MGI PHARMA Reports Fourth Quarter and Full Year 2006 Financial Results.2006 Total Revenue Increased 23% Over 2005 to $342.8 Million; Strong Dacogen([R]) Launch Underway; Sales Totaled $36.1 Million for 2006; Aquavan([R]) Phase 3 Trial in Bronchoscopy Bronchoscopy Definition Bronchoscopy is a procedure in which a cylindrical fiberoptic scope is inserted into the airways. This scope contains a viewing device that allows the visual examination of the lower airways. Fully Enrolled; Operating Profitability on an Adjusted Basis Projected for 2007; Four 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 and sNDA Submissions Planned for 2007 MINNEAPOLIS -- MGI MGI Mouse Genome Informatics MGI Modular Gateway Interface MGI McKinsey Global Institute MGI Military Geographic Information MGI Marine Geological Institute MGI Policy on the Management of Government Information (Canada) PHARMA, INC inc - /ink/ increment, i.e. increase by one. Especially used by assembly programmers, as many assembly languages have an "inc" mnemonic. Antonym: dec. . (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :MOGN), a biopharmaceutical company focused in oncology and acute care, today reported financial results for the three months and full year ended December 31, 2006. Total revenue for the fourth quarter of 2006 was $80.4 million compared to $81.1 million for the fourth quarter of 2005. The Company reported a net loss of $19.6 million, or $0.25 per diluted share, in the 2006 fourth quarter compared to a net loss of $169.6 million, or $2.19 per diluted share, in the 2005 fourth quarter. Adjusted or non-GAAP net loss for the 2006 fourth quarter was $8.8 million, or $0.11 per diluted share, compared to an adjusted net loss of $9.4 million, or $0.12 per diluted share, in the 2005 fourth quarter. See "Reconciliation of GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). Net Loss to Adjusted Net Income (Loss)" below for information on the adjusted numbers presented in this press release. For the year ended December 31, 2006, total revenue was $342.8 million, compared to $279.4 million in 2005. Net loss for 2006 was $40.2 million, or $0.51 per diluted share, compared to a net loss of $132.4 million, or $1.81 per diluted share in 2005. Adjusted net loss and loss per share for 2006 were $5.5 million and $0.07 per diluted share, respectively, compared to a 2005 adjusted net income of $32.4 million, or $0.42 per diluted share. At December 31, 2006, MGI PHARMA's cash and marketable debt investments totaled $162.7 million. For the full year 2006, MGI PHARMA generated positive cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses . "In 2006, we made significant progress building our oncology and acute care franchises," said Lonnie Moulder moul·der v. Chiefly British Variant of molder. moulder or US molder Verb to crumble or cause to crumble, as through decay: , President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of MGI PHARMA. "We announced positive phase 3 results for Aloxi in post operative nausea and vomiting Nausea and Vomiting Definition Nausea is the sensation of being about to vomit. Vomiting, or emesis, is the expelling of undigested food through the mouth. and for the first of two pivotal trials of Aquavan. In addition to these clinical successes, and following 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. approval in May, we successfully launched Dacogen in the U.S. and established an agreement with Janssen-Cilag for development and commercialization of Dacogen in territories outside of North America to maximize the potential of the brand worldwide. During the year, we also took definitive steps to improve our operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. structure. Our achievements in 2006 have established a strong foundation to build upon and position us well to attain our 2007 goals." Product Sales Performance Product sales were $77.6 million in the fourth quarter of 2006 compared to $79.8 million in the fourth quarter of 2005. Total product sales for 2006 increased to $336.8 million from $274.0 million in 2005, primarily as a result of the commercial launch of Dacogen([R]) (decitabine) for Injection and incorporation of a full year of sales of Gliadel([R]) Wafer (polifeprosan 20 with carmustine implant). During the fourth quarter of 2006, U.S. sales of Aloxi([R]) (palonosetron hydrochloride palonosetron hydrochloride Aloxi Pharmacologic class: Selective serotonin subtype 3 (5-HT3) receptor antagonist Therapeutic class: Antiemetic Pregnancy risk category B ) Injection totaled $49.6 million compared to $67.0 million in the fourth quarter of 2005. This decline in Aloxi sales was primarily due to a reduction in specialty distributor Aloxi inventory, which coincided with the anticipated introductions of generic ondansetron both in November and at the end of the fourth quarter, and a decline in net selling price