Par Pharmaceutical Companies (PRX) 8-K PAR PHARMACEUTICAL FILES FORM 10-Q/As FOR FIRST AND SECOND QUARTERS OF 2006

Exhibit 99.1

Investor Contact:
Stephen J. Mock

Media Contact:
Peter Wolf
Par Pharmaceutical Companies, Inc.
(201) 802-4000

PAR PHARMACEUTICAL FILES FORM 10-Q/As FOR FIRST AND SECOND QUARTERS OF 2006

Woodcliff Lake, N.J., July 10, 2007 —Par Pharmaceutical Companies, Inc. (NYSE:PRX) today filed with the U.S. Securities and Exchange Commission its Form 10-Q/A that restates previously issued consolidated financial statements for the first quarters of 2006 and 2005. Par previously disclosed that, due to inadvertent accounting errors, it would restate its consolidated financial statements for certain prior periods. Today, Par also filed its Form 10-Q/A for the second quarter of 2006. This filing supplements the company’s original Form 10-Q filing which did not include Part I, Item 1 (Condensed Consolidated Financial Statements) and Item 2 (Management’s Discussion and Analysis of Financial Condition and Results of Operations). Par intends to file its Form 10-Q/A for the third quarter of 2006, its Form 10-K for 2006 and its Form 10-Q for the first quarter of 2007 at the earliest practicable date.

The table below sets forth the impact of the restatement adjustments on the company’s reported net income for the three months ended April 1, 2006.

	Net Income
	(in millions)
	2006
Previously Reported Net Income	$	8.4
Restatement Adjustments:
Pre-tax Restatement Adjustments		(6.1	)
Tax effect of Restatement Adjustments		2.2
After tax Restatement Adjustments		(3.9	)
Net Income, as Restated	$	4.5

The restatement adjustments relate primarily to write-offs of inventory and increases in revenue reserves.

The restatement has not impacted the company’s ongoing sales and operations. Par currently has cash, cash equivalents and available for sale securities on hand of approximately $325 million, including approximately $60 million of non-recurring net collections principally

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relating to business development activities, tax refunds, the sale of certain investments and settlements with various partners and customers. There has been no increase in the company’s borrowings in 2006 or 2007. Par’s cash balances are subject to fluctuation based upon the timing of payments due to the company’s distribution agreement partners.

Second-Quarter and Six-Month Results

For the second quarter ended July 1, 2006, Par reported total revenues of $195.2 million and a net loss of $7.2 million, or $0.21 loss per diluted share. This is compared with reported revenues of $131.6 million, net income of $7.2 million and diluted earnings per share of $0.21 for the same period in 2005. For the six months ended July 1, 2006, Par reported total revenues of $367.6 million and a net loss of $2.7 million, or $0.08 loss per diluted share. This is compared with reported revenues of $234.6 million, net income of $8.2 million and diluted earnings per share of $0.24 for the first six months of 2005. Second-quarter reported, or GAAP results, include a write-off of approximately $10.0 million of accounts receivable relating to invalid customer deductions, the collection of which the company has determined it would no longer pursue, and more than $5.0 million of expense relating to the write-down of an equity investment and an arbitration settlement, both of which are discussed in more detail below. Adjusting for these items, net income for the second quarter 2006 was $2.1 million, or $0.06 per diluted share, and net income for the first six months of 2006 was $6.6 million, or $0.19 per diluted share.

Effective January 1, 2006, Par began recording stock-based compensation in accordance with SFAS 123R. As a result, Par recognized $3.4 million of stock option expense in the second quarter of 2006 and $7.4 million of stock option expense for the first six months of 2006.

Second-Quarter Review

For the second quarter of 2006, total revenues increased 48 percent compared with the same period a year ago, due primarily to the introduction of new products. Among the products introduced since the second quarter of 2005, fluticasone nasal spray achieved sales of $77.2 million; cabergoline contributed sales of $11.9 million; sales of Megace^® ES reached $8.5 million; and the various amoxicillin products totaled $8.3 million in the second quarter of 2006. Partially offsetting these increases were reduced sales of tramadol HCl and acetaminophen tablets, which declined by $30.7 million from the second quarter of 2005, and paroxetine, which decreased by $10.6 million from the second quarter of 2005, due to competitive pressures.

Par’s second quarter gross margin was 28 percent of sales, compared to 48 percent in 2005. The decrease in the company’s gross margin reflects, in part, the introduction of fluticasone nasal spray, the amoxicillin products and cefprozil. After profit sharing arrangements with the company’s partners, these products have significantly lower gross margin percentages than many of the products sold by the company in the second quarter of 2005. Reduced sales of higher margin tramadol HCl and acetaminophen tablets also contributed to the lower quarterly gross margin. Other factors reducing the company’s gross margin included increased inventory write-offs of $3.2 million and an increased amortization expense of $2 million relating to new product acquisitions.

