SAN DIEGO, Jan. 27 /PRNewswire/ -- Dura Pharmaceuticals, Inc.
(Nasdaq: DURA) today announced financial results for the fourth quarter and
year ended December 31, 1998. Dura reported total revenues of $55.1 million
and $199.2 million for the quarter and the full year 1998, respectively, and a
net loss of $15.0 million, or $0.33 per share, for the quarter and net income
of $2.7 million, or $0.06 per share, for the full year. The results for the
fourth quarter and full year 1998 were impacted significantly by a one-time
non-cash pre-tax charge of $29.3 million relating primarily to the write-down
of the carrying value of the Rondec(R) product line. Excluding the one-time
charge, Dura would have reported net income of $3.2 million, or $0.07 per
share for the fourth quarter, and $20.9 million, or $0.44 per share for the
year.
Dura's fourth quarter and full year 1998 earnings per share as reported
were also reduced by $0.10 due to the consolidation of the operations of DJ
Pharma, Inc. (DJ), a privately held company, which was required as DJ was
unable to secure independent financing during 1998. On January 25, 1999, DJ
closed a $25 million independent financing, which completed the transfer by
Dura to DJ of the marketing and distribution rights to Keftab(R) (cephalexin
hydrochloride, USP), the Rondec(R) line and the Dura branded
cough-cold-allergy line. With the completion of DJ's financing, Dura will not
consolidate DJ's operations going forward. Excluding the impact of the
consolidation of DJ operations and the one-time non-cash charge previously
described, Dura would have reported net income of $7.8 million, or $0.17 per
share for the fourth quarter of 1998 and $25.5 million, or $0.53 for the full
year. The 1998 results compare to net income of $18.0 million, or $0.37 per
share in the fourth quarter of 1997, and $47.4 million, or $0.99 per share for
the full year 1997, excluding one-time charges in the fourth quarter of 1997
which related primarily to the Company's Spiros(R) development program.
Revenues from the sale of respiratory pharmaceuticals were $136.2 million
in 1998. The combined revenues from Ceclor(R) CD (cefaclor extended release
tablets) and Nasarel(R) and Nasalide(R) (flunisolide) Nasal Solutions 0.025%,
Dura's proprietary promotional products, were in excess of $50 million for the
year. Total revenues for 1998 were up 10% over the previous year, and
included $63.0 million in contract revenues from increased Spiros(R) product
development activity on behalf of Spiros Development Corporation II, Inc.
(Spiros Corp. II) (Nasdaq: SDCOZ) and activity under the collaboration with
Eli Lilly and Company (NYSE: LLY) in the development of inhaled insulin.
"We are pleased with our fourth quarter performance, as we exceeded our
revenue and market share goals for our key brands, Ceclor(R) CD and Nasarel(R)
and, excluding the impact of the DJ consolidation, met our operating earnings
expectations," said Dura Chairman and Chief Executive Officer Cam L. Garner.
"As we begin 1999, Dura is substantially stronger than it was a year ago due
to the strategic decisions made and investments undertaken during 1998. We
significantly expanded our distribution capabilities, having increased our
sales force by more than 50% to 400 representatives. By increasing our
marketing presence and enhancing the sophistication of our sales and marketing
infrastructure, we restored the market share growth of both Ceclor(R) CD and
Nasarel(R)/Nasalide(R). These products reached all-time share highs of 34.3%
of the oral solid cefaclor market and 3.2% of the inhaled nasal steroid
market, respectively, by the end of 1998."
"With the licensing of exclusive U.S. marketing rights to Maxipime(R)
IV/IM (cefepime HCl) and Azactam(R) IV/IM (aztreonam) from Bristol-Myers
Squibb Company (NYSE: BMY) last month, our growth prospects are stronger than
ever. These two products have the potential to achieve combined peak annual
sales levels in excess of $120 million, and will contribute significantly to
our goal of achieving 35% growth in earnings in the 1999 -- 2000 timeframe,"
said Mr. Garner. "Importantly, Maxipime(R) and Azactam(R) establish a new
platform for growth for Dura, funding our penetration of the hospital market
which will be strategically important for the Spiros(R) product line, subject
to approval for marketing by the U.S. Food and Drug Administration (FDA). In
addition, they enable us to pursue product acquisitions for this additional
marketing channel.
