BRISTOL, Tenn.–(BUSINESS WIRE)–May 8, 2008 - King
Pharmaceuticals, Inc. (NYSE:KG) announced today that total revenues
were $432 million during the first quarter ended March 31, 2008,
compared to $516 million in the first quarter of 2007. This
decrease was primarily due to the market entry of the first generic
substitute for ALTACE(R) (ramipril) in December 2007. Reported net
earnings equaled $88 million and diluted earnings per share equaled
$0.36 during the first quarter of 2008, compared to net earnings of
$116 million and diluted earnings per share of $0.48 in the first
quarter of the prior year. Excluding special items, net earnings
equaled $90 million and diluted earnings per share equaled $0.37
during the first quarter ended March 31, 2008, compared to net
earnings of $118 million and diluted earnings per share of $0.48 in
the first quarter of 2007.
Brian A. Markison, Chairman, President and Chief Executive
Officer of King, stated, “We are focused on the continued
successful execution of our strategy for long-term growth, which
includes the submission of three important New Drug Applications
(NDAs) with the U.S. Food and Drug Administration (FDA) by the end
of this year. Once approved, these new products have the potential
to provide additional significant value for our shareholders.”
The three NDAs King plans to submit are REMOXY(TM) (long-acting
oral oxycodone), ACUROX(TM) (short-acting oral oxycodone HCl,
niacin, and other functional inactive ingredients), and CORVUE(TM)
(binodenoson, a pharmacologic stress imaging agent for injection).
Importantly, the REMOXY(TM) NDA remains on schedule for submission
by the end of June 2008.
As of March 31, 2008, the Company’s cash and cash equivalents
totaled approximately $827 million. During the first quarter of
2008, the Company generated cash flow from operations of
approximately $100 million. Additionally, the fair value of King’s
investments in debt securities equaled approximately $589 million
as of the end of the first quarter of 2008.
Joseph Squicciarino, King’s Chief Financial Officer, emphasized,
“We have taken the necessary steps to realize an expected SG&A
cost savings of $75 to $90 million this year. Accordingly, we are
on track to meet our annual cash flow from operations goal of $400
to $450 million for 2008.”
Commenting on the net sales performance of the Company’s
marketed products, Steve Andrzejewski, Chief Commercial Officer of
King, said, “We are particularly pleased with the continued strong
performance of THROMBIN-JMI(R), especially considering the market
entry of multiple new competitors since October 2007.”
Net revenue from branded pharmaceuticals totaled $369 million
for the first quarter of 2008, compared to $449 million during the
first quarter of 2007.
Net sales of SKELAXIN(R) (metaxalone) totaled $116 million
during the first quarter of 2008, compared to $112 million during
the same period of the prior year.
THROMBIN-JMI(R) (thrombin, topical, bovine, USP) net sales
totaled $67 million during the first quarter of 2008, compared to
$64 million during the first quarter of 2007.
Net sales of AVINZA(R) (morphine sulfate extended release)
totaled $32 million during the first quarter of 2008, compared to
$9 million during the first quarter of 2007. This increase is
primarily due to the fact that the Company did not acquire
AVINZA(R) until February 26, 2007 and is not due to an increase in
demand.
LEVOXYL(R) (levothyroxine sodium tablets, USP) net sales totaled
$16 million during the first quarter ended March 31, 2008, compared
to $22 million during the first quarter of 2007. This decrease was
primarily due to a reduction in the level of inventory held by the
Company’s wholesale customers during the most recent quarter from
that which existed on December 31, 2007.
ALTACE(R) net sales totaled $80 million during the first quarter
of 2008, compared to $157 million during the first quarter of
2007.
King’s Meridian Auto-Injector business contributed revenue of
$43 million during each of the first quarters of 2008 and 2007.
Royalty revenues, derived primarily from ADENOSCAN(R)
(adenosine), totaled $19 million during the first quarter ended
March 31, 2008.
About REMOXY(TM)
REMOXY(TM), an investigational drug, is an innovative
formulation of extended-release, long-acting oxycodone, a strong
opioid painkiller for the treatment of moderate to severe chronic
pain. It is designed to resist common methods of abuse that are
reported with respect to other long-acting opioids. REMOXY(TM) is a
proposed brand name that is subject to FDA approval.
