Par Pharmaceutical Companies, Inc. Reports Third Quarter 2011 Results

WOODCLIFF LAKE, N.J., Nov. 2, 2011 /PRNewswire/ -- Par Pharmaceutical Companies, Inc. (NYSE: PRX) today reported results for the third quarter ended September 30, 2011.

For the third quarter ended September 30, 2011, the Company reported total revenues of $215.4 million, and income from continuing operations of $22.1 million, or $0.60 per diluted share, which includes $2.9 million of acquisition-related expenses. Excluding this item and associated tax impacts, adjusted income from continuing operations (non-GAAP measure) was $25.5 million. On an adjusted cash basis (non-GAAP measure), which excludes amortization expenses, income from continuing operations was $27.1 million, or $0.74 per diluted share for the third quarter 2011. (Please see attached reconciliation page.) This is compared to reported revenues of $234.4 million and adjusted cash basis income from continuing operations of $31.3 million, or $0.88 per diluted share for the same period in 2010.

For the nine months ended September 30, 2011, the Company reported total revenues of $672.5 million and a loss of $77.6 million from continuing operations, or $2.17 per diluted share, as aresult of a $190.6 million pre-tax litigation settlement expense in the first quarter, second quarter restructuring charges of $27.7 million, and the aforementioned transaction costs. On an adjusted cash basis (non-GAAP measure), income from continuing operations was $92.9 million, or $2.54 per diluted share. This compares to reported revenues of $781.8 million and income from continuing operations of $75.1 million, or $2.12 diluted share, for the same period in 2010. On an adjusted cash basis, income from continuing operations for the first nine months of 2010 was $82.7 million, or $2.34 per diluted share.

The following is a product level discussion of third quarter 2011 results versus the second quarter 2011:

Key Product Sales

  • Metoprolol: For the quarter ended September 30, 2011, net sales of metoprolol succinate were $67.5 million compared to net sales of $63.7 million in the second quarter 2011. The increase was due to customer buying patterns. Par Pharmaceutical, the Company’s generic drug division, is the authorized generic for all strengths of AstraZeneca’s Toprol XL®.
  • Budesonide EC: Net sales for budesonide EC in the third quarter were $20.6 million compared to $16.4 million in the second quarter, when the product was launched. Par Pharmaceutical is the authorized generic for AstraZeneca’s Entocort® EC.
  • Sumatriptan: Net sales of sumatriptan succinate were $16.8 million in the third quarter 2011 compared to $15.3 million in the second quarter 2011. The increase was due to customer buying patterns.
  • Propafenone Hydrochloride ER: Net sales for Propafenone Hydrochloride ER in the third quarter were $18.1 million compared to $13.3 million in the second quarter. The increase was driven by customer buying patterns following the first quarter 2011 launch of the product. Par Pharmaceutical remained the exclusive supplier of generic Rythmol SR® throughout the third quarter.
  • Amlodipine and Benazepril: Net sales for the third quarter 2011 were $4.5 million compared to $12.5 million in the second quarter. The decrease was driven by price and volume declines due to additional competition in the third quarter.
  • Meclizine: Net sales for the third quarter were $3.9 million compared to $4.6 million in the previous quarter. The decrease was driven by price and volume declines due to additional competition in the third quarter.
  • Other Generic Products: For the third quarter 2011, net sales from all other generic products were $64.2 million. This compares to net sales of $76.7 million in the second quarter 2011. The decrease is due to customer buying patterns and a decrease in royalty income.
  • Megace® ES: Net sales were $14.2 million for the third quarter compared to $14.1 million in the second quarter.
  • Nascobal® B12 Nasal Spray: Net sales were $4.7 million for the third quarter compared to $6.3 million in the second quarter. The decrease was due to primarily to increases in Medicaid rebates.

Revenues and gross margin for the third quarter 2011 were $215.4 million and $85.1 million, respectively, compared to $224.2 million in net sales and $99 million in gross margin during the prior quarter (Q2 2011). The gross margin rate on the Company’s consolidated product portfolio decreased to 39.5% versus 44.2% in the second quarter 2011. The decrease was due primarily to lower royalty income, a decrease in price and volume of amlodipine/benazepril, and an increase in sales of lower-margin budesonide EC.

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