Albany Molecular Research, Inc. Posts 54% Increase in Contract Revenue, 51% Increase in Net Income in Second Quarter.Business Editors ALBANY, N.Y.--(BUSINESS WIRE)--Aug. 7, 2001 Albany Molecular Research, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : AMRI AMRI Albany Molecular Research (stock symbol) AMRI Advanced Magnetic Research Institute (Mocksville, NC) AMRI Advanced Materials Research Institute AMRI Adult Movie Review Index ) today reported financial results for the quarter and six-month period ending June 30, 2001. Second Quarter 2001 Earnings Total revenue for the second quarter of 2001 increased by $7.7 million, or 46%, to $24.2 million, compared to $16.6 million during the same period last year. Net contract revenue for the second quarter of 2001 increased by 54% to $13.6 million, compared to net contract revenue of $8.8 million during the second quarter of 2000. The quarter ended June 30, 2001 is the 18th consecutive quarter in which the company's contract revenue has increased. Recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. royalties for the second quarter of 2001 were $10.6 million, a 38% increase over recurring royalties of $7.7 million in the second quarter of 2000. AMRI earns royalties from worldwide sales of the non-sedating antihistamine antihistamine (ăn'tĭhĭs`təmēn), any one of a group of compounds having various chemical structures and characterized by the ability to antagonize the effects of histamine. Allegra Al·leg·ra A trademark for the drug fexofenadine hydrochloride. fexofenadine hydrochloride Allegra, Telfast (UK) Pharmacologic class: Peripherally selective piperidine, selective histamine (R) (Telfast(R) outside the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. ) for patents relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the active ingredient An active ingredient, also active pharmaceutical ingredient (or API), is the substance in a drug that is pharmaceutically active. Some medications may contain more than one active ingredient. in Allegra. Net income for the second quarter of 2001 increased by $3.0 million, or 51%, to $8.9 million, or $0.26 per share on a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis, as compared to net income for the second quarter of 2000 of $5.9 million, or $0.19 per share on a diluted basis. Year-to-Date Total revenue for the six-month period ending June 30, 2001 increased by $15.3 million, or 51% to $45.4 million, compared to total revenue of $30.1 million during the same period in 2000. Net contract revenue for the first six months of 2001 increased 56% to $26.0 million, compared to net contract revenue of $16.7 million for the comparable period in 2000. Recurring royalty revenue for the first half of 2001 increased by 45% to $19.4 million, compared to recurring royalty revenue of $13.4 million during the first half of 2000. Net income for the six-month period ending June 30, 2001 was $16.7 million, or $0.49 per share on a diluted basis, representing a 62% increase compared to net income during the first half of 2000. Net income for the comparable period in 2000 was $10.3 million, or $0.33 on a diluted basis. Total revenue at Organichem Corporation, an unconsolidated affiliate of AMRI, were $18.5 million in the second quarter of 2001 and $34.8 million for the six-month period ending June 30, 2001. As a minority shareholder, AMRI does not include these revenues in its total revenues stated above. "The fundamentals of our business remain solid," said AMRI Chairman and Chief Executive Officer Thomas E. D'Ambra, Ph.D. "We continue to see strong demand in new business, and have experienced a strengthening of relationships with several customers." During the second quarter of 2001, AMRI added ten new customers, renewed or expanded an additional nine contracts, and added a net of 11 scientists. In addition, 57 scientists have accepted positions and will begin employment during the remainder of 2001. The total number of employees at AMRI's five locations at the end of June 2001 was 400, including 275 scientists. Earnings Guidance AMRI Chief Financial Officer David P. Waldek provided updated guidance and EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. estimates for 2001. Said Mr. Waldek, "We are slightly revising our EPS guidance for the full year of 2001 upwards to a range of $0.97 to $0.99 per diluted share from a range of $0.96 to $0.98 per diluted share. For the third quarter of 2001, our EPS guidance is from $0.24 to $0.25 per diluted share." Allegra Developments Sales of Allegra continued to grow during the second quarter of 2001. Recurring royalties from Allegra sales are a key short-term driver of AMRI revenue. Worldwide sales of Allegra were approximately $400 million in the second quarter of 2001, a 41% increase from the second quarter of last year. Worldwide sales of Allegra for the six-month period ending June 30, 2001 were approximately $750 million, a 50% increase over the comparable period last year. In a press release on August 2, 2001, Aventis announced that on August 1, 2001, Aventis Pharmaceuticals, the U.S. pharmaceutical business of