per vial as a result of a one time adjustment. Total sales for Aloxi for 2006 were $250.7 million compared with $248.5 in the prior year.Sales of Dacogen totaled $19.0 million in the fourth quarter, its second full quarter of commercial availability. For the year ended December 31, 2006 and following its approval by the U.S. Food and Drug Administration (FDA) on May 2, Dacogen sales were $36.1 million. Sales of Gliadel Wafer were $8.2 million for the fourth quarter of 2006, compared to $8.5 million in the fourth quarter of 2005. For the year ended December 31, 2006, sales of Gliadel were $35.8 million, compared to $33.7 million for the year ended December 31, 2005. MGI PHARMA recorded $8.5 million of Gliadel sales following its acquisition of Gliadel as part of the October 2005 Guilford Pharmaceuticals Inc. transaction. 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. Selling, general and administrative expenses totaled $43.0 million for the fourth quarter and $148.4 million for the full year 2006, compared to $36.5 million and $89.0 million for the fourth quarter and full year 2005. Adjusted selling, general and administrative expenses increased to $39.8 million for the fourth quarter of 2006 compared to $35.7 million for the same period in 2005. This increase was primarily due to the commercial launch of Dacogen, increased investment in the area of medical and scientific affairs in support of Aloxi, and higher general and administrative expenses. During 2006, adjusted selling, general and administrative expenses were $140.1 million compared to $86.8 million in 2005. This increase was due to the addition of an acute care sales force, commercial costs related to Gliadel, other infrastructure and facility costs acquired in the Guilford acquisition, expenses related to the Dacogen launch, and higher investment in the Aloxi brand. Research and development expenses totaled $27.8 million for the fourth quarter and $100.1 million for full year 2006, compared to $31.6 million and $70.9 million for the fourth quarter and full year 2005. Adjusted research and development expenses in the fourth quarter of 2006 were $24.4 million compared to $28.2 million in the fourth quarter of 2005. This quarter-over-quarter decrease in research and development expense is primarily the result of lower clinical development costs related to completion of enrollment in one pivotal trial of Aquavan([R]) (fospropofol disodium) Injection and conclusion of enrollment in a phase 2 study of Dacogen in MDS MDS, n See temporomandibular pain-dysfunction syndrome. MDS 1 Maternal deprivation syndrome, see there 2 Myelodysplastic syndrome, see there , and a decrease in headcount and related compensation expense following the fourth quarter reduction in force. Adjusted research and development expenses in 2006 increased to $91.1 million from $65.9 million in 2005. This increase in research and development expenses was due to increased investment in the development programs for Aquavan, Dacogen, and amolimogene. Operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. for the fourth quarter was $18.8 million compared to an operating loss of $173.0 million for the same period in 2005. Operating loss for 2006 was $31.2 million compared to an operating loss of $134.8 million in 2005. Adjusted operating loss for the fourth quarter was $8.0 million compared to an adjusted operating loss of $10.0 million for the same period in 2005. Adjusted operating loss for the year was $2.6 million compared to an adjusted operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $32.8 million in 2005. Reconciliation of GAAP to Adjusted Results: In this press release, certain non-GAAP financial measures are presented as adjusted numbers. These numbers exclude the effects of non-cash, stock-based employee compensation expense, amortization of acquired product intangible assets, license and milestone payments, the consolidation of Symphony Neuro Development Company, restructuring expenses, acquired in process research and development expenses, transactions costs Transactions costs The time, effort, and money necessary, including such things as commission fees and the cost of physically moving the asset from seller to buyer. Transcations costs should also include the bid/ask spread as well as price impact costs (for example a large sell related to the divestiture of Aggrastat([R]) (tirofiban hydrochloride tirofiban hydrochloride Warning - High-alert drug! Aggrastat Pharmacologic class: Glycoprotein (GP IIb/IIIa)-receptor inhibitor Therapeutic class: ) Injection, and the impairment of the Company's investment in SuperGen, Inc. See the attached Reconciliation of GAAP Loss to Adjusted Net Income (Loss) for a detailed explanation of the amounts excluded and included to arrive at adjusted operating income (loss), adjusted net income (loss), and adjusted per share amounts, for the