Bentley Pharmaceuticals 8-K Bentley Pharmaceuticals Reports Third Quarter Results

Exhibit 99.1

	News Release
Bentley Park
2 Holland Way
Exeter, NH 03833-2937
Tel: 603.658.6100
Fax: 603.658.6101/6102
www.bentleypharm.com

	Contact:
	Sharon Merrill Associates
FOR IMMEDIATE RELEASE	Jim Buckley
	Executive Vice President
	617.542.5300
	bnt@investorrelations.com

Bentley Pharmaceuticals Reports Third Quarter Results

Company to Comment on Plans to Separate its Two Businesses and Explore Strategic Alternatives
For Its Generics Business on Conference Call Today at 10:00 a.m. ET

     EXETER, NH, November 6, 2007— Bentley Pharmaceuticals, Inc. (NYSE: BNT), a specialty pharmaceutical company, today reported financial results for the third quarter and nine months ended September 30, 2007.

     Bentley’s total third quarter 2007 revenues increased 9% to $27.3 million from $25.2 million in the third quarter of 2006. Bentley reported a net loss of $0.6 million, or $0.03 per share, for the third quarter of 2007, compared with a net loss of $7.2 million, or $0.33 per share, for the same period a year earlier. The Company noted the $0.03 per share loss for the third quarter of 2007 included $0.8 million, or approximately $0.04 per share, of professional fees related to the planned spin-off of its drug delivery business. The Company also noted that the third quarter of 2006 included $8.9 million of litigation settlement charges and $0.6 million of executive separation costs, which totaled approximately $0.43 per share.

     Bentley’s specialty generics segment’s revenue for the third quarter 2007 increased 5% to $24.3 million from $23.0 million in the third quarter of 2006. Reduced selling prices on the Company’s Spanish pharmaceutical products following the implementation of price reductions by the Spanish government on March 1, 2007 continue to affect revenues and gross margins. Specialty generics revenue outside of Spain as a percentage of total generics revenue increased to 26% for the third quarter 2007 from 22% reported in the third quarter of 2006. Specialty generics revenue was approximately 3% lower than the comparable quarter of the prior year when expressed in constant currency. Gross margins on net product sales decreased to 40% in the third quarter of 2007 from 49% in the third quarter of 2006. The decrease in gross margins primarily reflects the impact of reduced pricing. In addition, the third quarter sales volumes historically have been the lowest quarterly volumes of the year, and lower volumes have resulted in relatively lower gross margins when compared to other quarters of the year. Excluding $8.9 million of litigation expenses recorded in the third quarter 2006 and the impact of exchange rates, specialty generics operating expenses increased $0.1 million in the third quarter of 2007, or 1%, compared to third quarter of

2006 largely due to changes in exchange rates. Net income reported for specialty generics was $1.9 million for the third quarter 2007 compared to $3.4 million in the comparable quarter of 2006, excluding $8.9 million of litigation settlement charges in 2006.

     Drug delivery revenues in the third quarter of 2007 increased by 45%, or $1.0 million, to $3.1 million compared to the third quarter of 2006 due to increased royalties on sales of Testim^®. Research and development expenses increased 32% to $2.7 million in the third quarter 2007 primarily related to Nasulin™, Bentley’s intranasal insulin product candidate. Net loss reported for the third quarter 2007 increased $0.8 million to $2.5 million from the comparable quarter of 2006. Excluding the $0.6 million of executive severance costs in the third quarter of 2006 and $0.8 million of professional fees incurred in the third quarter of 2007 related to the planned spin-off, the quarterly net loss increased $0.5 million from the third quarter of 2006.

     Spin-off of CPEX Pharmaceuticals

     “The Company initiated a strategic review late last year which has led the Board of Directors to unanimously approve a plan to separate the drug delivery business from Bentley’s specialty generics business and to explore strategic alternatives for the specialty generics business. The Board and management believe that separating Bentley into two independent and highly focused companies at this time will substantially enhance opportunities for both businesses and create greater value than under the current structure,” commented Bentley President John Sedor.

