Noven Reports Third Quarter Earnings Per Share of $0.10; Nine Month Pre-Tax
Income Increases 38%
to $12.9 Million
Business Editors/Health & Medical Writers
MIAMI--(BUSINESS WIRE)--Nov. 1, 2001--
Novogyne Quarterly Profit Contribution Nearly Doubles
to $5.3 Million
Noven Pharmaceuticals, Inc. (Nasdaq:NOVN) today announced
financial results for the quarter and nine-month period ended
September 30, 2001.
2001 Third Quarter
Noven reported net income of $2.5 million ($0.10 diluted earnings
per share) for the third quarter of 2001 (the "current quarter"),
compared to $3.6 million ($0.15 diluted earnings per share) for the
third quarter of 2000 (the "2000 quarter"). Income before income taxes
for the current quarter was $4.0 million, compared to $3.9 million for
the 2000 quarter. Current quarter revenues were $10.4 million,
compared to $11.2 million for the 2000 quarter. Noven's provision for
income taxes in the current quarter increased $1.3 million over the
2000 quarter, as Noven's income became fully taxable in 2001 for the
first time. In the current quarter, Noven recognized $5.3 million in
earnings from Novogyne Pharmaceuticals, Noven's joint venture with
Novartis Pharmaceuticals Corporation, East Hanover, New Jersey
("Novartis"), compared to $2.7 million in the 2000 quarter.
Novogyne's current quarter net revenues more than doubled to
$28.5 million from $13.5 million due to increased sales of
Vivelle-Dot(TM) and the addition of CombiPatch(R) in March 2001.
Novogyne's selling, general and administrative expenses increased to
$9.7 million for the current quarter from $5.1 million in the 2000
quarter, primarily due to the relaunch of CombiPatch and expansion of
the Novogyne sales force. Novogyne amortized $1.5 million of
CombiPatch acquisition cost during the current quarter. Novogyne's net
income for the current quarter was $12.0 million, an 85% increase over
the $6.5 million reported in the 2000 quarter.
2001 First Nine Months
Noven reported net income of $8.3 million ($0.35 diluted earnings
per share) for the first nine months of 2001 (the "current period"),
compared to $8.9 million ($0.39 diluted earnings per share) for the
first nine months of 2000 (the "2000 period"). Income before income
taxes was $12.9 million, compared to $9.4 million for the 2000 period.
Current period revenues were $35.7 million, compared to $31.2 million
for the same period in 2000. Noven's provision for income taxes for
the current period increased $4.1 million over the 2000 period. In the
current period, Noven recognized $9.0 million in earnings from
Novogyne, compared to $6.4 million in the 2000 period, an increase of
41%.
In the current period, Novogyne net revenues increased to
$63.2 million from $42.6 million in the 2000 period, an increase of
48%. Novogyne's selling, general and administrative expenses increased
to $22.9 million from $14.6 million in the 2000 period, primarily due
to the CombiPatch relaunch and the Novogyne sales force expansion.
Novogyne amortized $3.1 million of CombiPatch acquisition cost during
the current period. Current period net income at Novogyne increased to
$26.6 million from $22.0 million in the 2000 period.
Business Update & Forecast
"The third quarter was marked by strong growth at Novogyne,
progress regarding our international products licensed to Novartis
Pharma AG, Basel, Switzerland ("Novartis Pharma"), and advances in the
development of new products intended to increase the base of revenues
that we control," said Robert C. Strauss, Noven's President, CEO and
Chairman.
U.S. Business - Novogyne
"Novogyne Pharmaceuticals, our highly profitable women's health
company jointly owned with Novartis, continues to be Noven's principal
growth driver. In September, the Vivelle(R) family of transdermal
estrogen patches held a 32.1% share of the U.S. transdermal estrogen
market, an increase of about 4% in the last 12 months." The Vivelle
family is led by Vivelle-Dot, the smallest estrogen patch in the
world. An application seeking a new low-dose and an osteoporosis
indication for Vivelle-Dot is pending at the Food & Drug
Administration.
Strauss continued: "With the relaunch of CombiPatch in May of this
year, Novogyne became the only company in the U.S. offering
transdermal therapies for both the estrogen-only and combination
hormone replacement therapy ("HRT") markets. During the 12 months
leading up to the relaunch, CombiPatch's share of the total
prescription market had declined slightly. Since relaunch, its market
share has stabilized, but we have not seen a meaningful increase. The
Novogyne sales force continues to deliver the CombiPatch message to
its customers, and we anticipate growth for the product in 2002 and
beyond as that message takes hold."
