(BW HealthWire) — IDEC Pharmaceuticals Corporation (Nasdaq: IDPH) today announced its financial results for the second quarter ended June 30, 2001. Total revenues for the second quarter ended June 30, 2001 were $64.8 million compared to $39.0 million for the second quarter of 2000. Net income was $25.2 million, or $0.15 per share on a diluted basis, compared to $14.7 million, or $0.09 per share on a diluted basis, for the same period in 2000. As discussed in our release for the year ended December 31, 2000, we adopted the U.S. Securities and Exchange Commission Staff Accounting Bulletin No. 101 in the fourth quarter of fiscal 2000 effective as of January 1, 2000, which resulted in the restatement of the financial results for the three and six months ended June 30, 2000.
Revenues for the second quarter of 2001 included $58.1 million recorded for IDEC’s joint business arrangement with Genentech, Inc. for the commercialization of Rituxan(R) (Rituximab) compared to $31.3 million for the first quarter of 2000. All per share amounts for the three and six months ended June 30, 2000 have been restated to reflect IDEC’s three-for-one stock split in January 2001.
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 2001 were $180.0 million compared to $96.7 million for the same period in 2000.
“We are very gratified with Rituxan’s robust growth, especially when you step back and look at its year-to-year progress — an 86 percent rise in the second quarter of this year compared to the same period last year,” said William H. Rastetter, IDEC’s chief executive officer. “This growth is driven, in part, by the expanded package insert approved early in the quarter, which has stimulated our discussions on the utility of Rituxan with medical oncologists.”
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 2001 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. on the sales of Rituxan outside the United States.
IDEC’s share of pretax copromotion profits consists of two tiers, a lower tier that resets annually at the beginning of each year and a higher tier, which applies once an annual fixed pretax copromotion profit level is met. IDEC began recording its share of pretax copromotion profits at the higher tier during the first quarter of 2001 compared to the beginning of the second quarter in 2000.
Operating Costs and Expenses
Operating costs and expenses for the second quarter of 2001 increased to $33.1 million from $23.6 million for the second quarter of 2000. Year-to-date operating costs and expenses increased by $19.7 million to $66.3 million in 2001, compared to $46.6 million in 2000. The higher 2001 operating expenses are primarily the result of increased clinical testing for our various products under development, sales and marketing expenses, personnel expenses and facility expenses.
IDEC ended the second quarter of 2001 with $821.5 million in cash, cash equivalents and marketable securities, compared to $750.5 million at December 31, 2000. Increases in cash stem primarily from operations and stock purchases under employee stock plans.
FDA Approved sBLA for Rituxan
On May 14, 2001, IDEC and Genentech, Inc. announced that the U.S. Food and Drug Administration (FDA) approved a supplemental Biologics License Application (sBLA) for Rituxan.
The new product labeling includes retreatment with Rituxan after a prior course of Rituxan therapy, initial treatment with eight weekly infusions of Rituxan, compared to four infusions, and treatment of bulky disease (tumors greater than 10 centimeters) for patients with relapsed or refractory, low-grade or follicular, CD20 positive B-cell non-Hodgkin’s lymphoma (NHL). Additionally, the two companies have emphasized already existing safety information in the revised package insert for physicians concerning rare severe and potentially fatal mucocutaneous skin reactions that have occurred in patients who have received Rituxan.
Rituxan Approved in Japan
On June 20, 2001, Rituxan was approved by the Japanese health authorities for the treatment of certain B-cell non-Hodgkin’s lymphoma (NHL). Rituxan will be co-promoted by Nippon Roche and Zenyaku Kogyo in Japan, where there are approximately 13,000 NHL patients.
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.
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.
For a menu of IDEC’s current news releases and quarterly reports or to retrieve a specific release, call (888) 329-2309. On the Internet check the News Center at IDEC’s website: http://idecpharm.cdmail.biz. As previously announced, interested parties can access a live webcast of management’s discussion of the second quarter 2001 results and a regulatory update on ZEVALIN(TM) through a link at IDEC’s website at http://idecpharm.cdmail.biz. The webcast will begin today at 1:30 p.m. Pacific Standard Time and will remain available for 48 hours.
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, 2000 and Form 10-Q for the quarter ended March 31, 2001, 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’ press releases are available at no charge through Business Wire’s News on Demand Plus. For a menu of IDEC’s current press releases and quarterly reports or to retrieve a specific release, call 888/329-2309. On the Internet, check the News Center at IDEC’s website: http://idecpharm.cdmail.biz.
IDEC PHARMACEUTICALS CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) Three months Six months ended June 30, ended June 30, -------------------- -------------------- 2001 2000(2) 2001 2000(2) --------- --------- --------- --------- Revenues: Revenues from unconsolidated joint business $ 58,072 $ 31,302 $ 106,630 $ 53,195 Contract revenues 2,152 6,088 3,507 9,592 License fees 4,625 1,625 11,250 3,250 --------- --------- --------- --------- Total revenues 64,849 39,015 121,387 66,037 Operating costs and expenses: Manufacturing costs -- -- -- 2,134 Research and development 21,691 17,038 43,161 31,760 Selling, general and administrative 11,430 6,600 23,134 12,677 --------- --------- --------- --------- 33,121 23,638 66,295 46,571 --------- --------- --------- --------- Income from operations 31,728 15,377 55,092 19,466 Interest income, net 8,257 2,389 17,980 4,265 --------- --------- --------- --------- Income before income tax provision 39,985 17,766 73,072 23,731 Income tax provision (14,832) (3,091) (27,112) (4,109) --------- --------- --------- --------- Income before cumulative effect of accounting change 25,153 14,675 45,960 19,622 Cumulative effect of accounting change, net of income tax benefit of $487 -- -- -- (9,263) --------- --------- --------- --------- Net income $ 25,153 $ 14,675 $ 45,960 $ 10,359====================================Basic earnings per share (1): Before cumulative effect of accounting change $ 0.17 $ 0.11 $ 0.31 $ 0.15 Cumulative effect of accounting change -- -- -- (0.07) --------- --------- --------- --------- Basic earnings per share $ 0.17 $ 0.11 $ 0.31 $ 0.08 Diluted earnings per share (1): Before cumulative effect of accounting change $ 0.15 $ 0.09 $ 0.27 $ 0.13 Cumulative effect of accounting change -- -- -- (0.06) --------- --------- --------- --------- Diluted earnings per share $ 0.15 $ 0.09 $ 0.27 $ 0.07 Shares used in calculation of earnings per share (1): Basic 150,477 133,524 149,167 131,937 Diluted 167,417 156,126 167,297 156,903 (1) Per share data for the three and six months ended June 30, 2000 have been restated to reflect a three-for-one stock split in January 2001. (2) The financial results for the three and six months ended June 30, 2000 have been restated to reflect the adoption of Staff Accounting Bulletin No. 101 as of January 1, 2000. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) June 30, December 31, 2001 2000 -------- -------- (unaudited) (audited) Assets Current assets: Cash, cash equivalents and securities available-for-sale $612,519 $581,338 Other current assets 64,378 49,920 -------- -------- Total current assets 676,897 631,258 Long-term securities available-for-sale 209,030 169,188 Property and equipment, net 57,807 47,514 Investment and other assets 9,206 8,446 -------- -------- Total assets $952,940 $856,406================Liabilities and Stockholders' Equity Current liabilities $ 21,544 $ 23,045 Non-current liabilities 142,731 138,742 Stockholders' equity 788,665 694,619 -------- -------- Total liabilities and stockholders' equity $952,940 $856,406================
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