|[March 05, 2012]
Medidata Solutions Provides Update on Tax Position and Litigation Settlement
NEW YORK --(Business Wire)--
Solutions (NASDAQ: MDSO), a leading global provider of SaaS (News - Alert) clinical
technology solutions that enhance the efficiency of clinical
development, today announced an update with respect to its tax position
and litigation settlement with DataSci.
Reversal of Income Tax Valuation Allowance
In its fourth quarter ended December 31, 2011, Medidata recorded a
non-cash GAAP tax benefit of approximately $19 million, or $0.77 per
diluted share, resulting from the reversal of the majority of the
Company's valuation allowance previously recorded against its net
domestic deferred tax assets.
The recognition of this tax benefit follows from an accounting based
determination that Medidata's domestic operations have achieved
sustainable profitability and are expected to continue to be profitable
for a reasonable period. This non-cash tax benefit represents 87 percent
of the valuation allowance previously recorded against the company's net
domestic deferred tax assets.
Medidata expects that its effective income tax rate will range from 38%
to 42% and its cash income tax expense will range from 28% to 32% of its
taxable income for 2012.
"We are very pleased to have achieved sustainable profitability as
defined by GAAP and expect to continue to deliver profitable growth for
the foreseeable future," said Cory Douglas, chief financial officer.
Litigation Settlement with DataSci
In its fourth quarter ended December 31, 2011, Medidata also entered
into a litigation settlement with DataSci. The settlement relates to a
lawsuit filed by DataSci in 2009 alleging breach of contract for failing
to pay royalties under a prior license and settlement agreement executed
between the parties in June 2007. As part of the settlement, Medidata
paid a one-time, lump-sum payment in the amount of $6.3 million to
settle the matter and obtained an irrevocable, fully-paid, worldwide,
non-exclusive license to DataSci patents related to the litigation. The
settlement will result in a pre-tax charge of $6.3 million, or $0.26 per
diluted share, in the fourth quarter.
"In addition to resolving the ongoing litigation with DataSci and
eliminating the inherent uncertainty associated with it, this settlement
provides us with the flexibility to pursue potentially interesting
technology opportunities in the future," said Tarek Sherif, chief
As previusly announced, Medidata is scheduled to release its fourth
quarter and full year 2011 earnings and 2012 financial guidance tomorrow
morning, March 6, 2012. To facilitate comparability of its results,
Medidata will also simultaneously provide a supplemental financial table
excluding these events in its earnings release. The release will be
followed by a conference call with investors at 8:00 a.m. Eastern time
to discuss further details.
The company plans to host its investor conference call on March 6th at
8:00 a.m. Eastern time. The investor conference call will be available
via live webcast on the "Investor" section of Medidata's web site at http://investor.mdsol.com.
To participate by telephone, domestic participants may dial 877-303-2528
and international participants may dial 847-829-0023. Those interested
in participating in the conference call should dial in at least 10
minutes prior to the call to register. Participants can also join the
call via a simultaneous live audio webcast, which will be made available
on the "Investor" section of Medidata's web site at http://investor.mdsol.com.
A replay of the conference call can be accessed until Tuesday, March 20,
2012 by dialing 855-859-2056 domestically or 404-537-3406
internationally, with the passcode 52824804. An archive of the call will
also be hosted on the "Investor" section of Medidata's web site, http://investor.mdsol.com,
for a limited period of time.
About Medidata Solutions Worldwide
Solutions is a leading global provider of SaaS clinical development
solutions that enhance the efficiency of customers' clinical trials.
Medidata's advanced solutions lower the total cost of clinical
development by optimizing clinical trials from concept to conclusion:
from study and protocol design, trial planning and budgeting, site
negotiation, clinical portal, trial management, randomization and trial
supply management, clinical data capture and management, safety events
capture, medical coding to business analytics. Our diverse life science
customer base spans biopharmaceutical companies, medical device and
diagnostic companies, academic and government institutions, CROs and
other research organizations, and includes more than 20 of the top 25
global pharmaceutical companies as well as organizations of all sizes
developing life-enhancing medical treatments and diagnostics.
Certain statements made in this press release are "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995 that involve significant risks and uncertainties
about Medidata Solutions, Inc. ("Medidata"), including but not limited
to statements about Medidata's forecast of financial performance,
products and services, business model, strategy and growth
opportunities, and competitive position. Such statements are subject to
risks and uncertainties that could cause actual performance or results
to differ materially from those expressed in these statements. In
particular, the risks and uncertainties include, among other things,
risks associated with possible fluctuations in our financial and
operating results; errors, interruptions or delays in our service or our
Web hosting; the financial impact of any future acquisitions; our
ability to continue to release, and gain customer acceptance of, new and
improved versions of our products; changes in our sales and
implementation cycles; competition; our ability to retain and expand our
customer base or increase new business from those customers; our ability
to hire, retain and motivate our employees and manage our growth;
regulatory developments; litigation; and general developments in the
economy. For additional disclosure regarding these and other risks faced
by the company, see disclosures contained in Medidata's public filings
with the Securities and Exchange Commission including, the "Risk
Factors" section of Medidata's Annual Report on Form 10-K for the year
ended December 31, 2010. You should consider these factors in evaluating
the forward-looking statements included in this press release and not
place undue reliance on such statements. The forward-looking statements
are made as of the date hereof, and Medidata undertakes no obligation to
update such statements as a result of new information.
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