Chiron Reports Second-Quarter 2005 Adjusted Earnings of $0.08 Per Share, GAAP Earnings of Less Than $0.01 Per Share; 10 Percent Increase in Revenues Over Second-Quarter 2004.EMERYVILLE, Calif. -- Chiron Corporation Chiron Corporation was a multinational biotechnology firm based in Emeryville, California that was acquired by Novartis International AG on April 20 2006. It had offices and facilities in eighteen countries on five continents. (Nasdaq:CHIR CHIR Chiricahua National Monument (US National Park Service) ) today reported financial results for the second quarter of 2005. HIGHLIGHTS --Chiron reported adjusted income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $0.08 per share and GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). income from continuing operations of less than $0.01 per share for the second quarter of 2005. --On July July: see month. 21, 2005, 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. ) completed an on-site on-site adj. Done or located at the site, as of a particular activity: on-site monitoring of a production run; an on-site film shoot. inspection of Chiron's Liverpool Liverpool, city (1991 pop. 448,300), NW England, on the Mersey River near its mouth. It is one of Britain's largest cities. A large center for food processing (especially flour and sugar), Liverpool has a variety of industries, including the manufacture of electrical facility, which manufactures FLUVIRIN(R) influenza virus vaccine influenza virus vaccine n. A vaccine containing influenza virus, usually several strains of the virus, prepared in chick embryos and used to immunize against influenza. . Consistent with FDA process, at the conclusion of the on-site inspection, Chiron Chiron (kī`rŏn), in Greek mythology, centaur, son of Kronos. He was a renowned sage, physician, and prophet. Among his pupils were Hercules, Achilles, Jason, and Asclepius. received a list of observations on a Form 483. Chiron expects to complete its response to these observations in early August. Chiron is not in a position to characterize the results of the inspection until the FDA delivers its final conclusion. --Chiron continues to expect 2005 income from continuing operations to be between $1.20 and $1.45 per share on an adjusted basis and between $0.86 and $1.11 per share on a GAAP basis. Chiron reported adjusted income from continuing operations of $16 million, or $0.08 per share, for the second quarter of 2005, compared to $39 million, or $0.20 per share, for the second quarter of 2004. Chiron reported GAAP income from continuing operations of $49,000, or less than $0.01 per share, for the second quarter of 2005, compared to $23 million, or $0.12 per share, for the second quarter of 2004. The costs associated with remediation of Chiron's Liverpool manufacturing facility, which produces FLUVIRIN vaccine vaccine Preparation containing either killed or weakened live microorganisms or their toxins, introduced by mouth, by injection, or by nasal spray to stimulate production of antibodies against an infectious agent. , had a material impact on the financial results for the second quarter of 2005. Chiron incurred an increase in idle in vain. - Chaucer. See also: Idle facility costs compared to the second quarter of 2004 of $14 million as a result of limited FLUVIRIN vaccine production in the second quarter of 2005 and incurred FLUVIRIN vaccine remediation costs of $8 million. In addition, Chiron incurred legal costs associated with the FLUVIRIN vaccine-related developments of $5 million. Chiron expects costs for the FLUVIRIN remediation and legal costs related to the FLUVIRIN developments to continue to impact financial results in successive quarters in 2005. The financial results for the second quarter of 2005 were also impacted because, as the company reported on July 20, 2005, due to a product sterility sterility: see infertility. issue Chiron has written off the entire BEGRIVAC(TM) influenza virus vaccine product inventory in the second quarter of 2005, resulting in a $15 million charge to cost of sales. Chiron will not supply any BEGRIVAC vaccine this influenza influenza or flu, acute, highly contagious disease caused by a virus; formerly known as the grippe. There are three types of the virus, designated A, B, and C, but only types A and B cause more serious contagious infections. season. Chiron has been working closely with the German 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. , the Paul Paul, 1901–64, king of the Hellenes (1947–64), brother and successor of George II. He married (1938) Princess Frederika of Brunswick. During Paul's reign Greece followed a pro-Western policy, and the Cyprus question was temporarily resolved. Ehrlich Ehr·lich , Paul 1854-1915. German bacteriologist who conducted pioneering research in chemotherapy and developed the chemical Salvarsan as a treatment of syphilis. Institute (PEI), toward Chiron's goal of returning to the market with BEGRIVAC vaccine next year. Foreign exchange rates resulted in an approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. $0.01 decrease in adjusted earnings per share and an approximate $0.01 decrease in GAAP earnings per share for the second quarter of 2005. "While the loss of the BEGRIVAC supply is a disappointment, we had a sound quarter, with revenue up 10 percent," said Howard Howard, English noble family. Landowners in Norfolk from the 13th cent., the Howards obtained the duchy of Norfolk through the marriage of Sir Robert Howard to Margaret Mowbray, daughter of Thomas Mowbray, 1st duke of Norfolk. Pien, chief executive officer of Chiron. Chiron uses adjusted financial statements to gain an understanding of the company's operating performance on a comparative basis. Adjusted amounts exclude special items relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc certain acquisitions, which may not be indicative indicative: see mood. of the company's trends or potential future performance. Please refer to the tables at the end of this press release (which are also located at www.chiron.com in the Investors section under Financial Reports) for more detail on these items and a reconciliation of the adjusted financial information to GAAP financial information. All references to per-share amounts are per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share.
