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 ANNOUNCES
FY 2001 FINANCIAL RESULTS AND
PLANNED STOCK OFFERING
RALEIGH, NC, February 12, 2002 - Salix Pharmaceuticals, Ltd. (Nasdaq:SLXP) today
announced operating results for the fourth quarter and year ended December 31,
2001 and its intention to conduct a public offering of its common stock.
FOURTH QUARTER AND YEAR END 2001 FINANCIAL RESULTS
The Company reported a net loss of $5.2 million, or $0.31 per share, for the
fourth quarter of 2001 and $17.5 million, or $1.13 per share, for the year.
Product revenues for the fourth quarter were $3.8 million, and product revenues
for the year were $14.1 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 $1.0 million and $3.5 million in the fourth quarter and year,
respectively. Gross margin on product revenue was 75% for both of these periods.
Operating expenses were $11.7 million for the fourth quarter of 2001, compared
to $8.1 million for the prior year period. Operating expenses were $40.4 million
for 2001, compared to $17.7 million for 2000. Selling, general and
administrative expenses were $7.0 million and $24.7 million for the fourth
quarter of 2001 and the year, respectively, compared to $4.6 million and $7.4
million for the respective periods of 2000. Higher operating and selling,
general and administrative expenses for 2001 were due primarily to
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costs associated with the expansion of the Company's commercialization
infrastructure, deployment and expansion of its sales force, and the marketing
campaign for COLAZAL. Research and development expenses were $2.2 million for
the fourth quarter of 2001, compared to $1.4 million for the fourth quarter of
2000. Research and development (R&D) expenses for 2001 were $6.6 million,
compared to $3.8 million for the prior year. The increased R&D expenses
primarily resulted from activities associated with the completion of clinical
trials and preparation of a New Drug Application (NDA) for LUMENAX(TM)
(rifaximin) as a treatment for travelers' diarrhea. The Company submitted the
NDA with the U.S. FDA in December 2001.
Revenues from collaborative agreements and related costs for the fourth quarter
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 to Shire of balsalazide intellectual
property rights in European countries. As a result of this transaction, the
Company recognized deferred revenue of $1.4 million and related expense of $0.7
million during the fourth quarter and deferred revenue of $5.5 and related
expenses of $2.8 million for 2001.
Cash, cash equivalents and investments were $27.9 million on December 31, 2001.
Commenting on the quarter and year, Robert Ruscher, President and Chief
Executive Officer, stated, "Salix accomplished much during 2001 in its efforts
to become the leading specialty pharmaceutical company providing products to
gastroenterologists and their patients. Highlights of the year include:
COLAZAL Launch
"Carolyn Logan, Senior Vice President of Sales and Marketing, and the entire
sales and marketing organization have done an outstanding job over the past
twelve months in launching our first product, COLAZAL. COLAZAL sales continued
to grow over the course of the fourth quarter. Approximately 24,000
prescriptions were written during the fourth quarter of 2001 compared to
approximately 17,000 prescriptions during the third
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quarter. We are pleased with the market penetration level we achieved in our
first year of sales. Our target audience of gastroenterologists and other
selected high prescribers of oral, branded 5-ASA products totals approximately
7,800. As of December 31, 2001, more than 50% of these physicians had prescribed
COLAZAL. We are also pleased with our success during 2001 in securing pharmacy
distribution. At mid year, COLAZAL was stocked in fewer than 10,000 pharmacies,
and by year end that number approached 20,000 pharmacies. As a result of the
dedication and hard work of our sales and marketing team, the Company enters
2002 with an increased level of product awareness in the marketplace and the
support of a growing network of gastroenterologists across the U.S.
Sales Force Expansion
"In October, we effectively doubled the number of professional sales
representatives calling on gastroenterologists. The Company now has over 60
field sales and TeleSales representatives. The expanded sales force should
position the Company to better capitalize on the near-term opportunity
represented by COLAZAL. During 2001, our sales representatives conducted
approximately 45,000 physician calls. With the expanded sales force, our goal
for physician calls for 2002 is over 100,000. The expanded sales force also
should equip the Company to more effectively market any future products as we
seek to expand our portfolio.
Senior Management Additions
"During the year, we made key hires at the senior management level to strengthen
our research and development, medical and manufacturing operations. We are
pleased to have Allen Mangel, M.D., Ph.D., Vice President, Research and
Development; Scott Sykes, M.D., Vice President, Medical Affairs & Chief Medical
Officer; and Joe Tyler, Vice President, Operations as members of the Salix team.