     Bentley plans to spin-off the drug delivery business as an independent, publicly traded company to be known as CPEX Pharmaceuticals, Inc. (CPEX Pharmaceuticals). Bentley’s drug delivery business segment reported revenues of $7.9 million through September 30, 2007. Bentley plans to implement the spin-off through a taxable stock dividend of all CPEX Pharmaceuticals common stock to Bentley shareholders. Bentley plans to seek a listing for CPEX Pharmaceuticals on the NASDAQ Capital Market under the ticker symbol “CPEX,” and Bentley will continue to trade on the NYSE under its current ticker symbol. Upon completion of the plan, Bentley will consist of the specialty generics business.

     Until CPEX Pharmaceuticals can fully establish its own operations, Bentley will provide transitional services, including managerial, operational and administrative support, for a period up to 24 months. The key executive officer positions, as well as the Board of Directors, of each of the companies will be named prior to the consummation of the plan.

     Bentley intends to pursue all options available for its two businesses to seek the highest value for shareholders. However, the Company can give no assurance that either a transaction involving the specialty generics business or that the spin-off of the drug delivery business will occur, or that Bentley’s business will not be affected by the uncertainty arising from any potential transaction. More information regarding CPEX Pharmaceuticals will be included in a Form 10 registration statement to be filed with the SEC. The Company’s current intention is to file the Form 10 before the end of 2007. The Board does not intend to provide any update with respect to its review of potential strategic alternatives until it has approved a definitive course of action.

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     Comments on the Third Quarter

     “With the challenges facing the generics industry, both our drug delivery and specialty generics businesses performed well this quarter,” said Sedor. “In drug delivery, we strengthened our IP portfolio and made good progress in our Nasulin clinical trials. Following the broad U.S. patent protection we received for our intranasal drug delivery technology in July, the European Patent Office recently granted Bentley 20-year protection for the use of testosterone and other androgen gels incorporating our CPE-215^® drug delivery technology. Our U.S. Phase II Nasulin trials continue to proceed on schedule, and the Phase II trials we recently commenced in India are progressing toward an expected completion in early 2008.”

     “Looking beyond testosterone and insulin, we continue to believe that our CPE-215 technology can provide therapeutic and commercial advantages for the delivery of other complex molecules that address a wide variety of metabolic, neurological and other serious medical conditions,” Sedor said. “In particular, intranasal drug delivery with CPE-215 promises to be highly beneficial to patients who are resistant to treatments with injectable pharmaceuticals. It also has the potential to create significant opportunities for life-cycle extension of existing marketed products.”

     “In our specialty generics business, during the third quarter we maintained our strong market position in Spain while significantly increasing our sales in several other European countries,” said Sedor. “Bentley has weathered the effects of first quarter pricing reductions in the Spanish market, posting modest increases in unit volume for the second consecutive quarter. At the same time, we capitalized on growth in demand for generic pharmaceuticals elsewhere in Europe, and revenues outside of Spain increased 25% from the third quarter last year. In addition, we recently reported that our subsidiaries in Spain had received five product approvals, our subsidiary in Ireland received two product approvals, and we obtained our first product approval in France.” Sedor concluded by saying, “These accomplishments have positioned us well, both in Spain and other major European markets, for the fourth quarter and for continued growth in 2008.”

