Drug Royalty Reports 99 Year End Results - Record Royalty Revenue In Sixth Consecutive Year Of
Growth
TORONTO, ONTARIO--Drug Royalty Corporation Inc. (TSE:DRI), today
announced record royalty revenue of $10.8 million for the year
ended August 31, 1999, an increase of over 230% from $3.2 million
in revenues generated in 1998. Fiscal 1999 was the first full year
in which revenue from royalty interests in the sales of
Neupogen(R)as recognized. The year also saw the booking of the
first revenues generated from interests in the sales of Taxol(R).
Neupogen and Taxol are sold by Amgen and Bristol-Myers Squibb,
respectively.
Net earnings for the year were $1.8 million or $0.05 per share
compared with $9.2 million or $0.29 per share in the prior year.
Cash flow from operations totaled $8.6 million or $0.24 per share
for the year ended August 31, 1999 compared with $16.6 million or
$0.51 per share for the corresponding period ended August 31,
1998. Prior year results included the proceeds of $17.6 million
from the sale of royalty interests to Dura Pharmaceuticals, for a
pre-tax gain of $15.6 million.
"These results are in line with our expectations," said Jim
Webster, President. "We have made significant progress in year two
of our three year program to achieve $20 million in sustainable
royalty revenue annually."
For the fourth quarter ended August 31, 1999, royalty revenue
doubled to $2.8 million from $1.4 million in the same quarter last
year, while net earnings increased to $0.5 million or $0.01 per
share from a net loss of $1.0 million or ($0.03) per share in the
same quarter of 1998. Cash flow from operations was $2.1 million
or $0.05 per share compared to $2.1 million or $0.07 per share in
the prior year period. Quarterly sales of Neupogen and Taxol are
up 12 percent and 19 percent, respectively. Drug Royalty receives
royalties based on the worldwide sales of both Neupogen and Taxol.
Drug Royalty's carrying cost of royalty interests was $45.6
million in 1999 compared to the carrying value of $36.7 million in
1998. 77% of the carrying cost was attributable to interests in
Neupogen and Taxol. Other interests in earlier stage companies
with innovative technologies and products accounted for the
remaining 23%.
During the fiscal year, Drug Royalty continued to strengthen its
financial position through the generation of cash flows and the
completion of finance activities. At August 31, 1999, the
Company's working capital was $23.9 million compared to $14.1
million a year earlier. This reflects the proceeds generated from
the Company's private placement completed in March 1999. In
December 1998, Drug Royalty announced that it had invested about
$16 million for a royalty interest in the worldwide sales of
Bristol-Myers Squibb Company's (NYSE:BMY) leading drug, Taxol, of
which 1999 sales are projected to be over US$1.4 billion. This
investment was completed with financing from a major Canadian
bank. The loan has been fully repaid although the credit facility
of $10 million remains in place.
During the quarter, Drug Royalty announced a reorganization of its
senior management team. James (Jim) R. Webster was appointed
President and a member of the Board of Directors. Mr. Webster was
formerly Executive Vice-President. Ian Lennox, was appointed
Chairman of the Board.
The fourth quarter witnessed positive activity in the companies of
Drug Royalty's royalty portfolio. Amgen Inc.'s (Nasdaq:AMGN)
sustained duration Neupogen has now entered Phase III clinical
trials. Bristol-Myers Squibb received FDA Advisory Panel
recommendation for marketing clearance for Taxol to be
administered sequentially to standard combination therapy for
adjuvant treatment of node positive breast cancer. Drug Royalty
receives royalties based on the worldwide sales of both Neupogen
and Taxol, and this activity is expected to result in further
royalty revenue growth for the Company.
The Company has reviewed the effect that the Year 2000 will have
on its essential computer systems, especially those related to its
ongoing operations, including the preparation of financial
information. The Company has addressed the potential adverse
effects on its operations and accounting records related to the
Year 2000 computer problem. The Company now believes that it is
Year 2000 compliant on all of its internal systems. However,
disruptions of the computer systems operated by the companies in
which Drug Royalty has Royalty Interests or which market the
underlying products could have an adverse effect on the Company's
operations and revenues. The Company can give no assurances that
the companies in which it has Royalty Interests or which market
the underlying products are or will be Year 2000 compliant.
Drug Royalty Corporation Inc. profits from the growth of the
global healthcare market by acquiring royalty streams generated
from pharmaceutical products. Drug Royalty is building an
international royalty portfolio of high growth, pharmaceutical
products.
The Company's common shares trade on The Toronto Stock Exchange
under the symbol DRI. Total number of shares outstanding is
40,253,548. This release and other information about Drug Royalty
Corporation Inc. can be found on their website at
www.drugroyalty.com.
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 Ended 12 Months Ended
Aug. 31, Aug. 31, Aug. 31, Aug. 31,
1999 1998 1999 1998
------- ------- ------- --------
Revenues
Royalties $ 2,782,365 $ 1,408,577 $10,834,810 $ 3,208,217
Fees & gain on sale of
royalty interests - 10 325,893 15,822,009
Interest and other 248,666 310,822 667,223 1,687,488
--------- --------- ---------- ----------
3,031,031 1,719,409 11,827,926 20,717,714
--------- --------- ---------- ----------
Expenses
General &
administration 583,288 465,442 2,460,162 2,300,109
Amortization, write-downs
and provision 1,554,893 3,047,283 6,185,935 5,291,166
Financial - - 43,709 -
--------- --------- ---------- ----------
2,138,181 3,512,725 8,689,806 7,591,275
--------- --------- ---------- ----------
Earnings Before
Income Taxes 892,850 (1,793,316) 3,138,120 13,126,439
Income taxes 390,153 (788,297) 1,333,166 3,891,880
--------- --------- ---------- ----------
Net Earnings 502,698 (1,005,019) 1,804,954 9,234,559
Retained Earnings
- Beginning
of Year 17,076,008 16,778,771 15,773,752 6,539,193
Retained Earnings
- End
of Year $17,578,706 $15,773,752 $17,578,705 $15,773,752
Basic Earnings
Per Share $ 0.01 $ ( 0.03) $ 0.05 $ 0.29
Cash Flow from
Operations $ 2,080,193 $ 2,148,415 $ 8,560,931 $16,624,231
Basic Cash Flow from
Operations
Per Share $ 0.05 $ 0.07 $ 0.24 $ 0.51
Weighted Average Number
of Shares
Outstanding 40,253,548 32,845,148 35,350,048 32,345,981
As at Aug. 31, 1999 As at Aug. 31, 1998
------------------- -------------------
Working Capital $23,884,368 $14,094,245
Royalty Interests $45,611,677 $36,673,122
Shareholders' Equity $70,447,958 $52,799,537
/T/ |
