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NOVEN REPORTS FIRST QUARTER EARNINGS PER SHARE OF $0.02 |
BackMiami, FL, April
30, 2003 -- 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 ended March 31, 2003, and provided an update on its
business and prospects.
Financial Results
Noven’s revenues for the first quarter of 2003 (the "current
quarter") were $10.0 million, compared to $12.7 million for the
first quarter of 2002 (the "2002 quarter"), reflecting
the impact of the Women's Health Initiative (WHI) study results,
published in July 2002, and inventory reduction initiatives intended
to align inventories for Noven’s U.S. products with current demand.
Research and development expense decreased compared to the 2002 quarter
due to the completion of MethyPatch® clinical studies, partially
offset by expenses related to development of Noven’s fentanyl
patch for chronic pain. Selling, general and administrative expense
increased in the current quarter, primarily due to MethyPatch pre-launch
marketing expenses. Noven recognized $1.5 million in earnings from
Novogyne Pharmaceuticals, Noven's U.S.-based joint venture with Novartis
Pharmaceuticals Corporation ("Novartis"), the same amount
recognized in the 2002 quarter.
Noven's net income was approximately $473,000 ($0.02 diluted
earnings per share), compared to $1.5 million ($0.06 diluted earnings
per share) in the 2002 quarter.
Novogyne's revenues were $24.5 million, down 11% from the 2002
quarter, reflecting the continuing impact of WHI and inventory reduction
initiatives, partially offset by higher sales of Vivelle-Dot®,
Novogyne’s lead product. Novogyne's selling, general and
administrative expenses decreased to $7.9 million from $9.9 million,
primarily due to reduced promotional spending for CombiPatch®.
Novogyne’s net income decreased 2% to $9.4 million, and was sufficient
to satisfy Novartis’ $6.1 million preferred distribution for
2003.
At March 31, 2003, Noven had cash and cash equivalents of $65.4 million,
compared to $58.7 million at December 31, 2002. In April 2003, Noven
received $25.0 million from Shire Pharmaceuticals Group plc (Shire)
upon closing of the MethyPatch license transaction.
Business Update
"Our strategy is to leverage our patented technology across a diverse
range of products and therapeutic categories with different strategic
partners, as we work to advance our HRT business," said Robert
Strauss, Noven's President, CEO & Chairman. "The first
four months of 2003 have been productive in this regard."
| • | "We are in the final phase of our U.S. HRT inventory reduction initiatives. We now believe that inventories at Novogyne are at acceptable levels, and that Vivelle inventories in the trade channel remain only modestly higher than desired. We expect to end our inventory reduction initiatives in the 2003 second quarter." |
| • | "In February, Vivelle-Dot became the market share leader in the U.S. estrogen patch market based on total prescriptions dispensed, and in March it saw the second-highest monthly prescriptions in its history," said Strauss. "Alone, Vivelle-Dot currently holds 31.7% of the market and, together with original Vivelle®, it holds 38.4%." |
| • | "Also in February, we signed an agreement licensing MethyPatch to Shire, the market leader in ADHD therapy. The transaction closed in early April, and we received a $25.0 million payment from Shire. Receipt of a MethyPatch "not approvable" letter from FDA is a set-back, but it does not alter our belief that the product represents a unique and valuable therapy for ADHD." |
| • | “We disclosed development of a fentanyl patch for chronic pain and a dextroamphetamine patch for ADHD. We also disclosed development of transdermal formulations for over 20 additional compounds that could be developed in partnership with other pharmaceutical companies. Each of these projects incorporate Noven's patented transdermal technology, and we expect that several will be partnered with other pharmaceutical companies and play a role in Noven’s long-term growth.” |
| • | "And concurrently with this press release, we announced formation of a development collaboration with Procter & Gamble for the development of new transdermal patches targeting a therapeutic category with substantial growth potential." |
Conference
Call
A conference call relating to Noven’s financial results will
be broadcast live at www.noven.com beginning at 11:00 a.m. Eastern
time this morning, April 30. Thereafter, a rebroadcast will be accessible
at the same website. A replay will be available from April 30 at
3:00 p.m. until the evening of May 2 by calling 877-660-6853 (within
the
U.S.) or 201-612-7415 (outside the U.S.) and entering the access
code 64158 and conference ID 1628. The 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, Noven
owns a 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 AG) 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®, licensed to Shire, Noven is committed to
becoming the world’s premier transdermal drug delivery company.
