Horizon Pharma Announces Second Quarter 2013 Financial Results and Provides Business Update

Horizon Pharma Announces Second Quarter 2013 Financial Results and Provides 
Business Update 
DUEXIS(R) Gross Sales Increase 136% Quarter Over Quarter; Sales
Acceleration Extends Cash Guidance 
Conference Call and Webcast Today, August 9th at 8:00 a.m. ET 
DEERFIELD, IL -- (Marketwired) -- 08/09/13 --  Horizon Pharma, Inc.
(NASDAQ: HZNP) today provided an update on the Company's business and
announced financial results for the second quarter and six months
ended June 30, 2013. 
Financial Results  


 
--  Gross and net sales for the second quarter of 2013 were $17.6 million
    and $12.3 million, respectively, increases of 64% and 34%,
    respectively, versus the first quarter of 2013.
--  Net loss for the second quarter of 2013 was $18.4 million, or $0.29
    per share, on a U.S. GAAP basis, and $15.0 million, or $0.24 per
    share, on a non-GAAP basis.
--  The Company had cash and cash equivalents at June 30, 2013 of $69.3
    million, versus $81.1 million at March 31, 2013.

  
DUEXIS(R) Highlights 


 
--  Gross and net sales of DUEXIS in the second quarter of 2013 were $15.8
    million and $10.5 million, respectively, increases of 136% and 98%,
    respectively, versus the first quarter of 2013.
--  According to monthly data from Source Healthcare Analytics (SHA),
    total prescriptions were 48,191 for the second quarter of 2013,
    compared to 45,879 total prescriptions for the first quarter of 2013,
    an increase of 5%.
--  According to SHA, total DUEXIS pills dispensed in the second quarter
    of 2013 increased 9.3% versus the first quarter of 2013 as a result of
    longer initial prescriptions and a 3.7% quarter-over-quarter increase
    in the refill rate of DUEXIS.
--  The gross-to-net sales deduction for DUEXIS was 33.1% in the second
    quarter of 2013, versus 20.6% in the first quarter of 2013, driven by
    rebates and reductions for certain governmental and third-party
    payers, along with the Company's co-pay buy down program, which
    ensures access to DUEXIS at reasonable out of pocket costs to
    patients.

  
RAYOS(R) / LODOTRA(R) Highlights 


 
--  RAYOS gross and net sales in the second quarter of 2013 were $0.7
    million and $0.6 million, respectively, compared to $0.4 million in
    gross and ne
t sales in the first quarter of 2013, increases of 75% and
    50%, respectively.
--  According to monthly data from SHA, total prescriptions were 2,241 for
    the second quarter of 2013, compared to 1,243 total prescriptions for
    the first quarter of 2013, an increase of 80%.
--  Through June 2013, there have been 704 cumulative prescribers and
    approximately 3,700 cumulative prescriptions of RAYOS.
--  LODOTRA, known as RAYOS in the U.S., gross and net sales in the second
    quarter of 2013 were $1.2 million each, compared to gross and net
    sales of $3.6 and $3.5 million, respectively, in the first quarter of
    2013.
--  LODOTRA is now approved for marketing in 30 countries outside the
    U.S., reimbursed in Germany, Italy, Switzerland and Sweden, and
    marketed and sold in numerous other countries.

  
Updated Cash Guidance 


 
--  Prior cash guidance for the Company stated cash and cash equivalents
    would allow the Company to operate through 2013.
--  Based on recent results and current business expectations, the Company
    now believes that it can operate into the third quarter of 2014 with
    its existing cash and cash equivalents and potentially beyond
    depending on future growth trends.

