Chiron Reports Third-Quarter 2005 Adjusted Earnings of $0.38 per Share, GAAP Earnings of $0.27 per Share.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 third quarter of 2005. 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. 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 $73 million, or $0.38 per share, for the third quarter of 2005, compared to $53 million, or $0.27 per share (as restated), for the third quarter of 2004. Chiron reported GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). income from continuing operations of $51 million, or $0.27 per share, for the third quarter of 2005, compared to $27 million, or $0.14 per share (as restated), for the third quarter of 2004. Three factors had a material impact on the quarterly comparison of financial results. As previously reported, following the suspension suspension, in vehicles suspension, in automobiles, system of springs used to suspend the frame, body, engine, and power train above the wheels. Its principal purpose is to lessen the jarring of the automobile that is caused by irregularities in the roads of Chiron's manufacturing license for its 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 in October October: see month. 2004, Chiron's entire 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. product inventory was written off in the third quarter of 2004, resulting in a $91 million charge to cost of sales. Also in the third quarter of 2004, Chiron recognized $46 million of 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 revenue resulting from a settlement with F. Hoffmann-La Roche n. 1. Rock. related to a U.S. patent directed to 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. 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. (Roche settlement), compared to $8 million recognized in the third quarter of 2005. Lastly, there was a lost contribution from sales of BEGRIVAC(R) influenza virus vaccine as there were no sales of BEGRIVAC 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. in the third quarter of 2005, compared to $41 million of sales in the third quarter of 2004. "The third quarter marked a significant turning point for the company. The work underpinning un·der·pin·ning n. 1. Material or masonry used to support a structure, such as a wall. 2. A support or foundation. Often used in the plural. 3. Informal The human legs. Often used in the plural. the Liverpool remediation came to culmination with the return of FLUVIRIN vaccine to the U.S. market, and Chiron is now poised to provide possible solutions in the government's assessment of policy options to address 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. . At the same time, we continue to hit important clinical and commercial milestones in our BioPharmaceuticals and Blood Testing businesses, and we continue to foster opportunities for growth and value creation across all our businesses," 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 and an impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. loss on acquired intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. , 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 for more detail on these items and a reconciliation of the adjusted financial information to GAAP financial information; this information is also located at www.chiron.com in the Investors section under Financial Reports. 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)
Third- Third-
Quarter Quarter Change
($ millions) 2005 2004
--------------------------------------------- -------- -------- ------
Net product sales $367 $376 (2%)
Total revenues 480 530 (9%)
Cost of sales 169 241
Gross profit margin 54% 36%
Research and development 107 103 4%
Selling, general and administrative 117 112 5%
--------------------------------------------- -------- -------- ------
Net product sales for the third quarter of 2005 decreased 2 percent, or $8 million, compared to the third quarter of 2004, primarily due to no sales of BEGRIVAC vaccine in the third quarter of 2005, compared to $41 million of sales of BEGRIVAC vaccine in the third quarter of 2004. The decline was partially offset by increases in sales of other 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 , 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 , PROCLEIX(R) NAT products, MENJUGATE(R) meningococcal C vaccine, 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, and 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.Revenues decreased 9 percent, or $50 million, primarily due to recognition of $46 million in the third quarter of 2004 relating to the Roche settlement, compared to recognition of $8 million in the third quarter of 2005 relating to the settlement. In addition, there were no BEGRIVAC vaccine product sales in the third quarter of 2005. 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. increased primarily due to the entire FLUVIRIN vaccine product inventory being written off in the third quarter of 2004, resulting in a $91 million charge to cost of sales. 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 and the meningococcal vaccine franchise. This increase was partially offset by decreases from a variety of BioPharmaceutical and Blood Testing research and development programs that were completed or 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 third quarter of 2005. Selling, general and administrative expenses increased due to a broad range of activities, including the pre-launch program 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 in 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). , higher employee-related
costs and corporate governance Corporate GovernanceThe 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. . The effective tax rate was 22 percent on an adjusted basis and a GAAP basis for the third quarter of 2005, compared to 25 percent on an adjusted basis and 31 percent on a GAAP basis for the third quarter of 2004. The tax rate decreased primarily due to lower than expected revenues from FLUVIRIN vaccine and BEGRIVAC vaccine, which are realized in high-tax jurisdictions. The change is expected to be a non-recurring event impacting adjusted and GAAP tax rates in 2005. BLOOD TESTING Total Blood Testing revenues were $138 million for the third quarter of 2005, a decrease of 2 percent compared to the third quarter of 2004.
