ImClone Systems Incorporated | ||
180 Varick Street New York, NY 10014 Tel: (212)645-1405 Fax: (212)645-2054 www.imclone.com | ||
ImClone Systems Incorporated | ||
Investors: | Media: | |
Andrea F. Rabney | David M. F. Pitts | |
(646) 638-5058 | (646) 638-5058 | |
Stefania Bethlen | ||
(646) 638-5058 |
IMCLONE SYSTEMS REPORTS FIRST-QUARTER FINANCIAL RESULTS
Erbitux® U.S. In-Market Quarterly Sales of $87.1 Million
Diluted Earnings Per Share of $.33
New York, NY – April 26, 2005 –ImClone Systems Incorporated (NASDAQ: IMCL) announced today its financial results for the first quarter ended March 31, 2005.
Total revenues for the first quarter of 2005 were $85.8 million as compared with $110.2 million for the first quarter of 2004. The first quarter of 2004 included a one-time “catch-up” amortization effect of approximately $43 million associated with the $250 million milestone payment received last year. Revenues include four principal components:- License fees and milestone revenueof $24.5 million in the first quarter of 2005 comparedwith $67.5 million in the first quarter of 2004. The decline is attributable to the above-mentioned “catch-up” amortization effect;
- Manufacturing revenueof $11.0 million in the first quarter of 2005 compared with $25.5million in the first quarter of 2004. The year-to-year decrease reflects higher volumepurchases by Bristol-Myers Squibb in the first quarter of last year to establish safetystock levels in the quarter of launch, as well as a lower selling price in 2005 as comparedwith 2004. Purchases by Bristol-Myers Squibb are timed at their discretion toaccommodate forecasts and safety stock needs, and are not necessarily indicative ofhistorical in-market sales or future sales expectations. No commercial product was sold toMerck KGaA during the first quarter of 2005 or 2004;
- Royalty revenueof $36.4 million in the first quarter of 2005 compared with $7.1 millionin the first quarter of 2004. Royalty revenue for the first quarter of 2005 includes $34.0million representing 39% of Bristol-Myers Squibb’s in-market Erbitux net sales of $87.1million. These in-market sales, reflecting a drop-ship distribution methodology, representErbitux shipments to end-user accounts only, with no wholesaler stocking; and
- Collaborative agreement revenueof $13.8 million in the first quarter of 2005 comparedwith $10.0 million in the first quarter of 2004. The year-to-year increase reflects greaterpurchases of clinical materials by Merck KGaA and higher reimbursements for royalty
payments. Included in the first quarters of 2005 and 2004 amounts are reimbursements for royalty expenses of approximately $4.5 million and $.9 million, respectively.
Total operating expenses for the first quarter of 2005 were $61.5 million, compared with $39.3 million in the first quarter of 2004. Operating expenses included:
- Research and development expensesfor the first quarter of 2005 were $21.2 millioncompared with $20.2 million in the first quarter of 2004;
- Clinical and regulatory expensesin the first quarter of 2005 were $9.4 million, comparedwith $7.1 million in the first quarter of 2004;
- Marketing, general and administrative expenseswere $17.6 million in the first quarter of2005 compared with $11.6 million in the first quarter of 2004. The increase in 2005 isprincipally attributable to higher compensation expenses associated with increasedheadcount, principally in sales and marketing attributable to the field force, and higherprofessional fees, primarily for accounting and tax services; and
- Royalty expenseswere $12.6 million in the first quarter of 2005 compared with $2.0million in the first quarter of 2004 as the result of higher sales in 2005. Approximately$4.5 million of the 2005 expenses were reimbursed as a component ofCollaborativeagreement revenue,resulting in net royalty expenses of $8.1 million for the first quarterof 2005.
The effective tax rate for the first quarter of 2005, and the estimate for the full year (assuming no $250 million milestone is earned from Bristol-Myers Squibb), is approximately 1.3%, principally because of the utilization of deferred tax assets, mainly including the amortization of license fees and milestones which were taxable in prior periods.
Net income for the first quarter of 2005 was $28.8 million compared with $62.7 million in the first quarter of last year. Diluted earnings per share were $.33 in the first quarter of 2005 compared with $.76 in the first quarter of 2004.
Conference Call
ImClone Systems will host a conference call with the financial community to discuss 2005 first quarter financial results, today, April 26, 2005 at 11:00 AM Eastern Daylight Time. The conference call will be webcast live and may be accessed by visiting ImClone Systems' website atwww.imclone.com. A replay of the audio webcast will be available under "Earnings Webcast" in the "Investor Relations" section of the Company's website starting shortly after the call on April 26, 2005.
