Exhibit 99.1
| Chiron Corporation |
4560 Horton Street | |
Emeryville, California 94608 - 2916 | |
510.655.8730 Fax 510.655.9910 | |
|
|
| News Release |
For Immediate Release
Contacts:
Chiron Corporate Communications &
Investor Relations
| (510) 923-6500 | |
Investors: |
| (510) 923-2300 |
CHIRON RECALLS AND WITHDRAWS MORUPAR® MMR VACCINE FROM ITALIAN AND DEVELOPING WORLD MARKETS
—Chiron also revises 2005 adjusted EPS from $1.34 to $1.31 per share and
GAAP EPS from $0.97 to $0.94 per share—
EMERYVILLE, Calif., March 16, 2006 — Chiron Corporation (NASDAQ: CHIR) today announced that it is recalling and withdrawing its measles, mumps and rubella (MMR) vaccine, MORUPAR®. Chiron supplied approximately 5 million doses of MORUPAR vaccine in 2005, providing most of its production to a limited number of developing countries, largely via the United Nations Children’s Fund (UNICEF) and the Pan American Health Organization (PAHO), and approximately 450,000 doses to Italy.
The results of routine pharmacovigilance surveillance in Italy suggest that MORUPAR vaccine may be associated with a higher reported rate of adverse events following immunization than other MMR vaccine products. While recent and historical surveillance data indicate that adverse events remain rare, Chiron is recalling and withdrawing the vaccine as a precautionary measure. Pharmacovigilance results suggest that these adverse events occurred post-immunization and do not indicate any long-term risk for patients who have previously received the vaccine. The adverse events on which the recall and withdrawal are based are within a range of those commonly associated with vaccines, such as fever, allergic reactions and swelling of the glands.
Chiron has been in communication with the relevant health authorities and informed them of its actions in order to enable them to find replacement supplies of MMR vaccine. Chiron will work closely with the World Health Organization (WHO) to assist it in conducting a thorough risk-benefit analysis of MORUPAR vaccine to determine whether it is appropriate for a limited quantity of the existing inventory to remain available for current public health programs such as those conducted by UNICEF and PAHO.
In 2005, Chiron’s sales of MORUPAR vaccine totaled approximately $10 million. As a result of this recall and withdrawal, as well as other adjustments identified by Chiron and recorded subsequent to the company’s January 31, 2006, announcement of fourth-quarter and year-end 2005 financial results, Chiron has revised its 2005 earnings per share to $1.31 on an adjusted basis and $0.94 on a GAAP basis. Chiron has written-off approximately $6.0 million of MORUPAR inventory in 2005 as a result of the withdrawal and has recorded approximately $1.7 million of product returns reserves in 2005 in
1
connection with expected returns of 2005 product sales from the recall. The recall and withdrawal of MORUPAR, which Chiron produces in Italy, does not affect any of Chiron’s other vaccines.
Revised Year-End December 31, 2005, Financial Results
For the year ended December 31, 2005, on an adjusted basis, Chiron reported revised income from continuing operations of $253 million, or $1.31 per share, a decrease of $0.03 per share from financial results as reported on January 31, 2006. On a GAAP basis, Chiron reported revised income from continuing operations of $180 million, or $0.94 per share, a decrease of $0.03 per share from financial results as reported on January 31, 2006.
Revised Fourth-Quarter 2005 Financial Results
For the fourth quarter of 2005, on an adjusted basis, Chiron reported revised income from continuing operations of $158 million, or $0.78 per share, a decrease of $0.03 per share from financial results as reported on January 31, 2006. On a GAAP basis, Chiron reported revised income from continuing operations of $138 million, or $0.68 per share, a decrease of $0.03 per share from financial results as reported on January 31, 2006.
Chiron uses adjusted financial information to gain an understanding of the company’s operating performance on a comparative basis. Adjusted amounts exclude special items relating to certain acquisitions and impairment losses on acquired intangible assets, which may not be indicative of the company’s trends or potential future performance. Please refer to the tables at the end of this press release for more detail on these items and a reconciliation of the adjusted financial information to GAAP financial information; this information is also located at www.chiron.com in the Investors section under Financial Reports. All references to per-share amounts are per diluted share.
About Chiron
Chiron delivers innovative and valuable products to protect human health by advancing pioneering science across the landscape of biotechnology. The company works to deliver on the limitless promise of science and make a positive difference in people’s lives. For more information, please visit www.chiron.com.
