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NOVEN ANNOUNCES SECOND QUARTER FINANCIAL RESULTS |
BackReports
Second Quarter Earnings Per Share of $0.14
Pre-Tax
Income for First Half Increases 63%, Revenues Up 26%
Lower Than Expected International Product Orders to Impact Second Half Results
MIAMI, FL. - August
2, 2001 - Noven Pharmaceuticals, Inc. (Nasdaq:NOVN) today announced financial
results for the quarter and six-month period ended June 30, 2001, and
revised its financial forecast for full-year 2001.
Financial Results
2001 Second Quarter
Noven reported net income of $3.2 million ($0.14 diluted earnings per
share) for the second quarter of 2001, compared to $3.5 million ($0.15
diluted earnings per share) for the second quarter of 2000. Income before
income taxes for the quarter was a record $4.7 million, compared to $3.6
million for the second quarter of last year. Revenues for the 2001 second
quarter were $12.6 million, compared to $10.5 million for the same quarter
in 2000. Noven's provision for income taxes in the 2001 second quarter
increased $1.4 million over the second quarter of 2000, as Noven's income
became fully taxable in 2001 for the first time. In the quarter, Noven
recognized $3.1 million in earnings from Novogyne Pharmaceuticals, Noven's
joint venture with Novartis Pharmaceuticals Corporation, compared to $3.3
million in the second quarter of last year. In the quarter, Novogyne had
net revenues of $20.9 million, compared to $15.8 million in the second
quarter of last year. Novogyne's net income for the quarter declined to
$7.2 million from $8.2 million in the second quarter of 2000, primarily
due to increased expenses associated with sales force expansion, product
launch activities and the amortization of Combipatch acquisition costs.
2001 First Half
Noven reported net income of $5.9 million ($0.25 diluted earnings per
share) for the first half of 2001, compared to $5.3 million ($0.23 diluted
earnings per share) for the same period last year. Income before income
taxes for the 2001 first half was a record $8.9 million, compared to $5.5
million for the first half of last year. Revenues for the first half were
$25.3 million, compared to $20.1 million for the same period in 2000.
Noven's provision for income taxes for the first half of 2001 increased
$2.9 million over the first half of 2000. In the 2001 first half, Noven
recognized $3.7 million in earnings from Novogyne, as it did in the first
half of last year. In the first half, Novogyne had net revenues of $34.7
million, compared to $29.1 million in the first half of last year. Novogyne's
net income for the half declined to $14.6 million from $15.5 million in
the first half of 2000, primarily due to increased expenses associated
with sales force expansion, product launch activities and the amortization
of Combipatch acquisition costs.
Business Update
& Forecast
"With pre-tax income and revenues up 63% and 26% respectively, we
were pleased with our results for the first half of 2001," said Robert
C. Strauss, Noven's President, Chief Executive Officer and Chairman. "The
second half of the year, however, presents a challenge. We have not received
certain expected product orders from Novartis Pharma AG that are important
to the continued growth of our international business, and we are therefore
revising our forecast for the year."
U.S. Business
Strauss continued: "In the hands of Novogyne, Vivelle®
family prescriptions continue to increase. We now hold about a 31% share
of the U.S. transdermal estrogen market, up from 28.7% at the beginning
of the year." In May 2001, Novogyne launched Combipatch™ nationwide,
making it the only company in the U.S. offering transdermal therapies
for both the estrogen-only and the combination hormone therapy markets.
"It is still too early to interpret prescription data, but feedback
from the sales force suggests that doctors are receptive to Combipatch.
Potential competitors continue to face product approval delays, which
extends our opportunity to establish Combipatch as the premier brand in
its category."
International
Business
"Our international business has not progressed as rapidly as we had
hoped," added Strauss. "Novartis Pharma AG licenses our principal
international products, Estalis® and Estradot™, in most
markets outside the U.S. We expected to receive significant orders for
those products as Novartis Pharma purchased supply for planned international
launches. To date, orders have been substantially less than we anticipated,
and this will significantly affect our second half results."
"We believe
that the failure to order at expected levels reflects Novartis Pharma's
strategies relating to regulatory approvals and launch timing, not a lack
of commitment to commercializing Noven's products. Several recent developments
support this belief. In March of this year, our joint venture with Novartis
Pharmaceuticals acquired Combipatch, the U.S. version of Estalis. As announced
separately today, Novartis Pharma and Noven have entered into an agreement
to develop line extensions to the Combipatch/Estalis product line. And
Novartis Pharma continues to advance the European mutual recognition process
for Estradot. We believe that these developments evidence Novartis Pharma's
confidence and commitment to the long-term success of Estalis and Estradot
in global markets."
"Product order
issues aside, we consider our relationship with Novartis Pharma to be
excellent. We are working with our colleagues there to better understand
their regulatory and launch strategies, and to determine when additional
orders will be received."
