TSE SYMBOL: DRI
JULY 12, 1999
Drug Royalty Announces Third Quarter 1999 Results -
Strong Pharmaceutical Product Sales Fuel 177 percent
Royalty Revenue Growth
TORONTO, ONTARIO--Drug Royalty Corporation Inc. (TSE:DRI), a
company focused on building an international royalty portfolio of
high growth, pharmaceutical products, today announced royalty
revenue of $2.6 million for the quarter ended May 31, 1999,
representing an almost threefold increase over the $0.9 million
reported for the corresponding period in the prior year. Royalty
revenue increased as a result of strong sales of Neupogen(R) and
Taxol(R), marketed by Amgen and Bristol-Myers Squibb,
respectively.
Cash flow from operations reported for the three months ended May
31, 1999 were $1.8 million or $0.05 per share versus $1.3 million
or $0.04 per share for the three months ended May 31, 1998.
Resulting net income was also stronger at $0.4 million compared
with net income of $0.1 million for the corresponding period ended
May 31, 1998.
"Growth in our royalty revenue further demonstrates the
investments we are making are paying off", said Ian Lennox,
President and CEO. "In the future we will continue to build from
the success we are seeing with drugs like Neupogen and Taxol by
aggressively investing in market-ready pharmaceutical products
that offer high growth opportunity with limited clinical risk."
For the nine months ended May 31, 1999 the company reported
royalty revenue of $8.1 million and net income of $1.3 million or
$0.04 per share. This compares to royalty revenue of $1.8 million
and net income of $10.2 million or $0.32 per share for the
corresponding period ended May 31, 1998. Cash flow from
operations for the nine months ended May 31, 1999 was $6.5 million
or $0.19 per share versus $14.7 million or $0.46 per share in the
prior year. Cash flow and net income in the prior year period
included a pretax gain on the sale of royalty interests to Dura
Pharmaceuticals of $15.6 million.
During the quarter, Drug Royalty continued to expand its available
cash resources with the successful completion of a $16.4 million
private placement financing, which contributed to a substantial
increase in the Company's working capital. As at May 31, 1999
working capital totalled $21.4 million versus $12.4 million as at
May 31, 1998. Subsequent to the end of the quarter, the company
also extended its credit facility with the Royal Bank of Canada
(TSE:RY) to facilitate new acquisitions. At the end of May, the
company had no debt.
Finally, the third quarter witnessed significant activity among
those companies in Drug Royalty's current portfolio. Amgen Inc.
(Nasdaq:AMGN) implemented a price increase and supported a new
marketing program called Project ChemoInsight(R) that is expected
to continue to fuel the growth of Neupogen sales in the US.
Bristol-Myers Squibb (NYSE:BMY) announced another regulatory
application has been submitted to the FDA for Taxol, allowing it
to be administered sequentially to standard combination therapy,
for the adjunctive treatment of node-positive breast cancer. On a
year over year basis, quarterly sales of Neupogen and Taxol are up
10 percent and 31 percent, respectively. Drug Royalty receives
royalties based on the worldwide sales of both Neupogen and Taxol.
Drug Royalty Corporation Inc. is an innovative and profitable
company participating in the growth of the global healthcare
market by investing in and creating royalty streams generated from
pharmaceutical products. DRC is building an international royalty
portfolio of high growth, pharmaceutical products.
This release and other information about Drug Royalty Corporation
Inc. can be found on their website at www.drugroyalty.com. Drug
Royalty's common shares trade on The Toronto Stock Exchange under
the symbol DRI. Total number of shares outstanding is 40,253,548.
Drug Royalty cannot guarantee that any predictions, forecasts and
other forward-looking statements in this news release will
materialize. Nor is it possible for the company to commit itself
to updating information about risks and other factors pertaining
to its business that might appear in this or any other
public-disclosure documents it publishes.
/T/
DRUG ROYALTY CORPORATION INC.
3 Months 9 Months
Ended Ended
May 31, May 31, May 31, May 31,
1999 1998 1999 1998
----------------------- -----------------------
Revenues
Royalties $ 2,572,386 $ 929,383 $ 8,052,445 $ 1,799,640
Fees and gain on sale of
royalty interests - 138,654 325,893 15,821,999
Interest and other
140,880 660,379 418,557 1,375,706
----------- --------- ---------- -----------
2,713,266 1,728,416 8,796,895 18,998,305
----------- --------- ---------- -----------
Expenses
General and
administration 708,515 655,798 1,876,875 1,834,667
Amortization, write-downs and
provisions 1,365,127 906,634 4,631,042 2,243,883
Financial (34,220) - 43,709 -
----------- --------- ---------- -----------
2,039,422 1,562,432 6,551,626 4,078,550
----------- --------- ---------- -----------
Earnings Before
Income Taxes 673,844 165,984 2,245,269 14,919,755
Income taxes 280,259 39,421 943,013 4,680,177
----------- --------- ---------- -----------
Net Earnings 393,585 126,563 1,302,256 10,239,578
Retained earnings beginning of
period 16,682,423 16,652,208 15,773,752 6,539,193
----------- ---------- ---------- -----------
Retained Earnings End of
Period $17,076,008 $16,778,771 $17,076,008 $16,778,771
----------- --------- ---------- -----------
----------- --------- ---------- -----------
Basic Earnings
Per Share $ 0.01 $ 0.00 $ 0.04 $ 0.32
Cash Flow from
Operations $ 1,758,714 $ 1,253,509 $ 6,480,738 $14,720,016
Basic Cash Flow from
Operations Per Share $0.05 $0.04 $0.19 $0.46
Weighted Average Number of Shares
Outstanding 35,386,881 32,797,648 33,715,548 32,165,148
As at May 31, 1999 As at May 31, 1998
------------------ -----------------
Cash and Cash Equivalents $17,682,518 $19,050,351
Working Capital $21,350,933 $12,394,877
Royalty Interests $47,145,033 $39,596,759
Shareholders' Equity $69,400,295 $53,842,617
/T/
-30-
FOR FURTHER INFORMATION PLEASE CONTACT:
Drug Royalty Corporation Inc.
Shameze Rampertab
Director, Financial Services
(416) 863-1865 ext.232
(416) 863-5161 (FAX)
shamezer@drugroyalty.com
or
The Equicom Group
Jason Hogan
Investor Relations
(416) 815-0700 ext.222
(416) 815-0080 (FAX)
jhogan@equicomgroup.com |
