MedImmune Sets New Revenue and Earnings Records
1999 Product Sales Nearly Double and Net Earnings Grow More Than Ninefold Over 1998 (Before One-Time Items)
Fourth Quarter Highlights * Revenues Grow 55 Percent to $173.7 million * Net Earnings Increase 149 Percent; Reach $0.69 Per Diluted Share(Before One-Time Items)
GAITHERSBURG, Md., Jan. 26 /PRNewswire/ -- MedImmune, Inc. (Nasdaq: MEDI - news)today reported a 55-percent increase in revenues for the 1999 fourth quarter over the same period in 1998, excluding one-time items and after restating 1998 amounts to reflect the acquisition of U.S. Bioscience, Inc. Total revenues of $173.7 million in the 1999 fourth quarter included product sales of $171.5 million and $2.2 million in other revenues. Total revenues of $112.0 million in the 1998 fourth quarter included $109.0 million in product sales and $2.9 million of other revenues. The primary growth driver for the 1999 quarter was sales of Synagis© (palivizumab), which totaled $151.1 million ($147.3 million in the United States), a 63-percent increase over the $92.8 million ($90.7 million in the United States) in sales of Synagis reported in the 1998 fourth quarter. Also contributing to product sales for the 1999 fourth quarter were $12.4 million in worldwide sales of CytoGam© (Cytomegalovirus Immune Globulin Intravenous (Human)) and $6.0 million in revenues from worldwide sales of Ethyol©(amifostine), a drug that MedImmune acquired in its merger with U.S. Bioscience. In the 1998 fourth quarter, sales of CytoGam totaled $9.2 million and Ethyol revenues totaled $4.5 million.
``1999 was a year of tremendous growth for MedImmune,' said Dr. Wayne T. Hockmeyer, chairman and chief executive officer. ``We posted another record year of revenues and earnings, due primarily to the growing acceptance of Synagis in the marketplace. We also made significant progress with our pipeline, moving three new products into the clinic, advancing ongoing clinical studies, and acquiring several new products through our active in- licensing program and the merger with U.S. Bioscience. As a result, we begin 2000 with six products on the market, seven products in clinical testing, and an array of early stage compounds for future development. We look forward to continuing to build for the future in 2000.'
Additional Fourth Quarter Results Excluding One-Time Items
Net earnings for the 1999 fourth quarter grew 149 percent to $49.4 million, or $0.69 per diluted share, from net earnings of $19.8 million, or $0.30 per diluted share, in the 1998 fourth quarter. Gross margins in the 1999 fourth quarter were 77 percent compared to 74 percent in the 1998 fourth quarter. Selling, general and administrative costs rose to $41.9 million in the 1999 fourth quarter from $35.5 million in 1998 fourth quarter, due primarily to higher promotion-related expenses for Synagis©, partially offset by a settlement received for the co-promotion of RespiGam©(Respiratory Syncytial Virus Immune Globulin Intravenous (Human)), MedImmune's first generation drug for RSV, which was largely replaced by Synagis following its launch in the third quarter of 1998. Research and development expenses increased to $16.2 million in the fourth quarter 1999 from $11.9 million in fourth quarter 1998 due to a larger number of active clinical trials. Other
operating expenses decreased to $1.1 million in fourth quarter 1999 from $3.0 million in fourth quarter 1998, reflecting decreased start-up costs for MedImmune's manufacturing facility in Frederick, Maryland.
Including One-Time Items
Including one-time transaction expenses associated with the completed acquisition of U.S.Bioscience, Inc., net earnings for the 1999 fourth quarter were $34.2 million, or $0.47 per diluted share. In the 1998 fourth quarter, net earnings were $69.3 million, or $1.02 per diluted share. One-time items for the 1998 fourth quarter included a $47.4 million tax benefit for the reversal of a valuation allowance for MedImmune's deferred tax asset and a $12.5 million reduction in revenues for returns of RespiGam.
Annual Results
For the year ended December 31, 1999, MedImmune reported revenues of $383.4 million, a 69-percent increase over 1998 when revenues totaled $227.2 million. Product sales of $356.8 million accounted for 93 percent of total revenues in 1999 and included $293 million in sales of Synagis, $34.7 million in sales of CytoGam©, and $19.6 million in revenues from sales of Ethyol©. In 1998, product sales of $183.9 million included $110 million in sales of Synagis,$32.9 million in sales of CytoGam, $19.8 million in sales of RespiGam, and $13.0 million in revenues from sales of Ethyol.
