sales of Vabomere, Orbactiv and Minocin IV, and the assumption by Melinta of all royalty, milestone and other payment obligations relating to those products.

In the first quarter of 2016, the Company completed the divestiture of its hemostasis products for an upfront payment of $174.1 million, and potential milestone payments of up to an additional $235.0 million, in the aggregate, following the achievement of certain specified net sales milestones.

Net loss from discontinued operations in the fourth quarter of 2017 was $18.8 million compared to $40.1 million in 2016.

Full-Year 2017 Financial Summary from Continuing Operations

Worldwide net revenue was $44.8 million for the full year 2017 compared to $143.2 million in 2016. Included in total net revenue for the full year 2017 and 2016 was $44.6 million and $104.9 million, respectively, of Angiomax revenue, including both royalty revenues derived from the gross profit on authorized generic sales of Angiomax (bivalirudin) by Sandoz, Inc. and worldwide Angiomax/Angiox (bivalirudin) net product sales.

On a GAAP basis, loss from continuing operations for the full year 2017 was $607.7 million, or $8.40 per share, compared to income from continuing operations of $20.5 million, or $0.28 per share, for the full year 2016. Included in net loss from continuing operations for 2017 were net charges of approximately $277.0 million associated with the discontinuation and market withdrawal of Ionsys (fentanyl iontophoretic transdermal system) in the U.S. market, $63.0 million for the impairment of the contingent purchase price of Raplixa, $27.3 million associated with the discontinuation of the clinical development program for MDCO-700, our investigational anesthetic agent, and $20.0 million milestone for the first dosing in the phase III inclisiran study. On a non-GAAP basis, adjusted loss(1) from continuing operations for the full year 2017 was $142.4 million, or $1.97(1) per share, compared to $169.0 million, or $2.42(1) per share, for the full year 2016.

(1) Adjusted net loss and adjusted loss per share from continuing operations are non-GAAP financial performance measures with no standardized definitions under U.S. GAAP. For further information and a detailed reconciliation, refer to the "Non-GAAP Financial Performance Measures" and "Reconciliations of GAAP to Adjusted Loss From Continuing Operations and Adjusted Loss per Share" sections of this press release.

Full-Year 2017 Financial Summary from Discontinued Operations

Net loss from discontinued operations for the full year 2017 was $100.7 million or $1.39 per share, compared to $139.7 million, or $1.91 per share in 2016.

At December 31, 2017, the Company had a total of $151.4 million in cash and cash equivalents.

Fourth-Quarter 2017 Conference Call and Webcast Information

The Company will host a conference call and webcast today, February 21, 2018, at 8:30 a.m., Eastern Daylight Time, to discuss its fourth-quarter 2017 financial results and provide clinical and operational updates. The dial-in information to access the call is as follows:

U.S./Canada: (877) 359-9508
International: (224) 357-2393
Conference ID: 3592738

A taped replay of the conference call will be available from 11:30 a.m., Eastern Daylight Time, today until 11:30 a.m., Eastern Daylight Time, on February 28, 2018. The replay may be accessed as follows:

U.S./Canada: (855) 859-2056
International: (404) 537-3406
Conference ID: 3592738

The webcast can be accessed in the Investors section of The Medicines Company website. A replay of the webcast will also be available.

About Inclisiran

Inclisiran (formerly known as PCSK9si and ALN-PCSsc) is an investigational GalNAc-conjugated RNAi therapeutic targeting PCSK9 – a genetically validated protein regulator of LDL receptor metabolism – being developed for the treatment of hypercholesterolemia. In contrast to anti-PCSK9 monoclonal antibodies (MAbs) that bind to PCSK9 in blood, inclisiran is a first-in-class investigational medicine that acts by turning off PCSK9 synthesis in the liver.

The Medicines Company and Alnylam Pharmaceuticals, Inc. are collaborating in the advancement of inclisiran pursuant to their 2013 agreement. Under the terms of the agreement, Alnylam completed certain pre-clinical studies and the Phase I clinical study, with The Medicines Company leading and funding the development of inclisiran from Phase II forward, as well as potential commercialization.