IMPAX Reports Record Sales in Third Quarter; Highlights Include ANDA Tentative and Final Approvals, Additional ANDA Filings and Favorable Court Rulings.Business Editors & Health/Medical Writers HAYWARD, Calif.--(BUSINESS WIRE)--Oct. 28, 2002 IMPAX Laboratories, Inc. (Nasdaq:IPXL) today reported financial results for the three and nine months ended September 30, 2002. Total revenues for the third quarter of 2002 were $7,538,000, up more than 350% compared with total revenues of $1,658,000 in the prior year's third quarter and up more than 46% compared with total revenues of $5,145,000 in the second quarter of 2002. The significant year-over-year increase came on the ramp up Ramp Up To increase a company's operations in anticipation of increased demand. Notes: A company might 'ramp up' operations if they just signed a contract creating substantially more demand for their product. See also: Demand, Economies of Scale of sales of Fludrocortisone Acetate flu·dro·cor·ti·sone acetate n. A synthetic mineralocorticoid used to increase blood pressure by lowering the amount of salt the body excretes and to treat adrenocortical insufficiency resulting from Addison's disease. Tablets, introduced at the end of the first quarter of 2002, Minocycline Hydrochloride min·o·cy·cline hydrochloride n. A broad-spectrum antibiotic derived from tetracycline. minocycline hydrochloride 50, 75 and 100mg Capsules launched in the third quarter of 2002, as well as other products introduced since July 2001, such as Terbutaline Sulfate terbutaline sulfate (terbū´t  lēn´),n brand names: Brethaire, Brethine, Bricanyl; drug class: Tablets and Methitest(TM) Tablets, and lower product returns. The net loss for the 2002 third quarter was $5,210,000, or $(0.11) per share, compared with a net loss of $6,769,000, or $(0.15) per share in the prior year third quarter, including goodwill amortization of approximately $876,000, or $(0.02) per share. Net loss narrowed due to increased sales, which partially offset increases in research and development, and operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . For the nine months ended September 30, 2002, the Company reported total revenues of $16,115,000, compared with total revenues of $4,566,000 in the comparable period the previous year. The net loss during the first three quarters of 2002 was $16,569,000, or $(0.35) per share, compared with a net loss of $18,257,000, or $(0.46) per share, in the first three quarters of 2001, including goodwill amortization of $2,628,000, or $(0.07) per share. Cash, cash equivalents and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments were $22.4 million at September 30, 2002, compared with $35.5 million at December 31, 2001. On October 23, 2002, IMPAX signed a $25 million loan agreement with Congress Financial Corporation comprised of a $20.5 million revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility and a $4.5 million term loan. "We are very pleased with our sales increases and the progress we have made in bringing new products to market," said Barry R. Edwards, Co-Chief Executive Officer. "In addition, we expect operating efficiencies to continue to improve as we increase the capacity utilization Capacity Utilization measures the rate at which a firm makes use of their capital productive capacities, such as factories and machinery. Capacity Utilization generally rises when the economy is healthy and falls when demand softens. of our new, state-of-the-art manufacturing facility in Hayward, Calif., that was completed in June. During the quarter, we received final approval for Rimantadine Tablets, a generic version of Flumadine(R), and tentative tentative, adj not final or definite, such as an experimental or clinical finding that has not been validated. approval for Riluzole Tablets, a generic version of Rilutek(R)." Mr. Edwards continued, "We also received several favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. rulings on patent infringement patent infringement n. the manufacture and/or use of an invention or improvement for which someone else owns a patent issued by the government, without obtaining permission of the owner of the patent by contract, license or waiver. cases that were filed against us by branded manufacturers, as they attempted to keep generic drugs generic drug, a drug sold or prescribed under the nonproprietary name of its active ingredients or under a generally descriptive name rather than under a brand or trade name. off the market. Favorable rulings came in August in 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. on Bupropion Hydrochloride bu·pro·pi·on hydrochloride n. A drug used to treat depression and nicotine dependence. bupropion hydrochloride Budeprion SR, Budeprion XL, Wellbutrin, Wellbutrin SR, Wellbutrin XL, Zyban Extended Release Tablets (marketed by GlaxoSmithKline as Wellbutrin(R) SR and Zyban(R)) and on various loratadine formulations (marketed by Schering-Plough as Claritin(R))." Larry Hsu, Ph.D., President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , stated: "We recently filed additional Abbreviated New Drug Applications abbreviated new drug application Pharmacology An application made in the US by a pharmaceutical company requesting authority to market a 'new' drug for which both