☒
|
Quarterly report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
|
☐
|
Transition report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
|
Delaware
|
13-3648318
|
(State or Other Jurisdiction of Incorporation or Organization)
|
(I.R.S. Employer Identification No.)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock $0.0001 par value
|
ALXN
|
NASDAQ Stock Market LLC
|
Common Stock
|
$0.0001 par value
|
220,827,431
|
Class
|
Outstanding as of May 4, 2020
|
|
|
|
Page
|
PART I.
|
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Item 1.
|
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Item 2.
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Item 3.
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Item 4.
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PART II.
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Item 1.
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Item 1A.
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Item 2.
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Item 5.
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Item 6.
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SIGNATURES
|
|
|
|
March 31,
|
|
December 31,
|
||||
|
2020
|
|
2019
|
||||
Assets
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,315.0
|
|
|
$
|
2,685.5
|
|
Marketable securities
|
47.8
|
|
|
64.0
|
|
||
Trade accounts receivable, net
|
1,345.2
|
|
|
1,243.2
|
|
||
Inventories
|
586.8
|
|
|
627.6
|
|
||
Prepaid expenses and other current assets
|
575.4
|
|
|
456.1
|
|
||
Total current assets
|
4,870.2
|
|
|
5,076.4
|
|
||
Property, plant and equipment, net
|
1,159.9
|
|
|
1,163.3
|
|
||
Intangible assets, net
|
4,187.6
|
|
|
3,344.3
|
|
||
Goodwill
|
5,072.1
|
|
|
5,037.4
|
|
||
Right of use operating assets
|
203.2
|
|
|
204.0
|
|
||
Deferred tax assets
|
2,223.5
|
|
|
2,290.2
|
|
||
Other assets
|
432.0
|
|
|
429.0
|
|
||
Total assets
|
$
|
18,148.5
|
|
|
$
|
17,544.6
|
|
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
862.8
|
|
|
$
|
966.7
|
|
Current portion of long-term debt
|
126.7
|
|
|
126.7
|
|
||
Other current liabilities
|
130.4
|
|
|
100.9
|
|
||
Total current liabilities
|
1,119.9
|
|
|
1,194.3
|
|
||
Long-term debt, less current portion
|
2,343.3
|
|
|
2,375.0
|
|
||
Contingent consideration
|
358.9
|
|
|
192.4
|
|
||
Deferred tax liabilities
|
2,113.3
|
|
|
2,081.4
|
|
||
Noncurrent operating lease liabilities
|
162.8
|
|
|
164.1
|
|
||
Other liabilities
|
302.5
|
|
|
265.6
|
|
||
Total liabilities
|
6,400.7
|
|
|
6,272.8
|
|
||
Commitments and contingencies (Note 16)
|
|
|
|
||||
Stockholders' Equity:
|
|
|
|
||||
Common stock, $0.0001 par value; 290.0 shares authorized; 238.9 and 237.8 shares issued at March 31, 2020 and December 31, 2019, respectively
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
8,864.9
|
|
|
8,804.7
|
|
||
Treasury stock, at cost, 17.8 and 16.5 shares at March 31, 2020 and December 31, 2019, respectively
|
(2,213.0
|
)
|
|
(2,105.9
|
)
|
||
Accumulated other comprehensive loss
|
(101.5
|
)
|
|
(66.8
|
)
|
||
Retained earnings
|
5,197.4
|
|
|
4,639.8
|
|
||
Total stockholders' equity
|
11,747.8
|
|
|
11,271.8
|
|
||
Total liabilities and stockholders' equity
|
$
|
18,148.5
|
|
|
$
|
17,544.6
|
|
|
Three months ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net product sales
|
$
|
1,444.6
|
|
|
$
|
1,140.2
|
|
Other revenue
|
0.2
|
|
|
0.2
|
|
||
Total revenues
|
1,444.8
|
|
|
1,140.4
|
|
||
Costs and expenses:
|
|
|
|
||||
Cost of sales (exclusive of amortization of purchased intangible assets)
|
111.7
|
|
|
85.8
|
|
||
Research and development
|
200.9
|
|
|
195.9
|
|
||
Selling, general and administrative
|
319.9
|
|
|
281.5
|
|
||
Amortization of purchased intangible assets
|
73.7
|
|
|
80.0
|
|
||
Change in fair value of contingent consideration
|
5.8
|
|
|
(28.7
|
)
|
||
Acquisition-related costs
|
38.1
|
|
|
—
|
|
||
Restructuring expenses
|
(0.8
|
)
|
|
9.1
|
|
||
Total costs and expenses
|
749.3
|
|
|
623.6
|
|
||
Operating income
|
695.5
|
|
|
516.8
|
|
||
Other income and expense:
|
|
|
|
||||
Investment (expense) income
|
(5.2
|
)
|
|
42.5
|
|
||
Interest expense
|
(25.8
|
)
|
|
(19.9
|
)
|
||
Other income and (expense)
|
(0.9
|
)
|
|
2.4
|
|
||
Income before income taxes
|
663.6
|
|
|
541.8
|
|
||
Income tax expense (benefit)
|
106.0
|
|
|
(46.1
|
)
|
||
Net income
|
$
|
557.6
|
|
|
$
|
587.9
|
|
Earnings per common share
|
|
|
|
||||
Basic
|
$
|
2.52
|
|
|
$
|
2.63
|
|
Diluted
|
$
|
2.50
|
|
|
$
|
2.61
|
|
Shares used in computing earnings per common share
|
|
|
|
||||
Basic
|
221.6
|
|
|
223.8
|
|
||
Diluted
|
222.6
|
|
|
225.5
|
|
|
Three months ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net income
|
$
|
557.6
|
|
|
$
|
587.9
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
||||
Foreign currency translation
|
(8.0
|
)
|
|
(2.0
|
)
|
||
Unrealized (losses) gains on debt securities
|
(0.2
|
)
|
|
0.2
|
|
||
Unrealized losses on hedging activities, net of tax of $(8.2) and $(2.2), respectively
|
(26.5
|
)
|
|
(9.0
|
)
|
||
Other comprehensive income (loss), net of tax
|
(34.7
|
)
|
|
(10.8
|
)
|
||
Comprehensive income
|
$
|
522.9
|
|
|
$
|
577.1
|
|
Three months ended March 31, 2020
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Treasury Stock
at Cost
|
|
Accumulated Other
Comprehensive
Income (Loss)
|
|
Retained Earnings
|
|
Total
Stockholders’
Equity
|
||||||||||||||||||
|
Shares Issued
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|||||||||||||||||||||
Balances, December 31, 2019
|
237.8
|
|
|
$
|
—
|
|
|
$
|
8,804.7
|
|
|
16.5
|
|
|
$
|
(2,105.9
|
)
|
|
$
|
(66.8
|
)
|
|
$
|
4,639.8
|
|
|
$
|
11,271.8
|
|
Repurchase of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
1.3
|
|
|
(107.1
|
)
|
|
—
|
|
|
—
|
|
|
(107.1
|
)
|
||||||
Issuance of common stock under stock option and stock purchase plans
|
0.1
|
|
|
—
|
|
|
2.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.8
|
|
||||||
Issuance of restricted common stock
|
1.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
57.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57.4
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
557.6
|
|
|
557.6
|
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(34.7
|
)
|
|
—
|
|
|
(34.7
|
)
|
||||||
Balances, March 31, 2020
|
238.9
|
|
|
$
|
—
|
|
|
$
|
8,864.9
|
|
|
17.8
|
|
|
$
|
(2,213.0
|
)
|
|
$
|
(101.5
|
)
|
|
$
|
5,197.4
|
|
|
$
|
11,747.8
|
|
Three months ended March 31, 2019
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Treasury Stock
at Cost
|
|
Accumulated Other
Comprehensive
Income (Loss)
|
|
Retained Earnings
|
|
Total
Stockholders’
Equity
|
||||||||||||||||||
|
Shares Issued
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|||||||||||||||||||||
Balances, December 31, 2018
|
236.2
|
|
|
$
|
—
|
|
|
$
|
8,539.1
|
|
|
12.7
|
|
|
$
|
(1,689.9
|
)
|
|
$
|
(9.7
|
)
|
|
$
|
2,325.8
|
|
|
$
|
9,165.3
|
|
Repurchase of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
(11.3
|
)
|
|
—
|
|
|
—
|
|
|
(11.3
|
)
|
||||||
Issuance of common stock under stock option and stock purchase plans
|
0.1
|
|
|
—
|
|
|
10.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10.1
|
|
