Exhibit 99.1
[GRAPHIC OMITTED
PAR PHARMACEUTICAL LOGO]
Contacts:
Stephen J. Mock
Cecelia C. Heer
Par Pharmaceutical Companies, Inc.
(201) 802-4000
PAR PHARMACEUTICAL REPORTS FIRST-QUARTER
SALES AND EARNINGS
DRIVEN BY NEW PRODUCT INTRODUCTIONS, FIRST-QUARTER TOTAL REVENUES
INCREASE 78 PERCENT TO $173.8 MILLION
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INCOME FROM CONTINUING OPERATIONS ROSE 212 PERCENT TO $8.4 MILLION, AND
DILUTED EPS FROM CONTINUING OPERATIONS INCREASED 200 PERCENT TO $.24
SPRING VALLEY, NY, MAY 1, 2006 - Par Pharmaceutical Companies, Inc. (NYSE:PRX)
today reported that total revenues grew 78 percent to $173.8 million for the
first quarter ended April 2, 2006. For the quarter, income from continuing
operations rose 212 percent to $8.4 million and diluted earnings per share from
continuing operations increased 200 percent to $.24. This is compared with
revenues of $97.5 million, income from continuing operations of $2.7 million and
diluted earnings per share from continuing operations of $.08 for the same
period a year ago. Effective December 31, 2005, Par divested FineTech
Laboratories Ltd. Income from continuing operations for the first quarter of
2005 excludes the financial results of FineTech.
"Par's first-quarter total revenues included new product sales of more than $100
million," said Scott Tarriff, president and chief executive officer. "Additions
since last year's first quarter include generic versions of Flonase(R),
Augmentin(R) and Ultracet(R), and Par's first branded pharmaceutical product,
Megace(R) ES.
"Par significantly improved its financial performance despite the continued
investment necessary to build its branded pharmaceutical organization and its
first brand," Mr. Tarriff said. "This investment diluted Par's first-quarter
earnings by almost $9 million, or $.16 a share. However, as sales of Megace ES
grow and we add additional products, the dilution will diminish and the
investment will be rewarded."
FIRST-QUARTER REVIEW
First-quarter sales growth was driven by fluticasone propionate nasal spray. In
February, Par announced that it entered into a supply and distribution agreement
with GlaxoSmithKline (GSK) in the U.S. to distribute the product. Fluticasone
propionate nasal spray is fully substitutable for GSK's allergy spray Flonase
and is manufactured by a GSK subsidiary. After a restraining order temporarily
halted distribution of generics, shipments of Par's product resumed in March. In
the first quarter, fluticasone achieved sales of $57.8 million.
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In December 2005, Par was assigned Ivax Corporation's distribution rights for
various dosage forms of the immediate release antibiotics
amoxicillin/clavulanate potassium and amoxicillin, which are fully substitutable
for corresponding formulations of Augmentin(R), Augmentin ES-600(R) and
Amoxil(R). Par also purchased eight products that were previously marketed in
the U.S. by Teva Pharmaceutical Industries Ltd. or Ivax Corporation prior to
Teva's acquisition of Ivax. In the first quarter, sales of all acquired products
totaled $20.3 million.
Sales of tramadol hydrochloride and acetaminophen tablets were $9.2 million in
the first quarter. The product is the generic version of the analgesic Ultracet
and was introduced in April 2005. Par was awarded 180 days of marketing
exclusivity for being the first to file an Abbreviated New Drug Application
containing a paragraph IV certification for the product. Par's exclusivity
expired in October and an additional generic competitor entered the market in
December.
In the first quarter, the appetite stimulant Megace ES (megestrol acetate) 625
mg/5 mL concentrated oral suspension achieved sales of $8.0 million. Megace ES
holds a 15.6 percent share of new prescriptions in the U.S. market for megestrol
acetate oral suspension products, according to the IMS Health national
prescription audit of retail and mail order trade outlets for March 2006. This
is compared with an 11.5 percent share of new prescriptions for December 2005.
Par's first-quarter gross margin was 32 percent of sales, compared to 41 percent
in 2005. The lower gross margin primarily reflects the effect of significant
sales of fluticasone, amoxicillin/clavulanate potassium and amoxicillin. After
profit splits with GSK, these products have significantly lower gross margins
than most of Par's other products. Also, in the first quarter of 2005, Par's
gross margin benefited from an increase in other product-related revenues.
