EXHIBIT 99.1
IVAX Reports 3rd Quarter 2004 Results; Revenues up 22% to $439.1 Million; Net
Income up 105% to $44.4 Million; EPS up 89% to $.17 -Pre-Split $.22-; 2004
Guidance Reconfirmed
MIAMI--(BUSINESS WIRE)--Nov. 1, 2004--IVAX Corporation (AMEX: IVX,
LSE: IVX.L) reported third quarter 2004 net revenues of $439.1 million
and gross profit of $190.6 million, 22% and 19% increases,
respectively, over net revenues of $360.6 million and gross profit of
$160.5 million in the third quarter of 2003. Net income for the third
quarter 2004 was $44.4 million, a 105% increase over net income of
$21.6 million for the third quarter 2003. Third quarter 2004 earnings
per share of $.17 (pre-split $.22) were 89% higher than $.09 in the
third quarter of 2003. For nine months ending September 30, 2004, net
revenues were $1.33 billion, and net income, $134.8 million, $.53 per
share (pre-split $.66), compared to net revenues of $1.02 billion and
net income, $91.9 million, $.37 per share in 2003. On August 24, 2004,
IVAX concluded a five-for-four stock split and all financial data,
except where indicated, have been adjusted accordingly.
Neil Flanzraich, vice chairman and president of IVAX Corporation
said, "We are pleased at the continued growth of our business. This is
the seventh consecutive quarter that IVAX has achieved year-over-year
increases of net revenues and gross profit and the third consecutive
quarter of year-over-year growth in net income. All our major business
regions have generated continued revenue growth. In the third quarter
2004, our North American net revenues increased 24% from $172.3
million to $213.0 million. European net revenues increased 22% from
$124.0 million to $151.2 million and Latin American net revenues
increased 21% from $68.8 million to $83.2 million. This is the seventh
consecutive quarter that our North American and European operations,
and the sixth consecutive quarter that our Latin American operations,
have achieved year-over-year quarterly net revenue growth.
"We also are pleased by the continued growth of IVAX' QVAR in the
U.S. market. QVAR(R), the only CFC-free aerosol corticosteroid for
asthma on the U.S. market, continues to gain market share which is up
seven-fold since we first started selling QVAR in the U.S. in April
2002. IVAX' QVAR sales in Europe, started in the fourth quarter 2003,
are also growing.
"IVAX continues to capitalize on a series of opportunities
provided by our strong and increasing U.S. generic pipeline. It began
with our six-month exclusivity launch of metformin ER in the U.S. in
the fourth quarter 2003, followed in 2004 by our launch of Paxene(TM)
in Europe as the first approved generic, and then our launch of
glyburide/metformin HCl in the U.S, also with six-month exclusivity.
On August 18, 2004, IVAX launched gabapentin tablets (100, 300 and 400
mg). Subsequently, three generic companies launched their gabapentin
capsules (100, 300, and 400 mg). However, IVAX' product was the sole
generic gabapentin on the market for nearly seven weeks. Patent
litigation on gabapentin is pending. We expect that our strong U.S.
generic pipeline will produce many such opportunities in the future.
"A number of factors reduced the expected benefits of some of
these opportunities. After our exclusivity period on metformin ER
expired, aggressive competitive pricing curtailed its revenue and
earnings contributions. Aggressive pricing by an authorized generic
distributor likewise affected revenues and profit from our sales of
glyburide/metformin HCl. Furthermore, the introduction of three other
generic marketers for gabapentin, markedly reduced prices after they
launched their products. Also, profits in Europe were limited by
generic pricing pressures and cyclical, weak summer sales.
"IVAX expects a good fourth quarter and year 2005, because of:
-- Sales of our current line of U.S. generic products, which
benefit from exclusivity periods for glyburide/metformin HCl
and our gabapentin tablets.
-- New generic approvals from our expanding generic pipeline,
which now consists of 48 ANDAs pending with the FDA, of which
ten are potentially first to be filed with current annual
brand sales of over $12 billion in the U.S. One of these,
fluticasone (a patent expiration), the generic equivalent of
GlaxoSmithKline's Flonase(R), has annual U.S. sales of
approximately $1 billion. This approval may come in 2004, and
it can also be an important contributor to future revenues.
-- First-to-file patent challenges of blockbuster drugs. We
expect a decision before the end of the year on our patent
challenge of Zyprexa(R), Eli Lilly's anti-psychotic drug with
annual U.S. sales of $3 billion. IVAX strongly believes in all
patent cases we initiate; naturally, however, no one can
predict the outcome of any particular case. In May 2005, we
start our patent challenge trial on Lexapro(R), Forest Labs
anti-depressant drug with annual U.S. sales of $1.4 billion.
-- Continued growth in QVAR sales in the U.S. and Europe.