Selected Financial Highlights (Amounts are both GAAP and adjusted)
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Second- Second-
Quarter Quarter
($ millions) 2005 2004 Change
---------------------------------------------------------------------
Net product sales $304 $281 8%
Total revenues 419 380 10%
Cost of sales 178 129
Gross profit margin 42% 54%
Research and development 107 100 7%
Selling, general and administrative 128 107 20%
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Net product sales for the second quarter of 2005 increased 8 percent compared to the second quarter of 2004, primarily due to increases in sales of travel vaccines, meningococcal vaccines, BETASERON Betaseron® Recombinant IFN-β1b, see there (R) interferon beta-1b interferon beta-1b Betaferon (UK), Betaseron Pharmacologic class: Biological response modifier Therapeutic class: Antiviral, immunoregulator Pregnancy risk category C Action, PROCLEIX(R) NAT (Network Address Translation) An IETF standard that allows an organization to present itself to the Internet with far fewer IP addresses than there are nodes on its internal network. products and TOBI TOBI® Infectious disease An aerosolized tobramycin used to treat chronic lung infection in Pts with cystic fibrosis infected with Pseudomonas aeruginosa and other bacteria. See Cystic fibrosis. (R) tobramycin tobramycin /to·bra·my·cin/ (to?brah-mi´sin) an aminoglycoside antibiotic derived from a complex produced by Streptomyces tenebrarius, inhalation inhalation /in·ha·la·tion/ (in?hah-la´shun)1. the drawing of air or other substances into the lungs.inhala´tional 2. the drawing of an aerosolized drug into the lungs with the breath. 3. solution offset by declines in sales of influenza vaccines influenza vaccine Flu vaccine A vaccine recommended for those at high risk for serious complications from influenza: > age 65; Pts with chronic diseases of heart, lung or kidneys, DM, immunosuppression, severe anemia, nursing home and other chronic-care , pediatric pediatric /pe·di·at·ric/ (pe?de-at´rik) pertaining to the health of children. pe·di·at·ric adj. Of or relating to pediatrics. and other vaccines, and PROLEUKIN Proleukin® Aldesleukin, IL-2 Immunology An agent used for metastatic kidney CA, melanoma, NHL, AML, TB, HIV infection, KS. See IL-2. (R) (aldesleukin aldesleukin /al·des·leu·kin/ (al?des-loo´kin) a recombinant interleukin-2 product used as an antineoplastic and biological response modifier. ) for injection. Revenues increased 10 percent primarily due to increases in product sales and royalty Compensation for the use of property, usually copyrighted works, patented inventions, or natural resources, expressed as a percentage of receipts from using the property or as a payment for each unit produced. and license fee revenues. For the second quarter of 2005, foreign exchange rates resulted in a 1 percent increase in total revenues. Gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. declined primarily due to $14 million in incremental costs Costs which are additional costs to the Service appropriations that would not have been incurred absent support of the contingency operation. See also financial management. associated with the idle capacity of Chiron's Liverpool facility, $8 million in remediation-related costs for the Liverpool facility, and a $15 million charge as a result of the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of the BEGRIVAC vaccine product inventory. Also contributing to the decrease was a reduction in the BioPharmaceuticals gross profit margin, primarily due to increases in planned idle facility time and ongoing process improvement efforts over the second quarter of 2004. Research and development expenses increased primarily due to the cost of development efforts in the oncology oncology /on·col·o·gy/ (ong-kol´ah-je) the sum of knowledge regarding tumors; the study of tumors. on·col·o·gy n. franchise, meningococcal franchise and for CUBICIN(R) (daptomycin Daptomycin is a novel lipopeptide antibiotic used in the treatment of certain infections caused by Gram-positive organisms. It is a naturally-occurring compound found in the soil saprotroph Streptomyces roseosporus. for injection). This increase was partially offset by eliminated costs from research and development programs that were discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: prior to the second quarter of 2005. In addition, the second quarter of 2004 included higher costs for the Phase III Noun 1. phase III - a large clinical trial of a treatment or drug that in phase I and phase II has been shown to be efficacious with tolerable side effects; after successful conclusion of these clinical trials it will receive formal approval from the FDA CAPTIVATE trial for tifacogin, which commenced in the second quarter of 2004, due to production of clinical materials. Selling, general and administrative expenses increased partially due to $5 million in legal costs associated with the FLUVIRIN(R) influenza virus influenza virus n. Any of three viruses of the genus Influenzavirus designated type A, type B, and type C, that cause influenza and influenzalike infections. vaccine-related developments and $2 million due to the effect of foreign exchange rates. In addition, marketing and pre-launch programs for the CUBICIN product and PULMINIQ(TM) (cyclosporine cyclosporine /cy·clo·spor·ine/ (-spor´en) a cyclic peptide from an extract of soil fungi that selectively inhibits T cell function; used as an immunosuppressant to prevent rejection in organ transplant recipients and to treat severe , USP USP - unique sales point ) inhalation solution, investment in geographic penetration, and corporate governance Corporate Governance The relationship between all the stakeholders in a company. This includes the shareholders, directors, and management of a company, as defined by the corporate charter, bylaws, formal policy, and rule of law. costs contributed to the increase. BLOOD TESTING Total Blood Testing revenues were $133 million for the second quarter of 2005, an increase of 16 percent compared to the second quarter of 2004.
Selected Blood Testing Revenues
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Second- Second-
Quarter Quarter
($ millions) 2005 2004 Change
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Ortho-Clinical Diagnostics $8 $7 21%
PROCLEIX(R) NAT products 66 61 9%
------------------------------
Blood Testing net product sales 74 67 10%
Revenues from joint business arrangement 31 29 9%
Royalty and license fee revenues 26 16 60%
Total Blood Testing revenues (1) $133 $115 16%
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(1) Total Blood Testing revenues consist of net product sales from
Chiron's joint business contractual arrangement with
Ortho-Clinical Diagnostics and from Chiron's PROCLEIX NAT product
line, revenues from Chiron's joint business arrangement with
Ortho-Clinical Diagnostics, collaborative agreement revenues,
royalty and license fee revenues, and other revenues. Totals may
not sum due to rounding and the inclusion of only selected
financial information.
--PROCLEIX NAT products: The increase in sales for the second quarter of 2005 compared to the second quarter of 2004 was primarily due to the introduction of the PROCLEIX(R) ULTRIO(TM) Assay ASSAY. A chemical examination of metals, by which the quantity of valuable or precious metal contained in any mineral or metallic mixture is ascertained. 2. By the acts of Congress of March 3, 1823, 3 Story's L. U. S. 1924; of June 25, 1834, 4 Shars. cont. Story's L. U. S. outside of 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. and continued penetration into several markets abroad. --Joint business arrangement with Ortho-Clinical Diagnostics Ortho Clinical Diagnostics is a Johnson & Johnson company. It was created following Johnson and Johnson's acquiring of Ortho Diagnostic Systems in 1994, which was then merged with Johnson & Johnson Clinical Diagnostics in 1997. : The increase in revenues was primarily due to higher profitability realized by the joint business. --Royalty and license fee revenues related to NAT blood screening: The increase was primarily due to recognition of the Blood Testing share of the September September: see month. 2004 settlement with F. Hoffmann-La Roche n. 1. Rock. (Roche) related to a U.S. patent directed to NAT methods for HIV HIV (Human Immunodeficiency Virus), either of two closely related retroviruses that invade T-helper lymphocytes and are responsible for AIDS. There are two types of HIV: HIV-1 and HIV-2. HIV-1 is responsible for the vast majority of AIDS in the United States. and various settlements subsequent to the second quarter of 2004, including Chiron's settlement agreement with the Scottish National Blood Service. In addition, Roche royalties Not to be confused with Royal family. Royalties (sometimes, running royalties) are usage-based payments made by one party (the "licensee") to another (the "licensor") for ongoing use of an asset, most typically an intellectual property (IP) right. increased due to rate increases resulting from certain countries entering the European Union European Union (EU), name given since the ratification (Nov., 1993) of the Treaty of European Union, or Maastricht Treaty, to the European Community and an increase in reported donations. The gross profit margin for Blood Testing products was 40 percent for the second quarter of 2005, compared to 42 percent for the second quarter of 2004. The decrease was primarily due to additional PROCLEIX(R) TIGRIS(R) System support and service. VACCINES Vaccines net product sales were $97 million for the second quarter of 2005, an increase of 12 percent compared to the second quarter of 2004.
