Andrx Group Reports Second Quarter 2001 Earnings; Reports $0.34 Per Diluted Share As Andrx Product Sales Reach $65 Million.

Business Editors

FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--July 26, 2001

Andrx Corporation today announced financial results for the three and the six month periods ended June 30, 2001, for the Andrx Group ("Andrx") (Nasdaq:ADRX), representing the businesses of Andrx Corporation and its subsidiaries other than the Cybear Group.

For the second quarter of 2001, Andrx reported total revenues of $178.4 million, compared to $127.3 million for the same quarter of 2000, an increase of 40.1%. Andrx also reported net income of $24.2 million, or $0.34 per diluted share, compared to pro forma net income of $20.5 million, or pro forma $0.30 per diluted share, for the same period of 2000. For the six months ended June 30, 2001, total revenues were $334.1 million, which represents a 37.7% increase over total revenues of $242.6 million for the same period in 2000. Andrx reported net income of $43.4 million, or $0.60 per diluted share, for the first six months of 2001, compared to pro forma net income of $41.6 million, or pro forma $0.62 per diluted share, for the six months ended June 30, 2000. Results of operations for the 2000 periods, as reported in this press release, are pro forma, as they exclude the net losses of Cybear Group, although the reorganization that enables Cybear Group's results to be excluded from Andrx did not become effective until September 7, 2000.

Commenting on Andrx's financial results, Alan P. Cohen, Co-Chairman and Chief Executive Officer of Andrx Corporation, said: "Our top line performance continues to be strong leading to this quarter's increase in our bottom line, our ability to continue to dedicate significant resources to R&D and the continued expansion of our brand sales force. Ever focused on the bottom line, we are continuing to build for the future."

For the second quarter of 2001, sales from distributed products increased by 37.2% to $106.6 million, compared to $77.7 million for the same quarter in 2000.

Sales of Andrx products were $65.5 million for the second quarter of 2001, compared to $46.0 million for the second quarter of 2000, a 42.4% increase. Andrx products included Diltia XT(R), Andrx's bioequivalent version of Dilacor XR(R); Cartia XT(R), Andrx's bioequivalent version of Cardizem(R) CD; and commencing on April 1, 2001, Andrx's bioequivalent version of Ventolin(R) (Albuterol Metered Dose Inhaler), which Andrx acquired through the acquisition of Armstrong Pharmaceuticals, Inc. ("Armstrong") on March 30, 2001. Commencing on January 24, 2001, Andrx products also included sales of brand products marketed by CTEX Pharmaceuticals, Inc. ("CTEX"), which Andrx acquired. In the future, sales of Andrx products will also include the sales of the Entex(R) brand product line, which Andrx acquired on June 30, 2001, as well as a hydrocodone product line to be supplied to Andrx by Mallinckrodt, a Tyco Healthcare company. Andrx will market this branded pain product line under the Andrx trade name Procet(R). Two dosage strengths of Procet are currently approved by the FDA and the Andrx sales force will begin to market those products shortly. The third strength of Procet is expected to be approved by the FDA in 2002. Andrx expects approximately $13 million to $20 million in sales of the Entex and Procet product lines for the second half of 2001.

In the second quarter of 2001, Andrx generated $6.3 million of other revenues, compared to $3.7 million for the same period last year. Other revenues primarily represented licensing fees related to brand products under development in Andrx's NDA program and, in the current quarter, revenues from Armstrong's contract manufacturing business.

Gross profit generated from total revenues was $74.7 million, with a gross margin of 41.9% in the second quarter of 2001, compared to $55.4 million, with a gross margin of 43.5% in the second quarter of 2000. The increase in gross profit was a result of the increase in total revenues, and the decrease in gross margin was a result of a change in the product mix sold by Andrx.

