EXHIBIT 99.1
MGI PHARMA Reports First Quarter 2007 Financial Results
--GAAP and Adjusted Profitability Achieved--
--2007 Dacogen Sales Guidance Increased to $95 to $105 Million--
--First Quarter Highlighted by Execution of Pipeline Initiatives--
Business Editors
MINNEAPOLIS--(BUSINESS WIRE)--April 18, 2007--MGI PHARMA, INC.
(NASDAQ:MOGN), a biopharmaceutical company focused in oncology and
acute care, today reported financial results for the three months
ended March 31, 2007.
Total revenue for the first quarter of 2007 was $83.2 million
compared to $78.2 million for the first quarter of 2006. The Company
reported GAAP net income of $0.7 million, or $0.01 per diluted share,
in the 2007 first quarter compared to a GAAP net loss of $2.8 million,
or $0.04 per diluted share, in the 2006 first quarter. Adjusted or
non-GAAP net income for the 2007 first quarter increased to $9.1
million, or $0.11 per diluted share, compared to adjusted net income
of $0.9 million, or $0.01 per diluted share, in the 2006 first
quarter. See "Reconciliation of GAAP Net Income (Loss) to Adjusted Net
Income (Loss)" below for information on the adjusted numbers presented
in this press release.
At March 31, 2007, MGI PHARMA's cash and marketable debt
investments totaled $161.1 million.
"MGI PHARMA had a strong start to 2007, and we continued to make
significant progress in positioning the Company for long-term,
sustainable growth," said Lonnie Moulder, President and Chief
Executive Officer of MGI PHARMA. "During the first quarter, we
received a five-year Hatch-Waxman extension for the patent covering
Aloxi, which now provides Aloxi with protection into 2015. This patent
extension, combined with the planned submission of an sNDA for Aloxi
in post-operative nausea and vomiting, will allow us to maximize this
brand franchise. We are very pleased with the Dacogen launch and the
progress made with our pipeline, including the positive phase 3
results from the Aquavan bronchoscopy trial, which will support an NDA
submission for this product candidate later this year."
Product Sales Performance
Product sales increased to $81.6 million in the first quarter of
2007 compared to $77.5 million in the first quarter of 2006, primarily
as a result of the inclusion of Dacogen(R) (decitabine) for Injection
sales following its commercial launch in mid-2006.
During the first quarter of 2007, U.S. sales of Aloxi(R)
(palonosetron hydrochloride) Injection totaled $47.3 million compared
to $63.3 million in the first quarter of 2006. This year-over-year
decline in Aloxi sales was primarily due to the disruption in the
chemotherapy-induced nausea and vomiting market following the
introduction of multiple generic ondansetron products at the end of
the fourth quarter of 2006. This result represented a 5% sequential
decline over the prior quarter.
Sales of Dacogen totaled $23.1 million in the first quarter, its
third full quarter of commercial availability, and represented 22%
growth versus the fourth quarter. Sales of Gliadel(R) Wafer
(polifeprosan 20 with carmustine implant) were $9.7 million for the
first quarter of 2007, compared to $9.7 million in the first quarter
of 2006. This result represented a 19% increase over the prior
quarter.
Operating Expenses
Selling, general and administrative expenses totaled $37.3 million
for the first quarter compared to $31.5 million for the first quarter
of 2006. Adjusted selling, general and administrative expenses were
$32.7 million for the first quarter of 2007 compared to $30.1 million
for the same period in 2006. This increase was primarily due to
expenses related to Dacogen promotion and increased funding of the
sales force.
Research and development expenses totaled $17.0 million for the
first quarter compared to $23.0 million for the first quarter of 2006.
Adjusted research and development expenses in the first quarter of
2007 were $15.6 million compared to $20.0 million in the first quarter
of 2006. This decrease was primarily a result of the conclusion of
certain clinical trials for Aquavan and Dacogen combined with lower
personnel expense following the fourth quarter reduction in force.
