IMPAX Reports Third Quarter Financial Results; Company Continues to Post Record Quarterly Revenues; Four FDA Approvals Received in the Quarter

November 05, 2003

HAYWARD, Calif.--(BUSINESS WIRE)--Nov. 5, 2003--IMPAX Laboratories, Inc. (Nasdaq:IPXL) today reported financial results for the three months and nine months ended September 30, 2003.

Total revenues for the third quarter of 2003 were $16,497,000, up more than 119% compared with revenues of $7,538,000 in the prior year's third quarter, and up more than 17% compared with total revenues of $14,067,000 in the second quarter of 2003. The significant year-over-year increases were primarily due to shipments of over-the-counter (OTC) Loratadine and Pseudoephedrine Sulfate (5mg/120mg) 12-hour Extended Release Tablets to Schering-Plough and to Wyeth during the third quarter of 2003; and higher sales of Fludrocortisone Tablets, Minocycline Capsules, and the LIPRAM product family.

The net loss for the 2003 third quarter was $3,608,000, or $(0.07) per share, compared with a net loss of $5,210,000, or $(0.11) per share, in the prior-year third quarter and a net loss of $2,284,000, or $(0.05) per share, in the 2003 second quarter. The year-over-year net loss narrowed due to higher sales, but increased on a sequential quarter basis due to increased expenses related to ramping up production for upcoming new product introductions, including, but not limited to, additional personnel, supplies, and training costs.

For the nine months ended September 30, 2003, the Company reported total revenues of $41,989,000 compared with $16,115,000 in the comparable period of the previous year. The net loss through the third quarter of 2003 was $9,105,000, or $(0.18) per share. This compares with a net loss of $16,569,000, or $(0.35) per share, in the nine months ended September 30, 2002.

Unrestricted cash, cash equivalents, and short-term investments were $22.5 million at September 30, 2003, compared to $10.2 million at December 31, 2002. The increase in the cash balance was primarily due to a $25 million private placement completed in May of this year.

"We are delighted to report that this is our fifth consecutive quarter of record revenues," said Barry R. Edwards, Co-Chief Executive Officer of IMPAX. "In addition to receiving final U.S. Food and Drug Administration (FDA) approval for our generic versions of Urispas(R), Claritin(R) Reditabs, and Aralen(R), we also received tentative approvals of a generic version of OxyContin(R) Controlled Release Tablets, 80mg."

Mr. Edwards continued, "Also in the quarter, we entered into an Exclusivity Transfer Agreement with Andrx Corporation (Nasdaq:ADRX) and a subsidiary of Teva Pharmaceutical Industries Ltd. (Nasdaq:TEVA) pertaining to pending Abbreviated New Drug Applications (ANDAs) for bioequivalent versions of Wellbutrin(R) SR and Zyban(R) (Bupropion Hydrochloride) 100mg and 150mg Extended Release Tablets filed by Andrx, as well as by IMPAX. We believe that this agreement with Andrx and Teva will provide us with an opportunity to bring our products to the market earlier than would be possible alone."

"We filed two ANDAs, as well as one Investigational New Drug application (IND), with the FDA during the quarter and we remain comfortable that we will meet our goal of filing at least six applications this year," said Larry Hsu, Ph.D., President of IMPAX. "This, our first IND filing, represents a significant milestone in the development of our branded pharmaceuticals program for products intended to treat disorders of the Central Nervous System (CNS)."

IMPAX has eighteen applications pending at the FDA, including three tentatively approved, that address approximately $7 billion in U.S. branded product sales for the twelve months ended August 31, 2003. Fourteen of these filings were made under Paragraph IV of the Hatch-Waxman Amendments.

IMPAX Laboratories, Inc. is a technology-based specialty pharmaceutical company applying its formulation expertise and drug delivery technology to the development of controlled-release and specialty 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. Additionally, where strategically appropriate, IMPAX has developed marketing partnerships to fully leverage its technology platform. IMPAX Laboratories is headquartered in Hayward, Calif., and has a full range of capabilities in its Hayward and Philadelphia facilities. For more information, please visit the Company's Web site at:

As previously announced, the Company has scheduled a conference call to discuss this announcement beginning at 9:00 a.m. Eastern Time today. To participate in the call, a few minutes prior to the start time, please dial 888-803-7396 in the U.S. or 706-634-1052 for international callers. Those unable to participate are invited to listen to a recording of the call and Question and Answer session from 10:00 a.m. Eastern Time, November 5, 2003, through 11:59 p.m. Eastern Time, November 7, 2003, by dialing 800-642-1687 in the U.S. or 706-645-9291 for international callers, and entering reservation code 3626714. Alternatively, individuals may listen to the call by visiting the investor relations section of the Company's Web site at To listen to the live call, please go to the Web site 15 minutes prior to its start to register, download, and install the necessary audio software. A recording of the call will be available for 14 days on the site beginning on November 5, 2003.