Selected Blood Testing Revenues
Third- Third-
Quarter Quarter
($ millions) 2005 2004 Change
--------------------------------------------- -------- -------- ------
Ortho-Clinical Diagnostics $7 $7 (1%)
PROCLEIX(R) NAT products 71 64 11%
-------- -------- ------
Blood Testing net product sales 78 71 10%
Revenues from joint business
arrangement 36 34 6%
Royalty and license fee revenues 23 34 (34%)
Total Blood Testing revenues(a) $138 $141 (2%)
--------------------------------------------- -------- -------- ------
(a) 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 third quarter of 2005 compared to the third quarter of 2004 was primarily due to the introduction of the PROCLEIX(R) ULTRIO(R) 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. and PROCLEIX(R) TIGRIS(R) System into a number of markets abroad and an increase in donations in 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. . --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 increased profitability realized by the joint business. --Royalty and license fee revenues related to NAT blood screening: The decrease was primarily due to recognition in the third quarter of 2004 of the Blood Testing share of the Roche settlement and the license fee under Chiron's license agreements with the Blood Transfusion blood transfusion, transfer of blood from one person to another, or from one animal to another of the same species. Transfusions are performed to replace a substantial loss of blood and as supportive treatment in certain diseases and blood disorders. Centers of the German Red Cross (Blutspendediensten des Deutsche Rotes Kreuz The term Kreuz (German for "cross") may mean:
DRK Devnet Resource Kit DRK Display Require Keyboard ). This was partially offset by increased 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. from Roche due to an increase in applicable royalty rates as certain countries entered the EU and an increase in reported donations. In addition, royalties increased due to several settlements entered into prior to the third quarter of 2005. The gross profit margin for Blood Testing products was 42 percent for the third quarter of 2005, compared to 43 percent for the third quarter of 2004. The decrease was primarily due to the cost of additional PROCLEIX TIGRIS System support and service. VACCINES Vaccines net product sales were $153 million for the third quarter of 2005, a decrease of 12 percent compared to the third quarter of 2004.
Selected Vaccines Revenues
Third- Third-
Quarter Quarter Change
($ millions) 2005 2004
--------------------------------------------- -------- -------- ------
Influenza vaccines $60 $93 (35%)
Meningococcal vaccines 12 9 31%
Travel vaccines 35 26 32%
Pediatric and other vaccines 46 44 3%
-------- -------- ------
Vaccines net product sales 153 173 (12%)
Total Vaccines revenues(a) $157 $180 (13%)
--------------------------------------------- -------- -------- ------
(a) 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 was due to no sales of BEGRIVAC vaccine in the third quarter of 2005, compared to $41 million of sales in the third quarter of 2004, partially offset by increased sales of other influenza vaccine products. --Meningococcal vaccines: The increase in MENJUGATE vaccine sales was primarily due to a tender sale in Spain Spain, Span. España (āspä`nyä), officially Kingdom of Spain, constitutional monarchy (2005 est. pop. 40,341,000), 194,884 sq mi (504,750 sq km), including the Balearic and Canary islands, SW Europe. , partially offset by a decline in tender sales to the United Kingdom and 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 . --Travel vaccines: The increase in travel vaccines sales was primarily due to an increase in sales of rabies vaccine due to increased demand as a result of a product recall from another supplier, an increase in price, and an increase in tender sales in Europe. --Pediatric and other vaccines: The increase in 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 sales was primarily due to an increase in sales of diphtheria diphtheria (dĭfthēr`ēə), acute contagious disease caused by Corynebacterium diphtheriae (Klebs-Loffler bacillus) bacteria that have been infected by a bacteriophage. It begins as a soreness of the throat with fever. , pertussis pertussis: see whooping cough. and tetanus vaccine tetanus vaccine n. Abbr. T Tetanus toxoids vaccine. tetanus vaccine, n one of several vaccinations used to immunize against tetanus (lockjaw). concentrate, partially offset by a decline in polio vaccine 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. sales due to product write-offs and product unavailability un·a·vail·a·ble adj. Not available, accessible, or at hand. un  a·vail as a result of manufacturing upgrades.The gross profit margin for Vaccines products was 45 percent for the third quarter of 2005, compared to 9 percent for the third quarter of 2004. The increase was primarily due to the entire FLUVIRIN vaccine product inventory being written off in the third quarter of 2004, resulting in a $91 million charge to cost of sales in that quarter. The absence of any sales of BEGRIVAC vaccine and costs related to remediation activities for FLUVIRIN vaccine and BEGRIVAC vaccine had a negative impact on gross margin for the third quarter of 2005. BIOPHARMACEUTICALS BioPharmaceuticals net product sales were $137 million for the third quarter of 2005, an increase of 4 percent compared to the third quarter of 2004.
Selected BioPharmaceuticals Revenues
Third- Third-
Quarter Quarter Change
($ millions) 2005 2004
--------------------------------------------- -------- -------- ------
TOBI(R) tobramycin inhalation solution $58 $56 4%
PROLEUKIN(R) (aldesleukin) for injection 31 32 (2%)
BETASERON(R) interferon beta-1b 37 35 5%
BioPharmaceuticals net product sales(a) 137 132 4%
BETAFERON(R) interferon beta-1b royalties 13 13 0%
Total BioPharmaceuticals revenues(b) $155 $148 5%
--------------------------------------------- -------- -------- ------
(a) Net product sales include sales from TOBI, PROLEUKIN, BETASERON
and other products.
