Business Editors & Health/Medical Writers
April 20, 2000–IDEC Pharmaceuticals Corporation (NASDAQ: IDPH) today announced its financial results for the first quarter ended March 31, 2000. Total revenues for the quarter were $25.4 million compared to $20.5 million for the first quarter of 1999. Net income was $3.6 million or $0.07 per share on a diluted basis, compared to $4.8 million or $0.10 per share on a diluted basis, for the same period in 1999. The decrease in net income from period to period reflects primarily ZEVALIN(TM)-related manufacturing expenses in preparation for the Biologics Licensing Application (BLA) with the United States Food and Drug Administration (FDA).
Total revenues for the first quarter of 2000 included $21.9 million recorded for IDEC’s joint business arrangement with Genentech for the commercialization of Rituxan(R) (Rituximab), compared to $19.3 million recorded in the first quarter of 1999. Contract revenues made up the remainder of revenues for the quarter. All per share amounts for the three months ended March 31, 1999 have been restated to reflect IDEC’s two-for-one stock split in December 1999.
“We are extremely pleased with the performance of Rituxan in the first quarter,” said William H. Rastetter, chief executive officer. “Net U.S. sales are up 50 percent for the first quarter, compared to the same period a year ago. Also noteworthy are the results of independent market research which indicate that physicians expect to further increase their use of Rituxan in the treatment of non-Hodgkin’s lymphomas.”
Rituxan is copromoted in the United States by IDEC and Genentech. Rituxan net sales in the United States for the first quarter of 2000, as recorded by Genentech, amounted to $78.0 million compared to $52.0 million for the same period in 1999, and $72.2 million in the fourth quarter of 1999.
Revenues from unconsolidated joint business reflect the financial results from the Rituxan collaboration and commercialization with Genentech and consist of IDEC’s share of the pretax copromotion profits from its Rituxan joint business arrangement, sales of bulk Rituxan to Genentech, reimbursement from Genentech for IDEC’s Rituxan-related sales force and development expenses, and royalty income from F. Hoffmann-La Roche Ltd. (Roche) on sales of Rituximab outside the United States.
During the first quarter of 2000, IDEC recognized $1.8 million in royalty income from Roche’s end-user Rituximab sales during the fourth quarter of 1999. IDEC’s royalty income on sales of Rituximab outside the United States is based on Roche’s end-user sales and is recorded with a one-quarter lag.
At the end of the third quarter 1999, IDEC completed its obligations to supply Genentech with bulk Rituxan manufactured at IDEC’s manufacturing facility and transferred all manufacturing responsibilities for bulk Rituxan to Genentech. This change resulted in decreased revenues from Rituxan bulk manufacturing reimbursements and a corresponding decrease in Rituxan manufacturing expenses during the first quarter of 2000 as the final lots manufactured by IDEC during the third quarter of 1999 have been released and accepted by Genentech.
IDEC’s share of copromotion profits consists of two tiers, a lower tier that resets at the beginning of January each year and a higher tier, which applies once a certain copromotion profit level is met. IDEC has now moved to the higher tier of copromotion profit for the balance of 2000.
Operating Costs and Expenses
Operating costs and expenses increased to $22.9 million for the first quarter of 2000 from $16.2 million for the first quarter of 1999. This increase was primarily due to ZEVALIN expenses relating to process development and manufacturing scale-up.
IDEC ended the first quarter of 2000 with $265.2 million in cash, cash equivalents and marketable securities, an increase of $18.9 million from $246.3 million at the end of 1999. Increases in cash stem primarily from cash provided by operations and employee stock plans.
IDEC recently completed a preliminary analysis of an 85-patient Phase II multi-center, randomized, placebo-controlled, multi-dose clinical trial with IDEC-131. The trial was designed to assess the antibody’s safety and potential efficacy in patients with active systemic lupus erythematous (SLE) who remained on background therapy for SLE. IDEC-131 demonstrated a favorable safety profile at repeat doses as high as 10 mg/kg. Additionally, significant improvement in global disease activity as compared to baseline was seen in all IDEC-131 treatment groups as determined by SLE Disease Activity Index scores. However, the improvement noted was not significantly different from that observed in the control group where a marked placebo effect was noted; therefore, a SLE Phase III development program will not be pursued at this time. The company is considering its future strategy in SLE and intends to initiate Phase II studies in additional indications during the second half of the year.
“We are encouraged by the multiple-dose safety profile of IDEC-131,” said Dr. Mark Totoritis, senior director of Autoimmune and Inflammatory Diseases. “The information obtained from the SLE study will certainly facilitate initiation of additional Phase II clinical trials.” It is anticipated that detailed results of the study will be presented at a scientific meeting later in the year.
During the first quarter, IDEC completed the BLA-enabling bulk manufacturing runs of the antibody component for ZEVALIN. Currently, IDEC anticipates submitting the BLA for ZEVALIN and the corresponding New Drug Application (NDA) for yttrium-90 during the fourth quarter of 2000.
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, achievement of product development milestone events and future product sales, the timing, success and cost of product launches and clinical studies, the timing, acceptability and review periods of regulatory filings, the timing of and ability to obtain regulatory approval of products, the level of manufacturing performance and performance of our suppliers, 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, 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 (Rituximab) are registered U.S. trademarks and ZEVALIN is a trademark of the company. IDEC’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 ended March 31, 2000 1999 Revenues: Revenues from unconsolidated joint business $21,893 $19,279 Contract revenues 3,504 1,232 ------ ------ 25,397 20,511 Operating costs and expenses: Manufacturing costs 2,134 4,007 Research and development 14,722 7,819 Selling, general and administrative 6,077 4,394 ------ ------ 22,933 16,220 Income from operations 2,464 4,291 Interest income, net 1,876 709 Income before taxes 4,340 5,000 Income tax provision 741 191 Net income applicable to common stock $ 3,599 $ 4,809 Earnings per share (1): Basic $ 0.08 $ 0.12 Diluted $ 0.07 $ 0.10 Shares used in calculation of earnings per share (1): Basic 43,449 40,554 Diluted 52,581 48,248 (1) Per share data for the three months ended March 31, 1999 have been restated to reflect a two-for-one stock split in December 1999. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) March 31, December 31, 2000 1999 (unaudited) (audited) ASSETS Current assets: Cash, cash equivalents and securities available-for-sale $265,168 $246,286 Inventories 1,265 2,400 Other current assets 28,149 29,833 ------- ------- Total current assets 294,582 278,519 Property and equipment, net 23,612 20,822 Other non-current assets 9,073 7,733 ------- ------- Total assets $327,267 $307,074 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities $ 18,981 $ 15,616 Non-current liabilities 133,075 131,480 Stockholders' equity 175,211 159,978 ------- ------- Total liabilities and stockholders' equity $327,267 $307,074
--30--sr/sd* gt/sd CONTACT: IDEC Pharmaceuticals Connie Matsui, 858/431-8656 KEYWORD: CALIFORNIA INDUSTRY KEYWORD: BIOTECHNOLOGY MEDICAL MEDICAL DEVICES PHARMACEUTICAL EARNINGS