  
"We had strong results in the second quarter, with DUEXIS revenue
doubling from the first quarter, driven by continued momentum in
prescriptions and a significant increase in the value per DUEXIS
prescription," said Timothy P. Walbert, chairman, president and chief
executive officer, Horizon Pharma. "DUEXIS revenue acceleration,
along with our continued progress in the launch of RAYOS, gives us
confidence that we can extend our cash runway into at least the third
quarter of 2014 and potentially beyond based on our current
expectations of continued revenue growth." 
Second Quarter 2013 Financial Results 
For the second quarter ended June 30, 2013, gross and net sales were
$17.6 million and $12.3 million, respectively, compared to gross and
net sales of $4.6 million and $3.8 million, respectively, for the
second quarter of 2012. DUEXIS gross sales were $15.8 million and net
sales were $10.5 million after deducting trade discounts and
allowances of $3.7 million and co-pay assistance costs of $1.6
million, compared to gross and net DUEXIS sales of $2.1 million and
$1.6 million, respectively, during the second quarter of 2012. The
increase in DUEXIS sales was primarily the result of the Company's
expanded sales force compared to the second quarter of 2012, as well
as an increase in the product price. DUEXIS represented 89% of
Horizon's gross sales and 86% of net sales during the quarter ended
June 30, 2013.  
RAYOS gross sales and net sales for the second quarter of 2013 were
approximately $0.7 million and $0.6 million, respectively. LODOTRA
gross and net sales in the second quarter of 2013 were $1.2 million
each, compared to gross and net sales of $2.5 million and $2.3
million, respectively, in the second quarter of 2012. The $1.3
million decrease in LODOTRA gross sales during the second quarter of
2013 was primarily attributable to lower product shipments to the
Company's European distribution partner, Mundipharma, compared to the
prior year period. LODOTRA sales to Mundipharma occur at the time the
Company ships product to Mundipharma based on its estimated
requirements. Accordingly, the Company's LODOTRA sales are not linear
or tied to Mundipharma sales to the market and can therefore
fluctuate from quarter to quarter or from year to year. 
Net loss for the quarter ended June 30, 2013, was $18.4 million, or
$0.29 per share based on 62,872,173 weighted average shares
outstanding, compared to a net loss of $22.8 million, or $0.68 per
share based on 33,715,703 weighted average shares outstanding, for
the quarter ended June 30, 2012. 
Non-GAAP net loss for the quarter ended June 30, 2013, was $15.0
million, or $0.24 per share, compared to a non-GAAP net loss of $20.6
million, or $0.62 per share, for the second quarter of 2012. Horizon
provides non-GAAP financial measures, which it believes can enhance
an overall understanding of its financial performance when considered
together with GAAP figures. Refer to the section of this press
release below entitled "Note Regarding Use of Non-GAAP Financial
Measures" for a full discussion on this subject.  
The Company had cash and cash equivalents of $69.3 million at June
30, 2013. As of June 30, 2013, Cowen and Company, LLC, the Company's
agent, had sold 1,266,161 shares of the Company's common stock under
its at-the-market (ATM) facility with gross proceeds to the Company
of $3.2 million. As of August 6, 2013, the Company had received gross
proceeds of $6.2 million under the ATM and had $21.2 million
remaining available under the ATM which can potentially supplement or
extend the Company's cash runway. 
Research and development expenses decreased $1.4 million, from $4.2
million during the three months ended June 30, 2012, to $2.8 million
during the three months ended June 30, 2013. The decrease in research
and development expenses during the second quarter of 2013 was
primarily associated with the classification of $1.2 million in
medical affairs expenses to sales and marketing expenses and a $0.3
million reducti
on in regulatory submission fees, which was partially
offset by a $0.1 million increase in equipment expense. During the
first quarter of 2013, in connection with the full commercial launch
of RAYOS, the Company began to classify its medical affairs expenses,
which consist of expenses related to scientific publications, health
outcomes, biostatistics, medical education and information, and
medical communications as sales and marketing expenses. Prior to the
full commercial launch of RAYOS in late January 2013, these medical
affairs expenses were classified as part of research and development
expenses. 
Sales and marketing expenses increased $6.0 million, from $10.5
during the three months ended June 30, 2012, to $16.5 during the
three months ended June 30, 2013. The increase was primarily
attributable to $4.5 million in salaries and benefits expenses due to
the increase in staffing of the Company's field sales force, the new
classification of $1.2 million of medical affairs expenses to sales
and marketing expenses and a $0.2 million increase in marketing and
commercialization expenses. 
General and administrative expenses increased $0.6 million, from $4.6
million during the three months ended June 30, 2012, to $5.2 million
during the three months ended June 30, 2013. The increase was mainly
attributable to a $0.7 million increase in salaries and benefits
expense primarily associated with new employees and $0.2 million in
higher facilities costs, which was partially offset by a reduction in
consulting expenses of $0.2 million.  
Interest expense, net increased $0.2 million, from $3.2 million
