Exhibit 99.1
SAVIENT
PHARMACEUTICALS, INC.
FOR IMMEDIATE RELEASE
SAVIENT PHARMACEUTICALS REPORTS UNAUDITED RESULTS
FOR SECOND QUARTER 2005
-MANAGEMENT PLEASED WITH PROGRESS SINCE A YEAR AGO-
-CORRECTED CUSTOMER PRODUCT RETURNS DATA REDUCES RESERVE REQUIREMENTS
RETROACTIVE TO FIRST QUARTER 2005-
East Brunswick, NJ - August 9, 2005 - Savient Pharmaceuticals, Inc., (NASDAQ:
SVNT) an emerging specialty pharmaceutical company engaged in developing,
manufacturing and marketing pharmaceutical products that address unmet medical
needs in niche and broader markets, announced today unaudited results for the
second quarter 2005.
For the three months ended June 30, 2005, total revenues were $32.3 million, up
from $17.7 million for the same period a year ago. The net loss for the second
quarter was $3.4 million, or 5 cents per share, compared to a net loss of $31.9
million, or 53 cents per share, for the same period a year ago. The prior year
quarter included a $16.3 million, or 27 cents per share, valuation allowance
against the Company's deferred tax assets because of uncertainty with respect to
the realization of those tax benefits.
For the six months ended June 30, 2005, total revenues were $56.8, up from $51.1
million for the same period a year ago. The net loss for the six-month period
was $5.8 million, or 9 cents per share, compared to a net loss of $30.7 million,
or 51 cents per share, for the same period a year ago, including the
aforementioned $16.3 million, or 27 cents per share, valuation allowance.
Christopher Clement, President and Chief Executive Officer of Savient, said, "In
the first quarter of this year, we saw an increase in customer product return
notifications for Oxandrin. Based upon those notifications, which usually
precede the actual return of product by several weeks, we were required to
increase our overall reserve for such returns by $1.5 million in the first
quarter of this year. Later in the second quarter, the actual goods returned by
the customer were a small fraction of the units originally reported. As a
result, we will be restating the first quarter 2005 results. The financial
statements previously filed on Form 10-Q for the three months ended March 31,
2005 should no longer be relied upon. Our reported results for the first
quarter, when amended with the SEC, will improve from a previously reported loss
of 6 cents per share to a loss of 4 cents per share. Reported revenues for the
first quarter 2005 will also increase from $23.0 million to $24.5 million."
Clement continued, "Just over a year ago, we announced a strategy to reposition
Savient as a world-class specialty pharmaceutical company. Today, our business
is focused on the development and expansion of our clinical pipeline and
extending the geographic reach of Rosemont, our oral liquids business. Moreover,
the completion of the sale of the global biologics manufacturing business early
in the third quarter has provided Savient with significant funding to advance
each of these efforts.
"Our positive end-of-Phase 2 meeting with the FDA for Puricase(R) has given us a
lot to look forward to in the coming months. We will enter the Phase 3
development program with clearly defined, FDA-reviewed endpoints and
methodologies for the evaluation of Puricase's efficacy. Those endpoints will
include not only the measurement of uric acid levels but also important clinical
outcomes such as the frequency of gout flares, reduction in burden of tophi,
joint counts and an overall improvement in patient-reported outcomes.
"Our results this quarter are encouraging and a reflection of our increasingly
focused efforts. We continue to see growth at Rosemont, albeit slower than our
historical rate due to temporary disruptions caused by the FDA's inspection of
our U.K.-based manufacturing facility. Nevertheless, Rosemont's EBITDA, or
operating income margin before corporate and non-cash charges, continued to be
in excess of 40% for the quarter. The geographic expansion of this business,
particularly in the U.S., will remain a key focus moving forward."
