(Source: Business Wire)
Impax Laboratories, Inc. (NASDAQ: IPXL) today reported
strong growth in revenue, net income and earnings per diluted share in
the third quarter 2009. Net income increased to $6.7 million, up $17.2
million compared to a net loss of $10.5 million in the prior year
period. Net Income per diluted share increased to $0.11, up $0.29 per
share, compared to a loss of $0.18 per diluted share in the prior year
period.
Total revenue for the third quarter 2009 increased 77% to $64.9 million,
compared to the prior year period, due primarily to strong sales of the
Company's Global label products. Gross profit increased to 57% of total
revenue, compared to 39% of total revenue in the prior year period. The
strong growth in revenue and gross profit resulted in an increase of
$28.3 million in income from operations to $10.2 million, compared to a
loss from operations of $18.1 million in the prior year period.
Larry Hsu, Ph.D., president and chief executive officer of Impax
Laboratories, said: "We continue to successfully execute our strategic
plan as we produced another solid quarter of financial performance in
our base generic business and further development of our brand products.
Our strong third quarter and year-to-date financial results reflect our
ability to capitalize on existing product opportunities. In addition,
the research and development investments we are making in creating
high-value opportunities continue to pay dividends as shown by our
October 1 launch of generic versions of Adderall XR®. These investments
will further increase our portfolio as we are on track to achieve our
2009 ANDA submission goal of 8 to 10 new applications."
Dr. Hsu continued, "We also remain pleased with the development of our
brand products. During the third quarter, our brand business reported
positive results from our completed Phase II trial of our late-stage
Parkinson's Disease drug candidate IPX066. In April 2009, based on
encouraging interim data, we began enrolling patients in the Phase III
trial in levodopa naive Parkinson's disease patients in North America
and Europe. In October, ahead of schedule, we commenced a second Phase
III trial in patients with advanced Parkinson's Disease. The positive
developments confirm our belief that the investments we are making in
our brand division will further enhance our long-term growth prospects."
Third Quarter 2009 Segment Information
The Company has two reportable segments, the Global Pharmaceuticals
Division (generic products) and the Impax Pharmaceuticals Division
(brand products).
Exception caught in main.
Global Pharmaceuticals Division revenues in the third quarter 2009
increased $27.9 million to $61.4 million, due primarily to an increase
in net Global product sales.
Net Global product sales increased 132% to $46.6 million, an increase of
$26.6 million over the same period in 2008 primarily due to sales of
fenofibrate products. Private label product sales increased 179% to $1.8
million primarily due to sales of generic loratadine/pseudoephedrine,
the generic version of Claritin® D 24-hour, as a result of a new supply
agreement. Rx Partner revenues were $8.3 million, down 12%, primarily
attributable to reduced sales of generic Wellbutrin® XL 300mg. OTC
Partner revenues decreased 48% to $1.8 million, primarily attributable
to the expiration of the Company's contract to supply Schering-Plough
with product effective December 31, 2008. Research Partner revenues were
$3.0 million resulting from a Joint Development Agreement entered into
during the fourth quarter of 2008.
Cost of revenues was $25.1 million for the third quarter 2009, an
increase of 30% primarily related to the higher sales of Global products.
Gross profit for the third quarter 2009 increased $22.1 million to $36.3
million primarily due to an increase in margins on fenofibrate sales.
Gross profit margin of 59% for the third quarter 2009 increased
significantly over the 42% for the prior year period.
Total research and development expenses for the third quarter 2009
decreased $3.3 million to $8.9 million, compared to the prior year
period primarily due to lower spending on bio-studies, bio-analytical
expenses and active pharmaceutical ingredient used in research
activities.
Total selling, general and administrative expenses for the third quarter
2009 decreased $1.8 million to $2.6 million primarily due to executive
level severance paid out in the prior year period, in addition to prior
period strategic management consulting and business development related
activities.
Generic division income from operations in the third quarter 2009
increased $27.5 million to $23.2 million, compared to a loss in the
prior year period, due primarily to higher sales as noted above.
Impax Pharmaceuticals Division Information
(unaudited, amounts in thousands) Three Months Ended September 30, Nine Months Ended September 30,
2009 2008 2009 2008
(as adjusted) (as adjusted)
Promotional Partner $ 3,499 $ 3,238 $ 10,007 $ 9,728
Cost of revenues 2,957 3,000 9,250 8,332
Gross profit 542 238 757 1,396
Operating expenses:
Research and development 6,334 3,935 17,983 11,530
Selling, general and administrative 761 538 2,528 1,879
Total operating expenses 7,095 4,473 20,511 13,409
Loss from operations ($6,553 ) ($4,235 ) ($19,754 ) ($12,013 )
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Promotional Partner revenues in the third quarter 2009 increased 8% to
$3.5 million. The change from the prior year period is primarily the
result of the commencement of physician detailing services under our
Co-Promotion Agreement with Wyeth on July 1, 2009, while the Promotional
Services Agreement with Shire ended on June 30, 2009.