||||||
Issuance of restricted common stock
|
0.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
55.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55.7
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
587.9
|
|
|
587.9
|
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10.8
|
)
|
|
—
|
|
|
(10.8
|
)
|
||||||
Adoption of new accounting standards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(90.3
|
)
|
|
(90.3
|
)
|
||||||
Balances, March 31, 2019
|
237.0
|
|
|
$
|
—
|
|
|
$
|
8,604.9
|
|
|
12.8
|
|
|
$
|
(1,701.2
|
)
|
|
$
|
(20.5
|
)
|
|
$
|
2,823.4
|
|
|
$
|
9,706.6
|
|
|
Three months ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
557.6
|
|
|
$
|
587.9
|
|
Adjustments to reconcile net income to net cash flows from operating activities:
|
|
|
|
||||
Depreciation and amortization
|
89.3
|
|
|
97.2
|
|
||
Change in fair value of contingent consideration
|
5.8
|
|
|
(28.7
|
)
|
||
Share-based compensation expense
|
57.6
|
|
|
56.7
|
|
||
Deferred taxes (benefit)
|
49.0
|
|
|
(81.1
|
)
|
||
Unrealized foreign currency loss
|
7.1
|
|
|
1.9
|
|
||
Unrealized (gain) loss on forward contracts
|
(15.0
|
)
|
|
5.5
|
|
||
Unrealized loss (gain) on strategic equity investments
|
9.2
|
|
|
(33.8
|
)
|
||
Other
|
13.7
|
|
|
(2.4
|
)
|
||
Changes in operating assets and liabilities, excluding the effect of acquisitions:
|
|
|
|
||||
Accounts receivable
|
(120.9
|
)
|
|
(95.3
|
)
|
||
Inventories
|
37.3
|
|
|
(11.2
|
)
|
||
Prepaid expenses, right of use operating assets and other assets
|
(72.9
|
)
|
|
(58.6
|
)
|
||
Accounts payable, accrued expenses, lease liabilities and other liabilities
|
(68.2
|
)
|
|
(8.2
|
)
|
||
Net cash provided by operating activities
|
549.6
|
|
|
429.9
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of available-for-sale debt securities
|
(19.4
|
)
|
|
—
|
|
||
Proceeds from maturity or sale of available-for-sale debt securities
|
141.4
|
|
|
92.6
|
|
||
Purchases of mutual funds related to nonqualified deferred compensation plan
|
(6.9
|
)
|
|
(5.8
|
)
|
||
Proceeds from sale of mutual funds related to nonqualified deferred compensation plan
|
3.3
|
|
|
3.7
|
|
||
Purchases of property, plant and equipment
|
(12.2
|
)
|
|
(36.0
|
)
|
||
Payment for acquisition of business, net of cash acquired
|
(837.7
|
)
|
|
—
|
|
||
Purchases of strategic equity investments and options
|
(34.5
|
)
|
|
(43.8
|
)
|
||
Purchase of intangible assets
|
—
|
|
|
(8.0
|
)
|
||
Other
|
—
|
|
|
0.2
|
|
||
Net cash (used in) provided by investing activities
|
(766.0
|
)
|
|
2.9
|
|
||
Cash flows from financing activities:
|
|
|
|
|
|
||
Payments on term loan
|
(32.6
|
)
|
|
—
|
|
||
Payments on revolving credit facility
|
—
|
|
|
(250.0
|
)
|
||
Repurchases of common stock
|
(107.1
|
)
|
|
(11.3
|
)
|
||
Net proceeds from issuance of common stock under share-based compensation arrangements
|
2.8
|
|
|
10.2
|
|
||
Other
|
(1.3
|
)
|
|
(1.3
|
)
|
||
Net cash used in financing activities
|
(138.2
|
)
|
|
(252.4
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents and restricted cash
|
(13.2
|
)
|
|
(1.4
|
)
|
||
Net change in cash and cash equivalents and restricted cash
|
(367.8
|
)
|
|
179.0
|
|
||
Cash and cash equivalents and restricted cash at beginning of period
|
2,723.6
|
|
|
1,367.3
|
|
||
Cash and cash equivalents and restricted cash at end of period
|
$
|
2,355.8
|
|
|
$
|
1,546.3
|
|
|
|
|
|
|
Three months ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
|
|
|
|
||||
Supplemental cash flow disclosures from investing and financing activities:
|
|
|
|
||||
Contingent consideration issued in acquisitions
|
$
|
155.0
|
|
|
$
|
—
|
|
Fair value of strategic investment and purchase option
|
$
|
—
|
|
|
$
|
27.1
|
|
Operating ROU lease assets obtained in exchange for operating lease liabilities
|
$
|
3.7
|
|
|
$
|
—
|
|
Accounts payable and accrued expenses for purchases of property, plant and equipment and intangible assets
|
$
|
13.0
|
|
|
$
|
10.8
|
|
|
Three months ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,315.0
|
|
|
$
|
1,544.8
|
|
Restricted cash included in other current assets
|
40.7
|
|
|
0.1
|
|
||
Restricted cash included in other noncurrent assets
|
0.1
|
|
|
1.4
|
|
||
Total cash and cash equivalents and restricted cash reported in the condensed consolidated statement of cash flows
|
$
|
2,355.8
|
|
|
$
|
1,546.3
|
|
1.
|
Business
|
2.
|
Basis of Presentation and Principles of Consolidation
|
3.
|
Acquisitions
|
Consideration
|
|
||
Upfront payment to shareholders and option holders
|
$
|
926.2
|
|
Upfront payment, fair value of equity compensation attributable to the post-combination service period
|
(20.0
|
)
|
|
Upfront cash paid, net
|
906.2
|
|
|
|
|
||
Contingent consideration
|
160.7
|
|
|
Contingent consideration, fair value of equity compensation attributable to the post-combination service period
|
(5.7
|
)
|
|
Total consideration
|
$
|
1,061.2
|
|
|
|
||
Assets Acquired and Liabilities Assumed
|
|
||
Cash and cash equivalents
|
$
|
68.5
|
|
Marketable securities
|
106.1
|
|
|
In-process research & development assets (IPR&D)
|
918.0
|
|
|
Goodwill
|
34.7
|
|
|
Deferred tax liabilities, net
|
(59.8
|
)
|
|
Other assets and liabilities, net
|
(6.3
|
)
|
|
Total net assets acquired
|
$
|
1,061.2
|
|
|
Three months ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Pro forma revenue
|
$
|
1,444.8
|
|
|
$
|
1,140.4
|
|
Pro forma net income
|
574.9
|
|
|
515.7
|
|
|
Three months ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Transaction costs (1)
|
$
|
1.4
|
|
|
$
|
—
|
|
Integration costs
|
0.1
|
|
|
—
|
|
||
Fair value of equity compensation attributable to the post-combination service period
|
25.7
|
|
|
—
|
|
||
Restructuring-related costs (2)
|
10.9
|
|
|
—
|
|
||
|
$
|
38.1
|
|
|
$
|
—
|
|
4.
|
Inventories
|
|
March 31,
|
|
December 31,
|
||||
|
2020
|
|
2019
|
||||
Raw materials
|
$
|
49.6
|
|
|
$
|
41.2
|
|
Work-in-process
|
108.8
|
|
|
180.8
|
|
||
Finished goods
|
428.4
|
|
|
405.6
|
|
||
|
$
|
586.8
|
|
|
$
|
627.6
|
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||||||||||
|
Estimated
Life (years) |
|
Cost
|
|
Accumulated
Amortization |
|
Net
|
|
Cost
|
|
Accumulated
Amortization |
|
Net
|
||||||||||||
Licensing rights
|
3-8
|
|
$
|
57.0
|
|
|
$
|
(35.6
|
)
|
|
$
|
21.4
|
|
|
$
|
57.0
|
|
|
$
|
(34.7
|
)
|
|
$
|
22.3
|
|
Patents
|
7
|
|
10.5
|
|
|
(10.5
|
)
|
|
—
|
|
|
10.5
|
|
|
(10.5
|
)
|
|
—
|
|
||||||
Purchased technology
|
6-16
|
|
4,710.5
|
|
|
(1,462.4
|
)
|
|
3,248.1
|
|
|
4,710.5
|
|
|
(1,388.7
|
)
|
|
3,321.8
|
|
||||||
Other intangibles
|
5
|
|
0.4
|
|
|
(0.3
|
)
|
|
0.1
|
|
|
0.4
|
|
|
(0.2
|
)
|
|
0.2
|
|
||||||
Acquired IPR&D
|
Indefinite
|
|
918.0
|
|
|
—
|
|
|
918.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
|
$
|
5,696.4
|
|
|
$
|
(1,508.8
|
)
|
|
$
|
4,187.6
|
|
|
$
|
4,778.4
|
|
|
$
|
(1,434.1
|
)
|
|
$
|
3,344.3
|
|
Goodwill
|
Indefinite
|
|
$
|
5,075.0
|
|
|
$
|
(2.9
|
)
|
|
$
|
5,072.1
|
|
|
$
|
5,040.3
|
|
|
$
|
(2.9
|
)
|
|
$
|
5,037.4
|
|
|
March 31, 2020
|
||
Balance at December 31, 2019
|
$
|
5,037.4
|
|
Goodwill resulting from the acquisition of Achillion
|
34.7
|
|
|
Balance at March 31, 2020
|
$
|
5,072.1
|
|
6.
