WOODCLIFF LAKE, N.J., Aug. 4 /PRNewswire-FirstCall/ -- Par Pharmaceutical Companies, Inc. today reported results for the second quarter ended June 27, 2009.
For the second quarter ended June 27, 2009, Par reported total revenues of $404.0 million and net income of $23.8 million, or $0.71 per diluted share, which included a one-time gain related to the acquisition of certain assets of MDRNA’s Hauppauge, NY facility. Adjusting for this item, earnings per diluted share were $0.65 for the three month period ended June 27, 2009. This is compared to reported revenues of $112.9 million and a net loss of $21.2 million, or $0.64 loss per diluted share for the same period in 2008, which included a one-time development milestone payment to a partner. Adjusting for this item, loss per diluted share was $0.61 for the three month period ended June 28, 2008.
For the six months ended June 27, 2009, total revenue was $608.0 million with net income of $39.9 million, or $1.18 per diluted share. This is compared to total revenues of $267.9 million and a net loss of $19.8 million, or $0.60 per diluted share in the same period of 2008.
Second Quarter Highlights
Key Product Sales (Net sales comparisons at the product level are to first quarter 2009)
Total net revenues for the three months ended June 27, 2009, were $404 million, up $291 million, or nearly 258%, from the year ago period, principally driven by the lack of competition in metoprolol succinate and meclizine, as well as the launches of sumatriptan injection and dronabinol in the second half of 2008.
Gross margin for the second quarter 2009 was $86.4 million, or 21.4% of total revenue, an increase of $61.3 million from the comparable period in 2008. Total generic gross margin in the second quarter 2009 was $70.7 million, or 18.5% of total generic revenue, compared to $9.2 million, or 9.9% of total generic revenue in the second quarter 2008. This increase is due primarily to higher sales of metoprolol and meclizine and the launches of sumatriptan and dronabinol. These four products contributed $52.5 million of gross margin, or 15.3% of such generic revenue. Gross margin of all other generic products was approximately $18.2 million, or 46% of other generic revenue. This compares to $5.4 million, or 10.0% of other generic revenue, in the second quarter of 2008. The increase in gross margin percentage was due to the trimming of the generic product line as part of the resizing of Par’s generic division in the fourth quarter of 2008. Strativa’s gross margin of $15.7 million, or 72% of total Strativa revenue, decreased compared to the second quarter of 2008 due to lower sales of Megace(R) ES.
Research and development (R&D) expenses decreased 63% to $5.9 million in the second quarter of 2009 compared to the second quarter 2008 due primarily to the resizing of the generic division, which included a headcount reduction and lower development and biostudy costs.
Selling, general and administrative (SG&A) expenses for the second quarter 2009 increased to $44.1 million compared to $36.7 million in the second quarter 2008. The increase reflects an increase of $6.8 million related to on-going expenditures supporting Strativa sales and marketing, driven primarily by an increase in the field force and other activities in preparation for the re-launch of Nascobal B12 Nasal Spray, as well as development costs of other products.
Cash and cash equivalents and marketable securities aggregate balance as of June 27, 2009, was $202.3 million and reflects significant one-time cash outflows related to the purchase of Nascobal B12 Nasal Spray (approximately $55 million), the year-to-date repurchase of $13.8 million face value of Par’s convertible debt at a discount and, as previously reported in the first quarter, the settlement of litigation with Pentech (approximately $66 million).
Face Value of Convertible Debt as of June 27, 2009, was $128.2 million. An additional $35.5 million in convertible debt was repurchased subsequent to the balance sheet date at a discount. The face value of convertible debt currently stands at $92.7 million and matures on September 30, 2010, unless earlier converted or repurchased.
Product and Pipeline Update
Strativa’s New Drug Application (NDA) for ondansetron orally dissolving film strip (ODFS) has been accepted by the FDA for review. Pursuant to Prescription Drug User Fee Act (PDUFA), Strativa expects the FDA will complete its review by February 7, 2010. If approved, ondansetron ODFS could launch by mid-2010.
