Miami, FL, April 30, 2002
Noven Reports First Quarter Earnings Per Share of $0.06
Vivelle® Family Claims Top Spot in U.S. Transdermal Estrogen Market
Estradot® Launched in First Major European Market
Once-Daily MethyPatch® Proceeding Towards Mid-Year NDA Filing
-- Noven Pharmaceuticals, Inc. (NASDAQ: NOVN),a leading developer of advanced transdermal drug delivery technologies and prescription transdermal products, today announced financial results for the first quarter of 2002 and provided an update on its business and outlook for 2002.
"The year is off to a good start," said Robert C. Strauss, Noven's President, Chief Executive Officer & Chairman. "Solid first quarter financial results, an improved outlook for international product sales in 2002, and other favorable business developments provide a sound basis for optimism with regard to Noven's prospects in the coming quarters."
Noven's revenues for the quarter ended March 31, 2002 (the "current quarter") were $12.7 million, in line with revenues reported for the quarter ended March 31, 2001 (the "2001 quarter"). Research and development expense increased 51% to $3.4 million, reflecting higher MethyPatch® clinical trial and related expenses. Net income was $1.5 million ($0.06 diluted earnings per share), compared to $2.7 million ($0.11 diluted earnings per share) in the 2001 quarter.
Novogyne Pharmaceuticals, Noven's women's health products company owned jointly with Novartis Pharmaceuticals Corporation (NPC), produced sufficient income in the current quarter to satisfy NPC's $6.1 million preferred return for the year and to contribute $1.5 million in pre-tax profit to Noven. Novogyne's revenues nearly doubled to $27.5 million in the current quarter, 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 $11.2 million from $4.8 million, reflecting primarily CombiPatch promotion expenses and an approximate 20% increase in the size of the Novogyne sales force. Novogyne amortized $1.5 million of CombiPatch acquisition cost in the current quarter, and had no comparable amortization expense in the 2001 quarter. In the current quarter, Novogyne's net income increased 29% to $9.6 million.
Novogyne. "During the first quarter, the Vivelle family of products (Vivelle-Dot and Vivelle) continued to increase market share," said Strauss. "In February, it became the most prescribed family of estrogen patches in the United States, achieving a goal we have worked towards since the launch of Vivelle-Dot in 1999. In March, the Vivelle family extended its lead, garnering a 34% share of the U.S. estrogen patch market. Among the physicians targeted by Novogyne, the Vivelle family holds a 45% share of the estrogen patch market, and in some sales territories, its market share exceeds 60%."
Novogyne also markets CombiPatch, which is the only FDA-approved 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. CombiPatch total prescriptions have not meaningfully increased since relaunch. "In 2002, a key Novogyne objective is to help more physicians and patients appreciate the benefits of CombiPatch therapy," said Strauss, "and Novogyne is implementing supplemental sales and marketing programs in support of that goal."
International. "Late in the first quarter of 2002, the international version of Vivelle-Dot (called Estradot) was launched by Novartis Pharma AG (Novartis Pharma) in some European countries," said Strauss. "In April, Novartis Pharma launched the product in Germany, which is the first major European market to receive the world's smallest estrogen patch. Novartis Pharma has planned a series of additional Estradot launches over the next 18 to 24 months, and we are encouraged by the level of preparation that we have seen in this regard."
MethyPatch. Strauss continued: "In March, Noven completed a Phase III clinical trial for once-daily MethyPatch, our transdermal methylphenidate patch for ADHD. In early April, we unblinded the study data. The primary outcome measure in the study was teacher ratings of patient attention and behavior using the IOWA Conners Rating Scale, a standard rating scale used for this condition in classroom and other settings. By this measure, MethyPatch offered highly statistically significant improvement (p < .001) in patient attention and behavior compared to placebo. We are now focused on completion of our MethyPatch New Drug Application, which we expect to submit to the FDA this summer. If approved by the FDA, we expect that MethyPatch will reach the U.S. market in the second half of 2003, and that it will be the first transdermal therapy available for ADHD."
