Horizon Therapeutics plc Reports Fourth-Quarter 2021 and Full-Year 2021 Financial Results; Announces Full-Year 2022 Guidance

Fourth-Quarter 2021 Results:
-- Net Sales of $1.01 Billion Increased 36% --
-- GAAP Net Income of $173.2 Million; Adjusted EBITDA of $416.0 Million --
-- TEPEZZA^® (teprotumumab-trbw) Net Sales of $589.6 Million Increased 72% --
-- KRYSTEXXA^® (pegloticase injection) Net Sales of $170.3 Million Increased 32%;
KRYSTEXXA Plus Immunomodulation Use Now Approaching 50% --
-- Cash Position of $1.58 Billion as of Dec. 31, 2021 --

Full-Year 2021 Results:
-- Record Net Sales of $3.23 Billion Increased 47% --
-- GAAP Net Income of $534.5 Million; Adjusted EBITDA of $1.28 Billion --
-- Record TEPEZZA Net Sales of $1.66 Billion, Representing Year-Over-Year Growth of 103% --
-- Record KRYSTEXXA Net Sales of $565.5 Million, Representing Year-Over-Year Growth of 39% --
-- Operating Cash Flow of More Than $1.0 Billion --

Full-Year 2022 Guidance:
-- Net Sales Guidance of $3.9 Billion to $4.0 Billion, Representing 22% Growth at the Midpoint --
-- Adjusted EBITDA Guidance of $1.63 Billion to $1.70 Billion, Representing
30% Growth and 230 Basis Points of Margin Expansion at the Midpoint --
-- Expect TEPEZZA Net Sales Percentage Growth in the Mid-30s --
-- Expect KRYSTEXXA Net Sales Growth of More Than 20% --

Company Highlights:
-- Initiated Four Clinical Trials, Including TEPEZZA Phase 3 Trial in Japan --
-- Submitted Supplemental Biologics License Application (sBLA) to the U.S. FDA to Expand Label for KRYSTEXXA to Include Co-Treatment with Methotrexate Based on Positive Data from MIRROR Trial --
-- Advanced Pipeline to Drive Long-Term Growth; Entered into Agreement with Alpine to
Develop Novel Therapies for Autoimmune and Inflammatory Diseases --

DUBLIN--(BUSINESS WIRE)--Horizon Therapeutics plc (Nasdaq: HZNP) today announced fourth-quarter and record full-year 2021 financial results and provided full-year 2022 net sales and adjusted EBITDA guidance.

“2021 marked a year of tremendous growth for Horizon – we invested significantly in our research and development capabilities and talent, significantly expanded our pipeline, increased our manufacturing capacity to meet growing demand and achieved outstanding financial results,” said Tim Walbert, chairman, president and chief executive officer, Horizon. “I am very proud of what we have accomplished, but I am most excited about the potential for continued growth going forward as we leverage the strong foundation we have built over the past several years. We expect another year of strong double-digit net sales and adjusted EBITDA growth in 2022, as well as meaningful margin expansion, as we continue to execute commercially and build on our momentum in R&D to develop new approaches for patients with rare, autoimmune and severe inflammatory diseases.”

Financial Highlights

Fourth Quarter and Recent Company Highlights

• Submitted sBLA for Co-Treatment of KRYSTEXXA Plus Methotrexate: In January, the Company submitted an sBLA to the U.S. Food and Drug Administration (FDA) to expand the label for KRYSTEXXA to include co-treatment with methotrexate. The submission is based on results from the MIRROR Phase 4 randomized, placebo-controlled trial announced in October, which demonstrated that 71% of patients receiving KRYSTEXXA plus methotrexate achieved a complete response, a more than 30 percentage point improvement compared to patients who were randomized to receive KRYSTEXXA plus placebo (p<0.001). KRYSTEXXA plus immunomodulation is a core element of the Company’s strategy to maximize the value of KRYSTEXXA and enable more patients with uncontrolled gout to benefit from the medicine.

• Entered into Agreement with Alpine Immune Sciences to Develop Novel Therapies for Autoimmune and Inflammatory Diseases: In December, the Company entered into an exclusive license and collaboration agreement with Alpine for the development and commercialization of up to four fusion protein-based preclinical candidates, including multi-specific approaches, for autoimmune and inflammatory diseases. The Alpine collaboration is an example of how Horizon continues to execute on its research strategy to drive earlier-stage discovery through internal research and research-based partnerships and collaborations.

