[LOGO] PAR PHARMACEUTICAL
Contact: Exhibit 99.1
Stephen J. Mock
Vice President, Corporate Affairs
Par Pharmaceutical Companies, Inc.
(201) 802-4000
PAR PHARMACEUTICAL REPORTS THIRD-QUARTER
SALES AND EARNINGS
PAR REPORTS THIRD-QUARTER TOTAL REVENUES OF $151.6 MILLION;
BASE BUSINESS GROWS 31 PERCENT TO $92.8 MILLION
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COMPANY ACHIEVES THIRD-QUARTER ADJUSTED NET INCOME OF $16.2 MILLION, AND
ADJUSTED DILUTED EPS OF $.48, EXCLUDING NON-CASH CHARGE
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PAR ANNOUNCES PLANNED SUBMISSION TO FDA OF REQUESTED DATA
IN SUPPORT OF ANDA FOR CLONIDINE TDS
SPRING VALLEY, NEW YORK, OCTOBER 28, 2004 - Par Pharmaceutical Companies, Inc.
(NYSE:PRX) today reported total revenues of $151.6 million for the third quarter
ended October 3, 2004. Par reported a net loss in the quarter of $35.1 million,
or $1.03 loss per diluted share. This result includes a non-cash charge of $84.0
million, or $51.2 million after tax, for the write-off of in-process research
and development (IPR&D) in connection with the purchase of Kali Laboratories,
Inc., which was completed on June 9, 2004. A valuation was performed by
independent specialists to determine the fair value of the underlying assets
acquired and liabilities assumed. Based on that fair value, $84.0 million of the
purchase price was determined to be associated with R&D projects, which were
in-process, but not completed, as of the acquisition date, and was therefore
written off to IPR&D. Excluding this non-cash charge, adjusted net income was
$16.2 million and adjusted diluted earnings per share were $.48. This is
compared with reported revenues of $216.6 million, net income of $38.7 million,
and diluted earnings per share of $1.11 for the same period a year ago.
"Par's comparative third-quarter results reflect the impact of last year's
launch of paroxetine, and this year's significant increase in R&D," said Scott
Tarriff, president and chief executive officer. "However, our base business
growth was impressive and our megestrol franchise remained stable. Our increased
investment in R&D demonstrates our commitment to building a company that can
sustain growth for years to come. Par expects to introduce as many as two dozen
new products between now and the end of 2005. Among these, we are especially
excited about our new Megace(R) product, which will potentially represent Par's
first entrant into the branded pharmaceutical arena."
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Par currently has 43 regulatory filings awaiting approval by the U.S. Food and
Drug Administration (FDA). This represents a record total for Par and includes
18 Abbreviated New Drug Applications (ANDAs) and 2 New Drug Applications (NDAs)
submitted this year by Par, its partners, and Kali.
Par also announced today that its partner, Aveva Drug Delivery Systems,
completed a 22-day adhesion and irritation study intended to support their
previously filed ANDA for a clonidine transdermal patch. The study was conducted
in response to a request from the FDA. Aveva believes the data from the study
demonstrated that its transdermal patch is equivalent to the reference product
on both parameters. The company expects to submit an amendment to their ANDA
shortly. Clonidine TDS is a generic version of Boehringer Ingelheim's Catapres
TTS(R), which is indicated for the treatment of hypertension. The product has
annual U.S. sales of approximately $250.0 million.
THIRD-QUARTER REVIEW
Sales of paroxetine hydrochloride (HCl) immediate release tablets, the generic
version of the antidepressant Paxil(R), were $26.9 million in the third quarter,
compared to $95.5 million in the same period a year ago. Par's paroxetine HCl
tablets are substitutable for Paxil(R) and are licensed from GlaxoSmithKline.