Selected Vaccines Revenues
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Second- Second-
Quarter Quarter
($ millions) 2005 2004 Change
----------------------------------------------------------------------
Influenza vaccines $0 $8 - 106%
Meningococcal vaccines 14 5 171%
Travel vaccines 45 26 71%
Pediatric and other vaccines 39 48 - 18%
--------------------------------
Vaccines net product sales 97 87 12%
Total Vaccines revenues (2) $102 $94 8%
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(2) Total Vaccines revenues consist of net product sales,
collaborative agreement revenues, royalty and license fee
revenues, and other revenues. Totals may not sum due to rounding
and the inclusion of only selected financial information.
--Influenza vaccines: The decrease in influenza vaccines sales for the second quarter of 2005 compared to the second quarter of 2004 was due to a manufacturing upgrade. --Meningococcal vaccines: The increase in meningococcal vaccines sales was primarily due to sales of MENZB MeNZB is a vaccine against a specific strain of group B meningococcus, currently being used to control an epidemic of meningococcal disease in New Zealand. Most people are able to carry the meningococcus bacteria safely with no ill effects. (TM) meningococcal B vaccine to the Ministry of Health in New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. . --Travel vaccines: The increase in travel vaccines sales was primarily due to an additional $17 million in sales of ENCEPUR(R) tick-borne tick-borne adj. Carried or transmitted by ticks, as certain diseases. encephalitis encephalitis (ĕnsĕf'əlī`təs), general term used to describe a diffuse inflammation of the brain and spinal cord, usually of viral origin, often transmitted by mosquitoes, in contrast to a bacterial infection of the meninges vaccine driven by overall market growth and a number of marketing initiatives. In addition, increased demand for rabies vaccines rabies vaccine n. 1. A vaccine introduced by Pasteur as a method of treatment for the bite of a rabid animal, consisting of 23 daily injections of virus that are increased serially from noninfective doses to doses containing fully infective in the United Kingdom, primarily due to a product recall from a competitor, contributed to the increase. --Pediatric and other vaccines: The decrease in pediatric and other vaccines sales was primarily due to a decrease in sales of measles measles or rubeola (r  bē`ələ), highly contagious disease of young children, caused by a filterable virus and spread by droplet spray from the nose, mouth, ,
mumps and rubella rubella or German measles, acute infectious disease of children and young adults. It is caused by a filterable virus that is spread by droplet spray from the respiratory tract of an infected individual. (MMR MMR measles-mumps-rubella (vaccine); see measles, mumps, and rubella vaccine live, under vaccine. MMR abbr. measles, mumps, rubella vaccine ) vaccines. In the second quarter of 2004, MMR product sales reflected sales from a tender for a large-scale large-scale adj. 1. Large in scope or extent. 2. Drawn or made large to show detail. large-scale Adjective 1. wide-ranging or extensive 2. MMR vaccination vaccination, means of producing immunity against pathogens, such as viruses and bacteria, by the introduction of live, killed, or altered antigens that stimulate the body to produce antibodies against more dangerous forms. campaign. Sales of polio vaccines Two polio vaccines are used throughout the world to combat polio. The first was developed by Jonas Salk, first tested in 1952, and announced to the world by Salk on April 12, 1955. It consists of an injected dose of inactivated (dead) poliovirus. were also down due to a decrease in tenders. These decreases were partially offset by increased sales of Chiron's diptheria, tetanus tetanus (tĕt`nəs, –ənəs) or lockjaw, acute infectious disease of the central nervous system caused by the toxins of Clostridium tetani. and pertussis vaccine pertussis vaccine n. A vaccine containing inactivated Bordetella pertussis bacteria, often used in the diphtheria, tetanus toxoids, and pertussis vaccine to immunize against whooping cough. Also called whooping cough vaccine. . The gross profit margin for Vaccines products was 7 percent for the second quarter of 2005, compared to 34 percent for the second quarter of 2004. The decrease was primarily due to Liverpool incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. idle facility costs of $14 million and FLUVIRIN(R) influenza virus vaccine remediation costs of $8 million, which were charged to cost of sales because the facility had limited production in the second quarter of 2005. In addition, Chiron wrote off the entire BEGRIVAC(TM) influenza virus vaccine product inventory in the second quarter of 2005, resulting in a $15 million charge to cost of sales. BIOPHARMACEUTICALS BioPharmaceuticals net product sales were $132 million for the second quarter of 2005, an increase of 4 percent compared to the second quarter of 2004.
Selected BioPharmaceuticals Revenues
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Second- Second-
Quarter Quarter
($ millions) 2005 2004 Change
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TOBI(R) tobramycin inhalation
solution $57 $51 10%
PROLEUKIN(R) (aldesleukin) for
injection 32 35 - 10%
BETASERON(R) interferon beta-1b 38 32 21%
BioPharmaceuticals net product
sales (3) 132 127 4%
BETAFERON(R) interferon beta-1b
royalties 17 12 46%
Total BioPharmaceuticals
revenues (4) $154 $147 5%
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(3) Net product sales include sales from TOBI, PROLEUKIN, BETASERON
and other products.
(4) Total BioPharmaceuticals revenues consist of net product sales,
collaborative agreement revenues, royalty and license fee
revenues, and other revenues. Totals may not sum due to the
inclusion of only selected financial information.
--TOBI: The increase in TOBI product sales for the second quarter of 2005 compared to the second quarter of 2004 was primarily due to increased patient demand in both the United States and Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and price
increases, offset by wholesaler ordering patterns.--PROLEUKIN: The decrease in PROLEUKIN product sales was due to decreased patient demand in the United States as a result of increased competition, a government rebate rebate, partial refund of the total price paid for goods or services. In the United States, rebates were historically given by railroads to favored shippers as a return on transportation charges. adjustment and wholesaler ordering patterns, partially offset by price increases. --BETASERON: The increase in BETASERON product sales to Berlex Inc. (and its parent company Schering For the American pharmaceutical company created by seizure of assets from Schering AG during World War II, see . Schering AG was a research-centered pharmaceutical company founded in 1851 that merged with Bayer in December 2006. AG) for marketing and resale resale n. selling again, particularly at retail. In many states a "resale license" or "resale number" is required so that the state can monitor the collection of sales tax on retail sales. RESALE. was primarily due to inventory ordering patterns and price increases. --BETAFERON royalties: The increase in royalties was primarily due to price increases and increased patient demand. The gross profit margin for BioPharmaceuticals products was 68 percent for the second quarter of 2005, compared to 74 percent for the second quarter of 2004. The decrease in gross profit margin was primarily due to increases in planned idle facility time and ongoing process improvement efforts over the second quarter of 2004. ROYALTY AND LICENSE FEE REVENUES Total royalty and license fee revenues include royalties and license fees attributed to Blood Testing, Vaccines and BioPharmaceuticals. These revenues also include other royalty and license fees, which consist primarily of royalties from Roche, Roche Molecular Systems and Bayer HealthCare AG for clinical diagnostic products.
Selected Royalty and License Fee Revenues
---------------------------------------------------------------------
Second- Second-
Quarter Quarter
($ millions) 2005 2004 Change
---------------------------------------------------------------------
Blood Testing $26 $16 60%
Vaccines 1 0 N/A
BioPharmaceuticals 20 15 30%
Other 30 24 26%
Total royalty and license
fee revenues (5) $77 $55 39%
---------------------------------------------------------------------
(5) Totals may not sum due to rounding.
