Exhibit 99
Contact: Robert Siegfried/Jeremy Fielding
Kekst and Company
212-521-4800
Endo Pharmaceuticals Achieves Strong Second Quarter and
Year-to-Date 2001 Financial Results
-- Net Sales Increase 62% and Gross Profit Rises by 82% for the Period -
CHADDS FORD, PA, August 13, 2001 -- Endo Pharmaceuticals Holdings Inc.
(Nasdaq: ENDP; ENDPW), a market leader in pain management, today reported
its financial results for the three months and six months ended June 30,
2001. For the second quarter ended June 30, 2001, Endo increased net sales
by 62% to $67.9 million from $41.9 million for the same period in 2000.
Gross profit for the three months ended June 30, 2001 grew by 82% to $46.8
million from $25.7 million over the comparable 2000 period. Results for the
2001 periods reflect the company's merger with Algos Pharmaceutical
Corporation, which was completed on July 17, 2000.
Carol A. Ammon, President and Chief Executive Officer of Endo
Pharmaceuticals, said, "Endo's continuing strong performance reflects both
the high growth potential inherent in the pain management pharmaceutical
marketplace and our successful positioning of our company to capitalize on
this growth potential. Our results are supported by Endo's investment in
sales and marketing and the first quarter deployment of 230 sales
representatives.
"Our strong performance comes amidst a growing investment in our
R&D pipeline and, as previously reported, Endo is advancing several
products in the clinic. In particular, we have initiated three chronic
multiple dosing studies of MorphiDex(R). These studies complement the
already successful pivotal chronic multiple dosing study previously
submitted to the FDA and the commercial optimization of the product. As
announced on September 26, 2000, the FDA requested Endo to submit a second
pivotal chronic multiple dosing study to support the intended indication of
MorphiDex(R). It remains our intention to file the reapplication for
MorphiDex(R) as soon as possible but, because of slower than anticipated
patient recruitment into the clinical studies, we believe that we will not
be in a position to file this reapplication until mid-2002. In addition,
the FDA is currently reviewing a number of our new products, and, although
we can make no assurance, we expect that we will be able to introduce one
or more of these products into the marketplace in the first half of 2002."
No assurance can be given as to the outcome of the clinical
studies or whether or if MorphiDex(R) will be approved by the FDA and
whether or if additional studies will be required.
Second Quarter Results
Three Months Ended June 30, 2001 Compared to the Three Months Ended June
30, 2000
Net sales for the three months ended June 30, 2001 increased by 62% to
$67.9 million from $41.9 million in the comparable 2000 period. This
increase in net sales was primarily due to the increase in net sales from
several new products. In November 1999, the Company launched Percocet(R)
2.5/325, Percocet(R) 7.5/500 and Percocet(R) 10.0/650 to complement the
existing Percocet(R) 5.0/325 for the relief of moderate-to-severe pain. In
September 1999, the Company launched Lidoderm(R), the first FDA-approved
product for the treatment of the pain of post-herpetic neuralgia. In
November 1998, the Company launched the 15mg, 30mg and 60mg strengths, and
in May 2001, the Company launched the 100mg strength, of Morphine Sulfate
Extended Release Tablets, the therapeutic equivalent version of MS
Contin(R), for relief of moderate-to-severe pain. On January 3, 2001,
Watson Pharmaceuticals, Inc. announced that the Food and Drug
Administration had approved Watson's abbreviated new drug application
(ANDA) for a generic equivalent to Percocet(R) 7.5/500 and Percocet(R)
10.0/650. This generic equivalent became available in April 2001. As
previously disclosed by the Company, these generics may have a material
impact on the results of operations and cash flows of the Company in the
future.
Gross profit for the three months ended June 30, 2001 increased by 82%
to $46.8 million from $25.7 million in the comparable 2000 period. Gross
profit margins increased to 69% from 61% in the comparable 2000 period due
to a more favorable mix of higher margin products resulting from the
product launches discussed above, and the discontinuation of some lower
margin non-core products. In addition, the increase in gross profit margins
was also due to the existing fixed cost nature of the Company's
manufacturing relationship with DuPont Pharmaceuticals, currently the
Company's most significant contract manufacturing relationship.
Selling, general and administrative expenses for the three months
ended June 30, 2001 increased by 38% to $19.5 million from $14.1 million in
the comparable 2000 period. This increase was due to a $2.7 million
increase in sales and promotional efforts in 2001 over the comparable 2000
period to support Lidoderm(R) and Percocet(R). The increase in sales and
promotional efforts was primarily due to the first quarter 2001 deployment
of a dedicated contract sales force of 230 full-time representatives
comprised of 70 full-time specialty representatives and 160 full-time
primary care representatives compared to 300 part-time representatives in
the comparable 2000 period. In addition, the Company experienced an
increase in personnel-related costs in the general and administrative
functions in order to support its growth.
