IDEC Pharmaceuticals Reports Second Quarter 2002 Results; Rituxan Sales Increase 43% Over 2Q 2001 and Earnings Increase to $0.20 Per Share

(BW HealthWire) — IDEC Pharmaceuticals Corporation (Nasdaq: IDPH) today announced its financial results for the second quarter ended June 30, 2002. Total revenues for the second quarter ended June 30, 2002 were $97.1 million compared to $64.8 million for the second quarter of 2001. Net income was $35.4 million, or $0.20 per share on a diluted basis, compared to $25.2 million, or $0.15 per share on a diluted basis, for the same period in 2001.

Revenues for the second quarter of 2002 included $92.5 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 $58.1 million for the second quarter of 2001. Revenues also included $3.3 million in U.S. net sales of Zevalin(TM) (ibritumomab tiuxetan) which IDEC markets alone in the U.S.

Rituxan Revenues

Rituxan is copromoted in the United States by IDEC and Genentech. U.S. net sales of Rituxan, as recorded by Genentech, in the second quarter of 2002 were $257.4 million compared to $180.0 million for the same period in 2001.

“Sales of Rituxan staged another impressive performance in the second quarter of this year,” said William H. Rastetter, IDEC’s chairman and chief executive officer. “Net U.S. sales increased $77.4 million in the second quarter, representing a 43 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 second quarter of 2002 increased to $47.1 million from $33.1 million for the second quarter of 2001. Year-to-date operating costs and expenses increased by $18.9 million to $85.2 million in 2002, compared to $66.3 million in 2001. The higher 2002 operating expenses are primarily the result of increased personnel expenses, sales and marketing expenses, facility expenses and increased 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 second quarter of 2002 with $1.4 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

Rituxan was discovered by IDEC and is jointly developed by IDEC, Genentech Inc., F. Hoffmann-La Roche Ltd. of Switzerland and Zenyaku Kogyo Co. Ltd. of Japan. Hoffmann-La Roche Ltd. has marketing rights to Rituximab outside of the United States and Japan, and shares rights with Zenyaku Kogyo in Japan.

Zevalin, an anti-CD-20 antibody labeled with Yttrium 90, targets the CD20 antigen on the surface of the mature B-cells and B-cell tumors, inducing cellular damage in the target and neighboring cells. Zevalin was approved for marketing by the FDA in February 2002. IDEC has exclusive rights to market Zevalin in the U.S. and Schering AG has exclusive marketing and distribution rights outside the U.S.

IDEC Pharmaceuticals focuses on the commercialization and development of targeted therapies for the treatment of cancer and autoimmune diseases. IDEC’s antibody products act chiefly through immune system mechanisms, exerting their effect by binding to specific, readily targeted immune cells in the patient’s blood or lymphatic system.

Today, interested parties can access a live webcast of management’s discussion of second 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 March 31, 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.

IDEC PHARMACEUTICALS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) Three months Six months ended June 30, ended June 30, ---------------------- ----------------------- 2002 2001 2002 2001 ---------- --------- ---------- ---------- Revenues: Product sales $ 3,300 $ -- $ 3,300 $ -- Revenues from unconsolidated joint business 92,455 58,072 170,637 106,630 Corporate partner revenues 1,376 6,777 2,935 14,757 ---------- --------- ---------- ---------- Total revenues 97,131 64,849 176,872 121,387 Operating costs and expenses: Cost of sales 889 -- 889 -- Research and development 22,980 21,691 42,229 43,161 Selling, general and administrative 23,224 11,430 42,067 23,134 ---------- --------- ---------- ---------- Total operating expenses 47,093 33,121 85,185 66,295 ---------- --------- ---------- ---------- Income from operations 50,038 31,728 91,687 55,092 Interest income, net 4,397 8,257 8,399 17,980 ---------- --------- ---------- ---------- Income before income tax provision 54,435 39,985 100,086 73,072 Income tax provision 19,052 14,832 35,030 27,112 ---------- --------- ---------- ---------- Net income $ 35,383 $ 25,153 $ 65,056 $ 45,960=======================================Earnings per share: Basic $ 0.23 $ 0.17 $ 0.42 $ 0.31 Diluted $ 0.20 $ 0.15 $ 0.37 $ 0.27 Shares used in calculation of earnings per share: Basic 152,827 150,477 153,128 149,167 Diluted 179,515 167,417 180,965 167,297 CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) June 30, December 31, 2002 2001 ------------ ------------ (unaudited) (audited) Assets Current assets: Cash, cash equivalents and securities available-for-sale $ 1,048,520 $ 623,823 Other current assets 112,520 76,220 ------------ ------------ Total current assets 1,161,040 700,043 Long-term securities available-for-sale 400,315 242,784 Property and equipment, net 154,894 108,588 Investment and other assets 115,784 81,313 ------------ ------------ Total assets $ 1,832,033 $ 1,132,728========================Liabilities and Stockholders' Equity Current liabilities $ 37,065 $ 35,289 Non-current liabilities 863,005 140,960 Stockholders' equity 931,963 956,479 ------------ ------------ Total liabilities and stockholders' equity $ 1,832,033 $ 1,132,728========================

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

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