--Total royalty and license fee revenues: In addition to the increases in Blood Testing, Vaccines and BioPharmaceuticals royalty and license fee revenues for the second quarter of 2005 compared to the second quarter of 2004 as explained above, other royalty and license fee revenues also increased. The increase was primarily due to revenues from the settlement with Roche in the third quarter of 2004 relating to Chiron's U.S. patent for HIV technology used in clinical diagnostics (1) Software routines that test hardware components (memory, keyboard, disks, etc.). Diagnostics are often stored in ROM chips and activated on startup. (2) Error messages in a programmer's source code that refer to statements or syntax that the compiler or assembler and blood-screening products. In the second quarter of 2005, $8 million of the settlement amount received from Roche became non-refundable and therefore was recognized as revenue. The blood-screening portion of the non-refundable amount is $3 million and is classified as Blood Testing royalties and license fees, and the remaining $5 million relates to clinical diagnostics and is classified as other royalty and license fee revenues. PIPELINE AND PRODUCTS UPDATE Blood Testing --Several studies of the PROCLEIX(R) ULTRIO(TM) Assay and the PROCLEIX(R) TIGRIS(R) System were presented at two symposia sym·po·si·a n. A plural of symposium. at the European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. regional congress of the International Society of Blood Transfusion The International Society of Blood Transfusion (ISBT) is a scientific society, founded in 1935, which aims to promote the study of blood transfusion, and to spread the know-how about the manner in which blood transfusion medicine and science best can serve the patient's interests. , held in Athens Athens, city, Greece Athens (ăth`ĭnz), Gr. Athínai, city (1991 pop. 2,907,179; 1991 urban agglomeration pop. 3,072,922), capital of Greece, E central Greece, on the plain of Attica, between the Kifisós and . The data included a presentation from Dr. Emma Castro Castro, Greece: see Kástron. , of the Spanish Red an ocherous red pigment resembling Venetian red, but slightly yellower and warmer. See also: Spanish Cross in Madrid Madrid (mədrĭd`, Span. mäthhrēth`), city (1990 pop. 3,120,732), capital of Spain and of Madrid prov., central Spain, and the focus of its own autonomous region, on the Manzanares River. , who described the detection of two hepatitis hepatitis (hĕp'ətī`tĭs), inflammation of the liver. There are many types of hepatitis. Causes include viruses, toxic chemicals, alcohol consumption, parasites and bacteria, and certain drugs. B-positive blood donations “Give blood” redirects here. For other uses, see Give blood (disambiguation). Blood donation is a process by which a blood donor voluntarily has blood drawn for storage in a blood bank, generally for subsequent use in a blood transfusion. out of 20,000 tested by the PROCLEIX ULTRIO Assay that would have gone undetected by previously approved blood-testing assays. Vaccines --As Chiron reported on July 20, 2005, due to a product sterility issue the company will not supply any BEGRIVAC(TM) influenza virus vaccine doses during the 2005-2006 influenza season. BEGRIVAC vaccine is manufactured at Chiron's facility in Marburg Marburg: see Maribor, Slovenia. , Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). . Chiron had expected to supply approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 12 million doses of BEGRIVAC vaccine to customers outside of the United States. Chiron is working to mitigate mit·i·gate v. To moderate in force or intensity. mit  i·ga tion n. the impact by reallocating non-U non-U adj. Chiefly British Not characteristic of the upper class, especially in language usage. [non- + U2. .S. vaccine doses among affected markets, including incremental extra production from its facility in Siena Siena (syĕ`nä), city (1991 pop. 56,956), capital of Siena prov., Tuscany, central Italy. Rich in art treasures and historic architecture, it is one of the most popular tourist centers in Italy. . --In June June: see month. 2005, Chiron announced revisions to its production estimates for FLUVIRIN(R) influenza virus vaccine for the 2005-2006 influenza season. Chiron estimates that it will produce between 18 million and 26 million doses of FLUVIRIN vaccine for the 2005-2006 influenza season. The number of doses Chiron will produce will depend upon the success of its remediation efforts, upon encountering no further adverse manufacturing developments or regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. decisions by the U.S. Food and Drug Administration (FDA) or the UK Medicines and Healthcare products Regulatory Agency The Medicines and Healthcare products Regulatory Agency (MHRA) is the UK government agency which is responsible for ensuring that medicines and medical devices work and are acceptably safe. (MHRA MHRA Medicines and Healthcare Products Regulatory Agency MHRA Modern Humanities Research Association (United Kingdom) MHRA Minnesota Human Rights Act MHRA Malta Hotels and Restaurants Association ), and upon the major factors that determine production -- volumes, yields and timing. BioPharmaceuticals --Chiron received an action letter from the FDA stating that the company's New Drug Application (NDA (Non Disclosure Agreement) An agreement signed between two parties that have to disclose confidential information to each other in order to do business. In general, the NDA states why the information is being divulged and stipulates that it cannot be used for any ) for PULMINIQ(TM) (cyclosporine, USP) inhalation solution is "approvable" but that an additional pre-approval In lending, pre-approval has two meanings: 1. The first is that a lender, via public or proprietary information, feels that a potential borrower is completely credit worthy enough for a certain credit product, and approaches the potential customer with a guarantee that study is required to confirm the efficacy efficacy /ef·fi·ca·cy/ (ef´i-kah-se) 1. the ability of an intervention to produce the desired beneficial effect in expert hands and under ideal circumstances. 2. of the drug. Chiron is evaluating possible next steps for PULMINIQ. --Cubist Pharmaceuticals Inc. announced that its Phase III Staphylococcus aureus Staphylococcus au·re·us n. A bacterium that causes furunculosis, pyemia, osteomyelitis, suppuration of wounds, and food poisoning. Staphylococcus aureus Staphylococcus pyogenes endocarditis endocarditis (ĕn'dōkärdī`tĭs), bacterial or fungal infection of the endocardium (inner lining of the heart) that can be either acute or subacute. and bacteremia bacteremia: see septicemia. bacteremia Presence of bacteria in the blood. Short-term bacteremia follows dental or surgical procedures, especially if local infection or very high-risk surgery releases bacteria from isolated sites. trial of CUBICIN(R) (daptomycin for injection) at 6 mg/kg mg/kg Milligrams Per Kilogram once daily met its primary endpoints of non-inferiority in the intent-to-treat and per protocol populations. Chiron has licensed the right to develop and commercialize CUBICIN in certain territories, including Western and Eastern Europe Eastern Europe The countries of eastern Europe, especially those that were allied with the USSR in the Warsaw Pact, which was established in 1955 and dissolved in 1991. , and has submitted a Marketing Authorization The right or permission to use a system resource; the process of granting access. See access control. Application (MAA MAA abbr. macroaggregated albumin ) to the European Medicines Agency The European Medicines Agency (EMEA) is a European agency for the evaluation of medicinal products. Until 2004, the European Medicines Agency was known as The European Agency for the Evaluation of Medicinal Products. Roughly parallel to the U.S. (EMEA (Europe, Middle East, Africa) Refers to that region of the world. For example, one might see products packaged differently for the UK, EMEA and Asia Pacific markets. ) under the European Union's Centralized cen·tral·ize v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es v.tr. 1. To draw into or toward a center; consolidate. 