Sales of fluoxetine, the generic version of Prozac(R), totaled $14.4 million in
the quarter, compared with $26.1 million in 2003. Third-quarter sales of both
products reflect the impact of increased generic competition and its
corresponding effect on pricing and market share. In the quarter, sales of
megestrol acetate oral suspension, the generic form of Megace(R), were $17.8
million. This is compared with sales of $22.5 million in 2003.
Third-quarter sales of Par's base business increased 31 percent to $92.8
million. The strong performance of the base business resulted, in part, from the
second-quarter introduction of glyburide and metformin HCl tablets, the generic
version of Glucovance(R), and the first-quarter introduction of mercaptopurine,
the generic form of Purinethol(R).
Par's third-quarter gross margin was 39 percent, unchanged from the same period
a year ago. Investment in R&D increased 151 percent from the same period a year
ago to $17.1 million in the third quarter of 2004. The substantial increase in
R&D reflects increased milestone payments to partners, the acquisition of Kali
Labs, and a steadily increasing number of products in development.
Third-quarter selling, general and administrative (SG&A) expense increased 14
percent to $16.1 million. The increase in SG&A expense reflects the
implementation of new information management systems, and additional personnel
costs across various administrative functions. The megestrol acetate oral
suspension product sampling program, and other marketing and promotional
activities also contributed to the increase in SG&A expense during the quarter.
NINE-MONTH REVIEW
For the nine months ended October 3, 2004, total revenues increased 31 percent
to $575.9 million, compared with $438.9 million for the same period in 2003. For
the first nine months of 2004, Par reported net income of $25.0 million, and
diluted earnings per share of $.71. Excluding the write-off of in-process R&D,
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and a first-quarter, after-tax gain of $1.7 million, or $.05 per diluted share,
associated with the sale of a company facility, net income was $74.5 million and
diluted earnings per share were $2.13 for the first nine months of 2004. This is
compared with reported net income of $84.3 million and reported diluted earnings
per share of $2.45 for the same period a year ago. Excluding a charge associated
with a retirement agreement, net income was $86.6 million and diluted earnings
per share were $2.52 for the first nine months of 2003.
Key contributors to Par's sales growth for the first nine months of 2004 were
paroxetine and the company's base business. For the first nine months,
paroxetine sales increased 117 percent to $208.7 million, and base business
sales grew 36 percent to $261.3 million.
For the first nine months of 2004, investment in R&D increased 88 percent to
$33.7 million. The substantial increase in R&D underscores Par's commitment to
identify, formulate and develop a continuing stream of new products.
Year-to-date, Par has repurchased 843,700 shares of its common stock at a total
cost of $32.0 million. On April 29, 2004, Par announced that its Board of
Directors had authorized the purchase of up to $50 million worth of the
company's common stock.
SINCE THE END OF THE SECOND QUARTER OF 2004:
o Par's Board of Directors adopted a stockholder rights plan designed to
ensure that all Par stockholders receive fair and equal treatment in the
event of an unsolicited attempt to acquire the company;
o Par entered into a licensing agreement with developer Nastech
Pharmaceutical Company, Inc. to market a calcitonin-salmon nasal spray. In
February 2004, the FDA accepted for filing Nastech's ANDA for the product;
o Par received from the FDA tentative approval of its ANDA for tramadol HCl
and acetaminophen tablets, the generic version of Ultracet(R);
o Par's NDA for megestrol acetate oral suspension NanoCrystal(R) Dispersion
(NCD) was accepted for filing by the FDA with a user fee goal date of April
29, 2005. The new NCD formulation represents a line extension of Par's
currently marketed megestrol acetate oral suspension. NanoCrystal(R)
Dispersion is a trademark of Elan Corporation, plc, Dublin, Ireland;
o Par entered into a licensing agreement with developer NovaDel Pharma Inc.
to market an aerosol nitroglycerin lingual spray. In June 2004, NovaDel
submitted an NDA to the FDA seeking marketing clearance for the product;
o Par placed 20th on FORTUNE MAGAZINE'S annual ranking of the nation's "100
Fastest-Growing Companies";
o Par purchased 875,000 shares of common stock of New River Pharmaceuticals
Inc. in an initial public offering. The purchase price was $8 per share and
Par's investment represents an ownership position of 4.9 percent of the
outstanding common stock of New River; and
o Par commenced shipment of fluconazole tablets, the generic version of
Diflucan(R).