|
Debt
|
7.
|
Earnings Per Common Share
|
|
Three months ended
|
||||||
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net income used for basic and diluted calculation
|
$
|
557.6
|
|
|
$
|
587.9
|
|
Shares used in computing earnings per common share—basic
|
221.6
|
|
|
223.8
|
|
||
Weighted-average effect of dilutive securities:
|
|
|
|
||||
Stock awards
|
1.0
|
|
|
1.7
|
|
||
Shares used in computing earnings per common share—diluted
|
222.6
|
|
|
225.5
|
|
||
Earnings per common share:
|
|
|
|
||||
Basic
|
$
|
2.52
|
|
|
$
|
2.63
|
|
Diluted
|
$
|
2.50
|
|
|
$
|
2.61
|
|
8.
|
Marketable Securities
|
|
|
March 31, 2020
|
||||||||||||||
|
|
Amortized Cost
|
|
Gross Unrealized Holding Gains
|
|
Gross Unrealized Holding Losses
|
|
Fair Value
|
||||||||
Commercial paper
|
|
$
|
134.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
134.2
|
|
Corporate bonds
|
|
3.6
|
|
|
—
|
|
|
(0.1
|
)
|
|
3.5
|
|
||||
Other government-related obligations:
|
|
|
|
|
|
|
|
|
||||||||
U.S.
|
|
60.0
|
|
|
—
|
|
|
—
|
|
|
60.0
|
|
||||
Bank certificates of deposit
|
|
6.5
|
|
|
—
|
|
|
—
|
|
|
6.5
|
|
||||
Total available-for-sale debt securities
|
|
$
|
204.3
|
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
$
|
204.2
|
|
|
|
December 31, 2019
|
||||||||||||||
|
|
Amortized Cost
|
|
Gross Unrealized Holding Gains
|
|
Gross Unrealized Holding Losses
|
|
Fair Value
|
||||||||
Commercial paper
|
|
$
|
246.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
246.9
|
|
Corporate bonds
|
|
24.3
|
|
|
—
|
|
|
—
|
|
|
24.3
|
|
||||
Other government-related obligations:
|
|
|
|
|
|
|
|
|
||||||||
U.S.
|
|
70.4
|
|
|
—
|
|
|
—
|
|
|
70.4
|
|
||||
Bank certificates of deposit
|
|
27.4
|
|
|
—
|
|
|
—
|
|
|
27.4
|
|
||||
Total available-for-sale debt securities
|
|
$
|
369.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
369.0
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Cash and cash equivalents
|
$
|
179.1
|
|
|
$
|
328.1
|
|
Marketable securities
|
25.1
|
|
|
40.9
|
|
||
|
$
|
204.2
|
|
|
$
|
369.0
|
|
|
March 31, 2020
|
||
Due in one year or less
|
$
|
204.2
|
|
Due after one year through three years
|
—
|
|
|
|
$
|
204.2
|
|
9.
|
Derivative Instruments and Hedging Activities
|
Type of Interest Rate Swap Contract
|
Notional Amount
|
Effective Date
|
Termination Date
|
Fixed Interest Rate or Rate Range
|
Floating to Fixed
|
450.0
|
December 2018
|
December 2022
|
2.60% - 2.79%
|
Floating to Fixed
|
1,300.0
|
December 2019
|
December 2022
|
2.37% - 2.83%
|
|
Three months ended
|
|
Three months ended
|
||||||||||||
|
March 31, 2020
|
|
March 31, 2019
|
||||||||||||
Financial Statement Line Item in which the Effects of Cash Flow Hedges are Recorded
|
Net Product Sales
|
|
Interest Expense
|
|
Net Product Sales
|
|
Interest Expense
|
||||||||
Total amount presented in the Condensed Consolidated Statements of Operations
|
$
|
1,444.6
|
|
|
$
|
(25.8
|
)
|
|
$
|
1,140.2
|
|
|
$
|
(19.9
|
)
|
Impact of cash flow hedging relationships:
|
|
|
|
|
|
|
|
||||||||
Foreign exchange forward contracts
|
$
|
11.4
|
|
|
$
|
—
|
|
|
$
|
7.0
|
|
|
$
|
—
|
|
Interest rate swap contracts
|
$
|
—
|
|
|
$
|
(4.6
|
)
|
|
$
|
—
|
|
|
$
|
4.6
|
|
|
Three months ended
|
|||||
|
March 31,
|
|||||
|
2020
|
2019
|
||||
Foreign Exchange Forward Contracts:
|
|
|
||||
Gain (loss) recognized in AOCI, net of tax
|
$
|
26.0
|
|
$
|
14.2
|
|
Gain (loss) reclassified from AOCI to net product sales, net of tax
|
$
|
8.8
|
|
$
|
5.4
|
|
Interest Rate Swap Contracts:
|
|
|
||||
Gain (loss) recognized in AOCI, net of tax
|
$
|
(47.3
|
)
|
$
|
(14.2
|
)
|
Gain (loss) reclassified from AOCI to interest expense, net of tax
|
$
|
(3.6
|
)
|
$
|
3.6
|
|
|
|||||||||||
|
March 31, 2020
|
||||||||||
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||
|
Balance Sheet
Location |
|
Fair
Value |
|
Balance Sheet
Location |
|
Fair
Value |
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||
Foreign exchange forward contracts
|
Prepaid expenses and other current assets
|
|
$
|
29.1
|
|
|
Other current liabilities
|
|
$
|
1.7
|
|
Foreign exchange forward contracts
|
Other assets
|
|
1.1
|
|
|
Other liabilities
|
|
0.8
|
|
||
Interest rate swap contracts
|
Prepaid expenses and other current assets
|
|
—
|
|
|
Other current liabilities
|
|
42.1
|
|
||
Interest rate swap contracts
|
Other assets
|
|
—
|
|
|
Other liabilities
|
|
75.8
|
|
||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||
Foreign exchange forward contracts
|
Prepaid expenses and other current assets
|
|
24.1
|
|
|
Other current liabilities
|
|
12.4
|
|
||
Total fair value of derivative instruments
|
|
|
$
|
54.3
|
|
|
|
|
$
|
132.8
|
|
|
|||||||||||
|
December 31, 2019
|
||||||||||
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||
|
Balance Sheet
Location |
|
Fair
Value |
|
Balance Sheet
Location |
|
Fair
Value |
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||
Foreign exchange forward contracts
|
Prepaid expenses and other current assets
|
|
$
|
12.7
|
|
|
Other current liabilities
|
|
$
|
6.2
|
|
Foreign exchange forward contracts
|
Other assets
|
|
0.6
|
|
|
Other liabilities
|
|
1.1
|
|
||
Interest rate swap contracts
|
Prepaid expenses and other current assets
|
|
—
|
|
|
Other current liabilities
|
|
19.5
|
|
||
Interest rate swap contracts
|
Other assets
|
|
—
|
|
|
Other liabilities
|
|
41.9
|
|
||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||
Foreign exchange forward contracts
|
Prepaid expenses and other current assets
|
|
17.2
|
|
|
Other current liabilities
|
|
20.4
|
|
||
Total fair value of derivative instruments
|
|
|
$
|
30.5
|
|
|
|
|
$
|
89.1
|
|
|
|
March 31, 2020
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet
|
|
|
||||||||||||||
Description
|
|
Gross Amounts of Recognized Assets/Liabilities
|
|
Gross Amounts Offset in the Condensed Consolidated Balance Sheet
|
|
Net Amounts of Assets/Liabilities Presented in the Condensed Consolidated Balance Sheet
|
|
Derivative Financial Instruments
|
|
Cash Collateral Received (Pledged)
|
|
Net Amount
|
||||||||||||
Derivative assets
|
|
$
|
54.3
|
|
|
$
|
—
|
|
|
$
|
54.3
|
|
|
$
|
(14.9
|
)
|
|
$
|
—
|
|
|
$
|
39.4
|
|
Derivative liabilities
|
|
(132.8
|
)
|
|
—
|
|
|
(132.8
|
)
|
|
14.9
|
|
|
—
|
|
|
(117.9
|
)
|
|
|
December 31, 2019
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet
|
|
|
||||||||||||||
Description
|
|
Gross Amounts of Recognized Assets/Liabilities
|
|
Gross Amounts Offset in the Condensed Consolidated Balance Sheet
|
|
Net Amounts of Assets/Liabilities Presented in the Condensed Consolidated Balance Sheet
|
|
Derivative Financial Instruments
|
|
Cash Collateral Received (Pledged)
|
|
Net Amount
|
||||||||||||
Derivative assets
|
|
$
|
30.5
|
|
|
$
|
—
|
|
|
$
|
30.5
|
|
|
$
|
(21.4
|
)
|
|
$
|
—
|
|
|
$
|
9.1
|
|
Derivative liabilities
|
|
(89.1
|
)
|
|
—
|
|
|
(89.1
|
)
|
|
21.4
|
|
|
—
|
|
|
(67.7
|
)
|
10.
