King Pharmaceuticals 8-K King Pharmaceuticals Reports Second Quarter 2009 Financial Results

Exhibit 99.1

PRESS RELEASE
Contacts:
Jack Howarth, Vice President, Investor Relations
908-429-8350

FOR IMMEDIATE RELEASE

KING PHARMACEUTICALS REPORTS
SECOND QUARTER 2009 FINANCIAL RESULTS

• Strong Cash flow from operations of $101 million

• $152 million in debt repayment

• acceleration of acquisition synergies

BRISTOL, TENNESSEE, August 6, 2009 — King Pharmaceuticals, Inc. (NYSE:KG) announced today that total revenues were $445 million during the second quarter ended June 30, 2009, compared to $397 million in the second quarter of 2008. The Company reported a net income of $38 million and diluted earnings per share of $0.15 during the second quarter of 2009, compared to net income of $41 million and diluted earnings per share of $0.17 in the second quarter of the prior year. Excluding certain special items and recurring non-GAAP adjustments, adjusted net income equaled $80 million and adjusted diluted earnings per share equaled $0.32 during the second quarter ended June 30, 2009, compared to adjusted net income of $87 million and adjusted diluted earnings per share of $0.35 in the second quarter of 2008.

Similar to its financial reporting in prior years, King reports financial results determined in accordance with Generally Accepted Accounting Principles (“GAAP”) and also adjusted financial results. However, beginning with the first quarter of 2009, King’s adjusted financial results exclude the amortization of intangible assets and non-cash imputed interest expense associated with the Company’s $400 million 1¹/4% Convertible Senior Notes, as well as special items. For more information, see the “About Adjusted Financial Results” paragraph below.

Brian A. Markison, Chairman, President and Chief Executive Officer of King, stated, “Today’s announcement of strong second quarter earnings underscores the successful and rapid integration of the Alpharma acquisition.” Mr. Markison continued, “More importantly, we believe we are moving closer to an EMBEDA™ approval and recently defined a clear regulatory path forward for REMOXY^®. We also remain excited about the prospects for ACUROX^®, and look forward to meeting with the FDA next month. We believe that all three of these products represent a potential first in class opioid formulation designed to deter some of the more common forms of misuse and abuse.”

Joseph Squicciarino, King’s Chief Financial Officer, stated, “We continue to execute on our growth strategy for the company and remain on target to deliver results consistent with our previously stated guidance. Of particular importance, the Company repaid a total of $152 million of principal during the second quarter on the $625 million of long-term debt we incurred in connection with the Alpharma acquisition, bringing the total debt repayment thus far to $200 million. Our cash flow from operations was $101 million during the second quarter of 2009

despite $44 million in restructuring payments made during the quarter, and we are on track to achieve $80 million in synergies this year from the Alpharma acquisition. These synergies, achieved earlier than anticipated, will allow us to reduce this year’s selling, general and administrative expense by $20 million to a range of $540 to $560 million.”

As of June 30, 2009, the Company’s cash and cash equivalents totaled approximately $442 million.

Net revenue from branded pharmaceuticals totaled $275 million for the second quarter of 2009, compared to $316 million during the second quarter of 2008. The decrease in revenues was primarily due to the market entry of generic substitutes for ALTACE^® (ramipril) beginning in December 2007.

Net sales of SKELAXIN^â (metaxalone) totaled $102 million during the second quarter of 2009, compared to $107 million during the same period of the prior year.

THROMBIN-JMI^Ò (thrombin, topical, bovine, USP) net sales totaled $49 million during the second quarter of 2009, compared to $64 million during the second quarter of 2008.

Net sales of AVINZA^â (morphine sulfate extended release) totaled $29 million during the second quarter of 2009, compared to $35 million during the second quarter of 2008.

Net sales of FLECTOR^â PATCH (diclofenac epolamine topical patch) 1.3% totaled $39 million during the second quarter of 2009. The Company added FLECTOR^â PATCH as a result of its acquisition of Alpharma on December 29, 2008. As previously reported, the wholesale inventory levels of FLECTOR^â PATCH exceeded King’s normal level as of the end of the fourth quarter of 2008. During the first quarter, wholesale inventory levels were fully adjusted and therefore net sales in the second quarter more closely reflected actual prescription demand.

Revenues from the Animal Health business were $83 million for the second quarter ended June 30, 2009. The Company added the Animal Health business as a result of its acquisition of Alpharma.

