Exhibit 99.1
For Immediate Release:
- ---------------------
October 28, 2003
Company Contact:
----------------
Nancy C. Broadbent
Chief Financial Officer
(215) 579-7388
Investor Relations:
------------------
Lisa M. Wilson
In-Site Communications
(212) 759-3929
CollaGenex Pharmaceuticals Reports Record Financial Results
-----------------------------------------------------------
in the Third Quarter of 2003
----------------------------
Net Income Allocable to Common Stockholders was $0.13 Per Basic
Share and $0.12 per Diluted Share on Revenues of $13.9 Million
Newtown, PA, October 28, 2003 - CollaGenex Pharmaceuticals, Inc. (Nasdaq: CGPI)
today reported financial results for the third quarter ended September 30, 2003.
Total revenues increased 24% to $13.9 million compared to $11.2 million in the
third quarter of 2002. Net product sales were $12.8 million in the third quarter
of 2003, a 19% increase over net product sales of $10.8 million recorded in the
third quarter of 2002.
Net income allocable to common stockholders for the third quarter of 2003
was $1.5 million, or $0.13 per basic share and $0.12 per diluted share, compared
to net income allocable to common stockholders of $356,000, or $0.03 per basic
and diluted share, in the third quarter of 2002.
"We are pleased with the results of the third quarter of 2003," said Brian
M. Gallagher, PhD, chairman, president and chief executive officer of
CollaGenex. "We continued to deliver solid operating and financial results,
reflecting the diligence of our sales force in expanding market penetration of
our dental and dermatology products and the increasing acceptance of these
products by physicians."
"In addition to focusing on increasing product sales, we continue to invest
in the future of our Company," Dr. Gallagher continued. "We are building our
presence in the dermatology market by pursuing dermatological indications for
Periostat(R) in the clinic and by exploring licensing and development
opportunities that would enable us further to leverage our sales force. The
$18.8 million we recently raised through our shelf
offering will facilitate our ability to license and/or develop these dermatology
products."
"We also are committed to the defense of Periostat(R) patents and the
development of a sustained release, once-daily formulation of Periostat(R). We
now have a suitable formulation and plan to enter Phase III clinical trials with
this new once-a-day formulation in the second quarter of 2004," concluded
Gallagher.
"During the third quarter of 2003, we increased our total revenues by 24%,
or $2.7 million, compared to the third quarter of 2002 while increasing our
operating expenses by only 15%, or $1.5 million," added Nancy C. Broadbent,
chief financial officer of CollaGenex. "Our SG&A expenses were approximately
$918,000 higher during the third quarter of 2003 compared to the third quarter
of 2002, primarily due to legal expenses we incurred in connection with our
patent and FDA litigation that exceeded the amount that could be reimbursed to
us by the licensor out of current royalties. We anticipate that we will be
reimbursed for patent-related legal costs out of future royalties otherwise
payable on future sales of Periostat(R). However, legal costs relating to the
litigation with the FDA and anti-trust matters are not eligible for
reimbursement by the licensor out of royalties."
"We continued to invest in our pipeline during the third quarter of 2003,
increasing our R&D spending by about $422,000 over the same period in the prior
year. This reflects expenses related to our ongoing clinical trials of
Periostat(R) in dermatology and other indications, our once-a-day, sustained
release formulation of Periostat(R) and the development of products based on our
Restoraderm(TM) platform technology," said Ms. Broadbent.
During the first nine months of 2003, CollaGenex recorded $38.8 million in
total revenues compared to $33.0 million in total revenues during the first nine
months of 2002. Net product sales during the first nine months of 2003 were
$35.9 million compared to $31.0 million during the comparable period in 2002.
The Company earned net income allocable to common stockholders of $0.31 per
basic share and $0.29 per diluted share during the first nine months of 2003
compared to a net loss allocable to common stockholders of $0.13 per basic and
diluted share during the first nine months of 2002.