Revised Financial Information
2005 financial information in PDF format
http://www.chiron.com/investors/2389/chiron_financial.pdf
2005 financial information online
http://www.chiron.com/investors/finreports/index.html
This news release contains forward-looking statements, including statements regarding expected financial results for 2005 and the impact of the recall and withdrawal of MORUPAR MMR vaccine on Chiron’s business, which involve risks and uncertainties and are subject to change. A discussion of the
2
company’s operations and financial condition, including factors that may affect its business and future prospects that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements, is contained in documents the company has filed with the SEC, including the Form 10-K for the year ended December 31, 2004, and the Form 10-Q for the quarter ended September 30, 2005, and will be contained in all subsequent periodic filings made with the SEC. These documents identify important factors that could cause the company’s actual performance to differ from current expectations, including, among others, litigation and investigations relating to influenza vaccines, the outcome of clinical trials, regulatory review and approvals, manufacturing capabilities, intellectual property protections and defenses, litigation, product liability claims, stock-price and interest-rate volatility, and marketing effectiveness. In particular, there can be no assurance that financial results for 2005 will be the same as preliminary results we have announced today or that Chiron will be able to successfully develop and receive approval to market new products. In addition, the company may engage in business opportunities, the successful completion of which is subject to certain risks, including approval by Novartis AG, regulatory approvals and the integration of operations.
Chiron does not undertake an obligation to update the forward-looking information the company is giving today. Financial results for 2005 included in this press release are preliminary.
###
3
CHIRON CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
|
| Three Months Ended |
| ||||||||||||||||
|
| December 31, |
| ||||||||||||||||
|
| 2005 |
| 2004 |
| ||||||||||||||
|
| Adjusted (1) |
| Adjustments |
| Actual |
| Adjusted (2) |
| Adjustments |
| Actual |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Product sales, net |
| $ | 473,581 |
| $ | — |
| $ | 473,581 |
| $ | 330,467 |
| $ | — |
| $ | 330,467 |
|
Revenues from joint business arrangement |
| 33,547 |
| — |
| 33,547 |
| 25,336 |
| — |
| 25,336 |
| ||||||
Collaborative agreement revenues |
| 1,955 |
| — |
| 1,955 |
| 3,577 |
| — |
| 3,577 |
| ||||||
Royalty and license fee revenues |
| 89,697 |
| — |
| 89,697 |
| 68,177 |
| — |
| 68,177 |
| ||||||
Other revenues |
| 15,173 |
| — |
| 15,173 |
| 6,838 |
| — |
| 6,838 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total revenues |
| 613,953 |
| — |
| 613,953 |
| 434,395 |
| — |
| 434,395 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Cost of sales |
| 221,095 |
| — |
| 221,095 |
| 177,136 |
| — |
| 177,136 |
| ||||||
Research and development |
| 109,271 |
| — |
| 109,271 |
| 129,392 |
| — |
| 129,392 |
| ||||||
Selling, general and administrative |
| 125,391 |
| — |
| 125,391 |
| 137,727 |
| — |
| 137,727 |
| ||||||
Amortization expense |
| — |
| (11,969 | ) | 11,969 |
| — |
| (21,426 | ) | 21,426 |
| ||||||
Impairment loss on acquired intangible assets |
| — |
| (1,136 | ) | 1,136 |
| — |
| — |
| — |
| ||||||
Other operating expenses |
| 7,692 |
| — |
| 7,692 |
| 4,804 |
| — |
| 4,804 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total operating expenses |
| 463,449 |
| (13,105 | ) | 476,554 |
| 449,059 |
| (21,426 | ) | 470,485 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Income (loss) from operations |
| 150,504 |
| 13,105 |
| 137,399 |
| (14,664 | ) | 21,426 |
| (36,090 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Loss on disposal of assets |
| (319 | ) | — |
| (319 | ) | (2,092 | ) | — |
| (2,092 | ) | ||||||
Interest expense |
| (7,683 | ) | — |
| (7,683 | ) | (6,653 | ) | — |
| (6,653 | ) | ||||||
Interest and other income, net |
| 19,644 |
| — |
| 19,644 |
| 14,390 |
| — |
