CHADDS FORD, Pa., Oct. 29 /PRNewswire-FirstCall/ -- Endo Pharmaceuticals today reported financial results for the third quarter of 2009.
Total revenues during the third quarter of 2009 increased 14 percent to $361 million compared with $317 million in the third quarter of 2008. Net income for the three months ended September 30, 2009 was $49 million, compared with $66 million in the comparable 2008 period. As detailed in the supplemental financial information below, adjusted net income for the three months ended September 30, 2009 was $74 million, compared with $79 million in the same period in 2008. Reported diluted earnings per share for the three months ended September 30, 2009 were $0.42 compared with $0.55 in the third quarter of 2008. Adjusted diluted earnings per share for the three months ended September 30, 2009 were $0.63, compared with $0.66 in the same period in 2008.
Total revenues for the nine months ended September 30, 2009 were $1.07 billion, compared with $913 million in the comparable 2008 period. Reported diluted earnings per share for the nine months ended September 30, 2009 were $1.01 compared with $1.45 in the comparable period of 2008. Adjusted diluted earnings per share for the nine months ended September 30, 2009 were $2.04, compared with $1.74 in the same period in 2008.
“This is an exciting time for Endo Pharmaceuticals,” said Dave Holveck, president and CEO of Endo. “Our core business continues to exceed our expectations; we have successfully launched Valstar(TM) for bladder cancer this quarter, and we are planning for the launch of our long-acting injectable testosterone product, which will now be called Aveed(TM). We believe our third quarter performance, in conjunction with a solid outlook for the remainder of the year, warrants an increase in our revenue and earnings guidance. And we continue to actively pursue business development opportunities that will further diversify our top line in the years ahead.”
2009 Financial Guidance
The company is raising guidance for 2009 annual total revenues and adjusted diluted earnings per share. The company now estimates total revenues to be between $1.440 billion and $1.465 billion. The company also now estimates reported (GAAP) diluted earnings per share to be between $1.41 and $1.47, and this EPS increase is primarily due to changes in the fair value of contingent consideration associated with the Indevus transaction partially offset by the addition of milestone payments associated with the company’s recent deal with ProStrakan to in-license FORTESTA(TM). Adjusted diluted earnings per share are now estimated to be between $2.67 and $2.73. The company’s reported (GAAP) EPS guidance does not include any estimates for potential future changes in the fair value of contingent consideration or for potential new business development transactions. These items could have a significant impact on the actual reported diluted earnings per share in the future. A reconciliation of GAAP to non-GAAP calculations is attached to this press release.
Third Quarter Highlights
On September 3, VALSTAR(TM) became commercially available for the treatment of a distinct form of bladder cancer. VALSTAR represents a new treatment option for patients who may otherwise have exhausted all other FDA-approved treatment alternatives.
On September 24, Endo announced the final results of a cash tender offer by one of its wholly owned subsidiaries, for any and all outstanding Ledgemont PhaRMA(SM) Secured 16% Notes. This offer resulted in Endo’s acquiring $48 million of the $105 million aggregate principal amount that was outstanding and reflects the company’s ongoing efforts to manage its capital structure.
Selected Product Review
PAIN PRODUCTS
LIDODERM(R): For the quarter ended September 30, 2009, net sales of LIDODERM were $193 million comparable to $194 million in the same period a year ago. For the nine months ended September 30, 2009, net sales of LIDODERM were flat at $560 million compared with $560 million in the same period a year ago.
OPANA(R) ER and OPANA(R): Combined net sales for the OPANA franchise increased 42 percent to $59 million for the third quarter 2009 compared with $41 million in the same period a year ago. For the nine months ended September 30, 2009, combined net sales for the OPANA franchise increased 30 percent to $167 million compared with $128 million in the same period a year ago.
FROVA(R): Net sales of FROVA were $15 million for the three months ended September 30, 2009 compared with $14 million for the same period in 2008. Net sales of FROVA were $42 million for the nine months ended September 30, 2009 compared with $41 million for the same period in 2008.
