Laval, Quebec, Canada - BioChem Pharma Inc. (NASDAQ: BCHE; TSE: BCH) today announced financial results for the second quarter and six months ended June 30, 2000. All figures, unless otherwise specified, are in Canadian dollars.
Before one-time gains, earnings per common share from continuing operations grew 15% to $0.38 in the second quarter, and 21% to $0.74 in the six months. Including one-time gains, per common share earnings from continuing operations were $1.67 in the second quarter and $2.07 in the six months.
Second quarter earnings from continuing operations, before one-time gains, amounted to $38.1 million, an increase of 6%; and six-month earnings from continuing operations were $74.7 million, up 13% from the prior year. Per share earnings rose faster than net earnings because of a reduction in the weighted average number of common shares outstanding.
One-time gains brought second quarter earnings from continuing operations to $169.3 million and six-month earnings from continuing operations to $209.7 million.
Gain on NAVA sale
On June 26, BioChem sold its stake in North American Vaccine, Inc. (NAVA). The gain on the sale was $137 million of which $131 million was recorded in the second quarter and $6 million is to be recorded in the third quarter. Cash proceeds from the sale are $167 million, $91 million in the second quarter and the remaining $76 million in the third quarter.
Core earnings growth
BioChem measures its business performance using core earnings which grew 6% to $25.4 million in the second quarter and 24% to $50.3 million in the year to date. Core earnings per common share grew 14% in the second quarter and 35% in the year to date. Core earnings are derived from direct sales, royalties, third-party R&D partnerships, and investment revenues. BioChem's objective is to steadily increase core earnings over time.
Operating highlights
Revenues in the second quarter were $72.7 million, an increase of 6% from the $68.7 million reported in the prior year period. Six-month revenue grew 11%, reaching $145.3 million in 2000 versus $131.4 million in the same period last year.
The company’s principal revenue source is royalties on two out-licensed products, 3TC/Epivir for HIV/AIDS and Zeffix for chronic hepatitis B. Royalty revenues grew 4% in the second quarter to $47.8 million from $45.9 million in 1999, and grew 7% in the first half to $90.6 million from $84.8 million in the same period in 1999.
Second quarter sales of 3TC/Epivir were U.S.$219.8 million (CAN$325.1 million) compared to U.S.$242.8 million (CAN$358.6 million) a year earlier. Six-month sales were U.S.$420.1 million (CAN$616.2 million) compared to U.S.$437.5 million (CAN$652.9 million) in the prior year period. Constant exchange rate (CER) reporting eliminates the impact of exchange fluctuations on reported sales. In CER terms, 3TC/Epivir sales in the second quarter were 6% below the prior year versus a 9% decline in current dollars. Six-month 3TC sales in CER terms were unchanged year over year, versus a 4% decline in current dollars. The CER sales decline in the second quarter is primarily due to unusually high prior-year sales, which were boosted by non-recurring orders from Brazil. The underlying demand for 3TC/Epivir, as measured by prescription data, continues to grow steadily.
The global market for Zeffix continues to expand, as regulatory approvals and reimbursement provisions are obtained in strategic markets. Driven by sales in the Far East, second quarter Zeffix sales reached U.S.$25.0 million (CAN$37.0 million), compared with U.S.$20.0 million (CAN$29.0 million) in the first quarter of 2000, and U.S.$13.3 million (CAN$19.8 million) in the fourth quarter of 1999. The upward trend of Zeffix sales points to the exciting potential for this new drug.
Research and development contracts were flat in comparison to the year earlier period at $15.0 million. CliniChem, BioChem Pharma’s off-balance sheet R&D vehicle, contributed $13.5 million, and $1.1 million was from Technology Partnerships Canada. Year to date, research and development contract revenues were down slightly to $30.4 million in 2000, versus $31.4 million in 1999.
Direct sales, which are largely derived from BioChem's market activities in Canada, grew to $5.0 million in the second quarter, from $4.5 million the year earlier. Year to date, direct sales are essentially flat at $9.0 million. Investment and other revenues were $4.9 million in the quarter, up from $3.2 million in 1999. In the year to date, investment and other revenues amounted to $15.3 million compared with $6.4 million in the prior period.
BioChem Pharma has a strong balance sheet, with a cash and temporary investments balance of $299.8 million as of June 30, 2000, compared to $190.9 million as at March 31, 2000. Free cash flow contributed $18 million to the increase, while $91 million pertains to the NAVA transaction.
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biochempharma.com
Kind of odd that only Standard&Poor's had any press. They only had the table results. Where are the other fin. news guys?
Jim |