Operating income for the first quarter was $0.9 million compared
to an operating loss of $4.6 million for the same period in 2006.
Adjusted operating income for the first quarter increased to $9.3
million compared to an adjusted operating income of $1.6 million for
the same period in 2006.
Reconciliation of U.S. GAAP to Adjusted Results:
In this press release, certain non-GAAP financial measures are
presented as adjusted numbers. These numbers exclude the effects of
non-cash, stock-based employee compensation expense, amortization of
product intangible assets, restructuring expenses, and license and
milestone payments. See the attached "Reconciliation of U.S. GAAP Net
Loss to Adjusted Net Income (Loss)" for a detailed explanation of the
amounts excluded and included to arrive at adjusted expenses, adjusted
operating income (loss), adjusted net income (loss), and adjusted per
share amounts for the three-month periods ended March 31, 2007 and
March 31, 2006. Adjusted or non-GAAP financial measures provide
investors and management with supplemental measures of operating
performance and trends that facilitate comparisons between periods
before, during, and after certain items that would not otherwise be
apparent on a GAAP basis. Adjusted financial measures are not, and
should not be, viewed as a substitute for GAAP results. We define
adjusted diluted earnings per share amounts as adjusted net income
divided by the GAAP weighted average number of diluted shares
outstanding. Our definition of these adjusted financial measures may
differ from similarly named measures used by others.
2007 Financial Outlook
For the year ending December 31, 2007, the Company now expects:
-- Dacogen sales of $95 to $105 million;
-- Adjusted SG&A expenses of $140 to $145 million;
-- Adjusted R&D expenses of approximately $70 million; and
-- Positive adjusted operating income under a wide range of Aloxi
sales scenarios.
Our adjusted financial outlook for SG&A excludes non-cash
stock-based compensation expense. Our adjusted financial outlook for
R&D excludes non-cash stock-based compensation expense and license and
milestone payments. Adjusted operating income additionally excludes
amortization of product intangible assets and restructuring costs. We
have excluded these expenses because their amount and significance
cannot readily be determined at this time.
Recent Corporate Highlights
Dacogen
-- The Centers for Medicare and Medicaid Services (CMS) assigned
a specific J-code (J0894) for Dacogen effective January 1,
2007, enabling providers to obtain reimbursement for Dacogen
via processing claims electronically.
-- The results of a single center clinical study that evaluated
three alternative dosing regimens for Dacogen were published
in the journal Blood. The objective response rate of this
study was 72%, including a 34% complete response (CR) rate, 1%
partial response (PR) rate, 24% marrow CR rate with or without
other hematologic improvement (HI) responses, and a 14% HI
rate. Among the 51 patients evaluable for cytogenetic
response, the overall cytogenetic response rate was 57
percent, including a cytogenetic CR rate of 33 percent and a
cytogenetic PR rate of 24 percent. The most common adverse
events were myelosuppression, liver dysfunction, nausea and
vomiting, fatigue and bone aches.
Aloxi
-- MGI PHARMA and Helsinn Healthcare SA announced that a
five-year Hatch-Waxman patent term extension has been granted
by the U.S. Patent and Trademark Office (PTO) for the patent
covering Aloxi. Following this five-year term extension, the
patent will now expire in April 2015.
Aquavan
-- MGI PHARMA announced positive results from a pivotal phase 3
trial of Aquavan(R) (fospropofol disodium) Injection in
sedation of patients undergoing bronchoscopy. This clinical
trial successfully met its primary endpoint of sedation
success as well as all secondary endpoints. The results of
this study are consistent with the previously reported data
from a pivotal phase 3 study of Aquavan in patients undergoing
colonoscopy. An open-label safety study conducted in patients
undergoing a variety of minor surgeries was also completed,
and data describe a predictable safety profile.
-- A pre-New Drug Application (NDA) meeting was held with the FDA
in January 2007, and the Aquavan NDA submission is planned for
third quarter of 2007.