"Based primarily on an improved outlook for international product sales this year, we are raising our guidance for 2002 revenues and earnings," said James Messiry, Noven's Vice President & Chief Financial Officer. "For full year 2002, we expect revenues to increase 15% to 20% over 2001, and we expect to report fully diluted earnings of $0.50 to $0.55 per share. As we have previously indicated, we expect 2002 to include increased investment in research and development, as well as MethyPatch launch preparation costs. We expect that a disproportionate share of the year's product sales will occur in the second quarter. Accordingly, we are forecasting second quarter revenues of nearly $16 million, and diluted earnings per share of $0.14 to $0.17, and we expect that the second quarter will be the strongest quarter of the year in terms of both revenues and net income."
A public telephone conference with management relating to Noven's financial results will be broadcast live via the Internet at www.noven.com beginning at 5:00 p.m. Eastern time this afternoon, April 30. 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 April 30 at 8:30 p.m. until the evening of May 2 by calling 800-475-6701 (from within the U.S.) or 320-365-3844 (from outside the U.S.) and entering the access code 636871. The conference call will contain forward-looking information in addition to that contained in this press release.
Noven Pharmaceuticals, Inc. Statements of Operations Data: Three Months Ended (amounts in thousands, except March 31, per share amounts) ------------------ 2002 2001 ---- ---- (Unaudited)(Unaudited) Revenues: Product sales $11,991 $12,022 License revenue 744 667 ------- ------- Total revenues 12,735 12,689 Expenses: Cost of products sold 5,900 4,816 Research and development 3,369 2,227 Marketing, general and administrative 2,933 2,660 ------- ------- Total expenses 12,202 9,703 ------- ------- Income from operations 533 2,986 Equity in earnings of Novogyne 1,515 595 Interest income, net 207 619 ------- ------- Income before income taxes 2,255 4,200 Provision for income taxes 802 1,533 ------- ------- Net income $ 1,453 $ 2,667 ======= ======= Basic earnings per share $ 0.06 $ 0.12 ======= ======= Diluted earnings per share $ 0.06 $ 0.11 ======= ======= Weighted average number of common shares outstanding: Basic 22,491 22,236 ======= ======= Diluted 23,456 23,606 ======= ======= As Of March 31, December 31, Balance Sheet Data: 2002 2001 ---- ---- (Unaudited) (Unaudited) Cash and cash equivalents $ 47,270 $ 49,389 Investment in Novogyne $ 33,558 $ 32,043 Total assets $ 128,628 $ 136,228 Deferred license revenue $ 32,014 $ 32,758 Stockholders' equity $ 83,585 $ 81,898
Noven Pharmaceuticals, Inc., headquartered in Miami, Florida, is a leading developer of advanced transdermal drug delivery technologies and prescription transdermal products. Together with NPC, 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 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 "outlook", "basis for optimism", "may provide", "encouraged", "expect", "planned", "guidance", "should", "will" and "forecast". 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 Novogyne to increase sales of CombiPatch or continue growing sales of the Vivelle family either as a result of the supplemental sales and marketing programs or otherwise; the inability of Noven to manufacture and supply Novartis Pharma's Estradot launch orders or any of Noven's other products; 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/or uncertainty regarding Novartis Pharma's strategy with regard to launching and marketing Estradot together with competitive products marketed by Novartis Pharma; issues that may arise following a complete analysis of MethyPatch clinical data and/or in the course of the NDA preparation process; 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; lower than expected Estalis orders by Novartis Pharma due to the failure of Novartis Pharma to successfully commercialize and support Estalis due to inventory levels, the absence of preferred dosing ranges, regulatory strategies or other factors; and potential fluctuations in research and development, sales and marketing and other expenses. FDA will examine efficacy data from the recently completed MethyPatch Phase III study together with safety and other data from this and other MethyPatch studies sponsored by Noven, and there can be no assurance that FDA will deem all of such data sufficient to approve the product for marketing or to authorize the product's use in the manner described by Noven. Noven believes that MethyPatch will be the first transdermal ADHD product submitted to FDA for approval, and there can be no assurance that FDA will not have questions or raise objections that could delay or prevent an approval. There are several other once-daily ADHD medications on the market, and other products that may have improved safety and efficacy profiles are also in development.
Investor & Media Contact:
Joseph C. Jones
Noven Pharmaceuticals, Inc.