CLEMENT HIGHLIGHTED SEVERAL RECENT DEVELOPMENTS:
o Closed the sale of the global biologics manufacturing business to Ferring on
July 18, 2005 and received the initial $55 million in cash;
o FDA completed their site inspection of the Rosemont oral liquids manufacturing
facility in conjunction with their review of the Soltamox NDA, submitted in
December of last year;
o Completed positive end-of-Phase 2 meeting with the U.S. Food and Drug
Administration (FDA) for Puricase;
o Notified of acceptance of two Puricase abstracts for presentation at the
November 2005 Annual Meeting of the American College of Rheumatology; and
o Notified of the Company's addition to the Russell 3000(R) and New Russell
Microcap(TM) Indexes.
QUARTER ENDED JUNE 30, 2005
Revenues
o Total revenues for the three months ended June 30, 2005, nearly doubled to
$32.3 million compared to $17.7 million during the same period a year ago.
o Net product sales doubled to $28.8 million compared to $14.3 million during
the same period a year ago.
o Net sales of Oxandrin in the second quarter were $12.5 million
compared to less than $100,000 during the same period a year
ago; the increase was attributable to the discontinuation of
wholesaler purchase incentives in the second quarter of last
year which negatively impacted sales for that period.
o Net sales of Rosemont's oral liquid pharmaceuticals increased
8% to $9.3 million compared to $8.6 million during the same
period a year ago; measured in pounds sterling, sales
increased only 5% reflecting a significant increase in
backorders as a result of the temporary disruptions caused by
the U.S. FDA inspection.
o Total revenues for the global biologics manufacturing business increased 18%
to $8.4 million compared to $7.1 million during the same period a year ago
driven primarily by higher sales of human growth hormone.
Expenses
o Total expenses for the second quarter were $34.2 million increasing 6% from
$32.4 million during the same period a year ago. The increase reflects the
higher sales volumes and related cost of sales, higher product development
costs and pre-marketing expenses incurred for Euflexxa in the U.S. offset, in
part, by lower litigation settlement costs and the absence of last year's
one-time retirement expense.
Other Net Expenses
o Other net expenses of $0.4 million compared favorably to $0.8 million during
the same period a year ago primarily as a result of lower interest expense
resulting from the repayment of debt as of April 30, 2005.
Income Taxes
o Provision for income taxes of $1.1 million compared to $16.5 million a year
ago which reflected primarily a $16.3 million valuation allowance against the
Company's deferred tax assets in June 2004 because of uncertainty with
respect to the realization of those deferred tax benefits.
Balance Sheet
o Savient had cash, cash equivalents and short-term investments of $16.1 million
at June 30, 2005, down from $25.3 million at year end, reflecting primarily
the repayment of $5.7 million in debt and other costs and payments
attributable to the divestiture of the global biologics manufacturing
business which closed on July 18, 2005.
SIX MONTHS ENDED JUNE 30, 2005
Revenues
o Total revenues for the six months ended June 30, 2005 were $56.8 million
compared to $51.1 million during the same period a year ago.
o Net product sales were $53.0 million compared to $46.5 million a year ago.
o Net product sales of Rosemont's oral liquid pharmaceuticals increased 16% to
$18.4 million compared to $15.9 million during the same period a year ago;
measured in pounds sterling, sales increased 13% versus a year ago.
o Net sales of Oxandrin were $22.3 million compared to $18.5 million a year ago;
the increase was primarily attributable to the discontinuation of wholesaler
purchase incentives in the second quarter of last year which negatively
impacted sales for that period.
o Total revenues for the global biologics manufacturing business increased to
$12.7 million compared to $11.4 million a year ago, driven largely by higher
sales of human growth hormone.
Expenses
o Total expenses for the first six months of 2005 were $62.7 million down 2%
from $64.1 million during the same period a year ago; the decrease reflects
higher sales volumes and cost of products sales more than offset by lower
development costs for Puricase and Prosaptide, lower sales and marketing
expense for Oxandrin and the absence of last year's one-time retirement
expense.
Other Net Income
o Other net income of $1.7 million compared to other net losses of $0.7 million
during the same period a year ago, primarily attributable to the receipt of
settlement proceeds from intellectual property litigation in 2005.
Income Taxes
o Provision for income taxes of $1.4 million compared to $17.0 million a year
ago which reflected primarily a $16.3 million valuation allowance against the
Company's deferred tax assets in June 2004 because of uncertainty with respect
to the realization of those deferred tax benefits.
