Exhibit 99.1
Chiron Reports 2003 Third-Quarter Pro-Forma Income of 60 Cents Per Share
47 Percent Increase in Revenues Over 2002 Driven by New U.S. Flu Sales
EMERYVILLE, Calif., Oct. 29 /PRNewswire-FirstCall/ -- Chiron Corporation
(Nasdaq: CHIR) today reported pro-forma income from continuing operations of
$117 million, or $0.60 per share, for the third quarter of 2003, compared to
$88 million, or $0.46 per share, for the third quarter of 2002. Foreign
exchange rates, on a pro-forma basis, resulted in a $0.02 increase in earnings
per share. On a GAAP basis, Chiron's loss from continuing operations was $20
million, or $0.11 per share, for the third quarter of 2003, compared to income
from continuing operations of $83 million, or $0.43 per share, for the third
quarter of 2002. The loss was due to the write-off of in-process research and
development in the PowderJect acquisition.
Chiron management uses pro-forma financial statements to gain an
understanding of the company's operating performance on a comparative basis.
Pro-forma results exclude special items relating to certain acquisitions and
revenues, which may not be relevant to gaining an understanding of the
company's trends or potential future performance. Please refer to the
attached tables at the end of this document for more detail on these items and
a reconciliation to GAAP financial statements. All references to per-share
amounts are per diluted share.
"Chiron continues to deliver the solid financial results that are a
hallmark of the company," said Howard Pien, Chiron's president and CEO.
"Looking forward, we expect 2004 to be a year of strong growth in vaccines and
blood testing, enabling investment that will further enhance shareholder value
and increase our impact on human health worldwide.
"We reaffirm our mid-year 2003 pro-forma EPS guidance to be at the upper
end of the $1.40-$1.50 range. Our 2004 guidance is consistent with our 20
percent pro-forma EPS growth goal. It is a testament to the strength of the
Chiron business model that we can deliver superior earnings and fund worthy
investment opportunities across our three business units."
2004 Guidance
Chiron expects 2004 pro-forma earnings per share from continuing
operations to be between $1.80 and $1.90. In 2004, Chiron expects product
sales to be between $1.5 billion and $1.6 billion, with revenues between
$1.9 billion and $2.0 billion. Gross margins are expected to be equivalent or
down slightly from 2003, while operating expenses are expected to be up
approximately 10 percent over the prior year. The tax rate is expected to be
at or slightly higher than the 2003 tax rate.
Overall Revenues
Total revenues in the third quarter of 2003 were $540 million, an increase
of approximately 47 percent from $368 million in the third quarter of 2002.
Foreign exchange rates resulted in a 6 percent increase in revenues. Net
product sales increased 59 percent in the third quarter of 2003, to $433
million from $272 million in the third quarter of 2002. Total third-quarter
2003 revenues for PowderJect Pharmaceuticals, which Chiron acquired during the
third quarter of 2003, were $116 million. Excluding PowderJect revenues and
foreign exchange effect, all other revenues increased 10 percent in the third
quarter of 2003.
BioPharmaceuticals
The BioPharmaceuticals division reported net product sales and
Betaferon(R) interferon beta-1b royalties of $126 million in the third quarter
of 2003, compared to $115 million in the third quarter of 2002. The gross
profit margin on biopharmaceutical products sold during the third quarter of
2003 was 74 percent, compared to 77 percent in the third quarter of 2002.
-- Proleukin(R) (aldesleukin) interleukin-2 sales were $30 million in the
third quarter of 2003, compared to $32 million in the third quarter of
2002, with the decrease primarily due to wholesaler ordering patterns,
offset by price increases.
-- TOBI(R) tobramycin solution for inhalation sales in the third quarter
of 2003 were $43 million, compared to $39 million in the third quarter
of 2002, with the increase primarily due to greater product penetration
in Europe and price increases in both the United States and Europe,
which were partially offset by wholesale ordering patterns.
-- Sales of Betaseron(R) interferon beta-1b, marketed in Europe as
Betaferon, to Berlex, Inc. (and its parent company Schering AG) for
marketing and resale were $29 million in the third quarter of 2003,
compared to $28 million in the third quarter of 2002. The increase was
due to price increases and increased patient demand, partially offset
by wholesaler ordering patterns. Royalties from Schering AG's European
sales of Betaferon were $16 million in the third quarter of 2003,
compared to $10 million in the third quarter of 2002.
