Exhibit 99.1
------------
MGI PHARMA Reports Second Quarter 2007 Financial Results
--GAAP and Adjusted Profitability Achieved For Q2 and First Half of 2007--
--Strong Aloxi(R) Sales Growth Expected For Remainder of 2007--
--Strong Dacogen(R) Sales Trends Continue; 2007 Dacogen Sales Guidance
Increased to $115 Million--
MINNEAPOLIS--(BUSINESS WIRE)--July 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 June 30, 2007.
Total revenue for the second quarter of 2007 was $93.0 million compared to
$87.2 million for the second quarter of 2006. The Company reported GAAP net
income of $2.1 million, or $0.03 per diluted share, in the 2007 second quarter
compared to a GAAP net loss of $19.4 million, or $0.25 per diluted share, in the
2006 second quarter. Adjusted or non-GAAP net income for the 2007 second quarter
increased to $11.1 million, or $0.13 per diluted share, compared to adjusted net
loss of $5.0 million, or $0.06 per diluted share, in the 2006 second 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 June 30, 2007, MGI PHARMA's cash and marketable debt investments totaled
$160.1 million.
"We are extremely pleased with our results for the second quarter," said
Lonnie Moulder, President and Chief Executive Officer of MGI PHARMA. "Aloxi
sales increased versus the prior quarter despite the transient disruption in the
CINV market, and we are greatly encouraged by the strong performance of Dacogen,
which continued to gain share in the market for treatment of MDS. The sNDA for
Aloxi in the post-operative nausea and vomiting indication was accepted for
filing by the FDA, and we remain on track to submit our NDA for Aquavan during
the third quarter".
Product Sales Performance
Product sales increased to $90.9 million in the second quarter of 2007
compared to $86.2 million in the second 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 second quarter of 2007, U.S. sales of Aloxi(R) (palonosetron
hydrochloride) Injection totaled $48.3 million compared to $67.4 million in the
second quarter of 2006. This year-over-year decline in Aloxi sales was primarily
due to the transient 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.
Sales of Dacogen totaled $30.2 million in the second quarter, its fourth
full quarter of commercial availability, and represented 31% growth versus the
first quarter. Sales of Gliadel(R) Wafer (polifeprosan 20 with carmustine
implant) were $10.5 million for the second quarter of 2007, compared to $8.4
million in the second quarter of 2006. When compared to the first quarter of
2007, this result represented an 8% sequential increase.
Operating Expenses
Selling, general and administrative expenses totaled $44.3 million for the
second quarter compared to $35.5 million for the second quarter of 2006.
Adjusted selling, general and administrative expenses were $38.8 million for the
second quarter of 2007 compared to $34.0 million for the same period in 2006.
This increase was primarily due to increased spending related to accelerated
growth of Dacogen.
Research and development expenses totaled $17.1 million for the second
quarter compared to $28.2 million for the second quarter of 2006. Adjusted
research and development expenses in the second quarter of 2007 were $15.5
million compared to $26.2 million in the second quarter of 2006. This decrease
was primarily a result of the conclusion of certain clinical trials for
Aquavan(R) and Dacogen.
Operating income for the second quarter was $2.4 million compared to an
operating loss of $10.3 million for the same period in 2006. Adjusted operating
income for the second quarter increased to $11.3 million compared to an adjusted
operating loss of $4.3 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 GAAP Net Income (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 and six-month periods ended June
30, 2007 and June 30, 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
Based on the best-in-class profile of Aloxi and the end of the transient
disruption in the chemotherapy-induced nausea and vomiting market, the Company
now expects Aloxi sales growth of twenty to twenty-five percent during the third
quarter when compared to the second quarter, and continued growth thereafter.
Based on strong first half results and current market trends, the Company
now expects full year Dacogen sales of approximately $115 million. Gliadel
revenues are expected to grow in the single digit range for the remainder of the
year.
