Exhibit 99.1
[SAVIENT
PHARMACEUTICALS, INC. LOGO]
CONTACT COMPANY CONTACT
Don Weinberger Beata Smith
Wolfe Axelrod Weinberger Associates Savient Pharmaceuticals, Inc.
212-370-4500 732- 565-4708
FOR IMMEDIATE RELEASE
SAVIENT PHARMACEUTICALS, INC. REPORTS IMPROVED REVENUES
AND NARROWER LOSSES FOR THIRD QUARTER 2004
EAST BRUNSWICK, N.J. - November 8, 2004 -- Savient Pharmaceuticals, Inc.
(NASDAQ:SVNT) today reported improved revenues and narrower losses for the three
and nine months ended September 30, 2004. For the three months ended September
30, 2004, total revenues were $26.4 million, down 22% from a year ago but up 50%
from the immediately preceding quarter. The net loss for the quarter of $4.5
million, or a negative 7 cents per share, compares to net income of $4.4
million, or 7 cents per share, a year ago and a net loss of $31.9 million, or a
negative 53 cents per share, in the second quarter.
For the nine months ended September 30, 2004, total revenues were $77.6 million,
down 16% from a year ago. The net loss of $35.1 million, or a negative 59 cents
per share, compares to net income of $9.9 million, or 17 cents per share, a year
ago.
"Our results for the recently completed quarter signaled a comeback from the
previous quarter," said Christopher Clement, President and Chief Executive
Officer of Savient. "Earnings improved. Demand for Oxandrin continued to improve
as did sales volume before consideration of the provisions taken for current and
future returns of expired product. Sales of Rosemont, our oral liquids business
in the U.K. also showed strong year-over-year gains. Finally, our clinical
programs to advance our two lead drug candidates are proceeding according to
plan."
QUARTER ENDED SEPTEMBER 30, 2004
Revenues
o Total revenues for the three months ended September 30, 2004 were $26.4
million compared to $33.8 million in the three months ended September 30,
2003, due primarily to lower product sales.
o Net product sales for the third quarter of 2004 were $24.4 million compared
to $32.1 million in the third quarter of 2003 and $14.3 million in the
immediately preceding quarter. Sales of Oxandrin(R), the Company's largest
selling brand, were $10.3 million, down from $16.9 million in 2003. The
decline in Oxandrin net product sales versus a year ago was largely driven
by the effects of returns of expired product and an increase in the
provision for future product returns. Prescriptions for Oxandrin were down
2% percent versus the same quarter a year ago and registered their second
successive quarter of growth, up 3% and 2% in the second and third
quarters, respectively. Other product sales were reduced by the
reintroduction in March 2004 of a generic version of Delatestryl(R) and
lower sales of human growth hormone and BioLon(R), partially offset by a
27% increase in U.S. dollar sales of the Company's U.K.-based oral liquid
pharmaceutical products (14% in local currency).
Product Returns
o Prior to this year, the Company experienced virtually no returns of
Oxandrin 2.5-mg because of its five-year shelf life. In the first six
months of this year, Company management became aware that retail customers
of the Company's wholesalers were preparing to return expiring Oxandrin
2.5-mg product as well as 10-mg product, which currently has a two-year
shelf life. Through June 2004, the Company issued credits and recorded
reserves for returned product (primarily Oxandrin) totaling $4.7 million as
an offset to sales. In the third quarter, the Company issued additional
credits and recorded additional reserves totaling $6.7 million for an
aggregate provision of $11.4 million year to date. As of September 30,
2004, the remaining reserve for future returns is $8.1 million.
Expenses
o Operating expenses in the third quarter of 2004 were $29.7 million,
compared to $30.9 million in the third quarter of 2003. Lower research and
development costs, attributable to the completion of Prosaptide toxicology
studies and the expense for the production of clinical supplies for both
Puricase(R) and Prosaptide, and lower general and administrative expense
were substantially offset by higher cost of sales.
o Cost of sales as a percentage of product sales increased from 15% in the
third quarter last year to 39% in the most recent quarter. The increase is
principally attributable to (i) reductions in net product sales as a result
of returned goods credits and provisions; (ii) $1.7 million in reserves
against Delatestryl inventories that were deemed in excess of projected
demand for the product following the re-introduction of a generic
competitor; (iii) $1.2 million in expenses related primarily to the
validation and qualification of the Company's new manufacturing facility in
Israel; (iv) $0.9 million in loss contract reserves; and (v) $0.6 million
in depreciation expense since the new Israeli manufacturing facility began
operations in January of this year.
