EXHIBIT 99.1
IVAX Reports Increased Revenues and Net Income for 2nd Quarter of 2003;
2Q2003 Net Revenues Up 22% to $343 Million, Net Income Up 30% to $41.3 Million
MIAMI--(BUSINESS WIRE)--July 30, 2003--IVAX Corporation (AMEX:IVX)
(LSE:IVX.L) reported second quarter 2003 net revenues of $343.0
million, a 22% increase over net revenues of $280.4 million in the
second quarter of 2002; net income of $41.3 million, a 30% increase
over net income of $31.7 million in the second quarter of 2002; and
earnings per share of $.21 (including $.11 per share from discontinued
operations), an increase of 31% over earnings per share of $.16 in the
second quarter of 2002. For the first two quarters of 2003, net
revenues were $660.7 million, net income, $70.3 million, or $.36 per
share; compared to net revenues of $552.6 million, net income, $55.2
million, or $.28 per share for the first two quarters of 2002,
increases of 20%, 27% and 29% respectively.
Commenting on the second quarter's results, Neil Flanzraich, vice
chairman and president of IVAX Corporation said, "Driving our second
quarter results were increases in revenues from our North American,
European and Latin American operations. In Europe and North America,
revenues increased by 26%. Latin American revenues showed a 4% growth
over revenues in the second quarter 2002 and a 19% increase over
revenues from the first quarter 2003. The results of the first and
second quarters of 2003 indicate continuing, robust growth in our
business."
During the second quarter, IVAX received the first of a series of
payments from B. Braun Melsungen AG, under a number of agreements, for
certain patent and product rights and for settlement of litigation.
The net present value of these payments is $22.2 million after
expenses, fees, and taxes, or $.11 per share. In accordance with
current accounting rules, all of this income has been accounted for in
this quarter as earnings from discontinued operations because the
agreements originated from a relationship that began with the sale of
a former IVAX business.
"Our anticipation of these B. Braun payments," Mr. Flanzraich
said, "allowed IVAX to accelerate spending to build our business. Of
course, these expenditures decreased income from continuing operations
in the quarter but we believe that they will increase future revenues
and profits. We increased spending on IVAX' recently acquired facility
to manufacture active pharmaceutical ingredients (API's) in Puerto
Rico to bring it up to IVAX' standards, as well as on our R&D program,
and our marketing and sales efforts for branded products in the United
States and France. We also incurred a one-time expense for a lump-sum
retirement payment to Isaac Kaye, the former Chairman of IVAX
Pharmaceuticals, UK, who retired in June 2003."
IVAX expects to benefit during the rest of the year and into 2004
from:
-- Increased capacity at IVAX' finished product and API
facilities will help meet the strong, growing demand
for its products. By supplying API's from its own
plants, it will also lower cost of goods and increase
operating margins.
-- IVAX' recently announced transaction with 3M gives
IVAX additional, profitable, branded asthma products
and additional, experienced marketing and sales
infrastructure in nine European countries. This will
rapidly increase IVAX' presence in Europe, and give it
a broader platform from which to sell other products.
IVAX expects the products and infrastructure it
acquired to increase its sales and profitability in
Europe; and to increase efficiencies and provide
synergies in the utilization of infrastructures in the
U.K. and France, to further increase profitability.
-- IVAX expects the European approval and launch of
paclitaxel for its primary cancer indications.
Currently, Bristol Meyers is the sole provider
of this product in Europe and its prices there are
considerably higher than in the U.S.
-- IVAX' strong business in Latin America should benefit
from improving economic conditions as well as from the
launches of new products and greater operating
efficiencies.
-- In the U.S., IVAX' asthma drug, QVAR(R), is being
marketed as the ideal product for treating lower
airway disease and continues to gain market share.
Additionally, IVAX anticipates the approval of its NDA
on Volare(TM), a chlorofluorocarbon-free formulation
of albuterol in a metered-dose inhaler, used
as a "rescue" medication for asthma.
-- So many of IVAX' proprietary drug candidates are
progressing well in advanced clinical development that
IVAX feels the need to focus, and has accordingly
undertaken to out-license some of these products. Such
arrangements may result in upfront and milestone
payments, even before the products reach market, and
later in royalty payments. These arrangements would
also have the effect of reducing IVAX' R&D costs. IVAX
also expects to receive additional payments from its
existing collaborations. The present value of this
pipeline is considerable and growing, and will in time
be reflected in the price of IVAX' shares.