(b) 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 third quarter of 2005 compared to the third quarter of 2004 was primarily due to price increases and increased patient demand in both the United States and Europe, partially offset by wholesaler ordering patterns. --PROLEUKIN: The decrease in PROLEUKIN Proleukin® Aldesleukin, IL-2 Immunology An agent used for metastatic kidney CA, melanoma, NHL, AML, TB, HIV infection, KS. See IL-2. product sales was primarily due to decreased patient demand in the United States and Europe 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 price increases, a shift from third-party to in-house In-house In the context of general equities, keeping an activity within the firm. For example, rather than go to the marketplace and sell a security for a client to anyone, an attempt is made to find a buyer to complete the transaction with the firm. production and timing of clinical product, partially offset by a reduction in shipments to Berlex and inventory ordering patterns. --BETAFERON royalties: BETAFERON royalties in the third quarter of 2005 were consistent with BETAFERON royalties the third quarter of 2004 due to an increase in demand and price, partially offset by a shift from third-party to in-house production. The gross profit margin for BioPharmaceuticals products was 71 percent for the third quarter of 2005, compared to 67 percent for the third quarter of 2004. The increase in gross profit margin was primarily due to favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. product mix and increased utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be of facilities over the prior year. 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 fee revenues, which consist primarily of royalties from Roche, Roche Molecular Systems and Bayer HealthCare AG for clinical diagnostic products.
Selected Royalty and License Fee Revenues
Third- Third-
Quarter Quarter
($ millions) 2005 2004 Change
--------------------------------------------- -------- -------- ------
Blood Testing $23 $34 (34%)
Vaccines 1 1 4%
BioPharmaceuticals 17 15 12%
Other 30 61 (51%)
Total royalty and license fee revenues(a) $71 $111 (37%)
--------------------------------------------- -------- -------- ------
(a) Totals may not sum due to rounding.
--Total royalty and license fee revenues: In addition to the variances in Blood Testing, Vaccines and BioPharmaceuticals royalty and license fee revenues for the third quarter of 2005 compared to the third quarter of 2004 as explained above, other royalty and license fee revenues decreased. The decrease was primarily due to the Roche settlement, which was entered into in the third quarter of 2004. In relation to this settlement in the third quarter of 2005, $3 million related to blood screening and thus was recognized as Blood Testing royalty and license fee revenues, and $5 million related to 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 thus was recognized as other royalty and license fee revenues. In the third quarter of 2004, $10 million of the Roche settlement was recognized as Blood Testing royalty and license fee revenues, and $36 million was recognized as other royalty and license fee revenues. RECENT EVENTS --Chiron has received all necessary approvals from 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. ) and 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 ) to start supplying FLUVIRIN vaccine to the U.S. market. Subsequent to the third quarter of 2005, Chiron announced that it began delivering FLUVIRIN vaccine to customers in the United States for the 2005-2006 influenza season. The company expects that the total number of FLUVIRIN vaccine doses it will produce for the 2005-2006 influenza season will be below its previously stated range announced on July July: see month. 27, 2005, due to production delays related to remediation as well as lower production output associated with adaptation adaptation, in biology, has several meanings. It can mean the adjustment of living matter to environmental conditions and to other living things either in an organism's lifetime (physiological adaptation) or in a population over many many generations (evolutionary to new processes and procedures implemented in remediation. Accordingly, Chiron expects that its financial results for 2005 will be below its previously stated guidance. Chiron expects to have more information on FLUVIRIN vaccine production totals and financial guidance in the weeks ahead. --The FDA notified Chiron's collaborator Gen-Probe Incorporated that it considers the PROCLEIX TIGRIS System "not substantially equivalent" to the PROCLEIX Enhanced Semi-Automated System (eSAS) for screening donated do·nate v. do·nat·ed, do·nat·ing, do·nates v.tr. To present as a gift to a fund or cause; contribute. v.intr. To make a contribution to a fund or cause. human blood with the PROCLEIX ULTRIO Assay. The FDA made this determination in response to Gen-Probe's 510(k) application for the TIGRIS System. Gen-Probe has discussed the determination with the FDA and is scheduling a series of meetings to resolve the outstanding issues. --In conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with the recently held European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. Committee for Treatment and Research in Multiple Sclerosis multiple