LUMENAX (rifaximin) New Drug Application (NDA) Submission
"We submitted our NDA for LUMENAX to the U.S. Food and Drug Administration on
December 26, 2001 seeking approval to market the product for the treatment of
travelers'
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diarrhea. We believe that our work to date on LUMENAX is only the first step in
the development of this novel antibiotic as a treatment for a number of
bacterial infections and related disorders of the gastrointestinal tract."
Mr. Ruscher also commented, with respect to 2002 that, "Based upon information
currently available, we estimate that net COLAZAL sales for 2002 will be between
$30 and $35 million."
PROPOSED PUBLIC OFFERING OF COMMON STOCK
The Company also announced that it intends to file today a registration
statement with the Securities and Exchange Commission relating to a public
offering of 4,000,000 shares of its common stock. The purpose of the proposed
offering is to raise capital for the potential acquisition of additional
products; marketing and, if necessary, development of those products; the
development and commercialization of LUMENAX as a treatment for travelers'
diarrhea; the development and commercialization of new indications for both
COLAZAL and LUMENAX; general corporate purposes; and working capital. The
Company cannot assure that the offering will occur. This press release does not
constitute an offer of any securities for sale. No offer of the Company's
securities will be made except by means of a prospectus.
The Company will host a conference call at 10:00 a.m., Eastern Standard Time, on
February 12, 2002 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
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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 February 19.
The telephone numbers to access the conference call are (800) 967-7140 (U.S. and
Canada) or (719) 457-2629 (international.) A replay of the call will be
available from 1:00 p.m. Eastern Standard Time, February 12 through February 19.
The telephone
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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 433741.
Salix Pharmaceuticals, Ltd., headquartered in Raleigh, North Carolina, develops
and markets prescription drugs for the treatment of gastrointestinal diseases.
Salix's strategy is to identify and acquire rights to products that it believes
have potential for rapid regulatory approval or are already approved; apply its
regulatory, product development, and sales and marketing expertise to
commercialize these products; and use its 60-person sales force focused on
high-prescribing U.S. gastroenterologists to sell its products. Salix's first
marketed 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 LUMENAX
(rifaximin), currently in development for the potential treatment of infections
of the lower gastrointestinal tract. The Company submitted an NDA for rifaximin
for the treatment of travelers' diarrhea to the FDA on December 26, 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.
Salix Pharmaceuticals, Ltd.
Condensed Consolidated Statement of Operations
Unaudited
(In thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31, December 31, December 31,
2001 2000 2001 2000
(unaudited) (unaudited) (unaudited) (audited)
-------------- ------------ ------------ ------------
Revenues:
Product Revenue $ 3,842 $ 5,455 $ 14,129 $ 6,307
Revenue from Collaborative Agreements 2,433 1,375 8,221 8,235
-------- -------- -------- --------
Total Revenues 6,275 6,830 22,350 14,542
Operating Expenses:
Cost of Products Sold 953 1,468 3,495 2,287
License Fees and Costs Related to Collaborative Agreements 1,571 610 5,583 4,173
Research and Development 2,177 1,359 6,629 3,844
Selling, General and Administrative 6,962 4,627 24,688 7,412
-------- -------- -------- --------
Total Costs and Expenses 11,663 8,064 40,395 17,716
Loss from operations (5,388) (1,234) (18,045) (3,174)
Interest and Other Income/(Expense), net 151 95 547 208
Income tax - - - (9)
-------- -------- -------- --------
Net loss $ (5,237) $ (1,139) $(17,498) $ (2,975)
Net loss per share $ (0.31) $ (0.09) $ (1.13) $ (0.26)
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Weighted average shares outstanding 16,689 12,573 15,456 11,356
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Salix Pharmaceuticals, Ltd.
Condensed Consolidated Balance Sheets
(In thousands)
December 31, December 31,
2001 2000
(unaudited) (audited)
------------ -----------
Assets
Cash and Cash Equivalents $ 27,868 $ 13,244
Accounts Receivable 2,378 6,156
Inventory 6,274 2,819
Other Assets 2,070 3,542
-------- --------
Total Assets $ 38,590 $ 25,761
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Liabilities & Stockholders' Equity
Accounts Payable and Other Current Liabilities $ 8,094 $ 4,532
Deferred Revenue 2,902 8,487
-------- --------
Total Current Liabilities 10,996 13,019
Common Stock 17 14
Additional Paid-in-Capital 73,461 41,114
Accumulated Deficit (45,884) (28,386)
-------- --------
Total Stockholders' Equity 27,594 12,742
-------- --------
Total Liabilities & Equity $ 38,590 $ 25,761
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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 stock price volatility, 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. There is no assurance that the proposed public offering will be
completed. The reader is referred to the documents that the Company files from
time to time with the Securities and Exchange Commission.
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