-- IVAX expects to file several additional generic
applications with the FDA before the end of the year,
adding to a pipeline that currently has 39 generic
applications pending. Furthermore, IVAX anticipates
significant additions to this pipeline from previously
announced and new partnerships with other companies.
IVAX anticipates launches of generic versions of
important brand products during the balance of 2003
and 2004. These include products with great potential
for IVAX, but may depend on success with on-going
litigation.
"We look forward to reporting on the impact of these developments
and the growing demand for our products on future sales and earnings,"
concluded Mr. Flanzraich.
IVAX will host a conference call and simultaneous webcast at 10
a.m. Eastern (Miami) Time today to discuss first quarter results and
other topics. Interested parties can access the conference call by
dialing 1-888-428-4469 from anywhere in the U.S. or by dialing
612-332-0345 from non-U.S. locations. To register and access the
webcast, go to IVAX' website at http://www.ivax.com at least fifteen
minutes before the 10:00 a.m. conference call. Click on the website
link on the IVAX home page to register and download or install any
necessary software.
Replays of the conference call will be available starting at
approximately 1:30 p.m. on July 30th and will continue through August
6th. To listen to the replay, dial 800-475-6701 and enter the ID #
693484. Replays of the webcast via IVAX' website will be available
from July 30th through August 6th.
IVAX Corporation, headquartered in Miami, Florida, discovers,
develops, manufactures, and markets branded and brand equivalent
(generic) pharmaceuticals and veterinary products in the U.S. and
abroad.
Copies of this and other news releases may be obtained free of
charge from IVAX' website at www.ivax.com.
This press release contains certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of
1995, regarding, among other things, statements relating to goals,
plans and projections regarding the company's financial position,
results of operations, market position, product development and
business strategy. These statements involve risks and uncertainties
that cannot be predicted or quantified and, consequentially, actual
results may differ materially from those expressed or implied by such
forward-looking statements. Such risks and uncertainties include,
among others, that increased expenditures may not increase our future
revenues and profits; that production from API Industries may not
increase and may not keep pace with growth in demand for our generics
or provide a lower cost of goods sold or increased operating margins;
that our increased presence in Europe may not increase our sales and
profitability or give us a broader platform for our products; that
efficiency and synergies in the U.K. and France may not increase our
profitability; that economic conditions in Latin America may not
improve; that IVAX may not enter into new product collaboration and
license agreements, receive upfront, milestone or royalty payments
from such agreements, or receive additional payments from existing
agreements; that IVAX may not receive approval for, or launch, its
paclitaxel product in Europe; that IVAX may not receive approval for
Volare(TM); that demand for our products may not increase; that
political and economic instability in some countries in which we
conduct our business, particularly Latin American countries, may
adversely affect the revenue our foreign operations generate; that
IVAX has in the past and may in the future experience difficulties in
obtaining raw materials necessary for the production of IVAX' products
on commercially reasonable terms or at all; that clinical trials and
studies for products and compounds under development may not be
commenced, may take longer than anticipated, may fail, may not achieve
the expected results or effectiveness and may not generate the data
that would support the approval or marketing of these products for the
indications being studied or for other indications; that the compounds
and products in IVAX' research pipeline will not be successfully
developed, will not receive regulatory approval, will not be
successfully commercialized or will not be reflected in the price of
our shares; the uncertainties related to the timing or outcome of
product development; that IVAX may not file new ANDAs during 2003 or
add to our pipeline from our R&D or collaborations. In addition to the
risk factors set forth above, IVAX' forward looking statements may
also be adversely affected by general market factors, competitive
product development, product availability, current and future branded
and generic competition for the company's products, federal and state
regulations and legislation, the regulatory process for new products
and indications, manufacturing issues that may arise, trade buying
patterns, exchange rate fluctuations, patent positions and the timing
and outcome of legal proceedings, among other things. For further