Excluding One-Time Items
Net earnings in 1999 were $68.7 million, or $0.98 per diluted share, compared to net earnings of $7.3 million, or $0.13 per diluted share in 1998. Gross margins for 1999 improved to 75 percent from 64 percent in 1998, reflecting the higher profit margin of Synagis, which accounted for 82 percent of total product sales in 1999 versus 60 percent in 1998. Selling,general and administrative expenses in 1999 rose to $118.2 million from $80.9 million in 1998, primarily reflecting increased promotional and co-promotional expenses related to Synagis, as well as the impact of a larger organization. Research and development costs increased 41 percent in 1999 to $59.6 million from $42.2 million in 1998, reflecting the expansion of our clinical development efforts for a larger number of product candidates. Other expenses for 1999 were $17.4 million, a decrease of 34 percent from the previous year when other operating expenses totaled $26.2 million.
Including One-Time Items
Including one-time items, net earnings for 1999 were $93.4 million, or $1.33 per diluted share,compared to net earnings of $47.2 million, or $0.73 per diluted share in 1998. One-time items in 1999 were related to the acquisition of U.S. Bioscience. These one-time items included a tax benefit of $41.0 million, accounted for in the second quarter of 1999, associated with the reversal of the valuation allowance on U.S. Bioscience's deferred tax asset, and $1.8 million and $19.4 million of merger related costs accounted for in the third and fourth quarters of 1999,
respectively, net of the related tax effect. The 1998 one-time items included those discussed above for the fourth quarter of 1998, plus a $7.6 million net charge related to RespiGam© inventory writedowns and a $10.3 million charge for the impact of Synagis© royalty buydowns.
Cash and marketable securities at December 31, 1999 increased to $270.4 million from $176.9 million at December 31, 1998. During 1999, MedImmune also reduced its long-term indebtedness to $11.9 million at December 31, 1999 from $87.9 million at December 31,1998.
Other Recent Activities
``Besides significantly growing revenue and earnings during the fourth quarter of 1999, we also took steps to build our overall business that both diversified and strengthened our core structure,' commented Dr. Hockmeyer. ``The two key developments that took place during the fourth quarter were the completion of our acquisition of U.S. Bioscience, a biotechnology company with a strong focus in the cancer market, and the approval of our Frederick manufacturing facility by the U.S. Food and Drug Administration for Synagis. Additionally, the international rollout of Synagis continued to make progress during the quarter, and we moved
two new vaccine candidates into the clinic. All of these activities are expected to help continue building MedImmune into a profitable, widely diversified, fully integrated biopharmaceutical company recognized for its innovation in bringing meaningful new products to market.'
On November 23, 1999, MedImmune completed its acquisition of U.S. Bioscience in a tax-free, stock-for-stock merger, accounted for as a pooling of interests. Each share of U.S.Bioscience was exchanged for 0.15 shares of MedImmune stock.
In December 1999, the FDA approved MedImmune's Frederick manufacturing facility,allowing the company to begin distributing Synagis manufactured at that facility, augmenting the supply of Synagis produced at Boehringer Ingelheim Pharma KG in Biberach, Germany.
Synagis has received regulatory approval in 28 countries, including Switzerland's approval in the fourth quarter and Norway's approval in early January. Additional regulatory approvals are expected in 2000, as are additional pricing and reimbursement approvals in various European countries.
MedImmune began Phase 1 clinical trials for two new vaccine candidates: one to prevent urinary tract infections caused by E. coli and the other to prevent infection with parvovirus B19. Both studies are expected to be completed in the second half of 2000.
Synagis© is a humanized monoclonal antibody marketed for the prevention of serious lower respiratory tract disease caused by respiratory syncytial virus in pediatric patients at high risk of RSV disease (see full prescribing information at www.medimmune.com/products/synagispi.htm). Ethyol© is an intravenous cytoprotective agent marketed for the reduction of both cumulative renal toxicity associated with repeated administration of cisplatin in patients with advanced ovarian cancer or non-small cell lung cancer (``NSCLC') and moderate to severe xerostomia in patients undergoing post-operative radiation treatment for head and neck cancer, where the radiation port includes a substantial portion of the parotid glands (see full prescribing information at www.usbio.com/research.htm). CytoGam© is an intravenous immune globulin enriched in antibodies against cytomegalovirus (CMV) and is marketed for the prophylaxis against CMV disease associated with transplantation of kidney, lung, liver, pancreas, and heart (please see full prescribing information attached and at www.medimmune.com/products/cytopi1.htm). RespiGam© is an intravenous immune globulin enriched in antibodies against RSV and is marketed for the prevention of serious lower respiratory tract infection caused by RSV in children under 24 months of age with bronchopulmonary dysplasia (BPD) or a history of premature birth (please see full prescribing information attached and at.medimmune.com/products/respi.htm).