-- Last Friday evening's FDA approval of our NDA for HFA
(CFC-free) albuterol in a metered dose inhaler (MDI), which
was announced earlier today.
-- Approval of our NDA for HFA (CFC-free) albuterol in our
patented breath-activated device, expected in the first half
of 2005. Both albuterol HFA products are expected to be
important products, more so when CFC albuterol is removed from
the U.S. market, now anticipated in 2006.
-- Continued strength in rapidly growing Latin American
operations.
-- Better results in our European business driven by continued
growth of QVAR sales, enhanced by the September 30, 2004 U.K.
approval of QVAR in our patented Easi-Breathe device.
-- Expected collaborative agreements for products in our
proprietary pipeline.
"For these and other reasons, IVAX expects to meet or exceed our
guidance for 2004 of $.71 per share."
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
internationally.
Copies of this and other news releases may be obtained free of
charge from IVAX' website at www.ivax.com.
Except for the historical matters contained herein, statements in
this press release are forward-looking and are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act
of 1995. Investors are cautioned that forward-looking statements,
including, among others, statements relating to goals, plans,
expectations, estimates and projections regarding the company's
financial position, results of operations, market position and
business strategy involve risks and uncertainties that cannot be
predicted or quantified and, consequently, actual results may differ
materially from those expressed or implied by such forward-looking
statements. Such risks and uncertainties include, among others, the
risks that the current trend in earnings growth may not continue and
that growth in any of the geographic areas in which IVAX operates may
be less than anticipated; that the results for the fourth quarter of
2004 or year 2005 may not be strong and may not meet expectations;
that there are uncertainties and matters beyond the control of
management, as well as a variety of assumptions and estimates with
respect to the future, which if they do not occur as or when
anticipated, or prove to be incorrect, could affect IVAX' earnings
expectations and IVAX may not, therefore, meet or exceed its guidance
for the year; that market acceptance for the tablet dosage form of
gabapentin may not be as anticipated; the impact of competitive
products and pricing, including the impact of "authorized generics";
the difficulty in predicting the timing and outcome of legal
proceedings, including the outcome of Pfizer's patent infringement
claim against IVAX and others with respect to gabapentin, the outcome
of Eli Lilly's patent infringement claim against IVAX and others with
respect to Zyprexa(R), including that a decision on Zyprexa may not
occur during 2004, and the outcome of Forest Laboratories' patent
infringement claim against IVAX with respect to Lexapro(TM); that the
patent litigation regarding these products may be delayed or resolved
adversely to IVAX and could prevent IVAX from selling these products;
that with respect to cases such as gabapentin, where we choose to
launch "at risk," the litigation could result in substantial damages
which could exceed the expected profit or selling price for these
products; the difficulty of predicting the timing of U.S. Food and
Drug Administration, or FDA, approvals for these products; the impact
of FDA's or other administrative or judicial agency's decisions on
exclusivity periods; competitors' ability to extend exclusivity
periods past initial patent terms; that future sales of
glyburide/metformin HCl during its exclusivity period may be less than
expected; that the launch of fluticasone propionate aqueous nasal
spray, 50mcg strengths may be delayed and may not occur in 2004 or
2005, and therefore may not be an important contributor to our
revenues in 2005; the difficulty of predicting the timeliness or
outcome of product development efforts and the filing of regulatory
applications; that IVAX may not increase the number of products in its
generic portfolio; that IVAX may not receive approval of its pending
ANDAs, or that if approved, the products will not be successfully
commercialized; that IVAX may not have or retain first to file status
on 10 ANDAs; that sales of QVAR may not continue to grow in the U.S.
or Europe and in Europe sales of QVAR may not be spurred by the
approval of QVAR in Easi-Breathe; that IVAX may not receive final
approval for HFA albuterol sulfate in its breath-activated inhaler or
that launch will be delayed; market acceptance and demand for IVAX'
respiratory products may not be as anticipated; that CFC propellants
may not be removed from the market when anticipated or at all; that
IVAX may not enter into other collaborative agreements related to
products in our proprietary pipeline; and that the collaboration with
Mayne regarding Paxene in the European Union may not achieve the
results expected. In addition to the risk factors set forth above,
IVAX' forward looking statements may also be adversely affected by
general market factors; product availability; federal and state
regulations and legislation, including changes in accounting
regulations; 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; changing market conditions; the availability and
cost of raw materials and other third party products; the impact of
competitive products and pricing; and other risks and uncertainties
based on economic, competitive, governmental, technological and other
factors. 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. Neurontin(R) is a registered
trademark of Warner-Lambert Company, a unit of Pfizer Inc. Zyprexa(R)
is a registered trademark of Eli Lilly and Company. Lexapro(TM) is a
trademark of Forest Laboratories. Flonase(R) is a registered trademark
of GlaxoSmithKline Corporation.