About ACUROX(TM) Tablets
ACUROX(TM) Tablets, an investigational drug, is an orally
administered immediate-release tablet containing oxycodone HCl as
an active analgesic ingredient, niacin as an active ingredient in
subtherapeutic amounts, and a proprietary composition of functional
inactive ingredients. ACUROX(TM) Tablets are intended to relieve
moderate to severe pain while resisting or deterring common methods
of prescription drug abuse, including intravenous injection of
dissolved tablets, nasal snorting of crushed tablets and
intentional swallowing of excessive numbers of tablets. ACUROX(TM)
is a proposed brand name subject to FDA approval.
About CORVUE(TM)
CORVUE(TM), a selective adenosine A2a receptor agonist, is being
developed as an alternative to exercise prior to cardiac perfusion
imaging for the diagnosis of coronary artery disease. CORVUE(TM) is
designed to minimize side effects such as dyspnea, nausea, heart
block, flushing and chest pain. For ease of administration,
CORVUE(TM) is being developed for dosing as a single IV injection
with a fast onset while providing a sufficient duration of coronary
blood vessel dilation for flexibility in diagnostic imaging.
CORVUE(TM) is an investigational drug that has not been approved by
the FDA. Additionally, CORVUE(TM) is a proposed brand name subject
to FDA approval.
Webcast Information
King will conduct a webcast today which may include discussion
of the Company’s marketed products, pipeline, strategy for growth,
financial results and expectations, and other matters relating to
its business. Interested persons may listen to the webcast on
Thursday, May 8, 2008, at 11:00 a.m., E.D.T., by clicking the
following link to register and then joining the live event with the
same URL:
http://www.kingpharm.com/web_casts.asp
If you are unable to participate during the live event, the
webcast will be archived on King’s web site at the same link for
not less than 30 days after the webcast.
About Special Items
Under Generally Accepted Accounting Principles (”GAAP”),
reported “net earnings” and “diluted earnings per share” include
special items. In addition to the reported results determined in
accordance with GAAP, King provides its net earnings and diluted
earnings per share results for the quarters ended March 31, 2008
and 2007, excluding special items. These non-GAAP financial
measures exclude special items which are those particular material
income or expense items that King considers to be unrelated to the
Company’s ongoing, underlying business, non-recurring, or not
generally predictable. Such items include, but are not limited to,
merger and restructuring expenses; non-capitalized expenses
associated with acquisitions, such as in-process research and
development charges and inventory valuation adjustment charges;
charges resulting from the early extinguishment of debt; asset
impairment charges; expenses of drug recalls; and gains and losses
resulting from the divestiture of assets. King believes the
identification of special items enhances the analysis of the
Company’s ongoing, underlying business and the analysis of the
Company’s financial results when comparing those results to that of
a previous or subsequent like period. However, it should be noted
that the determination of whether to classify an item as a special
item involves judgments by King’s management. A reconciliation of
non-GAAP financial measures referenced herein and King’s reported
financial results determined in accordance with GAAP is provided
below.
About King Pharmaceuticals
King, headquartered in Bristol, Tennessee, is a vertically
integrated branded pharmaceutical company. King, an S&P 500
Index company, seeks to capitalize on opportunities in the
pharmaceutical industry through the development, including through
in-licensing arrangements and acquisitions, of novel branded
prescription pharmaceutical products in attractive markets and the
strategic acquisition of branded products that can benefit from
focused promotion and marketing and product life-cycle
management.
Forward-looking Statements
This release contains forward-looking statements which reflect
management’s current views of future events and operations,
including, but not limited to, statements pertaining to the
expected timetable for REMOXY(TM), ACUROX(TM) Tablets and
CORVUE(TM) NDA submissions with the FDA; statements pertaining to
the Company’s expected SG&A expense and cash flow from
operations in 2008; and statements pertaining to the Company’s
planned webcast to discuss its first-quarter 2008 results. These
forward-looking statements involve certain significant risks and
uncertainties, and actual results may differ materially from the
forward-looking statements. Some important factors which may cause
actual results to differ materially from the forward-looking
statements include dependence on the future level of demand for and
net sales of King’s branded pharmaceutical products; dependence on
King’s ability to successfully market its branded pharmaceutical
products; dependence on King’s ability to increase its presence in
its targeted, specialty-driven markets; dependence on King’s
ability to continue to acquire branded pharmaceutical products,
including products in development; dependence on King’s ability to
continue to successfully execute the Company’s strategy and to
continue to capitalize on strategic opportunities in the future for
sustained long-term growth; dependence on King’s ability to
successfully integrate its acquisitions; dependence on King’s
ability to control its SG&A expense as planned; dependence on
whether the Company encounters unexpected events which could affect
its SG&A expense; dependence on the Company’s ability to
continue to advance the development of its pipeline products as
planned; dependence on the high cost and uncertainty of research,
clinical trials, and other development activities involving
pharmaceutical products in which King has an interest; dependence
on whether the NDAs for REMOXY(TM), ACUROX(TM) Tablets and
CORVUE(TM) are submitted to the FDA during the planned timeframe;
dependence on the unpredictability of the duration and results of
the FDA’s review of Investigational New Drug applications (”IND”),
NDAs, and Abbreviated New Drug Applications (”ANDA”) and/or the
review of other regulatory agencies worldwide that relate to
projects in King’s development pipeline; dependence on the
availability and cost of raw materials; dependence on no material
interruptions in supply by contract manufacturers of King’s
products; dependence on the potential effect on sales of the
Company’s existing branded pharmaceutical products as a result of
the potential development and approval of a generic substitute for
any such product or other new competitive products; dependence on
the potential effect of future acquisitions and other transactions
pursuant to the Company’s growth strategy; dependence on King’s
compliance with FDA and other government regulations that relate to
the Company’s business; dependence on King’s ability to conduct its
webcast as currently planned on May 8, 2008; dependence on changes
in general economic and business conditions; changes in current
pricing levels; changes in federal and state laws and regulations;
changes in competition; unexpected changes in technologies and
technological advances; and manufacturing capacity constraints.