• Added Second TEPEZZA Drug Product Manufacturer: In December, the U.S. FDA approved Horizon’s application for a second drug product manufacturer for TEPEZZA, Patheon (contract development and manufacturing organization services of Thermo Fisher Scientific). The addition of Patheon is part the Company’s long-term strategy adopted in early 2020 to support TEPEZZA supply, given the much stronger than expected demand since launch and planned expansion outside of the United States.

• Received CHMP Positive Opinion for UPLIZNA® (inebilizumab-cdon): In November, the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) issued a positive opinion recommending marketing authorization for UPLIZNA in adult patients with neuromyelitis optica spectrum disorder (NMOSD) who are anti-aquaporin-4 immunoglobulin G seropositive (AQP4-IgG+). The Company expects to launch UPLIZNA in Europe in 2022, beginning with Germany in the second quarter, as well as other international markets in the coming years.

• Presented Final Results from KRYSTEXXA PROTECT Trial at Key Medical Meeting: Final results from the PROTECT open-label trial evaluating KRYSTEXXA to improve management of uncontrolled gout in kidney transplant patients were presented at the American Society of Nephrology (ASN) Kidney Week in November. The data demonstrated that 89% (16 of 18 patients) achieved the primary endpoint at Month 6. The results are encouraging with respect to the ability of KRYSTEXXA to treat uncontrolled gout without compromising kidney function in this very sensitive transplant population.

• Presented New TEPEZZA Data at Key Medical Meetings: In February, multiple new data were presented at the 48^th Annual Meeting of the North American Neuro-Ophthalmology Society (NANOS 2022), including new data from a post-marketing safety analysis of hearing-related events associated with TEPEZZA that showed rates were comparable to what was seen in the OPTIC Phase 3 and OPTIC-X open-label extension trials. In November, new TEPEZZA real-world data were presented at the American Academy of Ophthalmology Annual Meeting (AAO 2021). The data showed that over 90% of TEPEZZA patients completed all eight infusions, indicating a high level of adherence to TEPEZZA in clinical practice.

• New TEPEZZA Chronic TED Data Published: In January, new data from an independent physician case study of six chronic thyroid eye disease (TED) patients who showed benefit after treatment with TEPEZZA were published in Eye, the official journal for the Royal College of Ophthalmologists. The case study adds to the growing body of evidence supporting the use of TEPEZZA in chronic TED patients, with nearly 60 chronic TED patients across multiple case studies who have demonstrated benefit.

• New UPLIZNA Data Published and Presented at Medical Meetings: New UPLIZNA data from the Phase 3 trial were presented at NANOS 2022 in February, showing treatment with UPLIZNA effectively reduced the severity of attacks in patients with NMOSD. In November, an analysis of UPLIZNA data from the Phase 3 trial was published in Multiple Sclerosis and Related Disorders showing that prior rituximab exposure did not impact the efficacy of UPLIZNA, and that UPLIZNA demonstrated comparable efficacy to trial participants without prior exposure to rituximab. Notably, all seven participants who had pre-study attacks despite rituximab use did not experience any attacks after being treated with UPLIZNA. In October, an analysis of data from the Phase 3 trial was published in the Multiple Sclerosis Journal highlighting a sustained effect on attack risk in people with NMOSD who were treated with UPLIZNA for four or more years. Multiple new data were also presented at the virtual 37^th Congress of the European Committee for Treatment and Research in Multiple Sclerosis (ECTRIMS) in October, including new data showing a link between the depth of b-cell depletion in the blood and long-term clinical outcomes.

• Initiated Enrollment in Four Clinical Trials:
  
  
  • In November, the first patient enrolled in a pivotal Phase 2b trial to evaluate HZN-825 in patients with diffuse cutaneous systemic sclerosis, a subset of systemic sclerosis (also known as scleroderma). Systemic sclerosis is a rare, chronic, autoimmune disease marked by fibrosis or skin thickening and can lead to internal organ damage.
    
    
  • In November, the first patient enrolled in a Phase 1 exploratory trial to evaluate TEPEZZA in patients with diffuse cutaneous systemic sclerosis.
    