Vaccines
Vaccines net product sales in the third quarter of 2003 were $263 million,
compared to $125 million in the third quarter of 2002. PowderJect product
revenues were $114 million in the third quarter of 2003. The gross profit
margin on vaccines products in the third quarter of 2003 was 58 percent,
compared to 60 percent in the third quarter of 2002.
-- Sales of flu vaccines were $183 million in the third quarter of 2003,
compared to $67 million in the third quarter of 2002. Sales of
Fluvirin(R) vaccine, the flu vaccine that Chiron acquired with
PowderJect, were $103 million in the third quarter of 2003, the first
quarter in which Chiron recorded Fluvirin revenues.
-- Sales of Menjugate(TM) conjugate vaccine against meningococcal C
disease were $11 million in the third quarter of 2003, compared to $6
million in the third quarter of 2002, with the increase primarily due
to sales made to Australia, Spain and France.
-- Sales from Chiron's travel vaccines were $11 million in the third
quarter of 2003, compared to $16 million in the third quarter of 2002.
Travel vaccines include Encepur(TM) vaccine for tick-borne
encephalitis, RabAvert(R) vaccine for rabies, and, newly acquired with
PowderJect, Arilvax(TM) vaccine for yellow fever and Dukoral(TM)
vaccine for cholera. The decrease is primarily due to the seasonality
of tick-borne encephalitis, as the first half of the year is typically
the prime season for Encepur.
-- Sales of Chiron's pediatric and other vaccines products were $58
million in the third quarter of 2003, compared to $36 million in the
third quarter of 2002, with the increase primarily due to tender sales
of pediatric vaccines and increased sales following the PowderJect
acquisition.
Blood Testing
Total Blood Testing revenues in the third quarter of 2003 were $109
million, compared to $89 million in the third quarter of 2002. Blood Testing
revenues primarily include revenues from the sales of products related to
Chiron's Procleix(R) HIV-1/HCV Assay; revenues related to Chiron's joint
business arrangement for immunodiagnostics with Ortho-Clinical Diagnostics,
Inc. (Ortho), a Johnson & Johnson company; and royalties paid by F.
Hoffmann-La Roche (Roche) related to nucleic acid testing (NAT) blood
screening.
-- Sales related to the Procleix(R) System were $54 million in the third
quarter of 2003, compared to sales of $36 million in the third quarter
of 2002. The increase is primarily due to revenues from the
investigation-only use of the Procleix(R) West Nile Virus Assay in the
United States, market share gains in the United States, and continued
penetration into several markets abroad.
-- Revenues from Chiron's joint business arrangement with Ortho were $26
million in the third quarter of 2003, compared to $32 million in
the third quarter of 2002, with the decrease primarily due to lower
profits from U.S. operations.
-- Royalties paid by Roche related to NAT blood screening were $19 million
in the third quarter of 2003, compared to $13 million in the third
quarter of 2002.
Pipeline and Products Update
Since mid-year, Chiron has seen advances in franchises across all three of
its business units.
BioPharmaceuticals: Oncology
Chiron's oncology franchise has three dimensions: immune-based therapies,
monoclonal antibodies and novel cancer agents.
-- Over the past year, Chiron has been conducting four clinical trials to
evaluate the potential of Proleukin(R) (aldesleukin) interleukin-2 and
its second-generation liquid formulation to increase the clinical
benefit of monoclonal antibodies in cancer treatments.
-- The Phase II study of Proleukin and rituximab in patients with
low-grade non-Hodgkin's lymphoma who have failed rituximab therapy
continues to enroll patients and should yield sufficient data to
allow a decision on next steps by the end of the year.
-- The Phase II trial of Proleukin and rituximab in patients with
high-grade lymphoma who have failed prior chemotherapy and/or
rituximab therapy will not continue due to limited efficacy.
-- The Phase I study of liquid IL-2 with rituximab in patients with
advanced non-Hodgkin's lymphoma continues to enroll patients and
should yield sufficient data to allow a decision on next steps by
the end of the year.
-- The Phase I study of liquid IL-2 and trastuzumab in patients with
metastatic breast cancer met the primary endpoint of determining
maximum tolerated dose and will no longer enroll patients.