during the three months ended June 30, 2012, to $3.4 million during
the three months ended June 30, 2013. The increase in interest
expense was primarily attributable to higher debt discount expenses
associated with an amendment to the Company's senior secured loan in
September 2012.  
During the three months ended June 30, 2013, the Company reported a
foreign exchange gain of $0.5 million compared to a foreign exchange
loss of $1.4 million during the three months ended June 30, 2012. The
foreign exchange gain in the second quarter of 2013 was primarily due
to a reduction in U.S. dollar denominated transactions for the
Company's Swiss subsidiary, Horizon Pharma AG, whose functional
currency is the Euro, in addition to a strengthening of the Euro
against the U.S. dollar during the three months ended June 30, 2013. 
Income tax benefit increased $0.2 million, from $0.2 million during
the three months ended June 30, 2012, to $0.4 million during the
three months ended June 30, 2013. The increase in income tax benefit
during the second quarter of 2013 was primarily due to a reduction in
the Company's deferred tax liability resulting from higher intangible
amortization expense in the current period. The increase in
amortization expense was associated with the FDA approval of RAYOS in
July 2012, which required the Company to begin amortization and to
reclassify an indefinite-lived intangible asset to a definite-lived
intangible asset on the balance sheet. 
Year-to-Date Financial Results 
For the six months ended June 30, 2013, gross and net sales were
$28.3 million and $21.4 million, respectively, compared to gross and
net sales of $7.5 million and $6.4 million, respectively, for the six
months ended June 30, 2012. DUEXIS gross sales were $22.5 million and
net sales were $15.9 million after deducting trade discounts and
allowances of $4.2 million and co-pay assistance costs of $2.4
million, compared to gross and net DUEXIS sales of $3.2 million and
$2.5 million, respectively, during the six months ended June 30,
2012. The increase in DUEXIS sales was primarily the result of the
Company's expanded sales force compared to the first six months of
2012, as well as product price increases. DUEXIS represented 79% of
gross sales and 74% of net sales during the six months ended June 30,
2013.  
RAYOS gross sales and net sales for the six months ended June 30,
2013 were approximately $1.1 million and $0.9 million, respectively,
with no RAYOS sales during the corresponding period in 2012 as the
product was launched in late 2012. LODOTRA gross and net sales for
the six months ended June 30, 2013 were $4.7 million and $4.6
million, respectively, compared to gross and net sales of $4.3
million and $3.9 million, respectively, during the six months ended
June 30, 2012.  
Net loss for the six months ended June 30, 2013 was $40.6 million, or
$0.65 per share based on 62,339,285 weighted average shares
outstanding, compared to a net loss of $46.5 million, or $1.61 per
share based on 28,909,080 weighted average shares outstanding, for
the six months ended June 30, 2012. 
Non-GAAP net loss for the six months ended June 30, 2013 was $33.7
million, or $0.54 per share, compared to a non-GAAP net loss of $41.2
million, or $1.43 per share, for the six months ended June 30, 2012.  
Research and development expenses decreased $3.3 million, from $8.3
million during the six months ended June 30, 2012, to $5.0 million
during the six months ended June 30, 2013. The decrease in research
and development expenses during the six months ended June 30, 2013
was primarily associated with the classification of $2.6 million in
medical affairs expenses to sales and marketing expenses, a $0.5
million reduction in expenses associated with DUEXIS clinical studies
and a $0.5 million decrease in consulting expenses, which was
partially offset by a $0.2 million increase in equipment expenses and
$0.1 million in additional salaries and benefits costs.  
Sales and marketing expenses increased $11.3 million, from $21.5
million during the six months ended June 30, 2012, to $32.8 million
during the six months ended June 30, 2013. The increase was primarily
attributable to $8.8 million in salaries and benefits expenses due to
the expansion of the Company's field sales force and the
classification of $2.6 million of medical affairs expenses to sales
and marketing expenses during the six months ended June 30, 2013. 
General and administrative expenses increased $0.3 million, from $9.8
million during the six months ended June 30, 2012, to $10.1 million
during the six months ended June 30, 2013. The increase was mainly
due to $0.5 million in higher salaries and benefits expenses
primarily associated with new employees, a $0.4 million increase in
facilities costs and $0.2 million in higher legal fees associated
with intellectual property related matters, which was primarily
offset by a $0.7 million reduction in professional fees compared to
the prior year.  
Interest expense, net decreased $0.7 million, from $7.7 million
during the six months ended June 30, 2012, to $7.0 million during the
six months ended June 30, 2013. The decrease in interest expense was
primarily attributable to the absence of debt extinguishment costs in
2013, partially offset by higher debt discount expenses. During the
six months ended June 30, 2012, the Company incurred approximately
$2.5 million in pre-payment and end of loan payments associated with
the extinguishment of its prior debt facilities.  
During the six months ended June 30, 2013 and 2012, the Company
reported a foreign exchange loss of $0.5 million and $0.9 million,