sclerosis (MS), chronic, slowly progressive autoimmune disease in which the body's immune system attacks the protective myelin sheaths that surround the nerve cells of the brain and spinal cord (a process called demyelination), resulting in damaged areas (ECTRIMS ECTRIMS European Committee for Treatment and Research in Multiple Sclerosis ) meeting, the University of Basel The University of Basel (German: Universität Basel) is located at Basel, Switzerland. History Founded in 1459, it is Switzerland's oldest university. in Switzerland Switzerland (swĭt`sərlənd), Fr. Suisse, Ger. Schweiz, Ital. Svizzera, officially Swiss Confederation, federal republic (2005 est. pop. 7,489,000), 15,941 sq mi (41,287 sq km), central Europe. announced results from the BENEFIT (BETAFERON/BETASERON in Newly Emerging Multiple Sclerosis For Initial Treatment) clinical study. Study results showed that BETAFERON/BETASERON interferon beta-1b 250 mcg treatment delayed the onset on·set n. A beginning; a start, as of a cold. of clinically definite multiple sclerosis by one year (363 days) in patients with first clinical signs of multiple sclerosis compared to placebo placebo (pləsē`bō), inert substance given instead of a potent drug. Placebo medications are sometimes prescribed when a drug is not really needed or when one would not be appropriate because they make patients feel well taken care of. . --Chiron and XOMA Ltd. announced the initiation initiation, the transition and attendant ceremonies, such as ordeals and rites, involved in passing from one state or status to another, often from childhood to adulthood. It was among the most important social institutions of early humans. of a second clinical trial of CHIR- chir- pref. Variant of cheiro-. 12.12, a novel, fully human, antagonist antagonist /an·tag·o·nist/ (an-tag´o-nist) 1. a substance that tends to nullify the action of another, as a drug that binds to a cell receptor without eliciting a biological response, blocking binding of substances that could antibody antibody, protein produced by the immune system (see immunity) in response to the presence in the body of antigens: foreign proteins or polysaccharides such as bacteria, bacterial toxins, viruses, or other cells or proteins. that targets the CD40 antigen antigen: see immunity. antigen Foreign substance in the body that induces an immune response. The antigen stimulates lymphocytes to produce antibodies or to attack the antigen directly (see antibody;immunity). . The Phase I trial is for patients with 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 that is associated with expression of the CD40 antigen on the cancer cell surface. --Chiron and Nektar If you want to read about Czech Republic's beer Nektar. Nektar is a 1970s English progressive rock band based in Germany. History The band formed in Hamburg, Germany in 1969, members included Englishmen Roye Albrighton on guitars and vocals, Allan "Taff" Therapeutics therapeutics Treatment and care to combat disease or alleviate pain or injury. Its tools include drugs, surgery, radiation therapy, mechanical devices, diet, and psychiatry. announced the initiation of clinical testing in 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 program evaluating tobramycin inhalation powder powder, any mass of fine particles or dust prepared by various mechanical means, e.g., grinding of solid substances, or by chemical means, e.g., precipitation from solutions. In a special sense, the word is applied to powdered propellant explosives, e.g. (TIP), an investigational inhaled in·hale v. in·haled, in·hal·ing, in·hales v.tr. 1. To draw (air or smoke, for example) into the lungs by breathing; inspire. 2. antibiotic antibiotic, any of a variety of substances, usually obtained from microorganisms, that inhibit the growth of or destroy certain other microorganisms. Types of Antibiotics . The TIP Phase III program includes two clinical trials and will evaluate 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. and safety of TIP in the treatment of lung infections caused by Pseudomonas aeruginosa Pseudomonas aeruginosa A normal soil inhabitant and human saprophyte that may contaminate various solutions in a hospital, causing opportunistic infection in weakened Pts Clinical Infective endocarditis in IVDAs, RTIs, UTIs, bacteremia, meningitis, 'malignant' in patients living with cystic fibrosis cystic fibrosis (sĭs`tĭk fībrō`sĭs), inherited disorder of the exocrine glands (see gland), affecting children and young people; median survival is 25 years in females and 30 years in males. . The first trial, called ASPIRE I, is now underway. THIRD-QUARTER 2005 EARNINGS CONFERENCE CALL Chiron will hold a conference call and webcast on Tuesday Tuesday: see week. , October 25, 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 third-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 (1) A file that contains one or more compressed files. Most archive formats are also capable of storing folders in order to reconstruct the file/folder relationship when decompressed. See archive formats. , 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 or (706) 643-7768 from other locations. Replay by phone is available approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. two hours after the completion of the call through 11:55 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. , Tuesday, November November: see month. 