For additional information on Noven, visit www.noven.com.
This release
contains forward-looking information related to the business of Noven that
can
be identified by the use of forward-looking terminology such as “could”, "may", "expect", "will", "should", “potential”, “plan”, "believe",
and similar words and phrases. 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: we may be unable to attract
additional development partners, which would limit our ability to develop
additional products; MethyPatch may not be approved, especially in
light of our receipt of a “not approvable” letter from
FDA; even if approved, MethyPatch may not be successfully commercialized
by Shire due to competitive market conditions or other factors, including
physician/patient preferences for other ADHD therapies; the timing
of FDA approval is outside the control of Noven; the FDA could place
limits on permitted marketing claims that could negatively impact MethyPatch's
sales potential; the availability of other once-daily ADHD therapies
could negatively impact MethyPatch's market penetration; Shire may
promote its other ADHD products at the expense of MethyPatch; Noven
has never manufactured MethyPatch on a commercial scale, and Noven
may be unable to supply Shire with its requirements for MethyPatch;
if Noven is unable to successfully scale up production of MethyPatch,
it may be unable to achieve satisfactory gross margins; the timing
of FDA approval may impact the success of the product launch and affect
market penetration; Shire may seek to exercise its right to require
Noven to repurchase the rights to MethyPatch for $5.0 million; our
fentanyl and dextroamphetamine patch development programs, and the
development program with Procter & Gamble, may not proceed as expected;
we have experienced a production problem with CombiPatch that we believe
relates to a material supplied by one vendor, and we believe the problem
is resolved; if the problem is not resolved, we may be unable to ship
any CombiPatch product, which would have a material adverse effect
on our future revenue and earnings; Noven and Novogyne may be unable
to align inventories with demand as soon as hoped because of inaccurate
estimates, lack of cooperation of third parties or otherwise; unexpected
sales deductions or higher product returns at Novogyne could negatively
impact Novogyne’s earnings; the U.S. HRT business may be further
impacted because of mandated product label changes, the announcement
of additional negative clinical results or other reasons; product development
is inherently risky and Noven may be unable to advance its other development
projects; Noven’s HRT business may decline further than expected
in 2003, whether as a continuing result of WHI and other studies announced
in 2002 or otherwise; there can be no assurance that Noven will receive
any additional payments from Shire or that if additional payments are
received, that we will utilize the funds expected to be received in
the Shire transaction in a manner that will increase long-term shareholder
value.
Noven Pharmaceuticals, Inc.
Statements of Operations Data: Three Months Ended
(amounts in thousands, except March 31,
per share amounts) 2003 2002
----------- -----------
(Unaudited) (Unaudited)
Revenues:
Product sales $9,144 $11,991
License revenue 881 744
----------- -----------
Total revenues 10,025 12,735
Expenses:
Cost of products sold 4,285 5,900
Research and development 2,493 3,369
Marketing, general and administrative 4,181 2,933
----------- -----------
Total expenses 10,959 12,202
----------- -----------
Income (loss) from operations (934) 533
Equity in earnings of Novogyne 1,525 1,515
Interest income, net 148 207
----------- -----------
Income before income taxes 739 2,255
Provision for income taxes 266 802
----------- -----------
Net income $473 $1,453
=========== ===========
Basic earnings per share $0.02 $0.06
=========== ===========
Diluted earnings per share $0.02 $0.06
=========== ===========
Weighted average number of common
shares outstanding:
Basic 22,581 22,491
=========== ===========
Diluted 22,920 23,456
=========== =========== As Of
-----------------------
March 31, December 31,
Balance Sheet Data: 2003 2002
----------- -----------
(Unaudited) (Unaudited)
Cash and cash equivalents $65,404 $58,684
Investment in Novogyne $25,561 $34,684
Total assets $135,345 $137,702
Deferred license revenue $28,564 $29,445
Stockholders' equity $96,048 $96,741
Contact:
Investor & Media Contact
Joseph C. Jones
Vice President – Corporate Affairs
Noven Pharmaceuticals, Inc.
(305) 253-1916
Copyright © 2003 Noven Pharmaceuticals, Inc. All rights reserved.