respectively. The decrease in the foreign exchange loss during the
six months ended June 30, 2013 was primarily due to a reduct
ion in
U.S. dollar denominated transactions for the Company's Swiss
subsidiary, Horizon Pharma AG, whose functional currency is the Euro,
in addition to a strengthening of the Euro against the U.S. dollar in
2013. 
Income tax benefit increased $0.9 million, from $0.3 million during
the six months ended June 30, 2012, to $1.2 million during the six
months ended June 30, 2013. The increase in income tax benefit during
the six months ended June 30, 2013 was primarily due to a reduction
in the Company's deferred tax valuation allowance resulting from a
determination that a greater portion of deferred tax assets
associated with deferred revenues from milestone payments would be
realized in future years. Accordingly, the Company recorded an
additional income tax benefit of $0.8 million during the six months
ended June 30, 2013 to properly account for the realization of its
deferred tax asset positions.  
Note Regarding Use of Non-GAAP Financial Measures 
Horizon provides non-GAAP net income (loss) and net income (loss) per
share financial measures that include adjustments to GAAP figures.
These adjustments to GAAP exclude non-cash items such as stock
compensation and depreciation and amortization, non-cash interest
expense, and other non-cash charges. Horizon believes that these
non-GAAP financial measures, when considered together with the GAAP
figures, can enhance an overall understanding of Horizon's financial
performance. The non-GAAP financial measures are included with the
intent of providing investors with a more complete understanding of
operational results and trends. In addition, these non-GAAP financial
measures are among the indicators Horizon's management uses for
planning and forecasting purposes and measuring the Company's
performance. These non-GAAP financial measures should be considered
in addition to, and not as a substitute for, or superior to,
financial measures calculated in accordance with GAAP. The non-GAAP
financial measures used by the Company may be calculated differently
from, and therefore may not be comparable to, non-GAAP financial
measures used by other companies. Please refer to the financial
statements portion of this press release for a reconciliation of
these non-GAAP financial measures to the comparable GAAP financial
measures. 
Conference Call 
At 8:00 a.m. Eastern Time today, Horizon's management will host a
live conference call and webcast to review the Company's financial
and operating results and provide a general business update. 
The live webcast and a replay may be accessed by visiting Horizon's
website at http://ir.horizon-pharma.com. Please connect to the
Company's website at least 15 minutes prior to the live webcast to
ensure adequate time for any software download that may be needed to
access the webcast. Alternatively, please call 1-888-338-8373 (U.S.)
or 973-872-3000 (international) to listen to the conference call. The
conference ID number for the live call is 11632898. Telephone replay
will be available approximately two hours after the call. To access
the replay, please call 1-855-859-2056 (U.S.) or 404-537-3406
(international). The conference ID number for the replay is 11632898. 
About Horizon Pharma 
Horizon Pharma, Inc. is a specialty pharmaceutical company that has
developed and is commercializing DUEXIS and RAYOS/LODOTRA, both of
which target unmet therapeutic needs in arthritis, pain and
inflammatory diseases. The Company's strategy is to develop, acquire,
in-license and/or co-promote additional innovative medicines where it
can execute a targeted commercial strategy in specific therapeutic
areas while taking advantage of its commercial strengths and the
infrastructure the Company has put in place. For more information,
please visit www.horizonpharma.com. 
Forward-Looking Statements 
This press release contains forward-looking statements, including
statements regarding the on-going commercial launches of DUEXIS and
RAYOS, trends with respect to DUEXIS revenue acceleration and DUEXIS
and RAYOS prescription growth, the momentum for DUEXIS and RAYOS, and
estimates of Horizon's cash runway and future impact of potential
revenue growth. These forward-looking statements are based on
management's expectations and assumptions as of the date of this
press release and actual results may differ materially from those in
these forward-looking statements as a result of various factors.
These factors include, but are not limited to risks regarding
Horizon's ability to commercialize products successfully, whether
commercial data regarding DUEXIS and RAYOS in the United States for
any historic periods are indicative of future results, the impact of
pricing decisions on product revenues, Horizon's ability to
successfully manage contract sales and marketing personnel, Horizon's
ability to comply with post-approval regulatory requirements, the
need to potentially obtain additional financing to successfully
commercialize or further develop DUEXIS and RAYOS/LODOTRA and
potential that Horizon may use cash resources in ways not currently
anticipated or planned. For a further description of these and other
risks facing the Company, please see the risk factors described in
the Company's filings with the United States Securities and Exchange
Commission, including those factors discussed under the caption "Risk
Factors" in those filings. Forward-looking statements speak only as
of the date of this press release and the Company undertakes no
obligation to update or revise these statements, except as may be
required by law. 


