SCOTTSDALE, Ariz., Nov. 4, 2009 (GLOBE NEWSWIRE) -- Medicis (NYSE:MRX) today announced revenues of approximately $151.8 million for the three months ended September 30, 2009, compared to revenues of approximately $115.4 million for the three months ended September 30, 2008, representing an increase of approximately 31.5%. This increase was due primarily to the strength of SOLODYN(R) and the launch of DYSPORT(TM) during the quarter.
Non-generally accepted accounting principles (non-GAAP) net income per diluted share (defined below) for the three months ended September 30, 2009, was $0.50, compared to non-GAAP net income per diluted share of $0.26 for the three months ended September 30, 2008, representing an increase of approximately 91.8%.
The Company's achievement of approximately $151.8 million in revenues is consistent with the Company's previously published guidance of approximately $147-$154 million for the three months ended September 30, 2009. Non-GAAP net income per diluted share of $0.50 compares favorably to the Company's previously published guidance of approximately $0.36-$0.42 in net income per diluted share for the three months ended September 30, 2009. As a result of the third quarter financial results, the Company has raised its revenue and EPS guidance for the calendar year (see "2009 Guidance" below).
"We are pleased to announce another record quarter fueled by the strength of SOLODYN," said Jonah Shacknai, Chairman and Chief Executive Officer of Medicis. "We are encouraged by the positive physician and patient response to DYSPORT. As we look to year's end, we are focused on our research and development efforts, having achieved our goal of three product approvals in 2009."
Non-GAAP net income for the three months ended September 30, 2009, was approximately $32.1 million, compared to non-GAAP net income of approximately $16.1 million for the three months ended September 30, 2008, representing an increase of approximately 99.1%. Non-GAAP net income for the three months ended September 30, 2009, excludes charges totaling approximately $11.0 million (net), consisting of a $17.0 million charge (pre-tax) for upfront and milestone research and development (R&D) payments to Medicis partners and an income tax benefit of approximately $6.0 million related to these transactions.
GAAP net income for the three months ended September 30, 2009, was approximately $21.1 million, compared to GAAP net loss of approximately ($14.7) million for the three months ended September 30, 2008. GAAP net income per diluted share for the three months ended September 30, 2009, was $0.33, compared to GAAP net loss per diluted share of ($0.26) for the three months ended September 30, 2008.
Acne Products
Medicis recorded revenues of approximately $106.8 million from sales of its acne products for the three months ended September 30, 2009, compared to revenues of approximately $66.3 million for the three months ended September 30, 2008, representing an increase of approximately 61.1%. This increase is due primarily to increased sales of SOLODYN and TRIAZ(R) in the quarter. Medicis acne products include primarily PLEXION(R), SOLODYN, TRIAZ and ZIANA(R).
Non-Acne Products
Medicis recorded revenues of approximately $35.5 million associated with its non-acne products for the three months ended September 30, 2009, compared to revenues of approximately $34.1 million for the three months ended September 30, 2008, representing an increase of approximately 4.2%. This increase is due primarily to increased sales of RESTYLANE(R) and the launch of DYSPORT in the quarter, offset by a decrease in LOPROX(R) sales. Medicis non-acne products include primarily DYSPORT, LOPROX, PERLANE(R), RESTYLANE and VANOS(R).
Other Non-Dermatological Products
Medicis recorded revenues of approximately $9.5 million associated with its other non-dermatological products for the three months ended September 30, 2009, compared to revenues of approximately $15.1 million for the three months ended September 30, 2008, representing a decrease of approximately 36.9%. This decrease is due primarily to a decrease in contract revenue. Medicis other non-dermatological products include primarily AMMONUL(R), BUPHENYL(R), LIPOSONIX(R)(1) and contract revenue.
Other Income Statement Items
Gross profit margin for the three months ended September 30, 2009, increased approximately 0.5 percentage points to approximately 91.1%, compared to approximately 90.6% for the three months ended September 30, 2008. This increase was due primarily to increased sales of the higher-margin product SOLODYN.