2. Procedure for approval to market CUBICIN for the complicated skin and soft-tissue infection (cSSTi) indication. --Chiron announced its Phase I program of CHIR- chir- pref. Variant of cheiro-. 258 in multiple myeloma multiple myeloma A malignant proliferation of abnormal plasma cells that populate the marrow-containing bones of the body. The affected plasma cells produce myeloma protein, a monoclonal antibody that replaces normal antibodies in the blood, thereby increasing susceptibility , a type of cancer. Other Recent Events --The National Academy of Sciences (NAS (1) See network access server. (2) (Network Attached Storage) A specialized file server that connects to the network. A NAS device contains a slimmed-down operating system and a file system and processes only I/O requests by supporting the popular ) elected e·lect v. e·lect·ed, e·lect·ing, e·lects v.tr. 1. To select by vote for an office or for membership. 2. To pick out; select: elect an art course. Rino Rappuoli Rino Rappuoli, PhD, is known globally for his work in vaccines and immunology. He co-founded the field of cellular microbiology, a discipline combining cell biology and microbiology, and pioneered the genomic approach to vaccine development known as reverse vaccinology. Dr. , Ph.D., for membership in the academy as a foreign associate. Dr. Rappuoli is the chief scientific officer of Chiron and head of research for Chiron Vaccines. Election to NAS recognizes distinguished and continuing achievements in original research and is considered one of the highest honors a scientist or engineer can receive. SECOND-QUARTER 2005 EARNINGS CONFERENCE CALL Chiron will hold a conference call and webcast on Wednesday Wednesday: see week. , July 27, 2005, at 4:45 p.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT to review its second-quarter 2005 results of operations and business highlights. In addition, the company may address forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. questions concerning business and financial matters and trends affecting the company. To access either the live call or the one-year adj. 1. completing its life cycle within a year. Adj. 1. one-year - completing its life cycle within a year; "a border of annual flowering plants" annual phytology, botany - the branch of biology that studies plants webcast archive, please log on to www.chiron.com/webcast. Please connect to the website at least 15 minutes prior to the conference call to ensure adequate time to download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. any necessary software. Alternatively, please call (800) 819-7026 from the United States or Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of or (706) 643-7768 from other locations. Replay by phone is available approximately two hours after the completion of the call through 11:55 p.m. EDT, Wednesday, August 3, 2005. To access the replay, please call (800) 642-1687 from the United States or Canada or (706) 645-9291 from other locations. The conference ID number is 7207333. ABOUT CHIRON Chiron delivers innovative and valuable products to protect human health by advancing pioneering science across the landscape of biotechnology. The company works to deliver on the limitless promise of science and make a positive difference in people's lives. For more information about Chiron, please visit www.chiron.com. Download financial information in PDF (Portable Document Format) The de facto standard for document publishing from Adobe. On the Web, there are countless brochures, data sheets, white papers and technical manuals in the PDF format. format: http://www.chiron.com/investors/4077/chiron_financial.pdf View financial information online: http://www.chiron.com/investors/finreports/index.html This news release contains 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. , including statements regarding earnings and sales growth, supply of influenza virus vaccines that Chiron expects to deliver in future influenza seasons, improvements to manufacturing facilities, product development initiatives, new product indications, new product marketing, and clinical trials that involve risks and uncertainties and are subject to change. A discussion of the company's operations and financial condition, including factors that may affect its business and future prospects that could cause actual results and developments to differ materially from those expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by these forward-looking statements, is contained in documents the company has filed with the SEC, including the 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 December: see month. 31, 2004, and the Form 10-Q Form 10-Q See 10-Q. for the quarter ended March 31, 2005, and will be contained in all subsequent periodic filings made with the SEC. These documents identify important factors that could cause the company's actual performance to differ from current expectations, including, among others, additional adverse developments resulting from the suspension of Chiron's UK license to manufacture FLUVIRIN(R) influenza virus vaccine from October October: see month. 5, 2004, through March 2, 2005, the announcement of such suspension and the 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. and investigations relating to those matters, the outcome of clinical trials, regulatory review and approvals, manufacturing capabilities, intellectual property protections and defenses, litigation, stock-price and interest-rate volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the , marketing effectiveness Marketing Effectiveness is the function of improving how marketers go to market with the goal of optimizing their marketing spend to achieve even better results for both the short-term and long-term. Also related to Marketing ROI and Return on Marketing Investment (ROMI). and the severity of the 2005-2006 influenza season. In particular, there can be no assurance that additional issues with respect to BEGRIVAC(TM) influenza virus vaccine or FLUVIRIN vaccine or Chiron's manufacturing generally will not arise in the future, or that Chiron will be able to cover vaccine shortfalls, successfully address matters raised in a warning letter from the FDA with respect to its FLUVIRIN vaccine manufacturing facilities, resume sale of FLUVIRIN vaccine for the 2005-2006 influenza season or BEGRIVAC vaccine for the 2006-2007 influenza season, increase sales of existing products, successfully develop and receive approval to market new products, or achieve market acceptance for such new products. In addition, the company may face additional competition in the influenza market in the future and challenges in distribution arrangements as a result of the recent BEGRIVAC and FLUVIRIN vaccine developments. In addition, the company may engage in business opportunities, the successful completion of which is subject to certain risks, including approval by Novartis AG Novartis AG Swiss pharmaceutical company. It was formed through the 1996 merger of two Swiss firms: Ciba (see Ciba-Geigy) and Sandoz, a chemical company with interests in pharmaceuticals, nutrition, and agriculture. , stockholder and regulatory approvals, and the integration of operations. Chiron does not undertake an obligation to update the forward-looking information the company is giving today. NOTE: BEGRIVAC, ENCEPUR, FLUVIRIN, MENZB, PROCLEIX, PROLEUKIN, PULMINIQ, TOBI and ULTRIO are trademarks of Chiron. BETASERON and BETAFERON are trademarks of Schering AG. TIGRIS is a trademark of Gen-Probe Incorporated. CUBICIN is a trademark of Cubist Pharmaceuticals.