Those parties interested in participating via telephone may join by dialing (888) 694-4641, or (973) 935-8512 for calls outside of Canada and the United States. A telephone replay of the conference call will be available shortly after the call until May 2, 2005 at midnight Eastern Daylight Time. To access the telephone replay, dial (877) 519-4471 domestically, or (973) 341-3080 for calls outside of Canada and the United States, and enter passcode number 5958288.
About ImClone Systems Incorporated
ImClone Systems Incorporated is committed to advancing oncology care by developing and commercializing a portfolio of targeted biologic treatments designed to address the medical needs of patients with a variety of cancers. The Company's three programs include growth factor blockers, angiogenesis inhibitors and cancer vaccines. ImClone Systems' strategy is to become a fully integrated biopharmaceutical company, taking its development programs from the research
stage to the market. ImClone Systems' headquarters and research operations are located in New York City, with additional administration and manufacturing facilities in Branchburg, New Jersey.
Certain matters discussed in this news release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the Federal securities laws. Although the company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions it can give no assurance that its expectations will be achieved. Forward-looking information is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Many of these factors are beyond the company's ability to control or predict. Important factors that may cause actual results to differ materially and could impact the company and the statements contained in this news release can be found in the company's filings with the Securities and Exchange Commission including quarterly reports on Form 10-Q, current reports on Form 8-K and annual reports on Form 10-K. For forward-looking statements in this news release, the company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The company assumes no obligation to update or supplement any forward-looking statements whether as a result of new information, future events or otherwise.
(see attached tables)
IMCLONE SYSTEMS INCORPORATED
Consolidated Condensed Statements of Operations
(Unaudited)
(in thousands, except per share data)
Three Months Ended | ||||||
March 31, | ||||||
2005 | 2004(1) | |||||
Revenues: | ||||||
License fees and milestone revenue | $ | 24,534 | $ | 67,498 | ||
Manufacturing revenue | 11,019 | 25,504 | ||||
Royalty revenue | 36,372 | 7,145 | ||||
Collaborative agreement revenue | 13,846 | 10,017 | ||||
Total revenues | 85,771 | 110,164 | ||||
Operating expenses: | ||||||
Research and development | 21,173 | 20,211 | ||||
Clinical and regulatory | 9,398 | 7,062 | ||||
Marketing, general and administrative | 17,623 | 11,628 | ||||
Royalty expense | 12,566 | 2,043 | ||||
Cost of manufacturing revenue | 743 | 213 | ||||
Other | - | (1,815 | ) | |||
Total operating expenses | 61,503 | 39,342 | ||||
Operating income | 24,268 | 70,822 | ||||
Other (income) expense, net | (4,932 | ) | 1,115 | |||
Income before income taxes | 29,200 | 69,707 | ||||
Provision for income taxes | 380 | 6,971 | ||||
Net income | $ | 28,820 | $ | 62,736 | ||
Income per common share: | ||||||
Basic | $ | 0.35 | $ | 0.83 | ||
Diluted | $ | 0.33 | $ | 0.76 | ||
Shares used in calculation of income per share: | ||||||
Basic | 83,278 | 75,259 | ||||
Diluted | 92,648 | 84,833 |
(1) | Royalty expense and Collaborative agreement revenue in 2004 have been reclassified to conform to the current year presentation. Both categories have been increased by $547 in order to reflect the reimbursed portion of royalties for agreements that were finalized in January, 2005. |
IMCLONE SYSTEMS INCORPORATED
Consolidated Condensed Balance Sheets
(Unaudited)
(in thousands)
Assets | March 31,2005 | December 31,2004 | |||
Current assets: | |||||
Cash and cash equivalents | $ | 16,388 | $ | 79,321 | |
Securities available for sale | 808,015 | 840,451 | |||
Inventories | 55,331 | 40,618 | |||
Other current assets | 77,992 | 102,047 | |||
Total current assets | 957,726 | 1,062,437 | |||
Property, plant and equipment, net | 361,050 | 339,293 | |||
Other assets | 31,348 | 33,046 (1) | |||
Total assets | $ | 1,350,124 | $ | 1,434,776 (1) | |
Liabilities and Stockholders' Equity | |||||
Current liabilities | $ | 217,521 | $ | 303,690 | |
Deferred revenue, long term | 323,481 | 348,814 | |||
Long-term obligations | 601,915 | 603,434 | |||
Total liabilities | 1,142,917 | 1,255,938 | |||
Stockholders' equity | 207,207 | 178,838 | |||
Total liabilities and stockholders' equity | $ | 1,350,124 | $ | 1,434,776 |
(1) | These numbers correct a typographical error that was included on the balance sheet that accompanied the press release issued by ImClone Systems on April 26, 2005. The previously reported incorrect numbers were $33,145 and $1,434,875, respectively. |