EXHIBIT 99.2
FOR IMMEDIATE RELEASE
Contact: Adam C. Derbyshire Mike Freeman
Vice President and CFO Director, Investor Relations and
919-862-1000 Corporate Communications
SALIX PHARMACEUTICALS REPORTS FY2000
FINANCIAL RESULTS
RALEIGH, NC, February 13, 2001 - Salix Pharmaceuticals, Ltd. (NasdaqSC:SLXP)
today announced operating results for the fourth quarter and year ended December
31, 2000. In the fourth quarter of 2000, Salix implemented the Securities and
Exchange Commission's (SEC) Staff Accounting Bulletin No. 101 (SAB 101) "Revenue
Recognition in Financial Statements" regarding revenue recognition of certain
fees upon the SEC's issuance of additional guidelines on SAB 101 during the
period. The following financial results reflect the adoption of SAB 101. The
Company reported a net loss of $1.1 million ($0.09 per share) for the fourth
quarter of 2000 and $3.0 million ($0.26 per share) for the year. This compares
to a net loss of $19,000 ($0.00 per share) for the fourth quarter of 1999 and
$4.6 million ($0.45 per share) for 1999. If the Company had not implemented SAB
101, the reported net loss would have been $1.8 million ($0.15 per share) for
the fourth quarter of 2000 and $224,000 ($0.02 per share) for 2000. Cash, cash
equivalents and investments were $13.2 million on December 31, 2000.
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
recognized as revenue through the end of 2001. The effect of changing the
accounting policy for the Company's recognition of this up-front nonrefundable
fee resulted in a reduction of previously reported revenues by $5.5 million and
previously reported earnings by $2.8 million for the year ended December 31,
2000. These deferred revenues and earnings will be recognized in 2001. Total
revenues were $6.8 million for the fourth quarter of 2000 and $14.5 million for
the year, as compared to $1.4 million for the
fourth quarter of 1999 and $3.1 million for 1999. Higher revenues for 2000 were
primarily due to proceeds received from Shire Pharmaceuticals Group plc for the
sale of intellectual property in European countries related to balsalazide
disodium. Higher revenues for the fourth quarter were primarily due to initial
stocking orders of COLAZAL(TM) in the United States.
Total expenses were $8.1 million and $17.7 million for the fourth quarter of
2000 and year, as compared to $1.4 million and $7.9 million for the prior year
periods. Higher expenses for 2000 were primarily due to payments to the licensor
of balsalazide as a result of the Shire agreement. Higher operating expenses for
the year were mainly due to costs associated with the building of the Company's
sales and marketing infrastructure in preparation for the January 2001 launch of
COLAZAL in the United States.
Commenting on the year, Robert Ruscher, President and Chief Executive Officer of
Salix, stated, "The Company experienced a dramatic turnaround during 2000.
Highlights of the year's accomplishments include:
COLAZAL commercialization
--------------------------
Issuance of FDA "approvable" letter for balsalazide disodium (March)
Agreement between Salix and Shire Pharmaceuticals for European
balsalazide intellectual property and receipt of $11.7 million initial
payment (May)
Issuance of FDA approval of COLAZAL for marketing in the United States
for the treatment of mildly to moderately active ulcerative colitis
(July)
Receipt of $4.4 million milestone payment from Shire Pharmaceuticals
in connection with the transfer to Shire of the United Kingdom Product
License for balsalazide (August)
Shipment of initial orders of COLAZAL to distribution channels
(December)
Product development milestones
------------------------------
Completion of second multi-center, randomized, double-blind Phase III
trial of rifaximin for the treatment of infectious diarrhea in
travelers
Appointment of board, management and staff
------------------------------------------
Thomas D'Alonzo and Richard Franco, Board of Directors
Carolyn Logan, Senior Vice President, Sales & Marketing
Adam Derbyshire, Vice President, Finance and Administration, and Chief
Financial Officer
Specialty sales force of 30 representatives - 5 years average
pharmaceutical sales experience, majority with gastroenterology
experience."