    
  • In January, the first patient enrolled in a pivotal Phase 2b trial to evaluate HZN-825 in patients with idiopathic pulmonary fibrosis (IPF), the most common form of interstitial lung disease. IPF is a rare, progressive lung disease caused by inflammation and fibrosis, or scarring, of the lungs.
    
    
  • In February, the first patient enrolled in a Phase 3 trial in Japan to evaluate TEPEZZA in patients with moderate-to-severe active TED, a serious, progressive and potentially vision-threatening rare autoimmune disease. TEPEZZA has not been approved for commercial use in Japan.

• Expanding East Coast Hub Following Viela Bio Acquisition: In January, the Company entered into an agreement to lease a new 192,000-square-foot, state-of-the-art facility under construction in Rockville, Maryland that will serve as the Company’s primary East Coast research and development and technical operations hub. The Company is significantly expanding and consolidating its East Coast footprint with the new facility, nearly quadrupling its current Maryland footprint acquired in the acquisition of Viela and anticipates adding key R&D talent to support its growing research and development capabilities and expanded pipeline.

• Sean Clayton Appointed as General Counsel: In February, the Company named Sean Clayton as executive vice president and general counsel. Mr. Clayton brings nearly 20 years of legal experience and was previously a partner at Cooley LLP where he represented public and private biotechnology companies in general corporate matters and securities laws, as well as a wide range of transactions, including public and private financings. Mr. Clayton led the Cooley team that represented Horizon in its initial public offering in 2011 and has advised Horizon’s management team and board of directors on corporate and transactional matters since that time.

• Continued to Demonstrate Gender and Ethnicity Pay Equity: A second study conducted by Aon, a leading compensation consulting firm, showed that Horizon continues to demonstrate both gender and ethnicity pay equity. This study was a follow-on study to the gender and ethnicity pay equity study Aon conducted in 2019. The Company maintained its gender and ethnicity pay equity after having grown significantly in the two years since the first study, as well as having completed the acquisition of Viela, which included the addition of a significant number of employees.

• Received Continued Recognition as a Top Workplace: In 2021, the Company received 15 workplace-related recognitions, including six in the fourth quarter, reflecting the high level of engagement of its employees. Horizon was named to the following lists in the fourth quarter:
  
  
  • Newsweek’s inaugural Most Loved Workplaces;
    
    
  • Great Place to Work’s 2021 Best Workplaces for Parents;
    
    
  • Chicago Tribune Top Workplaces 2021;
    
    
  • National Association for Business Resources’ 2021 Best and Brightest Companies to Work For in the Nation;
    
    
  • San Francisco Bay Area’s 2021 Best and Brightest Companies to Work For; and
    
    
  • Dave Thomas Foundation for Adoption’s Top 100 Best Adoption-Friendly Workplaces.

Key Clinical Development Programs

• Daxdilimab (HZN-7734), an anti-ILT7 human monoclonal antibody that depletes certain dendritic cells. Depleting these cells may interrupt the cycle of inflammation that causes tissue damage in diseases such as lupus, and a variety of other autoimmune conditions.
  
  
  • Systemic Lupus Erythematosus (SLE) Trial: Phase 2 randomized, placebo-controlled trial underway to evaluate daxdilimab in patients with SLE, a disease in which the body's immune system attacks its own tissues and organs.
    
    
  • Alopecia Areata Trial: Phase 2 trial to evaluate daxdilimab in patients with alopecia areata, an autoimmune disorder characterized by nonscarring hair loss, expected to initiate in the second quarter of 2022.
    
    
  • Discoid Lupus Erythematosus (DLE) Trial: Phase 2 trial to evaluate daxdilimab in patients with DLE, a rare, chronic, inflammatory skin condition characterized by lesions that result in scarring, expected to initiate by mid-year 2022.
    
    
  • Lupus Nephritis Trial: Phase 2 trial to evaluate daxdilimab in patients with lupus nephritis, a rare, autoimmune and inflammatory condition of the kidney, expected to initiate in the third quarter of 2022.
    
    
  • Dermatomyositis Trial: Phase 2 trial to evaluate daxdilimab in patients with dermatomyositis, a rare, autoimmune disorder characterized by rashes, debilitating muscle weakness and interstitial lung disease, expected to initiate in the fourth quarter of 2022.

