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Pharmacyclics, Inc. (PCYC)
Q2 2013 Earnings Call
February 14, 2013, 4:30 p.m. ET
Josh Brumm - EVP, Finance
Bob Duggan - Chairman and CEO
Urte Gayko, Ph.D. – Vice President, Global Regulatory Affairs
Dr. Lori Kunkel - Chief Medical Officer
Dr. Maky Zanganeh – COO
Paula Boultbee - EVP, Sales and Marketing
Dr. Maria Fardis – EVP, Operations and Alliances
Dr. Jesse McGreivy - VP, Clinical Science
Dr. Joe Buggy - VP, Research
Rich Love - VP, Legal
Rainer (Ramses) Erdtmann - Vice President, Finance & Administration
Jesse McGreivy - Vice President, Clinical Science
Michael J. Yee – RBC Capital Markets
Geoffrey Porges (Yon) - Sanford Bernstein
Joel Sendek - Stifel Nicolaus
Jason Cantor – Credit Suisse
Mike King – JMP Securities
Alan Carr (Mark) – Needham & Company
Jason Cantor – Credit Suisse
Greg Wade – Wedbush Securities
(Jay Sotherman – Kohls Capital)
Greetings and welcome to the Pharmacyclics' quarterly conference call. (Operator Instructions)
It is now my pleasure to introduce your host, Ramses Erdtmann. Thank you Mr. Erdtmann, you may now begin.
Thank you, Sharon and good afternoon and thank you for joining us for our conference call today.
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Our genre for today's call will include a review of our financials, brief comments on the quarter by our CEO, an update of our most recent regulatory success, and a summary of our clinical progress as well as an outlook of what to expect in 2013.
Before we start, let me remind you that this non-confidential presentation contains forward-looking statements about the business, prospects of Pharmacyclics including expectations regarding Pharmacyclics' financial performance, commercial products, and potential future products in different areas of therapeutic research and development.
Results may differ materially depending on the progress of Pharmacyclics' product program, actions of regulatory authorities, availability of capital, future actions in the pharmaceutical market, and developments by competitors, and those factors detailed in Pharmacyclics' filings with the SEC such as the 10-Q, 10-K, and 8-K reports.
I would now like to turn this call over to Josh Brumm, our Executive Vice President of Finance. Josh.
Thank you, Ramses, and good afternoon to everybody on the call.
I would like to begin by mentioning that Pharmacyclics announced on November 14th, 2012, that the company has changed its fiscal year end from June 30 to September 31.
Effective September 31, 2012, as a result of the six months ended December 31st, 2012, represents a transition period. And the company's net fiscal year will cover the period from January 1, 2013 to December 31, 2013.
On this call, I will provide operating results for the six and three months ended December 31, 2012.
The company's GAAP net income for the six months ended December 31, 2012, was $117.5 million or $1.69 basic and $1.58 diluted earnings per share. Compared to the six months ended December 31, 2011, GAAP net income of $41.7 million or $0.61 basic and $0.58 diluted earnings per share.
With respect to non-GAAP adjusted for stock based compensation for the six months ended December 31, 2012, net income was $125 million or $1.79 basic and $1.68 diluted earnings per share compared to non-GAAP net income of $46.3 million or $0.68 basic and $0.65 diluted earnings per share for the same period of the prior year.
The increase in net income from the year-over-year primarily relates to higher collaboration revenue earned as we achieved three milestones of $50 million each aggregating to $150 million for the six months ended December 31st, 2012 as compared to $70.6 million in licensed revenue recognized from the upfront payment received from Janssen during the six months ended December 31st, 2011.
In regards to the company's three month period ended December 31st, 2012, GAAP net income was $41.9 million or $0.60 basic and $0.56 diluted earnings per share compared to GAAP net income of $56.3 million or $0.82 basic and $0.78 diluted earnings per share for the quarter ended December 31st, 2011.
On a non-GAAP basis, net income reported for the quarter ended December 31st, 2012, was $46.2 million or $0.66 basic and $0.62 diluted earnings per share compared to non-GAAP net income of $58.6 million or $0.85 basic and $0.82 diluted earnings per share for the same period of the prior year.
The decrease in net income for the quarter ended December 31st, 2012 as compared to the quarter ended December 31st, 2011 primarily relates to lower license and milestone revenue earned during the quarter and higher general and administrative expenses.
Revenue for the six months ended December 31st, 2012 was a $160.7 million compared to $77.9 million for the six months ended December 31st, 2011.
Revenue for the quarter ended December 31, 2012 was $58 million compared to $77.9 million for the quarter ended December 31st, 2011. And revenues for the quarter ended December 31, 2012 includes $50 million of milestones revenue due to the company's achievement of one clinical milestone in connection with the collaboration agreement with Janssen as well as a $5 million license revenue related to our license agreement with Novo.