Voltaren(R) Gel: Net sales of Voltaren Gel were $20 million for the three months ended September 30, 2009 compared with $10 million for the same period in 2008. Net sales of Voltaren Gel were $57 million for the nine months ended September 30, 2009 compared with $11 million for the same period in 2008.
ONCOLOGY/ENDOCRINOLOGY PRODUCTS
SUPPRELIN(R) LA: Net Sales of SUPPRELIN LA for the third quarter were $8 million. For the period from the acquisition date of Indevus until September 30, 2009, net sales of SUPPRELIN LA were $18 million.
VANTAS(R): Net Sales of VANTAS for the third quarter were $6 million. For the period from the acquisition date of Indevus until September 30, 2009, net sales of VANTAS were $14 million.
OTHER BRANDED PRODUCTS
For the third quarter of 2009, net sales of other branded products were $4 million compared with $3 million in the same period in 2008. For the nine months ended September 30, 2009, net sales of other branded products were $12 million compared with $8 million in the same period in 2008.
GENERIC AND NON-PROMOTED PRODUCTS
For the third quarter of 2009, net sales from the company’s generic products were $23 million compared with $22 million in the same period in 2008. Net sales of Percocet(R) were $31 million for the three months ended September 30, 2009, which is comparable to net sales of Percocet(R) in the same period in 2008. For the nine months ended September 30, 2009, net sales from the company’s generic products were $96 million compared with $68 million in the same period in 2008. During the first half of 2009, the company benefitted from a market dislocation in the supply for certain generic products. Market conditions have now essentially normalized for these products. Net sales of Percocet(R) were $96 million for the nine months ended September 30, 2009, comparable to $97 million in the same period in 2008.
Conference Call Information
Endo will conduct a conference call with financial analysts to discuss this news release today at 9:00 a.m. ET. Investors and other interested parties may call 800-798-2884 (domestic) or 617-614-6207 (international) and enter code 12555118. Please dial in 10 minutes prior to the scheduled start time.
A replay of the call will be available from October 29 at 12:00 p.m. ET until 12:00 a.m. ET on November 4 by dialing 888-286-8010 (domestic) or 617-801-6888 (international) and enter code 66458151.
A simultaneous webcast of the call may be accessed by visiting www.endo.com. In addition, a replay of the webcast will be available until 12:00 a.m. ET on November 4. The replay can be accessed by clicking on “Events” in the Investor Relations section of the website.
Supplemental Financial Information
The following tables provide a reconciliation of our reported (GAAP) statements of operations to our adjusted statements of operations for each of the three months ended September 30, 2009 and September 30, 2008 (Certain prior period amounts have been adjusted to reflect the retrospective adoption of FSP APB 14-1 and to conform to the current period presentation) (in thousands, except per share data):
Notes to reconciliation of our GAAP statements of operations to our adjusted statements of operations:
Notes to reconciliation of our GAAP statements of operations to our adjusted statements of operations:
The following tables provide a reconciliation of our reported (GAAP) statements of operations to our adjusted statements of operations for each of the nine months ended September 30, 2009 and September 30, 2008 (Certain prior period amounts have been adjusted to reflect the retrospective adoption of FSP APB 14-1 and to conform to the current period presentation) (in thousands, except per share data):
Notes to reconciliation of our GAAP statements of operations to our adjusted statements of operations:
Notes to reconciliation of our GAAP statements of operations to our adjusted statements of operations:
For an explanation of Endo’s reasons for using non-GAAP measures, see Endo’s Current Report on Form 8-K filed today with the Securities and Exchange Commission.