|
Other Investments
|
11.
|
Stockholders' Equity
|
12.
|
Other Comprehensive Income and Accumulated Other Comprehensive Income
|
|
Defined Benefit Pension Plans
|
|
Unrealized Gains (Losses) from Debt Securities
|
|
Unrealized Gains (Losses) from Hedging Activities
|
|
Foreign Currency Translation Adjustment
|
|
Total Accumulated Other Comprehensive Income (Loss)
|
||||||||||
Balances, December 31, 2019
|
$
|
(9.2
|
)
|
|
$
|
(0.1
|
)
|
|
$
|
(40.1
|
)
|
|
$
|
(17.4
|
)
|
|
$
|
(66.8
|
)
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
(0.2
|
)
|
|
(21.3
|
)
|
|
(8.0
|
)
|
|
(29.5
|
)
|
|||||
Amounts reclassified from other comprehensive income
|
—
|
|
|
—
|
|
|
(5.2
|
)
|
|
—
|
|
|
(5.2
|
)
|
|||||
Net other comprehensive income (loss)
|
—
|
|
|
(0.2
|
)
|
|
(26.5
|
)
|
|
(8.0
|
)
|
|
(34.7
|
)
|
|||||
Balances, March 31, 2020
|
$
|
(9.2
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(66.6
|
)
|
|
$
|
(25.4
|
)
|
|
$
|
(101.5
|
)
|
|
Defined Benefit Pension Plans
|
|
Unrealized Gains (Losses) from Debt Securities
|
|
Unrealized Gains (Losses) from Hedging Activities
|
|
Foreign Currency Translation Adjustment
|
|
Total Accumulated Other Comprehensive Income (Loss)
|
||||||||||
Balances, December 31, 2018
|
$
|
(2.6
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
9.6
|
|
|
$
|
(16.4
|
)
|
|
$
|
(9.7
|
)
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
0.2
|
|
|
—
|
|
|
(2.0
|
)
|
|
(1.8
|
)
|
|||||
Amounts reclassified from other comprehensive income
|
—
|
|
|
—
|
|
|
(9.0
|
)
|
|
—
|
|
|
(9.0
|
)
|
|||||
Net other comprehensive income (loss)
|
—
|
|
|
0.2
|
|
|
(9.0
|
)
|
|
(2.0
|
)
|
|
(10.8
|
)
|
|||||
Balances, March 31, 2019
|
$
|
(2.6
|
)
|
|
$
|
(0.1
|
)
|
|
$
|
0.6
|
|
|
$
|
(18.4
|
)
|
|
$
|
(20.5
|
)
|
13.
|
Fair Value Measurement
|
|
|
Fair Value Measurement at
March 31, 2020 |
||||||||||||||
Balance Sheet
Classification |
Type of Instrument
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Cash equivalents
|
Money market funds
|
$
|
679.4
|
|
|
$
|
—
|
|
|
$
|
679.4
|
|
|
$
|
—
|
|
Cash equivalents
|
Commercial paper
|
$
|
119.1
|
|
|
$
|
—
|
|
|
$
|
119.1
|
|
|
$
|
—
|
|
Cash equivalents
|
Other government-related obligations
|
$
|
60.0
|
|
|
$
|
—
|
|
|
$
|
60.0
|
|
|
$
|
—
|
|
Marketable securities
|
Mutual funds
|
$
|
22.7
|
|
|
$
|
22.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Marketable securities
|
Commercial paper
|
$
|
15.1
|
|
|
$
|
—
|
|
|
$
|
15.1
|
|
|
$
|
—
|
|
Marketable securities
|
Corporate bonds
|
$
|
3.5
|
|
|
$
|
—
|
|
|
$
|
3.5
|
|
|
$
|
—
|
|
Marketable securities
|
Bank certificates of deposit
|
$
|
6.5
|
|
|
$
|
—
|
|
|
$
|
6.5
|
|
|
$
|
—
|
|
Other assets
|
Equity securities
|
$
|
83.8
|
|
|
$
|
59.7
|
|
|
$
|
24.1
|
|
|
$
|
—
|
|
Prepaid expenses and other current assets
|
Foreign exchange forward contracts
|
$
|
53.2
|
|
|
$
|
—
|
|
|
$
|
53.2
|
|
|
$
|
—
|
|
Other assets
|
Foreign exchange forward contracts
|
$
|
1.1
|
|
|
$
|
—
|
|
|
$
|
1.1
|
|
|
$
|
—
|
|
Other current liabilities
|
Foreign exchange forward contracts
|
$
|
14.1
|
|
|
$
|
—
|
|
|
$
|
14.1
|
|
|
$
|
—
|
|
Other liabilities
|
Foreign exchange forward contracts
|
$
|
0.8
|
|
|
$
|
—
|
|
|
$
|
0.8
|
|
|
$
|
—
|
|
Other current liabilities
|
Interest rate contracts
|
$
|
42.1
|
|
|
$
|
—
|
|
|
$
|
42.1
|
|
|
$
|
—
|
|
Other liabilities
|
Interest rate contracts
|
$
|
75.8
|
|
|
$
|
—
|
|
|
$
|
75.8
|
|
|
$
|
—
|
|
Contingent consideration
|
Acquisition-related contingent consideration
|
$
|
358.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
358.9
|
|
Other current liabilities
|
Other contingent payments
|
$
|
26.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
26.3
|
|
|
|
Fair Value Measurement at
December 31, 2019 |
||||||||||||||
Balance Sheet
Classification |
Type of Instrument
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Cash equivalents
|
Money market funds
|
$
|
635.9
|
|
|
$
|
—
|
|
|
$
|
635.9
|
|
|
$
|
—
|
|
Cash equivalents
|
Commercial paper
|
$
|
227.9
|
|
|
$
|
—
|
|
|
$
|
227.9
|
|
|
$
|
—
|
|
Cash equivalents
|
Corporate bonds
|
$
|
20.6
|
|
|
$
|
—
|
|
|
$
|
20.6
|
|
|
$
|
—
|
|
Cash equivalents
|
Bank certificates of deposit
|
$
|
19.2
|
|
|
$
|
—
|
|
|
$
|
19.2
|
|
|
$
|
—
|
|
Cash equivalents
|
Other government-related obligations
|
$
|
60.4
|
|
|
$
|
—
|
|
|
$
|
60.4
|
|
|
$
|
—
|
|
Marketable securities
|
Mutual funds
|
$
|
23.1
|
|
|
$
|
23.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Marketable securities
|
Commercial paper
|
$
|
19.0
|
|
|
$
|
—
|
|
|
$
|
19.0
|
|
|
$
|
—
|
|
Marketable securities
|
Corporate bonds
|
$
|
3.7
|
|
|
$
|
—
|
|
|
$
|
3.7
|
|
|
$
|
—
|
|
Marketable securities
|
Other government-related obligations
|
$
|
10.0
|
|
|
$
|
—
|
|
|
$
|
10.0
|
|
|
$
|
—
|
|
Marketable securities
|
Bank certificates of deposit
|
$
|
8.2
|
|
|
$
|
—
|
|
|
$
|
8.2
|
|
|
$
|
—
|
|
Other assets
|
Equity securities
|
$
|
79.0
|
|
|
$
|
51.2
|
|
|
$
|
27.8
|
|
|
$
|
—
|
|
Prepaid expenses and other current assets
|
Foreign exchange forward contracts
|
$
|
29.9
|
|
|
$
|
—
|
|
|
$
|
29.9
|
|
|
$
|
—
|
|
Other assets
|
Foreign exchange forward contracts
|
$
|
0.6
|
|
|
$
|
—
|
|
|
$
|
0.6
|
|
|
$
|
—
|
|
Other current liabilities
|
Foreign exchange forward contracts
|
$
|
26.6
|
|
|
$
|
—
|
|
|
$
|
26.6
|
|
|
$
|
—
|
|
Other liabilities
|
Foreign exchange forward contracts
|
$
|
1.1
|
|
|
$
|
—
|
|
|
$
|
1.1
|
|
|
$
|
—
|
|
Other current liabilities
|
Interest rate contracts
|
$
|
19.5
|
|
|
$
|
—
|
|
|
$
|
19.5
|
|
|
$
|
—
|
|
Other liabilities
|
Interest rate contracts
|
$
|
41.9
|
|
|
$
|
—
|
|
|
$
|
41.9
|
|
|
$
|
—
|
|
Contingent consideration
|
Acquisition-related contingent consideration
|
$
|
192.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
192.4
|
|
Other current liabilities
|
Other contingent payments
|
$
|
24.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24.0
|
|
|
March 31, 2020
|
||
Balance at beginning of period
|
$
|
192.4
|
|
Amounts issued
|
160.7
|
|
|
Changes in fair value
|
5.8
|
|
|
Balance at end of period
|
$
|
358.9
|
|
14.