King’s Meridian Auto-Injector business contributed revenue totaling $72 million during the second quarter of 2009, compared to $55 million during the second quarter of 2008.

Royalty revenues, derived primarily from ADENOSCAN^Ò (adenosine), totaled $15 million during the second quarter of 2009.

Conference Call and Web Cast Information

King management will conduct a conference call at 11:00 am ET today. This call may include discussion of the Company’s marketed products, pipeline, strategy for growth, financial results

and expectations, and other matters relating to its business. The call will be open to all interested parties and may be accessed by using the following information:

Conference Call Access
Domestic Dial In:     (888) 674-0224
International Dial In:     (201) 604-0502

Interested parties may also listen to the web cast by clicking the following link to register and then joining the live event with the same URL:

http://www.kingpharm.com/web_casts.asp

If you are unable to participate during the live event, the replay number is 888-632-8973 and the replay code is 79482704. The web cast of today’s call will be archived on King’s web site, accessible through the link above, for not less than 14 days.

About Adjusted Financial Results

In addition to financial results determined in accordance with Generally Accepted Accounting Principles (“GAAP”), King provides adjusted net earnings and adjusted diluted earnings per share results. These non-GAAP financial measures exclude the effect of amortization of intangible assets and non-cash imputed interest expense associated with the Company’s $400 million 1¹/4% Convertible Senior Notes, as well as special items. Special items are those particular material income or expense items that King considers to be unrelated to the Company’s ongoing, underlying business, non-recurring, or not generally predictable, and include, but are not limited to, merger and restructuring expenses; non-capitalized expenses associated with acquisitions, such as in-process research and development charges and inventory valuation adjustment charges; charges resulting from the early extinguishment of debt; asset impairment charges; expenses of drug recalls; and gains and losses resulting from the divestiture of assets. King believes that providing adjusted financial results enhances the analysis of the Company’s ongoing, underlying business and the analysis of the Company’s financial results when comparing those results to that of a previous or subsequent like period. However, it should be noted that the determination of whether to exclude an item from adjusted financial results involves judgments by King’s management. A reconciliation of adjusted financial results and King’s reported financial results determined in accordance with GAAP is provided below.

About King Pharmaceuticals, Inc.

King, headquartered in Bristol, Tennessee, is a vertically integrated branded pharmaceutical company. King, an S&P 500 Index company, seeks to capitalize on opportunities in the pharmaceutical industry through the development, including through in-licensing arrangements and acquisitions, of novel branded prescription pharmaceutical products and technologies that complement the Company’s focus in specialty-driven markets, particularly neuroscience and

hospital. King’s wholly owned subsidiary, Alpharma Inc., is also a leader in the development, registration, manufacture and marketing of pharmaceutical products for food producing animals.

Forward-looking Statements

This release contains forward-looking statements which reflect management’s current views of future events and operations, including, but not limited to, statements pertaining to the Company’s expectations regarding the FDA’s review and potential approval of the New Drug Application (“NDA”) related to EMBEDA™; statements relating to the Company’s plan to discuss with the FDA the recent Complete Response Letter related to the ACUROX^® NDA; statements pertaining to the regulatory review and approval process related to REMOXY^®; statements pertaining to the potential market performance of the Company’s novel opioid medicines in development; statements pertaining to the Company’s expectations for and uses of cash flow from operations for the remainder of 2009; statements pertaining to potential synergies and reductions in selling, general and administrative expenses related to the integration of Alpharma operations; statements pertaining to the continuing applicability of certain previously issued guidance regarding the Company’s anticipated performance; statements pertaining to net sales and wholesale inventory levels of FLECTOR^® PATCH; and statements pertaining to King’s planned webcast to discuss its second-quarter 2009 results. These forward-looking statements involve certain significant risks and uncertainties, and actual results may differ materially from the forward-looking statements. Some important factors which may cause actual results to differ materially from the forward-looking statements include dependence on the future level of demand for and net sales of King’s products; dependence on King’s ability to successfully market its products; dependence on King’s ability to successfully integrate its acquisitions; dependence on the Company’s ability to continue to advance the development of its pipeline products as planned; dependence on the high cost and uncertainty of research, clinical trials, and other development activities involving products in which King has an interest; dependence on the unpredictability of the duration and results of the FDA’s review of Investigational New Drug applications, NDAs, and Abbreviated New Drug Applications and/or the review of other regulatory agencies worldwide that relate to those projects; dependence on the availability and cost of raw materials; dependence on no material interruptions in supply by contract manufacturers of King’s products; dependence on the potential effect on sales of the Company’s existing products as a result of the potential development and approval of a generic substitute for any such product or other new competitive products; dependence on the potential effect of future acquisitions and other transactions pursuant to the Company’s growth strategy; dependence on King’s compliance with FDA and other government regulations that relate to the Company’s business; dependence on King’s ability to conduct its webcast as currently planned on August 6, 2009; dependence on changes in general economic and business conditions; changes in current pricing levels; changes in federal and state laws and regulations; changes in competition; unexpected changes in technologies and technological advances; and manufacturing capacity constraints. Other important factors that may cause actual results to differ materially from the forward-looking statements are discussed in the “Risk Factors” section and other sections of King’s Form 10-K for the year ended December 31, 2008 and Form 10-Q for the quarter ended March 31, 2009, which are on file with the U.S. Securities and Exchange