Clement concluded, "Over the past year, we have made significant progress and
can now look ahead with a definitive plan for the full development of our
clinical pipeline with the funding necessary to achieve it."
The Company is making every effort to file by today's deadline its Form 10-Q for
the quarter and six-months ended June 30, 2005 and its restated Form 10-Q/A
giving effect to the aforementioned correction in returned goods reserves for
the quarter-ended March 31, 2005. However, in the event that it is unable to do
so, the Company will file for an extension on Form 12b-25.
Savient will host a conference call/live webcast today to review second quarter
2005 results today, August 9, 2005, at 11:00 a.m. EDT.
The live webcast can be accessed under the Webcast page under the News section
of Savient's website at www.savientpharma.com and will be archived through
August 23, 2005.
In addition, an audio replay will be available until August 23, 2005. The replay
numbers are (888) 203-1112 for domestic callers and (719) 457-0820 for
international callers. The replay access code is 4891523.
ABOUT SAVIENT PHARMACEUTICALS, INC.
Based in East Brunswick, New Jersey, Savient Pharmaceuticals, Inc. is a
specialty pharmaceutical company dedicated to developing, manufacturing and
marketing novel therapeutic products that address unmet medical needs. The
Company's lead product development candidate, Puricase(R), for the treatment of
refractory gout has reported positive Phase 1 and 2 clinical data. Savient's
experienced management team is committed to advancing its pipeline and expanding
its product portfolio by in-licensing late stage compounds and exploring
co-promotion and co-development opportunities that fit the Company's expertise
in specialty pharmaceuticals and initial focus in rheumatology. The Company's
operations also include a wholly-owned U.K. subsidiary, Rosemont Pharmaceuticals
Ltd., which develops, manufactures and markets liquid formulations of
prescription pharmaceutical products. Rosemont's product portfolio includes over
90 liquid formulations primarily targeting the geriatric population. Puricase is
a registered trademark of Mountain View Pharmaceuticals, Inc. Further
information on the Company can be accessed by visiting www.savientpharma.com
(http://www.savientpharma.com/).
SAFE HARBOR STATEMENT
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, 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 estimated net proceeds from the sale of the global
biologics manufacturing business, the continued implementation of the Company's
strategic plan, the development of the Company's pipeline, the commencement of
Phase 3 clinical trials for Puricase and growth at Rosemont 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; introduction of generic
competition for Oxandrin; fluctuations in buying patterns of wholesalers;
potential future returns of Oxandrin or other products; our continuing to incur
substantial net losses for the foreseeable future; 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.
SOURCE: Savient Pharmaceuticals, Inc.
CONTACTS:
Savient Pharmaceuticals, Inc.
Jenene Thomas
Director, Investor Relations
732-565-4716
jdthomas@savientpharma.com
Investors/Media:
The Ruth Group
Francesca DeMartino/Janine McCargo
646-536-7024/7033
fdemartino@theruthgroup.com
jmccargo@theruthgroup.com
SAVIENT PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands except per share data)
SIX MONTHS ENDED JUNE 30,
2005 2004
------------------ ----------------
REVENUES:
Product sales, net 52,971 46,543
Royalties and other revenues 3,809 4,548
------------------ ----------------
TOTAL REVENUES 56,780 51,091
------------------ ----------------
EXPENSES:
Cost of sales 19,500 16,227
Research and development 14,522 15,546
Marketing and sales 11,689 12,534
General and administrative 12,592 12,767
Retirement - 2,110
Commissions and royalties 2,445 2,910
Amortization of intangibles associated with acquisitions 2,025 2,025
------------------ ----------------
TOTAL EXPENSES 62,773 64,119
------------------ ----------------
Operating (loss) income (5,993) (13,028)
Other income (expense) - net 1,652 (696)
------------------ ----------------