1, 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 1067243. ABOUT CHIRON Chiron delivers innovative and valuable products to protect human health by advancing pioneering science across the landscape of biotechnology biotechnology, the use of biological processes, as through the exploitation and manipulation of living organisms or biological systems, in the development or manufacture of a product or in the technological solution to a problem. . 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/7819/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 June June: see month. 30, 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 previous suspension of Chiron's UK license to manufacture FLUVIRIN(R) influenza virus vaccine from October 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 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. 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. There can be no assurance that additional issues with respect to FLUVIRIN vaccine or Chiron's manufacturing generally will not arise in the future, or additional doses of FLUVIRIN vaccine will satisfy Chiron's internal release procedures and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. FDA influenza vaccine lot release procedures. The company may face additional competition in the influenza market in the future and challenges in distribution arrangements as a result of previous 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, FLUVIRIN, MENJUGATE, PROCLEIX, PROLEUKIN, 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
September 30,
-----------------------------------------------------
2005 2004 Restated (3)
-------------------------- --------------------------
Adjusted Adjust- Actual Adjusted Adjust- Actual
(1) ments (2) ments
-------------------------- --------------------------
Revenues:
Product sales,
net $367,175 $- $367,175 $375,549 $- $375,549
Revenues from
joint business
arrangement 36,093 - 36,093 34,017 - 34,017
Collaborative
agreement
revenues 3,149 - 3,149 4,124 - 4,124
Royalty and
license fee
revenues 70,726 - 70,726 111,396 - 111,396
Other revenues 2,470 - 2,470 4,450 - 4,450
-------- ------- --------- -------- ------- ---------
Total
revenues 479,613 - 479,613 529,536 - 529,536
-------- ------- --------- -------- ------- ---------
Operating
expenses:
Cost of sales 168,726 - 168,726 241,044 - 241,044
Research and
development 107,309 - 107,309 103,000 - 103,000
Selling,
general and
administrative 117,152 - 117,152 112,013 - 112,013
Purchased in-
process
research and
development - - - - (9,629) 9,629
Amortization
expense - (12,361) 12,361 - (20,566) 20,566
Impairment loss
on acquired
intangible
assets - (14,522) 14,522 - - -
Other operating
expenses 3,621 - 3,621 1,280 - 1,280
-------- ------- --------- -------- ------- ---------
Total
operating
expenses 396,808 (26,883) 423,691 457,337 (30,195) 487,532
-------- ------- --------- -------- ------- ---------
Income from
operations 82,805 26,883 55,922 72,199 30,195 42,004
Interest expense (7,759) - (7,759) (7,063) - (7,063)
Interest and
other income,
net 18,514 - 18,514 5,369 - 5,369
Minority interest (531) - (531) (504) - (504)
-------- ------- --------- -------- ------- ---------
Income from
continuing
operations
before income
taxes 93,029 26,883 66,146 70,001 30,195 39,806
Provision for
income taxes 20,172 5,337 14,835 17,500 5,141 12,359
-------- ------- --------- -------- ------- ---------
Income from
continuing
operations 72,857 21,546 51,311 52,501 25,054 27,447
======== ======= ========= ======== ======= =========
Loss from
discontinued
operations, net
of taxes - - - (450) - (450)
-------- ------- --------- -------- ------- ---------
Net income $72,857 $21,546 $51,311 $52,051 $25,054 $26,997
======== ======= ========= ======== ======= =========
Basic earnings
per share:
Income from
continuing
operations $0.39 $0.27 $0.28 $0.15
========= ========= ========= =========
Net income $0.39 $0.27 $0.28 $0.14
========= ========= ========= =========
Diluted earnings
per share:
Income from
continuing
operations $0.38 $0.27 $0.27 $0.14
========= ========= ========= =========
Net income $0.38 $0.27 $0.27 $0.14
========= ========= ========= =========
Shares used in
calculating
basic earnings
per share 188,039 188,039 187,368 187,368
========= ========= ========= =========
Shares used in
calculating
diluted earnings
per share 197,802 197,802 197,894 190,014
========= ========= ========= =========
(1) Adjusted amounts exclude (a) the amortization expense on
acquired intangible assets related to the acquisitions of
PathoGenesis, Chiron Behring, Pulmopharm and PowderJect
Pharmaceuticals and (b) An impairment loss of $14.5 million on
acquired intangible assets from our acquisition of PowderJect related
to a yellow fever vaccine.
(2) Adjusted amounts exclude (a) the amortization expense on
acquired intangible assets related to the acquistions of PathoGenesis,
Chiron Behring, Pulmopharm and PowderJect Pharmaceuticals and (b)
Purchased in-process research and development related to the Sagres
acquisition.
(3) 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 September 30, 2004, product sales were
increased by $5.6 million, cost of sales were increased by $0.9
million and income taxes were increased by $1.2 million. This resulted