Selling, general and administrative expenses were $27.9 million, or 15.7% of total revenues, for the second quarter of 2001, compared to $14.3 million, or 11.3% of total revenues, for the second quarter of 2000. The increase in selling, general and administrative expenses in the second quarter of 2001, compared to the second quarter of 2000, was primarily the result of an increase in distributed and Andrx product sales, the establishment of brand sales and marketing infrastructure, including the CTEX sales force, and an increase in legal costs. As of June 30, 2001, Andrx had approximately 150 sales representatives. The Andrx sales force will market the current Andrx brand products including the CTEX, Entex and Procet product lines, as Andrx continues to expand its sales force in anticipation of the 2002 launch of its first internally developed NDA product, Altocor(TM), a high potency extended release lovastatin.

Research and development expenses were $14.4 million in the second quarter of 2001, compared to $10.5 million in the second quarter of 2000. The increase in research and development expenses of $3.9 million, or 37.3%, reflected Andrx's continued commercialization efforts in its bioequivalent (ANDA) and brand name (NDA) drug development programs. During the second quarter of 2001, Andrx filed Abbreviated New Drug Applications (ANDAs) with the FDA for Glucophage XR(R) (Metformin extended-release tablets marketed by Bristol-Myers Squibb Company) and Glucotrol XL(R) (Glipizide extended-release tablets marketed by Pfizer, Inc.). Andrx believes it was the first company to file ANDAs with the FDA for these products.

In the second quarter of 2001, Andrx reported income taxes of $11.2 million, or 32% of income before income taxes, compared to $12.1 million, or 37% of income before income taxes, for the same quarter of last year. The decrease in Andrx's effective tax rate for the second quarter of 2001 was primarily the result of Andrx's ability to realize certain tax benefits from the Cybear Group following the September 7, 2000 reorganization.

The diluted weighted average shares of Andrx common stock outstanding were 72.1 million for the second quarter of 2001, compared to 68.2 million for the second quarter of 2000. The increase in the diluted weighted average shares of common stock outstanding in the second quarter of 2001 was primarily attributable to the public offering of 5.2 million Andrx common shares in May 2000, stock option exercises, and approximately 291,000 shares issued in January 2001 in connection with the acquisition of CTEX.

On September 7, 2000, Andrx Corporation completed a reorganization whereby Andrx Corporation acquired the outstanding shares of common stock of Cybear Inc. that it did not own, Andrx Corporation was reincorporated in Delaware, and two new classes of Andrx Corporation common stock were created - Cybear common stock (Nasdaq:CYBA), to track the performance of the Cybear Group and Andrx common stock to track the performance of Andrx Corporation and its subsidiaries other than the Cybear Group. In connection with the reorganization, Andrx Corporation shareholders exchanged each share of Andrx common stock held (pre-reorganization) for one share of Andrx common stock and .1489 shares of Cybear common stock.

Andrx common stock is a class of common stock of Andrx Corporation but is designed to reflect Andrx's performance. Holders of Andrx common stock have no specific rights to the assets of Andrx. Andrx Corporation continues to hold title to all assets of Andrx and is responsible for all of its assets and for all of its liabilities, regardless of how it allocates assets and liabilities among the classes of stock for financial statement presentation purposes. Holders of Andrx common stock are therefore subject to the risks of investing in the businesses, assets and liabilities of Andrx Corporation as a whole. For instance, the assets devoted to each class of stock are subject to company-wide claims of creditors, product liability plaintiffs and stockholder litigation.

Andrx is engaged in the formulation and commercialization of oral controlled-release pharmaceuticals utilizing its proprietary drug delivery technologies. In its ANDA program, Andrx is developing generic versions of selected high sales volume controlled-release brand name pharmaceuticals. In its NDA program, Andrx is developing its own brand name formulations of certain existing drugs that it believes may be improved by the application of Andrx's drug delivery technologies. Andrx also markets and distributes pharmaceutical products manufactured by third parties. Through Andrx Corporation's Cybear Group, Andrx Corporation intends to use the Internet to improve the efficiency of clinical, administrative and communications tasks in the healthcare industry -- while addressing the healthcare industry's critical need for secure and reliable transmission of information. Cybear also includes the Cybearclub joint venture with Andrx, which distributes healthcare products to physicians through the Internet.