CHIRON CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months Ended
June 30, 2005
--------------------------------
Adjusted (1) Adjustments Actual
----------- ----------- -------
Revenues:
Product sales, net $303,575 $ - $303,575
Revenues from joint business
arrangement 31,003 - 31,003
Collaborative agreement revenues 3,453 - 3,453
Royalty and license fee revenues 76,522 - 76,522
Other revenues 4,204 - 4,204
-------- -------- --------
Total revenues 418,757 - 418,757
-------- -------- --------
Operating expenses:
Cost of sales 177,569 - 177,569
Research and development 107,472 - 107,472
Selling, general and administrative 128,492 - 128,492
Amortization expense - (20,613) 20,613
Other operating expenses 2,056 - 2,056
-------- -------- --------
Total operating expenses 415,589 (20,613) 436,202
-------- -------- --------
Income (loss) from operations 3,168 20,613 (17,445)
Interest expense (8,094) - (8,094)
Interest and other income, net 26,298 - 26,298
Minority interest (662) - (662)
-------- -------- --------
Income from continuing operations
before income taxes 20,710 20,613 97
Provision for income taxes 5,118 5,070 48
-------- -------- --------
Income from continuing operations 15,592 15,543 49
======== ======== ========
Gain from discontinued operations - - -
-------- -------- --------
Net income $ 15,592 $ 15,543 $ 49
======== ======== ========
Basic earnings per share:
Income from continuing operations $ 0.08 $ - (a)
======== ========
Net income $ 0.08 $ - (a)
======== ========
Diluted earnings per share:
Income from continuing operations $ 0.08 $ - (a)
======== ========
Net income $ 0.08 $ - (a)
======== ========
Shares used in calculating basic
earnings per share 187,532 187,532
======== ========
Shares used in calculating diluted
earnings per share 188,968 188,968
======== ========
Three Months Ended
June 30, 2004 Restated (2)
-------------------------------
-------------------------------
Adjusted (1) Adjustments Actual
----------- ----------- ------
Revenues:
Product sales, net $281,221 $ - $281,221
Revenues from joint business
arrangement 28,532 - 28,532
Collaborative agreement revenues 3,828 - 3,828
Royalty and license fee revenues 55,196 - 55,196
Other revenues 10,975 - 10,975
-------- -------- --------
Total revenues 379,752 - 379,752
-------- -------- --------
Operating expenses:
Cost of sales 129,228 - 129,228
Research and development 100,326 - 100,326
Selling, general and administrative 106,857 - 106,857
Amortization expense - (21,179) 21,179
Other operating expenses 4,644 - 4,644
-------- -------- --------
Total operating expenses 341,055 (21,179) 362,234
-------- -------- --------
Income (loss) from operations 38,697 21,179 17,518
Interest expense (6,452) - (6,452)
Interest and other income, net 19,809 - 19,809
Minority interest (459) - (459)
-------- -------- --------
Income from continuing operations
before income taxes 51,595 21,179 30,416
Provision for income taxes 12,899 5,295 7,604
-------- -------- --------
Income from continuing operations 38,696 15,884 22,812
======== ======== ========
Gain from discontinued operations 12,459 - 12,459
-------- -------- --------
Net income $ 51,155 $ 15,884 $ 35,271
======== ======== ========
Basic earnings per share:
Income from continuing operations $ 0.21 $ 0.12
======== ========
Net income $ 0.27 $ 0.19
======== ========
Diluted earnings per share:
Income from continuing operations $ 0.20 $ 0.12
======== ========
Net income $ 0.27 $ 0.18
======== ========
Shares used in calculating basic
earnings per share 188,275 188,275
======== ========
Shares used in calculating diluted
earnings per share 190,985 190,985
======== ========
(a) Less than $0.01 per share.
(1) Adjusted amounts exclude the amortization expense on acquired
intangible assets related to the acquisitions of PathoGenesis,
Chiron Behring, Pulmopharm and PowderJect Pharmaceuticals.
(2) Chiron determined that certain sales of a travel vaccine
recorded as revenues in the second quarter of 2004 should not have
been recorded as revenue at that time, and that portions of those
sales should have been recorded as revenues in the third and
fourth quarters of 2004 and possibly in later quarters.
On a GAAP and adjusted basis, as a result of the restatement, for
the three months ended June 30, 2004, product sales were reduced
by $13.9 million, cost of sales were reduced by $1.5 million and
income taxes were reduced by $3.1 million. This resulted in a $9.3
million reduction in income from continuing operations and net
income and a $0.05 reduction of diluted income from continuing
operations per share ($0.12 per share instead of the $0.17 per
share as previously reported on a GAAP basis and $0.20 per share
instead of $0.25 per share as previously reported on an adjusted
basis).
Note: Due to rounding, quarterly earnings (loss) per share amounts
may not sum fully to yearly earnings (loss) per share amounts.
CHIRON CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Six Months Ended
June 30, 2005
-------------------------------
Adjusted (3) Adjustments Actual
------------ ----------- ------
Revenues:
Product sales, net $580,738 $ - $580,738
Revenues from joint business
arrangement 67,061 - 67,061
Collaborative agreement revenues 7,980 - 7,980
Royalty and license fee revenues 156,583 - 156,583
Other revenues 13,751 - 13,751
-------- -------- --------
Total revenues 826,113 - 826,113
-------- -------- --------
Operating expenses:
Cost of sales 340,529 - 340,529
Research and development 217,311 - 217,311
Selling, general and administrative 260,400 - 260,400
Amortization expense - (41,876) 41,876
Other operating expenses 9,202 - 9,202
-------- -------- --------
Total operating expenses 827,442 (41,876) 869,318
-------- -------- --------
(Loss) income from operations (1,329) 41,876 (43,205)
Interest expense (15,173) - (15,173)
Interest and other income, net 47,745 - 47,745
Minority interest (1,192) - (1,192)
-------- -------- --------
Income (loss) from continuing
operations before income taxes 30,051 41,876 (11,825)
Provision for (benefit of) income
taxes 7,453 10,385 (2,932)
-------- -------- --------
Income (loss) from continuing
operations 22,598 31,491 (8,893)
======== ======== ========
Gain from discontinued operations - - -
-------- -------- --------
Net income (loss) $ 22,598 $ 31,491 $ (8,893)
======== ======== ========
Basic earnings (loss) per share:
Income (loss) from continuing
operations $ 0.12 $ (0.05)
======== =========
Net income (loss) $ 0.12 $ (0.05)
======== =========
Diluted earnings (loss) per share:
Income (loss) from continuing
operations $ 0.12 $ (0.05)
======== =========
Net income (loss) $ 0.12 $ (0.05)
======== =========
Shares used in calculating basic
earnings (loss) per share 187,321 187,321
======== =========
Shares used in calculating diluted
earnings (loss) per share 188,652 187,321
======== =========
Six Months Ended
June 30, 2004 Restated (4)
--------------------------------
Adjusted (3) Adjustments Actual
------------ ----------- -------
Revenues:
Product sales, net $562,287 $ - $562,287
Revenues from joint business
arrangement 58,893 - 58,893
Collaborative agreement revenues 10,343 - 10,343
Royalty and license fee revenues 109,988 - 109,988
Other revenues 17,913 - 17,913
-------- -------- --------
Total revenues 759,424 - 759,424
-------- -------- --------
Operating expenses:
Cost of sales 255,929 - 255,929
Research and development 198,736 - 198,736
Selling, general and administrative 211,597 - 211,597
Amortization expense - (42,511) 42,511
Other operating expenses 6,760 - 6,760
-------- -------- --------
Total operating expenses 673,022 (42,511) 715,533
-------- -------- --------
(Loss) income from operations 86,402 42,511 43,891
Interest expense (12,377) - (12,377)
Interest and other income, net 35,883 - 35,883
Minority interest (1,079) - (1,079)
-------- -------- --------
Income (loss) from continuing
operations before income taxes 108,829 42,511 66,318
Provision for (benefit of) income
taxes 27,207 10,628 16,579
-------- -------- --------
Income (loss) from continuing
operations 81,622 31,883 49,739
======== ======== ========
Gain from discontinued operations 25,304 - 25,304
-------- -------- --------
Net income (loss) $106,926 $ 31,883 $ 75,043
======== ======== ========
Basic earnings (loss) per share:
Income (loss) from continuing
operations $ 0.43 $ 0.26
======== ========
Net income (loss) $ 0.57 $ 0.40
======== ========
Diluted earnings (loss) per share:
Income (loss) from continuing
operations $ 0.43 $ 0.26
======== ========
Net income (loss) $ 0.56 $ 0.39
======== ========
Shares used in calculating basic
earnings (loss) per share 187,952 187,952
======== ========
Shares used in calculating diluted
earnings (loss) per share 191,402 191,402
======== ========
(3) Adjusted amounts exclude the amortization expense on acquired
intangible assets related to the acquisitions of PathoGenesis,
Chiron Behring, Pulmopharm and PowderJect Pharmaceuticals.
