Kos Reports a 17% Increase in Revenue, Earnings Per Share of $0.71, and Solid Cash Flow from Operations.CRANBURY, N.J. -- Kos Pharmaceuticals, Inc. (Nasdaq: KOSP): Third Quarter 2006 Financial Highlights(+) * Third quarter revenue increased 17% to a record $240.9 million * Net income including a one-time event was $35.3 million, or $0.71 per share; excluding the one-time event, adjusted net income was $37.8 million, or $0.76 per share * Generated $67.8 million in cash from operations; total cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has balance increased to a record $543.7 million, an increase of $221.1 million over the past 12 months (+)Attached is a reconciliation of GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). to Non-GAAP calculations. Kos Pharmaceuticals, Inc. (Nasdaq: KOSP) today announced financial results for the third quarter and nine months ended September 30, 2006. For the third quarter of 2006, revenue increased 17% to a record $240.9 million, up from $205.1 million for the third quarter of 2005. Revenue for the nine months ended September 30, 2006, increased 18% to $635.4 million, up from $537.8 million in the comparable period in 2005. Adjusted to exclude the Arisaph investment write-off of $4.0 million, net income for the third quarter was $37.8 million, or $0.76 per share, as compared to net income and earnings per share of $29.7 million and $0.60 (as adjusted on a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma basis to reflect the accounting expense associated with share-based compensation), respectively, during the comparable 2005 quarter. For the nine-month period in 2006, net income including one-time events was $46.4 million, or $0.95 per share. Excluding the impact of one-time events, adjusted net income was $70.8 million, or $1.44 per share. Kos generated $67.8 million in cash from operations in the third quarter of 2006, which represented the seventeenth consecutive quarter of cash generation. As of September 30, 2006, the Company had a record $543.7 million in cash and marketable securities. Revenue for the Company's cholesterol franchise increased 22% during the third quarter of 2006 to $179.8 million, as compared to $147.3 million reported during the same period in 2005. Niaspan([R]) revenue in the third quarter increased 28% to $146.4 million, as compared to $114.3 million during the same period one year ago. Advicor([R]) revenue totaled $33.4 million during the quarter. The Company's cholesterol franchise realized a 3.2% increase in total prescriptions and a 4.3% increase in unit volume versus the first nine months of 2005. Third quarter 2006 revenues for Kos' hypertension portfolio, comprised of Teveten([R]), Teveten([R])HCT Hct abbr. hematocrit HCT Hematocrit, see there and Cardizem([R])LA totaled $35.7 million. Revenue from the Teveten products totaled $5.6 million and Cardizem LA revenues totaled $30.1 million. Azmacort([R]) third quarter 2006 revenues were $25.4 million, an increase of 31% as compared to $19.4 million reported during the third quarter of 2005. In late July, Kos entered into an agreement with Select Access, a division of PDI PDI Protein Disulfide Isomerase PDI Personal Docente e Investigador (Spanish: Personal Educational and Investigating) PDI Pre Delivery Inspection PDI Professional Development Institute , Inc., to provide additional sales representatives detailing up to 6,000 Azmacort target physicians for a 12-month period. "Today's results, along with the Abbott acquisition announcement made earlier this week, once again reaffirm re·af·firm tr.v. re·af·firmed, re·af·firm·ing, re·af·firms To affirm or assert again. re our longstanding commitment to create value for our shareholders," said Adrian Adams, President and Chief Executive Officer. "We are truly excited about this opportunity to become part of another fast-growing company like Abbott, and look forward to working with them to utilize their additional resources to capture the full value of our highly differentiated cholesterol franchise and growing R&D pipeline." The Company also announced updates on the status of several R&D programs and initiatives. The ARBITER 3 (Arterial Biology for the Investigation of the Treatment Effects of Reducing Cholesterol) manuscript was published online on October 12th in Current Medical Research and Opinion, and will appear in such journal's November issue. In addition, the Icatibant 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 efficacy data from FAST-2 (For Angioedema Subcutaneous subcutaneous /sub·cu·ta·ne·ous/ (sub?ku-ta´ne-us) beneath the skin. sub·cu·ta·ne·ous adj. Abbr. s.c., SQ Located, found, or placed just beneath the skin; hypodermic. Treatment) met the primary endpoint for treatment of hereditary angioedema Hereditary angioedema A complement deficiency characterized by lymphatic vessel blockages that cause temporary swelling (edema) of areas of the skin, mucous membranes, and, sometimes, internal organs. Mentioned in: Complement Deficiencies , and the FAST-1 and FAST-2 combined analysis demonstrated a reduction in time to onset of symptom relief. Initial submission of a 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 ) with the 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. ) is expected to commence by year-end 2006, with a potential launch in 2007. Kos' collaboration partner, Jerini, plans to seek expedited review for Icatibant by the FDA. As a result of a definitive agreement for Abbott to acquire Kos, today's conference call will be cancelled. Should you have any specific questions about this earnings announcement, please call Kos' Investor Relations Investor relations The process by which the corporation communicates with its investors. department at 609-495-0726. Kos Pharmaceuticals, Inc. is a fully integrated specialty pharmaceutical company engaged in developing, commercializing, manufacturing and marketing proprietary prescription products for the treatment of chronic diseases with a particular focus on the cardiovascular, metabolic and respiratory disease Noun 1. respiratory disease - a disease affecting the respiratory system respiratory disorder, respiratory illness adult respiratory distress syndrome, ARDS, wet lung, white lung - acute lung injury characterized by coughing and rales; inflammation of the areas. The Company's principal product development strategy is to reformulate Verb 1. reformulate - formulate or develop again, of an improved theory or hypothesis redevelop formulate, explicate, develop - elaborate, as of theories and hypotheses; "Could you develop the ideas in your thesis" existing pharmaceutical products with large market potential to improve safety, efficacy, and patient compliance. Kos' strategy also includes making measured investments in new chemical entity research through in-house and sponsored research, scientific in-licensing and general corporate development activities. The Company currently markets Niaspan, Advicor, Azmacort, Cardizem LA, Teveten and Teveten HCT. Kos has a strong and growing research and development