-- Chiron and its collaborator Sirna are seeking a licensee for the
further development of ANGIOZYME(TM), a ribozyme that inhibits vascular
endothelial growth factor (VEGF) signaling via inhibition of VEGFR-1
expression. A pilot Phase II program studied ANGIOZYME in breast
cancer and colorectal cancer.
BioPharmaceuticals: Infectious Disease
Chiron continues to build its portfolio of products to treat and prevent
infectious disease. This franchise leverages a significant global commercial
infrastructure.
-- As announced separately today, Chiron plans to initiate a Phase III
trial for tifacogin in patients with severe community-acquired
pneumonia. This indication would fulfill a substantial unmet medical
need.
-- Chiron inlicensed the antibiotic daptomycin for injection from Cubist
Pharmaceuticals, Inc., gaining development and commercialization for
the product in multiple countries outside the United States. The FDA
recently approved Cubicin for the treatment of complicated skin and
skin structure infections caused by Gram-positive bacteria.
-- Chiron is further developing TOBI(R) tobramycin solution for
inhalation, used by cystic fibrosis patients with chronic pseudomonal
lung infection. The company has completed enrollment and dosing for
two cohorts of its Phase I trial for the dry-powder formulation and
hand-held device for TOBI, which it is developing in collaboration with
Nektar Therapeutics. Chiron anticipates results of this phase of the
multiyear program in the first half of next year.
BioPharmaceuticals: Betaseron(R) Interferon Beta-1b
Betaseron continues to distinguish itself in the multiple sclerosis (MS)
market through its strong clinical results. Convenience features and new
studies will help drive Betaseron growth.
-- The FDA approved a new pre-filled diluent syringe for Betaseron, making
it easier to use for people with MS. The drug's formulation remains
unchanged, continuing to provide patients with the proven efficacy of
Betaseron.
-- At the 19th Congress of the European Committee for Treatment and
Research in Multiple Sclerosis (ECTRIMS) in Milan, Chiron's partner
Schering AG announced the completion of the pilot phase of its BEYOND
study, with the first clinical outcomes showing that both the approved
Betaferon dose and a new, double-dose of Betaferon were safe and well
tolerated in relapsing-remitting MS patients, and no new or
unpredictable side effects were reported.
Vaccines
Chiron Vaccines development is focused on its meningococcal franchise and
flu cell culture technology.
-- Chiron's newly acquired U.S. flu business is on schedule to deliver
Fluvirin(R) flu vaccine to reach millions of patients in the United
States.
-- In the development of vaccines for the five primary serogroups that
cause meningococcal disease, Chiron anticipates upcoming advances:
-- The Phase III trial in the United States for Menjugate(TM) conjugate
vaccine for meningococcal C disease is on track to complete
enrollment this year, and Chiron expects to present data to the FDA
in 2004.
-- Chiron expects to see results from the Phase II trial for a
conjugated meningococcal ACYW vaccine in 2004.
-- In collaboration with St. Louis University, Chiron has initiated its
Phase I trial for a hepatitis C virus (HCV) vaccine.
Blood Testing: Procleix(R) System
Chiron expects to expand its leadership in blood testing through new
geographies and greater market penetration.
-- Since its June introduction to customers in the United States on a
cost-recovery basis under an IND, the Procleix(R) West Nile Virus Assay
has detected hundreds of confirmed samples of blood infected with West
Nile virus, preventing those donations from entering the blood supply.
Recent Business Milestones
Recent business activities underline the value of Chiron's products and
intellectual property and the strength of its leadership.
-- At the 17th Annual North American Cystic Fibrosis Conference (NACFC) in
Anaheim, California, Chiron announced funding for the establishment of
the TOBI Foundation, an independent non-profit foundation dedicated to
increasing access to TOBI(R) tobramycin solution for inhalation for
uninsured and underinsured people with CF.
-- Chiron and Children's Hospital and Regional Medical Center of Seattle
have settled a patent infringement suit against Roxane Laboratories, a
subsidiary of Boehringer-Ingelheim Corporation, regarding Roxane's
plans to market a generic equivalent of TOBI. Roxane agreed that it
would not seek approval to market the product until the patent
expiration in 2014 and dropped its challenge to the patent.
-- The federal Centers for Medicare and Medicaid Services recently
implemented a reimbursement change that will increase access to
Proleukin(R) (aldesleukin) interleukin-2 therapy for certain patients
with metastatic renal cancer and metastatic melanoma.