Saforis
-- The results for a randomized, double-blind, placebo-controlled
phase 3 trial of Saforis were published in the journal Cancer
in January 2007. Data from this study indicate that the
incidence of World Health Organization (WHO) Grade 2 of higher
oral mucositis was significantly reduced in Saforis-treated
patients compared to patients who received placebo (p=0.026).
Among those patients that experienced oral mucositis in this
study, the incidence of severe oral mucositis (WHO Grade 3 or
higher) was significantly lower in the Saforis arm compared
with the placebo arm (p=0.005). The most frequently observed
adverse events considered possibly or probably related to the
study drug were nausea and dry mouth.
2007 Corporate Objectives:
In 2007, MGI PHARMA is focusing on key initiatives to advance our
development pipeline and grow product sales.
Maximize our brand franchises
-- Submission of the Aloxi PONV sNDA
-- Submission of the Aloxi oral capsule sNDA
-- Advance Dacogen pivotal phase 3 AML program
-- Conclude Dacogen ADOPT trial
-- Submission of the sNDA for Dacogen alternative dosing regimen
Advance our product pipeline
-- Submission of the Aquavan NDA
-- Finalize Saforis development strategy
-- Advance amolimogene pivotal phase 2 program
-- Complete enrollment in the ZYC300 phase 1/2 trial in solid
tumors
-- Submission of the GPI 21016 (PARP inhibitor) IND for cancer
therapy sensitization
Conference Call & Webcast Information
MGI PHARMA will broadcast its quarterly investor conference call
live over the Internet today, Wednesday, April 18, 2007 at 5:00 p.m.
Eastern Time. The Company's executive management team will review
first quarter 2007 financial results, discuss operations, and provide
guidance on MGI PHARMA's business outlook. All interested parties are
welcome to access the webcast via the Company's Website at
www.mgipharma.com. The audio webcast will be archived on the Company's
Website through Wednesday, April 25, 2007.
Annual Shareholder Meeting
MGI PHARMA's Annual Meeting of Shareholders will be held on
Tuesday, May 8, 2007 at 1:00 p.m. Central Time at the Hilton
Minneapolis, 1001 Marquette Avenue, Minneapolis, Minnesota. All MGI
PHARMA shareholders are invited to attend.
About MGI PHARMA
MGI PHARMA, INC. is a biopharmaceutical company focused in
oncology and acute care that acquires, researches, develops and
commercializes proprietary products that address the unmet needs of
patients. MGI PHARMA markets Aloxi(R) (palonosetron hydrochloride)
Injection, Dacogen(R) (decitabine) for Injection, and Gliadel(R) Wafer
(polifeprosan 20 with carmustine implant) in the United States. The
Company directly markets its products in the U.S. and collaborates
with partners to reach international markets. For more information
about MGI PHARMA, please visit www.mgipharma.com.
Dacogen is being co-developed by MGI PHARMA and Janssen-Cilag, a
Johnson & Johnson company. Janssen-Cilag companies are responsible for
regulatory and commercial activities in all territories outside North
America, while MGI PHARMA retains responsibility for all activities in
the United States, Canada and Mexico.
This news release contains certain "forward-looking" statements
within the meaning of the Private Securities Litigation Reform Act of
1995. These statements are typically preceded by words such as
"believes," "expects," "anticipates," "intends," "will," "may,"
"should," or similar expressions. These forward-looking statements are
not guarantees of MGI PHARMA's future performance and involve a number
of risks and uncertainties that may cause actual results to differ
materially from the results discussed in these statements. Factors
that might cause MGI PHARMA's results to differ materially from those
expressed or implied by such forward-looking statements include, but
are not limited to, the ability of MGI PHARMA to continue to increase
sales of its marketed products, the ability of MGI PHARMA to achieve
its objectives for 2007,, the successful completion of clinical trials
for the Company's other product candidates, and other risks and
uncertainties detailed from time to time in MGI PHARMA's filings with
the Securities and Exchange Commission including its most recently
filed Form 10-K and Form 10-Q. MGI PHARMA undertakes no duty to update
any of these forward-looking statements.