| 14,390 |
| ||||||
Minority interest |
| (498 | ) | — |
| (498 | ) | (385 | ) | — |
| (385 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Income (loss) from continuing operations before income taxes |
| 161,648 |
| 13,105 |
| 148,543 |
| (9,404 | ) | 21,426 |
| (30,830 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Provision for (benefit of) income taxes |
| 3,806 |
| (6,685 | ) | 10,491 |
| (2,351 | ) | 5,356 |
| (7,707 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Income (loss) from continuing operations |
| 157,842 |
| 19,790 |
| 138,052 |
| (7,053 | ) | 16,070 |
| (23,123 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net income (loss) |
| $ | 157,842 |
| $ | 19,790 |
| $ | 138,052 |
| $ | (7,053 | ) | $ | 16,070 |
| $ | (23,123 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Basic earnings (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Income (loss) from continuing operations |
| $ | 0.83 |
|
|
| $ | 0.72 |
| $ | (0.04 | ) |
|
| $ | (0.12 | ) | ||
Net income (loss) |
| $ | 0.83 |
|
|
| $ | 0.72 |
| $ | (0.04 | ) |
|
| $ | (0.12 | ) | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Diluted earnings (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Income (loss) from continuing operations |
| $ | 0.78 |
|
|
| $ | 0.68 |
| $ | (0.04 | ) |
|
| $ | (0.12 | ) | ||
Net income (loss) |
| $ | 0.78 |
|
|
| $ | 0.68 |
| $ | (0.04 | ) |
|
| $ | (0.12 | ) | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Shares used in calculating basic earnings (loss) per share |
| 190,679 |
|
|
| 190,679 |
| 186,813 |
|
|
| 186,813 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Shares used in calculating diluted earnings (loss) per share |
| 205,008 |
|
|
| 205,008 |
| 186,813 |
|
|
| 186,813 |
| ||||||
(1) Adjusted amounts exclude (a) the amortization expense on acquired intangible assets related to the acquisitions of PathoGenesis, Chiron Behring, Pulmopharm and PowderJect Pharmaceuticals and (b) an impairment loss of $1.1 million on acquired intangible assets from our acquisition of PowderJect Pharmaceuticals related to a contract manufacturing agreement.
(2) Adjusted amounts exclude the amortization expense on acquired intangible assets related to the acquisitions of PathoGenesis, Chiron Behring, Pulmopharm and PowderJect Pharmaceuticals.
|
| Year Ended |
| ||||||||||||||||
|
| December 31, |
| ||||||||||||||||
|
| 2005 |
| 2004 |
| ||||||||||||||
|
| Adjusted (3) |
| Adjustments |
| Actual |
| Adjusted (4) |
| Adjustments |
| Actual |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Product sales, net |
| $ | 1,421,494 |
| $ | — |
| $ | 1,421,494 |
| $ | 1,268,303 |
| $ | — |
| $ | 1,268,303 |
|
Revenues from joint business arrangement |
| 136,701 |
| — |
| 136,701 |
| 118,246 |
| — |
| 118,246 |
| ||||||
Collaborative agreement revenues |
| 13,084 |
| — |
| 13,084 |
| 18,044 |
| — |
| 18,044 |
| ||||||
Royalty and license fee revenues |
| 317,006 |
| — |
| 317,006 |
| 289,561 |
| — |
| 289,561 |
| ||||||
Other revenues |
| 31,394 |
| — |
| 31,394 |
| 29,201 |
| — |
| 29,201 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total revenues |
| 1,919,679 |
| — |
| 1,919,679 |
| 1,723,355 |
| — |
| 1,723,355 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Cost of sales |
| 732,100 |
| — |
| 732,100 |
| 675,944 |
| — |
| 675,944 |
| ||||||
Research and development |
| 433,891 |
| — |
| 433,891 |
| 431,128 |
| — |
| 431,128 |
| ||||||
Selling, general and administrative |
| 501,193 |
| — |
| 501,193 |
| 459,502 |
| — |
| 459,502 |
| ||||||
Purchased in-process research and development |
| — |
| — |
| — |
| — |
| (9,629 | ) | 9,629 |
| ||||||
Amortization expense |
| — |
| (66,206 | ) | 66,206 |
| — |
| (84,503 | ) | 84,503 |
| ||||||
Impairment loss on acquired intangible assets |
| — |
| (15,658 | ) | 15,658 |
| — |
| — |
| — |
| ||||||
Other operating expenses |
| 20,515 |
| — |
| 20,515 |
| 12,844 |
| — |
| 12,844 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total operating expenses |
| 1,687,699 |
| (81,864 | ) | 1,769,563 |
| 1,579,418 |
| (94,132 | ) | 1,673,550 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Income from operations |
| 231,980 |
| 81,864 |
| 150,116 |
| 143,937 |
| 94,132 |
