IDEC Pharmaceuticals Reports Third Quarter 1998 Results
Business Wire - October 20, 1998 09:56
SAN DIEGO--(BW HealthWire)--Oct. 20, 1998--IDEC Pharmaceuticals Corporation (Nasdaq: IDPH) today
announced its financial results for the third quarter ended September 30, 1998.
Total revenues for the third quarter ended September 30, 1998 were $17.0 million compared to $6.4 million for
the third quarter of 1997. Net income was $1.8 million, or $0.08 per share on a diluted basis, compared to a net
loss of $9.6 million, or a $0.51 net loss per share on a diluted basis, for the same period in 1997.
Revenues for the third quarter of 1998 increased primarily due to $12.3 million recorded from the
commercialization of Rituxan(TM) (Rituximab) through IDEC's joint business arrangement with Genentech, Inc.
Revenues for the third quarter of 1998 include a $2.0 million development milestone from Mitsubishi Chemical
Corporation for the U.S. IND allowance of IDEC-114, an investigational PRIMATIZED(R) anti-B7 monoclonal
antibody for the treatment of psoriasis.
IDEC Pharmaceuticals and Genentech copromote Rituxan in the United States. U.S. net sales of Rituxan, as
recorded by Genentech, in the third quarter of 1998 were $36.1 million.
"Rituxan sales continue to show excellent progress in line with our expectations," stated William R. Rohn,
IDEC's chief operating officer. "According to our latest marketing research, brand awareness stands at 100
percent, product trial at 69 percent, and Rituxan is now the most frequently used therapy in the treatment of
relapsed or refractory low grade or follicular B-cell non-Hodgkin's lymphoma."
"Also at the end of the quarter we began the anticipated transition from drop-shipment directly to end users to a
more standard practice of distribution of Rituxan via drug wholesalers. Additional wholesaler stocking will take
place in the fourth quarter," said Rohn.
Revenues from unconsolidated joint business for the third quarter and year to date reflect the financial results
from the commercialization of Rituxan by IDEC and Genentech. Revenues from unconsolidated joint business
consist primarily of IDEC's share of pretax copromotion profits, bulk Rituxan-related sales to Genentech and
reimbursement from Genentech for IDEC's Rituxan-related sales force and development expenses.
For the third quarter of 1998, IDEC's share of the pretax copromotion profits amounted to 19.1 percent of U.S.
net sales of Rituxan before reimbursements to IDEC for certain manufacturing, sales and development expenses.
According to its agreement with Genentech, IDEC's share of pretax copromotion profits rose to a higher
percentage upon achievement of an annual fixed profit target by the Rituxan joint business venture during the later
part of the third quarter of 1998.
Operating expenses decreased to $15.8 million for the third quarter of 1998 from $16.7 million for the third
quarter of 1997. The lower operating expenses in 1998 are primarily the result of greater efficiencies and yields in
the manufacture of Rituxan. Year-to-date operating expenses increased by $1.0 million, from $44.4 million in
1997 compared to $45.4 million in 1998, primarily due to higher manufacturing-related activities and increased
expenses resulting from Rituxan marketing and sales.
Higher year-to-date research and development expenses in 1997 were the result of certain one-time charges
related to product licensing and development.
IDEC ended the third quarter of 1998 with $65.2 million in cash, cash equivalents and marketable securities, a
decrease of $4.5 million from $69.7 million at the end of 1997. The decrease in cash from 1997 is due to
working capital requirements, investments in capital equipment and repayment of debt obligations offset by funds
from employee stock plans.
IDEC Pharmaceuticals focuses on the commercialization and development of targeted therapies for the treatment
of cancer and autoimmune diseases. IDEC's antibody products act chiefly through immune system mechanisms,
exerting their effect by binding to specific, readily targeted immune cells in the patient's blood or lymphatic
systems.
IDEC Pharmaceuticals' news releases are available at no charge through Business Wire's News on Demand Plus.
For a menu of IDEC's current news releases and quarterly reports or to retrieve a specific release, call
888/239-2309. On the Internet see businesswire.com and
shareholdernews.com.
The statements in the press release contain certain forward-looking statements that involve a number of risks and
uncertainties. Actual events or results may differ from IDEC's expectations. In addition to the matters described
in this press release, variations in contract revenues and license fees, achievement of product development
milestone events and product sales, the timing and results of product launches and clinical studies, and the level
of manufacturing and distribution performance may result in period to period fluctuations in IDEC's revenues and
earnings. In addition, the risk factors listed from time to time in IDEC's SEC filings, including but not limited to
its Annual Report on Form 10-K/A for the year ended December 31, 1997, and Form 10-Q for the quarter ended
June 30, 1998, may effect the actual results achieved by IDEC.
Formerly known as IDEC-C2B8, Rituxan (Rituximab) is a trademark, and IDEC Pharmaceuticals and
PRIMATIZED are a registered U.S. trademarks of the company. IDEC's headquarters is located at 11011
Torreyanna Road, San Diego, CA 92121.
IDEC Pharmaceuticals Corporation and Subsidiary
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Nine Months
Ended Sept. 30 Ended Sept. 30
1998 1997 1998 1997
Revenues:
Revenues from
unconsolidated joint
business $12,290 $2,332 $31,046 $4,210
Contract revenues 2,719 2,595 9,860 7,783
License fees 2,000 1,500 18,300 6,500
17,009 6,427 59,206 18,493
Operating expenses:
Manufacturing costs 4,055 5,261 10,985 10,475
Research and development 8,009 7,988 22,187 25,754
Selling, general and
administrative 3,784 3,477 12,225 8,183
15,848 16,726 45,397 44,412
Income (loss) from
operations 1,161 (10,299) 13,809 (25,919)
Interest income, net 756 723 2,238 2,240
Income tax provision (152) -- (282) --
Net income (loss) $1,765 $(9,576) $15,765 $(23,679)
Net income (loss) per
share:
Basic $0.09 $(0.51) $0.80 $(1.27)
Diluted $0.08 $(0.51) $0.67 $(1.27)
Shares used in
calculation of net
income (loss) per
share:
Basic 19,892 18,875 19,779 18,601
Diluted 22,898 18,875 23,365 18,601
Condensed Consolidated Balance Sheets
(In thousands)
Sept. 30, Dec. 31,
1998 1997
(unaudited) (audited)
Assets
Current Assets:
Cash, cash equivalents
and securities
available-for-sale $65,241 $69,657
Inventories 8,824 4,134
Other current assets 17,071 5,402
Total current assets 91,136 79,193
Property and equipment,
net 21,482 23,449
Other non-current assets 3,374 3,371
Total assets $115,992 $106,013
Liabilities Stockholders' and Equity
Current liabilities $12,288 $19,432
Non-current liabilities 4,766 5,902
Stockholders' equity 98,938 80,679
Total liabilities and
stockholders' equity $115,992 $106,013
CONTACT: IDEC Pharmaceuticals Corporation
Connie Matsui, 619/550-8656 |