     Bentley’s results by operating segment were as follows:

(in thousands)	For the Three Months Ended September 30,
	2007									2006
	Specialty			Drug						Specialty			Drug
	Generics			Delivery			Consolidated			Generics			Delivery			Consolidated
Revenues	$	24,279		$	3,069		$	27,348		$	23,043		$	2,113		$	25,156
Cost of net product sales		14,451			—			14,451			11,778			—			11,778
Gross profit		9,828			3,069			12,897			11,265			2,113			13,378
Operating expenses		6,765			5,765			12,530			15,040			4,045			19,085
Income (loss) from operations		3,063			(2,696	)		367			(3,775	)		(1,932	)		(5,707	)
Other income (expenses), net		(205	)		148			(57	)		40			168			208
Income (loss) before income taxes		2,858			(2,548	)		310			(3,735	)		(1,764	)		(5,499	)
Provision for income taxes		911			—			911			1,730			—			1,730
Net income (loss)	$	1,947		$	(2,548	)	$	(601	)	$	(5,465	)	$	(1,764	)	$	(7,229	)
EBITDA	$	4,456		$	(2,538	)	$	1,918		$	(2,536	)	$	(1,763	)	$	(4,299	)

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     Significant components of Bentley’s revenues for the three months ended September 30, 2007 are summarized below:

(in thousands)	Revenues Within Spain
											Revenues
	Branded										Outside of						% of Total
Product Line	Generics			Generics					Other		Spain			Total			Revenues
Omeprazole	$	406			$	4,091		$	—		$	—		$	4,497			16	%
Enalapril		1,227				348			—			—			1,575			6	%
Simvastatin		153				1,041			—			—			1,194			4	%
Lansoprazole		805				294			—			—			1,099			4	%
Paroxetine		297				795			—			—			1,092			4	%
All other products		2,624				2,603			105			426			5,758			21	%
Sales to licensees and others		—				—			3,075			5,841			8,916			33	%
Licensing and collaborations		—				—			148			3,069			3,217			12	%
Total Revenues	$	5,512			$	9,172		$	3,328		$	9,336		$	27,348			100	%
% of Q3 2007 Revenues		20	%			34	%		12	%		34	%		100	%

     Significant components of Bentley’s revenues for the three months ended September 30, 2006 are summarized below:

(in thousands)	Revenues Within Spain
										Revenues
	Branded									Outside of						% of Total
Product Line	Generics			Generics			Other			Spain			Total			Revenues
Omeprazole	$	671		$	3,896		$	—		$	—		$	4,567			18	%
Enalapril		457			1,371			—			—			1,828			7	%
Simvastatin		1,241			347			—			—			1,588			6	%
Lansoprazole		633			219			—			—			852			4	%
Paroxetine		319			774			—			—			1,093			4	%
All other products		2,408			2,580			301			473			5,762			23	%
Sales to licensees and others		—			—			2,642			4,541			7,183			29	%
Licensing and collaborations		—			—			170			2,113			2,283			9	%
Total Revenues	$	5,729		$	9,187		$	3,113		$	7,127		$	25,156			100	%
% of Q3 2006 Revenues		23	%		37	%		12	%		28	%		100	%

     Bentley’s total revenues increased 9% (2% in constant currency) to $89.9 million in the first nine months of 2007 from $82.4 million in the comparable period of 2006. Bentley’s licensing and collaboration revenues increased by $1.8 million, or 28%, compared with the first nine months of 2006, primarily reflecting increased royalties on sales of Testim. Primarily due to price reductions in Spain and $0.4 million of inventory reserves and write-downs on U.S. simvastatin inventories, gross profit decreased to $43.8 million in the first nine months of 2007 from $45.2 million in the comparable period of 2006. Gross margins on net product sales decreased to 43.5% from 51.0% in the first nine months of 2006. Operating expenses decreased by 13% to $37.2 million from $42.7 million in the same period of the prior year. Operating expenses for the first nine months of 2006 included $10.3 million in litigation and litigation settlement charges. Net income for the first nine months of 2007 was $2.5 million, or $0.11 per diluted share, compared with a net loss of $3.4 million, or $0.16 per share, in the same period of the prior year.