The Company is maintaining its previous guidance of:
-- Adjusted SG&A expenses of $140 to $145 million;
-- Adjusted R&D expenses of approximately $70 million;
-- Positive adjusted operating income
The adjusted financial outlook for SG&A excludes non-cash stock-based
compensation expense. The 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.
Conference Call & Webcast Information
MGI PHARMA will broadcast its quarterly investor conference call live over
the Internet today, Wednesday, July 18, 2007 at 5:00 p.m. Eastern Time. The
Company's executive management team will review second 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, July 25, 2007.
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 Six Months Ended
June 30, June 30,
------------------ -------------------
2007 2006 2007 2006
-------- --------- --------- ---------
Revenues:
Sales $90,949 $ 86,190 $172,527 $163,715
Licensing and other 2,092 963 3,722 1,641
-------- --------- --------- ---------
93,041 87,153 176,249 165,356
-------- --------- --------- ---------
Costs and Expenses:
Cost of sales 29,455 33,813 57,061 62,155
Selling, general and
administrative 44,306 35,463 81,627 66,985
Research and development 17,132 28,192 34,134 51,157
Restructuring (208) - 173 -
-------- --------- --------- ---------
90,685 97,468 172,995 180,297
-------- --------- --------- ---------
Operating income (loss) 2,356 (10,315) 3,254 (14,941)
Interest income 1,909 1,361 3,974 2,517
Interest expense (1,874) (1,925) (3,750) (3,922)
Impairment of investment - (9,880) - (9,880)
Other income (expense) 60 (126) 33 55
-------- --------- --------- ---------
Income (loss) before minority
interest and income tax 2,451 (20,885) 3,511 (26,171)
Minority interest - 1,450 - 3,881
-------- --------- --------- ---------
Income (loss) before income tax 2,451 (19,435) 3,511 (22,290)
Provision (benefit) for income
tax 350 - 709 (47)
-------- --------- --------- ---------
Net income (loss) $ 2,101 $(19,435) $ 2,802 $(22,243)
======== ========= ========= =========
Net income (loss) per common
share
Basic $ 0.03 $ (0.25) $ 0.04 $ (0.29)
Diluted $ 0.03 $ (0.25) $ 0.03 $ (0.29)
Weighted average number of
common shares outstanding
Basic 79,833 78,210 79,641 78,000
Diluted 82,436 78,210 82,083 78,000
- -------------------------------
Consolidated
Balance Sheet Data
(unaudited)
(In thousands)
As of As of
June 30, Dec. 31,
--------- ---------
2007 2006
--------- ---------
Cash and marketable debt
securities, unrestricted $160,137 $162,743
Total assets $498,015 $482,975
Total stockholders' equity (a) $132,144 $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 TO ADJUSTED NET INCOME - UNAUDITED
(In thousands, except per share data)
Three Months Ended June 30, 2007
---------------------------------------
GAAP Adjustments (1) Adjusted
--------- ------------------- ---------
Revenues:
Sales $ 90,949 $ - $ 90,949
Licensing & other 2,092 - 2,092
--------- --------- ---------
93,041 - 93,041
--------- --------- ---------
Costs and Expenses:
Cost of sales 29,455 (1,979) (2) 27,476
Selling, general and
administrative 44,306 (5,531) (2, 3, 4) 38,775
Research and development 17,132 (1,660) (3) 15,472
Restructuring (208) 208 (5) -
--------- --------- ---------
90,685 (8,962) 81,723
--------- --------- ---------
Operating Income 2,356 8,962 11,318
Interest income 1,909 - 1,909
Interest expense (1,874) - (1,874)
Other expense 60 - 60
--------- --------- ---------
Income before income tax 2,451 8,962 11,413
Provision for income taxes 350 - 350
--------- --------- ---------
Net income $ 2,101 $ 8,962 $ 11,063
========= ========= =========
Net income per common share
Basic $ 0.03 $ 0.14
Diluted $ 0.03 $ 0.13
Weighted average number of
common shares outstanding
Basic 79,833 79,833
Diluted 82,436 82,436
See Notes to Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted
Net Income (Loss) - Unaudited