three-month and full-year periods ended December 31, 2006 and December 31, 2005. Adjusted or non-GAAP financial measures provide investors and management with supplemental measures of operating performance and trends that facilitate comparisons between periods before, during, and after certain items that would not otherwise be apparent on a GAAP basis. Adjusted financial measures are not, and should not be, viewed as a substitute for GAAP results. We define adjusted diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of amounts as adjusted net income divided by the GAAP weighted average number of diluted shares outstanding. Our definition of these adjusted financial measures may differ from similarly named measures used by others. 2007 Financial Outlook Due to recent changes in chemotherapy induced nausea and vomiting (CINV CINV Chemotherapy Induced Nausea and Vomiting ) market dynamics, MGI PHARMA will not be providing 2007 sales guidance for Aloxi at this time. We will continue to closely monitor the CINV market and will provide updates as more information becomes available. For the year ending December 31, 2007, the Company expects: * Dacogen sales of $90 to $100 million; * Adjusted SG&A expenses of $140 to $145 million; * Adjusted R&D expenses of approximately $70 million; and * Positive adjusted operating income under a wide range of Aloxi sales scenarios. Our adjusted financial outlook for SG&A excludes non-cash stock-based compensation expense. Our adjusted financial outlook for R&D excludes non-cash stock-based compensation expense and license and milestone payments. Adjusted operating income additionally excludes amortization of product intangible assets and restructuring costs. We have excluded these expenses because the amount and significance can not readily be determined at this time. Recent Corporate Highlights Dacogen * 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 (CMS (1) See content management system and color management system. (2) (Conversational Monitor System) Software that provides interactive communications for IBM's VM operating system. ) assigned a specific J-code (J0894) for Dacogen effective January 1, 2007, enabling providers to obtain reimbursement for Dacogen. * Dacogen presentations were made during the American Society of Hematology (ASH) 48th Annual Meeting and Exposition. Dacogen was the subject of two oral presentations, 10 poster presentations, and four publications. Preliminary results from a phase 2 study of Dacogen in elderly patients with acute myeloid leukemia myeloid leukemia n. See myelogenous leukemia. (AML AML - A Manufacturing Language ) and a retrospective survival analysis of Dacogen-treated patients with chronic myelomoncytic leukemia (CMML CMML Chronic Myelomonocytic Leukemia CMML Continuous Media Markup Language CMML Civilian Manpower Management Letter ) were among the data presented. * The results of a single center clinical study that evaluated three alternative dosing regimens for Dacogen were published in the journal Blood. The objective response rate of this study was 72 percent, including a 34 percent complete response (CR) rate, 1 percent partial response (PR) rate, 24 percent marrow CR rate with or without other hematologic hematological, hematologic pertaining to or emanating from blood cells. hematological tests total and differential white cell counts, hematocrit estimation, erythrocyte count. improvement (HI) responses, and a 14 percent HI rate. The most common adverse events were myelosuppression, liver dysfunction, nausea and vomiting, fatigue and bone aches. Aloxi * MGI PHARMA and Helsinn Healthcare SA announced positive phase 3 results for Aloxi for the prevention of post operative nausea and vomiting (PONV PONV Post-Operative Nausea and Vomiting ). Both clinical trials successfully met the primary efficacy endpoint of complete response for the 0-24 hour time period following surgery for the selected dose of 0.075 mg. Both trials also achieved the secondary endpoints of complete response for the 0-48 and 0-72 hour time periods. * A pre-New Drug Application (NDA) meeting was held with the FDA in December, and the supplemental NDA submission is planned for early in the second quarter of 2007. Aquavan * Enrollment in the pivotal phase 3 trial of Aquavan in patients undergoing bronchoscopy and the open label safety study in a variety of minor surgeries is now complete, and database lock is projected to occur during the first quarter of 2007. These studies together with the pivotal phase 3 colonoscopy trial are expected to form the foundation of the Aquavan NDA. * A pre-NDA meeting was held with the FDA in January 2007, and the NDA submission is planned for early in the third quarter of 2007. Saforis * The FDA issued an approvable letter for Saforis[TM] (glutamine glutamine (gl  `təmēn), organic compound, one of the 20 amino acids commonly found in animal proteins. )