pipeline including proprietary drug delivery technologies in solid-dose, 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. and aerosol aerosol (âr`əsōl,–sŏl): see colloid. aerosol System of tiny liquid or solid particles evenly distributed in a finely divided state through a gas, usually air. metered-dose device administration to help fuel sustained, organic sales growth into the future. The foregoing is neither an offer to purchase nor a solicitation of an offer to sell shares of any class of stock of the Company. Following commencement of the tender offer by Abbott, the Company intends to file a solicitation/recommendation statement on Schedule 14D-9 (the "Schedule 14D-9") with the Securities and Exchange Commission (the "SEC"). Investors and security holders are urged to read the Schedule 14D-9, as well as any amendments or supplements to the Schedule 14D-9, when those documents become available because they will contain important information. A free copy of the Schedule 14D-9 and other documents filed with the SEC (once filed) relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the tender offer and the related transactions can be obtained at the SEC's website at www.sec.gov. The Schedule 14D-9 and other documents filed with the SEC relating to the transaction described above may also be obtained free of charge at the Company's website at www.kospharm.com or free of charge by contacting the Company's investor Relations Department at 1 Cedar Brook Drive, Cranbury, New Jersey 08512-3618; Phone: 609-495-0726. Certain statements in this press release, including statements regarding the closing of the transaction with Abbott and our ability to use their additional resources to capture the full value of our highly differentiated cholesterol franchise and growing R&D pipeline, the filing of an NDA for and launch of Icatibant, the ARBITER 3 manuscript appearing in the November issue of Current Medical Research and Opinion, and the Company's strong and growing research and development pipeline and future sales growth, are forward-looking and are subject to risks and uncertainties which may cause actual results to differ materially from those projected in a forward-looking statement 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. . These risks and uncertainties include, the risk that the transaction with Abbott may not be completed because of a number of factors, including the failure to satisfy the closing conditions, the Company's ability to grow revenue and control expenses, the protection afforded by the Company's patents and those related to the acquired and licensed products, the ability to build awareness for Niaspan, Advicor, Azmacort, Cardizem LA, Teveten and Teveten HCT within the medical community, the continued success of the alliances with Merck KGaA This article needs sources or references that appear in reliable, third-party publications. Alone, primary sources and sources affiliated with the subject of this article are not sufficient for an accurate encyclopedia article. , Oryx oryx (ôr`ĭks), name for several small, horselike antelopes, genus Oryx, found in deserts and arid scrublands of Africa and Arabia. They feed on grasses and scrub and can go without water for long periods. , Arisaph, Barr, Biovail, SkyePharma and Jerini, the continuing growth of the cardiovascular and respiratory markets, the Company's ability to maintain its compliance with FDA regulations and standards without adversely affecting the Company's manufacturing capability or ability to meet its production requirements or profit margins, the Company's ability to increase the size of its sales force and to attract and retain sales professionals, and ensure compliance with prescription drug prescription drug Prescription medication Pharmacology An FDA-approved drug which must, by federal law or regulation, be dispensed only pursuant to a prescription–eg, finished dose form and active ingredients subject to the provisos of the Federal Food, Drug, sales and marketing laws and regulations, changes in the regulatory environment governing the Company's compliance with the FDA, U.S. Patent and Trademark Office, tax and competition issues, the impact of a possible generic version of the Cardizem LA product or other products sold by the Company, the ability of third party suppliers to the Company continuing to be able to perform their supply obligations, the Company and its licensors ability to achieve regulatory approvals and launch products under development in a timely manner, such as Simcor, Icatibant, Azmacort HFA HFA Harvard Film Archive (Harvard University) HFA Harry Fox Agency, Inc. HFA Housing Finance Agency (District of Columbia government) HFA Hyogo Framework for Action HFA High-Functioning Autism and others, the Company's ability to establish a footprint and generate sales in the hypertension and angina Angina Definition Angina is pain, "discomfort," or pressure localized in the chest that is caused by an insufficient supply of blood (ischemia) to the heart muscle. markets, the Company's ability to successfully negotiate additional important strategic business development opportunities, the progress of the Company's research and development pipeline, fluctuating buying patterns by the Company's wholesalers and distributors, the adequacy of the Company's reserves for income taxes, the Company's ability to maintain coverage of its products by government agencies and the effects of the loss of such coverage with such agencies, such as the Centers for Medicare and Medicaid Services The Centers for Medicare and Medicaid Services (CMS), previously known as the Health Care Financing Administration (HCFA), is a federal agency within the United States Department of Health and Human Services (DHHS) that administers the Medicare program and , the effect of conditions in the pharmaceutical industry and the economy in general, the possibility that any investigation conducted by the Securities and Exchange Commission may reveal issues that the Company does not currently realize exist as a result of its historical stock option grant practice or otherwise, the effect of any third party 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. arising out of the Company's investigation of its historical stock option grant practices and related accounting and the costs incurred by the Company in connection with such investigation and the SEC investigation, as well as certain other risks. A more detailed discussion of risks attendant to the forward-looking statements included in this press release are set forth in the "Forward-Looking Information: Certain Cautionary Statements" section of the Company's Annual Report on Form 10-K/A for the year ended December 31, 2005, filed with the Securities and Exchange Commission, and in other reports filed with the SEC. All information in this press release is as of November 9, 2006 and the Company undertakes no duty to update this information. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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