Commission. King does not undertake to publicly update or revise any of its forward-looking statements even if experience or future changes show that the indicated results or events will not be realized.

EXECUTIVE OFFICES

KING PHARMACEUTICALS, INC.
501 FIFTH STREET, BRISTOL, TENNESSEE 37620

KING PHARMACEUTICALS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)

	June 30,			December 31,
	2009			2008
ASSETS
Current assets:
Cash and cash equivalents	$	442,192		$	940,212
Investments in debt securities		41,064			6,441
Marketable securities		1,419			511
Accounts receivable, net		209,266			245,070
Inventories		224,077			258,303
Deferred income tax assets		125,243			89,513
Income tax receivable		12,357			—
Prepaid expenses and other current assets		120,078			129,214
Total current assets		1,175,696			1,669,264
Property, plant and equipment, net		405,778			417,259
Intangible assets, net		859,521			934,219
Goodwill		416,494			450,548
Deferred income tax assets		248,786			267,749
Investments in debt securities		294,166			353,848
Other assets		90,189			122,826
Assets held for sale		7,900			11,500
Total assets	$	3,498,530		$	4,227,213
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	61,325		$	140,908
Accrued expenses		293,950			411,488
Income taxes payable		—			10,448
Short-term debt		5,298			5,230
Current portion of long-term debt		159,410			439,047
Total current liabilities		519,983			1,007,121
Long-term debt		585,065			877,638
Other liabilities		115,019			110,022
Total liabilities		1,220,067			1,994,781
Commitments and contingencies
Shareholders’ equity:
Common shares no par value, 600,000,000 shares authorized, 248,129,768 and 246,487,232 shares issued and outstanding, respectively		1,403,339			1,389,698
Retained earnings		898,880			871,021
Accumulated other comprehensive loss		(23,756	)		(28,287	)
Total shareholders’ equity		2,278,463			2,232,432
Total liabilities and shareholders’ equity	$	3,498,530		$	4,227,213

KING PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2009			2008			2009			2008
REVENUES:
Total revenues	$	444,988		$	396,851		$	874,045		$	828,884
OPERATING COSTS AND EXPENSES:
Cost of revenues, exclusive of depreciation, amortization and impairments shown below		140,034			99,556			269,448			191,017
Excess purchase commitment		—			2,629			—			2,629
Acquisition related inventory step-up		16,059			—			37,584			—
Total cost of revenues		156,093			102,185			307,032			193,646
Selling, general and administrative, exclusive of co-promotion fees		119,434			102,735			256,570			211,776
Special legal and professional fees		—			(825	)		—			2,035
Acquisiton related costs		2,944			—			6,733			—
Co-promotion fees		1,197			10,063			2,595			28,020
Total selling, general, and administrative expense		123,575			111,973			265,898			241,831
Depreciation		14,422			10,294			28,621			18,610
Intangible amortization		38,149			21,044			76,327			71,971
Accelerated depreciation		291			651			1,263			1,274
Research and development		21,202			27,912			48,458			56,420
Research and development — milestone payments		—			20,750			—			20,750
Research and development-In-process upon acquisition		—			5,500			—			5,500
Asset impairments		—			39,429			—			39,429
Restructuring charges		1,475			(542	)		49,525			517
Total operating costs and expenses		355,207			339,196			777,124			649,948
OPERATING INCOME		89,781			57,655			96,921			178,936
OTHER (EXPENSE) INCOME:
Interest expense		(23,160	)		(1,161	)		(41,909	)		(2,084	)
Noncash convertible debt interest expense		(4,432	)		(4,130	)		(8,786	)		(8,187	)
Interest income		1,506			9,261			4,294			22,890
Loss on investment		(524	)		—			(1,347	)		—
Other, net		4,112			(123	)		1,333			(827	)
Total other (expense) income		(22,498	)		3,847			(46,415	)		11,792
INCOME BEFORE INCOME TAXES		67,283			61,502			50,506			190,728
Income tax expense		29,348			20,741			23,293			64,411
NET INCOME	$	37,935		$	40,761		$	27,213		$	126,317
Basic net income per common share	$	0.16		$	0.17		$	0.11		$	0.52
Diluted net income per common share	$	0.15		$	0.17		$	0.11		$	0.52
Shares used in basic net income per share		244,693			243,440			244,291			243,365
Shares used in diluted net income per share		247,207			245,029			246,922			244,859