CollaGenex announced a number of additional important achievements
during the third quarter of 2003:
o CollaGenex recently completed a $20 million shelf offering in which the
Company sold 2.0 million shares of its registered common stock to certain
institutional investors at $10 per share. Net proceeds to the Company were
approximately $18.8 million after the payment of placement agent fees and
related expenses and will be used for general working capital purposes,
including possible dermatology product licensing and development
opportunities consistent with the Company's strategy of expanding its
presence in the dermatology market.
o Paul Lubetkin was appointed to the newly-created position of senior vice
president and general counsel. He oversees all legal affairs at CollaGenex
and is a key addition to the CollaGenex management team, particularly given
the complexity of the legal issues involving the intellectual property
covering Periostat(R).
o The United States District Court of the District of Columbia granted a
preliminary injunction temporarily restraining the United States Food and
Drug Administration from approving any abbreviated new drug applications
(ANDAs) submitted for a capsule or tablet generic dosage form of
Periostat(R) (doxycycline hyclate) 20mg.
o CollaGenex completed initial Phase 1 clinical studies of a sustained
release, once-daily version of Periostat, thereby establishing the
pharmacokinetics of its lead formulation and confirming that the
formulation falls within the Company's pre-defined criteria for maximum
serum concentration and total dose delivered.
o CollaGenex initiated a double-blinded, placebo-controlled Phase 2 clinical
study to evaluate the safety and efficacy of Col-3, a novel,
non-antimicrobial tetracycline derivative, for the treatment of rosacea.
o An independent experience trial that demonstrated favorable results from
the use of Periostat(R) as a monotherapy in the treatment of rosacea was
published in the July/August issue of the peer-reviewed journal Skin Med.
As previously announced, CollaGenex will hold a conference call to discuss
the Company's third quarter 2003 operating and financial results as follows:
Date: October 28, 2003
Time: 11:00 a.m. Eastern Time
Dial-in: 800-695-6803 (US); 706-643-1452 (international)
Web cast: www.collagenex.com
------------------
For those who cannot listen to the live broadcast, a replay will be
available shortly after the call on the Company's website, www.collagenex.com,
for 90 days. A dial-in replay of the call will be available until 11:59 p.m. on
November 11, 2003 by dialing 800-642-1687, 706-645-9291 internationally, and
entering access code 3245703.
CollaGenex Pharmaceuticals, Inc. is a specialty pharmaceutical company
currently focused on providing innovative medical therapies to the dental and
dermatology markets. Currently, the Company's 115-person professional dental
pharmaceutical sales force markets Periostat(R), which is indicated as an
adjunct to scaling and root planing for the treatment of adult periodontitis.
Periostat(R) is the first and only pharmaceutical to treat periodontal disease
by inhibiting the enzymes that destroy periodontal support tissues, and by
enhancing bone protein synthesis.
The sales force also promotes Vioxx(R), a Merck & Co. drug that CollaGenex
co-promotes for the treatment of acute dental pain; Pandel, a prescription,
topical corticosteroid licensed from Altana, Inc.; Sirius Laboratories' AVAR(TM)
product line for the topical control of acne vulgaris, rosacea and seborrheic
dermatitis; and Atridox(R), Atrisorb(R) FreeFlow(TM) and Atrisorb-D FreeFlow,
Atrix Laboratories Inc.'s products for the treatment of adult periodontitis.
Research has shown that certain unique properties of the tetracyclines
discovered during the development of Periostat(R) may be applicable to other
diseases involving inflammation and/or destruction of the body's connective
tissues, including acne, rosacea, meibomianitis and cancer metastasis, among
others. CollaGenex is further evaluating Periostat(R), as well as the new
IMPACS(R) compounds, to assess whether they are safe and effective in these
applications. In addition, CollaGenex has licensed the Restoraderm(TM)
technology, a unique, proprietary dermal drug delivery system, in order to
develop a range of topical dermatological products with enhanced pharmacologic
and cosmetic properties.
To receive additional information on the Company, please visit our Web site
at www.collagenex.com, which does not form part of this press release.
Periostat(R), IMPACS(R) and Metastat(R) are registered trademarks, and
Restoraderm(TM) is a trademark, of CollaGenex Pharmaceuticals, Inc.
All other trade names, trademarks or service marks are the property of their
respective owners and are not the property of CollaGenex Pharmaceuticals, Inc.
or any of our subsidiaries.
Pandel(R) is a trademark of Taisho Pharmaceuticals.
VIOXX(R) is a trademark of Merck & Co., Inc.