IVAX Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Nine Months
Period Ended September 30, 2004 2003 2004 2003
(In thousands, except per --------------------- ---------------------
share data)
Net revenues $ 439,086 $ 360,638 $1,328,239 $1,021,316
Cost of sales (excludes
amortization, which is
presented below) 248,530 200,102 713,723 563,685
--------------------- ---------------------
Gross profit 190,556 160,536 614,516 457,631
--------------------- ---------------------
Operating expenses:
Selling 66,441 51,128 194,308 149,181
General and
administrative 40,393 34,902 120,498 91,249
Research and
development 33,639 29,973 104,651 75,459
Amortization of
intangible assets 5,510 4,611 16,447 14,417
Restructuring costs 517 18 1,114 798
--------------------- ---------------------
Total operating
expenses 146,500 120,632 437,018 331,104
--------------------- ---------------------
Operating income 44,056 39,904 177,498 126,527
Total other expense,
net (3,060) (5,568) (25,554) (19,747)
--------------------- ---------------------
Income before income
taxes and minority
interest 40,996 34,336 151,944 106,780
(Benefit) provision for
income taxes (3,358) 12,756 17,094 37,240
--------------------- ---------------------
Income before minority
interest 44,354 21,580 134,850 69,540
Minority interest 24 51 (33) 162
--------------------- ---------------------
Income from continuing
operations 44,378 21,631 134,817 69,702
Income from discontinued
operations, net of tax
of $12,763 - - - 22,204
--------------------- ---------------------
Net income $ 44,378 $ 21,631 $ 134,817 $ 91,906
===================== =====================
Basic earnings per common
share:
Continuing operations $ 0.18 $ 0.09 $ 0.54 $ 0.29
Discontinued
operations - - - 0.09
--------------------- ---------------------
Net income $ 0.18 $ 0.09 $ 0.54 $ 0.38
===================== =====================
Diluted earnings per
common share:
Continuing operations $ 0.17 $ 0.09 $ 0.53 $ 0.28
Discontinued
operations - - - 0.09
--------------------- ---------------------
Net income $ 0.17 $ 0.09 $ 0.53 $ 0.37
===================== =====================
Weighted average number
of common shares
outstanding:
Basic 250,296 244,814 248,158 244,160
===================== =====================
Diluted 256,235 249,567 254,229 247,837
===================== =====================
IVAX Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
September 30, December 31,
2004 2003
--------------------------
(In thousands) (Unaudited)
Assets
- -------------------------
Cash and cash equivalents $ 299,153 $ 146,870
Marketable securities,
short-term 2,563 10,470
Other current assets 1,020,997 838,376
Property, plant and
equipment, net 548,704 502,942
Other assets 916,727 874,276
------------------------
Total assets $2,788,144 $2,372,934
========================
Liabilities and
Shareholders' Equity
- ---------------------
Current portion of long-
term debt $ 54,930 $ 58,607
Other current liabilities 493,749 427,942
Long-term debt 999,245 855,335
Other long-term
liabilities 56,807 56,208
Minority interest 12,563 12,531
Shareholders' equity 1,170,850 962,311
------------------------
Total liabilities and
shareholders' equity $2,788,144 $2,372,934
========================
IVAX Corporation and Subsidiaries
Reportable Segment Data
(Unaudited)
Period Ended September 30, Three Months Nine Months
(In thousands) 2004 2003 2004 2003
----------------- ---------------------
North America
External sales $212,371 $167,418 $ 604,409 $ 456,217
Intersegment sales 431 27 4,885 489
Other revenues 148 4,858 1,953 21,938
----------------- ---------------------
Net revenues - North
America 212,950 172,303 611,247 478,644
----------------- ---------------------
Europe
External sales 126,329 100,586 400,363 299,396
Intersegment sales 23,949 19,090 65,710 47,031
Other revenues 945 4,363 45,162 22,005
----------------- ---------------------
Net revenues - Europe 151,223 124,039 511,235 368,432
----------------- ---------------------
Latin America
External sales 81,686 68,633 230,748 179,714
Other revenues 1,490 142 2,284 401
----------------- ---------------------
Net revenues - Latin
America 83,176 68,775 233,032 180,115
----------------- ---------------------
Corporate & other
External sales 10,614 14,199 36,217 39,014
Intersegment sales (24,380) (19,117) (70,595) (47,520)
Other revenues 5,503 439 7,103 2,631
----------------- ---------------------
Net revenues -
Corporate & other (8,263) (4,479) (27,275) (5,875)
----------------- ---------------------
----------------- ---------------------
Consolidated net revenues $439,086 $360,638 $1,328,239 $1,021,316
================= =====================
CONTACT: IVAX Corporation
David Malina, 305-575-6043
Director/Investor Relations & Corporate Communications