• Dazodalibep (HZN-4920), a CD40 ligand antagonist that blocks T cell interaction with CD40-expressing B cells, disrupting the overactivation of the CD40 ligand co-stimulatory pathway. Several autoimmune diseases are associated with the overactivation of this pathway.
  
  
  • Sjögren's Syndrome Trial: Phase 2b randomized, placebo-controlled trial underway to evaluate dazodalibep in patients with Sjögren's syndrome, a chronic, systemic autoimmune condition that impacts exocrine glands, including the salivary and tear glands.
    
    
  • Rheumatoid Arthritis Trial: Phase 2 randomized, placebo-controlled trial underway to evaluate dazodalibep in patients with rheumatoid arthritis.
    
    
  • Kidney Transplant Rejection Trial: Phase 2 open-label trial underway to evaluate dazodalibep in kidney transplant rejection patients.
    
    
  • Focal Segmental Glomerulosclerosis (FSGS) Trial: Phase 2 trial to evaluate dazodalibep in patients with FSGS, a rare kidney disorder characterized by scarring of glomeruli, expected to initiate in the fourth quarter of 2022.

• HZN-825, an oral lysophosphatidic acid receptor 1 (LPAR₁) antagonist that prevents gene activation.
  
  
  • Diffuse Cutaneous Systemic Sclerosis Trial: Pivotal Phase 2b trial initiated in November 2021 to evaluate HZN-825 in diffuse cutaneous systemic sclerosis.
    
    
  • Idiopathic Pulmonary Fibrosis Trial: Pivotal Phase 2b trial initiated in January 2022 to evaluate HZN-825 in idiopathic pulmonary fibrosis, the most common form of interstitial lung disease.

• UPLIZNA, an anti-CD19 humanized monoclonal antibody that depletes B cells, including the pathogenic cells that produce autoantibodies.
  
  
  • Myasthenia Gravis Trial: Phase 3 randomized, placebo-controlled trial underway to evaluate UPLIZNA in patients with myasthenia gravis, a chronic, rare, autoimmune neuromuscular disease that affects voluntary muscles, especially those that control the eyes, mouth, throat and limbs.
    
    
  • IgG4-Related Disease Trial: Phase 3 randomized, placebo-controlled trial underway to evaluate UPLIZNA in patients with IgG4-related disease, which is a group of disorders marked by tumor-like swelling and fibrosis of affected organs, such as the pancreas, salivary glands and kidneys.

• TEPEZZA, an insulin-like growth factor type 1 receptor (IGF-1R) antagonist monoclonal antibody.
  
  
  • Chronic TED Trial: Phase 4 randomized, placebo-controlled trial underway to evaluate TEPEZZA in chronic TED.
    
    
  • TED in Japan (OPTIC-J) Trial: Phase 3 randomized, placebo-controlled trial in Japan initiated in February 2022 to evaluate TEPEZZA in patients with moderate-to-severe active TED.
    
    
  • Subcutaneous (SC) Administration Trial: Phase 1b trial to explore the pharmacokinetics, safety, tolerability, efficacy, and immunogenicity of subcutaneous administration of TEPEZZA in patients with TED, expected to initiate by mid-year 2022.
    
    
  • Diffuse Cutaneous Systemic Sclerosis Exploratory Trial: Phase 1 exploratory trial initiated in November 2021 to evaluate TEPEZZA in diffuse cutaneous systemic sclerosis.

• KRYSTEXXA, a recombinant uricase enzyme that converts urate into a water-soluble liquid, allantoin, that can be easily excreted from the body.
  
  
  • Shorter Infusion Duration Trial: Phase 4 open-label trial underway to evaluate the impact of administering KRYSTEXXA plus methotrexate over a shorter infusion duration in patients with uncontrolled gout.
    
    
  • Monthly Dosing Trial: Phase 4 open-label trial underway to evaluate monthly dosing of KRYSTEXXA plus methotrexate in patients with uncontrolled gout.
    
    
  • Retreatment Trial: Phase 4 open-label trial underway to evaluate KRYSTEXXA plus methotrexate in patients who were not complete responders to KRYSTEXXA monotherapy.

