CINCINNATI, Jul 24, 2000 /PRNewswire via COMTEX/ -- Duramed Pharmaceuticals, Inc. (Nasdaq: DRMD chart, msgs) today reported that net sales for its second quarter ended June 30, 2000, were a record $20.7 million, up 107 percent from last year's second quarter and up 25 percent from first quarter 2000. Net income for the quarter was $273,000, or one cent per share, compared with a loss of $9.6 million, or 45 cents per share, reported in last year's second quarter. Weighted average shares outstanding rose approximately 4.8 million to 26.2 million, due primarily to shares issued to Solvay Pharmaceuticals in the fourth quarter of 1999, the conversion of Preferred Stock, and the exercise of outstanding stock options and warrants.
E. Thomas Arington, Duramed Chairman and Chief Executive Officer, commented, "I am pleased that Duramed has done what we have said we will do -- return to profitable operations. The sequential quarter-over-quarter improvement in the company's performance reflects our strengthened fundamentals and supports our confidence in the future. As we enter the second half of 2000, we are continuing to build on the momentum we have established so far this year. From our current position, we expect improving performance -- and we anticipate predictable profitability on a growing base of sales."
Duramed continues to implement its strategic business plan focused on making the family of Cenestin products the flagship of the company's long-term commitment to hormone products. "The value of our current product line, as well as the potential of our pipeline, contributes to our confidence," Arington added.
Arington continued, "We are just at the beginning of realizing the results of strategic decisions made and implemented over the past several years. Today's results underscore the near- and long-term confidence that exists throughout the company."
Growing Contributions Add to Sales
Cenestin, the oral contraceptive Apri, and the standard (multi-source) product line all contributed to the growth in sales in the quarter.
"Cenestin continues to achieve steady growth. Weekly prescriptions totaled 6,987 at the end of March. This number grew to 10,402 by the end of June, a 49 percent increase from the beginning to the end of the quarter. The company recognized $3.8 million in Cenestin sales in the second quarter, up from $3.0 million in the first quarter of 2000 and from $2.0 million in the fourth quarter of 1999," Arington said.
The oral contraceptives category also has made, and will continue to make, a positive contribution to Duramed's bottom line; Apri was the company's sales leader in the second quarter with $4.1 million in revenue. "Apri is significant because it has contributed substantially to our revenue stream even though it has only been marketed since October 1999. Apri continues to gain market share; the prescription data for the week ending July 7 indicates that the product has achieved a 33.3 percent new prescription market share for desogestrel products," said Arington.
Arington also noted that other products in Duramed's standard product line are growing and should continue to contribute to revenue expansion throughout 2000. "This balanced contribution is representative of our business plan, which calls for revenue to come from branded and multi-source products."
Gross Margin Improvement Leads to Profitability
Gross profit for the quarter was $9.2 million, up from $474,000 in the second quarter of 1999 and from $5.6 million in the first quarter of 2000. This 63 percent increase from the first quarter of 2000 is largely due to growth in net sales. "Increasing gross profits reflect Duramed's strategic commitment to high-margin specialty products," Arington said.
Effective January 1, 2000, Solvay Pharmaceuticals assumed responsibility for the Cenestin physicians' office promotion and payment of related expenses, in exchange for a share of the Cenestin profits. The terms of the agreement, announced March 1, 2000, allowed Duramed to begin realizing a profit contribution from Cenestin. The agreement with Solvay Pharmaceuticals is designed to have Duramed recover the $38 million invested during 1999 in Cenestin.
Improved Financial Condition
During the second quarter 2000, the company completed a private placement of $10 million of Series G Convertible Preferred Stock. Proceeds from the transaction were used to address obligations remaining from the 1999 Cenestin launch. As a result of the private placement and the improved operating performance, shareholders' equity at June 30, 2000, was $1.9 million, with total assets at $78.3 million and long-term obligations at $37.5 million.
The company is continuing to monitor a number of business activities that may improve its working capital position and expects to place heavy emphasis on partnering high-profile projects. "We continue to have active discussions -- offering both short- and long-term benefits to Duramed -- with a number of companies," Arington stated.
Six Month Results
For the six months ended June 30, 2000, Duramed reported record net sales of $37.3 million, up from $23.2 in the comparable prior period. For the six months, the net loss was $2.4 million, or 9 cents per share, vs. a net loss of $12 million, or 57 cents, last year.
About Solvay Pharmaceuticals, Inc.
Solvay Pharmaceuticals, Inc., based in Marietta, Ga., is a research-based pharmaceuticals company, active in the therapeutic areas of cardiology, gastroenterology, mental health and women's health. Solvay Pharmaceuticals is the second largest pharmaceutical company in the U.S. hormone replacement therapy market, having advanced from its previous standing of sixth in the industry in 1996. It is a member of the worldwide Solvay Group of chemical and pharmaceutical companies, headquartered in Brussels, Belgium. The Group's members employ some 33,000 people in 46 countries. Its 1999 revenue worldwide was 7.9 billion EUR ($7.9 billion) from four operating sectors: Chemicals, Plastics, Processing, and Pharmaceuticals. Additional information about the Group can be found on the World Wide Web at www.solvay.com .