MGI PHARMA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
(In thousands, except per share data)
Three Months Ended March 31,
-----------------------------------
2007 2006
---------------- ------------------
Revenues:
Sales $81,578 $77,525
Licensing and other 1,630 678
---------------- ------------------
83,208 78,203
---------------- ------------------
Costs and Expenses:
Cost of sales 27,606 28,342
Selling, general and
administrative 37,321 31,519
Research and development 17,002 22,967
Restructuring 381 -
---------------- ------------------
82,310 82,828
---------------- ------------------
Operating income (loss) 898 (4,625)
Interest income 2,065 1,156
Interest expense (1,876) (1,997)
Other income (expense) (27) 181
---------------- ------------------
Income (loss) before minority
interest and income tax 1,060 (5,285)
Minority interest - 2,431
---------------- ------------------
Income (loss) before income tax 1,060 (2,854)
Provision for income tax 359 (47)
---------------- ------------------
Net income (loss) $701 $(2,807)
================ ==================
Net income (loss) per common share
Basic $0.01 $(0.04)
Diluted $0.01 $(0.04)
Weighted average number of common
shares outstanding
Basic 79,447 77,788
Diluted 81,790 77,788
- ----------------------------------
Consolidated Balance Sheet Data
(unaudited)
(In thousands)
As of March 31, As of December 31,
---------------- ------------------
2007 2006
---------------- ------------------
Cash and marketable debt
securities, unrestricted $161,062 $162,743
Total assets $472,051 $482,975
Total stockholders' equity (a) $119,363 $105,935
(a) In accordance with SAB 108, stockholders' equity as of December
31, 2006, has been decreased by $0.9 million from $106.8 million to
$105.9 million. This reduction was due to our determination that
restructuring expenses recorded during the fourth quarter of 2006
were understated by $0.9 million and that these adjustments were
not material to MGI's 2006 financial statements.
MGI PHARMA, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME (LOSS) TO ADJUSTED NET INCOME -
UNAUDITED
(In thousands, except per share data)
Three Months Ended March 31, 2007
-----------------------------------
GAAP Adjustments (1) Adjusted
-------- ----------------- --------
Revenues:
Sales $81,578 $- $81,578
Licensing & other 1,630 - 1,630
-------- ------- --------
83,208 - 83,208
-------- ------- --------
Costs and Expenses:
Cost of sales 27,606 (1,979) (2) 25,627
Selling, general and (2, 3, 4)
administrative 37,321 (4,640) 32,681
Research and development 17,002 (1,373) (3) 15,629
Restructuring 381 (381) (5) -
-------- ------- --------
82,310 (8,373) 73,937
-------- ------- --------
Operating Income 898 8,373 9,271
Interest income 2,065 - 2,065
Interest expense (1,876) - (1,876)
Other expense (27) - (27)
-------- ------- --------
Income before income tax 1,060 8,373 9,433
Provision for income taxes 359 - 359
-------- ------- --------
Net Income $701 $8,373 $9,074
======== ======= ========
Net income per common share
Basic $0.01 $0.11
Diluted $0.01 $0.11
Weighted average number of common
shares outstanding
Basic 79,447 79,447
Diluted 81,790 81,790
See Notes to Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted
Net Income
- ----------------------------------------------------------------------
MGI PHARMA, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME (LOSS) TO ADJUSTED NET INCOME -
UNAUDITED
(In thousands, except per share data)
Three Months Ended March 31, 2006
---------------------------------
GAAP Adjustments Adjusted
(1)
--------- -------------- --------
Revenues:
Sales $77,525 $- $77,525
Licensing & other 678 - 678
--------- ------- --------
78,203 - 78,203
--------- ------- --------
Costs and Expenses:
Cost of sales 28,342 (1,773) (2) 26,569
Selling, general and (2, 3)
administrative 31,519 (1,486) 30,033
Research and development 22,967 (2,927) (3, 6) 20,040
--------- ------- --------
82,828 (6,186) 76,642
--------- ------- --------
Operating income (loss) (4,625) 6,186 1,561
