COMPANY CONTACT:
Danette R.M. Meyer, Ph.D. (Dmeyer@atrixlabs.com)
Director of Investor Relations
ATRIX LABORATORIES, INC.
(970) 482-5868
HTTP://WWW.ATRIXLABS.COM
ATRIX LABORATORIES REPORTS 2003 THIRD QUARTER FINANCIAL RESULTS
HIGHLIGHTS:
o CONTINUED TOTAL REVENUE GROWTH BASED ON ELIGARD(R)
PRODUCTS
o BREAKEVEN EARNINGS PER SHARE QUARTER
o COMPANY MAINTAINS EXPECTATION OF FULL YEAR
PROFITABILITY IN 2004 WITH ACCELERATED REVENUE GROWTH
IN 2005
FORT COLLINS, CO (OCTOBER 30, 2003) -- ATRIX LABORATORIES, INC. (NASDAQ NM:
ATRX) today announced consolidated financial results for the third quarter ended
September 30, 2003.
For the quarter ended September 30, 2003, the net loss applicable to common
stock for the third quarter of 2003 was $47,000, or $0.00 loss per share,
compared to a net loss applicable to common stock of $4.2 million, or $0.21 loss
per share, for the third quarter of 2002.
Total revenue increased 79 percent to $13.6 million compared to $7.6 million for
the quarter ended September 30, 2002. The revenue increase was due primarily to
$4.4 million in sales and royalty revenue earned from the continued growth of
the Eligard(R) (leuprolide acetate for injectable suspension) prostate cancer
products in the U.S. market. This represents a 42 percent increase in Eligard
sales and royalty revenue compared to the second quarter of 2003. Contract R&D
revenue remains high due to accelerated development of the Eligard 45mg
six-month product funded by Sanofi-Synthelabo, Inc., and due to progress in
Atrisone(TM) (5% dapsone) for acne, a portion of which is funded by Fujisawa
Healthcare Inc.
"A key measure of our company's future potential is accelerating growth in
product sales and our ability to develop the large product opportunities in our
pipeline," said David R. Bethune, chairman and chief executive officer.
"Eligard, our first major product, continues to gain market share in the U.S.
and we expect several non-U.S. Eligard approvals in 2004. We are confident that
we will be profitable in the fourth quarter of this year and estimate our first
full year of profitability in 2004."
Bethune continued, "Looking towards 2005, we anticipate sizeable product revenue
growth following the expected addition of the six-month Eligard product and
Atrisone to our marketed product line. Our goal is to be the first to market a
six-month product for advanced prostate cancer. This should further distinguish
the Eligard product line and potentially accelerate market penetration of the
franchise. Our plans are to complete pivotal Phase III studies on Atrisone and
submit a New Drug Application (NDA) to the U.S. Food and Drug Administration
(FDA) in July or August next year. We expect the introduction of Atrisone will
bring additional
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revenue in 2005. To build long-term corporate value, we have initiated a focused
product development plan to develop Atrix-owned products over the next five
years towards the goal of building an integrated specialty pharmaceutical
company."
For the nine months ended September 30, 2003, total revenue increased 85 percent
to $35.4 million compared to $19.1 million for the nine months ended September
30, 2002. The net loss applicable to common stock for the nine months ended
September 30, 2003 decreased 72 percent to $3.8 million or $0.19 loss per share
compared to a net loss applicable to common stock of $13.5 million or $0.67 loss
per share for the nine months ended September 30, 2002.
Mark Wallace, Atrix's chief financial officer remarked, "We are currently
working to strengthen the company's ability to manage costs and predict future
operating results. Product sales and royalty revenue are anticipated to grow
significantly in 2004 and we are working to allocate more of our resources on
developing Atrix-owned products with significant earnings potential."
Atrix Laboratories, Inc. is an emerging specialty pharmaceutical company focused
on advanced drug delivery. With five unique patented technologies, Atrix is
currently developing a diverse portfolio of proprietary products, including
oncology, pain management, and dermatology products. The company also partners
with large pharmaceutical and biotechnology companies to apply its proprietary
technologies to new chemical entities or to extend the patent life of existing
products. Additional information is available on the Atrix Laboratories, Inc.
website at http://www.atrixlabs.com.
