October 28, 2002 -- IMPAX Laboratories, Inc. (Nasdaq NM: IPXL) today reported
financial results for the three and nine months ended September 30, 2002.
Total revenues for the third quarter of 2002 were $7,538,000, up more than
350% compared with total revenues of $1,658,000 in the prior year's third quarter
and up more than 46% compared with total revenues of $5,145,000 in the second
quarter of 2002. The significant year-over-year increase came on the ramp up
of sales of Fludrocortisone Acetate Tablets, introduced at the end of the first
quarter of 2002, Minocycline Hydrochloride 50, 75 and 100mg Capsules launched
in the third quarter of 2002, as well as other products introduced since July
2001, such as Terbutaline Sulfate Tablets and Methitest(TM) Tablets, and lower
product returns.
The net loss for the 2002 third quarter was $5,210,000, or $(0.11) per share,
compared with a net loss of $6,769,000, or $(0.15) per share in the prior year
third quarter, including goodwill amortization of approximately $876,000, or
$(0.02) per share. Net loss narrowed due to increased sales, which partially
offset increases in research and development, and operating expenses.
For the nine months ended September 30, 2002, the Company reported total revenues
of $16,115,000, compared with total revenues of $4,566,000 in the comparable
period the previous year. The net loss during the first three quarters of 2002
was $16,569,000, or $(0.35) per share, compared with a net loss of $18,257,000,
or $(0.46) per share, in the first three quarters of 2001, including goodwill
amortization of $2,628,000, or $(0.07) per share.
Cash, cash equivalents and short-term investments were $22.4 million at September
30, 2002, compared with $35.5 million at December 31, 2001. On October 23, 2002,
IMPAX signed a $25 million loan agreement with Congress Financial Corporation
comprised of a $20.5 million revolving credit facility and a $4.5 million term
loan.
"We are very pleased with our sales increases and the progress we have
made in bringing new products to market," said Barry R. Edwards, Co-Chief
Executive Officer. "In addition, we expect operating efficiencies to continue
to improve as we increase the capacity utilization of our new, state-of-the-art
manufacturing facility in Hayward, Calif., that was completed in June. During
the quarter, we received final approval for Rimantadine Tablets, a generic version
of Flumadine®, and tentative approval for Riluzole Tablets, a generic version
of Rilutek®."
Mr. Edwards continued, "We also received several favorable rulings on
patent infringement cases that were filed against us by branded manufacturers,
as they attempted to keep generic drugs off the market. Favorable rulings came
in August in litigation on Bupropion Hydrochloride Extended Release Tablets
(marketed by GlaxoSmithKline as Wellbutrin® SR and Zyban®) and on various
loratadine formulations (marketed by Schering-Plough as Claritin®)."
Larry Hsu, Ph.D., President and Chief Operating Officer, stated: "We recently
filed additional Abbreviated New Drug Applications (ANDAs) with the U.S. Food
and Drug Administration (FDA) for generic versions of branded products, one
during the quarter and two during October. Two of these three filings were made
under Paragraph IV of the Hatch-Waxman Amendments. We have filed six ANDAs this
year and continue to be on track with our stated plan to file a total of six
to eight ANDAs this year. In addition, during the quarter we learned that the
FDA accepted our filings for generic OxyContin® in 40, 20 and 10mg strengths."
IMPAX currently has 19 ANDAs pending at the FDA that address more than $9 billion
in 2001 U.S. branded product sales. 12 of these filings were made under Paragraph
IV of the Hatch-Waxman Amendments, and four of these 19 ANDAs have received
tentative approval from the FDA.
IMPAX Laboratories, Inc. is a technology focused specialty pharmaceutical company
applying its formulation expertise and drug delivery technology to the development
of controlled-release and niche generics in addition to the development of branded
products. IMPAX markets its generic products through its Global Pharmaceuticals
division and intends to market its branded products through the IMPAX Pharmaceuticals
division. IMPAX Laboratories is headquartered in Hayward, California, and has
a full range of capabilities in its Hayward and Philadelphia facilities. For
more information, please visit the Company's Web site at : www.impaxlabs.com.
IMPAX LABORATORIES, INC.
STATEMENTS OF OPERATIONS
(unaudited)
(dollars in thousands, except share and per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
Net sales $7,283 $1,658 $15,860 $4,566
Other revenues 255 - 255 -
Total revenues 7,538 1,658 16,115 4,566
Cost of sales 5,153 2,247 12,274 6,515
Gross profit (loss) 2,385 (589) 3,841 (1,949)
Research and development 4,533 3,673 11,899 8,983
Less: Teva reimbursements (182) (399) (486) (699)
Research and development,
net 4,351 3,274 11,413 8,284
Selling 697 592 2,001 1,715
General and
Administrative(a) 2,084 2,269 6,193 6,664
Other operating income
(expense), net (30) - (39) 64
Net loss from operations (4,777) (6,724) (15,805) (18,548)
Interest income 138 412 540 835
Interest expense(b) (571) (457) (1,304) (544)
Net loss $(5,210) $(6,769) $(16,569) $(18,257)
Net loss per share (basic
and diluted) $(0.11) $(0.15) $(0.35) $(0.46)
Weighted average
common shares outstanding 47,778,512 45,943,604 47,302,950 39,932,294
(a) Includes amortization of goodwill of $876,000 in the quarter ended
September 30, 2001 and $2,628,000 in the nine months ended
September 30, 2001. There was no amortization of goodwill in 2002.
(b) The total interest expense of $571,000 for the quarter ended
September 30, 2002 included interest of $438,000 on the refundable
deposit from Teva. The total interest of $1,304,000 for the nine
months ended September 30, 2002, which was reduced by $394,000 in
capitalized interest, included interest of $1,314,000 on the
refundable deposit from Teva, as follows:
Interest on Refundable Deposit $1,314,000
Other Interest 384,000
Less: Amounts Capitalized (394,000)
$1,304,000
IMPAX LABORATORIES, INC.
CONDENSED BALANCE SHEETS
(unaudited)
(in thousands)
September 30, December 31,
2002 2001
ASSETS
Cash, cash equivalents and
short-term investments $22,405 $35,466
Accounts receivable, net 5,667 3,523
Inventory 5,069 3,488
Property, plant and equipment, net 35,502 24,334
Goodwill and intangibles, net 28,433 28,721
Other assets 1,099 2,080
Total assets $98,175 $97,612
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $13,727 $7,803
Long-term debt, net of current portion 6,695 6,868
Refundable deposit and related accrued interest 24,190 22,876
Other liabilities 1,728 117
Mandatorily redeemable convertible
preferred stock 7,500 7,500
Stockholders' equity 44,335 52,448
Total liabilities and stockholders' equity $98,175 $97,612