(Loss) income before income taxes (4,341) (13,724)
Income tax expense 1,416 16,986
------------------ ----------------
NET (LOSS) INCOME (5,757) (30,710)
================== ================
(LOSS) EARNINGS PER COMMON SHARE:
Basic:
Net (loss) income (0.09) (0.51)
================== ================
Diluted:
Net (loss) income (0.09) (0.51)
================== ================
WEIGHTED AVERAGE NUMBER OF COMMON
AND COMMON EQUIVALENT SHARES:
Basic 60,635 59,849
================== ================
Diluted 60,635 59,849
================== ================
SAVIENT PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands except per share data)
THREE MONTHS ENDED JUNE 30,
2005 2004
------------------ ----------------
REVENUES:
Product sales, net 28,849 14,342
Royalties and other revenues 3,443 3,346
------------------ ----------------
TOTAL REVENUES 32,292 17,688
------------------ ----------------
EXPENSES:
Cost of sales 10,779 7,576
Research and development 8,240 6,882
Marketing and sales 6,535 5,868
General and administrative 6,415 7,395
Retirement - 2,110
Commissions and royalties 1,221 1,507
Amortization of intangibles associated with acquisitions 1,012 1,012
------------------ ----------------
TOTAL EXPENSES 34,202 32,350
------------------ ----------------
Operating (loss) income (1,910) (14,662)
Other income (expense) - net (405) (769)
------------------ ----------------
(Loss) income before income taxes (2,315) (15,431)
Income tax expense 1,084 16,457
------------------ ----------------
NET (LOSS) INCOME (3,399) (31,888)
================== ================
(LOSS) EARNINGS PER COMMON SHARE:
Basic:
Net (loss) income (0.05) (0.53)
================== ================
Diluted:
Net (loss) income (0.05) (0.53)
================== ================
WEIGHTED AVERAGE NUMBER OF COMMON
AND COMMON EQUIVALENT SHARES:
Basic 60,722 59,962
================== ================
Diluted 60,722 59,962
================== ================
SAVIENT PHARMACEUTICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004
------------------- ------------------
ASSETS:
Cash, cash equivalents and short-term investments 16,138 25,282
Accounts receivable, net 13,935 15,537
Inventories, net 8,627 15,317
Other current assets 5,290 3,444
Assets available for sale 74,150 79,268
------------------- ------------------
TOTAL CURRENT ASSETS 118,140 138,848
Property and equipment, net 6,669 6,985
Intangible assets, net 69,663 71,688
Goodwill 40,121 40,121
Other long term-assets 1,365 2,946
------------------- ------------------
TOTAL ASSETS 235,958 260,588
=================== ==================
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current portion of long-term debt 161 5,903
Liabilities available for sale 11,255 12,742
Other current liabilities 38,295 49,598
Long-term debt 0 0
Other long-term liabilities and deferred items 37,134 37,677
Stockholders' equity 149,113 154,668
------------------- ------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 235,958 260,588
=================== ==================
NOTE: CERTAIN RECLASSIFICATIONS WERE MADE TO THE DECEMBER 31, 2004 BALANCES TO
BE CONSISTENT WITH THE PRESENTATION SHOWN AS OF JUNE 30, 2005.
SAVIENT PHARMACEUTICALS, INC. AND SUBSIDIARIES
RESTATEMENT OF CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended March 31, 2005
---------------------------------------------------------
As previously reported As restated
Product sales, net $ 22,615 $ 24,122
Total revenues 22,981 24,488
Operating income (loss) (5,590) (4,083)
Income (loss) before income taxes (3,533) (2,026)
Net Income (loss) $ (3,865) $ (2,358)
Earnings (loss) per common share:
Basic $ (0.06) $ (0.04)
Diluted $ (0.06) $ (0.04)
SAVIENT PHARMACEUTICALS, INC. AND SUBSIDIARIES
RESTATEMENT OF CONSOLIDATED BALANCE SHEET
(unaudited)
(in thousands, except per share data)
Three Months Ended March 31, 2005
---------------------------------------------------------
As previously reported As restated
Accounts receivable, net $ 2,692 $ 1,185
Total current assets 120,338 118,831
Total assets $ 239,350 $ 237,843
Accumulated deficit (69,561) (71,068)
Total stockholders' equity 152,390 150,883
Total liabilities and stockholders' equity $ 239,350 $ 237,843