BioAlliance Pharma, Strativa’s development partner for miconazole, mucoadhesive bucccal tablets (MBT), which is marketed under the brand name Loramyc(R) in Europe, submitted its NDA to the FDA. Pursuant to PDUFA, BioAlliance expects the FDA will complete its review by second quarter 2010. If approved, Strativa could launch the product in the second half of 2010.
Par successfully launched five strengths of risperidone ODT, a generic version of Risperdal(R) M-TAB, during the second quarter, and was the exclusive supplier of .25mg, 3mg and 4mg strengths of the product during the period. Risperdal M-TAB had $108.0 million in annual sales in 2008 according to IMS Health.
Par also launched calcitonin-salmon nasal spray, the generic version of Miacalcin(R), during the quarter. Annual U.S. sales of Miacalcin were approximately $104 million in 2008, according to IMS Health.
Par currently has approximately 37 ANDAs pending with the FDA, 14 of which Par believes to be first-to-file and/or first-to-market opportunities with a brand value of approximately $5.9 billion.
Conference Call
Par has scheduled a conference call for Tuesday, August 4 at 9:00 am EDT to discuss results for the second quarter of 2009. Par invites investors and the general public to listen to a webcast of the conference call. Access to the live webcast can be made via the Company’s website at http://www.parpharm.com and will be available for two weeks. The dial-in number is 866-788-0539 for domestic callers and 857-350-1677 for international callers. The access number is 40463383. A replay of the conference call will be available commencing approximately one hour after the call. The replay dial-in number is 888-286-8010 for domestic callers and 617-801-6888 for international callers. The access number is 95297063.
Non-GAAP Measures
Par believes it prepared its condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) and pursuant to accounting requirements of the Securities and Exchange Commission applicable to quarterly reports on Form 10-Q. In an effort to provide investors with additional information regarding Par’s results and to provide a meaningful period-over-period comparison of Par’s financial performance, the Company sometimes uses non-GAAP financial measures as defined by the Securities and Exchange Commission. The differences between the U.S. GAAP and non-GAAP financial measures are reconciled in an attached schedule. In presenting comparable results, the Company discloses non-GAAP financial measures when it believes such measures will be useful to investors in evaluating Par’s underlying business performance. Management uses the non-GAAP financial measures to evaluate Par’s financial performance against internal budgets and targets. In addition, management internally reviews Par’s results excluding the impact of certain items, as it believes that these non-GAAP financial measures are useful for evaluating Par’s core operating results and facilitating comparison across reporting periods. Importantly, Par believes non-GAAP financial measures should be considered in addition to, and not in lieu of, U.S. GAAP financial measures. Par’s non-GAAP financial measures may be different from non-GAAP financial measures used by other companies.
About Par
Par Pharmaceutical Companies, Inc. develops, manufactures and markets generic drugs and innovative branded pharmaceuticals for specialty markets. For press release and other company information, visit www.parpharm.com.
Safe Harbor Statement
Certain statements in this news release constitute “forward-looking statements” within the meaning of 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 essentially forward-looking and, as such, are subject to known and unknown risks, uncertainties and contingencies, many of which are beyond the control of the Company, which could cause actual results and outcomes to differ materially from those expressed herein. Risk factors that might affect such forward-looking statements include those set forth in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, in other of the Company’s filings with the SEC from time to time, including Current Reports on Form 8-K, and on general industry and economic conditions. Any forward-looking statements included in this news release are made as of the date hereof only, based on information available to the Company as of the date hereof, and, subject to any applicable law to the contrary, the Company assumes no obligation to update any forward-looking statements.
SOURCE Par Pharmaceutical Companies, Inc.
CONTACT: Allison Wey, Senior Director, Investor Relations and Corporate
Affairs of Par Pharmaceutical Companies, Inc., +1-201-802-4000
Web site: http://www.parpharm.com/