Aventis, filed a lawsuit against Barr Laboratories, Inc., in U.S. District Court in New Jersey alleging infringement of certain U.S. patents related to fexofenadine HCl, which Aventis Pharmaceuticals markets in the U.S. under the brand name Allegra(R). This was in response to notification from Barr Laboratories that it had filed an Abbreviated New Drug Application abbreviated new drug application Pharmacology An application made in the US by a pharmaceutical company requesting authority to market a 'new' drug for which both its therapeutic indications and formulation were previously approved by the FDA in another similar (ANDA ANDA abbr. abbreviated new drug application ) with the U.S. Food and Drug Administration (FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. ) seeking authorization to produce and market a generic version of fexofenadine HCl 60 mg capsules. In its press release, Aventis stated that in the U.S., it holds multiple, enforceable method of use, formulation formulation /for·mu·la·tion/ (for?mu-la´shun) the act or product of formulating. American Law Institute Formulation , process and composition patents with respect to Allegra. AMRI earns royalty revenue from worldwide sales of Allegra resulting from a 1995 licensing agreement with Aventis. Under its arrangements with Aventis, Albany Molecular will receive royalties until expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created of its underlying patents or until they are earlier determined to be invalid and/or unenforceable Adj. 1. unenforceable - not enforceable; not capable of being brought about by compulsion; "an unenforceable law"; "unenforceable reforms" enforceable - capable of being enforced . Under applicable federal law, marketing of an FDA-approved generic capsule capsule In botany, a dry fruit that opens when ripe. It splits from top to bottom into separate segments known as valves, as in the iris, or forms pores at the top (e.g., poppy), or splits around the circumference, with the top falling off (e.g., pigweed and plantain). at minimum may not commence unless and until a decision favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. to Barr Laboratories is rendered in any patent litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. or until 30 months have elapsed e·lapse intr.v. e·lapsed, e·laps·ing, e·laps·es To slip by; pass: Weeks elapsed before we could start renovating. n. , whichever comes first. Aventis has also stated that on July 30, 2001, Aventis Pharmaceuticals received notice that Barr Laboratories had filed another ANDA with the FDA seeking authorization to produce and market a generic version of fexofenadine HCl tablets. Aventis indicated that it is currently in the process of analyzing this situation. As noted above, if a patent infringement patent infringement n. the manufacture and/or use of an invention or improvement for which someone else owns a patent issued by the government, without obtaining permission of the owner of the patent by contract, license or waiver. suit is brought by Aventis against Barr relating to the ANDA for the tablets, marketing of an FDA-approved generic tablet See digitizer tablet and tablet computer. TABLET - A query language. ["Human Factor Comparison of a Procedural and a Non-procedural Query Language", C. Welty et al, ACM Trans Database Sys 6(4):626-649 (Dec 1981)]. at minimum may not commence unless and until a decision favorable to Barr Laboratories is rendered in the litigation or until 30 months have elapsed, whichever is first. In addition, Aventis stated that the tablet formulations are protected by regulatory exclusivity until the first quarter of 2003. Dr. D'Ambra commented, "Aventis is taking the lead in preparing and executing a strategy to defend and enforce the intellectual property rights that exist with respect to Allegra. We strongly support their efforts to date and will continue to assist them in defending and enforcing those rights." Also related to Allegra during the second quarter, on May 11, 2001, an FDA advisory panel recommended that the prescription allergy allergy, hypersensitive reaction of the body tissues of certain individuals to certain substances that, in similar amounts and circumstances, are innocuous to other persons. Allergens, or allergy-causing substances, can be airborne substances (e.g. drugs Claritin, Allegra and Zyrtec are safe enough to be made available over-the-counter (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). ). The panel had been assembled as a result of a 1998 petition by Blue Cross of California (now Wellpoint Health Networks) requesting that the three top-selling prescription antihistamines Antihistamines Definition Antihistamines are drugs that block the action of histamine (a compound released in allergic inflammatory reactions) at the H1 be switched to OTC status. The FDA panel's only consideration was whether Claritin, Allegra and Zyrtec have the safety profile for over-the-counter use without a learned intermediary Intermediary See: Financial intermediary intermediary See financial intermediary. . The panel's recommendation is under consideration by the full FDA. In a news release issued after the FDA panel's recommendation, Aventis announced its disagreement with the recommendation. Francois Nader, M.D., senior vice president, medical and regulatory affairs Regulatory Affairs (RA), also called Government Affairs, is a profession within regulated industries, such as pharmaceuticals, medical devices, energy, and banking. Regulatory Affairs professionals usually have responsibility for the following general areas: v. il·lu·mi·nat·ed, il·lu·mi·nat·ing, il·lu·mi·nates v.tr. 1. To provide or brighten with light. 