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NOVEN REPORTS 2001 EARNINGS PER SHARE OF $0.51 |
BackNoven Pretax Income Increases 57% to $18.8 Million
Novogyne Profit Contribution Increases 51% to $14 Million
Initial Estradot® Launch Orders Received
Miami, FL, February
26, 2002 -- Noven Pharmaceuticals, Inc. (NASDAQ: NOVN),a leading developer
of advanced transdermal drug delivery technologies and prescription transdermal
products, today announced financial results for the quarter and year ended
December 31, 2001, and provided an update on its business and prospects.
2001 Full Year
Financial Results
For the year ended December 31, 2001, Noven reported revenues of $45.9
million, compared to $42.9 million in 2000. Noven recognized $14.0 million
in earnings from Novogyne Pharmaceuticals, Noven's U.S.-based joint venture
with Novartis Pharmaceuticals Corporation of East Hanover, New Jersey
("Novartis Pharmaceuticals"), an increase of 51% over 2000.
Income before income taxes was $18.8 million, a 57% increase over 2000.
Provision for income taxes for 2001 increased $14.3 million over 2000
as Noven became fully taxable for the first time in 2001, which led to
lower net income in 2001. Net income was $12.1 million ($0.51 diluted
earnings per share) for 2001, compared to $19.6 million ($0.84 diluted
earnings per share) for 2000.
Novogyne revenues
increased 54% to $90.0 million in 2001, reflecting increased sales of
Vivelle-Dot® and the addition of CombiPatch®
to Novogyne's product line in March 2001. Novogyne's selling, general
and administrative expenses increased to $31.4 million from $21.3 million
in 2000, reflecting the CombiPatch relaunch and an approximate 20% increase
in the size of the Novogyne sales force. Novogyne amortized $4.6 million
of CombiPatch acquisition cost during 2001. In 2001, net income at Novogyne
increased 30% to $37.9 million.
2001 Fourth Quarter
Financial Results
Revenues for the quarter ended December 31, 2001 (the "current quarter")
were $10.3 million, compared to $11.7 million for the quarter ended December
31, 2000 (the "2000 quarter"), reflecting lower overseas sales,
partially offset by increases in sales to Novogyne. In the current quarter,
Noven recognized $5.0 million in earnings from Novogyne, an increase of
72% over the 2000 quarter. Income before income taxes was $5.9 million,
an increase of 124%. Provision for income taxes in the current quarter
increased $10.2 million over the 2000 quarter, which led to lower net
income in the current quarter. Net income was $3.7 million ($0.16 diluted
earnings per share) in the current quarter, compared to $10.7 million
($0.45 diluted earnings per share) in the 2000 quarter.
Novogyne's current
quarter revenues increased 68% to $26.8 million. Its selling, general
and administrative expenses increased to $8.5 million from $6.7 million
in the 2000 quarter, reflecting the CombiPatch relaunch and the Novogyne
sales force expansion. Novogyne amortized $1.5 million of CombiPatch acquisition
cost in the current quarter. Net income at Novogyne increased 59% to $11.2
million.
Business Update
& Forecast
"In 2001, our U.S. hormone replacement therapy ("HRT")
business demonstrated the level of success that can be achieved when Noven's
DOT Matrix™ patches are offered to physicians and patients who seek
the best available therapies,'' said Robert C. Strauss, Noven's President,
Chief Executive Officer & Chairman. DOT Matrix technology permits Noven
to deliver therapeutic doses of a range of prescription therapies through
discreet, comfortable patches that are well suited to active lifestyles.
DOT Matrix patents extend through 2014.
The core of Noven's
current U.S. business is Novogyne Pharmaceuticals, Noven's joint venture
with Novartis Pharmaceuticals. "Novogyne had an excellent year, and
remains an important contributor to Noven's bottom line," continued
Strauss, who also serves as President of Novogyne.
"In 2001, Novogyne's
Vivelle® family of prescription transdermal estrogen patches
increased its share of the U.S. transdermal estrogen market by four share
points. As of January 2002, the Vivelle family held a 33.5% share of that
market -- just a fraction of a share point from being the most prescribed
family of estrogen patches in the country."
This market share
growth was led by Vivelle-Dot, the smallest estrogen patch in the world.
During the fourth quarter, the U.S. Food and Drug Administration ("FDA")
issued an approvable letter for a new low-dose and an osteoporosis indication
for Vivelle-Dot. "We expect final approval and launch in 2002, giving
Vivelle-Dot even broader appeal to physicians and patients," said
Strauss.
Novogyne's other
main product is CombiPatch, the only combination estrogen/progestin patch
in the U.S. With the relaunch of CombiPatch by Novogyne in May 2001, Novogyne
became the only company in the U.S. offering transdermal therapies for
both the estrogen-only and combination HRT markets.