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     Bentley’s results by operating segment were as follows:

	For the Nine Months Ended September 30,
	2007							2006
	Specialty		Drug					Specialty		Drug
	Generics		Delivery			Consolidated		Generics		Delivery			Consolidated
Revenues	$	82,031	$	7,887		$	89,918	$	76,309	$	6,108		$	82,417
Cost of net product sales		46,138		—			46,138		37,182		—			37,182
Gross profit		35,893		7,887			43,780		39,127		6,108			45,235
Operating expenses		22,298		14,946			37,244		29,873		12,783			42,656
Income (loss) from operations		13,595		(7,059	)		6,536		9,254		(6,675	)		2,579
Other income (expenses), net		73		369			442		37		551			588
Income (loss) before income taxes		13,668		(6,690	)		6,978		9,291		(6,124	)		3,167
Provision for income taxes		4,509		—			4,509		6,607		—			6,607
Net income (loss)	$	9,159	$	(6,690	)	$	2,469	$	2,684	$	(6,124	)	$	(3,440	)
EBITDA	$	18,065	$	(6,484	)	$	11,581	$	12,834	$	(6,181	)	$	6,653

     Significant components of Bentley’s revenues for the nine months ended September 30, 2007 are summarized below:

(in thousands)	Revenues Within Spain
										Revenues
	Branded									Outside of						% of Total
Product Line	Generics			Generics			Other			Spain			Total			Revenues
Omeprazole	$	1,367		$	11,916		$	—		$	—		$	13,283			15	%
Enalapril		3,778			1,112			—			—			4,890			5	%
Simvastatin		723			3,631			—			—			4,354			5	%
Paroxetine		1,112			2,485			—			—			3,597			4	%
Lansoprazole		2,571			895			—			—			3,466			4	%
All other products		8,964			9,824			472			2,540			21,800			24	%
Sales to licensees and others		—			—			10,062			20,146			30,208			34	%
Licensing and collaborations		—			—			433			7,887			8,320			9	%
Total Revenues	$	18,515		$	29,863		$	10,967		$	30,573		$	89,918			100	%
% of YTD 2007 Revenues		21	%		33	%		12	%		34	%		100	%

     Significant components of Bentley’s revenues for the nine months ended September 30, 2006 are summarized below:

(in thousands)	Revenues Within Spain
										Revenues
	Branded									Outside of						% of Total
Product Line	Generics			Generics			Other			Spain			Total			Revenues
Omeprazole	$	2,012		$	12,589		$	—		$	—		$	14,601			18	%
Enalapril		3,538			1,477			—			—			5,015			6	%
Simvastatin		1,383			4,334			—			—			5,717			7	%
Paroxetine		1,094			2,389			—			—			3,483			4	%
Lansoprazole		1,958			671			—			—			2,629			3	%
All other products		7,693			8,172			782			1,100			17,747			22	%
Sales to licensees and others		—			—			9,553			17,155			26,708			32	%
Licensing and collaborations		—			—			409			6,108			6,517			8	%
Total Revenues	$	17,678		$	29,632		$	10,744		$	24,363		$	82,417			100	%
% of YTD 2006 Revenues		21	%		36	%		13	%		30	%		100	%

     Bentley uses both GAAP and certain non-GAAP measures to assess performance. The Company’s management believes the non-GAAP measure of EBITDA may also provide useful supplemental information to investors in order that

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they may evaluate Bentley’s financial performance using the same measures as management. The Company’s management believes that with this supplemental information investors are afforded greater transparency in assessing the Company’s financial performance. This non-GAAP financial measure should not be considered as a substitute for, nor superior to, measures of financial performance prepared in accordance with GAAP.

     Set forth below is a reconciliation of “EBITDA” to net income, the most directly comparable financial measure calculated and presented in accordance with GAAP.