Net Loss
o The Company recorded a net loss in the three months ended September 30,
2004 of $4.5 million, or a negative 7 cents per share, compared to net
income of $4.4 million, or 7 cents per share in the corresponding period a
year ago.
Balance Sheet
o The Company had cash, cash equivalents, and short-term investments of $24.7
million at September 30, 2004, compared to $26.4 million at June 30, 2004
and $22.8 million at the prior year end.
NINE MONTHS ENDED SEPTEMBER 30, 2004
Revenues
o Total revenues for the nine months ended September 30, 2004 were $77.6
million compared to $92.7 million a year ago, due primarily to lower
product sales.
o Net product sales for the nine months ended September 30, 2004 were $71.0
million compared to $87.1 million for the same period in 2003. Sales of
Oxandrin(R), the Company's largest selling brand, were $28.9 million, down
from $42.9 million in 2003. The decline in Oxandrin net product sales
versus a year ago was largely driven by the effects of returns of expired
product, an increase in the provision for future product returns and
reductions in wholesaler inventory levels primarily in the second quarter
of this year. However, prescriptions for Oxandrin were down just 6% percent
versus a year ago after two quarters of successive gains. Other product
sales were reduced by the reintroduction in March 2004 of a generic version
of Delatestryl(R) and lower sales of human growth hormone and BioLon(R),
partially offset by a 30% increase in U.S. dollar sales of the Company's
U.K.-based oral liquid pharmaceutical products (16% in local currency).
Expenses
o Operating expenses for the nine months ended September 30, 2004 were $93.8
million, compared to $82.1 million for the same period in 2003. Lower
research and development costs, attributable to the completion of
Prosaptide toxicology studies and the expense for the production of
clinical supplies for both Puricase and Prosaptide, were more than offset
by higher general and administrative expense, primarily in support of the
implementation of provisions of the Sarbanes-Oxley Act, one-time retirement
expense for the Company's former CEO and higher cost of sales.
o Cost of sales as a percentage of product sales increased from 17% for the
nine months of 2003 to 36% for the nine months of 2004. The increase is
principally attributable to (i) reductions in net product sales as a result
of returned goods credits and related provisions; (ii) $1.7 million in
reserves against Delatestryl inventories that were deemed in excess of
projected demand for the product following the re-introduction of a generic
competitor; (iii) $6.0 million in expenses related primarily to the
validation and qualification of the Company's new manufacturing facility in
Israel; (iv) $0.9 million in loss contract reserves; and (v) $2.2 million
in depreciation expense since the new Israeli manufacturing facility began
operations in January of this year.
Net Loss
o The Company recorded a net loss for the nine months ended September 30,
2004 of $35.1 million, or a negative 59 cents per share, compared to net
income of $9.9 million, or 17 cents per share in the corresponding period a
year ago.
OUTLOOK COMMENT FROM SAVIENT PHARMACEUTICALS' PRESIDENT AND CHIEF EXECUTIVE
OFFICER CHRISTOPHER CLEMENT:
"We continue to believe that the market significantly undervalues the assets of
Savient's business. Together with our advisors, UBS Investment Bank, we are
taking the steps necessary to recapture that value.
"First, we are proceeding with the process for exploring the divestiture of our
Israeli business operations, including our subsidiary, Bio-Technology General
(Israel) Ltd. We have distributed to interested parties a confidential
information memorandum on the business and are encouraged by the initial
expressions of interest.
"Second, we are taking the steps to enhance the value of our free-standing oral
liquid pharmaceutical business, Rosemont. Earlier this year, we completed
several major modifications to our U.K.-based manufacturing facility to prepare
it for the manufacture of products for the U.S. market. Later this year, we plan
to submit to FDA our first U.S. marketing application for a product of Rosemont,
Soltamax, an oral liquid form of tamoxifen. Gaining access to the U.S. market
should significantly enhance the value of our oral liquids business and open new
opportunities to realize it alone or with strategic partners.
