Impax Laboratories, Inc.Mark DonohueSr. DirectorInvestor Relations and Corporate Communications215-558-4526
today reported second quarter 2012 financial results.
Please refer to “Non-GAAP Financial Measures” below for a reconciliation of GAAP to non-GAAP items.
“The positive second quarter results reflect our Zomig® tablets sales in the U.S. utilizing our expanded neurology focused brand sales force, as well as increased receipt of shipments of generic Adderall XR® from our third-party supplier which led to higher sales in the quarter,” said Larry Hsu, Ph.D., president and CEO, Impax Laboratories, Inc. “We are excited that our brand sales force began promoting and sampling Zomig® tablets in the U.S. on April 1. This product will support the growth of our commercial organization as we prepare for the potential launch of Rytary, our first internally developed brand product for Parkinson’s Disease.”
“The U.S. Food and Drug Administration (FDA) recently completed a preapproval inspection for Rytaryand an undisclosed generic product at our Taiwan facility and there were no Form 483 observations. We continue to work at resolving the recent observation made by the FDA in Hayward and have been notified that a satisfactory re-inspection will be necessary to close out the warning letter,” Dr. Hsu continued.
“Our generic business pipeline has 46 pending ANDAs with more than 40 internally developed or partnered products, including many alternative dosage form products. We remain focused on pursuing strategic opportunities that are aimed at advancing our generic and brand businesses beyond our internal efforts. So far in 2012, our business development activities include the in-licensing of Zomig® on the brand side, and the acquisition of alternative dosage form generic products and a co-development, supply and distribution agreement with TOLMAR, Inc. on the generics side. With more than $354 million in cash and short-term investments and no debt, our business development activities will continue to focus on delivering growth from high-value products, technologies, and businesses in complementary dosage forms,” Dr. Hsu concluded.
The Company has two reportable segments, the Global Pharmaceuticals Division (generic products & services) and the Impax Pharmaceuticals Division (brand products & services) and does not allocate general corporate services to either segment.
Global Pharmaceuticals Division revenues in the second quarter 2012 were $133.1 million, up 10% compared to the prior year period, due to higher Global product sales, net, partially offset by lower Rx Partner sales.
For the second quarter 2012, Global product sales, net, were $126.4 million, up 14% from the prior year period, primarily due to higher sales of authorized generic Adderall XR®. Partially offsetting this increase was a $2.4 million decline in Rx Partner revenues due to lower customer demand.
Gross profit of $62.6 million represented a 47% gross margin in the second quarter 2012, and was in-line with the gross margin for the prior year period, primarily due to higher sales of our authorized generic Adderall XR® product.
Total generic operating expenses in the second quarter 2012 increased slightly compared to the prior year period, as higher patent litigation and selling, general and administrative (SG&A) expenses were offset by lower investments in research and development (R&D).
Impax Pharmaceuticals Division revenues in the second quarter 2012 increased $28.1 million to $33.4 million, compared to the prior year period, due to U.S. sales of Zomig® tablets pursuant to the AstraZeneca License Agreement for which there was no comparable amount in the prior year period.
Gross profit of $15.2 million increased $12.8 million in the second quarter 2012, due to U.S. Zomig® tablet sales, compared to the prior year period. Gross margin in the second quarter 2012 was 46%, up slightly over the prior year period. The second quarter 2012 gross margin was negatively impacted by the inclusion of $14.3 million in cost of revenues for amortization and acquisition-related costs due to the Zomig® transaction.
Total brand operating expenses in the second quarter 2012 increased $2.6 million, compared to the prior year period, due to higher SG&A expenses resulting from Zomig® marketing costs and the expansion of the Company’s neurology focused sales force, as well as pre-launch planning costs for Rytary, partially offset by lower R&D expenses.
General and administrative expenses in the second quarter 2012 increased $3.3 million, compared to the prior year period, primarily due to employee severance and increased personnel expenses.
Cash and short-term investments were $354.5 million as of June 30, 2012, as compared to $346.4 million as of December 31, 2011.
The Company updated its 2012 financial outlook as noted below.
The Company will host a conference call on July 31, 2012 at 11:00 a.m. EDT to discuss its results. The number to call from within the United States is (877) 356-3814 and (706) 758-0033 internationally. The call can also be accessed via a live Webcast through the Investor Relations section of the Company’s Web site, . A replay of the conference call will be available shortly after the call for a period of seven days. To access the replay, dial (855) 859-2056 (in the U.S.) and (404) 537-3406 (international callers). The access conference code is 99743725.
Impax Laboratories, Inc. is a technology based specialty pharmaceutical company applying its formulation expertise and drug delivery technology to the development of controlled-release and specialty generics in addition to the development of branded products. Impax markets its generic products through its Global Pharmaceuticals Division and markets branded products through the Impax Pharmaceuticals Division. Additionally, where strategically appropriate, Impax has developed marketing partnerships to fully leverage its technology platform. Impax Laboratories is headquartered in Hayward, California, and has a full range of capabilities in its Hayward, Philadelphia and Taiwan facilities. For more information, please visit the Company's Web site at: .
To the extent any statements made in this news release contain information that is not historical, these statements are forward-looking in nature and express the beliefs and expectations of management. Such statements are based on current expectations and involve a number of known and unknown risks and uncertainties that could cause the Company’s future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to, the effect of current economic conditions on the Company’s industry, business, financial position and results of operations, fluctuations in the Company’s revenues and operating income, the Company’s ability to successfully develop and commercialize pharmaceutical products, reductions or loss of business with any significant customer, the impact of consolidation of the Company’s customer base, the impact of competition, the Company’s ability to sustain profitability and positive cash flows, any delays or unanticipated expenses in connection with the operation of the Company’s Taiwan facility, the effect of foreign economic, political, legal and other risks on the Company’s operations abroad, the uncertainty of patent litigation, increased government scrutiny on the Company’s agreements with brand pharmaceutical companies, consumer acceptance and demand for new pharmaceutical products, the difficulty of predicting Food and Drug Administration filings and approvals, the Company’s inexperience in conducting clinical trials and submitting new drug applications, the Company’s ability to successfully conduct clinical trials, the Company’s reliance on third parties to conduct clinical trials and testing, the availability of raw materials and impact of interruptions in the Company’s supply chain, the use of controlled substances in the Company’s products, disruptions or failures in the Company’s information technology systems and network infrastructure, the Company’s reliance on alliance and collaboration agreements, the Company’s dependence on certain employees, the Company’s ability to comply with legal and regulatory requirements governing the healthcare industry, the regulatory environment, the Company’s ability to protect the Company’s intellectual property, exposure to product liability claims, changes in tax regulations, the Company’s ability to manage the Company’s growth, including through potential acquisitions, the restrictions imposed by the Company’s credit facility, uncertainties involved in the preparation of the Company’s financial statements, the Company’s ability to maintain an effective system of internal control over financial reporting, any manufacturing difficulties or delays, the effect of terrorist attacks on the Company’s business, the location of the Company’s manufacturing and research and development facilities near earthquake fault lines and other risks described in the Company’s periodic reports filed with the Securities and Exchange Commission. Forward-looking statements speak only as to the date on which they are made, and Impax undertakes no obligation to update publicly or revise any forward-looking statement, regardless of whether new information becomes available, future developments occur or otherwise.