Noven Announces Record Quarterly And Full-Year Financial Results

-- Noven Pharmaceuticals, Inc. (NASDAQ:NOVN) today announced record financial results for the quarter and year ended December 31, 1999.

For the fourth quarter of 1999, Noven reported net income of $7,547,000 ($.35 basic earnings per share), compared to $615,000 ($.03 basic earnings per share) for the fourth quarter of 1998. Excluding a $5,000,000 net deferred tax benefit described below (the "Tax Benefit"), net income for the fourth quarter of 1999 was $2,547,000 ($.12 basic earnings per share). The consensus of analysts' earnings estimates for Noven's 1999 fourth quarter, as reported by First Call, is $.05 per share. Revenues for the 1999 fourth quarter were $8,620,000, compared to $7,881,000 for the same quarter in 1998.

For the year ended December 31, 1999, Noven reported net income of $10,460,000 ($.49 basic earnings per share), compared to a net loss of $4,079,000 ($.19 basic loss per share) for 1998. Excluding the Tax Benefit, net income for 1999 was $5,460,000 ($.25 basic earnings per share). Revenues for full-year 1999 were $31,650,000, compared to $21,842,000 for 1998.

As of December 31, 1999, Noven had cash and short-term equivalents of $15,338,000, compared to $5,573,000 as of December 31, 1998.

Reported financial results include a $5,000,000 net deferred tax benefit that contributed basic earnings per share of $.23 to Noven's 1999 fourth quarter and full year results. Results also include $90,000 of a previously announced $2,700,000 payment received by Noven in October 1999 from Rhône-Poulenc Rorer ("RPR", now known as Aventis) in connection with the sublicense of Noven's Estalis® and Menorest® products by RPR to Novartis Pharma AG. In light of new accounting guidance contained in Staff Accounting Bulletin #101 issued by the Securities and Exchange Commission in December 1999, Noven will amortize the $2,700,000 payment over seven and one half years.

"Even without considering the Tax Benefit and the payment from RPR, Noven's 1999 fourth quarter marked our sixth consecutive quarter of increasing profits, and the highest revenues and net income ever reported in Noven's 12-year history," said James B. Messiry, Noven's Chief Financial Officer. "We believe that, barring unforeseen circumstances, we have sufficient growth drivers in place to outpace these record results from ongoing operations in 2000."

Robert C. Strauss, Noven's President and Chief Executive Officer, elaborated: "For Noven, 1999 was a year filled with financial records, solid gains in shareholder value and increased recognition by the investment community. Our financial improvement was largely driven by the enthusiastic acceptance by U.S. doctors and patients of Vivelle-Dot™, the smallest estrogen patch in the world, and CombiPatch®, the nation's only combination estrogen/progestin patch, and both products have room to grow in the U.S. market. Beginning in 2000, Novartis is scheduled to launch the European version of CombiPatch®, called Estalis®, throughout Europe and elsewhere. By 2001, Vivelle-Dot™ should be approved in Europe and in the hands of what we expect will be a formidable international marketing partner. In 2002, our breakthrough MethyPatch™ transdermal methylphenidate system for Attention Deficit Hyperactivity Disorder is expected to reach the U.S. market. Accordingly, as strong a year as 1999 was, we hold great confidence that the best is yet to come."

Conference Call
A telephone conference among management and equity analysts relating to Noven's financial results will be broadcast live via the Internet at www.noven.com beginning at 10:00 a.m. Eastern time this morning, February 24. Thereafter, a rebroadcast of the call will be accessible at the same web site. For those without Internet access, a taped replay of the conference call will be available by telephone from February 24 at 1:00 p.m. Eastern time to February 25 at 11:59 p.m. by calling 800-475-6701 (from within the U.S.) or 320-365-3844 (from outside the U.S.) and entering the access code 504004.

Statement of Operations Data:
Three months ended
Twelve months ended
(amounts in thousands exceptper share amounts)
 
1999
1998
1999
1998
 
(Unaudited)
(Unaudited)
Revenues:
     Product sales
 $        8,473
 $      7,325
 $    31,334
 $    20,114
     License revenue
147
            556
            316
        1,728
     Total revenues
          8,620
         7,881
       31,650
       21,842
Expenses:
     Cost of products sold
          2,652
         3,644
       12,721
        9,447
     Research and development
          2,444
         1,474
         7,171
        6,808
     Marketing, general & administrative
          2,414
         2,225
         7,860
       10,105
     Total  expenses
          7,510
         7,343
       27,752
       26,360
Equity interest in Vivelle Ventures, LLC
          1,487
                -
         1,487
               -
Interest income, net
             150
              77
            343
           439
Income (loss) before taxes
          2,747
            615
         5,728
       (4,079)
Income tax (benefit)
         (4,800)
                -
        (4,732)
               -
Net income (loss)
 $        7,547
 $         615
 $    10,460
 $     (4,079)
Basic earnings  (loss) per share
 $         0.35
 $        0.03
 $        0.49
 $      (0.19)
Diluted earnings (loss) per share
 $         0.34
 $        0.03
 $        0.48
 $      (0.19)
Weighted average of shares outstanding:
        Basic:
         21,529
       21,482
       21,508
       21,013
        Diluted:
         22,410
       21,482
       21,897
       21,013
  
Balance Sheet Data:
1999
1998
     Cash and short-term equivalents
 $     15,338
 $      5,573
     Working capital
 $     16,581
 $      8,847
     Net property and equipment
 $     15,329
 $    15,517
     Investment in Vivelle Ventures LLC
 $      8,365
 $      7,500
     Total assets
 $     56,888
 $    40,156
     Deferred license revenue
 $      8,028
 $      5,644
     Stockholders' equity
 $     39,393
 $    28,325

 

About Noven
Noven Pharmaceuticals, Inc., headquartered in Miami, Florida, is a leader in the development of transdermal and transmucosal drug delivery technologies. Together with Novartis Pharmaceuticals, 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); combination estrogen/progestin transdermal delivery systems (including CombiPatch™, licensed to RPR, and Estalis®, licensed to Novartis Pharma AG); and the first transmucosal patch delivery system approved by the FDA (DentiPatch®). 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 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.

Contact:
James B. Messiry
Chief Financial Officer
305-253-1916