Selling, general and administrative (SG&A) expense for the three months ended September 30, 2009, was approximately $71.9 million, or approximately 47.4% of revenues, compared to approximately $71.6 million, or approximately 62.0% of revenues, for the three months ended September 30, 2008. The Company continues to manage cost structure in non-strategic areas to achieve profitability objectives. This flat year-over-year cost structure, which includes three product launches, is evidence of the success to date of these efforts.
R&D expense for the three months ended September 30, 2009, was approximately $27.4 million, compared to approximately $37.6 million, inclusive of a $30.5 million acquired in-process R&D charge associated with the acquisition of LipoSonix, for the three months ended September 30, 2008. This represents a decrease of approximately 27.2%. R&D expense for the three months ended September 30, 2009, includes upfront and milestone payments to Medicis partners of $17.0 million.
2009 Guidance
Based upon information currently available, the Company's financial guidance for the remainder of 2009 is as follows:
Calendar 2009
(in millions, except per share amounts)
First Second Third Fourth Calendar
Quarter Quarter Quarter Quarter Year End
(3/31/09) (6/30/09) (9/30/09) (12/31/09) 2009
Actual Actual Actual Estimated Estimated
-------------------------------------------------------
Revenue $100 $141 $152 $168-$174 $561-$567
Non-GAAP
diluted net
income per
share
objectives $0.09 $0.39 $0.50 $0.58-$0.62 $1.56-$1.60
Additional 2009 Guidance Considerations
-- The Company is anticipating a significant increase in R&D and SG&A
spending in the fourth quarter of 2009 as compared to the third
quarter of 2009. The sequential increase in R&D expense is
primarily related to costs associated with the U.S. clinical
trials for LIPOSONIX. The sequential increase in SG&A expense is
primarily attributable to promotional costs associated with the
launch of DYSPORT in the U.S.
-- Revenue and non-GAAP diluted net income per share objectives
include a full year of SOLODYN revenue with no additional generic
entry;
-- annual gross profit margins of approximately 90-91% of revenues;
-- annual SG&A expense of approximately 51-53% of revenues;
-- annual R&D expense of approximately 7-9% of revenues;
-- annual depreciation and amortization expense of approximately $30
million;
-- annual effective tax rate of approximately 37-38%;
-- the non-GAAP diluted net income per share figures above
incorporate the impact of share-based compensation expense,
totaling approximately $18-$20 million for the year; and
-- fully diluted weighted average shares outstanding of
approximately 62-64 million shares for the year.
The above guidance could be materially impacted by the following:
-- the timing of potential approvals of generic versions of SOLODYN,
as well as potential commercial launches of such products;
-- the timing of additional SOLODYN patent allowances, if any;
-- uncertainty relating to the Company's continued ability to
utilize the SOLODYN Patient Access Card in the current manner,
which may affect the average selling price;
-- the impact of the U.S. economy on the Company's aesthetic and
therapeutic franchises;
-- the financial impact of changes in accounting or governmental
pronouncements; and
-- potential special charges associated with business development
transactions and R&D milestones, contract payments or impairment
charges on the Company's assets.
Diluted Net Income Per Share
Diluted net income per share amounts are calculated using the "if-converted" method of accounting regardless of whether the Company's outstanding convertible bonds meet the criteria for conversion and regardless of whether the bondholders actually convert their bonds into shares.
Use of Non-GAAP Financial Information
The Company has disclosed non-GAAP financial information in this press release to provide meaningful supplemental information regarding its operational performance and to enhance its investors' overall understanding of its core financial performance. Management measures the Company's performance using non-GAAP financial measures such as those that are disclosed in this press release. This information facilitates management's internal comparisons to the Company's historical core operating results and competitors' core operating results, and is a basis for financial decision making. Management believes that Medicis' investors benefit from seeing the Company's results on the same basis as management, in addition to the GAAP presentation. In our view, the non-GAAP financial measures are informative to investors, allowing them to focus on the ongoing operations and core results of Medicis' business. Historically, Medicis has reported similar non-GAAP information to its investors and believes that the inclusion of comparative numbers provides consistency in the Company's financial disclosures. This information is not in accordance with, or an alternative for, information prepared using GAAP. Non-GAAP net income excludes certain items, such as charges for R&D, transaction costs, gains and losses related to business development activities, the impairment of long-lived assets and litigation reserves. These items may have a material effect on the Company's net income and diluted net income per common share calculated in accordance with GAAP. The Company excludes such items and the related tax effects when analyzing its financial results as the items are distinguishable events. Management believes that, by viewing the Company's results of operations excluding these items, investors are given an indication of the ongoing results of the Company's operations.