|
Revenue Recognition
|
|
Three months ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
SOLIRIS
|
|
|
|
||||
United States
|
$
|
556.2
|
|
|
$
|
463.7
|
|
Europe
|
263.5
|
|
|
264.5
|
|
||
Asia Pacific
|
87.1
|
|
|
100.9
|
|
||
Rest of World
|
116.1
|
|
|
132.9
|
|
||
Total
|
$
|
1,022.9
|
|
|
$
|
962.0
|
|
|
|
|
|
||||
ULTOMIRIS
|
|
|
|
||||
United States
|
$
|
131.5
|
|
|
$
|
24.6
|
|
Europe
|
33.8
|
|
|
—
|
|
||
Asia Pacific
|
57.1
|
|
|
—
|
|
||
Rest of World
|
0.4
|
|
|
—
|
|
||
Total
|
$
|
222.8
|
|
|
$
|
24.6
|
|
|
|
|
|
||||
STRENSIQ
|
|
|
|
||||
United States
|
$
|
128.1
|
|
|
$
|
99.5
|
|
Europe
|
24.0
|
|
|
17.5
|
|
||
Asia Pacific
|
13.6
|
|
|
9.9
|
|
||
Rest of World
|
6.5
|
|
|
3.2
|
|
||
Total
|
$
|
172.2
|
|
|
$
|
130.1
|
|
|
|
|
|
||||
KANUMA
|
|
|
|
||||
United States
|
$
|
16.4
|
|
|
$
|
13.8
|
|
Europe
|
7.5
|
|
|
6.3
|
|
||
Asia Pacific
|
0.9
|
|
|
0.8
|
|
||
Rest of World
|
1.9
|
|
|
2.6
|
|
||
Total
|
$
|
26.7
|
|
|
$
|
23.5
|
|
|
|
|
|
||||
Total Net Product Sales
|
$
|
1,444.6
|
|
|
$
|
1,140.2
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Receivables, which are included in "Trade accounts receivable, net"
|
$
|
1,345.2
|
|
|
$
|
1,243.2
|
|
Contract liabilities, which are included in "Other current liabilities"
|
$
|
22.9
|
|
|
$
|
6.8
|
|
15.
|
Income Taxes
|
|
Three months ended
|
||||||
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
Income tax expense (benefit)
|
$
|
106.0
|
|
|
$
|
(46.1
|
)
|
Effective income tax rate
|
16.0
|
%
|
|
(8.5
|
)%
|
16.
|
Commitments and Contingencies
|
17.
|
Subsequent Events
|
Item 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|
•
|
the potential benefits and commercial potential of ULTOMIRIS®, SOLIRIS®, STRENSIQ® and KANUMA® for approved indications and any expanded uses;
|
•
|
sales of our products in various markets worldwide, pricing for our products, level of insurance coverage and reimbursement for our products, timing regarding development and regulatory approvals for our products or for additional indications or in additional territories;
|
•
|
plans for clinical trials (and proof of concept trials and exploratory clinical studies), status of our ongoing clinical trials for our product candidates, commencement dates for new clinical trials, clinical trial results and evaluation of our clinical trial results by regulatory agencies;
|
•
|
potential benefits offered by product candidates, including improved dosing intervals and potential to improve treatment in a number of IgG-mediated and neurological diseases;
|
•
|
the medical and commercial potential of additional indications for our products;
|
•
|
the expected timing for the completion and/or regulatory approval of our facilities and facilities of our third-party manufacturers;
|
•
|
future expansion of our commercial organization and transition to third parties in certain jurisdictions to perform sales, marketing and distribution functions;
|
•
|
future governmental and regulatory decisions regarding pricing (and discounts) and the adoption, implementation and interpretation of healthcare laws and regulations (and the impact on our business);
|
•
|
plans, prospects and expected timing for future regulatory approval of products and product candidates;
|
•
|
competitors, potential competitors and future competitive products (including biosimilars);
|
•
|
plans to grow our product pipeline (and diversify our business, including through acquisitions) and anticipated benefits to the Company;
|
•
|
future objective to expand business and sales;
|
•
|
future plans to retain earnings and not pay dividends;
|
•
|
expected decisions to appeal certain litigation and intellectual property decisions;
|
•
|
expectations to realize the carrying value of product inventory;
|
•
|
impact of accounting standards;
|
•
|
future costs, operating expenses (including research and development, sales, general and administrative and restructuring expenses) and capital requirements, capital investment, sufficiency of cash to fund operations for at least the next 12 months, ability to make payment on our credit facility and make contingent payment obligations, the sufficiency of our existing capital resources and projected cash needs, price approval and funding processes in various countries;
|
•
|
the sources of expected increases in cash flow from operations, if any;
|
•
|
anticipated impact of interest rate changes on financial statements;
|
•
|
anticipated future milestone, contingent and royalty payments and lease payments (and, in each case, expected impact on liquidity);
|
•
|
anticipated impact of the COVID-19 pandemic on our business;
|
•
|
timing and anticipated amounts of future tax payments and benefits (including the potential recognition of unrecognized tax benefits), as well as timing of conclusion of tax audits;
|
•
|
collection of accounts receivable and impact of any delay in the future in collecting accounts receivable on financial condition and operations, as well as the ability of counterparties to our derivatives to perform their obligations;
|
•
|
the safety and efficacy of our products and our product candidates;
|
•
|
the adequacy of our pharmacovigilance and drug safety reporting processes;
|
•
|
the uncertainties involved in the drug development process and manufacturing;
|
•
|
performance and reliance on third party service providers;
|
•
|
our future research and development activities, plans for acquired programs, our ability to develop and commercialize products with our collaborators, anticipated regulatory approval of acquisitions and anticipated closing of acquisitions;
|
•
|
periods of patent, regulatory and market exclusivity for our products;
|
•
|
the scope of our intellectual property and the outcome of any challenges or opposition to our intellectual property; and
|
•
|
estimates of the capacity of manufacturing and other service facilities to support our business operations, products and product candidates.
|
Paroxysmal Nocturnal Hemoglobinuria (PNH)
|
PNH is a chronic, progressive, debilitating and life-threatening ultra-rare blood disorder characterized by intravascular hemolysis (destruction of red blood cells) that is mediated by an uncontrolled activation of the complement system, a part of the immune system. Chronic hemolysis in patients with PNH may be associated with life-threatening thromboses, recurrent pain, kidney disease, disabling fatigue, impaired quality of life, severe anemia, pulmonary hypertension, shortness of breath and intermittent episodes of dark-colored urine (hemoglobinuria).
|
Atypical Hemolytic Uremic Syndrome (aHUS)
|
aHUS is a severe and life-threatening, ultra-rare genetic disease characterized by chronic uncontrolled complement activation and thrombotic microangiopathy (TMA), the formation of blood clots in small blood vessels throughout the body, causing a reduction in platelet count (thrombocytopenia) and life-threatening damage to the kidney, brain, heart and other vital organs.
|
Generalized Myasthenia Gravis (gMG)
|
Myasthenia Gravis (MG) is a debilitating, complement-mediated neuromuscular disease in which patients suffer profound muscle weakness throughout the body, resulting in slurred speech, impaired swallowing and choking, double vision, upper and lower extremity weakness, disabling fatigue, shortness of breath due to respiratory muscle weakness and episodes of respiratory failure.
|
Hypophosphatasia (HPP)
|
HPP is an ultra-rare genetic and progressive metabolic disease in which patients experience devastating effects on multiple systems of the body, leading to debilitating or life-threatening complications. HPP is characterized by defective bone mineralization that can lead to deformity of bones and other skeletal abnormalities, as well as systemic complications such as profound muscle weakness, seizures, pain, and respiratory failure leading to premature death in infants.
|
Lysosomal Acid Lipase Deficiency (LAL Deficiency or LAL-D)
|
LAL-D is a serious, life-threatening ultra-rare disease associated with premature mortality and significant morbidity. LAL-D is a chronic disease in which genetic mutations result in decreased activity of the LAL enzyme that leads to marked accumulation of lipids in vital organs, blood vessels, and other tissues, resulting in progressive and systemic organ damage including hepatic fibrosis, cirrhosis, liver failure, accelerated atherosclerosis, cardiovascular disease, and other devastating consequences.
|
Relapsing Neuromyelitis Optica Spectrum Disorder (NMOSD)
|
Relapsing NMOSD is a severe and ultra-rare autoimmune disease of the central nervous system (CNS) that primarily affects the optic nerves and the spinal cord. Each relapse of the disorder results in a stepwise accumulation of disability, including blindness and paralysis, and sometimes premature death. Complement activation due to anti-AQP4 antibodies is one of the primary underlying causes of the destruction of vital cells in the central nervous system in patients with NMOSD.