its therapeutic indications and formulation were previously approved by the FDA in another similar (ANDAs) with the U.S. Food and Drug Administration (FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. ) for generic versions of branded products, one during the quarter and two during October. Two of these three filings were made under Paragraph IV of the Hatch-Waxman Amendments. We have filed six ANDAs this year and continue to be on track with our stated plan to file a total of six to eight ANDAs this year. In addition, during the quarter we learned that the FDA accepted our filings for generic OxyContin Ox·y·con·tin A trademark for the drug oxycodone. oxycodone hydrochloride ETH-Oxydose, OxyContin, OxyFast, Oxy-IR, Oxynorm (UK), Roxicodone, Supeudol (CA) Pharmacologic class: Opioid agonist (R) in 40, 20 and 10mg strengths." IMPAX currently has 19 ANDAs pending at the FDA that address more than $9 billion in 2001 U.S. branded product sales. 12 of these filings were made under Paragraph IV of the Hatch-Waxman Amendments, and four of these 19 ANDAs have received tentative approval from the FDA. IMPAX Laboratories, Inc. is a technology focused specialty pharmaceutical company applying its formulation formulation /for·mu·la·tion/ (for?mu-la´shun) the act or product of formulating. American Law Institute Formulation expertise and drug delivery technology to the development of controlled-release and niche generics in addition to the development of branded products. IMPAX markets its generic products through its Global Pharmaceuticals division and intends to market its branded products through the IMPAX Pharmaceuticals division. IMPAX Laboratories is headquartered in Hayward, California Hayward is a city located in the East Bay in Alameda County. The sixth largest city in the San Francisco Bay Area, it is one of the larger suburbs of Oakland. As of the 2000 census, the city population was 140,030. The estimated population in 2007 is 155,312. , and has a full range of capabilities in its Hayward and Philadelphia facilities. For more information, please visit the Company's Web site at: www.impaxlabs.com. "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and To the extent any statements made in this news release contain information that is not historical, these statements are essentially forward-looking and are subject to risks and uncertainties, including the difficulty of predicting FDA filings and approvals, acceptance and demand for new pharmaceutical products, the impact of competitive products and pricing, new product development and launch, reliance on key strategic alliances, uncertainty of patent litigation filed against us, availability of raw materials, the regulatory environment, fluctuations in operating results and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission.
IMPAX LABORATORIES, INC.
STATEMENTS OF OPERATIONS
(unaudited)
(dollars in thousands, except share and per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
Net sales $7,283 $1,658 $15,860 $4,566
Other revenues 255 - 255 -
Total revenues 7,538 1,658 16,115 4,566
Cost of sales 5,153 2,247 12,274 6,515
Gross profit (loss) 2,385 (589) 3,841 (1,949)
Research and development 4,533 3,673 11,899 8,983
Less: Teva reimbursements (182) (399) (486) (699)
Research and development,
net 4,351 3,274 11,413 8,284
Selling 697 592 2,001 1,715
General and
Administrative(a) 2,084 2,269 6,193 6,664
Other operating income
(expense), net (30) - (39) 64
Net loss from operations (4,777) (6,724) (15,805) (18,548)
Interest income 138 412 540 835
Interest expense(b) (571) (457) (1,304) (544)
Net loss $(5,210) $(6,769) $(16,569) $(18,257)
Net loss per share (basic
and diluted) $(0.11) $(0.15) $(0.35) $(0.46)
Weighted average
common shares outstanding 47,778,512 45,943,604 47,302,950 39,932,294
(a) Includes amortization of goodwill of $876,000 in the quarter ended
September 30, 2001 and $2,628,000 in the nine months ended
September 30, 2001. There was no amortization of goodwill in 2002.
(b) The total interest expense of $571,000 for the quarter ended
September 30, 2002 included interest of $438,000 on the refundable
deposit from Teva. The total interest of $1,304,000 for the nine
months ended September 30, 2002, which was reduced by $394,000 in
capitalized interest, included interest of $1,314,000 on the
refundable deposit from Teva, as follows:
Interest on Refundable Deposit $1,314,000
Other Interest 384,000
Less: Amounts Capitalized (394,000)
$1,304,000
IMPAX LABORATORIES, INC.
CONDENSED BALANCE SHEETS
(unaudited)
(in thousands)
September 30, December 31,
2002 2001
ASSETS
Cash, cash equivalents and
short-term investments $22,405 $35,466
Accounts receivable, net 5,667 3,523
Inventory 5,069 3,488
Property, plant and equipment, net 35,502 24,334
Goodwill and intangibles, net 28,433 28,721
Other assets 1,099 2,080
Total assets $98,175 $97,612
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $13,727 $7,803
Long-term debt, net of current portion 6,695 6,868
Refundable deposit and related accrued interest 24,190 22,876
Other liabilities 1,728 117
Mandatorily redeemable convertible
preferred stock 7,500 7,500
Stockholders' equity 44,335 52,448
Total liabilities and stockholders' equity $98,175 $97,612
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