Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact: Adam C. Derbyshire Mike Freeman
Vice President and Director, Investor Relations and
Chief Financial Officer Corporate Communications
919 862-1000 919 862-1000
SALIX PHARMACEUTICALS REPORTS THIRD
QUARTER 2001 FINANCIAL RESULTS
RALEIGH, NC, November 1, 2001 - Salix Pharmaceuticals, Ltd. (Nasdaq:SLXP) today
announced operating results for the third quarter of 2001. The Company reported
a net loss of $5.1 million, or $0.30 per share, for the third quarter of 2001.
Product revenues for the current period were $2.8 million. Product revenues for
the first nine months of 2001 were $10.3 million. Product revenues were derived
from sales of COLAZAL(TM) (balsalazide disodium) Capsules 750 mg, the Company's
first-line therapy for the treatment of mildly to moderately active ulcerative
colitis. Cost of sales was $0.7 million and $2.5 million in the third quarter
and first nine months of 2001, respectively. Gross margin was 76% and 75%,
respectively, for the same periods.
Operating expenses were $8.1 million for the third quarter of 2001, compared to
$2.4 million for the prior year period. Operating expenses were $22.2 million
for the first nine months of 2001, compared to $5.3 million for the prior year
period. Selling, general and administrative expenses were $6.6 million for the
third quarter of 2001, compared to $1.2 million for the third quarter of 2000.
Higher operating and selling, general and administrative expenses for 2001 were
due primarily to costs associated with the expansion of the Company's
commercialization infrastructure, deployment of the sales force, and the
marketing campaign for COLAZAL. Research and development expenses were $1.6
million for the third quarter of 2001, compared to $1.2 million for the third
quarter of 2000.
Other revenues and expenses for the current period were primarily related to the
recognition of deferred revenues associated with the payment received during the
second quarter of 2000 from Shire Pharmaceuticals Group plc for the sale of
intellectual property in European countries related to balsalazide disodium. As
a result of this transaction, the Company recognized deferred revenue of $1.4
million and expense related to this deferred revenue of $0.7 million during the
third quarter of 2001.
Cash, cash equivalents and investments were $32.4 million on September 30, 2001.
Commenting on the quarter, Robert Ruscher, President and Chief Executive
Officer, stated, "Progress was made on a number of fronts in our efforts to
build the premier specialty pharmaceutical company focusing on
gastroenterologists and their patients. We succeeded in meeting our goal to
expand our sales force. We believe our team of 61 focused sales professionals
should generate the frequency and reach of sales calls necessary to effectively
market COLAZAL and should better equip the Company to sell any future products
to the gastroenterologist community in the United States. Additionally, we have
strengthened our product development and support capabilities with the
appointments of Allen Mangel, M.D., Ph.D., as Vice President, Research and
Development, and Scott Sykes, M.D., as Vice President, Medical Affairs & Chief
Medical Officer.
"COLAZAL continued to make gains in the marketplace during the period. Total
COLAZAL prescriptions increased more than 50% during the third quarter compared
to the second quarter of 2001. It is important to note that this growth over the
course of the third quarter does not reflect any significant contribution by our
new sales representatives. The remainder of 2001 will serve as a period for the
new sales representatives to become acclimated to their new territories and to
begin establishing relationships with physicians. We believe that the impact of
the additional sales representatives will begin to be reflected on product sales
beginning in 2002.
"As a marketing-driven pharmaceutical company, our greatest asset is our
specialty sales force. Now that we have our sales force in place, the Company is
focusing on acquiring and
commercializing additional opportunities to utilize the expertise of these
experienced sales professionals. Our current development efforts remain centered
on rifaximin, a broad-spectrum, site-targeted antibiotic. The preparation of the
New Drug Application (NDA) for rifaximin for the treatment of infectious
diarrhea continued on track during the quarter. At this time we intend to submit
the NDA to the Food and Drug Administration (FDA) in December 2001. We have
continued to be active in seeking and reviewing product in-licensing
opportunities as well. We remain committed to acquiring additional products to
advance our mission to build the premier specialty pharmaceutical company
focusing on gastroenterologists and their patients.
"Based upon information currently available, we estimate that net COLAZAL sales
for 2001 will be between $13 and $14 million. Accordingly, we expect a net loss
ranging from $17 to $18 million, or $1.10 to $1.20 per share, for 2001."
The Company will host a conference call at 8:30 a.m. Eastern Standard Time on
November 1, 2001 to discuss the subjects of this press release. Interested
parties may access the conference call by way of webcast or telephone. The live
webcast will be available at http://www.salixpharm.com. To access the live
webcast, log on to the Company's web site at the address listed above and go to
the investor information section. The webcast will be archived on the Company's
web site through November 7.