in a $3.5 million increase in income from continuing operations and
net income and a $0.01 increase of diluted income from continuing
operations per share ($0.14 per share instead of the $0.13 per share
as previously reported on a GAAP basis and $0.27 per share instead of
$0.26 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 per share amounts.
CHIRON CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Nine Months Ended
September 30,
---------------------------------------------------------
2005 2004 Restated (6)
---------------------------- ----------------------------
Adjusted Adjust- Actual Adjusted Adjust- Actual
(4) ments (5) ments
---------------------------- ----------------------------
Revenues:
Product
sales, net $947,913 $- $947,913 $937,836 $- $937,836
Revenues
from joint
business
arrangement 103,154 - 103,154 92,910 - 92,910
Collaborative
agreement
revenues 11,129 - 11,129 14,467 - 14,467
Royalty and
license fee
revenues 227,309 - 227,309 221,384 - 221,384
Other
revenues 16,221 - 16,221 22,363 - 22,363
---------- ----------------- ---------- ------- ---------
Total
revenues 1,305,726 - 1,305,726 1,288,960 - 1,288,960
---------- ----------------- ---------- ------- ---------
Operating
expenses:
Cost of
sales 511,005 - 511,005 498,808 - 498,808
Research and
development 324,620 - 324,620 301,736 - 301,736
Selling,
general
and admini-
strative 375,802 - 375,802 321,775 - 321,775
Purchased in-
process
research and
development - - - - (9,629) 9,629
Amortization
expense - (54,237) 54,237 - (63,077) 63,077
Impairment
loss on
acquired
intangible
assets - (14,522) 14,522 - - -
Other
operating
expenses 12,823 - 12,823 8,040 - 8,040
---------- ----------------- ---------- ------- ---------
Total
operating
expenses 1,224,250 (68,759)1,293,009 1,130,359 (72,706)1,203,065
---------- ----------------- ---------- ------- ---------
Income from
operations 81,476 68,759 12,717 158,601 72,706 85,895
Interest
expense (22,932) - (22,932) (19,440) - (19,440)
Interest and
other
income, net 66,259 - 66,259 41,252 - 41,252
Minority
interest (1,723) - (1,723) (1,583) - (1,583)
---------- ----------------- ---------- ------- ---------
Income from
continuing
operations
before
income taxes 123,080 68,759 54,321 178,830 72,706 106,124
Provision for
income taxes 27,625 15,722 11,903 44,708 15,770 28,938
---------- ----------------- ---------- ------- ---------
Income from
continuing
operations 95,455 53,037 42,418 134,122 56,936 77,186
========== ================= ========== ======= =========
Gain from
discontinued
operations,
net of taxes - - - 24,854 - 24,854
---------- ----------------- ---------- ------- ---------
Net income $95,455 $53,037 $42,418 $158,976 $56,936 $102,040
========== ================= ========== ======= =========
Basic
earnings per
share:
Income from
continuing
operations $0.51 $0.23 $0.71 $0.41
========== ========== ========== ==========
Net income $0.51 $0.23 $0.85 $0.54
========== ========== ========== ==========
Diluted
earnings per
share:
Income from
continuing
operations $0.50 $0.22 $0.70 $0.40
========== ========== ========== ==========
Net income $0.50 $0.22 $0.83 $0.53
========== ========== ========== ==========
Shares used
in calculating
basic
earnings
per share 187,564 187,564 187,751 187,751
========== ========== ========== ==========
Shares used
in calculating
diluted
earnings per
share 189,064 189,064 198,134 190,901
========== ========== ========== ==========
(4) Adjusted amounts exclude (a) the amortization expense on
acquired intangible assets related to the acquisitions of
PathoGenesis, Chiron Behring, Pulmopharm and PowderJect
Pharmaceuticals and (b) An impairment loss of $14.5 million on
acquired intangible assets from our acquisition of PowderJect related
to a yellow fever vaccine.
(5) Adjusted amounts exclude (a) the amortization expense on
acquired intangible assets related to the acquistions of PathoGenesis,
Chiron Behring, Pulmopharm and PowderJect Pharmaceuticals and (b)
Purchased in-process research and development related to the Sagres
acquisition.
(6) 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 nine months ended September 30, 2004, product sales were
reduced by $8.3 million, cost of sales were reduced by $0.6 million
and income taxes were reduced by $1.9 million. This resulted in a $5.8
million reduction in income from continuing operations and net income
on a GAAP and an adjusted basis. The restatement also resulted in a
$0.03 reduction of diluted income from continuing operations per share
on a GAAP basis ($0.40 per share instead of the $0.43 per share as
previously reported) and a $0.03 reduction of diluted income from
continuing operations per share on an adjusted basis ($0.70 per share
instead of the $0.73 per share as previously reported).
Note: Due to rounding, quarterly earnings (loss) per share amounts
may not sum fully to yearly earnings per share amounts
CHIRON CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
September December
30, 31,
2005 2004
----------- -----------
Assets
-----------------------------------------------
Current assets:
Cash, cash equivalents and short-term
investments $580,106 $603,621
Accounts receivable, net of allowances 383,925 402,094
Inventories, net of reserves 268,566 221,154
Other current assets 209,525 167,154
----------- -----------
Total current assets 1,442,122 1,394,023