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Par Pharmaceutical Companies, Inc. develops, manufactures and markets generic
pharmaceuticals through its principal subsidiary, Par Pharmaceutical, Inc., and
its recently acquired subsidiary, Kali Laboratories, Inc. The company is also
developing an additional line of branded pharmaceutical products for specialty
markets and expects to introduce the first of these in 2005. Through its
FineTech subsidiary, Par also develops and utilizes synthetic chemical processes
to design and develop intermediate ingredients used in the production of
finished products for the pharmaceutical industry. Par currently manufactures,
markets or licenses more than 80 prescription drugs. For press release and other
company information, visit http://www.parpharm.com.
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 are subject
to risks and uncertainties, including 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 us, 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, such as the Company's Form 10-K, Form 10-Q, and Form 8-K reports.
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PAR PHARMACEUTICAL COMPANIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
NINE MONTHS ENDED THREE MONTHS ENDED
OCT. 3, SEPT. 28, OCT. 3, SEPT. 28,
2004 2003 2004 2003
-------------- --------------- ---------------- ----------------
Revenues:
Net product sales $574,810 $424,418 $151,566 $214,933
Other product related revenues 1,054 14,490 - 1,702
-------------- --------------- ---------------- ----------------
Total revenues 575,864 438,908 151,566 216,635
Cost of goods sold 373,461 237,709 92,832 131,709
-------------- --------------- ---------------- ----------------
Gross margin 202,403 201,199 58,734 84,926
-------------- --------------- ---------------- ----------------
Operating expenses (income):
Research and development 33,722 17,908 17,060 6,788
In-process research and development 84,000 - 84,000 -
Selling, general and administrative 49,676 44,246 16,128 14,141
Gain of sale of facility (2,812) - - -
Settlements, net (2,846) - - -
-------------- --------------- ---------------- ----------------
Total operating expenses 161,740 62,154 117,188 20,929
-------------- --------------- ---------------- ----------------
Operating income (loss) 40,663 139,045 (58,454) 63,997
Other expense, net (130) (145) (55) (101)
Interest (expense) income, net (667) 474 (94) 141
-------------- --------------- ---------------- ----------------
Income (loss) before provision (credit) for income taxes 39,866 139,374 (58,603) 64,037
Provision (credit) for income taxes 14,885 55,053 (23,518) 25,295
-------------- --------------- ---------------- ----------------
Net income (loss) $24,981 $84,321 ($35,085) $38,742
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NET INCOME (LOSS) PER SHARE OF COMMON STOCK:
BASIC $0.73 $2.53 ($1.03) $1.15
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Diluted $0.71 $2.45 ($1.03) $1.11
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WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING:
BASIC 34,225 33,269 33,958 33,758
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Diluted 35,027 34,368 33,958 35,004
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COMPARATIVE ADJUSTED FOR IN-PROCESS RESEARCH AND DEVELOPMENT, GAIN ON SALE OF FACILITY AND RETIREMENT CHARGES
====================================================================================================================================
Net income (loss) as reported above $24,981 $84,321 ($35,085) $38,742
In-process research and development, net of tax 51,240 - 51,240 -
Gain of sale of facility, net of tax (1,715) - - -
Retirement charges, net of tax - 2,246 - -
-------------- --------------- ---------------- ----------------
NET INCOME $74,506 $86,567 $16,155 $38,742
============== =============== ================ ================
NET INCOME PER SHARE OF COMMON STOCK:
BASIC $2.18 $2.60 $0.48 $1.15
============== =============== ================ ================
Diluted $2.13 $2.52 $0.48 $1.11
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