- ----------------------------------------------------------------------
MGI PHARMA, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP NET LOSS TO ADJUSTED NET LOSS - UNAUDITED
(In thousands, except per share data)
Three Months Ended June 30, 2006
---------------------------------------
GAAP Adjustments (1) Adjusted
--------- ------------------- ---------
Revenues:
Sales $ 86,190 $ - $ 86,190
Licensing & other 963 - 963
--------- --------- ---------
87,153 - 87,153
--------- --------- ---------
Costs and Expenses:
Cost of sales 33,813 (2,578) (2) 31,235
Selling, general and
administrative 35,463 (1,458) (2, 3, 4) 34,005
Research and development 28,192 (2,017) (3, 7) 26,175
--------- --------- ---------
97,468 (6,053) 91,415
--------- --------- ---------
Operating loss (10,315) 6,053 (4,262)
-
Interest income 1,361 - 1,361
Interest expense (1,925) - (1,925)
Impairment of investment (9,880) 9,880 (6) -
Other income (126) - (126)
--------- --------- ---------
Loss before minority interest
and income tax (20,885) 15,933 (4,952)
Minority interest 1,450 (1,450) (7) -
--------- --------- ---------
Loss before income tax (19,435) 14,483 (4,952)
Provision for income taxes - - -
--------- --------- ---------
Net loss $(19,435) $ 14,483 $ (4,952)
========= ========= =========
Net loss per common share
Basic $ (0.25) $ (0.06)
Diluted $ (0.25) $ (0.06)
Weighted average number of
common shares outstanding
Basic 78,210 78,210
Diluted 78,210 78,210
See Notes to Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted
Net Income (Loss) - Unaudited
- ----------------------------------------------------------------------
MGI PHARMA, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME TO ADJUSTED NET INCOME - UNAUDITED
(In thousands, except per share data)
Six Months Ended June 30, 2007
---------------------------------------
GAAP Adjustments (1) Adjusted
--------- ------------------- ---------
Revenues:
Sales $172,527 $ - $172,527
Licensing & other 3,722 - 3,722
--------- --------- ---------
176,249 - 176,249
--------- --------- ---------
Costs and Expenses:
Cost of sales 57,061 (3,958) (2) 53,103
Selling, general and
administrative 81,627 (10,171) (2, 3, 4) 71,456
Research and development 34,134 (3,033) (3) 31,101
Restructuring 173 (173) (5) -
--------- --------- ---------
172,995 (17,335) 155,660
--------- --------- ---------
Income from operations 3,254 17,335 20,589
Interest income 3,974 - 3,974
Interest expense (3,750) - (3,750)
Other income 33 - 33
--------- --------- ---------
Income before minority
interest and income tax 3,511 17,335 20,846
Minority interest - - -
------------------- ---------
Income before income tax 3,511 17,335 20,846
Provision for income taxes 709 - 709
--------- --------- ---------
Net income $ 2,802 $ 17,335 $ 20,137
========= ========= =========
Net income per common share
Basic $ 0.04 $ 0.25
Diluted $ 0.03 $ 0.25
Weighted average number of
common shares outstanding
Basic 79,641 79,641
Diluted 82,083 82,083
See Notes to Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted
Net Income (Loss) - Unaudited
- ----------------------------------------------------------------------
MGI PHARMA, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP NET LOSS TO ADJUSTED NET LOSS - UNAUDITED
(In thousands, except per share data)
Six Months Ended June 30, 2006
---------------------------------------
GAAP Adjustments (1) Adjusted
--------- ------------------- ---------
Revenues:
Sales $163,715 $ - $163,715
Licensing & other 1,641 - 1,641
--------- --------- ---------
165,356 - 165,356
--------- --------- ---------
Costs and Expenses:
Cost of sales 62,155 (4,350) (2) 57,805
Selling, general and
administrative 66,985 (2,945) (2, 3, 4) 64,040
Research and development 51,157 (4,944) (3, 7) 46,213
--------- --------- ---------
180,297 (12,239) 168,058
--------- --------- ---------
Loss from operations (14,941) 12,239 (2,702)
-
Interest income 2,517 - 2,517