2. To decorate or hang with lights. 3. the complexity of this issue and the types of concerns that the FDA will now need to consider." Dr. Nader also remarked that "the substance of the panel's debate pointed to the need for further evaluation of the likely impact of a switch on patients." Regardless of any FDA decision, AMRI will continue to receive royalties on all sales of Allegra, including over-the-counter sales, until expiration of its underlying patents or until they are earlier determined to be invalid and/or unenforceable. Additional Information At June 30, 2001, AMRI had cash, cash equivalents and investments of $142.8 million, compared to $152.0 million at December 31, 2000. The net decrease of $9.2 million in cash, cash equivalents and investments in the first six months of 2001 was due primarily to the $23.0 million purchase of Seattle-based New Chemical Entities, Inc. and $5.0 million in purchases of property, plant and equipment, offset by cash generated from operations and $5.7 million in low-interest Industrial Development Agency financing. Net interest income was $1.7 million for the three-month period ending June 30, 2001, compared to $0.6 million during the comparable period in 2000. The increase was due primarily to higher cash balances resulting from the company's follow-on offering Follow-On Offering An offering of additional shares after a company has had an initial public offering. Notes: This sometimes means the company is strapped for cash. So they need to issue more shares to pay bills or finance a new project. in October 2000. Total shares outstanding at June 30, 2001 were 33,104,290. During the second quarter, AMRI placed seventh on Business Week magazine's list of the Top 100 Hot Growth Companies for 2001, marking the second consecutive year that AMRI has been among the top ten companies on the national list. Rankings are based on each company's three-year results in key areas: sales growth, earnings growth, and return on invested capital. Business Week reported for AMRI a three-year average sales increase of 79.6%, three-year average profit increase of 107.9%, and return on invested capital of 25.5%. AMRI was listed fourth on the 2000 list of Business Week's Hot Growth Companies. AMRI also recently placed third in the Capital District Business Review's list of the Albany area's best private sector employers. Rankings are based on a weighted scale that includes such factors as employee health insurance costs, turnover rate, retirement contributions and other benefits. AMRI recently strengthened its leadership team by electing prominent physicist and university administrator Shirley Ann Jackson, Ph.D., to its Board of Directors. Dr. Jackson, a former chairman of the U.S. Nuclear Regulatory Agency regulatory agency Independent government commission charged by the legislature with setting and enforcing standards for specific industries in the private sector. The concept was invented by the U.S. , university professor and researcher at AT&T Bell Laboratories, currently serves as president of Rensselaer Polytechnic Institute Rensselaer Polytechnic Institute, at Troy, N.Y.; coeducational; founded and opened 1824 as Rensselaer School; chartered 1826. It was called Rensselaer Institute from 1837 to 1861. in Troy, NY. She joined AMRI's Board in July. Dr. D'Ambra added, "Although the second quarter saw the emergence of two challenges to Aventis' Allegra products, AMRI had the strongest quarter in its history. From financial performance to customer satisfaction to business development to recruiting, all signs continue to point to a continued strengthening of our core operations. We are pleased by our continued growth and progress. I want to thank the employees at AMRI for their continued high quality efforts and strong commitment to excellence." Second Quarter Conference Call The company will hold a conference call at 4:30 p.m. Eastern Time on August 7, 2001 to discuss its quarterly results and business highlights. Individuals interested in listening to the conference call should dial 800-450-0785 (for domestic calls) or 612-332-0932 (for international calls) at 4:15 p.m. and reference the AMRI Second Quarter 2001 Earnings Release conference call. Replays of the call will be available for seven days following the call beginning at 9:45 p.m. on August 7, 2001. To access the replay by telephone, please call 800-475-6701 (for domestic calls) or 320-365-3844 (for international calls) and use access code # 595444. Albany Molecular Research, Inc. is a chemistry-based