(BW HealthWire) — IDEC Pharmaceuticals Corporation (Nasdaq:IDPH) today announced its financial results for the fourth quarter and year ended December 31, 2000. Total annual revenues were $154.7 million, a $36.7 million, or 31 percent increase over 1999 revenues of $118.0 million. The company reported net income of $48.1 million, or $0.30 per share on a diluted basis in 2000, versus net income of $43.2 million, or $0.29 per share on a diluted basis for the same period in 1999. IDEC’s fourth quarter and full year results for both 2000 and 1999 have been adjusted to reflect IDEC’s three-for-one stock split in January 2001 and implementation of the U.S. Securities and Exchange Commission Staff Accounting Bulletin No. 101. If IDEC had not implemented SAB No. 101, the reported earnings per share on a diluted basis would have been $0.33 per share for the year ended December 31, 2000.
Revenues for 2000 increased primarily due to $132.8 million recorded as revenues from unconsolidated joint business from the commercialization of Rituxan(R) (Rituximab) with business partner Genentech, Inc., compared to $93.2 million in 1999.
“Year-end 2000 marks IDEC’s third consecutive year of profitability and at the core of this success is Rituxan,” said William H. Rastetter, chairman, chief executive officer and president of IDEC. “Revenues in the year 2000 grew 31 percent compared to 1999, driven by a 62 percent increase in net U.S. Rituxan sales during the year.”
Total revenues for the fourth quarter of 2000 were $45.8 million compared with $32.0 million for the fourth quarter of 1999. Net income in the fourth quarter of 2000 was $20.4 million, or $0.12 per share on a diluted basis, compared to $7.7 million, or $0.05 per share on a diluted basis for the same period in 1999.
SAB No. 101 provides that nonrefundable up-front fees received under collaborative agreements be recognized over future periods rather than upon payment. The cumulative effect of changing the accounting policy for the company’s recognition of up-front nonrefundable fees received under collaborative agreements resulted in a non-cash charge to earnings of $9.3 million net of tax for the year ended December 31, 2000. Also resulting from the implementation of SAB No. 101, the company recognized $1.6 million and $6.5 million in license fee revenue for the three months and year ended December 31, 2000, respectively.
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 fourth quarter of 2000 were $134.0 million compared to $72.2 million in the fourth quarter of 1999. Total U.S. net sales for the year ended December 31, 2000 were $424.3 million compared to $262.7 million for the year ended December 31, 1999.
Revenues from unconsolidated joint business reflect the financial results from the commercialization of Rituxan by IDEC and Genentech. This line item includes various revenues associated with Rituxan commercialization such as IDEC’s share of the 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 sales of Rituximab outside the United States.
IDEC’s share of copromotion profits is received in two tiers, a lower tier, that resets annually at the beginning of each year and a higher tier which applies once a certain copromotion profit level is met. IDEC’s profit-sharing formula was reset to the lower tier beginning in January 2001 and will remain at that level until such time that the annual fixed copromotion profit level is achieved again, which is expected in the first quarter of 2001.
Operating Expenses
Annual operating costs and expenses increased by $22.2 million, to $98.8 million from $76.6 million in 1999. This increase was primarily due to increased manufacturing development and drug supply expenses for IDEC’s products under development, personnel expenses, sales and marketing expenses, facility expenses and increased legal and patent filing fees, which were offset by decreased manufacturing costs. The decrease in manufacturing costs was related to the transfer of all Rituxan manufacturing to IDEC’s partner, Genentech.
Operating costs and expenses increased to $27.7 million for the fourth quarter of 2000, compared to $24.9 million in fourth quarter 1999, primarily due to increased personnel expenses, technology licensing fees, sales and marketing expenses and facility expenses, which were offset by decreased manufacturing development and drug supply expenses for IDEC’s products under development and decreased manufacturing costs, as mentioned above.
Equity Underwriting
IDEC ended 2000 with $750.5 million in cash, cash equivalents and marketable securities, an increase of $504.2 million from $246.3 million at the end of 1999. Increases in cash stem primarily from the issuance of 7.8 million shares of IDEC common stock in November 2000 in which IDEC raised approximately $449.5 million. In addition, the company realized increases in cash from operations and stock purchases under employee stock plans.