"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995:

To the extent any statements made in this news release contain information that is not historical, these statements are forward-looking in nature and express the beliefs and expectations of management. Such statements are based on current expectations and involve a number of known and unknown risks and uncertainties that could cause IMPAX's future results, performance, or achievements to differ significantly from the results, performance, or achievements expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to, IMPAX's ability to obtain sufficient capital to fund its operations, the difficulty of predicting FDA filings and approvals, consumer acceptance and demand for new pharmaceutical products, the impact of competitive products and pricing, IMPAX's ability to successfully develop and commercialize pharmaceutical products, IMPAX's reliance on key strategic alliances, the uncertainty of patent litigation, the availability of raw materials, the regulatory environment, dependence on patent and other protection for innovative products, exposure to product liability claims, fluctuations in operating results, and other risks detailed from time to time in IMPAX's filings with the Securities and Exchange Commission. Forward-looking statements speak only as to the date on which they are made, and IMPAX undertakes no obligation to update publicly or revise any forward-looking statement, regardless of whether new information becomes available, future developments occur, or otherwise.

                       IMPAX LABORATORIES, INC.
                       STATEMENTS OF OPERATIONS
        (dollars in thousands, except share and per share data)

                      Three Months Ended         Nine Months Ended
                         September 30,             September 30,
                      2003         2002         2003         2002

Net Sales          $    15,908  $     7,283  $    40,434  $    15,860
Other revenues             589          255        1,555          255
Total revenues          16,497        7,538       41,989       16,115
Cost of sales           12,976        5,153       30,444       12,274
Gross margin             3,521        2,385       11,545        3,841
Research and
 development             4,203        4,533       12,305       11,899
Less: Teva
 payments                  (93)        (182)        (247)        (486)
Research and
 development, net        4,110        4,351       12,058       11,413
Selling expenses           546          697        1,552        2,001
General and
 expenses                2,321        2,084        6,526        6,193
Other operating
 income (expense),
 net                         4          (30)          25          (39)
Net loss from
 operations             (3,452)      (4,777)      (8,566)     (15,805)
Interest income             87          138          199          540
Interest expense          (243)        (571)        (738)      (1,304)
Net loss                (3,608)      (5,210)      (9,105)     (16,569)
Net loss per share
 (basic and
 diluted)          $     (0.07) $     (0.11) $     (0.18) $     (0.35)
Weighted average
 common shares
 outstanding        52,610,356   47,778,512   50,382,455   47,302,950

                       IMPAX LABORATORIES, INC.
                        CONDENSED BALANCE SHEET
                            (in thousands)

                                               Sept. 30,     Dec. 31,
                                                 2003          2002

Cash and cash equivalents                     $   22,482   $   10,219

Accounts receivable, net                           7,899        6,524

Inventory                                         19,863       10,478

Restricted cash (a)                               10,000       10,000

Property, plant and equipment, net                37,696       37,065

Goodwill and intangibles, net                     28,049       28,337

Other assets                                       2,067        1,780

  Total assets                                $  128,056   $  104,403


Current liabilities                           $   30,955   $   23,248

Refundable deposit (b)                             8,500       22,000

Long-term debt, net of current portion             9,035       9,105

Deferred revenues and other liabilities            2,441       1,486

Mandatorily redeemable convertible
 preferred stock                                   7,500       7,500

Stockholders' equity                              69,625      41,064

  Total liabilities and stockholders'
   equity                                     $  128,056   $  104,403

(a) Represents cash held as collateral for the $25 million revolving
    credit facility and term loan with Congress Financial.
(b) As of the date of this press release, we expect to pay the
    refundable deposit to Teva in IMPAX common stock.  In September
    2003, we issued 888,918 shares of common stock to Teva, paying
    $13.5 million of the original $22 million refundable deposit.
    CONTACT: IMPAX Laboratories, Inc.
             Barry R. Edwards, Co-CEO, 215-289-2220, Ext. 1771
             Larry Hsu, Ph.D., President, 510-476-2000, Ext. 1111
             Cornel C. Spiegler, CFO, 215-289-2220, Ext. 1706
             Lippert/Heilshorn & Associates, Inc.
             Kim Sutton Golodetz (, 212-838-3777
             Bruce Voss (, 310-691-7100

    SOURCE: IMPAX Laboratories, Inc.