IMPAX Reports Second Quarter Financial Results; Highlights Include Record Quarterly Net Sales, Additional Strategic Agreements, ANDA Filings and Tentative Approvals.Business Editors & Health/Medical Writers HAYWARD, Calif.--(BW HealthWire)--July 25, 2002 IMPAX Laboratories, Inc. (Nasdaq:IPXL) today reported financial results for the three months and six months ended June 30, 2002. The net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the second quarter of 2002 were $5,145,000 compared with $1,136,000 in the prior year's second quarter and $3,432,000 in the first quarter of 2002. The increase in net sales by approximately 350% over the prior year was primarily due to the March 2002 introduction of a new product, 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, 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. The net loss for the 2002 second quarter was $5,938,000 or $(0.13) per share, compared with a net loss of $6,150,000 or $(0.15) per share in the prior year second quarter, including goodwill amortization expenses of approximately $876,000 or $(0.02) per share. Higher net sales in the 2002 second quarter partially offset the increase in research and development and in infrastructure costs related to the Company's manufacturing facility 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. . For the six months ended June 30, 2002, the Company reported net sales of $8,577,000, compared with $2,908,000 in the comparable period the previous year. The net loss for the first half of 2002 was $11,359,000, or $(0.24) per share. This compares with a net loss of $11,488,000, or ($0.31) per share in the prior year's six months, including goodwill amortization expense of approximately $1,752,000 or $(0.05) 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 $28.4 million at June 30, 2002, compared with $35.5 million at December 31, 2001. During the quarter, IMPAX issued 463,135 shares of common stock to a subsidiary of Teva Pharmaceuticals Industries, Ltd., for net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). to the Company of $3.75 million. Under the terms of a strategic alliance announced in June 2001, TEVA has made significant investments in IMPAX totaling $15 million under a fixed schedule through June 2002. Through these investments, TEVA purchased a total of 1,462,083 shares, or approximately 3% of total shares of common stock outstanding. A Form S-3 Registration Statement registering these shares was filed with the Securities and Exchange Commission (SEC) on July 23, 2002. "We are delighted with our growth in net sales, owing to owing to prep. Because of; on account of: I couldn't attend, owing to illness. owing to prep → debido a, por causa de an increasing portfolio of marketed products, and look forward to continue bringing new 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. to market," said Barry R. Edwards, Co-Chief Executive Officer. "Second quarter highlights include the tentative tentative, adj not final or definite, such as an experimental or clinical finding that has not been validated. approval by 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. ) of our ANDAs for generic versions of Claritin-D(R) 24-Hour (loratadine/pseudoephedrine sulfate sulfate, chemical compound containing the sulfate (SO4) radical. Sulfates are salts or esters of sulfuric acid, H2SO4, formed by replacing one or both of the hydrogens with a metal (e.g., sodium) or a radical (e.g., ammonium or ethyl). , 10mg/240mg) Extended Release Tablets, and Claritin-D(R) 12-Hour (loratadine/pseudoephedrine sulfate, 5mg/120mg) Extended Release Tablets. Subsequent to the close of the quarter, we also received tentative approval from the FDA of our ANDA ANDA abbr. abbreviated new drug application for a generic version of Rilutek Riluzole (Rilutek) The first drug approved in the United States for the treatment of ALS. Mentioned in: Amyotrophic Lateral Sclerosis riluzole Rilutek Pharmacologic class: Glutamate antagonist (R) (Riluzole) 50mg tablets. "In addition, we signed two significant agreements last quarter: one regarding the loratadine/pseudoephedrine sulfate products for the OTC market Noun 1. OTC market - a stock exchange where securities transactions are made via telephone and computer rather than on the floor of an exchange over-the-counter market with Wyeth; and the second one, a Manufacturing and Supply Agreement with Schering relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc Claritin D(R) 12-Hour for the OTC market." 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: "In the second quarter, we filed three new ANDAs for generic versions of undisclosed branded products, one of which was made under Paragraph IV of the Hatch-Waxman Amendments. We are, therefore, on track with our plans of filing a total of six to eight ANDAs this year." While the Company submitted its first brand filing as an ANDA during the quarter, based on discussions with FDA regarding the file, IMPAX subsequently withdrew the application and is planning to resubmit Verb 1. resubmit - submit (information) again to a program or automatic system feed back return, render - give back; "render money" it as an 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 . Additionally, good progress has been made in formulation formulation /for·mu·la·tion/ (for?mu-la´shun) the act or product of formulating. American Law Institute Formulation development for three other brand products with IND filings scheduled during the next 12 months for at least two of the three products. IMPAX currently has 17 ANDAs pending at the FDA that address more than $9 billion in 2001 U.S. branded product sales. Ten of these filings were made under Paragraph IV of the Hatch-Waxman Amendments, and four of these 17 ANDAs now have received tentative approval from the FDA. IMPAX Laboratories, Inc. is a technology focused specialty pharmaceutical company applying its 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, 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 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. 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 Six Months Ended
June 30, June 30,
2002 2001 2002 2001
Net sales $5,145 $1,136 $8,577 $2,908
Cost of sales 3,982 1,992 7,121 4,268
Gross margin (loss) 1,163 (856) 1,456 (1,360)
Research and development 4,476 2,415 7,366 5,010
Less: Teva reimbursements (138) -- (304) --
Research and development,
net 4,338 2,415 7,062 5,010
Selling 646 806 1,304 1,123
General and
administrative(a) 1,939 2,236 4,109 4,395
Other operating income
(expense), net 21 39 (9) 64
Net loss from operations (5,739) (6,274) (11,028) (11,824)
Interest income 167 161 402 423
Interest expense(b) (366) (37) (733) (87)
Net loss $(5,938) $(6,150) $(11,359) $(11,488)
Net loss per share
(basic and diluted) $(0.13) $(0.15) $(0.24) $(0.31)
Weighted average common
shares outstanding 47,306,741 41,138,673 47,061,223 37,565,128
(a) Includes amortization of goodwill of $876,000 in the quarter
ended June 30, 2001 and $1,752,000 in the six months ended June
30, 2001. There was no amortization of goodwill in 2002.
(b) The total interest expense of $366K for the quarter ended June
30, 2002, which was reduced by $222K in capitalized interest,
included interest of $438K on the refundable deposit from Teva.
The total interest of $733K for the six months ended June 30,
2002, which was reduced by $394K in capitalized interest, included
interest of $876K on the refundable deposit from Teva.
IMPAX LABORATORIES, INC.
CONDENSED BALANCE SHEET
(in thousands)
June 30, December 31,
2002 2001
(unaudited)
ASSETS
Cash, cash equivalents and short-term
investments $28,400 $35,466
Accounts receivable, net 4,561 3,523
Inventory 4,688 3,488
Property, plant and equipment, net 31,398 24,334
Goodwill and intangibles, net 28,529 28,721
Other assets 2,025 2,080
Total assets $99,601 $97,612
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $9,579 $7,803
Long-term debt, net of current portion 6,752 6,868
Refundable deposit and related accrued
interest 23,752 22,876
Other liabilities 2,684 117
Mandatorily redeemable convertible
preferred stock 7,500 7,500
Stockholders' equity 49,334 52,448
Total liabilities and
stockholders' equity $99,601 $97,612
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