Adam Derbyshire, Vice President, Finance and Administration, and Chief Financial
Officer, commented on additional achievements during the year, "The progress of
the Company during the year was reflected in the strong performance of the
Company's stock price over the course of the 12-month period. During 2000 the
Company's common stock price increased significantly, achieving a then all-time
high of $12.00 on December 29, 2000. Consistent with our efforts to build
shareholder value, on November 20, 2000 the Company transferred to and began
trading shares of its common stock on the Nasdaq SmallCap Market. Subsequently,
on November 24 the Company de-listed from the Toronto Stock Exchange. In
November the Company strengthened its financial position by raising $14 million
in a private placement financing. The proceeds from this financing, combined
with cash on hand, should provide sufficient working capital to pursue our
mission to become the leading gastroenterology pharmaceutical company in the
United States."
Salix Pharmaceuticals, Ltd., headquartered in Raleigh, North Carolina, develops
and markets prescription pharmaceutical products for the treatment of
gastrointestinal diseases. Salix is executing a strategy to in-license
proprietary therapeutic drugs which 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, an anti-inflammatory drug approved for
the treatment of mildly to moderately active ulcerative colitis. Salix's follow-
on product candidate is rifaximin, currently in Phase III development for the
potential treatment of infections of the lower gastrointestinal tract. Salix
trades on the Nasdaq SmallCap Market under the ticker symbol "SLXP."
For more information about Salix Pharmaceuticals, Ltd. or COLAZAL, please
contact the Company at 919-862-1000 or visit our web site at www.salixpharm.com.
------------------
Table follows
###
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, risks of developing our own
sale force, management of growth, dependence on key personnel, competition
and manufacturing risks. The reader is referred to the documents that the
Company files from time to time with the Securities and Exchange
Commission.
Salix Pharmaceuticals, Ltd.
Condensed Consolidated Balance Sheets
(In thousands, except share amounts)
December 31, December 31,
2000 1999
(unaudited)* (audited)
------------ ------------
Assets
Cash and cash equivalents $ 13,244 $ 2,402
Accounts receivable 6,156 287
Other current assets 6,027 768
------------ ------------
Total current assets 25,427 3,457
Property and equipment, net 208 151
Other assets 126 51
------------ ------------
Total Assets $ 25,761 $ 3,659
============ ============
Liabilities & Stockholders' Equity
Accounts payable and other current
liabilities $ 4,532 $ 1,444
Deferred revenue 8,487 -
------------ ------------
Total current liabilities 13,019 1,444
Common Stock, no par value; 40,000,000
shares authorized; 13,562,771 and 10,208,838
shares were issued and outstanding at
December 31, 2000 and December 31, 1999,
respectively. 41,128 27,626
Accumulated deficit (28,386) (25,411)
------------ ------------
Total stockholders' equity 12,742 2,215
------------ ------------
Total Liabilities & Equity $ 25,761 $ 3,659
============ ============
Salix Pharmaceuticals, Ltd.
Condensed Consolidated Statement of Operations
(In thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31, December 31, December 31,
2000 1999 2000 1999
(unaudited)* (unaudited) (unaudited)* (audited)
------------ ----------- ------------ ------------
Revenues:
Product revenues $ 5,455 $ 278 $ 6,307 $ 491
Other revenue 1,375 1,118 8,235 2,602
------------ ------------ ------------ ------------
Total revenues 6,830 1,396 14,542 3,093
Expenses:
Cost of products sold 1,468 204 2,287 878
License fees 610 - 4,173 297
Research and development 1,359 810 3,844 4,787
Selling, general and administrative 4,627 431 7,412 1,932
------------ ------------ ------------ ------------
Total expenses 8,064 1,445 17,716 7,894
Loss from operations (1,234) (49) (3,174) (4,801)
Interest and other income/(expense), net 95 30 208 190
------------ ------------ ------------ ------------
Net loss before tax (1,139) (19) (2,966) (4,611)
Income tax - - 9 -
------------ ------------ ------------ ------------
Net loss $ (1,139) $ (19) $ (2,975) $ (4,611)
Net loss per share $ (0.09) $ - $ (0.26) $ (0.45)
============ ============ ============ ============
Weighted average shares outstanding 12,573 10,209 11,356 10,209
============ ============ ============ ============
*The above financial results reflect the adoption of SAB 101.