EARNINGS DOUBLE!!
ORONTO, ONTARIO--Drug Royalty Corporation Inc. (TSE:DRI -
news), today announced increased earnings and revenue for the second
quarter ended February 29, 2000.
Royalty revenue increased 76% to $4.4 million compared to $2.5 million for the corresponding prior period. Net
earnings for the second quarter increased 96% to $0.8 million or $0.02 per share versus net earnings of $0.4 million or
$0.01 per share reported in the prior year quarter. Royalty revenue was strengthened by the initial recognition of
revenues from a European royalty acquired during the quarter as well as strong seasonal sales by Neupogen© and
Taxol©, some of which was due to Y2K stocking. Appreciation of the Canadian dollar over the prior year quarter had an
adverse affect on revenues as royalties are primarily paid in US dollars. Excluding the European royalty and foreign
exchange influences, royalty revenue increased about 41%.
The Company recorded a pre-tax gain of $0.7 million in the quarter due to the sale of certain equity interests and the
exercise of warrants in non-core investments. Earnings also included a foreign exchange loss of $0.5 million or $0.01
per share due to the decline of the US dollar at the time of the acquisition of two new royalty interests during the
quarter. The Company maintains its cash primarily in US dollars and values its investments at the exchange rate in
effect at the time of its investment.
``As expected, our increased transaction activity is continuing to pay off,' commented Jim Webster, President. ``Our
royalty portfolio continues to increase in value with the addition of each new royalty agreement. We believe that these
investments will provide the foundation for greater shareholder returns in the years to come.'
For the six months ended February 29, 2000 the Company reported royalty revenue of $7.6 million compared to $5.5
million for the corresponding prior period. Net income for the six months ended February 29, 2000 increased 74% to
$1.6 million or $0.04 per share versus net income of $0.9 million or $0.03 per share reported in the prior year period.
During the quarter, Drug Royalty closed two new acquisitions for up to $18 million. The first, a royalty interest in the
international sales of desloratadine (``DSL'), the next generation Claritin©, was purchased for up to $9 million. DSL is
expected to be marketed in 2001 by Schering-Plough (NYSE:SGP - news), subject to FDA approval, and will be
positioned to protect the US$2.7 billion Claritin franchise from generic competition. Secondly, a royalty interest was
acquired from a major multinational pharmaceutical company, on their royalty entitlement to the sales of a significant
prescription drug sold in Europe, for $9 million. Both of these acquisitions strengthen Drug Royalty's portfolio with
significant products in a spectrum of therapeutic areas across a variety of geographic territories.
The previously announced agreement to acquire a royalty interest in the international sales of ReoPro©, is expected to
close prior to the end of June. Upon closing, Drug Royalty will receive royalty payments retroactive to December 31,
1999. ReoPro is a high-growth, cardiovascular pharmaceutical product marketed by Johnson and Johnson (NYSE:JNJ -
news) and Eli Lilly and Company (NYSE:LLY - news; NYSE:LLY - news). 1999 sales were US$447 million. The deal
will be funded from available cash and a credit facility with a major commercial bank. There was no debt outstanding as
at February 29, 2000.
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 40,419,006. 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.
DRUG ROYALTY CORPORATION INC.
3 Months Ended 6 Months Ended
Feb 29, 2000 Feb 28, 1999 Feb 29, 2000 Feb 28, 1999
------------ ------------ ------------ ------------
Revenues
Royalties $4,429,580 $2,488,800 $7,557,632 $5,480,060
Fees and gain on sale of
royalty interest 668,243 325,893 668,243 325,893
Interest and other 248,048 38,582 529,424 277,675
----------- ----------- ----------- -----------
5,345,871 2,853,275 8,755,299 6,083,628
----------- ----------- ----------- -----------
Expenses
General and
administration 646,504 580,449 1,244,505 1,168,360
Amortization, write-downs
and provisions 2,657,984 1,464,620 4,094,173 3,265,913
Financial 575,167 77,930 603,317 77,930
----------- ----------- ----------- -----------
3,879,655 2,122,999 5,941,995 4,512,203
----------- ----------- ----------- -----------
Earnings Before
Income Taxes 1,466,216 730,276 2,813,304 1,571,425
Income taxes 673,941 326,146 1,229,999 662,754
----------- ----------- ----------- -----------
Net Earnings 792,275 404,130 1,583,305 908,671
Retained Earnings -
Beginning
of Period 18,369,735 16,278,293 17,578,706 15,773,752
----------- ----------- ----------- -----------
Retained Earnings -
End
of Period $19,162,010 $16,682,423 $19,162,011 $16,682,423
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Basic Earnings
Per Share $0.02 $0.01 $0.04 $0.03
Cash Flow from
Operations $4,354,490 $2,450,221 $6,581,708 $4,756,056
Basic Cash Flow from
Operations
Per Share $0.11 $0.07 $0.16 $0.14
Weighted Average Number
of Shares
Outstanding 40,378,434 32,914,615 40,354,946 32,879,881
As at As at As at
Feb 29, 2000 Feb 28, 1999 Aug 31, 1999
------------ ------------ ------------
Working Capital $12,875,590 $4,502,551 $23,884,368
Royalty Interests $58,409,635 $48,427,794 $45,611,677
Shareholders' Equity $72,164,323 $53,836,692 $70,447,958 |