AVAR(TM) is a trademark of Sirius Laboratories, Inc.
Atridox(R) and Atrisorb(R) are registered trademarks, and FreeFlow(TM) is a
trademark, of Atrix Laboratories, Inc.
(Financial Tables Follow)
Summary Financial Data
(Unaudited)
(In thousands, except share amounts)
Three Months Ended September 30,
-------------------------------
2003 2002
---- ----
Consolidated Statement of Operations:
Revenues:
Net product sales $ 12,797 $ 10,767
Contract revenues 1,111 422
License revenues 8 40
------ ------
Total revenues 13,916 11,229
Operating Expenses:
Cost of product sales 1,907 1,713
Research and development 1,777 1,355
SG&A 8,338 7,420
------- ------
Total operating expenses 12,022 10,488
Other Income (Expense):
Interest income 28 18
Interest expense - (3)
Other income 8 -
------ ------
Net income 1,930 756
Preferred stock dividend 400 400
------ ------
Net income allocable to common
stockholders $ 1,530 $ 356
====== ======
Net income per basic share allocable to
common stockholders $ 0.13 $ 0.03
====== ======
Weighted average shares used in computing
net income per basic share allocable to
common stockholders 11,738,583 11,321,679
Net income per diluted share allocable to
common stockholders $ 0.12 $ 0.03
====== ======
Weighted average shares used in computing
net income per diluted share allocable to
common stockholders 12,813,907 11,589,483
Nine Months Ended September 30,
------------------------------
2003 2002
---- ----
Consolidated Statement of Operations:
Revenues:
Net product sales $ 35,917 $ 31,026
Contract revenues 2,164 1,769
License revenues 679 162
------ ------
Total revenues 38,760 32,957
Operating Expenses:
Cost of product sales 5,560 4,891
Research and development 4,397 3,054
SG&A, Other 23,878 25,248
SG&A, Stock Compensation Charge 251 -
------ ------
Total operating expenses 34,086 33,193
Other Income (Expense):
Interest income 84 55
Interest expense - (5)
Other expense (2) -
------- ------
Net income (loss) 4,756 (186)
Preferred stock dividend 1,200 1,229
------ ------
Net income (loss) allocable to common
stockholders $ 3,556 $ (1,415)
====== =======
Net income (loss) per basic share
allocable to common stockholders $ 0.31 $ (0.13)
====== =======
Weighted average shares used in computing
net income (loss) per basic share
allocable to common stockholders 11,521,337 11,189,318
Net income (loss) per diluted share
allocable to common stockholders $ 0.29 $ (0.13)
====== =======
Weighted average shares used in computing
net income (loss) per diluted share
allocable to common stockholders 12,303,922 11,189,318
---------- ----------
Consolidated Selected
- --------------------
Balance Sheet Data: September 30, December 31,
- ------------------ 2003 2002
---- ----
Cash, cash equivalents and
short-term investments* $ 14,519 $ 10,112
Total current assets 19,630 15,299
Total assets 21,557 17,634
Total current liabilities 6,889 8,721
Long-term liabilities 334 561
------ ------
Total liabilities 7,223 9,282
Total stockholders' equity* 14,334 8,352
* Does not include approximately $18.8 million in net proceeds from the sale of
2 million shares of common stock on October 3, 2003 at a price of $10 per share.
This press release contains forward-looking statements within the meaning
of Section 21E of the Securities and Exchange Act of 1934, as amended. Investors
are cautioned that forward-looking statements involve risks and uncertainties,
which may affect the Company's business and prospects. The Company's business of
selling, marketing and developing pharmaceutical products is subject to a number
of significant risks, including risks relating to the implementation of the
Company's sales and marketing plans for Periostat(R) and other products that the
Company markets, the outcome and consequences of the patent litigation against
West-ward and Mutual and the outcome of litigation initiated by Mutual, risks
that the FDA will approve generic products, such as West-ward's or Mutual's
products, that will compete with and limit the market for Periostat, risks
inherent in research and development activities, risks associated with
conducting business in a highly regulated environment and uncertainty relating
to clinical trials of products under development, all as discussed in the
Company's periodic filings with the U.S. Securities and Exchange Commission.
###