| 49,805 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Loss on disposal of assets |
| (1,108 | ) | — |
| (1,108 | ) | (3,247 | ) | — |
| (3,247 | ) | ||||||
Interest expense |
| (30,615 | ) | — |
| (30,615 | ) | (26,093 | ) | — |
| (26,093 | ) | ||||||
Interest and other income, net |
| 86,692 |
| — |
| 86,692 |
| 56,797 |
| — |
| 56,797 |
| ||||||
Minority interest |
| (2,221 | ) | — |
| (2,221 | ) | (1,968 | ) | — |
| (1,968 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Income from continuing operations before income taxes |
| 284,728 |
| 81,864 |
| 202,864 |
| 169,426 |
| 94,132 |
| 75,294 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Provision for income taxes |
| 31,431 |
| 9,037 |
| 22,394 |
| 42,357 |
| 21,126 |
| 21,231 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Income from continuing operations |
| 253,297 |
| 72,827 |
| 180,470 |
| 127,069 |
| 73,006 |
| 54,063 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Gain from discontinued operations, net of taxes |
| — |
| — |
| — |
| 24,854 |
| — |
| 24,854 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net income |
| $ | 253,297 |
| $ | 72,827 |
| $ | 180,470 |
| $ | 151,923 |
| $ | 73,006 |
| $ | 78,917 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Basic earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Income from continuing operations |
| $ | 1.34 |
|
|
| $ | 0.96 |
| $ | 0.68 |
|
|
| $ | 0.29 |
| ||
Net income |
| $ | 1.34 |
|
|
| $ | 0.96 |
| $ | 0.81 |
|
|
| $ | 0.42 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Diluted earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Income from continuing operations |
| $ | 1.31 |
|
|
| $ | 0.94 |
| $ | 0.67 |
|
|
| $ | 0.28 |
| ||
Net income |
| $ | 1.31 |
|
|
| $ | 0.94 |
| $ | 0.80 |
|
|
| $ | 0.41 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Shares used in calculating basic earnings per share |
| 188,448 |
|
|
| 188,448 |
| 187,545 |
|
|
| 187,545 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Shares used in calculating diluted earnings per share |
| 199,280 |
|
|
| 198,704 |
| 190,202 |
|
|
| 190,202 |
| ||||||
(3) Adjusted amounts exclude (a) the amortization expense on acquired intangible assets related to the acquisitions of PathoGenesis, Chiron Behring, Pulmopharm and PowderJect Pharmaceuticals, (b) an impairment loss of $14.5 million on acquired intangible assets from our acquisition of PowderJect Pharmaceuticals related to a yellow fever vaccine and (c) an impairment loss of $1.1 million on acquired intangible assets from our acquisition of PowderJect Pharmaceuticals related to a contract manufacturing agreement.
(4) Adjusted amounts exclude (a) the amortization expense on acquired intangible assets related to the acquisitions of PathoGenesis, Chiron Behring, Pulmopharm and PowderJect Pharmaceuticals and (b) Purchased in-process research and development related to the Sagres acquisition.
CHIRON CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
|
| December 31, |
| December 31, |
| ||
|
| 2005 |
| 2004 |
| ||
|
|
|
|
|
| ||
Assets |
|
|
|
|
| ||
Current assets: |
|
|
|
|
| ||
Cash, cash equivalents and short-term investments |
| $ | 686,074 |
| $ | 603,621 |
|
Accounts receivable, net of allowances |
| 475,718 |
| 402,094 |
| ||
Inventories, net of reserves |
| 231,666 |
| 221,154 |
| ||
Other current assets |
| 198,394 |
| 167,154 |
| ||
Total current assets |
| 1,591,852 |
| 1,394,023 |
| ||
Non-current investments in marketable debt securities |
| 722,717 |
| 409,421 |
| ||
Property, plant, equipment and leasehold improvements, net |
| 888,803 |
| 799,415 |
| ||
Other non-current assets |
| 1,544,107 |
| 1,702,644 |
| ||
Total assets |
| $ | 4,747,479 |
| $ | 4,305,503 |
|
|
|
|
|
|
| ||
Liabilities and stockholders’ equity |
|
|
|
|
| ||
Current liabilities |
| $ | 564,764 |
| $ | 434,444 |
|
Long-term debt |
| 890,945 |
| 936,652 |
| ||
Long-term portion of capital lease |
| 156,661 |
| 156,952 |
| ||
Non-current unearned revenue |
| 27,359 |
| 26,175 |
| ||
Other non-current liabilities |
| 112,828 |
| 140,226 |
| ||
Minority interest |
| 10,779 |
| 9,350 |
| ||
Stockholders’ equity |
| 2,984,143 |
| 2,601,704 |
| ||
Total liabilities and stockholders’ equity |
| $ | 4,747,479 |