-- Chiron announced that, as of the May 2004 annual meeting of
shareholders, president and CEO Howard Pien will become chairman of the
board, succeeding current chairman Sean Lance. Mr. Lance intends to
retire from active service with Chiron and its board of directors as of
the same meeting.
-- Chiron further strengthened its BioPharmaceuticals senior management
team. Following the appointments last quarter of senior vice
presidents of BioPharma research and BioPharma commercial operations,
Chiron recently filled the role of senior vice president and head of
BioPharma development.
-- Chiron granted a nonexclusive license to Gilead Sciences for the
research, development and commercialization of small molecule
therapeutics against certain hepatitis C virus (HCV) drug targets.
3Q03 Earnings Conference Call
Chiron will hold a conference call and webcast on Wednesday, October 29,
2003, at 4:45 p.m. Eastern Standard Time (EST) to review its third-quarter
2003 results of operations and business highlights. In addition, the company
may address forward-looking questions concerning business, financial matters
and trends affecting the company.
To access either the live webcast or the one-week archive, please log on
to http://www.chiron.com/webcast . Please connect to the website at least 15
minutes prior to the conference call to ensure adequate time to download any
necessary software. Alternatively, please call 1-800-374-0907 (U.S.) or
706-643-3367 (international). Replay is available approximately two hours
after the completion of the call through 11:59 p.m. EST, Friday, November 7,
2003. To access the replay, please call 1-800-642-1687 (U.S.) or 706-645-9291
(international). The conference ID number is 3325860.
About Chiron
Chiron Corporation, headquartered in Emeryville, California, is a global
pharmaceutical company that leverages a diverse business model to develop and
commercialize high-value products that make a difference in people's lives.
The company has a strategic focus on cancer and infectious disease. Chiron
applies its advanced understanding of the biology of cancer and infectious
disease to develop products from its platforms in proteins, small molecules
and vaccines. The company commercializes its products through three business
units: BioPharmaceuticals, Vaccines and Blood Testing. For more information
about Chiron, visit the company's website at www.chiron.com.
This news release contains forward-looking statements, including
statements regarding sales growth, product development initiatives, new
product indications, new product marketing, acquisitions, and in- and
out-licensing activities that involve risks and uncertainties and are subject
to change. A full discussion of the company's operations and financial
condition, including factors that may affect its business and future
prospects, is contained in documents the company has filed with the SEC,
including the form 10-Q for the quarter ended June 30, 2003, and the form 10-K
for the year ended December 31, 2002, 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 the outcome of clinical trials, regulatory
review and approvals, manufacturing capabilities, intellectual property
protections and defenses, stock-price and interest-rate volatility, and
marketing effectiveness. In particular, there can be no assurance that Chiron
will increase sales of existing products, successfully develop and receive
approval to market new products, or achieve market acceptance for such new
products. There can be no assurance that Chiron's out-licensing activity will
generate significant revenue, nor that its in-licensing activities will fully
protect it from claims of infringement by third parties. In addition, the
company may engage in business opportunities, the successful completion of
which are subject to certain risks, including shareholder and regulatory
approvals and the integration of operations.
Consistent with SEC Regulation FD, we do not undertake an obligation to
update the forward-looking information we are giving today.
NOTE: Arilvax, Dukoral, Encepur, Fluvirin, Menjugate, Procleix,
Proleukin, RabAvert and TOBI are trademarks of Chiron Corporation. Betaseron
and Betaferon are trademarks of Schering AG.