Research and development expenses for the three months ended June 30,
2001 increased by 77% to $8.3 million from $4.7 million in the comparable
2000 period. This increase was due to the Company's increased spending on
products under development that are focused in pain management including
the products under development that had been part of the former Algos
pipeline. The results of operations of Algos have been included in the
Company's financial statements prospectively for reporting periods
beginning July 17, 2000.
Operating income for the three months ended June 30, 2001
increased to $6.7 million from $4.8 million in the comparable 2000 period.
Pro Forma Consolidated EBITDA (as defined in footnote (1) below) for the
three months ended June 30, 2001 increased to $26.6 million from $9.4
million in the comparable 2000 period. A reconciliation of Operating Income
as determined by GAAP to Pro Forma Consolidated EBITDA is as follows:
(Unaudited)
Three Months Ended
June 30,
(in thousands)
--------------
2001 2000
---- ----
GAAP Operating Income $6,659 $4,755
Depreciation and amortization 12,377 2,175
Non-cash manufacturing charges 7,554 6,060
Subtotal: Consolidated EBITDA $26,590 $12,990
Operating loss of Algos - (3,696)
Depreciation and amortization of Algos - 63
-------- ------
Pro Forma Consolidated EBITDA $26,590 $9,357
======== ======
Year-to-Date Results
Six Months Ended June 30, 2001 Compared to the Six Months Ended June 30, 2000
Net sales for the six months ended June 30, 2001 increased by 56% to
$107.2 million from $68.9 million in the comparable 2000 period. Gross
profit for the six months ended June 30, 2001 increased by 81% to $73.6
million from $40.6 million in the comparable 2000 period. Gross profit
margins increased to 69% from 59%. Selling, general and administrative
expenses for the six months ended June 30, 2001 increased by 35% to $35.3
million from $26.1 million in the comparable 2000 period. Research and
development expenses for the six months ended June 30, 2001 increased by
127% to $17.5 million from $7.7 million in the comparable 2000 period.
Operating Loss for the six months ended June 30, 2001 decreased to
$4.1 million from $19.6 million in the comparable 2000 period. Pro Forma
Consolidated EBITDA (as defined in footnote (1) below) for the six months
ended June 30, 2001 increased to $31.2 million from $8.2 million in the
comparable 2000 period. A reconciliation of Operating Loss as determined by
GAAP to Pro Forma Consolidated EBITDA is as follows:
(Unaudited)
Six Months Ended
June 30,
(in thousands)
--------------
2001 2000
---- ----
GAAP Operating Loss $(4,071) $(19,593)
Depreciation and amortization 24,776 4,326
Non-cash manufacturing charges 10,471 9,557
Non-cash separation benefits - 20,782
----------- ---------
Subtotal: Consolidated EBITDA $31,176 $15,072
Operating loss of Algos - (7,017)
Depreciation and amortization of Algos - 118
----------- ---------
Pro Forma Consolidated EBITDA $31,176 $8,173
=========== =========
The assets acquired and liabilities assumed, results of operations
and cash flows of Algos have been included in the Company's financial
statements and Management's Discussion and Analysis of Financial Conditions
and Results of Operations prospectively for reporting periods beginning
July 17, 2000. The Company's results have fluctuated in the past, and may
continue to fluctuate. These fluctuations are primarily due to the timing
of new product launches, purchasing patterns of the Company's customers,
market acceptance of the Company's products and the impact of competitive
products and pricing.
Forward Looking Statements
This press release contains forward-looking statements, within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, as amended, that are based on management's
beliefs and assumptions, current expectations, estimates and projections.
Statements that are not historical facts, including statements which are
preceded by, followed by, or that include, the words "believes,"
"anticipates," "plans," "expects" or similar expressions and statements.
Endo's estimated or anticipated future results, product performance or
other non-historical facts are forward-looking and reflect Endo's current
perspective on existing trends and information. Many of the factors that
will determine the Company's future results are beyond the ability of the
Company to control or predict. These statements are subject to risks and
uncertainties and, therefore, actual results may differ materially from
those expressed or implied by these forward-looking statements. The reader
should not rely on any forward-looking statement. The Company undertakes no
obligations to update any forward-looking statements whether as a result of
new information, future events or otherwise. Several important factors, in
addition to the specific factors discussed in connection with these
forward-looking statements individually, could affect the future results of
the Endo and could cause those results to differ materially from those
expressed in the forward-looking statements contained herein. Important
factors that may affect future results include, but are not limited to:
market acceptance of the Company's products and the impact of competitive
products and pricing; dependence on sole source suppliers; the success of
the Company's product development activities and the timeliness with which
regulatory authorizations and product launches may be achieved; successful
compliance with extensive, costly, complex and evolving governmental
regulations and restrictions; the availability on commercially reasonable
terms of raw materials and other third party manufactured products;
exposure to product liability and other lawsuits and contingencies;
dependence on third party suppliers, distributors and collaboration
partners; the ability to timely and cost effectively integrate
acquisitions; uncertainty associated with pre-clinical studies and clinical
trials and regulatory approval; uncertainty of market acceptance of new
products; the difficulty of predicting FDA approvals; risks with respect to
technology and product development; the effect of competing products and
prices; uncertainties regarding intellectual property protection;
uncertainties as to the outcome of litigation; changes in operating
results; impact of competitive products and pricing; product development;
changes in laws and regulations; customer demand; possible future
litigation; availability of future financing and reimbursement policies of
government and private health insurers and others; and other risks and
uncertainties detailed in Endo's Registration Statement on Form S-4 filed
with the Securities and Exchange Commission on June 9, 2000, as amended.