| $ | 4,305,503 |
|
CHIRON CORPORATION
SUPPLEMENTAL SCHEDULE OF COMPUTATION OF EARNINGS (LOSS) PER SHARE
(Unaudited)
(In thousands, except per share data)
|
| Three Months Ended |
| ||||||||||
|
| December 31, |
| ||||||||||
|
| 2005 |
| 2004 |
| ||||||||
|
| Adjusted |
| Actual |
| Adjusted |
| Actual |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Computation for earnings (loss) per share - continuing operations |
|
|
|
|
|
|
|
|
| ||||
Income (loss) (Numerator): |
|
|
|
|
|
|
|
|
| ||||
Income (loss) from continuing operations |
| $ | 157,842 |
| $ | 138,052 |
| $ | (7,053 | ) | $ | (23,123 | ) |
Plus: Interest on 1.625% convertible debentures, net of taxes |
| 1,586 |
| 1,586 |
| — |
| — |
| ||||
Plus: Interest on Liquid Yield Option Notes, net of taxes |
| 147 |
| 147 |
| — |
| — |
| ||||
Income (loss) from continuing operations, plus impact from assumed conversions |
| $ | 159,575 |
| $ | 139,785 |
| $ | (7,053 | ) | $ | (23,123 | ) |
|
|
|
|
|
|
|
|
|
| ||||
Shares (Denominator): |
|
|
|
|
|
|
|
|
| ||||
Weighted-average common shares outstanding |
| 190,679 |
| 190,679 |
| 186,813 |
| 186,813 |
| ||||
Additional shares from exercise of right under an agreement with Novartis (5) |
| 3,448 |
| 3,448 |
| — |
| — |
| ||||
Effect of dilutive securities: |
|
|
|
|
|
|
|
|
| ||||
Stock options and equivalents |
| 3,001 |
| 3,001 |
| — |
| — |
| ||||
1.625% convertible debentures |
| 7,306 |
| 7,306 |
| — |
| — |
| ||||
Liquid Yield Option Notes |
| 574 |
| 574 |
| — |
| — |
| ||||
Weighted-average common shares outstanding, plus impact from assumed conversions |
| 205,008 |
| 205,008 |
| 186,813 |
| 186,813 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Basic earnings (loss) per share from continuing operations |
| $ | 0.83 |
| $ | 0.72 |
| $ | (0.04 | ) | $ | (0.12 | ) |
Diluted earnings (loss) per share from continuing operations |
| $ | 0.78 |
| $ | 0.68 |
| $ | (0.04 | ) | $ | (0.12 | ) |
|
|
|
|
|
|
|
|
|
| ||||
Computation for earnings (loss) per share - net income (loss) |
|
|
|
|
|
|
|
|
| ||||
Income (loss) (Numerator): |
|
|
|
|
|
|
|
|
| ||||
Net income (loss) |
| $ | 157,842 |
| $ | 138,052 |
| $ | (7,053 | ) | $ | (23,123 | ) |
Plus: Interest on 1.625% convertible debentures, net of taxes |
| 1,586 |
| 1,586 |
| — |
| — |
| ||||
Plus: Interest on Liquid Yield Option Notes, net of taxes |
| 147 |
| 147 |
| — |
| — |
| ||||
Net income (loss), plus impact from assumed conversions |
| $ | 159,575 |
| $ | 139,785 |
| $ | (7,053 | ) | $ | (23,123 | ) |
|
|
|
|
|
|
|
|
|
| ||||
Shares (Denominator): |
|
|
|
|
|
|
|
|
| ||||
Weighted-average common shares outstanding |
| 190,679 |
| 190,679 |
| 186,813 |
| 186,813 |
| ||||
Additional shares from exercise of right under an agreement with Novartis (5) |
| 3,448 |
| 3,448 |
| — |
| — |
| ||||
Effect of dilutive securities: |
|
|
|
|
|
|
|
|
| ||||
Stock options and equivalents |
| 3,001 |
| 3,001 |
| — |
| — |
| ||||
1.625% convertible debentures |
| 7,306 |
| 7,306 |
| — |
| — |
| ||||
Liquid Yield Option Notes |
| 574 |
| 574 |
| — |
| — |
| ||||
Weighted-average common shares outstanding, plus impact from assumed conversions |
| 205,008 |
| 205,008 |
| 186,813 |
| 186,813 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Basic earnings (loss) per share from net income |
| $ | 0.83 |
| $ | 0.72 |
| $ | (0.04 | ) | $ | (0.12 | ) |
Diluted earnings (loss) per share from net income |
| $ | 0.78 |
| $ | 0.68 |
| $ | (0.04 | ) | $ | (0.12 | ) |
(5) On October 30, 2005 we exercised our right under an agreement with Novartis (as successor to Ciba-Geigy), dated as of November 20, 1994, as amended, to require Novartis or its affiliate to purchase shares of our common stock for an aggregate purchase price of $300.0 million at a per share purchase price of $43.50. On December 8, 2005, we closed on a sale of $300.0 million in newly issued shares of our common stock at a price of $43.50 per share to a subsidiary of Novartis. For purposes of calculating diluted earnings per share, the issued shares of this transaction are considered outstanding from October 30, 2005. As a result, the calculation of diluted earnings per share for the fourth quarter of 2005 included an additional 3.4 million shares.