|
Wilson Disease
|
Wilson disease is a rare disorder, characterized by excess copper stored in various body tissues, that can lead to severe liver disease, including cirrhosis and acute liver failure, as well as debilitating neurological morbidities such as impaired movement, gait, speech, swallowing, and psychiatric disorders.
|
Warm Autoimmune Hemolytic Anemia (WAIHA)
|
WAIHA is a rare autoimmune disorder caused by pathogenic Immunoglobulin G (IgG) antibodies that react with and cause the premature destruction of red blood cells at normal body temperature. The disease is often characterized by profound, and potentially life-threatening anemia and other acute complications, including severe and life-threatening hemolysis, severe weakness, enlarged spleen and/or liver, rapid heart rate (tachycardia), chest pain, heart failure and fainting (syncope).
|
Amyotrophic Lateral Sclerosis (ALS)
|
ALS is a pathophysiologically diverse, progressive neurodegenerative disease of the CNS characterized by the loss of upper (brain) and lower (spinal cord) motor neurons. Ongoing loss of motor neurons and muscle strength leads to loss of independence, paralysis and death, typically due to respiratory insufficiency.
|
C3 Glomerulopathy (C3G)
|
C3 glomerulopathy (C3G) is a rare, chronic disease affecting the kidneys in which the alternative pathway of the complement system is dysregulated due to genetic mutations or autoantibodies affecting the regulation of the alternative pathway. This lack of regulation results in the alternative pathway overactivation and the excessive deposition of C3 protein fragments in the glomeruli, a key filtration component of the kidney, often leading to serious kidney damage.
|
COVID-19
|
Coronaviruses are a family of viruses that can cause illnesses such as the common cold, severe acute respiratory syndrome (SARS) and Middle East respiratory syndrome (MERS). In 2019, a new coronavirus was identified as the cause of a disease outbreak that likely originated in China. The virus is now known as the severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) and the disease it causes is called coronavirus disease 2019 (COVID-19). In March 2020, the World Health Organization (WHO) declared the COVID-19 outbreak a pandemic. Signs and symptoms of COVID-19 may appear two to 14 days after exposure and can include fever, cough, shortness of breath or difficulty breathing. The severity of COVID-19 symptoms can range from very mild to very severe. Some people may have no symptoms at all and spread the infection inadvertently. People who are older or who have pre-existing diagnosed or undiagnosed medical conditions, such as heart disease, lung disease and/or diabetes, or who have a compromised or overreacting immune system may be at higher risk of serious illness or complications and may require assisted ventilation as well as urgent critical care.
|
Product
|
Therapeutic Area
|
Approved Indication
|
|
|
Hematology
|
Paroxysmal Nocturnal Hemoglobinuria (PNH)
|
|
Hematology/Nephrology
|
Atypical Hemolytic Uremic Syndrome (aHUS)
|
||
|
Hematology
|
Paroxysmal Nocturnal Hemoglobinuria (PNH)
|
|
Hematology/Nephrology
|
Atypical Hemolytic Uremic Syndrome (aHUS)
|
||
Neurology
|
Generalized Myasthenia Gravis (gMG)
|
||
Neurology
|
Neuromyelitis Optica Spectrum Disorder (NMOSD)
|
||
|
Metabolic Disorders
|
Hypophosphatasia (HPP)
|
|
|
Metabolic Disorders
|
Lysosomal Acid Lipase Deficiency (LAL-D)
|
Product
|
Mechanism of Action
|
Development Area
|
Indication
|
Phase I
|
Phase II
|
Phase III
|
Filed
|
ULTOMIRIS (ALXN1210/ravulizumab-cwvz)
(Intravenous) |
Anti-C5
|
Neurology
|
gMG/NMOSD/ALS
|
|
|
l
|
|
|
|
|
|
|
|
|
|
ULTOMIRIS (ALXN1210/ravulizumab-cwvz)
(Subcutaneous) |
Anti-C5
|
Hematology/Nephrology
|
PNH/aHUS
|
|
|
l
|
|
|
|
|
|
|
|
|
|
ALXN1720 (Subcutaneous)
|
Anti-C5
|
Next Generation Subcutaneous Complement Inhibitor
|
|
l
|
|
|
|
|
|
|
|
|
|
|
|
ALXN1830
(SYNT001)
(Subcutaneous)
|
Anti-FcRN
|
FcRN
|
WAIHA
|
|
l
|
|
|
|
|
|
|
|
|
|
|
ALXN1840
(WTX101)
|
High-affinity, specific Cu binder
|
Metabolic Disorders
|
Wilson disease
|
|
|
l
|
|
|
|
|
|
|
|
|
|
ALXN2040
(ACH-4771)
|
Factor D Inhibitor
|
Hematology/Nephrology
|
PNH/C3G
|
|
l
|
|
|
|
|
|
|
|
|
|
|
ALXN2050
(ACH-5228)
|
Factor D Inhibitor
|
Hematology/Nephrology
|
PNH
|
|
l
|
|
|
•
|
Revenue recognition;
|
•
|
Contingent liabilities;
|
•
|
Share-based compensation;
|
•
|
Valuation of goodwill, acquired intangible assets and in-process research and development (IPR&D);
|
•
|
Valuation of contingent consideration; and
|
•
|
Income taxes.
|
|
Three months ended
|
|
|
|||||||
|
March 31,
|
|
%
|
|||||||
|
2020
|
|
2019
|
|
Change
|
|||||
SOLIRIS
|
|
|
|
|
|
|||||
United States
|
$
|
556.2
|
|
|
$
|
463.7
|
|
|
19.9
|
%
|
Europe
|
263.5
|
|
|
264.5
|
|
|
(0.4
|
)%
|
||
Asia Pacific
|
87.1
|
|
|
100.9
|
|
|
(13.7
|
)%
|
||
Rest of World
|
116.1
|
|
|
132.9
|
|
|
(12.6
|
)%
|
||
Total
|
$
|
1,022.9
|
|
|
$
|
962.0
|
|
|
6.3
|
%
|
|
|
|
|
|
|
|||||
ULTOMIRIS
|
|
|
|
|
|
|||||
United States
|
$
|
131.5
|
|
|
$
|
24.6
|
|
|
434.6
|
%
|
Europe
|
33.8
|
|
|
—
|
|
|
**
|
|||
Asia Pacific
|
57.1
|
|
|
—
|
|
|
**
|
|||
Rest of World
|
0.4
|
|
|
—
|
|
|
**
|
|||
Total
|
$
|
222.8
|
|
|
$
|
24.6
|
|
|
805.7
|
%
|
|
|
|
|
|
|
|||||
STRENSIQ
|
|
|
|
|
|
|||||
United States
|
$
|
128.1
|
|
|
$
|
99.5
|
|
|
28.7
|
%
|
Europe
|
24.0
|
|
|
17.5
|
|
|
37.1
|
%
|
||
Asia Pacific
|
13.6
|
|
|
9.9
|
|
|
37.4
|
%
|
||
Rest of World
|
6.5
|
|
|
3.2
|
|
|
103.1
|
%
|
||
Total
|
$
|
172.2
|
|
|
$
|
130.1
|
|
|
32.4
|
%
|
|
|
|
|
|
|
|||||
KANUMA
|
|
|
|
|
|
|||||
United States
|
$
|
16.4
|
|
|
$
|
13.8
|
|
|
18.8
|
%
|
Europe
|
7.5
|
|
|
6.3
|
|
|
19.0
|
%
|
||
Asia Pacific
|
0.9
|
|
|
0.8
|
|
|
12.5
|
%
|
||
Rest of World
|
1.9
|
|
|
2.6
|
|
|
(26.9
|
)%
|
||
Total
|
$
|
26.7
|
|
|
$
|
23.5
|
|
|
13.6
|
%
|
|
|
|
|
|
|
|||||
Total Net Product Sales
|
$
|
1,444.6
|
|
|
$
|
1,140.2
|
|
|
26.7
|
%
|
|
United States
|
|
Asia Pacific
|
|
Europe
|
|
Rest of World
|
|
United States
|
|
Asia Pacific
|
|
Europe
|
|
Rest of World
|
|
United States
|
|
Asia Pacific
|
|
Europe
|
|
Rest of World
|
|
United States
|
|
Asia Pacific
|
|
Europe
|
|
Rest of World
|
|
United States
|
|
Asia Pacific
|
|
Europe
|
|
Rest of World
|
|
2020 Cost of Sales
|
|
2019 Cost of Sales
|
●
|
Cost of sales as a percentage of net product sales
|
|
2020 Research and Development Expense (R&D)
|
|
2019 Research and Development Expense (R&D)
|
●
|
R&D as a % of net product sales
|
|
Clinical Development
|
|
Discovery
|
|
Product Development
|
|
Payroll and Benefits
|
|
Upfront Payments
|
|
Facilities and Other
|
•
|
Increase of $31.9 in clinical development mainly driven by increased clinical expenses related to ALXN1210, ALXN1840 and ALXN1830. See chart below for additional details by program.