Other important factors that may cause actual results to differ
materially from the forward-looking statements are discussed in the
“Risk Factors” section and other sections of King’s Form 10-K for
the year ended December 31, 2007, which is on file with the U.S.
Securities and Exchange Commission. King does not undertake to
publicly update or revise any of its forward-looking statements
even if experience or future changes show that the indicated
results or events will not be realized. -0-
KING PHARMACEUTICALS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
March 31, December 31,
2008 2007
———– ————
ASSETS
Current assets:
Cash and cash equivalents $ 826,582 $ 20,009
Investments in debt securities 589,107 1,344,980
Marketable securities 1,589 1,135
Accounts receivable, net 186,787 183,664
Inventories 110,561 110,308
Deferred income tax assets 95,836 100,138
Income tax receivable - 20,175
Prepaid expenses and other current assets 40,311 39,245
———– ————
Total current assets 1,850,773 1,819,654
———– ————
Property, plant and equipment, net 264,789 257,093
Intangible assets, net 733,847 780,974
Goodwill 129,150 129,150
Deferred income tax assets 351,983 343,700
Other assets 88,827 96,251
———– ————
Total assets $3,419,369 $3,426,822
=========== ============
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 59,342 $ 76,481
Accrued expenses 293,304 376,604
Income taxes payable 17,180 -
———– ————
Total current liabilities 369,826 453,085
———– ————
Long-term debt 400,000 400,000
Other liabilities 62,331 62,980
———– ————
Total liabilities 832,157 916,065
———– ————
Commitments and contingencies
Shareholders’ equity:
Common shares no par value, 600,000,000
shares authorized, 246,544,435 and
245,937,709 shares issued and
outstanding, respectively 1,290,079 1,283,440
Retained earnings 1,312,993 1,225,360
Accumulated other comprehensive (loss)
income (15,860) 1,957
———– ————
Total shareholders’ equity 2,587,212 2,510,757
———– ————
Total liabilities and shareholders’
equity $3,419,369 $3,426,822
=========== ============
-0-
KING PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
Three Months Ended
March 31,
——————-
2008 2007
——— ———
REVENUES:
Total revenues $432,033 $516,030
——— ———
OPERATING COSTS AND EXPENSES:
Cost of revenues, exclusive of depreciation and
amortization shown below 91,461 111,454
——— ———
Selling, general and administrative, exclusive of
co-promotion fees 109,041 121,210
Special legal and professional fees 2,860 1,144
Co-promotion fees 17,957 45,958
——— ———
Total selling, general, and administrative
expense 129,858 168,312
——— ———
Depreciation and amortization 59,075 34,178
Accelerated depreciation 623 1,500
Research and development 28,508 32,271
Restructuring charges 1,059 460
——— ———
Total operating costs and expenses 310,584 348,175
——— ———
OPERATING INCOME 121,449 167,855
OTHER INCOME:
Interest expense (1,804) (2,025)
Interest income 13,629 9,266
Other, net (704) (543)
——— ———
Total other income 11,121 6,698
——— ———
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME
TAXES 132,570 174,553
Income tax expense 44,937 58,499
——— ———
INCOME FROM CONTINUING OPERATIONS 87,633 116,054
——— ———
DISCONTINUED OPERATIONS
Loss from discontinued operations - (220)
Income tax benefit - (79)
——— ———
Total loss from discontinued operations - (141)
——— ———
NET INCOME $ 87,633 $115,913
========= =========
Basic net income per common share $ 0.36 $ 0.48
========= =========
Diluted net income per common share $ 0.36 $ 0.48
========= =========
Shares used in basic net income per share 243,290 242,390
Shares used in diluted net income per share 244,689 243,671
-0-
KING PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
EXCLUDING SPECIAL ITEMS - NON GAAP
(in thousands, except per share data)