About Endo
Endo Pharmaceuticals is a specialty pharmaceutical company engaged in the research, development, sale and marketing of branded and generic prescription pharmaceuticals used to treat and manage pain, prostate cancer and the early onset of puberty in children, or central precocious puberty (CPP). Its products include LIDODERM(R), a topical patch to relieve the pain of postherpetic neuralgia; Percocet(R) and Percodan(R) tablets for the relief of moderate-to-moderately severe pain; FROVA(R) tablets for the acute treatment of migraine attacks with or without aura in adults; OPANA(R) tablets for the relief of moderate-to-severe acute pain where the use of an opioid is appropriate; OPANA(R) ER tablets for the relief of moderate-to-severe pain in patients requiring continuous, around-the-clock opioid treatment for an extended period of time; Voltaren(R) Gel, which is owned and licensed by Novartis AG, a nonsteroidal anti-inflammatory drug indicated for the relief of the pain of osteoarthritis of joints amenable to topical treatment, such as those of the hands and the knees; VANTAS(R) for the palliative treatment of advanced prostate cancer; SUPPRELIN(R) LA for the treatment of early onset puberty in children; and VALSTAR(TM) for the treatment of BCG-refractory carcinoma in situ (CIS) of the urinary bladder in patients for whom immediate cystectomy would be associated with unacceptable medical risks. The company markets its branded pharmaceutical products to physicians in pain management, urology, endocrinology, oncology, neurology, surgery and primary care. More information, including this and past press releases of Endo Pharmaceuticals, is available at www.endo.com.
The following tables present Endo’s unaudited Total Revenues for the three months ended September 30, 2009 and September 30, 2008:
The following tables present Endo’s unaudited Total Revenues for the nine months ended September 30, 2009 and September 30, 2008:
The following table presents condensed consolidated cash flow data for the nine months ended September 30, 2009 and September 30, 2008:
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding, among other things, the company’s financial position, results of operations, market position, product development and business strategy, as well as estimates of future net sales, future expenses, future net income and future earnings per share. Statements including words such as “believes,” “expects,” “anticipates,” “intends,” “estimates,” “plan,” “will,” “may,” “intend,” “guidance” or similar expressions are forward-looking statements. Because these statements reflect our current views, expectations and beliefs concerning future events, these forward-looking statements involve risks and uncertainties. Investors should note that many factors could affect our future financial results and could cause our actual results to differ materially from those expressed in forward-looking statements contained in this press release. These factors include, but are not limited to: the possibility that the acquisition of Indevus is not complementary to Endo; the inherent uncertainty of the timing and success of, and expense associated with, research, development, regulatory approval and commercialization of our products and pipeline products; competition in our industry, including for branded and generic products, and in connection with our acquisition of rights to assets, including intellectual property; government regulation of the pharmaceutical industry; our dependence on a small number of products and on outside manufacturers for the manufacture of our products; our dependence on third parties to supply raw materials and to provide services for certain core aspects of our business; new regulatory action or lawsuits relating to our use of controlled substances in many of our core products; our exposure to product liability claims and product recalls and the possibility that we may not be able to adequately insure ourselves; our ability to protect our proprietary technology; our ability to successfully implement our in-licensing and acquisition strategy; the availability of third-party reimbursement for our products; the outcome of any pending or future litigation or claims by the government; our dependence on sales to a limited number of large pharmacy chains and wholesale drug distributors for a large portion of our total net sales; a determination by a regulatory agency that we are engaging in inappropriate sales or marketing activities, including promoting the “off-label” use of our products; the loss of branded product exclusivity periods and related intellectual property; and exposure to securities that are subject to market risk including auction-rate securities the market for which is currently illiquid; and other risks and uncertainties, including those detailed from time to time in our periodic reports filed with the Securities and Exchange Commission, including our current reports on Form 8-K, quarterly reports on Form 10-Q and annual reports on Form 10-K, particularly the discussion under the caption “Item 1A, RISK FACTORS” in our annual report on Form 10-K for the year ended December 31, 2008, which was filed with the Securities and Exchange Commission on March 2, 2009. The forward-looking statements in this press release and on the related conference call are qualified by these risk factors. These are factors that, individually or in the aggregate, we think could cause our actual results to differ materially from expected and historical results. We assume no obligation to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise.
CONTACT: Investors/Media, Blaine Davis, +1-610-459-7158, Media, Kevin
Wiggins, +1-610-459-7281, Investors, Jonathan Neely, +1-610-459-6645
Web site: http://www.endo.com/