CHIRON CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months Ended
September 30,
2003
Pro Forma Pro Forma
Adjusted (1) Adjustments Actual
Revenues:
Product sales, net $432,674 $-- $432,674
Revenues from joint business
arrangement 26,058 -- 26,058
Collaborative agreement revenues 7,816 -- 7,816
Royalty and license fee revenues 66,237 -- 66,237
Other revenues 7,688 -- 7,688
Total revenues 540,473 -- 540,473
Operating expenses:
Cost of sales 174,380 -- 174,380
Research and development 97,519 -- 97,519
Selling, general and administrative 104,736 -- 104,736
Write-off of purchased in-process
research and development -- (122,700) 122,700
Amortization expense -- (19,821) 19,821
Restructuring and reorganization
charges 1,082 -- 1,082
Other operating expenses 4,779 -- 4,779
Total operating expenses 382,496 (142,521) 525,017
Income from operations 157,977 142,521 15,456
Interest expense (6,222) -- (6,222)
Interest and other income, net 5,239 -- 5,239
Minority interest (443) -- (443)
Income from continuing operations
before income taxes 156,551 142,521 14,030
Provision for income taxes 39,138 4,955 34,183
Income (loss) from continuing
operations 117,413 137,566 (20,153)
Gain (loss) from discontinued
operations 1,174 -- 1,174
Net income (loss) $118,587 $137,566 $(18,979)
Basic earnings (loss) per share:
Income (loss) from continuing
operations $0.63 $(0.11)
Net Income (loss) $0.64 $(0.10)
Diluted earnings (loss) per share:
Income (loss) from continuing
operations $0.60 $(0.11)
Net Income (loss) $0.61 $(0.10)
Shares used in calculating basic
earnings (loss) per share 186,685 186,685
Shares used in calculating diluted
earnings (loss) per share 200,463 186,685
Three Months Ended
September 30,
2002
Pro Forma Pro Forma
Adjusted (2) Adjustments Actual (3)
Revenues:
Product sales, net $272,190 $-- $272,190
Revenues from joint business
arrangement 32,356 -- 32,356
Collaborative agreement revenues 4,977 -- 4,977
Royalty and license fee revenues 48,047 -- 48,047
Other revenues 10,911 -- 10,911
Total revenues 368,481 -- 368,481
Operating expenses:
Cost of sales 97,432 -- 97,432
Research and development 81,635 -- 81,635
Selling, general and administrative 68,159 -- 68,159
Write-off of purchased in-process
research and development -- -- --
Amortization expense -- (7,504) 7,504
Restructuring and reorganization
charges -- -- --
Other operating expenses 5,694 -- 5,694
Total operating expenses 252,920 (7,504) 260,424
Income from operations 115,561 7,504 108,057
Interest expense (3,210) -- (3,210)
Interest and other income, net 8,696 -- 8,696
Minority interest (477) -- (477)
Income from continuing operations
before income taxes 120,570 7,504 113,066
Provision for income taxes 32,554 2,024 30,530
Income (loss) from continuing
operations 88,016 5,480 82,536
Gain (loss) from discontinued
operations (320) -- (320)
Net income (loss) $87,696 $5,480 $82,216
Basic earnings (loss) per share:
Income (loss) from continuing
operations $0.47 $0.44
Net Income (loss) $0.47 $0.44
Diluted earnings (loss) per share:
Income (loss) from continuing
operations $0.46 $0.43
Net Income (loss) $0.46 $0.43
Shares used in calculating basic
earnings per share 188,493 188,493
Shares used in calculating diluted
earnings per share 196,547 196,547
(1) Pro Forma Adjusted amounts exclude the amortization expense on
acquired intangible assets related to the acquisitions of
PathoGenesis, Chiron Behring, Pulmopharm and PowderJect
Pharmaceuticals and (b) the write-off of purchased in-process
research and development related to the PowderJect Pharmaceuticals
acquisition.
(2) Pro Forma Adjusted amounts exclude the amortization expense on
acquired intangible assets related to the acquisitions of
PathoGenesis, Chiron Behring and Pulmopharm.
(3) Actual results reflect increased cost of sales of $1.9 million (a
reduction of $1.4 million in net income) compared to Chiron's
earnings press release dated October 23, 2002, related to the results
for the three months ended September 30, 2002. There was a
corresponding decrease in inventories of $1.9 million at
September 30, 2002.