Forward-looking statements (statements which are not historical facts) in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. For this purpose, any statements contained in this report that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as "may," "will," "to," "expect," "believe," "anticipate," "intend," "could," "would," "estimate," or "continue" or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. Investors are cautioned that all forward-looking statements involve risk and uncertainties. Andrx common stock is a class of common stock of Andrx Corporation, therefore Andrx Corporation stockholders are subject to the risks and uncertainties described in Andrx Corporation's filings with the U.S. Securities and Exchange Commission, including Andrx Corporation's Annual Report on Form 10-K for the year ended December 31, 2000 and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2001.

This release and additional information about Andrx Group and Andrx Corporation are also available on the Internet at: http://www.andrx.com.

                            ANDRX GROUP
      (Representing Andrx Corporation and its subsidiaries other
                       than the Cybear Group)
        UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
       (in thousands, except for share and per share amounts)


                           Three Months Ended       Six Months Ended
                                June 30,                June 30,
                         --------------------   ---------------------

                            2001       2000 (1)    2001       2000 (1)
                         ---------   --------   ---------   ---------
Revenues
  Distributed products   $ 106,578   $ 77,696   $ 213,609   $ 145,307
  Andrx products            65,476     45,994     110,230      90,108
  Other                      6,330      3,654      10,304       7,176
                         ---------   --------   ---------   ---------
Total revenues             178,384    127,344     334,143     242,591
                         ---------   --------   ---------   ---------

Operating expenses
  Cost of goods sold       103,675     71,968     197,536     134,963
  Selling, general and
   administrative           27,925     14,338      50,443      25,880
  Research and development  14,398     10,483      29,054      18,694
                         ---------   --------   ---------   ---------

Total operating expenses   145,998     96,789     277,033     179,537
                         ---------   --------   ---------   ---------

Income from operations      32,386     30,555      57,110      63,054

Other income
  Investment income, net     2,969      2,058       6,270       2,556
                         ---------   --------   ---------   ---------

Income before income taxes  35,355     32,613      63,380      65,610

Income taxes                11,154     12,124      20,010      23,980
                         ---------   --------   ---------   ---------

Net income               $  24,201   $ 20,489    $ 43,370    $ 41,630
                         =========   ========   =========   =========


Basic net income per share  $ 0.35     $ 0.31      $ 0.62      $ 0.65
                         =========   ========   =========   =========


Diluted net income per
 share                      $ 0.34     $ 0.30      $ 0.60      $ 0.62
                         =========   ========   =========   =========

Basic weighted average
 shares of common stock
  outstanding           69,872,600 65,485,200  69,734,900  64,348,900
                        ========== ==========  ==========  ==========

Diluted weighted average
 shares of common stock
  outstanding           72,149,700 68,171,400  72,030,200  67,013,100
                        ========== ==========  ==========  ==========

(1) For the 2000 periods, the unaudited condensed consolidated
statements of income are pro forma as they exclude the net losses of
Cybear Group, although the reorganization that enables Cybear Group's
results to be excluded from Andrx Group did not become effective until
September 7, 2000. Certain prior period amounts have been reclassified
to conform to the current period presentation.



                          ANDRX GROUP
  (Representing Andrx Corporation and its subsidiaries other than
                       the Cybear Group)
           UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
                          (in thousands)


                                      June 30,       December 31,
                                        2001             2000
                                     ---------        ---------
    Assets


Cash, cash equivalents and
 investments available-for-sale      $ 276,245        $ 320,108

Accounts receivable, net,
 inventories and other current assets  267,231          223,551
                                     ---------        ---------

Total current assets                   543,476          543,659

Property, plant and equipment,
 net and other assets                  161,651           85,394
                                     ---------        ---------

Total assets                         $ 705,127        $ 629,053
                                     =========        =========


    Liabilities and Group Equity

Total liabilities                    $ 106,298        $ 106,807

Group equity                           598,829          522,246
                                     ---------        ---------

Total liabilities and group equity   $ 705,127        $ 629,053
                                     =========        =========