"Lastly, our programs to advance our two lead drug candidates, Puricase and
Prosaptide are proceeding toward the completion of our ongoing Phase 2 clinical
trials. We should have the results for Puricase in the first quarter of next
year. The results for Prosaptide should be available by the third quarter of
next year. Both product candidates and their associated development programs are
directed toward diseases with serious unmet medical needs. With the results of
the ongoing clinical trials known, we can better assess our strategic options
for their further development alone or with strategic partners.
"Together, these three initiatives should pave the way for unlocking the value
of Savient's under appreciated assets.
"In summary, with the bad news behind us and a clear path ahead, we are
proceeding with the implementation of our new strategic plan."
SAVIENT WILL OFFER A LIVE WEBCAST DISCUSSION OF THE EARNINGS AND THE COMPANY'S
BUSINESS OUTLOOK, HOSTED BY CHRISTOPHER CLEMENT, PRESIDENT AND CEO, ON MONDAY,
NOVEMBER 8, 2004, AT 11:00 A.M. ET. THE WEBCAST CAN BE ACCESSED AT
WWW.SAVIENTPHARMA.COM, AND WILL BE ARCHIVED THROUGH NOVEMBER 15, 2004.
AN AUDIO REPLAY WILL ALSO BE AVAILABLE THROUGH NOVEMBER 15, 2004 AND CAN BE
ACCESSED BY DIALING 888-203-1112 (IN THE U.S.) OR 719-457-0820 (OUTSIDE THE
U.S.); PASSCODE NUMBER IS 864474.
ABOUT SAVIENT PHARMACEUTICALS, INC.
Savient Pharmaceuticals, Inc. is engaged in developing, manufacturing, and
marketing pharmaceutical products that address unmet medical needs in both niche
and wider markets. Products marketed by Savient's sales force in the United
States are Oxandrin(R) (oxandrolone, USP) and Delatestryl(R) (testosterone
enanthate). The Company's subsidiary, Rosemont Pharmaceuticals Limited,
develops, manufactures, and markets through its own sales force oral liquid
formulations of prescription products for the UK pharmaceutical market. The
Company's Israeli subsidiary, Bio-Technology General (Israel) Ltd., manufactures
and markets in Israel Bio-Tropin(TM) (recombinant human growth hormone),
BioLon(R) (sodium hyaluronate), Bio-Hep-B(R) (hepatitis B vaccine), and
Arthrease(TM) (sodium hyaluronate for osteoarthritis). Products marketed by
Savient's licensees are Mircette(R) (oral contraceptive), and BioLon(R) in the
United States, and Bio-Tropin(TM), BioLon(R), Bio-Hep-B(R), Silkis(R) (vitamin D
derivative), and recombinant human insulin, in international markets. Savient's
news releases and other information are available on the Company's website at
www.savientpharma.com.
Puricase is a registered trademark of Mountain View Pharmaceuticals, Inc.
#####
This news release contains forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934. All statements, other than
statements of historical facts, included in this report regarding the Company's
strategy, expected future financial position, results of operations, cash flows,
financing plans, discovery and development of products, strategic alliances,
competitive position, plans and objectives of management are forward-looking
statements. Words such as "anticipate," "believe," "estimate," "expect,"
"intend," "plan," "will" and other similar expressions help identify
forward-looking statements, although not all forward-looking statements contain
these identifying words. In particular, the statements regarding the Company's
new strategic direction and its potential effects on the Company's business are
forward-looking statements. These forward-looking statements involve substantial
risks and uncertainties and are based on current expectations, assumptions,
estimates and projections about the Company's business and the biopharmaceutical
and specialty pharmaceutical industries in which the Company operates. Such
risks and uncertainties include, but are not limited to, delay or failure in
developing Prosaptide, Puricase and other product candidates; difficulties of
expanding the Company's product portfolio through in-licensing; disruption of
management and costs associated with the divestiture of the Company's operations
in Israel; introduction of generic competition for Oxandrin; fluctuations in
buying patterns of wholesalers; potential future returns of Oxandrin or other
products; difficulties in obtaining financing; potential development of
alternative technologies or more effective products by competitors; reliance on
third-parties to manufacture, market and distribute many of the Company's
products; economic, political and other risks associated with foreign
operations; risks of maintaining protection for the Company's intellectual
property; risks of an adverse determination in on-going or future intellectual
property litigation; and risks associated with stringent government regulation
of the biopharmaceutical and specialty pharmaceutical industries. The Company
may not actually achieve the plans, intentions or expectations disclosed in its
forward-looking statements, and you should not place undue reliance on the
Company's forward-looking statements. Actual results or events could differ
materially from the plans, intentions and expectations disclosed in the
forward-looking statements that the Company makes. The Company's forward-looking
statements do not reflect the potential impact of any future acquisitions,
mergers, dispositions, joint ventures or investments that the Company may make.