KING PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
EXCLUDING NON-GAAP ITEMS
(in thousands, except per share data)
(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2009			2008			2009			2008
REVENUES:
Total revenues	$	444,988		$	396,851		$	874,045		$	828,884
OPERATING COSTS AND EXPENSES:
Cost of revenues , exclusive of depreciation shown below		140,034			99,556			269,448			191,017
Selling, general and administrative, exclusive of co-promotion fees		119,434			102,735			256,570			211,776
Co-promotion fees		1,197			10,063			2,595			28,020
Total selling, general, and administrative expense		120,631			112,798			259,165			239,796
Depreciation		14,422			10,294			28,621			18,610
Research and development		21,202			27,912			48,458			56,420
Research and development — milestone payments		—			20,750			—			20,750
Total operating costs and expenses		296,289			271,310			605,692			526,593
OPERATING INCOME		148,699			125,541			268,353			302,291
OTHER (EXPENSE) INCOME:
Interest expense		(23,160	)		(1,161	)		(41,909	)		(2,084	)
Interest income		1,506			9,261			4,294			22,890
Other, net		4,112			(123	)		1,333			(827	)
Total other (expense) income		(17,542	)		7,977			(36,282	)		19,979
INCOME BEFORE INCOME TAXES		131,157			133,518			232,071			322,270
Income tax expense		51,284			46,671			88,186			111,771
NET INCOME	$	79,873		$	86,847		$	143,885		$	210,499
Basic net income per common share	$	0.33		$	0.36		$	0.59		$	0.86
Diluted net income per common share	$	0.32		$	0.35		$	0.58		$	0.86
Shares used in basic net income per share		244,693			243,440			244,291			243,365
Shares used in diluted net income per share		247,207			245,029			246,922			244,859

KING PHARMACEUTICALS, INC.
RECONCILIATION OF NON-GAAP ITEMS
(in thousands, except per share data)
(Unaudited)

The following tables reconcile Non-GAAP items to amounts reported under GAAP:

	Three Months Ended June 30,						Six Months Ended June 30,
	2009			2008			2009			2008
Diluted income per common share, as reported under GAAP	$	0.15		$	0.17		$	0.11		$	0.52
Effect of non-GAAP items		0.17			0.18			0.47			0.34
Diluted income per common share, excluding non-GAAP items	$	0.32		$	0.35		$	0.58		$	0.86
NON-GAAP ITEMS:
Excess purchase commitment (cost of revenues)		—			2,629			—			2,629
Acquisition related inventory step-up (cost of revenues)		16,059			—			37,584			—
Special legal and professional fees (selling, general, and administrative)		—			(825	)		—			2,035
Acquisition related costs (selling, general, and administrative)		2,944			—			6,733			—
Intangible amortization (other operating costs and expenses)		38,149			21,044			76,327			71,971
Accelerated depreciation (other operating costs and expenses)		291			651			1,263			1,274
Research and development-In-process upon acquisition (other operating costs and expenses)		—			5,500			—			5,500
Asset impairments (other operating costs and expenses)		—			39,429			—			39,429
Restructuring charges (other operating costs and expenses)		1,475			(542	)		49,525			517
Noncash convertible debt interest expense (other income (expense))		4,432			4,130			8,786			8,187
Loss on investment (other income (expense))		524			—			1,347			—
Total non-GAAP items before income taxes		63,874			72,016			181,565			131,542
Income tax benefit from non-GAAP items		(21,936	)		(25,930	)		(64,893	)		(47,360	)
Increase (decrease) in net income	$	41,938		$	46,086		$	116,672		$	84,182
Effect of non-GAAP items on diluted income per common share	$	0.17		$	0.18		$	0.47		$	0.34