"We are pleased
with the financial impact of the CombiPatch acquisition," said Strauss.
"CombiPatch has been accretive to Novogyne's earnings, and CombiPatch
revenues helped fund a sales force expansion that contributed to Vivelle
family growth. CombiPatch total prescriptions, however, have not meaningfully
increased since acquisition. In 2002, one of Novogyne's primary objectives
is to help more physicians and patients discover the benefits of CombiPatch
therapy, and we are implementing supplemental sales and marketing programs
in support of that objective."
International
Business
"Noven
received its first orders for Estradot in the fourth quarter of 2001,
and expects to record its first Estradot sales in the first quarter of
2002," said Strauss. Estradot is Vivelle-Dot's sister product, which
is licensed to Novartis Pharma AG of Basel, Switzerland ("Novartis
Pharma") in most countries outside the U.S. "We expect Novartis
Pharma to launch Estradot beginning in the 2002 second quarter, with country-by-country
launches continuing through 2003."
In recent months,
Noven has participated in Novartis Pharma's pre-launch planning, training
and brand positioning exercises for Estradot. Launch schedules and materials,
including product logos, trade dress and advertisements, have been introduced
to Novartis Pharma's marketing units. "Based on our close interaction
with Novartis Pharma on the Estradot launch, we are confident that they
recognize Estradot as the world's new gold-standard estrogen patch, and
that they are planning initial launches for the second quarter, pending
receipt of certain country-specific regulatory approvals," said Strauss.
"We are encouraged by the level of preparation, planning and execution
that we have seen over the past several months, and we are optimistic
about Estradot's long-term prospects abroad."
MethyPatch®
Update
Once-daily MethyPatch is Noven's transdermal methylphenidate patch for
Attention Deficit Hyperactivity Disorder ("ADHD"). "We
are pleased to have completed enrollment for our new Phase III MethyPatch
trial on schedule," said Strauss. "The trial should conclude
in March 2002 and, assuming successful trial results, we plan to file
a New Drug Application in the middle of this year. We hope to be on the
market in the latter half of 2003 with the only ADHD medication providing
physicians and parents with the ability to adjust dose and dosing duration
to the unique needs of each patient."
Financial Guidance
"Based in part on initial Estradot orders, Noven expects 2002 first
quarter revenues in the $12 million range, and diluted earnings per share
in the $0.04 to $0.07 range," said James Messiry, Noven's Vice President
& Chief Financial Officer. "The 2002 first quarter is expected to
include the satisfaction of the Novartis preferred distribution by Novogyne,
and continued MethyPatch development costs at Noven." Under the Novogyne
joint venture agreements, Novartis is entitled to a preferred distribution
of the first $6.1 million of Novogyne's annual profits. After satisfaction
of that distribution, profits are split based on a formula.
Messiry continued:
"With increases in U.S. revenues expected to offset a net decline
in international revenues, Noven's 2002 total revenues should increase
modestly over 2001. Full-year 2002 diluted earnings per share are expected
to be in the $0.45 to $0.55 range, reflecting an increase in the Novogyne
profit contribution, offset by increases in sales and marketing expense
(as we prepare for the launch of MethyPatch) and in research and development
expense (as we initiate clinical trials for new prescription transdermal
therapies). Our strategy is to continue to reinvest a significant portion
of our profits from Novogyne in research and development and other areas
that help build Noven's business for the long term."
Strauss offered a
concluding comment: "We believe our success in the U.S. HRT market
is a powerful indicator of the value and appeal that our patented DOT
Matrix technology brings to prescription transdermal patch therapy. That
success bodes well for other geographic and therapeutic markets, beginning
with expected launches of Estradot in 2002 and the planned introduction
of MethyPatch in 2003.''
Analyst Conference
Call
A public telephone conference with management relating to Noven's financial
results will be broadcast live via the Internet at http://www.noven.com
beginning at 5:00 p.m. Eastern time this afternoon, February 26. Thereafter,
a rebroadcast of the call will be accessible at the same website. A taped
replay of the conference call will be available by telephone from February
26 at 9:00 p.m. Eastern time until the evening of November 28, or by calling
800-475-6701 (from within the U.S.) or 320-365-3844 (from outside the
U.S.) and entering the access code 627458. This conference call will contain
forward-looking information in addition to that contained in this press
release.
About Noven
Noven Pharmaceuticals, Inc., headquartered in Miami, Florida, is a leading
developer of advanced transdermal drug delivery technologies and prescription
transdermal products. Together with Novartis Pharmaceuticals, Noven owns
a highly profitable women's health products company called Novogyne Pharmaceuticals.
