IDEC Pharmaceuticals Reports Third Quarter 2002 Results; Rituxan Sales Increase 31% Over 3Q 2001 and Earnings Increase to $0.22 Per Diluted Share

(BUSINESS WIRE) — IDEC Pharmaceuticals Corporation (Nasdaq: IDPH) today announced its financial results for the third quarter ended September 30, 2002. Total revenues for the third quarter ended September 30, 2002 were $103.7 million, compared to $69.6 million for the third quarter of 2001. Net income was $38.4 million, or $0.22 per share on a diluted basis, compared to $27.0 million, or $0.16 per share on a diluted basis, for the same period in 2001.

Revenues for the third quarter of 2002 included $98.6 million recorded for IDEC’s joint business arrangement with Genentech, Inc. for the commercialization of Rituxan(R) (Rituximab), which IDEC copromotes in the U.S. with Genentech, compared to $68.5 million for the third quarter of 2001. Revenues in the third quarter of 2002 also included $5.0 million in U.S. net sales of Zevalin(TM) (ibritumomab tiuxetan) which IDEC markets alone in the U.S.

Rituxan Revenues

U.S. net sales of Rituxan in the third quarter of 2002, as recorded by Genentech, were $269.6 million compared to $205.0 million for the same period in 2001.

“Rituxan sales produced another notable performance in the third quarter of this year,” said William H. Rastetter, IDEC’s chairman and chief executive officer. “Net U.S. sales increased $64.6 million in the third quarter, representing a 31 percent increase from the same quarter last year.”

Revenues from unconsolidated joint business reflect the financial results from the U.S. marketing of Rituxan by IDEC and Genentech. Revenues from unconsolidated joint business for 2002 consist of IDEC’s share of pretax copromotion profits, reimbursements from Genentech for IDEC’s Rituxan-related sales force and development expenses and royalty income from F. Hoffmann-La Roche Ltd. and Zenyaku Kogyo Co. Ltd. on the sales of Rituxan outside the United States.

Operating Costs and Expenses

Operating costs and expenses for the third quarter of 2002 increased to $49.4 million from $33.7 million for the third quarter of 2001. Year-to-date operating costs and expenses increased by $34.6 million to $134.6 million in 2002, compared to $100.0 million in 2001. The higher 2002 operating expenses are primarily the result of upfront fees under our collaborations with Caprion Pharmaceuticals, Inc. and Nippon Shinyaku Co., Ltd. both entered into in the third quarter of 2002, as well as increased personnel, sales and marketing, facility and legal expenses, which were offset by decreased research and development expenses resulting from the U.S. Food and Drug Administration (FDA) approval of Zevalin and capitalization of manufacturing costs for production of commercial inventory of Zevalin antibodies. Prior to Zevalin’s approval by the FDA, Zevalin manufacturing costs were recorded as research and development expenses.

IDEC ended the third quarter of 2002 with $1.5 billion in cash, cash equivalents and marketable securities, compared to $866.6 million at December 31, 2001. Increases in cash stem primarily from $714.4 million received from the sale of 30-year senior convertible promissory notes during the second quarter of 2002 offset by the repurchase of $135.0 million of IDEC’s outstanding common stock for treasury.

General Information

IDEC Pharmaceuticals Corporation is a leader in the discovery, development, and commercialization of targeted immunotherapies for the treatment of cancer and autoimmune diseases. IDEC discovered and developed the first commercially available radioimmunotherapy product (Zevalin) approved in the United States and, with co-promotion partner Genentech, Inc., the first monoclonal antibody product (Rituxan) approved in the United States, both for the treatment of cancer. IDEC is a San Diego based, integrated biopharmaceutical company with multiple products in clinical stage development and strategic alliances involving a variety of research platforms.

Today, interested parties can access a live webcast of management’s discussion of third quarter of 2002 results at IDEC’s website ( at 1:30 p.m. Pacific Standard Time. The webcast will remain available for 10 business days. For a menu of IDEC’s current news releases and quarterly reports or to retrieve a specific release, call (888) 329-2309.

The statements made in this press release contain certain forward-looking statements that involve a number of risks and uncertainties. Actual events or results may differ from IDEC’s expectations. For example, the timing, success and cost of preclinical research and clinical studies, the timing, acceptability and review periods for regulatory filings, the timing of and ability to obtain regulatory approval of products, the achievement of future product sales, the level of manufacturing performance and the risk factors listed from time to time in IDEC’s SEC filings including but not limited to its Annual Report on Form 10-K for the year ended December 31, 2001 and Form 10-Q for the quarter ended June 30, 2002, may affect the actual results achieved by IDEC. These 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.

IDEC Pharmaceuticals and Rituxan are registered U.S. trademarks of the company. Zevalin is a trademark of the company. The company’s headquarters are located at 3030 Callan Road, San Diego, CA 92121.v

IDEC PHARMACEUTICALS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) Three months Nine months ended September 30, ended September 30, ------------------- ------------------- 2002 2001 2002 2001 ---- ---- ---- ---- Revenues: Product sales $ 4,958 $ -- $ 8,258 $ -- Revenues from un- consolidated joint business 98,613 68,525 269,250 175,155 Corporate partner revenues 127 1,090 3,062 15,847 -------- -------- -------- -------- Total revenues 103,698 69,615 280,570 191,002 Operating costs and expenses: Cost of sales 232 -- 1,121 -- Research and development 25,367 20,751 67,596 63,912 Selling, general and administrative 23,798 12,991 65,865 36,125 -------- -------- -------- -------- Total operating costs and expenses 49,397 33,742 134,582 100,037 -------- -------- -------- -------- Income from operations 54,301 35,783 145,988 90,965 Interest income, net 4,838 6,977 13,237 24,957 -------- -------- -------- -------- Income before income tax provision 59,139 42,850 159,225 115,922 Income tax provision 20,699 15,893 55,729 43,005 -------- -------- -------- -------- Net income $ 38,440 $ 26,957 $103,496 $ 72,917================================Earnings per share: Basic $ 0.25 $ 0.18 $ 0.68 $ 0.49 Diluted $ 0.22 $ 0.16 $ 0.60 $ 0.42 Shares used in calculation of earnings per share: Basic 152,679 152,061 152,977 150,142 Diluted 178,362 167,394 180,096 181,278 CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) September 30, December 31, 2002 2001 ---------- ----------- (unaudited) (audited) Assets Current assets: Cash, cash equivalents and securities available-for-sale $ 947,374 $ 623,823 Other current assets 129,606 76,220 ---------- ---------- Total current assets 1,076,980 700,043 Long-term securities available-for-sale 507,289 242,784 Property and equipment, net 202,817 108,588 Investment and other assets 122,346 81,313 ---------- ---------- Total assets $1,909,432 $1,132,728====================Liabilities and Stockholders' Equity Current liabilities $ 47,402 $ 35,289 Non-current liabilities 869,094 140,960 Stockholders' equity 992,936 956,479 ---------- ---------- Total liabilities and stockholders' equity $1,909,432 $1,132,728====================

CONTACT: IDEC Pharmaceuticals Corporation Vince Reardon, Director, Corporate Communications 858/431-8656

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