• HZN-1116, a fully human monoclonal antibody that binds and neutralizes the function of the FLT3-ligand, thereby reducing both conventional and plasmacytoid dendritic cells.
  
  
  • Autoimmune Disease Trial: Phase 1 trial underway to evaluate HZN-1116 in patients with autoimmune diseases.

Fourth-Quarter Financial Results

Note: For additional detail and reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures, please refer to the tables at the end of this release.

• Net Sales: Fourth-quarter 2021 net sales were $1.014 billion, an increase of 36% compared to the fourth quarter of 2020.

• Gross Profit: Under U.S. GAAP, the fourth-quarter 2021 gross profit ratio was 76.2% compared to 78.2% in the fourth quarter of 2020. The non-GAAP gross profit ratio in the fourth quarter of 2021 was 86.5% compared to 87.1% in the fourth quarter of 2020.

• Operating Expenses: R&D expenses were 13.9% of net sales and SG&A expenses were 39.3% of net sales. Non-GAAP R&D expenses were 11.4% of net sales and non-GAAP SG&A expenses were 34.0% of net sales. Fourth-quarter 2021 GAAP and non-GAAP R&D expenses include $36.2 million of upfront and milestone payments primarily related to the collaboration agreement with Alpine. Beginning in the fourth quarter of 2021, the Company no longer excludes upfront and milestone payments related to license and collaboration agreements from non-GAAP financial measures and line item components.

• Income Tax Expense: On a GAAP basis in the fourth quarter of 2021, income tax expense was $37.9 million. Fourth-quarter non-GAAP income tax expense was $61.4 million.

• Net Income: In the fourth-quarter of 2021, net income on a GAAP and non-GAAP basis was $173.2 million and $334.0 million, respectively.

• Adjusted EBITDA: Fourth-quarter 2021 adjusted EBITDA was $416.0 million and includes $36.2 million of upfront and milestone payments primarily related to the collaboration agreement with Alpine. Beginning in the fourth quarter of 2021, the Company no longer excludes upfront and milestone payments related to license and collaboration agreements from non-GAAP financial measures.

• Earnings per Share: On a GAAP basis, diluted earnings per share in the fourth quarter of 2021 and 2020 were $0.73 and $0.82, respectively. Non-GAAP diluted earnings per share in the fourth quarter of 2021 and 2020 were $1.41 and $1.17, respectively. Weighted average shares outstanding used for calculating GAAP and non-GAAP diluted earnings per share in the fourth quarter of 2021 were 236.8 million.

Fourth-Quarter Segment Results

Management uses net sales and segment operating income to evaluate the performance of the Company’s two segments, the orphan segment and the inflammation segment. While segment operating income contains certain adjustments to the directly comparable GAAP figures in the Company’s consolidated financial results, it is considered to be prepared in accordance with GAAP for purposes of presenting the Company’s segment operating results. The Company continues to exclude upfront and milestone payments related to license and collaboration agreements from its segment operating income.

Orphan Segment

• Fourth-quarter 2021 net sales of the orphan segment, the Company’s strategic growth segment, were $940.5 million, an increase of 50% over the prior year’s quarter, driven by the strong performance of TEPEZZA, KRYSTEXXA and RAVICTI. The orphan segment represented 93% of total company fourth-quarter net sales.
  
  
• KRYSTEXXA fourth-quarter 2021 net sales increased 32% year-over-year driven by increased adoption of KRYSTEXXA plus immunomodulation, which is now approaching 50%. In addition, the Company continues to see strong uptake of KRYSTEXXA from both rheumatologists and nephrologists.
  

• Fourth-quarter 2021 orphan segment operating income was $420.8 million, which includes additional investment associated with TEPEZZA, UPLIZNA and the Company’s pipeline programs.

Inflammation Segment

Investors:
Tina Ventura
Senior Vice President,
Investor Relations
investor-relations@horizontherapeutics.com

Ruth Venning
Executive Director,
Investor Relations
investor-relations@horizontherapeutics.com

U.S. Media:
Geoff Curtis
Executive Vice President,
Corporate Affairs & Chief Communications Officer
media@horizontherapeutics.com

Ireland Media:
Ray Gordon
Gordon MRM
ray@gordonmrm.ie