Land Purchase
These increases in cash were offset by an $18.5 million purchase of a 60-acre site in Oceanside, California for a planned large-scale manufacturing facility. With several potential autoimmune drugs in mid-stages of clinical development, IDEC has developed a manufacturing plan that will provide needed capacity for products moving through the company’s pipeline.
ZEVALIN Filing Accepted by FDA
On December 29, 2000 IDEC received written notification from the U.S. Food and Drug Administration (FDA) that IDEC’s Biologics License Application (BLA) seeking marketing approval for ZEVALIN(TM) (ibritumomab tiuxetan) had been accepted for filing. The action means that the FDA has determined that the submission contains sufficient information for the agency to perform a meaningful review for marketing authorization. The FDA also approved IDEC’s request for priority review of the ZEVALIN BLA, meaning that the agency’s review of the filing should be completed within six months of submission, although final approval, if at all, may require additional time. The company submitted the BLA to the FDA on November 1, 2000.
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 systems.
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 fourth quarter and year 2000 results 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 S-3 filed on November 16, 2000, Annual Report on Form 10-K for the year ended December 31, 1999 and Form 10-Q for the quarter ended September 30, 2000, 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 is 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) Three months Years ended December 31, ended December 31, --------------------- ---------------------- (unaudited) (audited) 2000 1999 2000 1999 --------- --------- --------- --------- Revenues: Revenues from unconsolidated joint business $ 42,809 $ 26,974 $ 132,782 $ 93,197 Contract revenues 1,408 4,034 15,400 10,806 License fees 1,625 1,000 6,500 14,000 --------- --------- --------- --------- Total revenues 45,842 32,008 154,682 118,003 Operating costs and expenses: Manufacturing costs -- 4,602 2,134 14,277 Research and development 19,154 14,679 68,922 42,831 Selling, general and administrative 8,514 5,603 27,767 19,478 --------- --------- --------- --------- Total operating costs and expenses 27,668 24,884 98,823 76,586 --------- --------- --------- --------- Income from operations 18,174 7,124 55,859 41,417 Interest income, net 6,435 1,245 13,488 4,189 --------- --------- --------- --------- Income before income tax provision 24,609 8,369 69,347 45,606 Income tax provision 4,221 658 11,939 2,449 --------- --------- --------- --------- Income before cumulative effect of accounting change 20,388 7,711 57,408 43,157 Cumulative effect of accounting change, net of income tax benefit of $487 -- -- (9,263) -- --------- --------- --------- --------- Net income $ 20,388 $ 7,711 $ 48,145 $ 43,157====================================Basic earnings per share (1): Before cumulative effect of accounting change $ 0.14 $ 0.06 $ 0.43 $ 0.35 Cumulative effect of accounting change -- -- (0.07) -- --------- --------- --------- --------- Basic earnings per share $ 0.14 $ 0.06 $ 0.36 $ 0.35====================================Diluted earnings per share (1): Before cumulative effect of accounting change $ 0.12 $ 0.05 $ 0.36 $ 0.29 Cumulative effect of accounting change -- -- (0.06) -- --------- --------- --------- --------- Diluted earnings per share $ 0.12 $ 0.05 $ 0.30 $ 0.29====================================Shares used in calculation of earnings per share: Basic 141,301 127,059 134,880 124,146 Diluted 164,614 154,593 159,310 151,287 (1) Earnings per share for the three months and years ended December 31, 2000 and 1999 have been restated to reflect a three-for-one stock split effected in January 2001. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) December 31, December 31, 2000 1999 ------------ ------------ (audited) (audited) Assets Current assets: Cash, cash equivalents and securities available-for-sale $581,338 $246,286 Inventories -- 2,400 Other current assets 49,920 29,833 ------------ ------------ Total current assets 631,258 278,519 Long-Term Securities available-for-sale 169,188 -- Property and equipment, net 47,514 20,822 Other non-current assets 8,446 7,733 ------------ ------------ Total assets $856,406 $307,074========================Liabilities and Stockholders' Equity Current liabilities $ 23,045 $ 15,616 Non-current liabilities 138,742 131,480 Stockholders' equity 694,619 159,978 ------------ ------------ Total liabilities and stockholders' equity $856,406 $307,074========================
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