(in thousands)	For the Three Months Ended September 30,
	2007								2006
	Specialty		Drug						Specialty			Drug
	Generics		Delivery			Consolidated			Generics			Delivery			Consolidated
Net income (loss)	$	1,947	$	(2,548	)	$	(601	)	$	(5,465	)	$	(1,764	)	$	(7,229	)
Provision for income taxes		911		—			911			1,730			—			1,730
Interest expense (income)		58		(150	)		(92	)		(40	)		(168	)		(208	)
Depreciation & amortization		1,540		160			1,700			1,239			169			1,408
EBITDA	$	4,456	$	(2,538	)	$	1,918		$	(2,536	)	$	(1,763	)	$	(4,299	)

(in thousands)	For the Nine Months Ended September 30,
	2007								2006
	Specialty		Drug						Specialty			Drug
	Generics		Delivery			Consolidated			Generics			Delivery			Consolidated
Net income (loss)	$	9,159	$	(6,690	)	$	2,469		$	2,684		$	(6,124	)	$	(3,440	)
Provision for income taxes		4,509		—			4,509			6,607			—			6,607
Interest expense (income)		16		(372	)		(356	)		(1	)		(551	)		(552	)
Depreciation & amortization		4,381		578			4,959			3,544			494			4,038
EBITDA	$	18,065	$	(6,484	)	$	11,581		$	12,834		$	(6,181	)	$	6,653

     EBITDA is calculated as earnings before interest, income taxes, depreciation and amortization. The Company uses EBITDA as a supplemental financial measure of its operational performance. Management believes EBITDA to be an important measure as it excludes the effects of items which primarily reflect the impact of long-term investment decisions, rather than the performance of the Company’s day-to-day operations. The Company believes that this measurement is useful to measure a company’s ability to service debt and to meet other payment obligations or as a valuation measurement. As compared to net income according to GAAP, this measure is more limited in scope because it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in the Company’s business. Management evaluates those items through other financial measures such as capital expenditures and cash flow provided by operating activities.

     Management will host a conference call at 10:00 a.m. (ET) on November 6, 2007 to discuss the third quarter 2007 results and review the Company’s plan to separate its drug delivery and generics businesses. To participate on the live call, please dial (888) 332-7254 from the U.S. and Canada or, for international callers, please dial (973) 582-2856. The access code for this call is 9313321. The conference call will also be webcast live and may be accessed via Bentley’s website,www.bentleypharm.com. A telephone replay will be available for 30 days by dialing (877) 519-4471 from the U.S. and

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Canada or (973) 341-3080 for international callers. Please reference reservation number 9313321. A replay of the conference will also be available on Bentley’s website for 30 days.

     Bentley Pharmaceuticals, Inc. is a specialty pharmaceutical company focused on advanced drug delivery technologies and generic pharmaceutical products. Bentley’s proprietary drug delivery technologies enhance the absorption of pharmaceutical compounds across various membranes. Bentley manufactures and markets a growing portfolio of generic and branded generic pharmaceuticals in Europe for the treatment of cardiovascular, gastrointestinal, infectious and central nervous system diseases through its subsidiaries — Laboratorios Belmac, Laboratorios Davur, Laboratorios Rimafar and Bentley Pharmaceuticals Ireland. Bentley also manufactures and markets active pharmaceutical ingredients through its subsidiary, Bentley API.

     Additional information regarding Bentley Pharmaceuticals may be obtained through Bentley’s website at www.bentleypharm.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward looking statements, including without limitation statements regarding the Company’s plans for separating its drug delivery and specialty generics businesses and exploring strategic alternatives for its specialty generics business, future prospects for the two businesses as independent companies, anticipated completion of clinical trials, the application of the Company’s CPE-215 technology to complex molecules in addition to testosterone, and growth prospects for the Company’s drug delivery and specialty generics businesses. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from future results expressed or implied by such statements. Factors that may cause such differences include, but are not limited to, risks associated with the following: the timing and results of clinical trials, the timing and nature of regulatory approvals, changes in third-party reimbursement and government mandates that impact pharmaceutical pricing, development and commercialization of Bentley’s proprietary products and formulations, competition from other manufacturers of generic and proprietary pharmaceuticals, intellectual property litigation, the efficacy and safety of Bentley’s products, the unpredictability of patent protection, international operations, and other uncertainties detailed under “Risk Factors” in Bentley’s most recent Annual Report on Form 10-K and its other subsequent periodic reports filed with the Securities and Exchange Commission. Bentley cautions investors not to place undue reliance on the forward-looking statements contained in this release. These statements speak only as of the date of this document, and Bentley undertakes no obligation to update or revise the statements, except as may be required by law.