(4) Chiron determined that certain sales of a travel vaccine
recorded as revenues in the second quarter of 2004 should not have
been recorded as revenue at that time, and that portions of those
sales should have been recorded as revenues in the third and
fourth quarters of 2004 and possibly in later quarters.
On a GAAP and an adjusted basis, as a result of the restatement,
for the six months ended June 30, 2004, product sales were reduced
by $13.9 million, cost of sales were reduced by $1.5 million and
income taxes were reduced by $3.1 million. This resulted in a $9.3
million reduction in income from continuing operations and net
income on a GAAP and an adjusted basis. The restatement also
resulted in a $0.05 reduction of diluted income from continuing
operations per share on a GAAP basis ($0.26 per share instead of
the $0.31 per share as previously reported) and a $0.04 reduction
of diluted income from continuing operations per share on an
adjusted basis ($0.43 per share instead of the $0.47 per share as
previously reported).
Note: Due to rounding, quarterly earnings (loss) per share amounts
may not sum fully to yearly earnings (loss) per share amounts.
CHIRON CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
June 30, December 31,
2005 2004
-------- ------------
Assets
----------------------------------------------
Current assets:
Cash and short-term investments $ 583,983 $ 603,621
Accounts receivable, net 338,168 402,094
Inventories, net 238,894 221,154
Other current assets 174,415 167,154
---------- ----------
Total current assets 1,335,460 1,394,023
Non-current investments in marketable debt
securities 435,287 409,421
Property, plant, equipment and leasehold
improvements, net 808,378 799,415
Other non-current assets 1,562,360 1,702,644
---------- ----------
Total assets $4,141,485 $4,305,503
========== ==========
Liabilities and stockholders' equity
----------------------------------------------
Current liabilities $ 424,312 $ 434,444
Long-term debt 938,248 936,652
Long-term portion of capital lease 156,828 156,952
Non-current unearned revenue 31,568 26,175
Other non-current liabilities 108,333 140,226
Minority interest 10,258 9,350
Stockholders' equity 2,471,938 2,601,704
---------- ----------
Total liabilities and
stockholders' equity $4,141,485 $4,305,503
========== ==========
CHIRON CORPORATION
SUPPLEMENTAL SCHEDULE OF COMPUTATION OF EARNINGS PER SHARE
(Unaudited)
(In thousands, except per share data)
Three Months Ended
June 30,
2005 2004 Restated
------------------- -------------------
Adjusted Actual Adjusted Actual
--------- --------- --------- ---------
Computation for earnings per
share - continuing
operations
Income (Numerator):
Income from continuing
operations $ 15,592 $ 49 $ 38,696 $ 22,812
======== ========= ======== ========
Shares (Denominator):
Weighted-average common
shares outstanding 187,532 187,532 188,275 188,275
Effect of dilutive
securities:
Stock options and
equivalents 1,436 1,436 2,710 2,710
-------- -------- -------- --------
Weighted-average common
shares outstanding, plus
impact from assumed
conversions 188,968 188,968 190,985 190,985
======== ========= ======== ========
Basic earnings per share from
continuing operations
$ 0.08 $ - (a) $ 0.21 $ 0.12
======== ========= ======== ========
Diluted earnings per share
from continuing operations
$ 0.08 $ - (a) $ 0.20 $ 0.12
======== ========= ======== ========
Computation for earnings per
share - net income
Income (Numerator):
Net income $ 15,592 $ 49 $ 51,155 $ 35,271
======== ========= ======== ========
Shares (Denominator):
Weighted-average common
shares outstanding 187,532 187,532 188,275 188,275
Effect of dilutive
securities:
Stock options and
equivalents 1,436 1,436 2,710 2,710
-------- -------- -------- --------
Weighted-average common
shares outstanding, plus
impact from assumed
conversions 188,968 188,968 190,985 190,985
======== ========= ======== ========
Basic earnings per share
$ 0.08 $ - (a) $ 0.27 $ 0.19
======== ========= ======== ========
Diluted earnings per share
$ 0.08 $ - (a) $ 0.27 $ 0.18
======== ========= ======== ========
(a) Less than $0.01 per share.