Non-current investments in marketable debt
securities 437,650 409,421
Property, plant, equipment and leasehold
improvements, net 824,097 799,415
Other non-current assets 1,512,937 1,702,644
----------- -----------
Total assets $4,216,806 $4,305,503
=========== ===========
Liabilities and stockholders' equity
-----------------------------------------------
Current liabilities $459,522 $434,444
Long-term debt 938,449 936,652
Long-term portion of capital lease 156,723 156,952
Non-current unearned revenue 25,146 26,175
Other non-current liabilities 105,612 140,226
Minority interest 10,679 9,350
Stockholders' equity 2,520,675 2,601,704
----------- -----------
Total liabilities and stockholders' equity $4,216,806 $4,305,503
=========== ===========
CHIRON CORPORATION
SUPPLEMENTAL SCHEDULE OF COMPUTATION OF EARNINGS PER SHARE
(Unaudited)
(In thousands, except per share data)
Three Months Ended
September 30,
2005 2004 Restated
---------------- ----------------
Adjusted Actual Adjusted Actual
---------------- ----------------
Computation for earnings per share -
continuing operations
Income (Numerator):
Income from continuing operations $72,857 $51,311 $52,501 $27,447
Plus: Interest on 1.625%
convertible debentures, net of
taxes 1,589 1,589 1,570 -
Plus: Interest on Liquid Yield
Option Notes, net of taxes 147 147 143 -
---------------- ----------------
Income from continuing operations,
plus impact from assumed
conversions $74,593 $53,047 $54,214 $27,447
================ ================
Shares (Denominator):
Weighted-average common shares
outstanding 188,039 188,039 187,368 187,368
Effect of dilutive securities:
Stock options and equivalents 1,883 1,883 2,646 2,646
1.625% convertible debentures 7,306 7,306 7,306 -
Liquid Yield Option Notes 574 574 574 -
---------------- ----------------
Weighted-average common shares
outstanding, plus impact from
assumed conversions 197,802 197,802 197,894 190,014
================ ================
Basic earnings per share from
continuing operations $0.39 $0.27 $0.28 $0.15
================ ================
Diluted earnings per share from
continuing operations $0.38 $0.27 $0.27 $0.14
================ ================
Computation for earnings per share -
net income
Income (Numerator):
Net income $72,857 $51,311 $52,051 $26,997
Plus: Interest on 1.625%
convertible debentures, net of
taxes 1,589 1,589 1,570 -
Plus: Interest on Liquid Yield
Option Notes, net of taxes 147 147 143 -
---------------- ----------------
Net income, plus impact from
assumed conversions $74,593 $53,047 $53,764 $26,997
================ ================
Shares (Denominator):
Weighted-average common shares
outstanding 188,039 188,039 187,368 187,368
Effect of dilutive securities:
Stock options and equivalents 1,883 1,883 2,646 2,646
1.625% convertible debentures 7,306 7,306 7,306 -
Liquid Yield Option Notes 574 574 574 -
---------------- ----------------
Weighted-average common shares
outstanding, plus impact from
assumed conversions 197,802 197,802 197,894 190,014
================ ================
Basic earnings per share from net
income $0.39 $0.27 $0.28 $0.14
================ ================
Diluted earnings per share from net
income $0.38 $0.27 $0.27 $0.14
================ ================
CHIRON CORPORATION
SUPPLEMENTAL SCHEDULE OF COMPUTATION OF EARNINGS PER SHARE
(Unaudited)
(In thousands, except per share data)
Nine Months Ended
September 30,
2005 2004 Restated
---------------- ------------------
Adjusted Actual Adjusted Actual
---------------- ------------------
Computation for earnings per share
- continuing operations
Income (Numerator):
Income from continuing
operations $95,455 $42,418 $134,122 $77,186
Plus: Interest on 1.625%
convertible debentures, net of
taxes - - 4,710 -
---------------- ------------------
Income from continuing
operations, plus impact from
assumed conversions $95,455 $42,418 $138,832 $77,186
=============== ===================
Shares (Denominator):
Weighted-average common shares
outstanding 187,564 187,564 187,751 187,751
Effect of dilutive securities:
Stock options and equivalents 1,500 1,500 3,150 3,150
1.625% convertible debentures - - 7,233 -
---------------- ------------------
Weighted-average common shares
outstanding, plus impact from
assumed conversions 189,064 189,064 198,134 190,901
================ ==================
Basic earnings per share from
continuing operations $0.51 $0.23 $0.71 $0.41
================ ==================
Diluted earnings per share from
continuing operations $0.50 $0.22 $0.70 $0.40
================ ==================
Computation for earnings per share
- net income
Income (Numerator):
Net income $95,455 $42,418 $158,976 $102,040
Plus: Interest on 1.625%
convertible debentures, net of
taxes - - 4,710 -
---------------- ------------------
Net income, plus impact from
assumed conversions $95,455 $42,418 $163,686 $102,040
================ ==================
Shares (Denominator):
Weighted-average common shares
outstanding 187,564 187,564 187,751 187,751
Effect of dilutive securities:
Stock options and equivalents 1,500 1,500 3,150 3,150
1.625% convertible debentures - - 7,233 -
---------------- ------------------
Weighted-average common shares
outstanding, plus impact from
assumed conversions 189,064 189,064 198,134 190,901
================ ==================
Basic earnings per share from net