About Medicis
Medicis is the leading independent specialty pharmaceutical company in the United States focusing primarily on the treatment of dermatological and aesthetic conditions. The Company is dedicated to helping patients attain a healthy and youthful appearance and self-image. Medicis has leading branded prescription products in a number of therapeutic and aesthetic categories. The Company's products have earned wide acceptance by both physicians and patients due to their clinical effectiveness, high quality and cosmetic elegance.
The Company's products include the brands DYSPORT(TM) (abobotulinumtoxinA) 300 Units for Injection, PERLANE(R), RESTYLANE(R), DYNACIN(R) (minocycline HCl Tablets, USP), LIDEX(R) (fluocinonide) Cream 0.05%, LOPROX(R) (ciclopirox) Gel 0.77% and Shampoo 1%, PLEXION(R) (sodium sulfacetamide 10% and sulfur 5%) Cleanser, Cleansing Cloths, Cream and Topical Suspension, SOLODYN(R) (minocycline HCl, USP) Extended Release Tablets, TRIAZ(R) (benzoyl peroxide) 3%, 6% and 9% Cleansers, Gels, Pads and Foaming Cloths, VANOS(R) (fluocinonide) Cream 0.1%, ZIANA(R) (clindamycin phosphate 1.2% and tretinoin 0.025%) Gel, AMMONUL(R) (sodium phenylacetate and sodium benzoate) Injection 10%/10%, BUPHENYL(R) (sodium phenylbutyrate) Tablets and Powder, the LIPOSONIX(R)(1) System and the over-the-counter brand ESOTERICA(R).
For more information about Medicis, please visit the Company's website at www.Medicis.com. Printed copies of the Company's complete audited financial statements are available free of charge upon request.
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act. All statements included in this press release that address activities, events or developments that Medicis expects, believes or anticipates will or may occur in the future are forward-looking statements, including:
-- Medicis' future prospects;
-- revenues, gross profit margin, expenses, tax rate and net income
per share guidance;
-- information regarding business development activities and future
regulatory approval of the Company's products;
-- the commercial success of the Company's products;
-- the patentability of certain intellectual property;
-- the potential for generic competition to SOLODYN and other
Medicis products;
-- the future expansion of the aesthetics market; and
-- expectations relating to the Company's product development
pipeline.
These statements are based on certain assumptions made by Medicis based on its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. No assurances can be given, however, that these activities, events or developments will occur or that such results will be achieved. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of Medicis. The Company's business is subject to all risk factors outlined in the Company's most recent annual report on Form 10-K for the year ended December 31, 2008, and other documents we file with the Securities and Exchange Commission (SEC). At the time of this press release, the Company cannot, among other things, assess the likelihood, timing or forthcoming results of R&D projects, the risks associated with the FDA approval process and risks associated with significant competition within the Company's industry, nor can the Company validate its assumptions of the full impact on its business of the approval of competitive generic versions of the Company's primary brands, and any future competitive product approvals that may affect the Company's brands, including the RESTYLANE franchise. The RESTYLANE franchise currently includes PERLANE and RESTYLANE.