|
•
|
Increase of $12.3 in payroll and benefits primarily related to headcount increases.
|
•
|
Decrease of $21.2 in upfront payments relating to the license payment made during the first quarter 2019 in connection with the arrangement we entered into with Zealand. No upfront payments related to licensing arrangements were made for the three months ended March 31, 2020.
|
•
|
Decrease of $17.3 in product development expenses primarily related to ALXN1210, offset in part by an increase in product development expenses for ALXN2040 and ALXN2050.
|
|
2020
|
|
2019
|
|
2020 Selling General and Administrative Expense (SG&A)
|
|
2019 Selling General and Administrative Expense (SG&A)
|
●
|
SG&A as a % of net product sales
|
|
Salary, benefits and other labor expense
|
|
External selling, general and administrative expense
|
|
Investment (expense) Income
|
|
Interest Expense
|
|
Other Income and (expense)
|
|
2020 Income tax expense (benefit)
|
|
2019 Income tax expense (benefit)
|
●
|
Effective tax rate
|
|
March 31, 2020
|
December 31, 2019
|
$
Change
|
||||||
Cash and cash equivalents
|
$
|
2,315.0
|
|
$
|
2,685.5
|
|
$
|
(370.5
|
)
|
Marketable securities
|
$
|
47.8
|
|
64.0
|
|
(16.2
|
)
|
||
Long-term debt (includes current portion & revolving credit facility)
|
$
|
2,481.9
|
|
2,514.5
|
|
(32.6
|
)
|
||
|
|
|
|
||||||
Current assets
|
$
|
4,870.2
|
|
5,076.4
|
|
(206.2
|
)
|
||
Current liabilities
|
$
|
1,119.9
|
|
1,194.3
|
|
(74.4
|
)
|
||
Working capital
|
$
|
3,750.3
|
|
3,882.1
|
|
(131.8
|
)
|
|
Three months ended March 31,
|
|
$
|
||||||||
|
2020
|
|
2019
|
|
Change
|
||||||
Net cash provided by operating activities
|
$
|
549.6
|
|
|
$
|
429.9
|
|
|
$
|
119.7
|
|
Net cash (used in) provided by investing activities
|
(766.0
|
)
|
|
2.9
|
|
|
(768.9
|
)
|
|||
Net cash used in financing activities
|
(138.2
|
)
|
|
(252.4
|
)
|
|
114.2
|
|
|||
Effect of exchange rate changes on cash and restricted cash
|
(13.2
|
)
|
|
(1.4
|
)
|
|
(11.8
|
)
|
|||
Net change in cash and cash equivalents and restricted cash
|
$
|
(367.8
|
)
|
|
$
|
179.0
|
|
|
$
|
(546.8
|
)
|
Item 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
|
Item 4.
|
CONTROLS AND PROCEDURES
|
Item 1.
|
LEGAL PROCEEDINGS.
|
•
|
Government and healthcare policies and federal, state, local or foreign regulations to address the COVID-19 pandemic may adversely affect our sales and revenue. Due to quarantines, travel restrictions, hospital policies and patient concerns regarding exposure to COVID-19, we have observed fewer patient/doctor interactions and our representatives are having fewer in-person visits with health care providers, including for infusion of our products which may affect our sales in the future. A decrease in the demand of our products could also cause our cost of goods sold to increase due to expiration of inventory on hand, an increase in manufacturing overhead allocated to inventory sold and other factors. Our net product sales could also be adversely impacted by the negative effects the COVID-19 pandemic has had on the global economy, which could result in (i) an increased number of patients utilizing our patient access programs to receive free drug due to loss of employer-based health insurance, or other factors impacting their ability to afford our medicines; and (ii) patients increasingly seeking Medicaid coverage for our products, which would lead to higher gross-to-net revenue reductions compared to commercial insurance providers.
|
•
|
Due to financial demands in addressing the COVID-19 pandemic, payors have requested and may continue to request extended credit terms, may extend payment dates beyond those experienced in the past, or may not be able to timely reimburse us for our products or at all,
|
•
|
We believe that the COVID-19 pandemic has had, and will likely continue to have, an impact on various aspects of our clinical programs and trials. For example, our clinical trial for ALXN1830 as a treatment for WAIHA has been delayed due to COVID-19. Patient dosing and study monitoring may be paused, delayed or temporarily halted due to changes in policies at various clinical sites and federal, state, local or foreign laws, rules and regulations, including quarantines or other travel restrictions, prioritization of healthcare resources toward pandemic efforts, including diminished attention of physicians serving as our clinical trial investigators and reduced availability of site staff supporting the conduct of our clinical trials, or other reasons related to the COVID-19 pandemic. If the COVID-19 pandemic continues for an extended period of time, other aspects of our clinical trials may be adversely affected, delayed or interrupted, including, for example, site initiation, patient recruitment and enrollment, availability of clinical trial materials, and data analysis. Some patients and clinical investigators may not be able to comply with clinical trial protocols and patients may choose to withdraw from our studies, or we may choose to or be required to pause enrollment and/or patient dosing in our ongoing clinical trials in order to preserve health resources and protect trial participants. Any such disruption could negatively impact the results generated in the trial, the development of our pipeline programs and the timing and probability of paying milestones associated with prior acquisitions and active license agreements (which may lead to litigation over milestone payments).
|
•
|
We currently utilize third parties to, among other things, manufacture our products and product candidates, supply raw materials and consumables, perform quality testing and provide supply chain services. We also manufacture certain of our products and product candidates and perform various services at our manufacturing facilities. If any of these processes or services are adversely impacted by the COVID-19 outbreak, our ability to manufacture and supply our products to patients or manufacture product candidates for our clinical trials and conduct our research and development operations may be materially effected.
|
•
|
The potential economic and financial impacts of the pandemic, including a deterioration in economic conditions that may negatively impact
|
•
|
In accordance with business continuity plans and for the safety of our employees, we have directed most of our personnel to work remotely and we have restricted on-site staff to only those personnel and contractors who perform essential activities that must be completed on-site. Our increased reliance on personnel working from home may negatively impact productivity, or disrupt, delay, or otherwise adversely impact our business. In addition, this could increase our cyber-security risk, create data accessibility concerns, and make us more susceptible to communication disruptions, any of which could adversely impact our business operations.
|
•
|
While our essential R&D employees have been able to access our laboratory space, if employees and contractors conducting such activities were exposed to or contracted COVID-19, we may be required to restrict access to our laboratory space for an extended period of time as a result. Governmental authorities may also impose restrictions limiting access to our lab space. As a result, this could delay timely completion of preclinical and other R&D activities.
|
•
|
Health regulatory agencies globally may experience disruptions in their operations as a result of the COVID-19 pandemic. The FDA and other foreign regulatory agencies may have slower response times or be under-resourced to continue to authorize and monitor our clinical trials or review regulatory submissions (or authorize the use of facilities for manufacturing and related services) and, as a result, review, inspection, and other timelines may be materially delayed.
|
•
|
In addition, a recession or other sustained adverse market event resulting from the spread of the COVID-19 could materially and adversely affect our business, the value of our common shares and the availability of credit to operate our business and execute business development transactions. As a result, we may
|
•
|
The trading prices for our common shares and other biopharmaceutical companies have been highly volatile as a result of the COVID-19 pandemic and we expect this volatility may continue.
|
•
|
establishing formularies under which only selected drugs are covered (which may exclude one or more of our products);
|
•
|
utilizing variable co-payments that make drugs that are not preferred by the payer more expensive for patients; and
|
•
|
utilizing management controls, such as requirements for prior authorization or failure first on another treatment.
|
•
|
our products and investigational compounds do not infringe the patents;
|
•
|
the patents are not valid or enforceable; and/or
|
•
|
we have identified and are testing various alternatives that should not infringe the patents and which should permit continued development and commercialization of our products and investigational compounds.
|
•
|
prevalence and severity of adverse side effects in both clinical trials and commercial use;
|
•
|
the timing of the market introduction of competitive drugs, biosimilars and generics;
|
•
|
perceived safety of our products
|
•
|
demonstrated clinical safety and efficacy compared to other drugs;
|
•
|
perceived benefits relative to cost and/ or evaluations in HTAs (or similar assessments);
|
•
|
pricing and availability of reimbursement from third-party payers, including governmental entities;
|
•
|
convenience and ease of administration;
|
•
|
effectiveness of our marketing strategy;
|
•
|
publicity concerning our products and our other product candidates (and those of competitive products); and
|
•
|
availability of alternative treatments.