Research and development expense of $13.7 million declined 12 percent from $15.5
million in the first quarter of 2005. The decline reflects Par's lower net
development costs following the termination of its partnership agreement with
Advancis Pharmaceutical Corporation in August 2005. In the first quarter, Par
initiated the first of two Phase III clinical trials on PAR-100.2, a new
formulation of megestrol acetate concentrate under development for appetite
stimulation in cancer-induced anorexia. Par also began patient enrollment in a
Phase IIB study of PAR-101, a narrow-spectrum antibiotic being developed for the
treatment of Clostridium difficile-associated diarrhea.
First-quarter selling, general and administrative (SG&A) expense increased 35
percent to $28.4 million. The increase in SG&A expense primarily reflects sales
and marketing expenses associated with Megace ES, which was introduced in the
third quarter of 2005. In the second quarter of 2005, Par created a new branded
sales force to promote Megace ES to physicians. In the first quarter of 2006,
Par increased the size of the Megace ES sales force from 59 to 73 sales
representatives. For the first quarter, SG&A expense included $10.3 million of
sales and marketing expenses associated with Megace ES and Par's branded
division.
Effective January 1, 2006, Par began expensing stock-based compensation in
accordance with SFAS 123R. As a result, Par recognized $2.7 million of stock
option expense in the first quarter, $1.9 million of which is included in SG&A
expense.
IN OTHER RECENT DEVELOPMENTS:
o Par announced Gerard A. Martino has been named executive vice president
and chief financial officer.
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Par Pharmaceutical Companies, Inc. develops, manufactures and markets generic
drugs and innovative branded pharmaceuticals for specialty markets. In 2005, Par
received approval for and introduced Megace ES, its first branded pharmaceutical
product, and expects to launch its second in 2006. Par's Generic Products
Division is committed to providing high-quality pharmaceuticals that are
affordable and accessible to patients. Par manufactures, markets or licenses
more than 110 generic drugs. For press release and other company information,
visit 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.
PAR PHARMACEUTICAL COMPANIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
THREE MONTHS ENDED
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APRIL 2, APRIL 3,
2006 2005
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Revenues:
Net product sales $173,608 $91,037
Other product related revenues 224 6,413
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Total revenues 173,832 97,450
Cost of goods sold 118,470 57,856
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Gross margin 55,362 39,594
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Operating expenses:
Research and development 13,699 15,519
Selling, general and administrative 28,426 21,102
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Total operating expenses 42,125 36,621
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Operating income 13,237 2,973
Other expense, net (685) (30)
Net investment gain - 1,353
Interest income (expense), net 519 (152)
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Income from continuing operations before provision for income taxes 13,071 4,144
Provision for income taxes 4,670 1,450
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Income from continuing operations 8,401 2,694
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DISCONTINUED OPERATIONS:
(Loss) from discontinued operations - (1,156)
(Benefit) for income taxes - (439)
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(Loss) from discontinued operations - (717)
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Net income $8,401 $1,977
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NET INCOME (LOSS) PER SHARE OF COMMON STOCK:
BASIC
Continuing operations $0.25 $0.08
Discontinued operations - ($0.02)
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$0.25 $0.06
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DILUTED
Continuing operations $0.24 $0.08
Discontinued operations - ($0.02)
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$0.24 $0.06
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WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING:
BASIC 34,259 34,137
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DILUTED 34,461 34,646
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PAR PHARMACEUTICAL COMPANIES, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In Thousands)
APRIL 2, DEC. 31,
2006 2005
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Assets:
Current assets:
Cash and cash equivalents $ 45,702 $ 93,438
Available for sale securities 107,235 106,807
Accounts receivable, net 234,401 143,608
Inventories, net 117,568 100,945
Deferred tax assets, prepaid expenses and other current assets 66,925 78,711
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Total current assets 571,831 523,509
Property, plant and equipment, net 87,834 89,135
Investments 23,651 21,741
Goodwill and intangible assets, net 104,172 95,015
Non-current deferred tax assets, deferred charges and other assets 64,906 57,617
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Total assets $ 852,394 $ 787,017
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Liabilities and stockholders' equity:
Current liabilities:
Short-term and current portion of long-term debt $ 1,791 $ 2,897
Accounts payable 148,720 102,034
Accrued expenses and other current liabilities 37,608 40,603
Income taxes payable 11,909 11,879
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Total current liabilities 200,028 157,413
Long-term debt, less current portion 200,044 200,068
Other long-term liabilities 330 561
Stockholders' equity 451,992 428,975
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Total liabilities and stockholders' equity $ 852,394 $ 787,017
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