drug discovery and development company, focusing on applications for new small molecule prescription drugs prescription drug Prescription medication Pharmacology An FDA-approved drug which must, by federal law or regulation, be dispensed only pursuant to a prescription–eg, finished dose form and active ingredients subject to the provisos of the Federal Food, Drug, . The company conducts R&D projects and collaborates with many leading pharmaceutical, biotechnology and genomics companies, and is developing new chemistry technology for potential prescription drug applications. Statements in this press release that are not historical facts are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 that involve risks and uncertainties. These statements include, but are not limited to, statements regarding (i) the company's earnings guidance for the third quarter 2001 and for the full year 2001, (ii) the development of new technology and receipt of future success fees and royalty payments, (iii) the enforceability of patents relating to Allegra(R), (iv) demand for the company's services, and (v) the company's views with respect to the strength of its underlying core operations. These statements may also be identified by forward-looking words such as "may," "could," "should," "would," "will," "intend," "expect," "anticipate," "believe" and "continue" or similar words. Readers should not place undue reliance on our forward-looking statements. The company's actual results may differ materially from such forward-looking statements as a result of numerous factors, some of which the company may not be able to predict and may not be within the company's control. Factors that could cause such differences include, but are not limited to (a) the company's ability to attract and retain experienced scientists, (b) trends in pharmaceutical and biotechnology companies Top 100 Biotechnology Companies The following is a list of the top 100 biotechnology companies ranked by revenue. The first nine companies qualify for the list of the top 50 pharmaceutical companies. outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. chemical research and development, (c) sales of Allegra (including any deviations in estimates provided by Aventis) and the company's receipt of significant royalties from the Allegra license agreement, (d) the possibility that Allegra will be approved by the FDA for over-the-counter sales and the potential adverse effects to the company's licensing revenues as a result of such determination, (e) the company's and Aventis' ability to successfully enforce their intellectual property, patent rights and technology, including with respect to the recent Barr ANDA filings, (f) the company's ability to take advantage of proprietary technology and expand the scientific tools available to it, (g) the ability of the company's strategic investments and acquisitions to perform as expected, (h) the company's ability to successfully complete its ongoing expansion projects on schedule and integrate acquired companies, and (i) the company's ability to effectively manage its growth, as well as those factors discussed in the company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2000 as filed with the Securities and Exchange Commission on April 2, 2001 and the company's other SEC filings. The company does not undertake or intend to update any forward-looking statements contained in this press release after the date of this press release.
Albany Molecular Research, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
Dollars in thousands (except per share)
Three Months Ended Six Months Ended
June 30, June 30,
2001 2000 2001 2000
Net contract revenue $ 13,594 $ 8,834 $ 25,999 $ 16,667
Recurring royalty 10,648 7,744 19,408 13,425
Total revenue 24,242 16,578 45,407 30,092
Cost of contract revenue 7,501 4,938 14,380 9,324
Technology incentive award 1,065 774 1,941 1,343
Research and development 1,008 568 1,925 986
Selling, general and
administrative 2,903 1,867 5,461 3,769
Total costs and expenses 12,477 8,147 23,707 15,422
Income from operations 11,765 8,431 21,700 14,670
Equity earnings of
unconsolidated affiliates 589 243 901 350
Other income, net 1,712 632 3,846 1,345
Income before income
tax expense 14,066 9,306 26,447 16,365
Income tax expense 5,198 3,444 9,787 6,086
Net Income $ 8,868 $ 5,862 $ 16,660 $ 10,279
Weighted Average basic
shares 33,092 29,658 33,012 29,590
Weighted Average diluted
shares 34,174 31,020 34,238 31,045
Basic EPS $ 0.27 $ 0.20 $ 0.50 $ 0.35
Diluted EPS $ 0.26 $ 0.19 $ 0.49 $ 0.33
Albany Molecular Research, Inc.
Selected Consolidated Balance Sheet Data
In thousands (Unaudited)
June 30, December 31,
2001 2000
Cash, Cash Equivalents and Investments $142,825 $152,024
Accounts receivable, net 12,901 7,952
Royalty receivable 10,614 7,827
Total current assets 176,236 171,162
Net property, plant and equipment 36,489 30,914
Total assets 270,517 238,566
Current liabilities 17,597 9,913
Long term debt 5,820 120
Stockholders' equity 246,238 228,533
Total liabilities and stockholders' equity 270,517 238,566
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