Second-quarter selling, general and administrative (SG&A) expense increased 72 percent to $42.9 million. This increase was primarily driven by the previously discussed $10 million

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write-off of accounts receivable, marketing and selling support behind the company’s first branded product, Megace^® ES, which was launched in the third quarter of 2005, and the implementation of SFAS 123R. Research and development (R&D) expense decreased 3 percent to $17.6 million in the second quarter of 2006.

In August 2006, Par and its distribution partner, Genpharm Inc., entered into a settlement agreement of arbitration proceedings to resolve ongoing disputes between the two parties. Par recorded $1.5 million of expenses in the second quarter of 2006 as a result of this settlement, $1.25 million of which was recorded in other expense, net. The remainder was included in R&D expense.

In the second quarter of 2006, Par wrote down its equity investment in Abrika Pharmaceuticals LLP resulting in an expense of $3.8 million because the terms of the merger agreement between Abrika and the Actavis Group, dated November 20, 2006, indicated that Par’s investment was impaired. In June 2007, Par received $4.6 million for its equity stake in Abrika.

For a copy of Par’s Form 10-Q/As for the quarterly periods ended April 1, 2006 and July 1, 2006, visit Investors/SEC Filings on the Par Web site at www.parpharm.com.

Non-GAAP Measures

We prepare our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). In an effort to provide investors with additional information regarding the company’s results and to provide a meaningful year-over-year comparison of the company’s financial performance, we sometimes use non-GAAP financial measures as defined by the Securities and Exchange Commission. The differences between the U.S. GAAP and non-GAAP financial measures are reconciled in the attached. In presenting comparable results, the company discloses non-GAAP financial measures when it believes such measures will be useful to investors in evaluating the company’s underlying business performance. Management uses the non-GAAP financial measures to evaluate the company’s financial performance against internal budgets and targets. In addition, management internally reviews the results of the company excluding the impact of certain items as it believes that these non-GAAP financial measures are useful for evaluating the company’s core operating results and facilitating comparison across reporting periods. Importantly, the company believes non-GAAP financial measures should be considered in addition to, and not in lieu of U.S. GAAP financial measures. The company’s non-GAAP financial measures may be different from non-GAAP financial measures used by other companies.

About Par

Par Pharmaceutical Companies, Inc. develops, manufactures and markets generic drugs and innovative branded pharmaceuticals for specialty markets. For press release and other company information, visit www.parpharm.com.

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Safe Harbor Statement

Certain statements in this press release constitute “forward-looking statements” within the meaning of 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 essentially forward-looking and as such, are subject to risks and uncertainties, including the extent and impact of litigation arising out of the accounting issue described in this and prior public announcements, including the lawsuit brought against the company by the trustee for the company’s Senior Subordinated Convertible Notes seeking an accelerated payment of the $200 million of principal of and accrued interest on the notes or, in the alternative, damages, the difficulty of predicting FDA filings and approvals, acceptance and demand for new pharmaceutical products, the impact of competitive products and pricing, new product development and launch, reliance on key strategic alliances, uncertainty of patent litigation filed against the company, availability of raw materials, the regulatory environment, fluctuations in operating results and other risks and uncertainties detailed from time to time in the company’s filings with the Securities and Exchange Commission (SEC), such as the company’s reports on Form 10-K, Form 10-Q, and Form 8-K, and amendments thereto. The company can make no assurance as to the potential effects of the restatement, including the effects of any investigations, informal or otherwise, conducted by the SEC, or other entities, or lawsuits filed against the company in connection therewith. Any forward-looking statements included in this press release are made as of the date here of only, based on information available to the company as of the date hereof, and, subject to any applicable law to the contrary, the company assumes no obligation to update any forward-looking statements.