International Business
"In August, we announced that orders for our international
products had been substantially less than we expected, and that we
would be working with Novartis Pharma to accelerate product roll-out.
To this end, senior representatives from both companies have held
cooperative and productive sessions in Basel, in Miami, and by
telephone conference. We remain in near-daily contact, from the
country product manager level to senior Novartis Pharma executives."
"Novartis Pharma has taken steps that confirm its commitment to
HRT and to Noven's products," said Strauss. "Last month, they expanded
internal resources to strengthen global HRT marketing. In the third
quarter, they launched Estradot in Canada. They have moved Estradot(R)
through to the concluding stages of the European mutual recognition
procedure. In addition, senior management has assured us that planning
for 2002 Estradot launches is a priority project, and Noven is working
side-by-side with Novartis Pharma to develop an effective, aggressive
launch plan for Estradot."
"Ever since Novartis Pharma first licensed the product, we have
been hopeful that they would rapidly convert their existing
transdermal estrogen business to Estradot. We know that active
conversion is an option under consideration in the launch planning
process, and we are doing everything possible to influence the
outcome. We must recognize the fact that, without broad conversion,
launches may not be as robust or rapid as we would like. At this time,
we understand that Novartis Pharma has not reached a decision on
conversion strategy or timing," said Strauss.
"Estalis orders by Novartis Pharma in the second half of 2001 have
been much lower than in the first half, and forecasted orders for 2002
are lower than 2001. Novartis Pharma has advised that its inventory
levels for Estalis are high. We also understand that Novartis Pharma
plans to seek approval of a second Estalis dosage strength in European
countries where only one strength is presently approved, and that they
have initiated a supporting clinical study. We do not expect renewed
growth in our sales of Estalis until the second dosage is approved."
MethyPatch(R) Update
"The delays in commercialization of our international products by
our licensee reinforce the need to develop and market products
ourselves," said Strauss. "Once-daily MethyPatch(R), our transdermal
methylphenidate system for Attention Deficit Hyperactivity Disorder,
is central to this strategy. Recently, we completed investigator
training and began patient screening for a multi-center double-blind
placebo-controlled trial scheduled to conclude in the 2002 first
quarter. A successful trial would lead to a MethyPatch New Drug
Application in mid-2002 and ultimately a new, Noven-controlled revenue
source beginning in late 2003."
Financial Guidance
"We expect 2001 fourth quarter revenues to be in line with the
quarter that we just completed," said Strauss. "Fourth quarter diluted
earnings per share should be in the $0.10 to $0.12 range. Pre-tax
income for full year 2001 is expected to increase in the 40% range
compared to 2000. We expect to earn $0.45 to $0.47 per share for
full-year 2001, which represents an increase over our prior full year
guidance of $0.40 to $0.45 per share. This increase is largely due to
lower than planned expenses in the 2001 fourth quarter."
Strauss continued: "As indicated, we have seen a significant
decline in Estalis orders, and we expect that decline to continue at
least through 2002. Estradot orders in 2002 are expected to be
insufficient to offset Estalis declines. As a result, we expect our
international sales to decline substantially in 2002 compared to 2001.
Noven's target for 2002 calls for sales growth in Vivelle-Dot and
CombiPatch sufficient to offset this international decline. If met, we
would expect 2002 revenues to be comparable with 2001 full-year
revenues, and 2002 diluted earnings per share to be in the $0.45 to
$0.55 range."
"For the balance of this year and into 2002, we will be working
diligently to enhance U.S. growth, to accelerate launches abroad, to
advance new products that we can market ourselves, and to resume our
high growth rate. We are committed to success on each of these
fronts."
Analyst Conference Call
A public telephone conference with management relating to Noven's
financial results will be broadcast live via the Internet at
noven.com beginning at 5:00 p.m. Eastern time this
afternoon, November 1. Thereafter, a rebroadcast of the call will be
accessible at the same website. A taped replay of the conference call
will be available by telephone from November 1 at 9:00 p.m. Eastern
time until the evening of November 3 or by calling 800-475-6701 (from
within the U.S.) or 320-365-3844 (from outside the U.S.) and entering
the access code 607357. This conference call will contain
forward-looking information in addition to that contained in this
press release.
Fred |