CHIRON CORPORATION
SUPPLEMENTAL SCHEDULE OF COMPUTATION OF EARNINGS PER SHARE
(Unaudited)
(In thousands, except per share data)
|
| Year Ended |
| ||||||||||
|
| December 31, |
| ||||||||||
|
| 2005 |
| 2004 |
| ||||||||
|
| Adjusted |
| Actual |
| Adjusted |
| Actual |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Computation for earnings per share - continuing operations |
|
|
|
|
|
|
|
|
| ||||
Income (Numerator): |
|
|
|
|
|
|
|
|
| ||||
Income from continuing operations |
| $ | 253,297 |
| $ | 180,470 |
| $ | 127,069 |
| $ | 54,063 |
|
Plus: Interest on 1.625% convertible debentures, net of taxes |
| 6,357 |
| 6,357 |
| — |
| — |
| ||||
Plus: Interest on Liquid Yield Option Notes, net of taxes |
| 586 |
| — |
| — |
| — |
| ||||
Income from continuing operations, plus impact from assumed conversions |
| $ | 260,240 |
| $ | 186,827 |
| $ | 127,069 |
| $ | 54,063 |
|
|
|
|
|
|
|
|
|
|
| ||||
Shares (Denominator): |
|
|
|
|
|
|
|
|
| ||||
Weighted-average common shares outstanding |
| 188,448 |
| 188,448 |
| 187,545 |
| 187,545 |
| ||||
Additional shares from exercise of right under an agreement with Novartis (6) |
| 1,061 |
| 1,061 |
| — |
| — |
| ||||
Effect of dilutive securities: |
|
|
|
|
|
|
|
|
| ||||
Stock options and equivalents |
| 1,887 |
| 1,887 |
| 2,657 |
| 2,657 |
| ||||
1.625% convertible debentures |
| 7,308 |
| 7,308 |
| — |
| — |
| ||||
Liquid Yield Option Notes |
| 576 |
| — |
| — |
| — |
| ||||
Weighted-average common shares outstanding, plus impact from assumed conversions |
| 199,280 |
| 198,704 |
| 190,202 |
| 190,202 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Basic earnings per share from continuing operations |
| $ | 1.34 |
| $ | 0.96 |
| $ | 0.68 |
| $ | 0.29 |
|
Diluted earnings per share from continuing operations |
| $ | 1.31 |
| $ | 0.94 |
| $ | 0.67 |
| $ | 0.28 |
|
|
|
|
|
|
|
|
|
|
| ||||
Computation for earnings per share - net income |
|
|
|
|
|
|
|
|
| ||||
Income (Numerator): |
|
|
|
|
|
|
|
|
| ||||
Net income |
| $ | 253,297 |
| $ | 180,470 |
| $ | 151,923 |
| $ | 78,917 |
|
Plus: Interest on 1.625% convertible debentures, net of taxes |
| 6,357 |
| 6,357 |
| — |
| — |
| ||||
Plus: Interest on Liquid Yield Option Notes, net of taxes |
| 586 |
| — |
| — |
| — |
| ||||
Net income, plus impact from assumed conversions |
| $ | 260,240 |
| $ | 186,827 |
| $ | 151,923 |
| $ | 78,917 |
|
|
|
|
|
|
|
|
|
|
| ||||
Shares (Denominator): |
|
|
|
|
|
|
|
|
| ||||
Weighted-average common shares outstanding |
| 188,448 |
| 188,448 |
| 187,545 |
| 187,545 |
| ||||
Additional shares from exercise of right under an agreement with Novartis (6) |
| 1,061 |
| 1,061 |
| — |
| — |
| ||||
Effect of dilutive securities: |
|
|
|
|
|
|
|
|
| ||||
Stock options and equivalents |
| 1,887 |
| 1,887 |
| 2,657 |
| 2,657 |
| ||||
1.625% convertible debentures |
| 7,308 |
| 7,308 |
| — |
| — |
| ||||
Liquid Yield Option Notes |
| 576 |
| — |
| — |
| — |
| ||||
Weighted-average common shares outstanding, plus impact from assumed conversions |
| 199,280 |
| 198,704 |
| 190,202 |
| 190,202 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Basic earnings per share from net income |
| $ | 1.34 |
| $ | 0.96 |
| $ | 0.81 |
| $ | 0.42 |
|
Diluted earnings per share from net income |
| $ | 1.31 |
| $ | 0.94 |
| $ | 0.80 |
| $ | 0.41 |
|
(6) On October 30, 2005, we exercised our right under an agreement with Novartis (as successor to Ciba-Geigy), dated as of November 20, 1994, as amended, to require Novartis or its affiliate to purchase shares of our common stock for an aggregate purchase price of $300.0 million at a per share purchase price of $43.50. On December 8, 2005, we closed on a sale of $300.0 million in newly issued shares of our common stock at a price of $43.50 per share to a subsidiary of Novartis. For purposes of calculating diluted earnings per share, the issued shares of this transaction are considered outstanding from October 30, 2005. As a result, the calculation of diluted earnings per share for the year included an additional 1.1 million shares.
