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 SECOND QUARTER 2002 FINANCIAL RESULTS
RALEIGH, NC, July 30, 2002 - Salix Pharmaceuticals, Ltd. (Nasdaq:SLXP) today
announced operating results for the second quarter of 2002. The Company reported
a net loss of $5.2 million, or $0.24 per share, for the second quarter of 2002.
Product revenues for the period were $7.3 million, an increase of 74%, compared
to $4.2 million for the prior year period. Product revenues for the first six
months of 2002 were $13.5 million, an increase of 80%, compared to $7.5 million
for the first six months of 2001. Product revenues were derived from sales of
COLAZAL(R) (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 $1.8 million for the second quarter and $3.4 million for the
first six months of 2002. Gross margin was 75.5% and 75.2%, respectively, for
the same periods.
Operating expenses were $12.8 million for the second quarter of 2002, compared
to $8.9 million for the prior year period. Operating expenses were $23.9 million
for the first six months of 2002, compared to $17.4 million for the prior year
period. Selling, general and administrative expenses were $7.5 million and $14.4
million for the second quarter and first six months of 2002, respectively,
compared to $5.6 million and $11.2 million for the same respective periods of
2001. Research and development expenses were $3.5 million for the second quarter
of 2002, compared to $1.5 million for the prior year period. Research and
development expenses were $6.0 million for the first six months of 2002,
compared to $2.9 million for the first six months of 2001.
Cash, cash equivalents and investments were $69.4 million on June 30, 2002.
Commenting on the quarter, Carolyn Logan, President and Chief Executive Officer,
stated, "COLAZAL continues to be a great product for us. Approximately 44,000
prescriptions were written during the second quarter of 2002, compared to 34,200
prescriptions during the first quarter of 2002. This represents a 29%
quarter-over-quarter rate of growth. The 44,000 prescriptions written during the
quarter represent a 280% year-over-year increase compared to the 11,600
prescriptions written during the second quarter of 2001. Based upon information
currently available, we continue to estimate that net COLAZAL sales for 2002
will be between $30 and $35 million.
"We believe that today Salix is in its strongest position ever to accomplish its
mission to become the leading specialty gastroenterology company in the United
States. We are executing our strategy. Our 60-member specialty sales force is
building relationships with gastroenterologists, our in-house product
development team is working to expand the commercial possibilities for
rifaximin, and, as announced earlier this month, we have in-licensed rights to
an additional product and have established a collaboration with Dr. Falk Pharma
GmbH. The mesalamine pellet product we have in-licensed illustrates our
commitment to providing gastroenterologists and their patients with product
innovations for the treatment of gastrointestinal disease. Feedback from
gastroenterologists indicates that no single anti-inflammatory agent provides
optimal therapy for all patients, and consequently, the more treatment options
available, the better. We have listened to our customers and intend to develop
this late-stage product to compliment COLAZAL as another option a
gastroenterologist can use to tailor therapy to meet the specific needs of an
individual patient. Our collaboration with Dr. Falk Pharma represents a key
strategic alignment of one of the leading gastroenterology companies in Europe
with Salix. Under the terms of our agreement, we now have access to one of the
most highly respected and productive gastroenterology-focused research and
development organizations in the world. We are intent on expanding our business
and look forward to the future with great anticipation."
Adam Derbyshire, Vice President, Finance and Administration, and Chief Financial
Officer, stated, "The in-licensing of rights to the pellet formulation of
mesalamine is the first of what we
intend to be a number of acquisitions as we work to build the Company's product
pipeline. We expect research and development expenses for the second half of the
year will include the upfront payment for the new mesalamine product and
activities in preparation of a Phase III study that we anticipate initiating
during the first quarter of 2003. Other R&D expenses for the first six months
and anticipated for the remainder of the year include costs associated with
several small, single-center studies of rifaximin currently, or soon to be,
underway. Based upon information currently available, we estimate that net loss
for 2002 will be between $1.15 and $1.35 per share."
The Company will host a conference call at 10:00 a.m. EDT, on July 30, 2002 to
discuss the subjects of this press release. Interested parties may access the
conference call by way of web cast or telephone. The live web cast will be
available at http://www.salix.com. The web cast will be archived on the
Company's web site through August 5.
The telephone numbers to access the conference call are (800) 231-9012 (U.S. and
Canada) or (719) 457-2617 (international.) A replay of the call will be
available from 1:00 p.m., EDT, July 30 through August 5. 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 310572.
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 late-stage or
marketed proprietary therapeutic drugs, complete the required development and
regulatory submission of these products, and market them through the Company's
60-member gastroenterology specialty sales force. Salix's first marketed product
is COLAZAL(R), 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 gastrointestinal tract. The Company submitted an NDA for rifaximin for
the treatment of travelers' diarrhea to the FDA on December 26, 2001. In July
2002, Salix acquired exclusive U.S. development and marketing rights to a pellet
formulation of mesalamine. The Company intends to complete the development work
required to secure regulatory approval for the product in the U.S. 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.salix.com.
Table follows
Salix Pharmaceuticals, Ltd.
Condened Consolidated Statement of Operations
Unaudited
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2002 2001 2002 2001
(unaudited) (unaudited) (unaudited) (unaudited)
------------------------------ -----------------------------
Revenues:
Product revenue $ 7,337 $ 4,163 $ 13,548 $ 7,453
Revenue from collaborative agreements - 1,376 - 2,751
------------------------------ -----------------------------
Total revenues 7,337 5,539 13,548 10,204
Operating Expenses:
Cost of products sold 1,797 1,080 3,363 1,866
License fees and costs related to
collaborative agreements 31 808 63 1,500
Research and development 3,532 1,456 6,016 2,891
Selling, general and administrative 7,458 5,604 14,436 11,162
------------------------------ -----------------------------
Total costs and expenses 12,818 8,948 23,878 17,419
Loss from operations (5,481) (3,409) (10,330) (7,215)
Interest and other income/(expense), net 267 100 392 9
Income tax - - - -
------------------------------ -----------------------------
Net loss $ (5,214) $ (3,309) $ (9,938) $ (7,206)
Net loss per share $ (0.24) $ (0.22) $ (0.51) $ (0.51)
============================== =============================
Weighted average shares outstanding 21,334 14,766 19,624 14,242
============================== =============================
Salix Pharmaceuticals, Ltd.
Condensed Consolidated Balance Sheets
(In thousands)
June 30, December 31,
2002 2001
(unaudited) (audited)
----------------------------
Assets
Cash, cash equivalents and investments $ 69,367 $ 27,868
Accounts receivable 4,317 2,378
Inventory 9,511 6,274
Other assets 2,201 2,070
----------------------------
Total Assets $ 85,396 $ 38,590
============================
Liabilities & Stockholders' Equity
Accounts payable and other current liabilities $ 7,179 $ 8,094
Deferred revenue 3,066 2,902
----------------------------
Total current liabilities 10,245 10,996
Common stock 21 17
Additional paid-in-capital 131,115 73,461
Accumulated deficit (55,821) (45,884)
Other comprehensive loss (164) -
----------------------------
Total Stockholders' Equity 75,151 27,594
----------------------------
Total Liabilities & Equity $ 85,396 $ 38,590
============================
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 risks
of regulatory review and clinical trials, the need to acquire additional
products and management of rapid growth. The reader is referred to the
documents that the Company files from time to time with the Securities and
Exchange Commission.