Exhibit 99.1
IVAX Reports Results For Second Quarter 2005;
Revenues Up 24% To $577.3 Million;
Net Income $45.6 Million; EPS $0.17
MIAMI--(BUSINESS WIRE)--Aug. 1, 2005--IVAX Corporation (AMEX:IVX)
(LSE:IVX.L) (WSE:IVX) reported second quarter 2005 net revenues of
$577.3 million, a 24% increase over net revenues of $464.0 million in
the second quarter 2004. Net income in the second quarter 2005 was
$45.6 million. Earnings per share was $0.17 for the second quarter
2005. Net income in the second quarter 2004 was $48.1 million and
earnings per share $0.18.
Neil Flanzraich, vice chairman and president of IVAX Corporation,
said, "These results were consistent with our expectations for the
quarter and above our expectations for the first half of the year. Our
income before income taxes for the second quarter of this year was
$65.1 million compared to $58.2 million in the second quarter of 2004.
Our net income for this quarter was impacted by a significantly higher
income tax rate of approximately 30% as compared to a 17% tax rate for
the comparable quarter in 2004.
"We expect our second half of 2005 to be significantly stronger
and confirm our earnings guidance of $0.76 - $0.86 per share. We
believe our earnings for the full year will be in the middle to upper
end of this range. We also confirm our 2006 guidance of $1.35 - $1.55
per share. Not included in this guidance is profit from our sale of
our generic version of Zocor(R), which we expect to launch in the
middle of 2006. We continue to believe that we should be granted a six
month period of exclusivity for our generic version of Zocor, which
would provide very considerable upside to our guidance. Of course, our
guidance for 2005 and 2006 must be qualified by any impact of our
recently (July 25, 2005) announced agreement with Teva Pharmaceuticals
Industries Ltd (Nasdaq:TEVA) providing for the acquisition of IVAX by
Teva. We are currently preparing the proxy material to be filed with
the SEC in order to obtain shareholder approval for this agreement.
"IVAX achieved substantial revenue growth in all its major
business regions in the second quarter of 2005 over the same period
last year. North American revenues increased 14% from $228.3 million
to $261.0 million. European revenues increased 15% from $171.6 million
to $197.0 million and Latin American revenues increased 29% from $76.0
million to $98.4 million.
"Our U.S. generics business was the major contributor to the 14%
North American growth during the second quarter. We had 6 generic
product approvals and launches, one tentative approval and we became
the authorized distributor of generic equivalents of two important
products, OMJ Pharmaceuticals, Inc.'s Ultracet(R) and Purdue Pharma's
OxyContin(R). We expect a significant number of additional generic
approvals during the remainder of the year and on July 29, 2005 we
announced that we are the authorized distributor of the generic
equivalent of Purdue Pharma's MS Contin(R) Tablets.
"IVAX' branded respiratory product, albuterol sulfate HFA
(CFC-free) in a standard metered dose inhaler, launched in the fourth
quarter of 2004, is presently vying for the number one market share
position among HFA albuterol products. We believe that our breath
actuated inhaler product, when approved, will permit us to obtain a
more significant part of the large albuterol inhaler market.
"Our animal health business has recently been expanded with the
May 11, 2005 completion of our acquisition of Phoenix Scientific,
Inc., the largest generic veterinary pharmaceutical company in the
United States. We expect our veterinary subsidiary formed from this
merger, IVX Animal Health, Inc., to be a significant contributor.
"IVAX' European revenues 15% growth came from the continued
success of many of our Central and Eastern European operations,
contributions from our Polish pharmaceutical company, Polfa Kutno,
acquired in the fourth quarter 2004, continued growth of QVAR sales
and IVAX' first-to-market launch of Nasofan, the generic equivalent of
Flonase(R), in the United Kingdom, where it has established a 44%
market share.
"Our Latin American revenues grew 29%. This is the ninth
consecutive quarter IVAX' Latin American operations have achieved
year-over-year, quarterly revenue growth. Our units in Venezuela,
Chile, Argentina and Peru and our recently acquired (second quarter
2004) Peruvian pharmacy chain, BTL, made significant contributions to
that growth.