CHIRON CORPORATION
SUPPLEMENTAL REVENUE SUMMARY
(Unaudited)
(In thousands, except percentages)
|
| Current |
| Prior |
| Change |
|
|
| Prior |
| Change |
|
|
| |||||
|
| Quarter |
| Quarter |
| from |
| Change |
| Year |
| from |
| Change |
| |||||
|
| Q4 2005 |
| Q3 2005 |
| Prior QTR |
| % |
| Q4 2004 |
| Prior Year |
| % |
| |||||
Product Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Blood Testing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Ortho |
| $ | 9,825 |
| $ | 7,023 |
| $ | 2,802 |
| 40 | % | $ | 7,904 |
| $ | 1,921 |
| 24 | % |
NAT |
| 72,195 |
| 70,677 |
| 1,518 |
| 2 | % | 63,705 |
| 8,490 |
| 13 | % | |||||
Total Blood Testing |
| 82,020 |
| 77,700 |
| 4,320 |
| 6 | % | 71,609 |
| 10,411 |
| 15 | % | |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Vaccines |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Influenza vaccines |
| 161,955 |
| 60,321 |
| 101,634 |
| 168 | % | 44,015 |
| 117,940 |
| 268 | % | |||||
Meningococcal vaccines |
| 8,968 |
| 11,635 |
| (2,667 | ) | (23 | )% | 9,309 |
| (341 | ) | (4 | )% | |||||
Travel vaccines (TBE, Rabies, Arilvax and Dukoral) |
| 23,722 |
| 35,012 |
| (11,290 | ) | (32 | )% | 21,159 |
| 2,563 |
| 12 | % | |||||
Pediatric/Other vaccines |
| 48,888 |
| 45,800 |
| 3,088 |
| 7 | % | 57,656 |
| (8,768 | ) | (15 | )% | |||||
Total Vaccines |
| 243,533 |
| 152,768 |
| 90,765 |
| 59 | % | 132,139 |
| 111,394 |
| 84 | % | |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Biopharmaceuticals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Proleukin |
| 31,259 |
| 31,028 |
| 231 |
| 1 | % | 30,713 |
| 546 |
| 2 | % | |||||
TOBI |
| 65,199 |
| 57,890 |
| 7,309 |
| 13 | % | 53,276 |
| 11,923 |
| 22 | % | |||||
Betaseron* |
| 40,545 |
| 36,927 |
| 3,618 |
| 10 | % | 33,639 |
| 6,906 |
| 21 | % | |||||
Other |
| 11,025 |
| 10,862 |
| 163 |
| 2 | % | 9,091 |
| 1,934 |
| 21 | % | |||||
Total Biopharmaceuticals |
| 148,028 |
| 136,707 |
| 11,321 |
| 8 | % | 126,719 |
| 21,309 |
| 17 | % | |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
TOTAL PRODUCT SALES, NET |
| $ | 473,581 |
| $ | 367,175 |
| $ | 106,406 |
| 29 | % | $ | 330,467 |
| $ | 143,114 |
| 43 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Revenues from joint business arrangement |
| $ | 33,547 |
| $ | 36,093 |
| $ | (2,546 | ) | (7 | )% | $ | 25,336 |
| $ | 8,211 |
| 32 | % |
Collaborative agreement revenues |
| 1,955 |
| 3,149 |
| (1,194 | ) | (38 | )% | 3,577 |
| (1,622 | ) | (45 | )% | |||||
Royalty and license fee revenues |
| 89,697 |
| 70,726 |
| 18,971 |
| 27 | % | 68,177 |
| 21,520 |
| 32 | % | |||||
Other revenues |
| 15,173 |
| 2,470 |
| 12,703 |
| 514 | % | 6,838 |
| 8,335 |
| 122 | % | |||||
TOTAL REVENUES |
| $ | 613,953 |
| $ | 479,613 |
| $ | 134,340 |
| 28 | % | $ | 434,395 |
| $ | 179,558 |