|
•
|
substantial cash expenditures;
|
•
|
potentially dilutive issuance of equity securities and incurrence of debt;
|
•
|
assumption of material liabilities in connection with the target or purchased technology, some of which may be difficult or impossible to identify at the time of acquisition;
|
•
|
difficulties in integrating the operations of the acquired companies;
|
•
|
failure of any acquired businesses or products or in-licensed products or technologies to achieve the scientific, medical, commercial or other results we anticipate;
|
•
|
diverting our management's attention away from other business opportunities and on-going operations;
|
•
|
the potential loss of our key employees or key employees of the acquired companies;
|
•
|
risks of entering disease areas and indications or modalities in which we have limited or no direct experience; and
|
•
|
significant investments in resources and personnel to evaluate, integrate and develop acquisition and in-license programs.
|
•
|
the diversion of management’s attention from ongoing business concerns;
|
•
|
managing a larger combined business that includes a new therapeutic area for Alexion;
|
•
|
maintaining employee morale and retaining key management and other employees;
|
•
|
retaining existing business and operational relationships, including customers, suppliers and employees and other counterparties, and attracting new business and operational relationships; and
|
•
|
coordinating geographically separate organizations.
|
•
|
delay or failure in obtaining institutional review board (IRB) approval or the approval of other reviewing entities to conduct a clinical trial at each site;
|
•
|
delay or failure in reaching agreement on acceptable terms with prospective CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;
|
•
|
withdrawal of clinical trial sites from our clinical trials as a result of changing standards of care or the ineligibility of a site to participate in our clinical trials;
|
•
|
clinical sites and investigators deviating from trial protocol, failing to conduct the trial in accordance with regulatory requirements, or dropping out of a trial;
|
•
|
delay or failure in having patients complete a trial or return for post-treatment follow-up;
|
•
|
lack of sufficient supplies of the product candidate;
|
•
|
disruption of operations at the clinical trial sites;
|
•
|
adverse medical events or side effects in treated patients;
|
•
|
failure of patients taking the placebo to continue to participate in our clinical trials;
|
•
|
insufficient clinical trial data to support safety and effectiveness of the product candidates;
|
•
|
lack of effectiveness or safety of the product candidate being tested;
|
•
|
decisions by regulatory authorities, the IRB, ethics committee, or us, or recommendation by a data safety monitoring board, to suspend or terminate clinical trials at any time for safety issues or for any other reason;
|
•
|
failure to obtain the necessary regulatory approvals for the product candidate or the approvals for the facilities in which such product candidate is manufactured; and
|
•
|
decisions by competent authorities, IRBs or ethics committees to demand variations in protocols or conduct of clinical trials
|
•
|
make us more vulnerable to economic or industry downturns and competitive pressures;
|
•
|
make it difficult for us to make payments on our credit facilities and require us to use cash flow from operations to satisfy our debt obligations, which may reduce the availability of our cash flow for other purposes, including business development efforts and research and development;
|
•
|
limit our ability to incur additional debt or access the capital markets; and
|
•
|
limit our flexibility in planning for, or reacting to changes in, our business.
|
•
|
difficulties or the inability to obtain necessary foreign regulatory or reimbursement approvals of our products in a timely manner or at all;
|
•
|
political or economic determinations or decisions that adversely impact pricing or reimbursement policies in foreign countries;
|
•
|
economic problems or political instability;
|
•
|
fluctuations in currency exchange rates;
|
•
|
difficulties or inability to obtain financing in markets;
|
•
|
unexpected changes in tariffs, trade barriers and regulatory requirements;
|
•
|
customs and tax officials in foreign jurisdictions may disagree with the value we set when we or others import our products (including products that are donated for charitable purposes or used for clinical trials) and we may be required to pay additional duties or fines and such amounts may be substantial. For example, our offices in Brazil were visited by the Brazilian federal tax authorities and we received a written notice from such authorities requesting information with respect to the importation of SOLIRIS free of charge to patients in Brazil from 2014 to 2019. In connection with this matter, in August 2019, the Brazilian Federal Revenue Service provided a Notice of Tax and Description of the Facts to, among others, two Alexion subsidiaries. This notice focuses on: (i) the identity of the importer and (ii) the importation value of SOLIRIS vials in connection with Alexion’s free drug program in Brazil. See Note 16, Commitments and Contingencies to the condensed consolidated financial statements for more information on this matter);
|
•
|
difficulties in establishing and enforcing contractual and intellectual property rights;
|
•
|
compliance with complex import and export control laws;
|
•
|
trade restrictions and restrictions on direct investments by foreign entities;
|
•
|
compliance with local tax, employment and labor laws;
|
•
|
costs and difficulties in recruiting and retaining qualified managers and employees to manage and operate the business in local jurisdictions;
|
•
|
costs and difficulties in managing and monitoring international operations; and
|
•
|
longer payment cycles
|
•
|
a product recall;
|
•
|
a product withdrawal;
|
•
|
modification or revision to a product label;
|
•
|
significant administrative and judicial sanctions, including, warning letters or untitled letters;
|
•
|
significant fines and other civil penalties;
|
•
|
suspension, variation or withdrawal of a previously granted approval for our products;
|
•
|
interruption, suspension or termination of production;
|
•
|
operating restrictions, such as a shutdown of production facilities or production lines, or new manufacturing requirements;
|
•
|
suspension or termination of ongoing clinical trials;
|
•
|
delays in approving or refusal to approve our products including pending BLAs or BLA supplements for our products or a facility that manufactures our products;
|
•
|
seizing or detaining product;
|
•
|
requiring us or third-parties performing services for us to enter into a consent decree, which can include imposition of various fines, reimbursements for inspection costs, required due dates for specific actions and penalties for noncompliance;
|
•
|
injunctions; and/or
|
•
|
criminal prosecution.
|
•
|
the method of calculating the 340B ceiling price for our products;
|
•
|
any expansion of the entities that qualify as covered entities; and
|
•
|
any requirement that participating manufacturers agree to provide 340B discounted pricing on drugs used in an inpatient setting;
|
Item 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
|
Period
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Programs
|
|
Maximum Dollar Value of Shares that May Yet Be Purchased Under the Program
|
||||||
January 1-31, 2020
|
—
|
|
|
$
|
107.7
|
|
|
—
|
|
|
$
|
1,033.8
|
|
February 1-29, 2020
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
1,033.8
|
|
March 1-31, 2020
|
1.3
|
|
|
$
|
82.8
|
|
|
1.3
|
|
|
$
|
928.3
|
|
Total
|
1.3
|
|
|
$
|
83.1
|
|
|
1.3
|
|
|
|
Item 5.
|
OTHER INFORMATION.
|
Item 6.
|
EXHIBITS.
|
|
|
|
|
Certificate of Chief Executive Officer pursuant to Exchange Act Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 Sarbanes Oxley Act of 2002.
|
|
|
|
|
|
Certificate of Chief Financial Officer pursuant to Exchange Act Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of Sarbanes Oxley Act of 2002.
|
|
|
|
|
|
Certificate of Chief Executive Officer pursuant to Section 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act.
|
|
|
|
|
|
Certificate of Chief Financial Officer pursuant to Section 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act.
|
|
|
|
|
101
|
|
The following materials from the Alexion Pharmaceuticals, Inc. Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 formatted in eXtensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019, (ii) the Condensed Consolidated Statements of Operations for the three months ended March 31, 2020 and 2019, (iii) the Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2020 and 2019, (iv) the Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2020 and 2019, (v) the Condensed Consolidated Statements of Changes in Stockholders' Equity the three months ended March 31, 2020 and 2019, and (vi) Notes to Condensed Consolidated Financial Statements.
|
|
|
|
ALEXION PHARMACEUTICALS, INC.
|
|
|
|
|
|
By:
|
/s/ Ludwig N. Hantson, Ph.D.
|
Date: May 6, 2020
|
|
Ludwig N. Hantson, Ph.D.
Chief Executive Officer (principal executive officer)
|
|
|
|
|
By:
|
/s/ Aradhana Sarin, M.D.
|
Date: May 6, 2020
|
|
Aradhana Sarin, M.D.
Executive Vice President and Chief Financial Officer (principal financial officer) |
1
|
I have reviewed this quarterly report on Form 10-Q of Alexion Pharmaceuticals, Inc.;
|
2
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Dated:
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May 6, 2020
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|
/s/ LUDWIG N. HANTSON, Ph.D.
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|
|
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Chief Executive Officer
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1
|
I have reviewed this quarterly report on Form 10-Q of Alexion Pharmaceuticals, Inc.;
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2
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated:
|
May 6, 2020
|
|
/s/ ARADHANA SARIN, M.D.
|
|
|
|
Executive Vice President and Chief Financial Officer
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated:
|
May 6, 2020
|
|
/s/ LUDWIG N. HANTSON, Ph.D.
|
|
|
|
Chief Executive Officer
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated:
|
May 6, 2020
|
|
/s/ ARADHANA SARIN, M.D.
|
|
|
|
Executive Vice President and Chief Financial Officer
|