The Company does not assume any obligation to update any forward-looking
statements.
#####
TABLES TO FOLLOW
SAVIENT PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands except per share data)
THREE MONTHS ENDED SEPTEMBER 30,
2004 2003
------------------ ---------------
REVENUES:
Product sales, net $ 24,408 $ 32,112
Contract fees 222 327
Royalties 1,044 855
Other 697 487
------------------ ---------------
TOTAL REVENUES 26,371 33,781
------------------ ---------------
EXPENSES:
Research and development 6,265 11,528
Cost of sales 9,624 4,876
Marketing and sales 5,175 5,412
General and administrative 5,999 6,343
Commissions and royalties 1,620 1,704
Amortization of intangibles 1,013 1,013
------------------ ---------------
TOTAL EXPENSES 29,696 30,876
------------------ ---------------
Operating (loss) income (3,325) 2,905
Other (expense) income, net 13 3,517
------------------ ---------------
(Loss) income before income taxes (3,312) 6,422
Income taxes 1,150 2,064
------------------ ---------------
NET (LOSS) INCOME $ (4,462) $ 4,358
================== ===============
(LOSS) EARNINGS PER COMMON SHARE:
Basic $ (0.07) $ 0.07
================== ===============
Diluted $ (0.07) $ 0.07
================== ===============
WEIGHTED AVERAGE NUMBER OF COMMON
AND COMMON EQUIVALENT SHARES:
Basic 60,182 59,339
================== ===============
Diluted 60,182 60,164
================== ===============
SAVIENT PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED) (in thousands except per share data)
NINE MONTHS ENDED SEPTEMBER 30,
2004 2003
------------------ ----------------
REVENUES:
Product sales, net $ 71,041 $ 87,110
Contract fees 672 1,070
Royalties 4,848 2,425
Other 991 2,088
------------------ ----------------
TOTAL REVENUES 77,552 92,693
------------------ ----------------
EXPENSES:
Research and development 21,811 25,384
Cost of sales 25,857 14,556
Marketing and sales 17,709 17,390
General and administrative 18,766 17,839
Retirement 2,110 -
Commissions and royalties 4,530 3,935
Amortization of intangibles 3,038 3,038
------------------ ----------------
TOTAL EXPENSES 93,821 82,142
------------------ ----------------
Operating (loss) income (16,269) 10,551
Other (expense) income, net (683) 3,938
------------------ ----------------
(Loss) income before income taxes (16,952) 14,489
Income taxes 18,136 4,636
------------------ ----------------
NET (LOSS) INCOME $ (35,088) $ 9,853
================== ================
(LOSS) EARNINGS PER COMMON SHARE:
Basic $ (0.59) $ 0.17
================== ================
Diluted $ (0.59) $ 0.17
================== ================
WEIGHTED AVERAGE NUMBER OF COMMON
AND COMMON EQUIVALENT SHARES:
Basic 59,961 59,076
================== ================
Diluted 59,961 59,555
================== ================
SAVIENT PHARMACEUTICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
SEPTEMBER 30, DECEMBER 31,
2004 2003
------------------- ------------------
ASSETS:
Cash, cash equivalents and short-term investments $ 24,720 $ 22,801
Accounts receivable, net 13,093 33,375
Inventories 21,573 20,216
Other current assets 4,011 7,051
------------------- ------------------
TOTAL CURRENT ASSETS 63,397 83,443
Property and equipment, net 67,665 70,426
Intangible assets 72,700 75,743
Goodwill 40,121 40,121
Other long term-assets 6,550 20,807
------------------- ------------------
TOTAL ASSETS $ 250,433 $290,540
=================== ==================
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current portion of long-term debt $ 7,040 $ 7,020
Other current liabilities 37,751 37,510
Long-term debt 621 5,903
Other long-term liabilities and deferred items 51,638 52,677
Stockholders' equity 153,383 187,430
------------------- ------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 250,433 $290,540
=================== ==================