CHIRON CORPORATION
SUPPLEMENTAL SCHEDULE OF COMPUTATION OF EARNINGS (LOSS) PER SHARE
(Unaudited)
(In thousands, except per share data)
Six Months Ended
June 30,
2005 2004 Restated
------------------ -------------------
Adjusted Actual Adjusted Actual
--------- --------- --------- ---------
Computation for earnings
(loss) per share - continuing
operations
Income (loss) (Numerator):
Income (loss) from
continuing operations $ 22,598 $ (8,893) $ 81,622 $ 49,739
======== ========= ======== ========
Shares (Denominator):
Weighted-average common
shares outstanding 187,321 187,321 187,952 187,952
Effect of dilutive securities:
Stock options and
equivalents 1,331 - 3,450 3,450
-------- -------- -------- --------
Weighted-average common
shares outstanding, plus
impact from assumed
conversions 188,652 187,321 191,402 191,402
======== ========= ======== ========
Basic earnings (loss) per
share from continuing
operations $ 0.12 $ (0.05) $ 0.43 $ 0.26
======== ======== ======== ========
Diluted earnings (loss) per
share from continuing
operations $ 0.12 $ (0.05) $ 0.43 $ 0.26
======== ======== ======== ========
Computation for earnings
(loss) per share - net income
Income (loss) (Numerator):
Net income (loss) $ 22,598 $ (8,893) $106,926 $ 75,043
======== ========= ======== ========
Shares (Denominator):
Weighted-average common
shares outstanding 187,321 187,321 187,952 187,952
Effect of dilutive securities:
Stock options and
equivalents 1,331 - 3,450 3,450
-------- -------- -------- --------
Weighted-average common
shares outstanding, plus
impact from assumed
conversions 188,652 187,321 191,402 191,402
======== ========= ======== ========
Basic earnings (loss)
per share $ 0.12 $ (0.05) $ 0.57 $ 0.40
======== ======== ======== ========
Diluted earnings (loss)
per share $ 0.12 $ (0.05) $ 0.56 $ 0.39
======== ======== ======== ========
CHIRON CORPORATION
Supplemental Revenue Summary (Adjusted)
USD $ (in thousands)
Change
Current Prior from
Quarter Quarter Prior Change
Q2 2005 Q1 2005 QTR %
------------------------------- --------- --------- -------- --------
Product Sales
Blood Testing
Ortho $ 7,988 $ 6,462 $ 1,526 23.6%
NAT 66,104 64,431 1,673 2.6%
-------- -------- ------- --------
Total Blood Testing 74,092 70,893 3,199 4.5%
Vaccines
Influenza Vaccines (492) 3,571 (4,063) (113.8)%
Meningococcus Vaccines 13,605 9,153 4,452 48.6%
Travel Vaccines (TBE,
Rabies, Arilvax and
Dukoral) 45,014 43,759 1,255 2.9%
Pediatric/Other Vaccines 39,127 30,493 8,634 28.3%
-------- -------- ------- --------
Total Vaccines 97,254 86,976 10,278 11.8%
Biopharmaceuticals
Proleukin 31,727 29,535 2,192 7.4%
TOBI 56,600 52,935 3,665 6.9%
Betaseron (b) 38,132 26,634 11,498 43.2%
Other 5,770 10,190 (4,420) (43.4)%
-------- -------- ------- --------
Total Biopharmaceuticals 132,229 119,294 12,935 10.8%
TOTAL PRODUCT SALES, NET $303,575 $277,163 $26,412 9.5%
======== ======== ======= ========
Revenues From Joint Business
Arrangement $ 31,003 $ 36,058 $(5,055) (14.0)%
Collaborative Agreement
Revenues 3,453 4,527 (1,074) (23.7)%
Royalty and License Fees
Revenues 76,522 80,061 (3,539) (4.4)%
Other Revenues 4,204 9,547 (5,343) (56.0)%
-------- -------- ------- --------
TOTAL REVENUES $418,757 $407,356 $11,401 2.8%
-------- -------- ------- --------
Gross Margins
Blood Testing 40% 44% (4)%
Vaccines 7% (3)% 10%
Biopharmaceuticals 68% 72% (4)%
-------- -------- ------- --------
TOTAL GROSS MARGINS 42% 41% 1%
-------- -------- ------- --------
------------------------------- --------- --------- ------- --------
(b) Excludes Betaferon Royalty $ 16,943 $ 15,477 $ 1,466 9.5%
------------------------------- -------- -------- ------- --------
Change
Restated from
Quarter Prior Change
Q2 2004 Year %
-------------------------------------------------- -------- --------
Product Sales
Blood Testing
Ortho $ 6,608 $ 1,380 20.9%
NAT 60,589 5,515 9.1%
-------- ------- --------
Total Blood Testing 67,197 6,895 10.3%
Vaccines
Influenza Vaccines 8,207 (8,699) (106.0)%
Meningococcus Vaccines 5,016 8,589 171.2%
Travel Vaccines (TBE, Rabies,
Arilvax and Dukoral) 26,261 18,753 71.4%
Pediatric/Other Vaccines 47,619 (8,492) (17.8)%
-------- ------- --------
Total Vaccines 87,103 10,151 11.7%
Biopharmaceuticals
Proleukin 35,057 (3,330) (9.5)%
TOBI 51,342 5,258 10.2%
Betaseron (b) 31,626 6,506 20.6%
Other 8,896 (3,126) (35.1)%
-------- ------- --------
Total Biopharmaceuticals 126,921 5,308 4.2%
TOTAL PRODUCT SALES, NET $281,221 $22,354 7.9%
======== ======= ========
Revenues From Joint Business
Arrangement $ 28,532 $ 2,471 8.7%
Collaborative Agreement Revenues 3,828 (375) (9.8)%
Royalty and License Fees Revenues 55,196 21,326 38.6%
Other Revenues 10,975 (6,771) (61.7)%
-------- ------- --------
TOTAL REVENUES $379,752 $39,005 10.3%
-------- ------- --------
Gross Margins
Blood Testing 42% (2)%
Vaccines 34% (27)%
Biopharmaceuticals 74% (6)%
-------- ------- --------
TOTAL GROSS MARGINS 54% (12)%
-------- ------- --------
--------------------------------------------------- ------- --------
(b) Excludes Betaferon Royalty $ 11,585 $ 5,358 46.2%
----------------------------------------- -------- ------- --------
CHIRON CORPORATION
Supplemental YTD Revenue Summary (Adjusted)
USD $ (in thousands)
Six Months Ended Change
June 30, from
2004 Prior Change
2005 Restated Year %
------------------------------- -------- --------- --------- -------
Product Sales
Blood Testing
Ortho $ 14,450 $ 12,842 $ 1,608 12.5%
NAT 130,535 122,475 8,060 6.6%
-------- -------- -------- -------
Total Blood Testing 144,985 135,317 9,668 7.1%
Vaccines
Influenza Vaccines 3,079 15,912 (12,833) (80.6)%
Meningococcus Vaccines 22,758 9,565 13,193 137.9%
Travel Vaccines (TBE,
Rabies, Arilvax and
Dukoral) 88,773 49,271 39,502 80.2%
Pediatric/Other Vaccines 69,620 98,801 (29,181) (29.5)%
-------- -------- -------- -------
Total Vaccines 184,230 173,549 10,681 6.2%
Biopharmaceuticals
Proleukin 61,262 66,925 (5,663) (8.5)%
TOBI 109,535 103,866 5,669 5.5%
Betaseron (b) 64,766 61,762 3,004 4.9%
Other 15,960 20,868 (4,908) (23.5)%
-------- -------- -------- -------
Total Biopharmaceuticals 251,523 253,421 (1,898) (0.7)%
TOTAL PRODUCT SALES, NET $580,738 $562,287 $ 18,451 3.3%
======== ======== ======== =======
Revenues From Joint Business
Arrangement $ 67,061 $ 58,893 $ 8,168 13.9%
Collaborative Agreement
Revenues 7,980 10,343 (2,363) (22.8)%
Royalty and License Fees
Revenues 156,583 109,988 46,595 42.4%
Other Revenues 13,751 17,913 (4,162) (23.2)%
-------- -------- -------- -------
TOTAL REVENUES $826,113 $759,424 $ 66,689 8.8%
-------- -------- -------- -------
Gross Margins
Blood Testing 42% 42% 0%
Vaccines 2% 34% (32)%
Biopharmaceuticals 70% 75% (5)%
-------- -------- --------
TOTAL GROSS MARGINS 41% 54% (13)%
-------- -------- --------
------------------------------- --------- --------- -------- -------
(b) Excludes Betaferon Royalty $ 32,420 $ 25,392 $ 7,028 27.7%
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