MethyPatch Update
"MethyPatch® is advancing toward our supplemental
Phase III clinical trials," added Strauss, referring to Noven's once-daily
methylphenidate patch for Attention Deficit Hyperactivity Disorder (ADHD).
"We have submitted our revised protocol to FDA for comment following
a stringent analysis of our prior study results, and we expect to begin
our Phase III study in the fall."
Financial Forecast
"Given
the lower levels of international orders, we now expect Noven's total
revenues for 2001 to be modestly higher than the $42.9 million reported
last year," said Strauss. "Noven's pre-tax income should increase
25-35% over the $12.0 million reported for 2000, which at assumed tax
rates would yield net earnings per share of $0.40 to $0.45 for 2001."
"Although overseas
growth will be constrained, Noven remains a consistently profitable company
with leading-edge technology, commercialized products, a robust U.S. business,
a strong global partner, a promising product pipeline, outstanding employees,
virtually no debt and over $40 million in cash," said Strauss. "In
short, we continue to have solid fundamentals and exceptional long-term
growth prospects."
Analyst Conference
Call
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 5:15 p.m. Eastern time this afternoon, August 2. 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 August 2 at 9:00
p.m. Eastern time until the evening of August 4 by calling 800-475-6701
(from within the U.S.) or 320-365-3844 (from outside the U.S.) and entering
the access code 597166. 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 leader
in the development of transdermal and transmucosal drug delivery technologies
and products. Together with Novartis Pharmaceuticals Corporation, Noven
owns a 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 AG). 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. For additional information on Noven, visit the company's web
site at www.noven.com. For information on Noven's Vivelle and Vivelle-Dot
products, visit www.vivelledot.com.
Forward looking statements contained in this release are qualified by and subject to the risks and uncertainties specified in Noven's most recent filings with the Securities and Exchange Commission, including the risk 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, delays in the launch of Estalis by Novartis Pharma in certain countries, delays in the launch of Estradot abroad due to the failure to receive regulatory approvals or other factors, lower than expected orders of Estalis and/or Estradot by Novartis Pharma, the failure of Novogyne to successfully market Combipatch, fluctuations in research and development and other expenses, the failure of MethyPatch® clinical studies, delays in filing a MethyPatch® New Drug Application, the inability of Noven to receive FDA approval to market MethyPatch® or its developmental HRT patches and/or to successfully commercialize such products, and the failure of Noven to reach the development milestones in the Novartis Pharma development agreement.
Noven Pharmaceuticals, Inc.
Statements of Operations Data: Three Months Ended Six Months Ended
(amounts in thousands, except June 30, June 30,
per share amounts) ------------------- --------------------
2001 2000 2001 2000
--------- --------- --------- ---------
(Unaudited)(Unaudited)(Unaudited)(Unaudited)
Revenues:
Product sales $ 11,842 $ 10,335 $ 23,864 $ 19,791
License revenue 752 146 1,419 293
--------- --------- --------- ---------
Total revenues 12,594 10,481 25,283 20,084
Expenses:
Cost of products sold 5,894 4,512 10,710 9,023
Research and development 2,410 3,555 4,637 5,380
Marketing, general
and administrative 3,176 2,307 5,836 4,389
--------- --------- --------- ---------
Total expenses 11,480 10,374 21,183 18,792
--------- --------- --------- ---------
Income from operations 1,114 107 4,100 1,292
Equity in earnings of Novogyne 3,137 3,253 3,732 3,730
Interest income, net 482 267 1,101 467
--------- --------- --------- ---------
Income before income taxes 4,733 3,627 8,933 5,489
Provision for income taxes 1,510 153 3,043 188
--------- --------- --------- ---------
Net income $ 3,223 $ 3,474 $ 5,890 $ 5,301
========= ========= ========= =========
Basic earnings per share $ 0.14 $ 0.16 $ 0.26 $ 0.24
========= ========= ========= =========
Diluted earnings per share $ 0.14 $ 0.15 $ 0.25 $ 0.23
========= ========= ========= =========
Weighted average number
of common shares outstanding:
Basic 22,335 21,797 22,286 21,740
========= ========= ========= =========
Diluted 23,561 22,895 23,585 22,862
========= ========= ========= =========
As Of
----------------------------------
June 30, December 31,
Balance Sheet Data: 2001 2000
-------------- --------------
Cash and cash equivalents $ 42,060 $ 40,976
Working capital $ 49,833 $ 46,734
Investment in Novogyne $ 21,763 $ 15,431
Total assets $143,975 $104,031
Deferred license revenue $ 29,301 $ 27,220
Stockholders' equity $ 74,634 $ 65,277
Investor &
Media Contact:
Joseph C. Jones
Vice President, Corporate Affairs
Noven Pharmaceuticals, Inc.
(305) 253-1916
Copyright © 2001 Noven Pharmaceuticals, Inc. All rights reserved.