Business Editors/Health and Medical Writers
(BW HealthWire) — IDEC Pharmaceuticals Corp. (Nasdaq:IDPH) today announced its financial results for the fourth quarter and year ended December 31, 1999.
Total revenues were $118.0 million in 1999, a $31.0 million, or 36 percent increase over 1998 revenues of $87.0 million. The company reported net income of $43.2 million, or $0.86 per share on a diluted basis in 1999, versus net income of $21.5 million in 1998, or $0.46 per share on a diluted basis, in 1998. Revenues for 1999 increased primarily due to $93.2 million recorded for IDEC’s commercialization of Rituxan(R) (Rituximab) with joint business partner Genentech, Inc., compared to $53.8 million for 1998.
Total revenues for the fourth quarter ended December 31, 1999 were $32.0 million compared to $27.8 million for the fourth quarter of 1998. Net income in the fourth quarter of 1999 was $7.7 million, or $0.15 per share on a diluted basis, compared to net income of $5.7 million, or $0.12 per share on a diluted basis, for the same period in 1998. All per share amounts for the three months and year ended December 31, 1998 have been restated to reflect IDEC’s two-for-one stock split in December 1999.
“Rituxan’s strong sales performance has driven IDEC’s profitability, and we anticipate continued growth from Rituxan in the future,” said William H. Rastetter, chairman, chief executive officer and president. “In addition, we are in the process of preparing the Biologic License Application (BLA) for ZEVALIN(TM) (formerly IDEC-Y2B8), our investigational radioimmunotherapy, for submission to the Food and Drug Administration (FDA) later this year.” Rastetter continued, “ZEVALIN is being developed as a product complementary to Rituxan for use especially in patients requiring more aggressive therapy such as patients that have become refractory to chemotherapy or to Rituxan alone.”
Rituxan
Rituxan is copromoted in the United States by IDEC and Genentech. U.S. net sales of Rituxan as recorded by Genentech totaled $72.2 million in the fourth quarter of 1999, bringing total U.S. net sales to $262.7 million for the year ended December 31, 1999, compared to $48.8 million in the fourth quarter of 1998 and $152.1 million for the year ended December 31, 1998.
Revenues from unconsolidated joint business for the quarter and year ended December 31, 1999 and 1998 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, reimbursement from Genentech for IDEC’s Rituxan-related sales force and development expenses, revenues from the sale of bulk Rituxan to Genentech, and royalty income from F. Hoffmann-La Roche Ltd. on sales of Rituxan outside the United States.
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. These changes will result in decreased revenues from Rituxan bulk manufacturing reimbursements and a corresponding decrease in Rituxan manufacturing expenses in future quarters as the final lots manufactured by IDEC during the third quarter of 1999 are released and accepted by Genentech.
IDEC’s share of copromotion profits contains two tiers, the 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 will reset to the lower tier beginning in January 2000 until such time that the annual copromotion profit level is achieved again, which is expected to occur in the first half of 2000.
ZEVALIN Update
Phase III interim results were presented at the American Society of Hematology (ASH) in December 1999 comparing ZEVALIN, plus Rituxan, to Rituxan alone in patients with relapsed or refractory, low grade, follicular or transformed CD20-positive, B-cell NHL. The prospectively defined 90-patient interim analysis of the multi-center, randomized controlled study showed an overall response rate (ORR) of 80 percent for the ZEVALIN group compared to ORR of 44 percent for the Rituxan group. Data from completed clinical trials from over 35 sites are currently being gathered and analyzed. Due to process and equipment changes that have been implemented in the manufacturing scale-up and switch over from Rituxan, the ZEVALIN manufacturing campaign has been extended by approximately three months. Also, within this time frame, we are preparing to submit with our isotope supplier a New Drug Application (NDA) for yttrium-90 from a new and larger site that has the capacity to support global commercialization of ZEVALIN. As a result, IDEC currently anticipates submitting the BLA for ZEVALIN and the corresponding NDA for yttrium-90 during the fourth quarter of 2000.