The telephone numbers to access the conference call are (800) 474-8920 (U.S. and
Canada) or (719) 457-2727 (international.) A replay of the call will be
available from 11:30 a.m. Eastern Standard Time, November 1 through November 7.
The telephone numbers to access the replay of the call are (888) 203-1112 (U.S.
and Canada) or (719) 457-0820 (international.) The access code for the replay is
550071.
Salix Pharmaceuticals, Ltd., headquartered in Raleigh, North Carolina, develops
and markets prescription pharmaceutical products for the treatment of
gastrointestinal diseases. Salix's strategy is to in-license proprietary
therapeutic drugs that have an existing database of positive, late-stage
clinical data; complete the development and regulatory submission of these
products;
and market them through the Company's gastroenterology specialty sales force.
Salix's lead product is COLAZAL(TM), an anti-inflammatory drug approved for the
treatment of mildly to moderately active ulcerative colitis. The Company
launched the product in the U.S. through its specialty sales force in January
2001. COLAZAL was well tolerated in clinical studies. In clinical trials,
patients reported the following adverse events most frequently: headache (8%);
abdominal pain (6%); diarrhea (5%); nausea (5%); vomiting (4%); respiratory
infection (4%); and arthralgia (4%). Withdrawal from therapy due to adverse
events was comparable to placebo. Salix's next product candidate is rifaximin,
currently in development for the potential treatment of infections of the lower
gastrointestinal tract. The Company currently intends to submit an NDA for
rifaximin for the treatment of infectious diarrhea to the FDA in December 2001.
Salix trades on the Nasdaq National Market under the ticker symbol "SLXP."
For more information please contact the Company at 919-862-1000 or visit our web
site at www.salixpharm.com.
Table Follows
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Please note: This press release contains forward-looking statements regarding
future events. These statements are just predictions and are subject to risks
and uncertainties that could cause the actual events or results to differ
materially. These risks and uncertainties include the uncertainty of market
acceptance of COLAZAL and rifaximin, our limited sales and marketing experience,
timing of customer purchases, our ability to manage growth, risks of clinical
trials and regulatory review, and the need to acquire new products. The reader
is referred to the documents that the Company files from time to time with the
Securities Exchange Commission.
Salix Pharmaceuticals, Ltd.
Condensed Consolidated Statement of Operations
Unaudited
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30, September 30, September 30,
2001 2000 2001 2000
Restated* Restated*
-------------- -------------- -------------- -------------
Product Revenues and Costs:
Product Sales $ 2,834 $ 299 $ 10,287 $ 852
Cost of Sales 676 284 2,542 819
-------------- -------------- -------------- -------------
Gross Margin 2,158 15 7,745 33
Operating Expenses:
Research and Development 1,561 1,161 4,452 2,485
Selling, General and Administrative 6,564 1,239 17,726 2,785
-------------- -------------- -------------- -------------
Total Operating Expenses 8,125 2,400 22,178 5,270
Loss from operations (5,967) (2,385) (14,433) (5,237)
Other Revenues and Expenses:
Other Revenue 2,589 5,740 5,788 6,860
Other Expense 1,955 3,230 4,147 3,617
Interest Income/(Expense), net 278 95 531 167
-------------- -------------- -------------- -------------
Net loss before tax (5,055) 220 (12,261) (1,827)
Income tax - - - 9
-------------- -------------- -------------- -------------
Net loss $ (5,055) $ 220 $ (12,261) $ (1,836)
Net loss per share ($0.30) $0.02 ($0.82) ($0.17)
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Weighted average shares outstanding 16,612 11,223 15,040 10,948
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*In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial
Statements", which among other guidance clarifies certain conditions to be
met in order to recognize revenue. In the fourth quarter of 2000, Salix
implemented SAB 101. As a result of the adoption of SAB 101, $8.7 million
of the $11.7 million initial payment received and recognized in full
during the second quarter of 2000 from Shire Pharmaceuticals Group plc has
been deferred and is now being recognzied as revenue through the end of
2001.
Salix Pharmaceuticals, Ltd.
Condensed Consolidated Balance Sheets
(In thousands)
September 30, December 31,
2001 2000
(unaudited) (audited)
---------------- --------------
Assets
Cash and Cash Equivalents $ 32,408 $ 13,244
Accounts Receivable 3,089 6,156
Inventory 5,219 2,819
Other Assets 2,417 3,542
---------------- --------------
Total Assets $ 43,133 $ 25,761
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Liabilities & Stockholders' Equity
Accounts Payable and Other Current Liabilities $ 5,812 $ 4,532
Deferred Revenue 4,619 8,487
---------------- --------------
Total Current Liabilities 10,431 13,019
Common Stock 73,349 41,128
Accumulated Deficit (40,647) (28,386)
---------------- --------------
Total Stockholders' Equity 32,702 12,742
---------------- --------------
Total Liabilities & Equity $ 43,133 $ 25,761
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