Cost of revenues for the third quarter 2009 were $3.0 million, down
slightly from the prior year period.
The Company is currently investing in research and development to
develop brand products which provide longer product life cycles and the
potential for significantly higher profit margins than generic products.
In the third quarter 2009, R&D increased $2.4 million to $6.3 million,
due to planned increased spending on clinical studies and additional
research personnel.
The Company's planned increase in investment in R&D during the third
quarter 2009 contributed to a brand division loss from operations of
$6.6 million compared to a loss from operations of $4.2 million in the
third quarter of 2008.
Other Operating Information
Corporate general and administrative expenses for the third quarter 2009
declined 32% to $6.5 million, primarily attributable to a decrease in
professional fees related to the examination and review of the Company's
financial statements in conjunction with the financial statements for
the years 2004 through 2007 and the resulting filing with the SEC of the
Company's Registration Statement on Form 10. Also contributing to the
decline was the adjustment of accrued settlement-related charges in
conjunction with the repayment of a subordinated promissory note, and
lower employment-related expenses.
Cash and short-term investments, net of interest-bearing debt, was
$100.5 million as of September 30, 2009, as compared to $99.6 million as
of December 31, 2008. The change in cash and short-term investments, net
from year-end 2008, included the Company's June 15, 2009 repayment, at
the option of the holders, of the $12.75 million remaining outstanding
balance of the Company's 3.5% Debentures, offset by changes in working
capital assets and liabilities, including the collection of accounts
receivable balances and payments of accounts payable during the nine
months ended September 30, 2009.
Cash flow from operating activities was approximately a positive $3.6
million before changes in certain working capital assets and liabilities.
2009 Financial Outlook
The Company previously disclosed its 2009 financial outlook on February
26, 2009. As of November 3, 2009, the Company has updated its full year
2009 forecast as noted below.
Positive cash flows from operating activities before changes in
working capital assets and liabilities for the third consecutive year.
Gross margins as a percent of total revenues to approximate 50%.
Total research and development expenses across the generic and brand
divisions to approximate $64 million with $40 million and $24 million
allocated to generic and brand R&D, respectively.
Patent litigation expenses of approximately $6 to $7 million
(previously $10 million).
Selling, general and administrative expenses of approximately $44
million (previously $39 million).
Conference Call Information
The Company will host a conference call today at 11:00 a.m. EDT to
discuss its results. The number to call from within the United States is
(877) 356-3814 and (706) 758-0033 internationally. The call can also be
accessed via a live Webcast through the Investor Relations section of
the Company's Web site, www.impaxlabs.com.
A replay of the conference call will be available shortly after the call
for a period of seven days. To access the replay, dial (800) 642-1687
(in the U.S.) and (706) 645-9291 (international callers). The access
conference code is 35901562.
About Impax Laboratories, Inc.
Impax Laboratories, Inc. is a technology-based specialty pharmaceutical
company applying its formulation expertise and drug delivery technology
to the development of controlled-release and specialty generics in
addition to the development of branded products. Impax markets its
generic products through its Global Pharmaceuticals division and markets
its branded products through the Impax Pharmaceuticals division.
Additionally, where strategically appropriate, Impax has developed
marketing partnerships to fully leverage its technology platform. Impax
is headquartered in Hayward, California, and has a full range of
capabilities in its Hayward and Philadelphia facilities. For more
information, please visit the Company's Web site at: www.impaxlabs.com.
"Safe Harbor" statement under the Private Securities Litigation
Reform Act of 1995:
To the extent any statements made in this news release contain
information that is not historical, these statements are forward-looking
in nature and express the beliefs and expectations of management. Such
statements are based on current expectations and involve a number of
known and unknown risks and uncertainties that could cause the Company's
future results, performance or achievements to differ significantly from
the results, performance or achievements expressed or implied by such
forward-looking statements. Such risks and uncertainties include, but
are not limited to; ability to timely file periodic reports required by
the Exchange Act; ability to maintain an effective system of internal
control over financial reporting; ability to sustain profitability and
positive cash flows; ability to maintain sufficient capital to fund
operations; any delays or unanticipated expenses in connection with the
construction of our Taiwan facility; ability to successfully develop and
commercialize pharmaceutical products; the uncertainty of patent
litigation; consumer acceptance and demand for new pharmaceutical
products; the impact of competitive products and pricing; the difficulty
of predicting Food and Drug Administration filings and approvals;
inexperience in conducting clinical trials and submitting new drug
applications; reliance on key alliance agreements; the availability of
raw materials; the regulatory environment; exposure to product liability
claims; fluctuations in operating results and other risks described in
our periodic reports filed with the Securities and Exchange Commission.
Forward-looking statements speak only as to the date on which they are
made, and Impax undertakes no obligation to update publicly or revise
any forward-looking statement, regardless of whether new information
becomes available, future developments occur or otherwise.
Exception caught in main.
Impax Laboratories, Inc.