This press release contains statements that qualify as "forward-looking
statements" under the Private Securities Litigation Reform Act of 1995,
including statements about the following topics: the company's expectations for
Eligard, Atrisone and other products in the company's pipeline; its expectation
of receiving royalties on sales of products developed by Atrix and its plan to
manufacture those products at its facility in Fort Collins, Colorado, and the
expectation of building an integrated specialty pharmaceutical company with
strong growth potential. The company is subject to certain risk factors that may
cause actual results to differ materially from anticipated results. Those risks
include, but are not limited to, the following: risks associated with product
demand, pricing, market acceptance of its current and proposed products, the
company's expectation for several non-U.S. Eligard approvals in 2004, the
expectation of introduction of Eligard 45mg in 2005 along with the company's
expectations that Eligard 45mg should further distinguish the product line and
potentially accelerate market penetration of Eligard. Additional risks include,
but are not limited to, the company's expectations for an NDA submission in
mid-2004 for Atrisone, subsequent approval and expectation of additional revenue
in 2005, the company's expectations for growing product revenue in 2004 and 2005
and the company's expectation for a full year of profitability in 2004. Other
risks include, but are not limited to, changing economic conditions, risks in
product and technology development and competition from other products and
treatments. For additional information about risk factors, please see the
reports filed by the company with the SEC, including the company's Annual Report
on Form 10-K for the year ended December 31, 2002 and the company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 2003. The statements in
this press release are made as of today, based on information currently known to
management, and the company disclaims any duty to update such statements.
Eligard is a registered trademark of Sanofi-Synthelabo, Inc.
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ATRIX LABORATORIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
<Table>
<Caption>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------------- --------------------------------
2003 2002 2003 2002
-------------- -------------- -------------- --------------
REVENUES:
Net sales and royalties $ 5,342 $ 1,587 $ 13,125 $ 4,230
Contract research and development revenue 5,773 4,306 15,772 10,314
Licensing, marketing rights and milestone revenue 2,524 1,731 6,546 4,591
-------------- -------------- -------------- --------------
Total revenues 13,639 7,624 35,443 19,135
-------------- -------------- -------------- --------------
OPERATING EXPENSES:
Cost of sales 2,901 502 6,190 1,815
Research and development 8,738 9,438 26,707 23,512
Administrative and marketing 2,387 2,413 7,879 6,597
Administrative - stock option compensation -- -- 22 1,257
-------------- -------------- -------------- --------------
Total operating expenses 14,026 12,353 40,799 33,181
-------------- -------------- -------------- --------------
LOSS FROM OPERATIONS (387) (4,729) (5,356) (14,046)
-------------- -------------- -------------- --------------
OTHER INCOME (EXPENSE):
Equity in loss of joint venture (6) (195) (83) (940)
Investment income and expense, net 638 1,047 2,059 3,427
Gain (loss) on sale and write-down of marketable
securities 139 (15) 567 (1,091)
Debt conversion expense -- -- -- (125)
Other (7) (27) (23) (32)
-------------- -------------- -------------- --------------
Other income (expense), net 764 810 2,520 1,239
-------------- -------------- -------------- --------------
NET INCOME (LOSS) 377 (3,919) (2,836) (12,807)
Accretion of dividends and beneficial conversion
feature charge on preferred stock (424) (242) (918) (703)
-------------- -------------- -------------- --------------
NET LOSS APPLICABLE TO COMMON STOCK $ (47) $ (4,161) $ (3,754) $ (13,510)
============== ============== ============== ==============
Basic and diluted loss per common share:
Net income (loss) $ .02 $ (.20) $ (.14) $ (.64)
Accretion of dividends and beneficial conversion
feature charge on preferred stock (.02) (.01) (.05) (.03)
-------------- -------------- -------------- --------------
Net loss applicable to common stock $ -- $ (.21) $ (.19) $ (.67)
============== ============== ============== ==============
Basic and diluted weighted average common
shares outstanding 20,257,238 20,202,479 19,925,896 20,122,029
============== ============== ============== ==============
</Table>
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BALANCE SHEET DATA
(IN THOUSANDS)
<Table>
<Caption>
SEPTEMBER 30, DECEMBER 31,
2003 2002
(UNAUDITED)
-------------- --------------
Working capital $ 110,232 $ 114,039
Total assets 149,768 150,025
Non-current deferred revenue 34,918 37,064
Preferred stock 15,431 14,514
Common stockholders' equity 85,512 82,255
</Table>
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