Business Editors/Health & Medical Writers
(BW HealthWire) — IDEC Pharmaceuticals Corporation (Nasdaq:IDPH) today announced its financial results for the second quarter ended June 30, 2000. Total revenues for the second quarter ended June 30, 2000 were $37.4 million compared to $35.3 million for the second quarter of 1999. Net income was $13.3 million, or $0.26 per share on a diluted basis, compared to $19.9 million, or $0.40 per share on a diluted basis, for the same period in 1999.
Revenues for the second quarter of 2000 included $31.3 million recorded for IDEC’s joint business arrangement with Genentech, Inc. for the commercialization of Rituxan(R) (Rituximab) compared to $21.0 million for the second quarter of 1999. Revenues for the second quarter of 1999 included a non-recurrent $13.0 million upfront licensing fee from Schering AG for the exclusive marketing and distribution rights outside the United States to ZEVALIN(TM) (ibritumomab tiuxetan, IDEC-Y2B8). Contract revenues for the second quarter of 2000 include additional revenues from IDEC’s new agreement with Taisho Pharmaceuticals.
“We are extremely pleased with the growth in Rituxan net sales in the second quarter of 2000 to $96.7 million,” said William R. Rohn, chief operating officer. “Rituxan sales growth of 41% compared to the same quarter last year is especially significant. This trend shows the continued acceptance and adoption of Rituxan for the treatment of relapsed or refractory, low grade or follicular, B-cell non-Hodgkin’s lymphoma by the oncology community.”
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 2000 were $96.7 million compared to $68.3 million for the same period in 1999.
Revenues from unconsolidated joint business for the quarter ended June 30, 2000 reflect the financial results from the U.S. marketing of Rituxan by IDEC and Genentech. Revenues from unconsolidated joint business for the second quarter of 2000 consist of IDEC’s share of pretax copromotion profits, reimbursement 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. According to its agreement with Genentech, IDEC’s share of pretax copromotion profits rose for the second quarter of 2000 to a higher percentage upon achievement of an annual fixed profit target by the Rituxan joint business arrangement.
In addition, net sales of Rituxan reported by Genentech in the second quarter included $6.1 million of ex-US sales to its partner F. Hoffmann-La Roche Ltd. IDEC’s royalty revenue on sales of Rituximab outside the U.S. is based on Roche’s end-user sales and is recorded with a one-quarter lag. IDEC recognized, during the second quarter, $2.0 million in royalties from Roche’s end-user sales in the first quarter.
Operating Costs and Expenses
Operating costs and expenses for the second quarter of 2000 increased to $23.6 million from $15.3 million for the second quarter of 1999. The higher 2000 operating expenses are the result of increased manufacturing development and drug supply expenses for IDEC’s products under development, personnel expenses and facility expenses.
Manufacturing costs in 1999 were driven by IDEC’s obligation to supply Genentech with bulk Rituxan manufactured at IDEC’s manufacturing facility. In September 1999 all manufacturing responsibilities for bulk Rituxan were transferred to Genentech. Year-to-date operating costs and expenses increased by $15.1 million, from $31.5 million in 1999 compared to $46.6 million in 2000, primarily due to the aforementioned costs and expenses plus increased contract manufacturing expenses by third-parties and increased legal and patent filing fees.
IDEC ended the second quarter of 2000 with $274.3 million in cash, cash equivalents and marketable securities, an increase of $28.0 million from $246.3 million at the end of 1999. Increases in cash stem primarily from operations and stock purchases under employee stock plans.
IDEC Signs Agreement with Taisho
As announced in June, IDEC signed a collaborative research and development agreement with Taisho Pharmaceuticals Co. Ltd. of Tokyo to develop and commercialize antibody therapeutics against macrophage migration inhibitory factor (MIF) for the treatment of inflammatory and autoimmune diseases.
Under the terms of the research and development agreement, IDEC will develop high-affinity, humanized monoclonal antibodies with the intent to complete Phase I and Phase II clinical trials during the term of the agreement.
The research and development agreement is valued at approximately $35.0 million, including $18.5 million in fixed R&D funding over the next four years. The remaining value represents patent license reimbursements, license fees and conditional milestones that will be realized, if at all, over the life of the collaboration. IDEC will share any such realized fees or milestones with Cytokine PharmaSciences.
ZEVALIN is an investigational therapy seeking to combine the targeting power of monoclonal antibodies with the cancer-killing ability of radiation. During the second quarter, IDEC continued to make progress with its Biologics Licensing Application (BLA) for ZEVALIN, which is targeted for a fourth quarter filing with the Food and Drug Administration (FDA). Pivotal trial analysis and BLA-enabling manufacturing runs have been completed. Based on the favorable safety and efficacy profile to date, IDEC’s primary focus is now on preparation of the BLA dossier.
Rituxan is copromoted in the United States by IDEC and Genentech. Rituximab 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. Roche 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.
IDEC Pharmaceuticals’ news releases are available at no charge through Business Wire’s News on Demand Plus. 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 .
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, 1999 and Form 10-Q for the quarter ended March 31, 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 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, 2000 1999 2000 1999 Revenues: Revenues from unconsolidated joint business $ 31,302 $ 21,045 $ 53,195 $ 40,324 Contract revenues 6,088 1,249 9,592 2,481 License fees -- 13,000 -- 13,000 -------- -------- -------- -------- Total revenues 37,390 35,294 62,787 55,805 Operating costs and expenses: Manufacturing costs -- 879 2,134 4,886 Research and development 17,038 9,535 31,760 17,354 Selling, general and administrative 6,600 4,859 12,677 9,253 -------- -------- -------- -------- Total operating costs and expenses 23,638 15,273 46,571 31,493 -------- -------- -------- -------- Income from operations 13,752 20,021 16,216 24,312 Interest income, net 2,389 930 4,265 1,639 -------- -------- -------- -------- Income before income tax provision 16,141 20,951 20,481 25,951 Income tax provision (2,816) (1,043) (3,557) (1,234) -------- -------- -------- -------- Net income $ 13,325 $ 19,908 $ 16,924 $ 24,717================================Earnings per share (1): Basic $ 0.30 $ 0.49 $ 0.38 $ 0.61 Diluted $ 0.26 $ 0.40 $ 0.32 $ 0.51 Shares used in calculation of earnings per share (1): Basic 44,508 41,034 43,979 40,798 Diluted 52,042 53,788 52,301 48,750 (1) Per share data for the three and six months ended June 30, 1999 have been restated to reflect a two-for-one stock split in December 1999. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) June 30, December 31, 2000 1999 (unaudited) (audited) Assets Current assets: Cash, cash equivalents and securities available-for-sale $274,257 $246,286 Inventories 778 2,400 Other current assets 38,544 29,833 -------- -------- Total current assets 313,579 278,519 Property and equipment, net 25,433 20,822 Other non-current assets 13,121 7,733 -------- -------- Total assets $352,133 $307,074================Liabilities and Stockholders' Equity Current liabilities $ 19,315 $ 15,616 Non-current liabilities 135,056 131,480 Stockholders' equity 197,762 159,978 -------- -------- Total liabilities and stockholders' equity $352,133 $307,074================
--30--jf/sd* ts/sd CONTACT: IDEC Pharmaceuticals Corporation Connie Matsui, 858/431-8656 KEYWORD: CALIFORNIA INDUSTRY KEYWORD: BIOTECHNOLOGY MEDICAL MEDICAL DEVICES PHARMACEUTICAL EARNINGS