"During the second quarter 2005, IVAX spent 25% more on marketing
and sales and 7% more on general and administrative expenses than the
second quarter 2004. These expense increases were primarily related to
recently acquired businesses: Medco and BTL in the second quarter
2004, Polfa Kutno in the fourth quarter 2004 and Phoenix Scientific on
May 11, 2005. R&D expenditures in the second quarter 2005 were 7%
lower than in the second quarter 2004."
IVAX will conduct a conference call at 10:30 A.M. Eastern Time
(Miami) to discuss the second quarter, as well as other topics.
Interested parties can access the conference call by dialing
1-800-288-8975 from anywhere in the U.S. or by dialing 612-332-0932
from non-U.S. locations. The conference call will also be webcast. To
access and register for the webcast, go to IVAX' website at
http://www.ivax.com at least fifteen minutes before the 10:30 A.M.
conference call and click on the webcast link on IVAX' home page.
Replays of the conference call will be available starting at
approximately 2:00 P.M. on August 1st and will continue through August
8th. To listen to the replay of the conference call, dial 800-475-6701
in the U.S. and internationally dial 320-365-3844, then enter the ID
#791336. Replays of the webcast via IVAX' website will also be
available.
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 there are uncertainties and matters beyond the control of
management, as well as a variety of assumptions and estimates with
respect to financial data, which if they do not occur, or prove to be
incorrect, could affect IVAX' earnings expectations and IVAX may not,
therefore, meet its guidance that the results for the year 2005 will
be in a range of $0.76 to $0.86 per share, that the results will be at
the middle or upper end of the range, that the results for the year
2006 will be in a range of $1.35 to $1.55 per share, or that we may
not launch a generic equivalent of Zocor(R) in the middle of 2006 or
that such launch would provide considerable upside to 2006 earnings;
that earnings may not be significantly stronger during the second half
of 2005 ; 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 receive a six-month exclusivity
period for its generic equivalent of Zocor(R), and even if it does,
may not be alone on the market during any such period; the impact of
competitive products and pricing, including the impact of "authorized
generics"; the difficulty of predicting the timing of U.S. Food and
Drug Administration, or FDA, European Medicines Association and other
regulatory authority approvals; 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 growth in any of the geographic areas in which IVAX
operates may be less than anticipated; the difficulty of predicting
the timeliness or outcome of product development efforts and the
filing of regulatory applications; potential liability for sales of
generic products prior to completion of appellate litigation,
including that relating to Neurontin(R); the impact of pharmaceutical
industry regulation and pending legislation that could affect the
pharmaceutical industry; the regulatory environment and changes in the
health policies and structure of various countries; that IVAX may not
receive final approval for HFA albuterol in its breath operated
inhaler or that its launch will be delayed; that albuterol HFA in a
breath operated inhaler may not obtain a significant part of the
albuterol inhaler market; that market acceptance and demand for IVAX'
respiratory products may not be as anticipated; that the acquisition
of Phoenix Scientific may not provide the synergies or benefits
anticipated; that IVX Animal Health may not contribute to IVAX
revenues as anticipated; that the change of control of the Company or
regulatory issues arising from the proposed merger of the Company and
Teva Pharmaceutical Industries Limited could affect the Company's
relationships and/or agreements with third parties, including
distributors, manufacturers, suppliers and customers; whether and when
the proposed merger will be consummated and the terms of any
conditions imposed in connection with such closing; and diversion of
management time on merger-related issues. 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.
Zocor(R) is a registered trademark of Merck & Co., Inc. OxyContin(R)
and MS Contin(R) are registered trademarks of Purdue Pharma L.P.
Ultracet(R) is a registered trademark of Ortho-McNeil Pharmaceuticals,
Inc. Flonase(R) is a registered trademark of GlaxoSmithKline
Corporation. Neurontin(R) is a registered trademark of Warner-Lambert
Company, a unit Pfizer Inc.
