For the second quarter ended June 27, 2009, Par reported total revenues of $404.0 million and net income of $23.8 million, or $0.71 per diluted share, which included a one-time gain related to the acquisition of certain assets of MDRNA's Hauppauge, NY facility. Adjusting for this item, earnings per diluted share were $0.65 for the three month period ended June 27, 2009. This is compared to reported revenues of $112.9 million and a net loss of $21.2 million, or $0.64 loss per diluted share for the same period in 2008, which included a one-time development milestone payment to a partner. Adjusting for this item, loss per diluted share was $0.61 for the three month period ended June 28, 2008.

For the six months ended June 27, 2009, total revenue was $608.0 million with net income of $39.9 million, or $1.18 per diluted share. This is compared to total revenues of $267.9 million and a net loss of $19.8 million, or $0.60 per diluted share in the same period of 2008.

Second Quarter Highlights

Key Product Sales (Net sales comparisons at the product level are to first quarter 2009)

   --  Metoprolol:  For the quarter ended June 27, 2009, net sales of       metoprolol succinate reached $306 million, an increase of 173% from       the first quarter 2009.  The increase was driven by market exclusivity       and additional product supply which led to increased volume and price.       Par remained the exclusive supplier of metoprolol succinate through       the second quarter.  Par is the authorized generic for all strengths       of AstraZeneca's Toprol  XL.     --  Sumatriptan: Net sales of sumatriptan injection were $21.8 million for       the quarter ended June 27, 2009 compared to $16.0 million in the first       quarter.  The increase was principally due to trade buying patterns,       which included the release of backorders.  Par remained the exclusive       supplier of generic Imitrex  4mg and 6mg starter kits and 4mg       prefilled cartridges and had one competitor in the 6mg prefilled       cartridges throughout the second quarter.     --  Meclizine: Net sales for the three months ended June 27, 2009 were       $8.9 million compared to $9.8 million in the first quarter of 2009.        The decrease was due primarily to trade buying patterns.  Par was the       exclusive supplier of meclizine in the first half of 2009.     --  Dronabinol: Net sales for the second quarter 2009 were $5.5 million       compared to $7.0 million in the first quarter.  The decrease was due       to competitive pricing pressures.     --  Other generic products:  For the second quarter 2009, net sales from       all other generic products were $39.6 million compared to $43.0       million in the first quarter. The decrease primarily reflects the       discontinuation of fluticasone and a decline in volume and price of       certain products, including ibuprofen, due to continued competition in       the market, tempered by an increase in volume of certain products such       as tramadol APAP and fluoxetine HCl, as well as the launch of       risperidone ODT in June 2009.     --  Megace  ES:  Net sales were $17.1 million for the three months ended       June 27, 2009 compared to $13.5 million in the first quarter.  The       increase in net sales was due to the increase in prescription demand       and the return to normal trade buying patterns.     --  Nascobal  B12 Nasal Spray:  Net sales were $2.2 million for the three       months ended June 27, 2009.  Strativa Pharmaceutical purchased       Nascobal from QOL Medical, LLC on March 31, 2009 and re-launched the       product on June 15, 2009.   

Total net revenues for the three months ended June 27, 2009, were $404 million, up $291 million, or nearly 258%, from the year ago period, principally driven by the lack of competition in metoprolol succinate and meclizine, as well as the launches of sumatriptan injection and dronabinol in the second half of 2008.

Gross margin for the second quarter 2009 was $86.4 million, or 21.4% of total revenue, an increase of $61.3 million from the comparable period in 2008. Total generic gross margin in the second quarter 2009 was $70.7 million, or 18.5% of total generic revenue, compared to $9.2 million, or 9.9% of total generic revenue in the second quarter 2008. This increase is due primarily to higher sales of metoprolol and meclizine and the launches of sumatriptan and dronabinol. These four products contributed $52.5 million of gross margin, or 15.3% of such generic revenue. Gross margin of all other generic products was approximately $18.2 million, or 46% of other generic revenue. This compares to $5.4 million, or 10.0% of other generic revenue, in the second quarter of 2008. The increase in gross margin percentage was due to the trimming of the generic product line as part of the resizing of Par's generic division in the fourth quarter of 2008. Strativa's gross margin of $15.7 million, or 72% of total Strativa revenue, decreased compared to the second quarter of 2008 due to lower sales of Megace ES.

Research and development (R&D) expenses decreased 63% to $5.9 million in the second quarter of 2009 compared to the second quarter 2008 due primarily to the resizing of the generic division, which included a headcount reduction and lower development and biostudy costs.

Selling, general and administrative (SG&A) expenses for the second quarter 2009 increased to $44.1 million compared to $36.7 million in the second quarter 2008. The increase reflects an increase of $6.8 million related to on-going expenditures supporting Strativa sales and marketing, driven primarily by an increase in the field force and other activities in preparation for the re-launch of Nascobal B12 Nasal Spray, as well as development costs of other products.

Cash and cash equivalents and marketable securities aggregate balance as of June 27, 2009, was $202.3 million and reflects significant one-time cash outflows related to the purchase of Nascobal B12 Nasal Spray (approximately $55 million), the year-to-date repurchase of $13.8 million face value of Par's convertible debt at a discount and, as previously reported in the first quarter, the settlement of litigation with Pentech (approximately $66 million).

Face Value of Convertible Debt as of June 27, 2009, was $128.2 million. An additional $35.5 million in convertible debt was repurchased subsequent to the balance sheet date at a discount. The face value of convertible debt currently stands at $92.7 million and matures on September 30, 2010, unless earlier converted or repurchased.

Product and Pipeline Update

Strativa's New Drug Application (NDA) for ondansetron orally dissolving film strip (ODFS) has been accepted by the FDA for review. Pursuant to Prescription Drug User Fee Act (PDUFA), Strativa expects the FDA will complete its review by February 7, 2010. If approved, ondansetron ODFS could launch by mid-2010.

BioAlliance Pharma, Strativa's development partner for miconazole, mucoadhesive bucccal tablets (MBT), which is marketed under the brand name Loramyc in Europe, submitted its NDA to the FDA. Pursuant to PDUFA, BioAlliance expects the FDA will complete its review by second quarter 2010. If approved, Strativa could launch the product in the second half of 2010.

Par successfully launched five strengths of risperidone ODT, a generic version of Risperdal M-TAB, during the second quarter, and was the exclusive supplier of .25mg, 3mg and 4mg strengths of the product during the period. Risperdal M-TAB had $108.0 million in annual sales in 2008 according to IMS Health.