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PAR PHARMACEUTICAL COMPANIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)

	April 1,			December 31,
	2006			2005
	(Restated)
ASSETS
Current assets:
Cash and cash equivalents	$	45,702		$	93,477
Available for sale debt and marketable equity securities		103,092			103,066
Accounts receivable, net		151,362			62,362
Inventories		107,562			96,393
Prepaid expenses and other current assets		14,393			18,759
Deferred income tax assets		75,678			69,256
Income taxes receivable		18,859			18,859
Assets held for sale		—			1,944
Total current assets		516,648			464,116
Property, plant and equipment, at cost less accumulated depreciation and amortization		86,983			87,570
Available for sale debt and marketable equity securities		4,143			3,741
Investment in joint venture		4,161			4,153
Other investments		23,651			21,741
Intangible assets, net		45,509			36,235
Goodwill		58,729			58,729
Deferred charges and other assets		17,306			8,828
Non-current deferred income tax assets, net		50,274			50,917
Total assets	$	807,404		$	736,030
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term and current portion of long-term debt	$	1,905		$	3,011
Accounts payable		50,736			56,412
Payables due to distribution agreement partners		99,751			46,937
Accrued salaries and employee benefits		7,729			12,780
Accrued expenses and other current liabilities		28,372			25,739
Income taxes payable		19,106			9,683
Liabilities held for sale		—			1,944
Total current liabilities		207,599			156,506
Long-term debt, less current portion		201,953			202,001
Other long-term liabilities		345			335
Commitments and contingencies
Stockholders’ equity:
Preferred stock, par value $0.0001 per share; authorized 6,000,000 shares; no shares issued and outstanding		—			—
Common stock, par value $0.01 per share; authorized: 90,000,000 shares; issued: 35,885,074 and 35,114,026 shares		359			351
Additional paid-in capital		232,371			217,403
Retained earnings		198,028			193,515
Accumulated other comprehensive loss		(506	)		(1,903	)
Treasury stock, at cost, 866,042 and 848,588 shares		(32,745	)		(32,178	)
Total stockholders’ equity		397,507			377,188
Total liabilities and stockholders’ equity	$	807,404		$	736,030

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PAR PHARMACEUTICAL COMPANIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

	Three Months Ended
	April 1,			April 2,
	2006			2005
	(Restated)			(Restated)
Revenues:
Net product sales	$	169,037		$	93,330
Other product related revenues		3,281			9,644
Total revenues		172,318			102,974
Cost of goods sold		123,150			65,679
Gross margin		49,168			37,295
Operating expenses:
Research and development		13,852			15,384
Selling, general and administrative		28,342			20,377
Total operating expenses		42,194			35,761
Operating income		6,974			1,534
Other expense, net		(39	)		(26	)
Equity loss from joint venture		(253	)		(36	)
Net investment gain		—			1,353
Interest income		1,983			1,331
Interest expense		(1,694	)		(1,715	)
Income from continuing operations before provision for income taxes		6,971			2,441
Provision for income taxes		2,457			785
Income from continuing operations		4,514			1,656
Discontinued operations:
Loss from discontinued operations		—			(1,156	)
Benefit for income taxes		—			(439	)
Loss from discontinued operations		—			(717	)
Net income	$	4,514		$	939
Basic income (loss) per share of common stock:
Income from continuing operations	$	0.13		$	0.05
Loss from discontinued operations		—			(0.02	)
Net income	$	0.13		$	0.03
Diluted income (loss) per share of common stock:
Income from continuing operations	$	0.13		$	0.05
Loss from discontinued operations		—			(0.02	)
Net income	$	0.13		$	0.03
Weighted average number of common shares outstanding:
Basic		34,259			34,137
Diluted		34,766			34,646

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PAR PHARMACEUTICAL COMPANIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)

	July 1,			December 31,
	2006			2005
ASSETS
Current assets:
Cash and cash equivalents	$	65,024		$	93,477
Available for sale debt and marketable equity securities		98,121			103,066
Accounts receivable, net		125,924			62,362
Inventories		109,305			96,393
Prepaid expenses and other current assets		12,016			18,759
Deferred income tax assets		75,678			69,256
Income taxes receivable		18,859			18,859
Assets held for sale		—			1,944
Total current assets		504,927			464,116
Property, plant and equipment, at cost less accumulated depreciation and amortization		89,419			87,570
Available for sale debt and marketable equity securities		4,151			3,741
Investment in joint venture		4,224			4,153
Other investments		19,558			21,741
Intangible assets, net		42,443			36,235
Goodwill		58,729			58,729
Deferred charges and other assets		16,324			8,828
Non-current deferred income taxes, net		50,507			50,917
Total assets	$	790,282		$	736,030
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term and current portion of long-term debt	$	833		$	3,011
Accounts payable		45,740			56,412
Payables due to distribution agreement partners		103,935			46,937
Accrued salaries and employee benefits		10,378			12,780
Accrued expenses and other current liabilities		17,058			25,739
Income taxes payable		15,057			9,683
Liabilities held for sale		—			1,944
Total current liabilities		193,001			156,506
Long-term debt, less current portion		201,908			202,001
Other long-term liabilities		345			335
Stockholders’ equity:
Preferred Stock, par value $.0001 per share, authorized 6,000,000 shares; none issued and outstanding		—			—
Common Stock, par value $.01 per share, authorized 90,000,000 shares, issued 35,903,728 and 35,114,026 shares		359			351
Additional paid-in-capital		237,412			217,403
Retained earnings		190,824			193,515
Accumulated other comprehensive loss		(822	)		(1,903	)
Treasury stock, at cost 869,845 and 848,588 shares		(32,745	)		(32,178	)
Total stockholders’ equity		395,028			377,188
Total liabilities and stockholders’ equity	$	790,282		$	736,030