“With a fourth quarter submission, we believe that we will be able to demonstrate a longer duration of remission to accompany our favorable response rates and thus present an even stronger package to the FDA for consideration for rapid review and approval,” Rastetter said.
Operating Expenses
Annual operating costs and expenses increased by $8.5 million, from $68.1 million in 1998 to $76.6 million in 1999. This increase was primarily due to ZEVALIN-related expenses of increased clinical trial costs, process development and manufacturing scale-up, plus increased sales and marketing expenses resulting from the commercialization of Rituxan. Over the next year, the company expects to see a higher level of operating expenses related to its investment in research and development. The increases will be primarily related to completion of its ZEVALIN BLA package, its expenses related to moving four other product candidates forward in clinical development and the company’s preparation for the future commercialization of ZEVALIN.
Operating costs and expenses increased to $24.9 million for the fourth quarter of 1999 compared to $22.7 million for the fourth quarter of 1998. The increased operating expenses were primarily the result of increased process development and manufacturing scale-up related expenses for ZEVALIN, which were offset by decreased manufacturing costs related to Rituxan in the fourth quarter of 1999.
IDEC ended 1999 with $246.3 million in cash, cash equivalents and marketable securities, an increase of $172.8 million from $73.5 million at the end of 1998. The increase in cash, cash equivalents and marketable securities is due primarily to a 20-year convertible zero coupon subordinated notes offering, in which IDEC raised approximately $112.7 million. In addition, the company realized an increase in cash from operations and from the issuance of common stock under its employee stock plans. These were offset by repayment of debt obligations and investments in capital equipment.
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 New 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 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, 1998, and Form 10-Q for the quarter ended September 30, 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 11011 Torreyana Road, San Diego, CA 92121.
IDEC PHARMACEUTICALS CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Three months ended December 31, Years Ended December 31, (unaudited) (audited) 1999 1998 1999 1998 Revenues: Revenues from unconsolidated joint business $26,974 $22,767 $93,197 $53,813 Contract revenues 4,034 4,986 10,806 14,846 License fees 1,000 -- 14,000 18,300 32,008 27,753 118,003 86,959 Operating costs and expenses: Manufacturing costs 4,602 8,617 14,277 19,602 Research and development 14,679 9,298 42,831 31,485 Selling, general and administrative 5,603 4,743 19,478 16,968 24,884 22,658 76,586 68,055 Income from operations 7,124 5,095 41,417 18,904 Interest income, net 1,245 758 4,189 2,996 Income before taxes 8,369 5,853 45,606 21,900 Income tax provision (658) (140) (2,449) (422) Net income $7,711 $5,713 $43,157 $21,478 Earnings per share (1): Basic $0.18 $0.14 $1.04 $0.54 Diluted $0.15 $0.12 $0.86 $0.46 Shares used in calculation of earnings per share: Basic 42,353 40,030 41,382 39,676 Diluted 51,531 46,822 50,429 46,754 (1) Earnings per share for the three months and year ended December 31, 1998 have been restated to reflect a two-for-one stock split in December 1999. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) December 31, 1999 1998 (audited) (audited) ASSETS Current assets: Cash, cash equivalents and securities available-for-sale $246,286 $73,502 Inventories 2,400 5,346 Other current assets 29,833 22,179 Total current assets 278,519 101,027 Property and equipment, net 20,822 20,897 Other non-current assets 7,733 3,349 Total assets $307,074 $125,273 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities $15,616 $14,483 Non-current liabilities 131,480 4,362 Stockholders' equity 159,978 106,428 Total liabilities and stockholders' equity $307,074 $125,273
--30--jm/sd* jf/sd CONTACT: IDEC Pharmaceuticals Corporation Connie Matsui, 858/431-8656 KEYWORD: CALIFORNIA INDUSTRY KEYWORD: MEDICAL BIOTECHNOLOGY PHARMACEUTICALS EARNINGS