| 41 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Gross Margins |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Blood Testing |
| 38 | % | 42 | % | (4 | )% |
|
| 40 | % | (2 | )% |
|
| |||||
Vaccines |
| 45 | % | 45 | % | 0 | % |
|
| 28 | % | 17 | % |
|
| |||||
Biopharmaceuticals |
| 76 | % | 71 | % | 5 | % |
|
| 70 | % | 6 | % |
|
| |||||
TOTAL GROSS MARGINS |
| 53 | % | 54 | % | (1 | )% |
|
| 46 | % | 7 | % |
|
| |||||
* Excludes Betaferon Royalty |
| $ | 14,122 |
| $ | 13,413 |
| $ | 709 |
| 5 | % | $ | 12,798 |
| $ | 1,324 |
| 10 | % |
CHIRON CORPORATION
SUPPLEMENTAL YTD REVENUE SUMMARY
(Unaudited)
(In thousands, except percentages)
|
| Twelve Months Ended December 31, |
| Change from |
| Change |
| |||||
|
| 2005 |
| 2004 |
| Prior Year |
| % |
| |||
Product Sales |
|
|
|
|
|
|
|
|
| |||
Blood Testing |
|
|
|
|
|
|
|
|
| |||
Ortho |
| $ | 31,298 |
| $ | 27,844 |
| $ | 3,454 |
| 12 | % |
NAT |
| 273,407 |
| 249,809 |
| 23,598 |
| 9 | % | |||
Total Blood Testing |
| 304,705 |
| 277,653 |
| 27,052 |
| 10 | % | |||
|
|
|
|
|
|
|
|
|
| |||
Vaccines |
|
|
|
|
|
|
|
|
| |||
Influenza vaccines |
| 225,355 |
| 153,413 |
| 71,942 |
| 47 | % | |||
Meningococcal vaccines |
| 43,361 |
| 27,739 |
| 15,622 |
| 56 | % | |||
Travel vaccines (TBE, Rabies, Arilvax and Dukoral) |
| 147,507 |
| 96,864 |
| 50,643 |
| 52 | % | |||
Pediatric/Other vaccines |
| 164,308 |
| 200,948 |
| (36,640 | ) | (18 | )% | |||
Total Vaccines |
| 580,531 |
| 478,964 |
| 101,567 |
| 21 | % | |||
|
|
|
|
|
|
|
|
|
| |||
Biopharmaceuticals |
|
|
|
|
|
|
|
|
| |||
Proleukin |
| 123,549 |
| 129,377 |
| (5,828 | ) | (5 | )% | |||
TOBI |
| 232,624 |
| 212,876 |
| 19,748 |
| 9 | % | |||
Betaseron* |
| 142,238 |
| 130,572 |
| 11,666 |
| 9 | % | |||
Other |
| 37,847 |
| 38,861 |
| (1,014 | ) | (3 | )% | |||
Total Biopharmaceuticals |
| 536,258 |
| 511,686 |
| 24,572 |
| 5 | % | |||
|
|
|
|
|
|
|
|
|
| |||
TOTAL PRODUCT SALES, NET |
| $ | 1,421,494 |
| $ | 1,268,303 |
| $ | 153,191 |
| 12 | % |
|
|
|
|
|
|
|
|
|
| |||
Revenues from joint business arrangement |
| $ | 136,701 |
| $ | 118,246 |
| $ | 18,455 |
| 16 | % |
Collaborative agreement revenues |
| 13,084 |
| 18,044 |
| (4,960 | ) | (27 | )% | |||
Royalty and license fee revenues |
| 317,006 |
| 289,561 |
| 27,445 |
| 9 | % | |||
Other revenues |
| 31,394 |
| 29,201 |
| 2,193 |
| 8 | % | |||
TOTAL REVENUES |
| $ | 1,919,679 |
| $ | 1,723,355 |
| $ | 196,324 |
| 11 | % |
|
|
|
|
|
|
|
|
|
| |||
Gross Margins |
|
|
|
|
|
|
|
|
| |||
Blood Testing |
| 41 | % | 42 | % | (1 | )% |
|
| |||
Vaccines |
| 31 | % | 23 | % | 8 | % |
|
| |||
Biopharmaceuticals |
| 72 | % | 72 | % | 0 | % |
|
| |||
TOTAL GROSS MARGINS |
| 48 | % | 47 | % | 1 | % |
|
| |||
* Excludes Betaferon Royalty |
| $ | 59,955 |
| $ | 51,564 |
| $ | 8,391 |
| 16 | % |