details and discussion of these and other risks and uncertainties, see
IVAX' Annual Report on Form 10-K and other filings with the Securities
and Exchange Commission. IVAX undertakes no obligation to publicly
update any forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
IVAX Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Six Months
Period Ended June 30, 2003 2002 2003 2002
(In thousands, except per ----------- ----------- --------- ---------
share data)
Net revenues $342,985 $280,406 $660,678 $552,628
Cost of sales 192,033 149,843 363,583 300,090
----------- ----------- --------- ---------
Gross profit 150,952 130,563 297,095 252,538
----------- ----------- --------- ---------
Operating expenses:
Selling 52,458 43,701 98,053 85,847
General and
administrative 31,279 27,368 56,347 54,634
Research and development 25,065 18,330 45,486 37,384
Amortization of
intangible assets 5,315 3,918 9,806 6,932
Restructuring costs 317 1,794 780 2,282
----------- ----------- --------- ---------
Total operating
expenses 114,434 95,111 210,472 187,079
----------- ----------- --------- ---------
Income from operations 36,518 35,452 86,623 65,459
Total other (expense)
income, net (10,087) 10,068 (14,179) 5,079
----------- ----------- --------- ---------
Income before income taxes
and minority interest 26,431 45,520 72,444 70,538
Provision for income taxes 7,378 13,766 24,484 19,578
----------- ----------- --------- ---------
Income before minority
interest 19,053 31,754 47,960 50,960
Minority interest 33 (32) 111 62
----------- ----------- --------- ---------
Income from continuing
operations 19,086 31,722 48,071 51,022
Income from discontinued
operations, net of tax of
$12,763 22,204 - 22,204 -
Cumulative effect of
accounting change - - - 4,161
----------- ----------- --------- ---------
Net income $41,290 $31,722 $70,275 $55,183
=========== =========== ========= =========
Basic earnings per common
share:
Continuing operations $0.10 $0.16 $0.25 $0.26
Discontinued operations $0.11 $ - $0.11 $ -
Cumulative effect of
accounting change $ - $ - $ - $0.02
----------- ----------- --------- ---------
Net income $0.21 $0.16 $0.36 $0.28
=========== =========== ========= =========
Diluted earnings per common
share:
Continuing operations $0.10 $0.16 $0.25 $0.26
Discontinued operations $0.11 $ - $0.11 $ -
Cumulative effect of
accounting change $ - $ - $ - $0.02
----------- ----------- --------- ---------
Net income $0.21 $0.16 $0.36 $0.28
=========== =========== ========= =========
Weighted average number of
common shares outstanding:
Basic 195,163 195,083 195,066 195,642
=========== =========== ========= =========
Diluted 198,503 196,998 197,578 198,128
=========== =========== ========= =========
IVAX Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
June 30, December 31,
2003 2002
------------- -------------
(In thousands) (Unaudited)
Assets
- ------
Cash and cash equivalents $185,955 $155,408
Marketable securities, short-term 2,101 28,873
Other current assets 699,077 696,936
Property, plant and equipment, net 453,102 420,246
Other assets 786,485 746,296
------------- -------------
Total assets $2,126,720 $2,047,759
============= =============
Liabilities and Shareholders' Equity
- ------------------------------------
Current portion of long-term debt $37,289 $28,617
Other current liabilities 398,134 405,446
Long-term debt 819,510 872,339
Other long-term liabilities 55,251 46,115
Minority interest 12,608 10,379
Shareholders' equity 803,928 684,863
------------- -------------
Total liabilities and shareholders'
equity $2,126,720 $2,047,759
============= =============
IVAX Corporation and Subsidiaries
Reportable Segment Data
(Unaudited)
Period Ended June 30, Three Months Six Months
In thousands 2003 2002 2003 2002
--------- --------- --------- ---------
North America
External sales $142,436 $111,546 $288,799 $214,507
Intersegment sales 178 276 462 552
Other revenues 6,954 7,124 17,080 14,860
--------- --------- --------- ---------
Net revenues - North
America 149,568 118,946 306,341 229,919
--------- --------- --------- ---------
Europe
External sales 105,107 80,906 198,810 166,189
Intersegment sales 14,546 15,516 27,941 29,905
Other revenues 12,513 8,651 17,642 17,191
--------- --------- --------- ---------
Net revenues - Europe 132,166 105,073 244,393 213,285
--------- --------- --------- ---------
Latin America
External sales 60,458 57,726 111,081 116,503
Other revenues 132 430 259 830
--------- --------- --------- ---------
Net revenues - Latin
America 60,590 58,156 111,340 117,333
--------- --------- --------- ---------
Corporate & other
External sales 13,768 12,928 24,815 20,208
Intersegment sales (14,724) (15,792) (28,403) (30,457)
Other revenues 1,617 1,095 2,192 2,340
--------- --------- --------- ---------
Net revenues - Corporate &
other 661 (1,769) (1,396) (7,909)
--------- --------- --------- ---------
--------- --------- --------- ---------
Consolidated net revenues $342,985 $280,406 $660,678 $552,628
========= ========= ========= =========
CONTACT: IVAX Corporation
Thomas Beier, 305-575-6563
or
David Malina, 305-575-6043