-
Interest income 1,156 - 1,156
Interest expense (1,997) - (1,997)
Other income 181 - 181
--------- ------- --------
Income (loss) before minority
interest and income tax (5,285) 6,186 901
Minority interest 2,431 (2,431) (6) -
--------- ------- --------
Income (loss) before income tax (2,854) 3,755 901
Benefit for income taxes (47) - (47)
--------- ------- --------
Net Income (loss) $(2,807) $3,755 $948
========= ======= ========
Net income (loss) per common share
Basic $(0.04) $0.01
Diluted $(0.04) $0.01
Weighted average number of common
shares outstanding
Basic 77,788 77,788
Diluted 77,788 77,788
See Notes to Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted
Net Income
- ----------------------------------------------------------------------
MGI PHARMA, Inc. and Subsidiaries
Notes to Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted Net
Income - Unaudited
Three Months Ended March 31, 2007 and 2006
(In thousands, except per share data)
(1) Adjusted net income and adjusted per share amounts for the three-
month periods ended March 31, 2007 and 2006, exclude the effects of
non-cash stock-based employee compensation expense, amortization of
product intangible assets, license and milestone payments, the
consolidation of Symphony Neuro Development Company and restructuring
expenses. The GAAP provision for income tax is used for both GAAP net
income (loss) and adjusted net income. Adjusted net income per share
amounts represent adjusted net income divided by the GAAP diluted
weighted average number of shares outstanding. The following tables
summarize the adjustments and reconciles GAAP net income (loss) to
adjusted net income.
- ----------------------------------------------------------------------
MGI PHARMA, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME (LOSS) TO
ADJUSTED NET INCOME - UNAUDITED
(In thousands, except per share data)
Three Months Ended
March 31
---------------------------
2007 2006
------------- -------------
GAAP net income (loss) $701 $(2,807)
Amortization of product intangible
assets (2) 1,998 1,792
Non-cash, stock-based compensation
expense (3) 5,874 1,963
License & milestone payments (4) 120 -
Restructuring expenses (5) 381 -
------------- -------------
Adjusted net income $9,074 $948
============= =============
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
MGI PHARMA, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME (LOSS) PER COMMON SHARE TO
ADJUSTED NET INCOME PER COMMON SHARE - UNAUDITED
(In thousands, except per share data)
Three Months Ended March 31
---------------------------
2007 2006
------------- -------------
GAAP income or (loss) per diluted share $0.01 $(0.04)
Amortization of product intangible
assets (2) $0.02 0.02
Non-cash, stock-based compensation
expense (3) $0.07 0.03
License & milestone payments (4) $0.00 -
Restructuring expenses (5) $0.01 -
------------- -------------
Adjusted income per diluted share $0.11 $0.01
============= =============
- ----------------------------------------------------------------------
(2) To exclude amortization of product intangible assets.
(3) To exclude the effects of charges for non-cash stock-based
employee compensation expense The following tables breakout the
expense by operating expense category:
Three Months Ended
------------------
2007 2006
--------- --------
Selling, general and administrative $4,501 $1,467
Research and development 1,373 496
--------- --------
$5,874 $1,963
========= ========
(4) To exclude license and milestone payments.
(5) To exclude employee related expenses pursuant to the plan of
organizational restructuring undertaken in Q4 2006.
(6) To exclude the impact of consolidating Symphony Neuro
Development Company, a variable interest entity that was included in
MGI consolidated financial statements from October 3, 2005 (date of
the Guilford acquisition) through the date of effective termination in
Q2 2006.
CONTACT: MGI PHARMA, INC.
Jennifer Davis, 212-332-4381
IR@mgipharma.com
or
Susan Silao, 212-332-4364