Readers should evaluate any statement in light of these important factors.
The following table presents the Company's consolidated statements of
operations for the three months and six months ended June 30, 2001 and
2000:
Endo Pharmaceuticals Holdings Inc.
Consolidated Statements of Operations (unaudited)
(in thousands, except share and per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2001 2000 2001 2000
---- ---- ---- ----
NET SALES $67,857 $41,934 $107,239 $68,934
COST OF SALES 21,032 16,271 33,681 28,333
------ ------ ------ ------
GROSS PROFIT 46,825 25,663 73,558 40,601
COSTS AND EXPENSES:
Selling, general and administrative 19,453 14,065 35,343 26,138
Research and development 8,336 4,668 17,510 7,696
Depreciation and amortization 12,377 2,175 24,776 4,326
Separation benefits 22,034
OPERATING INCOME (LOSS) 6,659 4,755 (4,071) (19,593)
INTEREST EXPENSE, Net 2,903 3,781 6,443 7,718
----- ------ ----- ------
INCOME (LOSS) BEFORE INCOME TAX BENEFIT 3,756 974 (10,514) (27,311)
------ ------- -------- -------
INCOME TAX (BENEFIT) 1,025 366 993 (10,325)
------ ------- -------- -------
NET INCOME (LOSS) $2,731 $608 $(11,507) $(16,986)
====== ==== ========= =========
NET INCOME (LOSS) PER SHARE:
Basic $.03 $.01 $(.13) $(.24)
Diluted $.03 $.01 $(.13) $(.24)
Weighted average shares
Basic
89,138,950 71,328,424 89,138,950 71,326,680
Diluted
89,212,515 71,328,424 89,138,950 71,326,680
The following table presents the Company's unaudited condensed
consolidated balance sheet data at June 30, 2001 and December 31, 2000:
Endo Pharmaceuticals Holdings Inc.
Condensed Consolidated Balance Sheet Data (unaudited)
(in thousands)
June 30, December 31,
2001 2000
---- ----
ASSETS
Cash and cash equivalents $67,027 $ 59,196
Other current assets 99,578 113,858
-------- --------
Total current assets 166,605 173,054
Property and equipment, net 6,742 5,742
Goodwill and other intangibles, net 260,766 284,560
Deferred income taxes 1,205 736
Restricted cash 150 150
Other assets 5,689 3,598
-------- --------
TOTAL ASSETS $441,157 $467,840
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Total current liabilities $ 80,407 $100,295
Long-term debt, less current portion 156,075 162,154
Other liabilities 18,009 7,218
Total stockholders' equity 186,666 198,173
The following table presents the Company's unaudited net sales for the
three months and six months ended June 30, 2001 and 2000:
Endo Pharmaceuticals Holdings Inc.
Net Sales (unaudited)
(in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
2001 2000 2001 2000
---- ---- ---- ----
Percocet(R) $36,242 $ 18,566 $56,401 $30,861
Lidoderm(R) 7,022 4,006 10,665 5,490
Other Brands 3,589 7,389 8,591 12,992
-------- -------- -------- ------
Total Brands $46,853 $29,961 $75,657 $49,343
Total Generics $21,004 $11,973 $31,582 $19,591
-------- -------- -------- -------
Total Net Sales $67,857 $41,934 $107,239 $68,934
======== ======= ======== =======
Endo is a fully integrated specialty pharmaceutical company with
market leadership in pain management. The company researches, develops,
produces and markets both branded and generic pharmaceutical products
primarily for the treatment of pain. Endo has a portfolio of thirteen
branded products that includes established brands such as Percocet(R) and
Percodan(R), opioid analgesics. This and past press releases of Endo
Pharmaceuticals Holdings Inc. are available at Endo's web site at
http://www.endo.com.
(1) Endo's credit facility defines Consolidated EBITDA as consolidated net
income for the applicable period plus, without duplication and to the
extent deducted from revenues in determining consolidated net income
for that period, the sum of (a) the aggregate amount of consolidated
cash interest expense for the period, (b) the aggregate amount of
letter of credit fees paid during the period, (c) the aggregate amount
of income tax expense for the period, (d) all amounts attributable to
depreciation and amortization for the period, (e) all extraordinary
charges during the period and (f) all other non-cash charges during
the period; and minus, without duplication and to the extent added to
revenues in determining consolidated net income for such period, the
sum of (i) all extraordinary gains during the period and (ii) all
other non-cash gains during such period, all as determined on a
consolidated basis with respect to Endo and subsidiaries in accordance
with generally accepted accounting principles.
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