 
                                                                            
                                                                            
                            Horizon Pharma, Inc.                            
                   Condensed Consolidated Balance Sheets                    
             (in thousands, except share and per share amounts)             
                                                                            
                                                            As of           
                                                 -------------------------- 
                                                   June 30,    December 31, 
                                                     2013          2012     
                                                 ------------  ------------ 
Assets                                                   (Unaudited)        
Current assets                                                              
  Cash and cash equivalents                      $     69,340  $    104,087 
  Restricted cash                                         800           800 
  Accounts receivable, net                              7,340         3,463 
  Inventories, net                                      5,787         5,245 
  Prepaid expenses and other current assets             3,367         3,323 
                                                 ------------  ------------ 
    Total current assets
                               86,634       116,918 
  Property and equipment, net                           3,500         3,725 
  Developed technology, net                            64,544        68,892 
  Other assets                                          3,839         4,449 
                                                 ------------  ------------ 
    Total assets                                 $    158,517  $    193,984 
                                                 ============  ============ 
Liabilities and Stockholders' Equity                                        
Current liabilities                                                         
  Accounts payable                               $      5,624  $      5,986 
  Accrued expenses                                     20,516        16,784 
  Deferred revenues - current portion                   1,498         2,230 
  Notes payable - current portion                      15,913        11,935 
                                                 ------------  ------------ 
    Total current liabilities                          43,551        36,935 
Long-term liabilities                                                       
  Notes payable, net of current                        31,938        36,866 
  Deferred revenues, net of current                     9,363         9,554 
  Deferred tax liabilities, net                         3,148         4,408 
  Other long term liabilities                             203           243 
                                                 ------------  ------------ 
    Total liabilities                                  88,203        88,006 
                                                 ------------  ------------ 
                                                                            