"While we were disappointed that we were not granted FDA approval to
market Albuterol Spiros(R) this year, we significantly advanced the
development of our proprietary Spiros(R) technology. During the year, on
behalf of Spiros Corp. II, we successfully completed the FDA's pre-approval
inspection of our manufacturing facility, completed pivotal clinical trials
for Beclomethasone Spiros(R) and advanced discussions with the FDA on our new
drug application filed for Albuterol Spiros(R) to clarify the requirements to
gain approval, including additional clinical data. We expect to provide an
update on the revised development plans for Albuterol Spiros(R) and
Beclomethasone Spiros(R) in February. Particularly noteworthy this year, we
announced our partnership with Eli Lilly and Company for the development of
inhaled insulin. We are very enthusiastic about this partnership, as we
believe it further validates the Spiros(R) technology platform and its
application to systemic delivery of macromolecules, which represents a
potentially vast market opportunity for Dura."
"Financially, the Company is in a strong position to continue executing
our growth strategy," added Garner. "Our cash position at year-end was
approximately $269 million and reflects the payments made during the fourth
quarter to acquire the Maxipime(R) and Azactam(R) product rights and the
Company's stock under our repurchase plan. We intend to use our cash to
continue to execute our product acquisition strategy, one of our key goals for
1999. We are focusing on product opportunities that can leverage either our
primary care sales force or our new hospital marketing channel, provide
substantial growth potential and are accretive to earnings."
Dura Pharmaceuticals, Inc. is a San Diego based developer and marketer of
prescription pharmaceutical products for the treatment of allergies, asthma,
pneumonia and related respiratory conditions. Dura has focused on the U.S.
respiratory market because of its size and growth opportunities through two
major strategies: (1) acquiring prescription pharmaceuticals and/or
businesses developing or marketing such pharmaceuticals to support our
marketing presence in high-prescribing respiratory physicians' offices and/or
the hospital market, and (2) developing Spiros(R), a pulmonary drug delivery
system for both topical and systemic delivery of medications.
Except for the historical and factual information contained herein, the
matters discussed in this press release may contain forward-looking statements
which involve risks and uncertainties, including market conditions,
competitive products and pricing, seasonality, the ability of the Company to
add qualified sales representatives in a timely manner, the timely
establishment of a hospital sales force and marketing capability, the timely
development of the Spiros(R) system, the timely receipt of FDA approval of
Spiros(R) products, if at all, Dura's limited manufacturing experience,
dependency upon third parties and their successful development efforts and
other risks detailed from time to time in the Company's filings with the
Securities and Exchange Commission. Actual results may differ materially from
those projected. Any forward-looking statements represent the Company's
judgment as of the date of this release. The Company disclaims, however, any
intent or obligation to update these forward-looking statements.
CONSOLIDATED STATEMENTS OF OPERATIONS DATA
(In thousands, except per share data)
(unaudited)
Three Months Ended Year Ended
December 31, December 31,
1997 1998 1997 1998
REVENUES:
Sales $45,039 $40,434 $150,476 $136,193
Contract 8,417 14,651 30,847 62,959
Total Revenues 53,456 55,085 181,323 199,152
OPERATING COSTS AND EXPENSES:
Cost of sales 8,708 7,915 32,081 29,263
Clinical, Development
and Regulatory 6,880 11,500 25,288 43,876
Selling, General and
Administrative 15,095 33,405 64,332 104,090
Charges for Acquired
In-Process Technology,
Purchase Option and
Other Non-Recurring Items 137,639 29,332 137,639 29,332
Total Operating Costs
and Expenses 168,322 82,152 259,340 206,561
OPERATING LOSS (114,866) (27,067) (78,017) (7,409)
OTHER INCOME - net 3,228 1,963 12,130 9,235
INCOME (LOSS) BEFORE
INCOME TAXES (111,638) (25,104) (65,887) 1,826
PROVISION FOR INCOME TAXES (2,448) 10,073 (18,805) 907
NET INCOME (LOSS) $(114,086) $(15,031) $(84,692) $2,733
NET INCOME (LOSS) PER SHARE $(2.57) $(0.33) $(1.93) $0.06
WEIGHTED AVERAGE NUMBER
OF COMMON AND COMMON
EQUIVALENT SHARES 44,409 45,471 43,828 47,809
CONSOLIDATED BALANCE SHEET DATA (unaudited)
December 31, December 31,
1997 1998
CASH AND SHORT-TERM INVESTMENTS $385,221 $269,412
OTHER CURRENT ASSETS 59,454 41,073
LICENSE AGREEMENTS, PRODUCT RIGHTS, AND OTHER 330,205 514,974
TOTAL ASSETS $774,880 $825,459
CURRENT LIABILITIES $48,539 $62,247
LONG-TERM LIABILITIES 297,064 352,839
SHAREHOLDERS' EQUITY 429,277 410,373
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $774,880 $825,459
SOURCE Dura Pharmaceuticals, Inc.
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CONTACT:
Michael T. Borer, Chief Financial Officer of
Dura Pharmaceuticals, Inc., 619-457-2553
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