CHIRON CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Nine Months Ended
September 30,
2003
Pro Forma Pro Forma
Adjusted (4) Adjustments Actual
Revenues:
Product sales, net $897,222 $-- $897,222
Revenues from joint business
arrangement 79,985 -- 79,985
Collaborative agreement revenues 15,554 -- 15,554
Royalty and license fee revenues 186,537 -- 186,537
Other revenues 18,069 (14,413) 32,482
Total revenues 1,197,367 (14,413) 1,211,780
Operating expenses:
Cost of sales 357,389 -- 357,389
Research and development 269,564 -- 269,564
Selling, general and administrative 257,485 -- 257,485
Write-off of purchased in-process
research and development -- (122,700) 122,700
Amortization expense -- (35,135) 35,135
Restructuring and reorganization
charges 1,757 -- 1,757
Other operating expenses 7,573 -- 7,573
Total operating expenses 893,768 (157,835) 1,051,603
Income from operations 303,599 143,422 160,177
Interest expense (12,523) -- (12,523)
Interest and other income, net 31,170 -- 31,170
Minority interest (1,424) -- (1,424)
Income from continuing operations
before income taxes 320,822 143,422 177,400
Provision for income taxes 80,206 5,181 75,025
Income from continuing operations 240,616 138,241 102,375
Gain (loss) from discontinued
operations 3,138 -- 3,138
Net income $243,754 $138,241 $105,513
Basic earnings per share:
Income from continuing operations $1.29 $0.55
Net income $1.31 $0.57
Diluted earnings per share:
Income from continuing operations $1.25 $0.54
Net income $1.27 $0.55
Shares used in calculating basic
earnings per share 186,658 186,658
Shares used in calculating diluted
earnings per share 196,935 190,488
Nine Months Ended
September 30,
2002
Pro Forma Pro Forma
Adjusted (5) Adjustments Actual (6)
Revenues:
Product sales, net $657,067 $-- $657,067
Revenues from joint business
arrangement 78,548 -- 78,548
Collaborative agreement revenues 17,786 -- 17,786
Royalty and license fee revenues 138,419 -- 138,419
Other revenues 28,136 -- 28,136
Total revenues 919,956 -- 919,956
Operating expenses:
Cost of sales 239,823 -- 239,823
Research and development 243,938 -- 243,938
Selling, general and administrative 202,022 -- 202,022
Write-off of purchased in-process
research and development -- (54,781) 54,781
Amortization expense -- (22,328) 22,328
Restructuring and reorganization
charges -- -- --
Other operating expenses 11,176 -- 11,176
Total operating expenses 696,959 (77,109) 774,068
Income from operations 222,997 77,109 145,888
Interest expense (9,498) -- (9,498)
Interest and other income, net 41,456 -- 41,456
Minority interest (1,360) -- (1,360)
Income from continuing operations
before income taxes 253,595 77,109 176,486
Provision for income taxes 68,471 6,028 62,443
Income from continuing operations 185,124 71,081 114,043
Gain (loss) from discontinued
operations (320) -- (320)
Net income $184,804 $71,081 $113,723
Basic earnings per share:
Income from continuing operations $0.98 $0.60
Net income $0.98 $0.60
Diluted earnings per share:
Income from continuing operations $0.96 $0.59
Net income $0.96 $0.59
Shares used in calculating basic
earnings per share 189,175 189,175
Shares used in calculating diluted
earnings per share 192,565 192,565
(4) Pro Forma Adjusted amounts exclude: (a) amortization expense on
acquired intangible assets related to the acquisitions of
PathoGenesis, Chiron Behring, Pulmopharm and PowderJect
Pharmaceuticals, (b) the Biogen and Serono settlements in connection
with the McCormick patents owned by Schering's U.S. subsidiary,
Berlex Labratories, and (c) the write-off of purchased in-process
research and development related to the PowderJect Pharmaceuticals
acquisition.
(5) Pro Forma Adjusted amounts exclude: (a) write-off of purchased in-
process research and development related to the Matrix acquisition
and (b) amortization expense on acquired identifiable intangible
assets related to the acquisitions of PathoGenesis, Chiron Behring
and Pulmopharm.
(6) Actual results reflect increased cost of sales of $1.9 million (a
reduction of $1.4 million in net income) compared to Chiron's
earnings press release dated October 23, 2002, related to the results
for nine months ended September 30, 2002. There was a corresponding
decrease in inventories of $1.9 million at September 30, 2002.
Note: Due to rounding, quarterly earnings per share amounts may not sum
fully to yearly earnings per share amounts.