MedImmune, Inc. is a fully integrated biotechnology company focused on developing and marketing products that address medical needs in areas such as infectious disease, immune regulation and cancer. Headquartered in Gaithersburg, Maryland, MedImmune has manufacturing facilities in Frederick, Maryland and Nijmegen, The Netherlands, and an oncology subsidiary in West Conshohocken, Pennsylvania.
Condensed Consolidated Statements of Operations
Three Months Ended December 31, Year Ended December 31,
1999 1998 1999 1998
Revenues:
Product sales $171,459 $109,020 (6) $356,815 $183,948
Other 2,235 2,931 26,560 43,273
Total 173,694 111,951 383,375 227,221
Costs and expenses:
Cost of sales 39,371 28,189 90,193 65,548 (1)
Research and
development 16,245 11,922 59,565 42,153
Selling,
administrative
and general 41,939 (7) 35,503 118,155 (7) 80,888 (2)
Other operating
expenses 1,096 3,049 17,409 26,245 (3)
Total 98,651 78,663 285,322 214,834
Interest income,
net 2,696 1,094 9,457 5,206
Income before
income taxes 77,739 34,382 107,510 17,593
Provision for
income taxes 28,342 (8) 14,555 (4) 38,762 (5) 10,286 (4)
Net earnings $49,397 $19,827 $68,748 $7,307
Basic earnings
per share $0.73 $0.34 $1.08 $0.13
Shares used in computing
basic earnings
per share 67,606 57,884 63,474 56,776
Diluted earnings
per share $0.69 $0.30 $0.98 $0.13
Shares used in computing
diluted earnings
per share 71,941 68,081 70,770 67,049
The above amounts are restated to reflect the merger with U.S. Bioscience and exclude the
one-time impact of significant items as follows:
(1) The net impact of $10.4 million related to the write-down of RespiGam© inventory following FDA approval of Synagis©
(2) The impact of $2.8 million reimbursement from co-promotion partner related to writedown of RespiGam inventory
(3) The impact of $10.3 million related to the buy-down of Synagis royalties
(4) The tax benefit of $47.4 million related to the reversal of the valuation allowance on the Company's deferred tax assets and the tax benefit related to the other one-time charges
(5) The tax benefit of $41.0 million related to the reversal of the valuation allowance on U.S. Bioscience's deferred tax assets and the tax benefit related to the other one-time charges
(6) The impact of $12.5 million related to returns of RespiGam following the launch of Synagis
(7) The impact of merger and severance related costs associated with the acquisition of U.S. Bioscience of $21.2 million and $19.4 million for the year ended and the quarter ended December 31, 1999, respectively
(8) The impact of the tax benefit related to the merger and severance related costs associated with the acquisition of U.S. Bioscience
MedImmune, Inc. INCLUDING ONE-TIME ITEMS
Selected Financial Information
(in thousands, except per share data)
Condensed Consolidated Statements of Operations
Three Months Ended December 31, Year Ended December 31,
1999 1998 1999 1998
Revenues:
Product sales $171,459 $96,540 $356,815 $183,948
Other 2,235 2,931 26,560 43,273
Total 173,694 99,471 383,375 227,221
Costs and expenses:
Cost of sales 39,371 28,189 90,193 75,960
Research and
development 16,245 11,922 59,565 42,153
Selling,
administrative
and general 61,373 35,503 139,389 78,060
Other operating
expenses 1,096 3,049 17,409 36,495
Total 118,085 78,663 306,556 232,668
Interest income, net 2,696 1,094 9,457 5,206
Income (loss)
before income taxes 58,305 21,902 86,276 (241)
Provision (benefit)
for income taxes 24,154 (47,428) (7,095) (47,428)
Net earnings $ 34,151 $ 69,330 $93,371 $47,187
Basic earnings
per share $0.51 $1.20 $1.47 $0.83
Shares used in computing
basic earnings
per share 67,606 57,884 63,474 56,776
Diluted earnings
per share $0.47 $1.02 $1.33 $0.73
Shares used in computing
diluted earnings
per share 71,941 68,081 70,770 67,049
Condensed Consolidated Balance Sheets
December 31, December 31,
1999 1998
Assets:
Cash and marketable
securities $270,394 $176,860
Trade and contract
receivables, net 87,780 36,503
Inventory, net 35,996 27,581
Deferred taxes, net 152,122 77,518
Property and
equipment, net 87,452 80,256
Other assets 14,680 7,059
$648,424 $405,777
Liabilities and
shareholders' equity:
Accounts payable $2,995 $4,798
Accrued expenses 93,827 59,970
Other liabilities 2,667 4,533
Long term debt 11,856 87,910
Shareholders' equity 537,079 248,566
$648,424 $405,777
Common shares
outstanding 67,947 58,309
Prior period amounts have been restated to conform with the current presentation and to reflect the merger with U.S. Bioscience. |