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PAR PHARMACEUTICAL COMPANIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

	Three months ended						Six months ended
	July 1,			July 2,			July 1,			July 2,
	2006			2005			2006			2005
				(Restated)						(Restated)
Revenues:
Net product sales	$	190,583		$	127,473		$	359,620		$	220,802
Other product related revenues		4,655			4,127			7,937			13,772
Total revenues		195,238			131,600			367,557			234,574
Cost of goods sold		140,471			67,886			263,621			133,565
Gross margin		54,767			63,714			103,936			101,009
Operating expenses:
Research and development		17,557			18,032			31,409			33,416
Selling, general and administrative		42,941			24,946			71,283			45,323
Total operating expenses		60,498			42,978			102,692			78,739
Operating (loss) income		(5,731	)		20,736			1,244			22,270
Other expense, net		(1,108	)		(181	)		(1,146	)		(207	)
Equity loss from joint venture		(225	)		(106	)		(479	)		(142	)
Net investment loss		(3,773	)		(6,477	)		(3,773	)		(5,124	)
Interest income		1,973			1,110			3,956			2,441
Interest expense		(1,693	)		(1,719	)		(3,388	)		(3,434	)
(Loss) income from continuing operations before (benefit) provision for income taxes		(10,557	)		13,363			(3,586	)		15,804
(Benefit) provision for income taxes		(3,352	)		5,311			(896	)		6,096
(Loss) income from continuing operations		(7,205	)		8,052			(2,690	)		9,708
Discontinued operations:
Loss from discontinued operations		—			(1,338	)		—			(2,494	)
Benefit for income taxes		—			(508	)		—			(947	)
Loss from discontinued operations		—			(830	)		—			(1,547	)
Net (loss) income	$	(7,205	)	$	7,222		$	(2,690	)	$	8,161
Basic earnings (loss) per share of common stock:
(Loss) income from continuing operations	$	(0.21	)	$	0.24		$	(0.08	)	$	0.28
Loss from discontinued operations		—			(0.03	)		—			(0.04	)
Net (loss) income	$	(0.21	)	$	0.21		$	(0.08	)	$	0.24
Diluted earnings (loss) per share of common stock:
(Loss) income from continuing operations	$	(0.21	)	$	0.23		$	(0.08	)	$	0.28
Loss from discontinued operations		—			(0.02	)		—			(0.04	)
Net (loss) income	$	(0.21	)	$	0.21		$	(0.08	)	$	0.24
Weighted average number of common shares outstanding:
Basic		34,454			34,186			34,368			34,081
��
Diluted		34,454			34,467			34,368			34,487

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Reconciliation Between Reported(GAAP) and Adjusted Net Income (Loss)
(In thousands, except share data)
(Unaudited)

	Three Months Ended
	July 1,			July 2,
	2006			2005
Reported Net Income (Loss)	($	7,205	)	$	7,222
Write off of Accounts Receivable Relating to Invalid
Customer Deductions		9,965			—
Net Investment Loss		3,773			6,477
Arbitration Settlement		1,502			—
Estimated tax on adjustments		(5,944	)		(2,526	)
Adjusted Net Income (non-GAAP measure)	$	2,091		$	11,173
Diluted Earnings (Loss) Per Share:
Reported	($	0.21	)	$	0.21
Adjusted (non-GAAP measure)	$	0.06		$	0.32

	Six Months Ended
	July 1,			July 2,
	2006			2005
Reported Net Income (Loss)	($	2,690	)	$	8,161
Write-off of Receivable Relating to Invalid
Customer Deductions		9,965			—
Net Investment Loss		3,773			5,124
Aribitration Settlement		1,502			—
Estimated tax on adjustments		(5,944	)		(1,998	)
Adjusted Net Income (non-GAAP measure)	$	6,606		$	11,287
Diluted Earnings (Loss) Per Share:
Reported	($	0.08	)	$	0.24
Adjusted (non-GAAP measure)	$	0.19		$	0.33

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