Noven Announces 1998 Fourth Quarter And Full Year Financial Results

Reports 1998 Fourth Quarter Net Income of $.03 Per Share 1998 Net Revenues Increase 53% Over 1997

-- Noven Pharmaceuticals, Inc. (NASDAQ:NOVN) today announced financial results for the quarter and year ended December 31, 1998.

For the fourth quarter of 1998, Noven reported net income of $615,000, or $.03 per share, compared to a net loss of $4,764,000, or $.23 per share, for the fourth quarter of 1997.

Revenues for the 1998 fourth quarter were $7,881,000, compared to $3,143,000 for the same quarter in 1997. For the year ended December 31, 1998, Noven reported a net loss of $4,079,000, or $.19 per share, compared to a net loss of $9,557,000, or $.47 per share, for 1997. Revenues for full-year 1998 were $21,842,000, compared to $14,267,000 for full-year 1997.

"We are pleased to report our second consecutive quarter of profits, as well as improved net revenues that reflect the launch and initial sales of CombiPatch™," said Robert C. Strauss, Noven's President and Chief Executive Officer. "CombiPatch™, developed by Noven and marketed by Rhône-Poulenc Rorer, is the nation's first and only combination estrogen/ progestogen patch, and should contribute to the growth that we hope to achieve in 1999. That growth should be further enhanced by our second generation estrogen patch, which is less than one-half the size of any other estrogen patch on the U.S. market. Already approved by the FDA, we expect to launch the second generation patch in the U.S. through Vivelle Ventures in mid-1999."

Vivelle Ventures LLC is a women's health products company jointly owned by Noven and Novartis Pharmaceuticals.

Noven Pharmaceuticals, Inc., headquartered in Miami Florida, is a leader in the development of advanced drug delivery technologies. Noven's existing products include: advanced estrogen transdermal delivery systems (Vivelle®, licensed to Vivelle Ventures LLC, and Menorest®, licensed to Rhône-Poulenc Rorer); combination estrogen/progestogen transdermal delivery systems (CombiPatch™ and Estalis®, licensed to Rhône-Poulenc Rorer); and the first transmucosal patch delivery system approved by the FDA (DentiPatch®, developed, marketed and sold by Noven). With a range of additional products in development, Noven is committed to becoming the world's premier developer, manufacturer and marketer of transdermal and transmucosal drug delivery systems.

Statement of Operations Data

(amounts in thousands except per share amounts)
  Fourth Quarter Ended
December 31,
Year Ended
December 31,
Revenues:
1998
1997
1998
1997
  Product sales
$7,325
$ 3,087
$20,114
$12,395
  License revenue
     556
     56
1,728
1,872
  Total revenues
7,881
3,143
21,842
14,267
Expenses:
  
Cost of products sold
3,644
1,170
9,447
5,180
  Research and development
1,474
3,539
6,808
9,723
  Marketing, general and
  administrative
2,225
3,424
10,105
9,845
  Total expenses
7,343
8,133
26,360
24,748
Interest income
77
226
439
893
Other income
      —
      —
      —
      31
Net income (loss)
$ 615
$ (4,764)
$ (4,079)
$ (9,557)
Net income (loss) per share
$ 0.03
$ (0.23)
$ (0.19)
$ (0.47)
Weighted average of common shares outstanding:
   Basic
 21,482
20,443
 21,013
20,159
   Diluted
 21,635
20,443
 21,013
20,159

Balance Sheet Data

(amounts in thousands)
Year End December 31,
Current Assets:
1998
1997
  Cash and short term equivalents
$  5,573
$ 17,148
  Working capital
9,073
18,683
  Net property, plant and equipment 
15,517
15,243
  Investment in Vivelle Ventures LLC
7,500
  Total Assets
40,156
38,224
  Deferred license revenue
5,644
5,870
  Stockholders' equity
28,325
29,881

Forward looking statements contained in this release are qualified by and subject to the risks and uncertainties specified by Noven in its most recent filings with the Securities and Exchange Commission, including the risk that CombiPatch™ orders may be less than expected, and that the second generation estrogen patch may not be launched successfully or in a timely fashion.