American Pharmaceutical Partners Announces Record Quarterly Sales Of $128.8 Million
SCHAUMBURG, Ill., Nov. 1 /PRNewswire-FirstCall/ -- American Pharmaceutical Partners, Inc. today reported record quarterly net sales of $128.8 million for the third quarter ended September 30, 2005, a 35% increase over net sales of $95.6 million in the 2004 third quarter. Third quarter 2005 results included net sales of ABRAXANE(TM) of $32.1 million. For the base injectable products, third quarter net sales increased to $96.7 million compared with $95.6 million in the same quarter last year, despite the extended upgrade and subsequent re-validation process for the Melrose Park, IL facility.
Net sales for the nine-month period ended September 30, 2005, increased 32% to $374.0 million versus $282.5 million in the comparable period last year. Year-to-date 2005 results included ABRAXANE net sales of $86.3 million.
Net income in the 2005 third quarter was $18.2 million, or $0.25 per diluted share, versus $13.8 million, or $0.19 per diluted share, in the prior year period. Third quarter 2005 results were impacted by selling, general and administrative expenses of $5.9 million, or $0.05 per diluted share, incurred by the company for third party advisory fees and costs of $9.7 million, or $0.09 per diluted share included in cost of sales, related to the extended Melrose Park re-validation process. The 2004 third quarter included $2.0 million, or $0.02 per diluted share in costs resulting from the early termination of a credit facility. ABRAXANE-related operating expenses in the 2005 third quarter totaled $12.9 million and $42.5 million in the year-to-date period versus $10.1 million and $40.4 million in the respective 2004 periods.
Cash and short-term investments totaled $61.1 million at September 30, 2005 and currently approximate $80.0 million.
"We are pleased with the ongoing strength of the base injectable business. After an extended re-validation process, the Melrose Park facility is scheduled to resume full production in November," said Al Heller, the company's president and chief executive officer. "In the third quarter, our Swiss facility was inspected by the Swiss Medic, the Swiss version of our FDA. We expect to initiate production in the fourth quarter. We also are pleased with the issuance of a unique J-code for ABRAXANE, which will become effective on January 1, 2006 and facilitate reimbursement from Medicare, Medicaid as well as private payors."
Patrick Soon-Shiong, M.D., executive chairman, said, "We are encouraged by the pace of market penetration for ABRAXANE. Since August, a significant body of work regarding ABRAXANE has been published in the Journal of Clinical Oncology (JCO), a prestigious peer-reviewed journal widely read by oncologists. These publications, three editorials and three trial results, include reporting of the Phase II results in first line metastatic breast cancer, the pivotal Phase III trial in metastatic breast cancer and the report on activity in lung and ovarian cancer following weekly dosing of ABRAXANE. The importance of the pivotal data upon which ABRAXANE was approved was underscored by an accompanying editorial, as well as the decision by JCO to publish early the results online."
Three presentations pertaining to ABRAXANE will be made at the upcoming Chemotherapy Foundation Symposium in New York, November 3-4, 2005 at the Marriott Marquis Hotel, titled:
* Experience with ABRAXANE in Head and Neck Cancers * Phase I/II Study of ABRAXANE in Chemotherapy-naive, Advanced Non-small Cell Lung Cancer * Open-Label, Multicenter, Phase II trial of ABRAXANE in Previously Treated and Chemotherapy Naive Patients with Metastatic Malignant Melanoma
The U.S. Food and Drug Administration approved ABRAXANE(TM) (formerly ABI-007) in January 2005 for the treatment of breast cancer after failure of combination chemotherapy for metastatic disease or relapse within six months of adjuvant chemotherapy. Prior therapy should have included an anthracycline unless clinically contraindicated. For the full prescribing information for ABRAXANE(TM) please visit www.abraxane.com.
2005 Outlook -- Forward Looking Information The company updated its 2005 full year guidance, as follows: * Net sales in the base injectable business is expected to be in the range of $380-$400 million for 2005, accounting for the extended re-validation process at Melrose Park; * Net sales of ABRAXANE are expected to be in the range of $125 million to $140 million; * Gross margin is anticipated to be in the upper-50 percent range, after any ABRAXANE profit sharing and including approximately $15 million in incremental expense for the full year related to the Melrose Park upgrade and extended re-validation; * Expenses related to ABRAXANE are expected to be in the range of $55-$60 million for all of 2005. Conference Call Information and Forward-Looking Statements
On Tuesday, November 1, 2005, the company will host a conference call with interested parties beginning at 10:00 a.m. (EST) to review the results of operations for the third quarter ended September 30, 2005. Discussion during the conference call may include forward-looking statements regarding such topics as, but not limited to, the company's revenues, margins, operating expenses, distribution arrangements, clinical or FDA developments, and any comments the company may make about its future in response to questions from participants on the conference call. The conference call may be heard by any interested party through a live audio Internet broadcast at www.appdrugs.com and www.earnings.com. For those unable to listen to the live broadcast, a playback of the webcast will be available at both Web sites for one year beginning shortly after the conclusion of the call.