Powder in UpTec[TM] for Oral Suspension on October 12, 2006, in which it
requested an additional pivotal trial to evaluate the efficacy of
Saforis in the proposed indication. The Company is currently evaluating
its options to maximize the value of Saforis.Other Business Items * The Company has implemented a plan of organizational restructuring announced in October 2006 in order to better align its workforce and resources with operational objectives. 2007 Corporate Objectives: In 2007, MGI PHARMA is focused on building upon the commercial and R&D progress made in 2006 by executing on key initiatives to advance our development pipeline and grow product sales. Maximize our brand franchises * Submission of the Aloxi PONV sNDA * Submission of the Aloxi oral capsule sNDA * Advance Dacogen pivotal phase 3 AML program * Conclude Dacogen ADOPT trial * Submission of the sNDA for Dacogen alternative dosing regimen Advance our product pipeline * Submission of the Aquavan NDA * Finalize Saforis development strategy * Complete enrollment in the amolimogene pivotal phase 2 study for cervical dysplasia Cervical dysplasia Dysplasia is the abnormal growth of the epithelial cells. This is what a Pap smear will detect in the cervix. Mentioned in: Pelvic Exam cervical dysplasia * Complete enrollment in the ZYC ZYC Zürcher Yacht Club (Switzerland) 300 phase 1/2 trial in solid tumors * Submission of the GPI (Graphical Programming Interface) A graphics language in OS/2 Presentation Manager. It is a derivative of the GDDM mainframe interface and includes Bezier curves. 21016 (PARP PARP Poly ADP-Ribose Polymerase PARP Planning And Review Process PARP PfP Planning and Review Process (NATO) PARP Pajarito Archaeological Research Project PARP Possible Acknowledgement Returning Period PARP Proxy Attribute Request Protocol inhibitor) IND for cancer therapy sensitization sensitization /sen·si·ti·za·tion/ (sen?si-ti-za´shun) 1. administration of an antigen to induce a primary immune response. 2. exposure to allergen that results in the development of hypersensitivity. Conference Call & Webcast Information MGI PHARMA will broadcast its quarterly investor conference call live over the Internet today, Wednesday, February 7, 2007 at 5:00 p.m. Eastern Time. The Company's executive management team will review fourth quarter and full year 2006 financial results, discuss operations, and provide guidance on MGI PHARMA's business outlook. All interested parties are welcome to access the webcast via the Company's Website at www.mgipharma.com. The audio webcast will be archived on the Company's Website through Wednesday, February 14, 2007. About MGI PHARMA MGI PHARMA, INC. is a biopharmaceutical company focused in oncology and acute care that acquires, researches, develops and commercializes proprietary products that address the unmet needs of patients. MGI PHARMA markets Aloxi[R] (palonosetron hydrochloride) Injection, Dacogen[R] (decitabine) for Injection, and Gliadel[R] Wafer (polifeprosan 20 with carmustine implant) in the United States. The Company directly markets its products in the U.S. and collaborates with partners to reach international markets. For more information about MGI PHARMA, please visit www.mgipharma.com. Dacogen is being co-developed by MGI PHARMA and Janssen-Cilag, a Johnson & Johnson company. Janssen-Cilag companies are responsible for regulatory and commercial activities in all territories outside North America, while MGI PHARMA retains responsibility for all activities in the United States, Canada and Mexico. This news release contains certain "forward-looking" statements within the meaning of 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 of 1995. These statements are typically preceded by words such as "believes," "expects," "anticipates," "intends," "will," "may," "should," or similar expressions. These forward-looking statements are not guarantees of MGI PHARMA's future performance and involve a number of risks and uncertainties that may cause actual results to differ materially from the results discussed in these statements. Factors that might cause MGI PHARMA's results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, the ability of MGI PHARMA to continue to increase sales of its marketed products, the ability to successfully commercialize Saforis[TM] / the ability for MGI PHARMA to respond to the FDA's approvable letter, the successful completion of clinical trials for the Company's other product candidates, and other risks and uncertainties detailed from time to time in MGI PHARMA's filings with the Securities and Exchange Commission including its most recently filed 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. and Form 10-Q. MGI PHARMA undertakes no duty to update any of these forward-looking statements. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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