income $0.51 $0.23 $0.85 $0.54
================ ==================
Diluted earnings per share from net
income $0.50 $0.22 $0.83 $0.53
================ ==================
CHIRON CORPORATION
SUPPLEMENTAL QTR REVENUE SUMMARY (ADJUSTED)
(Unaudited)
(In thousands)
Current Prior Change
Quarter Quarter from Change
Q3 2005 Q2 2005 Prior
QTR %
----------------------------------------------------------------------
Product Sales
Blood Testing
Ortho $7,023 $7,988 $(965) (12.1)%
NAT 70,677 66,104 4,573 6.9%
----------------------------------
Total Blood
Testing 77,700 74,092 3,608 4.9%
Vaccines
Influenza
vaccines 60,321 (492) 60,813 12360.4%
Meningococcal
vaccines 11,635 13,605 (1,970) (14.5)%
Travel vaccines (TBE, Rabies,
Arilvax and Dukoral) 35,012 45,014 (10,002) (22.2)%
Pediatric/Other
vaccines 45,800 39,127 6,673 17.1%
----------------------------------
Total Vaccines 152,768 97,254 55,514 57.1%
Biopharmaceuticals
Proleukin 31,028 31,727 (699) (2.2)%
TOBI 57,890 56,600 1,290 2.3%
Betaseron(a) 36,927 38,132 (1,205) (3.2)%
Other 10,862 5,770 5,092 88.2%
----------------------------------
Total
Biopharmaceuticals 136,707 132,229 4,478 3.4%
TOTAL PRODUCT
SALES, NET $367,175 $303,575 $63,600 21.0%
==================================
Revenues from joint
business
arrangement $36,093 $31,003 $5,090 16.4%
Collaborative
agreement revenues 3,149 3,453 (304) (8.8)%
Royalty and license
fee revenues 70,726 76,522 (5,796) (7.6)%
Other revenues 2,470 4,204 (1,734) (41.2)%
----------------------------------
TOTAL REVENUES $479,613 $418,757 $60,856 14.5%
==================================
Gross Margins
Blood Testing 42% 40% 2%
Vaccines 45% 6% 39%
Biopharmaceuticals 71% 68% 3%
----------------------------------
TOTAL GROSS
MARGINS 54% 41% 13%
==================================
----------------------------------------------------------------------
(a) Excludes
Betaferon
Royalty $13,413 $16,943 $(3,530) (20.8)%
----------------------------------------------------------------------
Restated Change
Quarter from Change
Q3 2004 Prior
Year %
----------------------------------------------------------------------
Product Sales
Blood Testing
Ortho $7,098 $(75) (1.1)%
NAT 63,629 7,048 11.1%
-------------------------
Total Blood
Testing 70,727 6,973 9.9%
Vaccines
Influenza
vaccines 93,486 (33,165)(35.5)%
Meningococcal
vaccines 8,865 2,770 31.2%
Travel vaccines (TBE, Rabies,
Arilvax and Dukoral) 26,434 8,578 32.5%
Pediatric/Other
vaccines 44,491 1,309 2.9%
-------------------------
Total Vaccines 173,276 (20,508)(11.8)%
Biopharmaceuticals
Proleukin 31,739 (711) (2.2)%
TOBI 55,734 2,156 3.9%
Betaseron(a) 35,171 1,756 5.0%
Other 8,902 1,960 22.0%
-------------------------
Total
Biopharmaceuticals 131,546 5,161 3.9%
TOTAL PRODUCT
SALES, NET $375,549 $(8,374) (2.2)%
=========================
Revenues from joint
business
arrangement $34,017 $2,076 6.1%
Collaborative
agreement revenues 4,124 (975)(23.6)%
Royalty and license
fee revenues 111,396 (40,670)(36.5)%
Other revenues 4,450 (1,980)(44.5)%
-------------------------
TOTAL REVENUES $529,536 $(49,923) (9.4)%
=========================
Gross Margins
Blood Testing 43% (1)%
Vaccines 9% 36%
Biopharmaceuticals 67% 4%
-------------------------
TOTAL GROSS
MARGINS 36% 18%
=========================
----------------------------------------------------------------------
(a) Excludes
Betaferon
Royalty $13,374 $39 0.3%
----------------------------------------------------------------------
CHIRON CORPORATION
SUPPLEMENTAL YTD REVENUE SUMMARY (ADJUSTED)
(Unaudited)
(In thousands)
Nine Months Ended Change Change
September 30, from
2004 Prior
2005 Restated Year %
----------------------------------------------------------------------
Product Sales
Blood Testing
Ortho $21,473 $19,940 $1,533 7.7%
NAT 201,212 186,104 15,108 8.1%
-------------------------------------
Total Blood Testing 222,685 206,044 16,641 8.1%
Vaccines
Influenza vaccines 63,400 109,398 (45,998)(42.0)%
Meningococcal vaccines 34,393 18,430 15,963 86.6%
Travel vaccines (TBE, Rabies,
Arilvax and Dukoral) 123,785 75,705 48,080 63.5%
Pediatric/Other vaccines 115,420 143,292 (27,872)(19.5)%
-------------------------------------
Total Vaccines 336,998 346,825 (9,827) (2.8)%
Biopharmaceuticals
Proleukin 92,290 98,664 (6,374) (6.5)%
TOBI 167,425 159,600 7,825 4.9%
Betaseron(a) 101,693 96,933 4,760 4.9%
Other 26,822 29,770 (2,948) (9.9)%
-------------------------------------
Total Biopharmaceuticals 388,230 384,967 3,263 0.8%
TOTAL PRODUCT SALES, NET $947,913 $937,836 $10,077 1.1%
=====================================
Revenues from joint business
arrangement $103,154 $92,910 $10,244 11.0%
Collaborative agreement revenues 11,129 14,467 (3,338)(23.1)%
Royalty and license fee revenues 227,309 221,384 5,925 2.7%
Other revenues 16,221 22,363 (6,142)(27.5)%
-------------------------------------
TOTAL REVENUES $1,305,726 $1,288,960 $16,766 1.3%
=====================================
Gross Margins
Blood Testing 42% 42% 0%
Vaccines 21% 21% 0%
Biopharmaceuticals 70% 72% (2)%
------------------------------
TOTAL GROSS MARGINS 46% 47% (1)%
==============================
----------------------------------------------------------------------
(a) Excludes Betaferon Royalty $45,833 $38,766 $7,067 18.2%
----------------------------------------------------------------------
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