(Unaudited)
Three Months Ended
March 31,
——————-
2008 2007
——— ———
REVENUES:
Total revenues $432,033 $516,030
——— ———
OPERATING COSTS AND EXPENSES:
Cost of revenues , exclusive of depreciation and
amortization shown below 91,461 111,454
——— ———
Selling, general and administrative, exclusive of
co-promotion fees 109,041 121,210
Co-promotion fees 17,957 45,958
——— ———
Total selling, general, and administrative
expense 126,998 167,168
——— ———
Depreciation and amortization 59,075 34,178
Research and development 28,508 32,271
——— ———
Total operating costs and expenses 306,042 345,071
——— ———
OPERATING INCOME 125,991 170,959
OTHER INCOME:
Interest expense (1,804) (2,025)
Interest income 13,629 9,266
Other, net (704) (543)
——— ———
Total other income 11,121 6,698
——— ———
INCOME BEFORE INCOME TAXES 137,112 177,657
Income tax expense 46,644 59,659
——— ———
NET INCOME $ 90,468 $117,998
========= =========
Basic net income per common share $ 0.37 $ 0.49
========= =========
Diluted net income per common share $ 0.37 $ 0.48
========= =========
Shares used in basic net income per share 243,290 242,390
Shares used in diluted net income per share 244,689 243,671
-0-
KING PHARMACEUTICALS, INC.
RECONCILIATION OF NON-GAAP MEASURES
(in thousands, except per share data)
(Unaudited)
The following tables reconcile Non-GAAP measures to
amounts reported under GAAP:
Three Months
Ended March 31,
2008
—————–
EPS
——-
Net income, excluding special items $ 90,468
Diluted income per common share, excluding special
items $ 0.37
SPECIAL ITEMS:
Special legal and professional fees (selling,
general, and administrative) (2,860) (0.01)
Accelerated depreciation (other operating costs and
expenses) (623) (0.00)
Restructuring charges (other operating costs and
expenses) (1,059) (0.01)
——— ——-
Total special items before income taxes (4,542) (0. zithromax. 02)
Income tax benefit from special items 1,707 0.01
———
Net income $ 87,633
========= ——-
Diluted income per common share, as reported under
GAAP $ 0.36
=======
Three Months
Ended March 31,
2007
—————–
EPS
——-
Net income, excluding special items $117,998
Diluted income per common share, excluding special
items $ 0.48
SPECIAL ITEMS:
Special legal and professional fees (selling,
general, and administrative) (1,144) (0.00)
Accelerated depreciation (other operating costs and
expenses) (1,500) (0.01)
Restructuring charges (other operating costs and
expenses) (460) (0.00)
Loss from discontinued operations (220) (0.00)
——— ——-
Total special items before income taxes (3,324) (0.01)
Income tax benefit from special items 1,239 0.01
———
Net income $115,913
========= ——-
Diluted income per common share, as reported under
GAAP $ 0.48
=======
KING PHARMACEUTICALS, INC.
SUMMARY RECONCILIATION OF SPECIAL ITEMS
FOR THE FIRST QUARTERS ENDED MARCH 31, 2008 AND 2007
King recorded special items during the first quarter ended March
31, 2008 resulting in a net charge of $5 million, or $3 million net
of tax, primarily due to professional fees associated with
previously disclosed government inquiries and private plaintiff
securities litigation.
During the first quarter ended March 31, 2007, King recorded
special items resulting in a net charge of $3 million, or $2
million net of tax, primarily due to accelerated depreciation and
restructuring charges in connection with the transfer of the
production of LEVOXYL(R) from the Company’s St. Petersburg, Florida
facility to its Bristol, Tennessee facility.
EXECUTIVE OFFICES
KING PHARMACEUTICALS, INC.
501 FIFTH STREET, BRISTOL, TENNESSEE 37620
Contact
King Pharmaceuticals, Inc.
James E. Green, 423-989-8125
Executive Vice President, Corporate Affairs
or
David E. Robinson, 423-989-7045
Senior Director, Corporate Affairs
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