(tables to follow)

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Bentley Pharmaceuticals, Inc. and Subsidiaries
Consolidated Income Statements
(Unaudited)

(in thousands, except per share data)	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2007			2006			2007			2006
Revenues:
Net product sales	$	24,131		$	22,873		$	81,598		$	75,900
Licensing and collaboration revenues		3,217			2,283			8,320			6,517
Total revenues		27,348			25,156			89,918			82,417
Cost of net product sales		14,451			11,778			46,138			37,182
Gross profit		12,897			13,378			43,780			45,235
Operating expenses:
Selling and marketing		4,080			3,495			13,338			11,876
General and administrative		4,098			3,751			12,016			11,320
Research and development		3,017			2,447			9,194			7,850
Litigation settlement		—			8,932			—			10,269
Separation costs		846			—			1,153			—
Depreciation and amortization		489			460			1,543			1,341
Total operating expenses		12,530			19,085			37,244			42,656
Income (loss) from operations		367			(5,707	)		6,536			2,579
Other income (expenses):
Interest income		339			223			706			661
Interest expense		(247	)		(15	)		(348	)		(109	)
Other, net		(149	)		—			84			36
Income (loss) before income taxes		310			(5,499	)		6,978			3,167
Provision for income taxes		911			1,730			4,509			6,607
Net (loss) income	$	(601	)	$	(7,229	)	$	2,469		$	(3,440	)
Net (loss) income per common share:
Basic	$	(0.03	)	$	(0.33	)	$	0.11		$	(0.16	)
Diluted	$	(0.03	)	$	(0.33	)	$	0.11		$	(0.16	)
Weighted average common shares outstanding:
Basic		22,354			22,194			22,322			22,107
Diluted		22,354			22,194			22,829			22,107

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Bentley Pharmaceuticals, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)

(in thousands, except per share data)	September 30,			December 31,
	2007			2006
Assets
Current assets:
Cash and cash equivalents	$	38,452		$	12,424
Marketable securities		560			3,177
Receivables, net		31,469			32,963
Inventories, net		15,043			16,279
Deferred taxes		1,579			1,049
Prepaid expenses and other		2,437			1,798
Total current assets		89,540			67,690
Non-current assets:
Fixed assets, net		55,821			48,556
Drug licenses and related costs, net		17,147			16,026
Restricted cash		1,000			1,000
Deferred taxes		195			240
Other		945			844
Total non-current assets		75,108			66,666
	$	164,648		$	134,356
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	15,582		$	14,566
Accrued expenses		11,276			9,704
Short-term borrowings		—			247
Current portion of long-term debt		—			307
Deferred income		998			1,045
Other current liabilities		1,571			1,518
Total current liabilities		29,427			27,387
Non-current liabilities:
Long-term debt		15,559			—
Deferred income		4,757			3,899
Other		4,055			2,739
Total non-current liabilities		24,371			6,638
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $1.00 par value, authorized 2,000 shares, issued and outstanding, none		—			—
Common stock, $0.02 par value, authorized 100,000 shares, issued and outstanding, 22,323 and 22,262 shares		446			445
Additional paid-in capital		142,092			140,030
Accumulated deficit		(46,952	)		(49,016	)
Accumulated other comprehensive income		15,264			8,872
Total stockholders’ equity		110,850			100,331
	$	164,648		$	134,356

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