About Duramed Pharmaceuticals, Inc.
Duramed Pharmaceuticals develops, manufactures and markets prescription drug products. The company's business strategy emphasizes products with attractive market opportunities and potentially limited competition due to technological barriers to entry, focusing on women's health and the hormone replacement therapy market. On March 24, 1999, the FDA approved the company's first branded product, Cenestin(R) (synthetic conjugated estrogens, A) Tablets, for the treatment of moderate-to-severe vasomotor symptoms associated with menopause.
On October 6, 1999, Duramed entered into an alliance with Solvay Pharmaceuticals, Inc. to jointly promote three of the companies' hormone products to obstetricians and gynecologists across the United States: Duramed Pharmaceuticals' Cenestin and Solvay Pharmaceuticals' Estratest(R)(1) and Prometrium(R)(2).
Duramed's containment manufacturing facility for the production of hormones distinguishes the company from most competitors. The facility incorporates enclosed product flow and state-of-the-art environmental controls to ensure purity, stability, and tablet uniformity for Cenestin and other hormone products. While Duramed's primary focus will be solid oral dose hormones, the company's other areas of concentration -- controlled release technology and oncology -- continue to represent attractive market opportunities.
The company's stock is traded on Nasdaq using the symbol DRMD. Additional information about the company can be found on the World Wide Web at www.duramed.com and www.cenestin.com .
(1) Estratest is a trademark of Solvay Pharmaceuticals.
(2) Prometrium is a trademark of Solvay Pharmaceuticals.
Like all estrogen drug products, CENESTIN(R) Tablets should not be used in women with known or suspected pregnancy, breast cancer, or estrogen-dependent neoplasia, undiagnosed abnormal genital bleeding, active thrombophlebitis, or thromboembolic disorders. Estrogens have been reported to increase the risk of endometrial carcinoma in postmenopausal women with an intact uterus. The most common adverse events reported in clinical experience with CENESTIN included headache, insomnia, asthenia, nervousness, paresthesia, and depression. For additional information on CENESTIN, please see full prescribing information.
The Securities and Exchange Commission (SEC) encourages companies to disclose forward-looking information so that investors can better understand a company's future prospects and make informed investment decisions. Due to changing market conditions, product competition, the nature of product development and regulatory approval processes, the achievement of forward- looking statements contained in this press release are subject to risks and uncertainties. For further details and a discussion of these risks and uncertainties, see Duramed's SEC filings, including its annual report on Form 1O-K.
Duramed Pharmaceuticals, Inc.
Income Statement
(in thousands except per share amounts and shares outstanding)
Second Quarter Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
Net sales $20,668 $9,966 $37,261 $23,216
Cost of goods sold 11,499 9,492 22,473 19,910
Gross profit 9,169 474 14,788 3,306
Operating expenses:
Product development 587 2,308 1,852 3,611
Selling, general &
administrative 6,862 6,965 12,452 10,187
Operating income (loss) 1,720 (8,799) 484 (10,492)
Interest expense 1,371 732 2,820 1,415
Income (loss) before income
tax and dividends 349 (9,531) (2,336) (11,907)
Income tax provision 7 -- 7 --
Net income (loss) 342 (9,531) (2,336) (11,907)
Preferred dividends 69 62 86 130
Net income (loss) applicable
to common shareholders $273 $(9,593) $(2,429) $(12,037)
Income (loss) per average
common and common equivalent
shares (basic and diluted): $0.01 $(0.45) $(0.09) $(0.57)
Weighted average number of
common and common equivalent
shares outstanding:
Basic 26,248,852 21,476,065 26,040,449 21,046,006
Diluted 27,823,614 21,476,065 26,040,449 21,046,006
Note: Outstanding stock options and warrants are recognized for the purpose of computing the weighted average number of diluted common shares only when their effect would be dilutive. In the period in which Duramed reported a profit, the resulting difference in basic and diluted common shares outstanding was immaterial in the calculation of earnings per share. In periods in which Duramed reported a loss, no stock options or warrants were recognized as their effect would be anti-dilutive.
Balance Sheet
(in thousands) June 30, December 31,
2000 1999
Current Assets $46,393 $49,207
Property, Plant and Equipment and Other 31,871 31,566
Total Assets $78,264 $80,773
Current Liabilities $28,882 $46,627
Long Term Debt 37,518 31,556
Total Liabilities $66,400 $78,183
Mandatory Redeemable Convertible Preferred Stock 10,000 4,900
Shareholders' Equity 1,864 (2,310)
Total Liabilities and Equity $78,264 $80,773
Source: Duramed Pharmaceuticals, Inc.
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Contact:
Investor Relations, Duramed Pharmaceuticals, Inc.,
513-731-9900; or Media, Ursula Miller or Ellen Knight of Dan Pinger Public
Relations Inc., 513-564-0700
/Web Site: duramed.com
cenestin.com
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