Commitments and Contingencies                                               
                                                                            
Stockholders' equity                                                        
  Common stock, $0.0001 par value per share;                                
   200,000,000 shares authorized; 63,310,334 and                            
   61,722,247 shares issued and outstanding at                              
   June 30, 2013 and December 31, 2012,                                     
   respectively.                                            6             6 
  Additional paid-in capital                          422,798       417,455 
  Accumulated other comprehensive loss                 (3,767)       (3,372)
  Accumulated deficit                                (348,723)     (308,111)
                                                 ------------  ------------ 
    Total stockholders' equity                         70,314       105,978 
                                                 ------------  ------------ 
    Total liabilities and stockholders' equity   $    158,517  $    193,984 
                                                 ============  ============ 
                                                                            
                                                                            
                                                                            
                            Horizon Pharma, Inc.                            
              Condensed Consolidated Statements of Operations               
             (in thousands, except share and per share amounts)             
                                                                            
                              For the Three              For the Six        
                               Months Ended              Months Ended       
                                 June 30,                  June 30,         
                         ------------------------  ------------------------ 
                             2013         2012         2013         2012    
                         -----------  -----------  -----------  ----------- 
                                (Unaudited)               (Unaudited)       
Revenues                                                                    
Sales of goods           $    17,490  $     4,556  $    28,120  $     7,411 
Contract revenue                 147           52          215          105 
                         -----------  -----------  -----------  ----------- 
    Gross sales               17,637        4,608       28,335        7,516 
Sales discounts and                                                         
 allowances                   (5,383)        (767)      (6,910)      (1,152)
                         -----------  -----------  -----------  ----------- 
    Net sales                 12,254        3,841       21,425        6,364 
                         -----------  -----------  -----------  ----------- 
                                                                            
Cost of goods sold             3,517        2,855        7,764        4,922 
                         -----------  -----------  -----------  ----------- 
Gross profit                   8,737          986       13,661        1,442 
Operating Expenses                                                          
  Research and                                                              
   development                 2,833        4,233        5,031        8,302 
  Sales and marketing         16,526       10,543       32,854       21,515 
  General and                                                               
   administrative              5,182        4,555       10,124        9,758 
                         -----------  -----------  -----------  ----------- 
    Total operating                                                         
     expenses                 24,541       19,331       48,009       39,575 
                         -----------  -----------  -----------  ----------- 
Operating loss               (15,804)     (18,345)     (34,348)     (38,133)
                                                                            
Interest expense, net         (3,442)      (3,191)      (7,045)      (7,742)
Foreign exchange gain                                                       
 (loss)                          454       (1,401)        (451)        (900)
Other expense, net                 -           (4)           -          (56)
                         -----------  -----------  -----------  ----------- 
Loss before benefit for                                                     
 income taxes                (18,792)     (22,941)     (41,844)     (46,831)
Benefit for income taxes        (351)        (159)      (1,232)        (323)
                         -----------  -----------  -----------  ----------- 
Net loss                 $   (18,441) $   (22,782) $   (40,612) $   (46,508)
                         ===========  ===========  ===========  =========== 
                                                                            
Net loss per common                                                         
 share- basic and                                                           
 diluted                 $     (0.29) $     (0.68) $     (0.65) $     (1.61)
                         -----------  -----------  -----------  ----------- 
Weighted average common                                                     
 shares outstanding -                                                       
 basic and diluted        62,872,173   33,715,703   62,339,285   28,909,080 
                         -----------  -----------  -----------  ----------- 
                                                                            
                                                                            
                                                                            
                            Horizon Pharma, Inc.                            
            Reconciliation of GAAP Net Loss to Non-GAAP Net Loss            
              (in thousands, except share and per share data)               
                                                                            
                            Three Months Ended         Six Months Ended     
                                 June 30,                  June 30,         
                         ------------------------  ------------------------ 
                             2013         2012         2013         2012    
                         -----------  -----------  -----------  ----------- 
                                (Unaudited)               (Unaudited)       
GAAP Net Loss            $   (18,441) $   (22,782) $   (40,612) $   (46,508)
Non-GAAP Adjustments                                                        
 (net of tax effect):                                                       
  Amortization of                                                           
   developed technology        1,311          684        2,635        1,397 
  Stock-based                       
                                        
   compensation                1,021          731        2,100        2,490 
  Non-cash interest                                                         
   expense                       919          576        1,829        1,169 
  Depreciation expense           299          208          558          392 
  Amortization of                                                           
   deferred revenue             (147)         (52)        (215)        (105)
                         -----------  -----------  -----------  ----------- 
    Total of non-GAAP                                                       
     adjustments               3,403        2,147        6,907        5,343 
                         -----------  -----------  -----------  ----------- 
Non-GAAP Net Loss        $   (15,038) $   (20,635) $   (33,705) $   (41,165)
                         ===========  ===========  ===========  =========== 
                                                                            