In addition to the considerations set forth above, there are a number of important factors that could cause actual results to differ materially from those projected, including:
-- the anticipated size of the markets and demand for Medicis'
products;
-- the availability of product supply or changes in the costs of raw
materials;
-- the receipt of required regulatory approvals;
-- competitive developments affecting our products, such as the FDA
approvals of Elevess(TM), Evolence(R), Hydrelle(TM), Juvederm(R)
Ultra, Juvederm(R) Ultra Plus, Prevelle(TM) Silk, Radiesse(R) and
Sculptra(R), competitors to RESTYLANE and PERLANE, and generic
forms of our DYNACIN Tablets, LOPROX, PLEXION, SOLODYN, TRIAZ or
VANOS products;
-- product liability claims;
-- the introduction and/or passage of federal and/or state laws
and/or regulations relating to the Company's business, including
but not limited to passage of new laws affecting the ability to
settle patent litigation;
-- dependence on sales of key products;
-- changes in the treatment practices of physicians that currently
prescribe the Medicis products, including prescription levels;
-- the uncertainty of future financial results and fluctuations in
operating results, and the factors that may attribute to such
fluctuations as set forth in our SEC filings;
-- dependence on Medicis' strategy (including the uncertainty of
license payments and/or other payments due from third parties);
-- changes in reimbursement policies of health plans and other
health insurers;
-- the timing and success of new product development by Medicis or
third parties;
-- the inability to secure patent protection from filed patent
applications, inadequate protection of Medicis' intellectual
property or challenges to the validity or enforceability of the
Medicis proprietary rights or the Company's expectation regarding
the ability to receive 30-month stays;
-- the risks of pending and future litigation or government
investigations; and
-- other risks described from time to time in Medicis' filings with
the SEC.
Forward-looking statements represent the judgment of Medicis' management as of the date of this release and Medicis disclaims any intent or obligation to update any forward-looking statements contained herein, which speak as of the date hereof.
NOTE: Full prescribing information for any Medicis prescription product is available by contacting the Company. All trademarks are the property of their respective owners.
(1) The LIPOSONIX(R) System is not cleared for sale in the U.S.
Medicis Pharmaceutical Corporation
Summary Statements of Operations (Unaudited)
--------------------------------------------
(in thousands, except per share data)
Three months ended Nine months ended
September 30, September 30,
------------------ ------------------
2009 2008 2009 2008
------------------ ------------------
Product revenues $150,311 $110,574 $385,605 $368,668
Contract revenues 1,500 4,851 7,270 13,111
-------- -------- -------- --------
Total revenues 151,811 115,425 392,875 381,779
Cost of revenues 13,540 10,848 36,053 31,185
-------- -------- -------- --------
Gross profit 138,271 104,577 356,822 350,594
Operating expenses:
Selling, general
and administrative 71,936 71,575 214,014 215,509
Research and development 27,405 7,143 52,752 49,333
In-process research
and development -- 30,500 -- 30,500
Depreciation and amortization 7,112 7,078 22,189 20,579
-------- -------- -------- --------
Total operating expenses 106,453 116,296 288,955 315,921
Operating income (loss) 31,818 (11,719) 67,867 34,673
Other (income) expense, net (1,492) 2,593 (862) 5,465
Interest income, net (484) (2,377) (3,017) (14,472)
Income tax expense 12,646 2,722 34,677 24,802
-------- -------- -------- --------
Net income (loss) $21,148 $(14,657) $37,069 $18,878
======== ======== ======== ========
Basic net income (loss)
per common share $0.36 $(0.26) $0.63 $ 0.33
Diluted net income (loss)
per common share $0.33 $(0.26) $0.60 $0.33
Shares used in basic net
income (loss) per common share 57,476 56,698 57,101 56,517
Shares used in diluted net
income (loss) per common share 63,317 56,698 63,028 56,517
Cash flow from (used in)
operations $86,414 $(7,651) $137,436 $40,725
Medicis Pharmaceutical Corporation
Balance Sheets
(in thousands)
Sept. 30, Dec. 31,
2009 2008
---------- ----------
Assets
Cash, cash equivalents & short-term
investments $ 496,820 $ 343,885
Accounts receivable, net 60,307 52,588
Inventory, net 26,649 24,226
Deferred tax assets 62,509 53,161
Other current assets 21,657 19,676
---------- ----------
Total current assets 667,942 493,536