Interest expense (3,922) - (3,922)
Impairment of investment (9,880) 9,880 (6) -
Other income 55 - 55
--------- --------- ---------
Loss before minority interest
and income tax (26,171) 22,119 (4,052)
Minority interest 3,881 (3,881) (7) -
--------- --------- ---------
Loss before income tax (22,290) 18,238 (4,052)
Benefit for income taxes (47) - (47)
--------- --------- ---------
Net loss $(22,243) $ 18,238 $ (4,005)
========= ========= =========
Net loss per common share
Basic $ (0.29) $ (0.05)
Diluted $ (0.29) $ (0.05)
Weighted average number of
common shares outstanding
Basic 78,000 78,000
Diluted 78,000 78,000
See Notes to Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted
Net Income (Loss) - Unaudited
- ----------------------------------------------------------------------
MGI PHARMA, Inc. and Subsidiaries
Notes to Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted Net
Income (Loss) - Unaudited
Three and Six Months Ended June 30, 2007 and 2006
(In thousands, except per share data)
(1) Adjusted net income (loss) and adjusted per share amounts for the
three-month periods and six-month periods ended June 30, 2007 and
2006, exclude the effects of non-cash stock-based employee
compensation expense, amortization of product intangible assets,
license and milestone payments, the impairment of an equity
investment, 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 (loss).
Adjusted net income (loss) per share amounts represent adjusted net
income (loss) 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 (loss).
- ----------------------------------------------------------------------
MGI PHARMA, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME (LOSS) TO
ADJUSTED NET INCOME (LOSS) - UNAUDITED
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30 June 30
------------------- ------------------
2007 2006 2007 2006
--------- --------- -------- ---------
GAAP net income (loss) $ 2,101 $(19,435) $ 2,802 $(22,243)
Amortization of product
intangible assets (2) 1,998 2,598 3,996 4,390
Non-cash, stock-based
compensation expense (3) 7,104 1,955 12,978 3,918
License & milestone payments
(4) 68 50 188 50
Restructuring expenses (5) (208) - 173 -
Impairment of investment (6) - 9,880 - 9,880
--------- --------- -------- ---------
Adjusted net income (loss) $ 11,063 $ (4,952) $ 20,137 $ (4,005)
========= ========= ======== =========
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
MGI PHARMA, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME (LOSS) PER COMMON SHARE TO
ADJUSTED NET INCOME (LOSS) PER COMMON SHARE - UNAUDITED
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30 June 30
------------------- ------------------
2007 2006 2007 2006
--------- --------- -------- ---------
GAAP income or (loss) per
diluted share $ 0.03 $ (0.25) $ 0.03 $ (0.29)
Amortization of product
intangible assets (2) 0.02 0.03 0.05 0.06
Non-cash, stock-based
compensation expense (3) 0.08 0.03 0.16 0.05
License & milestone payments
(4) and Restructuring
expenses (5)
0.00 0.00 0.01 0.00
Impairment of investment (6) - 0.13 - 0.13
--------- --------- -------- ---------
Adjusted income or (loss) per
diluted share $ 0.13 $ (0.06) $ 0.25 $ (0.05)
========= ========= ======== =========
- ----------------------------------------------------------------------
(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 Six Months Ended
------------------- ------------------
2007 2006 2007 2006
--------- --------- -------- ---------
Selling, general and
administrative $ 5,444 $ 1,388 $ 9,945 $ 2,855
Research and development 1,660 567 3,033 1,063
--------- --------- -------- ---------
$ 7,104 $ 1,955 $ 12,978 $ 3,918
========= ========= ======== =========
(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 impairment of the equity investment in SuperGen, Inc.
(7) 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.
Timothy J. Smith, 952-406-3100
IR@mgipharma.com