CHIRON CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
September 30, December 31,
Assets 2003 2002
Current assets:
Cash and short-term investments $697,698 $874,080
Accounts receivable, net 427,749 278,625
Current portion of notes receivable 1,469 718
Inventories, net 247,641 146,005
Other current assets 150,041 86,294
Total current assets 1,524,598 1,385,722
Noncurrent investments in marketable debt
securities 340,308 414,447
Property, plant, equipment and leasehold
improvements, net 642,318 373,558
Other noncurrent assets 1,585,221 786,617
Total assets $4,092,445 $2,960,344
Liabilities and stockholders'
equity
Current liabilities $477,231 $298,636
Long-term debt 923,725 416,954
Capital lease 157,756 --
Noncurrent unearned revenue 49,696 62,580
Other noncurrent liabilities 217,566 81,809
Minority interest 6,633 5,355
Put options -- 19,054
Stockholders' equity 2,259,838 2,075,956
Total liabilities and stockholders'
equity $4,092,445 $2,960,344
CHIRON CORPORATION
Supplemental Revenue Summary (Pro Forma)
USD $ (in thousands)
Current Prior Change
Quarter Quarter from Change
Q3 2003 Q2 2003 Prior QTR %
Product Sales
Biopharmaceuticals:
Proleukin $29,859 $29,381 $478 1.6%
TOBI 43,022 38,984 4,038 10.4%
Betaseron* 29,010 30,478 (1,468) (4.8)%
Other 8,166 8,424 (258) (3.1)%
Total Biopharmaceuticals 110,057 107,267 2,790 2.6%
Vaccines
Flu Vaccines 183,250 3,783 179,467 4744.0%
Meningococcus Vaccines 10,642 13,696 (3,054) (22.3)%
Travel Vaccines 11,229 23,052 (11,823) (51.3)%
Pediatric/Other Vaccines 57,598 45,026 12,572 27.9%
Total Vaccines 262,719 85,557 177,162 207.1%
Blood Testing
Ortho 6,235 7,123 (888) (12.5)%
NAT 53,663 45,981 7,682 16.7%
Total Blood Testing 59,898 53,104 6,794 12.8%
TOTAL PRODUCT SALES $432,674 $245,928 $186,746 75.9%
Revenues from Joint Business
Arrangement $26,058 $27,475 $(1,417) (5.2)%
Collaborative Agreement Revenues 7,816 3,624 4,192 115.7%
Royalty and License Fees 66,237 66,876 (639) (1.0)%
Other Revenues 7,688 6,369 1,319 20.7%
TOTAL REVENUES $540,473 $350,272 $190,201 54.3%
Gross Margins
Biopharmaceuticals 74% 71% 3%
Vaccines 58% 56% 2%
Blood Testing 40% 46% (6)%
TOTAL GROSS MARGINS 60% 60% 0%
*Excludes Betaferon Royalty $15,970 $17,174 $(1,204) (7.0)%
Year Ago Change
Quarter from Change
Q3 2002 Prior Year %
Product Sales
Biopharmaceuticals:
Proleukin $32,088 $(2,229) (6.9)%
TOBI 38,971 4,051 10.4%
Betaseron* 28,533 477 1.7%
Other 6,127 2,039 33.3%
Total Biopharmaceuticals 105,719 4,338 4.1%
Vaccines
Flu Vaccines 66,907 116,343 173.9%
Meningococcus Vaccines 6,193 4,449 71.8%
Travel Vaccines 16,621 (5,392) (32.4)%
Pediatric/Other Vaccines 35,963 21,635 60.2%
Total Vaccines 125,684 137,035 109.0%
Blood Testing
Ortho 4,826 1,409 29.2%
NAT 35,961 17,702 49.2%
Total Blood Testing 40,787 19,111 46.9%
TOTAL PRODUCT SALES $272,190 $160,484 59.0%
Revenues from Joint Business
Arrangement $32,356 $(6,298) (19.5)%
Collaborative Agreement Revenues 4,977 2,839 57.0%
Royalty and License Fees 48,047 18,190 37.9%
Other Revenues 10,911 (3,223) (29.5)%
TOTAL REVENUES $368,481 $171,992 46.7%
Gross Margins
Biopharmaceuticals 77% (3)%
Vaccines 60% (2)%
Blood Testing 40% 0%
TOTAL GROSS MARGINS 64% (4)%
*Excludes Betaferon Royalty $9,622 $6,348 66.0%
SOURCE Chiron Corporation
-0- 10/29/2003
/CONTACT: Chiron Corporate Communications & Investor Relations, Media,
+1-510-923-6500, or Investors, +1-510-923-2300/
/Web site: http://www.chiron.com /
(CHIR)
CO: Chiron Corporation
ST: California
IN: MTC BIO HEA
SU: ERN CCA ERP