Property & equipment, net 25,928 26,300
Intangible assets, net 312,589 318,191
Deferred tax asset 65,911 77,149
Long-term investments 28,164 55,333
Other assets 2,414 2,925
---------- ----------
Total assets $1,102,948 $ 973,434
========== ==========
Liabilities and stockholders' equity
Total current liabilities $ 274,844 $ 185,901
Contingent convertible senior notes 2.5%,
due 2032 169,145 169,145
Contingent convertible senior notes 1.5%,
due 2033 181 181
Other liabilities 10,382 14,513
Stockholders' equity 648,396 603,694
---------- ----------
Total liabilities and stockholders' equity $1,102,948 $ 973,434
========== ==========
Working capital $ 393,098 $ 307,635
========== ==========
Medicis Pharmaceutical Corporation
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands, except per share data)
Three months ended Nine months ended
September 30, 2009 September 30, 2009
------------------ ------------------
Dollar EPS Dollar EPS
Value Impact Value Impact
-------- -------- -------- --------
GAAP net income $ 21,148 $ 37,069
Less: income allocated to
participating securities (684) (1,133)
-------- --------
GAAP net income attributable
to common shareholders 20,464 $ 0.36 35,936 $ 0.63
Less: net undistributed
earnings allocated to unvested
shareholders -- (1)
Interest expense and associated
bond offering costs
(tax-effected) 666(a) 1,999(a)
-------- --------
GAAP "if-converted" net income
and diluted EPS 21,130 $ 0.33 37,934 $ 0.60
Non-GAAP adjustments:
Research and development
expenses related to our
collaborations 17,000 $ 0.27 25,000 $ 0.39
Net gain related to the sale
of Medicis Pediatrics -- -- (2,210) $ (0.04)
Charge related to our
investment in Revance -- -- 2,886 $ 0.04
Income tax effects related to
the above transactions (6,045) $ (0.10) (752) $ (0.01)
Less: income allocated to
participating securities and
net undistributed earnings
allocated to unvested
shareholders related to the
above transactions (358) -- (780) --
-------- -------- -------- --------
Non-GAAP "if-converted" net
income and diluted EPS $ 31,727 $ 0.50 $ 62,078 $ 0.98
======== ======== ======== ========
Shares used in basic net
income per common share 57,476 57,101
Shares used in diluted net
income per common share 63,317 63,028
(a) In order to determine "if-converted" net income, the tax-effected
net interest on the 2.5% and 1.5% contingent convertible notes of
$0.7 million and $2.0 million are added back to GAAP net income
for the three months and nine months ended September 30, 2009,
respectively.
Medicis Pharmaceutical Corporation
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands, except per share data)
Three months ended Nine months ended
September 30, 2008 September 30, 2008
------------------ ------------------
Dollar EPS Dollar EPS
Value Impact Value Impact
-------- -------- -------- --------
GAAP net (loss) income $(14,657) $ 18,878
Less: loss (income) allocated
to participating securities 314 (296)
-------- --------
GAAP net (loss) income
attributable to common
shareholders (14,343) $ (0.26) 18,582 $ 0.33
Less: net undistributed
earnings allocated to unvested
shareholders 3 (2)
Interest expense and associated
bond offering costs
(tax-effected) 666(a) 3,536(a)
-------- --------
GAAP "if-converted" net (loss)
income and diluted EPS (13,674) $ (0.22) 22,116 $ 0.33
Non-GAAP adjustments:
In-process research and
development expense related
to our acquisition of
LipoSonix 30,500 $ 0.48 30,500 $ 0.45
Research and development
expense related to milestone
payment to Ipsen upon the
FDA's acceptance of DYSPORT
BLA -- -- 25,000 $ 0.37
Charge related to our
investment in Revance 2,593 $ 0.04 5,464 $ 0.08
Lease exit costs related to
our former headquarters
facility 4,813 $ 0.08 4,813 $ 0.07
Income tax effects related to
the above transactions (7,125) $ (0.12) (16,125) $ (0.24)
Less: income allocated to
participating securities and
net undistributed earnings
allocated to unvested
shareholders related to the
above transactions (645) -- (840) --
-------- -------- -------- --------
Non-GAAP "if-converted" net
income and diluted EPS $ 16,462 $ 0.26 $ 70,928 $ 1.06
======== ======== ======== ========
Shares used in basic net
income per common share 56,698 56,517
Shares used in diluted net
income per common share 62,999 67,123
(a) In order to determine "if-converted" net income, the tax-effected
net interest on the 2.5% and 1.5% contingent convertible notes
and the associated bond offering costs of $0.7 million and
$3.5 million are added back to GAAP net income for the three
months and nine months ended September 30, 2008, respectively.