About American Pharmaceutical Partners, Inc.
American Pharmaceutical Partners, Inc. is a specialty drug company that develops, manufactures and markets injectable pharmaceutical products, focusing on the oncology, anti-infective and critical care markets. Abraxis Oncology, the proprietary division of APP, is devoted entirely to developing and promoting innovative, next-generation cancer therapies such as ABRAXANE(TM), recently launched for the treatment of metastatic breast cancer. For more information, visit APP's website at www.appdrugs.com and www.abraxisoncology.com.
Because these forward-looking statements, whether expressed or implied, involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those in the forward-looking statements. These factors include, without limitation, the timing of completing the re-validation process at the Melrose Park and Swiss facilities, the adverse impact to production delays on the sales and marketing of our products and the timing of and costs associated with the ongoing launch of ABRAXANE(TM), the market adoption and demand of ABRAXANE, the fact that actual results achieved in further Phase II and III trials for ABRAXANE may or may not be consistent with results achieved to date, the difficulty in predicting the timing or outcome of other product research and development efforts, potential product characteristics and indications, marketing approvals and launches of other products, the impact of pharmaceutical industry regulation, the impact of competitive products and pricing, the availability and pricing of ingredients used in the manufacture of pharmaceutical products, the ability to successfully manufacture products in a time-sensitive and cost effective manner, the acceptance and demand of new pharmaceutical products, the impact of patents and other proprietary rights held by competitors and other third parties. Additional relevant information concerning risks can be found in our Form 10-K for the year ended December 31, 2004 and other documents filed by us with the Securities and Exchange Commission.
Contacts: American Pharmaceutical Partners, Inc. Nicole Williams Chief Financial Officer (888) 391-6300 Robert Jaffe/Rob Whetstone PondelWilkinson Inc. (310) 279-5963 AMERICAN PHARMACEUTICAL PARTNERS, INC. CONSOLIDATED STATEMENTS OF INCOME (unaudited, in thousands, except per share amounts) Three months ended Nine months ended September 30, September 30, % % 2005 2004 Change 2005 2004 Change Net sales $128,794 $95,614 35% $373,984 $282,456 32% Cost of sales 63,295 43,915 44% 164,185 133,229 23% Gross profit 65,499 51,699 27% 209,799 149,227 41% Percent to sales 50.9% 54.1% 56.1% 52.8% Operating expenses: Research and development 8,155 7,406 22,446 21,346 Selling, general and administrative 31,612 21,693 92,243 65,583 Milestone payment -- -- -- 10,000 Other (190) (578) (799) (1,341) Total operating expenses 39,577 28,521 39% 113,890 95,588 19% Percent to sales 30.7% 29.8% 30.5% 33.8% Income from operations 25,922 23,178 12% 95,909 53,639 79% Percent to sales 20.1% 24.2% 25.6% 19.0% Other income, net 702 581 1,748 1,334 Loss on early extinguishment of credit facility -- (1,986) -- (1,986) Income before income taxes 26,624 21,773 22% 97,657 52,987 84% Income tax expense 8,386 7,960 34,668 18,160 Net income $18,238 $13,813 32% $62,989 $34,827 81% Net income per share: Basic $0.25 $0.20 $0.88 $0.50 Diluted $0.25 $0.19 $0.85 $0.48 Weighted - average common shares outstanding: Basic 72,158 70,399 71,636 70,234 Diluted 74,105 73,025 74,041 73,127 AMERICAN PHARMACEUTICAL PARTNERS, INC. CONSOLIDATED BALANCE SHEETS (in thousands) September 30, December 31, 2005 2004 ASSETS (Unaudited) (Audited) Current assets: Cash and cash equivalents $29,861 $1,154 Short-term investments 31,285 66,475 Accounts receivable, net 38,597 15,457 Inventory, net 171,656 151,035 Prepaid expenses and other 13,483 6,492 Deferred income taxes 12,825 12,825 Total current assets 297,707 253,438 Property, plant and equipment, net 136,106 106,410 Other assets 27,075 13,485 Total assets $460,888 $373,333 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $19,778 $22,247 Accrued expenses 35,638 35,562 Total current liabilities 55,416 57,809 Long-term deferred income tax liability 2,833 2,833 Total liabilities 58,249 60,642 Stockholders' Equity Common stock 79 77 Additional paid-in capital 238,889 212,399 Amounts due from American BioScience, Inc. (22,878) (21,603) Deferred stock-based compensation (1,653) (2,385) Retained earnings 243,232 180,243 Accumulated other comprehensive income 1,244 234 Less treasury stock, at cost (56,274) (56,274) Total stockholders' equity 402,639 312,691 Total liabilities and stockholders' equity $460,888 $373,333
American Pharmaceutical Partners, Inc.CONTACT: Nicole Williams, Chief Financial Officer of AmericanPharmaceutical Partners, Inc., +1-888-391-6300; or Robert Jaffe or RobWhetstone, both of PondelWilkinson Inc., +1-310-279-5963, for AmericanPharmaceutical Partners, Inc.