IVAX Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Six Months
Period Ended June 30, 2005 2004 2005 2004
---------------------- ----------------------
(In thousands, except per
share data)
Net revenues $577,293 $463,962 $1,068,884 $889,153
Cost of sales (excludes
amortization, which is
presented below) 340,544 239,408 629,373 465,193
---------------------- ----------------------
Gross profit 236,749 224,554 439,511 423,960
---------------------- ----------------------
Operating expenses:
Selling 83,049 66,496 158,371 127,867
General and
administrative 46,512 43,599 83,398 80,105
Research and
development 35,887 38,662 69,608 71,012
Amortization of
intangible assets 7,083 5,432 13,829 10,937
Restructuring costs
(reversal) 1,591 (36) 3,139 597
---------------------- ----------------------
Total operating
expenses 174,122 154,153 328,345 290,518
---------------------- ----------------------
Operating income 62,627 70,401 111,166 133,442
Total other income
(expense), net 2,522 (12,179) (1,078) (22,494)
---------------------- ----------------------
Income before income
taxes and minority
interest 65,149 58,222 110,088 110,948
Provision for income
taxes 19,363 10,071 30,712 20,452
---------------------- ----------------------
Income before minority
interest 45,786 48,151 79,376 90,496
Minority interest (225) (53) (269) (57)
---------------------- ----------------------
Net income $45,561 $48,098 $79,107 $90,439
====================== ======================
Earnings per common
share:
Basic $0.17 $0.19 $0.30 $0.37
====================== ======================
Diluted $0.17 $0.18 $0.29 $0.35
====================== ======================
Weighted average number
of common shares
outstanding:
Basic 266,009 247,835 263,564 247,089
====================== ======================
Diluted 270,744 268,726 272,955 262,988
====================== ======================
IVAX Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
June 30, December 31,
2005 2004
--------------------------------
(In thousands) (Unaudited)
Assets
- -----------------------
Cash & cash equivalents $241,170 $391,988
Marketable Securities,
short term 197,441 6,058
Other current assets 1,212,524 1,123,597
Property, plant and
equipment, net 608,037 604,647
Other assets 1,419,760 1,085,729
--------------------------------
Total assets $3,678,932 $3,212,019
================================
Liabilities and
Shareholders' Equity
- -----------------------
Current portion of long-
term debt $35,660 $60,145
Other current liabilities 545,382 518,276
Long-term debt 1,394,312 1,057,843
Other long-term
liabilities 97,493 72,855
Minority interest 12,839 12,571
Shareholders' equity 1,593,246 1,490,329
--------------------------------
Total liabilities and
shareholders' equity $3,678,932 $3,212,019
================================
IVAX Corporation and Subsidiaries
Reportable Segment Data
(Unaudited)
Period Ended June 30, Three Months Six Months
(In thousands) 2005 2004 2005 2004
---------------------- ----------------------
North America
External sales $259,946 $225,347 $486,580 $392,728
Intersegment sales 437 2,382 1,013 4,477
Other revenues 635 602 1,313 1,092
---------------------- ----------------------
Net revenues -
North America 261,018 228,331 488,906 398,297
---------------------- ----------------------
Europe
External sales 165,587 132,374 321,060 273,733
Intersegment sales 16,452 25,596 35,931 44,230
Other revenues 14,955 13,589 20,368 42,049
---------------------- ----------------------
Net revenues -
Europe 196,994 171,559 377,359 360,012
---------------------- ----------------------
Latin America
External sales 97,998 75,626 184,931 149,062
Other revenues 410 388 672 794
---------------------- ----------------------
Net revenues -
Latin America 98,408 76,014 185,603 149,856
---------------------- ----------------------
Corporate & other
External sales 35,015 13,825 48,577 25,214
Intersegment sales (16,889) (27,978) (36,944) (48,707)
Other revenues 2,747 2,211 5,383 4,481
---------------------- ----------------------
Net revenues -
Corporate & other 20,873 (11,942) 17,016 (19,012)
---------------------- ----------------------
---------------------- ----------------------
Consolidated net revenues $577,293 $463,962 $1,068,884 $889,153
====================== ======================
CONTACT: IVAX Corporation, Miami
David Malina, 305-575-6043
or
Thomas Beier, 305-575-6563