Noven's existing products include advanced estrogen transdermal delivery
systems (including Vivelle-Dot®, licensed to Novogyne,
and Estradot®, licensed to Novartis Pharma) and combination
estrogen/progestin transdermal delivery systems (including CombiPatch®,
licensed to Novogyne, and Estalis, licensed to Novartis Pharma). With
a range of additional products in development, including MethyPatch®,
Noven is committed to becoming the world's premier developer, manufacturer
and marketer of transdermal drug delivery systems. For additional information
on Noven, visit http://www.noven.com.
This
release contains forward-looking statements related to the business of
Noven that can be identified by the use of forward-looking terminology
such as "expect", "should", "are planning",
"are optimistic", "scheduled to", "plan to"',
"hope to", "we believe" and "bodes well".
Such statements are qualified by and subject to the risks and uncertainties
specified in Noven's most recent filings with the Securities and Exchange
Commission and those specified herein, including the risk that planned
or expected milestones may not be achieved and that results for future
periods may be materially different than anticipated because of, among
other factors: competitive market conditions affecting Noven's hormone
replacement patches and other products; the inability to develop new products;
the failure of FDA to issue final marketing clearance for the new Vivelle-Dot
indication and the new low dose because, among other reasons, the conditions
to approval identified by FDA may not be met and that FDA's review of
requested information may result in non-approval; the failure of Novogyne
to launch the new Vivelle-Dot low dose for any reason, including actions
by the Novogyne management committee that are outside the control of Noven;
the failure of Novogyne to increase sales of CombiPatch or continue growing
sales of the Vivelle family; the inability of Noven to manufacture and
supply Novartis Pharma's Estradot launch orders; delays in the launch
of Estradot abroad and/or lower than expected sales of Estradot to Novartis
Pharma due to the failure of Novartis Pharma to receive regulatory approvals
and uncertainty regarding Novartis Pharma's strategy with regard to marketing
Estradot together with competitive products marketed by Novartis Pharma;
the failure of MethyPatch clinical trials; delays in filing a MethyPatch
New Drug Application; the inability of Noven to receive FDA approval to
market MethyPatch in a timely manner or at all and/or to successfully
commercialize MethyPatch; the failure of Novartis Pharma to commercialize
and support Estalis due to inventory levels, regulatory strategies or
other factors; lower than expected orders of Estalis and/or Estradot by
Novartis Pharma; the failure of Novogyne to generate sufficient income
in the 2002 first quarter to satisfy the Novartis Pharmaceuticals preferred
distribution; the failure of Novogyne to generate sufficient income in
2002 for Noven's equity in earnings of Novogyne to increase over 2001;
and potential fluctuations in research and development, sales and marketing
and other expenses.
Noven Pharmaceuticals, Inc.
Statements of Operations Data:
(amounts in thousands, except
per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
2001 2000 2001 2000
-------- -------- -------- --------
(Unaudited) (Unaudited)
Revenues:
Product sales $ 9,527 $ 11,198 $ 43,096 $ 42,005
License revenue 734 479 2,851 919
-------- -------- -------- --------
Total revenues 10,261 11,677 45,947 42,924
Expenses:
Cost of products sold 4,684 5,268 20,376 19,219
Research and development 2,620 4,934 10,973 13,621
Marketing, general and
administrative 2,335 2,368 11,554 8,737
-------- -------- -------- --------
Total expenses 9,639 12,570 42,903 41,577
-------- -------- -------- --------
Income (loss) from
operations 622 (893) 3,044 1,347
Equity in earnings of
Novogyne 5,003 2,911 14,013 9,294
Interest income, net 271 612 1,770 1,385
-------- -------- -------- --------
Income before income taxes 5,896 2,630 18,827 12,026
Provision (benefit) for
income taxes 2,151 (8,078) 6,736 (7,608)
-------- -------- -------- --------
Net income $ 3,745 $ 10,708 $ 12,091 $ 19,634
======== ======== ======== ========
Basic earnings per share $ 0.17 $ 0.48 $ 0.54 $ 0.90
======== ======== ======== ========
Diluted earnings per share $ 0.16 $ 0.45 $ 0.51 $ 0.84
======== ======== ======== ========
Weighted average number
of common shares
outstanding:
Basic 22,468 22,132 22,367 21,914
======== ======== ======== ========
Diluted 23,331 23,682 23,511 23,249
======== ======== ======== ========
As Of
Dec. 31, Dec. 31,
Balance Sheet Data: 2001 2000
------- --------
Cash and cash
equivalents $ 49,389 $ 40,976
Investment in Novogyne $ 32,043 $ 15,431
Total assets $136,228 $104,031
Deferred license revenue $ 32,758 $ 27,109
Stockholders' equity $ 81,898 $ 65,277
Investor &
Media Contact:
Joseph C. Jones
Vice President – Corporate Affairs
Noven Pharmaceuticals, Inc.
(305) 253-1916
Copyright © 2002 Noven Pharmaceuticals, Inc. All rights reserved.