Weighted average shares                                                     
 - basic and diluted      62,872,173   33,715,703   62,339,285   28,909,080 
                                                                            
GAAP net loss per common                                                    
 share-basic and diluted $     (0.29) $     (0.68) $     (0.65) $     (1.61)
  Non-GAAP adjustments                                                      
   detailed above               0.05         0.06         0.11         0.18 
                         -----------  -----------  -----------  ----------- 
Non-GAAP net loss per                                                       
 common share-basic and                                                     
 diluted                 $     (0.24) $     (0.62) $     (0.54) $     (1.43)
                         ===========  ===========  ===========  =========== 
                                                                            
                                                                            
                                                                            
                            Horizon Pharma, Inc.                            
              Condensed Consolidated Statements of Cash Flows               
                               (in thousands)                               
                                                                            
                                                  Six Months Ended June 30, 
                                                 -------------------------- 
                                                     2013          2012     
                                                 ------------  ------------ 
                                                         (Unaudited)        
Cash flows from operating activities                                        
Net loss                                         $    (40,612) $    (46,508)
Adjustments to reconcile net loss to net cash                               
 used in operating activities                                               
  Depreciation and amortization                         3,855         2,140 
  Stock-based compensation                              2,100         2,490 
  Non-cash interest expense                             1,829         1,169 
  Paid in kind interest expense                         1,525         1,079 
  Foreign exchange loss                                   451           900 
  Loss on disposal of asset                                 -            68 
  Changes in operating assets and liabilities:                              
    Accounts receivable                                (3,880)        1,751 
    Inventories                                          (559)       (2,001)
    Prepaid expenses and other current assets             (58)       (1,631)
    Accounts payable                                     (348)         (255)
    Accrued expenses                                    3,795         1,527 
    Deferred revenues                                    (774)        2,973 
    Deferred tax liabilities                           (1,203)         (349)
    Other non-current assets and liabilities              211             - 
                                                 ------------  ------------ 
      Net cash used in operating activities           (33,668)      (36,647)
                                                 ------------  ------------ 
Cash flows from investing activities                                        
Purchase of property and equipment                       (345)       (1,043)
                                                 ------------  ------------ 
      Net cash used in investing activities              (345)       (1,043)
                                                 ------------  ------------ 
Cash flows from financing activities                                        
Proceeds from the sale of common stock under an                             
 ATM agreement, net of issuance costs                   3,039             - 
Proceeds from the issuance of common stock                                  
 through ESPP programs                                    204           147 
Proceeds from the issuance of notes payable, net                            
 of issuance costs                                          -        55,578 
Proceeds from private equity offering, net of                               
 issuance costs                                             -        47,475 
Repayment of notes payable                             (3,978)      (19,814)
                                                 ------------  ------------ 
      Net cash (used in) provided by financing                              
       activities                                        (735)       83,386 
                                                 ------------  ------------ 
Effect of foreign exchange rate changes on cash                             
 and cash equivalents                                       1          (202)
      Net (decrease) increase in cash and cash                              
       equivalents                                    (34,747)       45,494 
Cash and cash equivalents                                                   
Beginning of period                                   104,087        17,966 
                                                 ------------  ------------ 
End of period                                    $     69,340  $     63,460 
                                                 ============  ============ 

  
Contacts
Robert J. De Vaere
Executive Vice President and Chief Financial Officer
investor-relations@horizonpharma.com 
Investors
Kathy Galante
Burns McClellan, Inc.
212-213-0006
kgalante@burnsmc.com 
 
 
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