Business Editors (BUSINESS WIRE) -- IDEC Pharmaceuticals Corporation (Nasdaq:IDPH) today announced its financial results for the third quarter ended September 30, 1999. Total revenues for the third quarter ended September 30, 1999 were $30.2 million compared to $17.0 million for the third quarter of 1998. Net income was $10.7 million, or $0.42 per share on a diluted basis, compared to net income of $1.8 million, or a $0.08 per share on a diluted basis, for the same period in 1998. Revenues for the third quarter of 1999 increased primarily due to $25.9 million recorded for IDEC's commercialization of Rituxan(R) (Rituximab) with joint business partner Genentech, Inc., compared to $12.3 million for the third quarter of 1998. Rituxan is copromoted in the United States by IDEC and Genentech. U.S. net sales of Rituxan, as recorded by Genentech, in the third quarter of 1999 were $70.2 million. "We continue to be extremely pleased with Rituxan's performance this year," said William R. Rohn, IDEC's chief operating officer. "Net sales for the past nine months are up over 84 percent compared to the same period in 1998, and third quarter sales this year are up 94 percent, compared to the third quarter last year. Importantly, physicians prescribing Rituxan continued to drive strong sales growth during the most recent quarter." Revenues from unconsolidated joint business for the third quarter and year-to-date reflect the financial results from the commercialization of Rituxan by IDEC and Genentech. Revenues from unconsolidated joint business consist primarily of IDEC's share of pretax copromotion profits, bulk Rituxan-related sales to Genentech, 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. In addition to U.S. sales of Rituxan, Genentech recorded during the third quarter of 1999 $2.2 million of Rituximab that was shipped to its ex-U.S. marketing 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 third quarter, $1.2 million in royalties from Roche's end-user sales during the second quarter. Operating expenses increased to $20.2 million for the third quarter of 1999 from $15.8 million for the third quarter of 1998. The higher 1999 operating expenses are the result of increased personnel costs and clinical trial expenses for IDEC's products under development, offset in part by decreased contract manufacturing and outside service expenses. Year-to-date operating costs and expenses increased by $6.3 million, to $51.7 million in 1999 from $45.4 million in 1998, primarily due to the aforementioned costs and expenses. IDEC ended the third quarter of 1999 with $230.0 million in cash, cash equivalents and marketable securities, an increase of $156.5 million from $73.5 million at the end of 1998. In February 1999, IDEC raised approximately $113.1 million in cash, net of underwriting commissions, through the private sale of 20-year convertible zero coupon subordinated notes. Additional increases in cash stem primarily from cash provided by operations and stock sales through employee stock plans. Stock Split IDEC also announced that its board of directors has approved a 2-for-1 split of its common stock. The stock split is subject to the approval of IDEC's stockholders, who are being asked to approve an amendment to IDEC's certificate of incorporation to increase its authorized common stock, and to consummate the split. If the increase and the split are approved, stockholders will receive one additional common share for every share held on the proposed record date of December 1, 1999. As of September 30, 1999, IDEC had approximately 21.0 million common shares outstanding. Upon completion of the split, the number will increase to approximately 42.0 million common shares. The additional shares will be mailed or delivered on or about December 20, 1999 by the company's transfer agent, ChaseMellon Shareholder Services L.L.C. This is the first time the common stock has split since the company went public on September 16, 1991. Other Programs In February 1999, IDEC announced that its partner SmithKline Beecham was discontinuing development efforts for IDEC-151 (Clenoliximab) in rheumatoid arthritis. IDEC is currently discussing with SmithKline Beecham return of all anti-CD4 program rights to IDEC. This would allow IDEC to proceed independently, if at all, on new development strategies for IDEC-151 and related anti-CD4 products. IDEC has completed patient accrual in two pivotal studies of ZEVALIN(TM), its experimental radioimmunotherapy, in non-Hodgkin's lymphoma. These studies will provide the primary basis for the Biologics License Application (BLA) which the company anticipates submitting to the FDA by the end of the first half of 2000. Patient accrual was also completed in a randomized, double-blind Phase II trial of the anti-CD40L antibody, IDEC-131, in patients with systemic lupus erythematosus. Also, the company recently announced the initiation of a Phase I/II clinical trial with the company's investigational PRIMATIZED(R) anti-B7-1 (anti-CD80) monoclonal antibody, IDEC-114, in patients with psoriasis. 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. In addition to the matters described in this press release, achievement of product development milestone events and future product sales, the timing and success, and cost of product launches and clinical studies, and the level of manufacturing performance may result in period to period fluctuations in IDEC's revenues and earnings. In addition to these matters, 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 June 30, 1999, may affect the actual results achieved by IDEC. Rituxan and IDEC Pharmaceuticals are a registered U.S. 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) (Unaudited) Three months Nine months ended September 30, ended September 30, 1999 1998 1999 1998 Revenues: Revenues from unconsolidated joint business $25,899 $12,290 $66,223 $31,046 Contract revenues 4,291 2,719 6,772 9,860 License fees -- 2,000 13,000 18,300 30,190 17,009 85,995 59,206 Operating costs and expenses: Manufacturing costs 4,789 4,055 9,675 10,985 Research and development 10,798 8,009 28,152 22,187 Selling, general and administrative 4,622 3,784 13,875 12,225 20,209 15,848 51,702 45,397 Income from operations 9,981 1,161 34,293 13,809 Interest income, net 1,305 756 2,944 2,238 Income before taxes 11,286 1,917 37,237 16,047 Income tax provision 557 152 1,791 282 Net income $10,729 $ 1,765 $35,446 $15,765 Earnings per share: Basic $ 0.52 $ 0.09 $ 1.73 $ 0.80 Diluted $ 0.42 $ 0.08 $ 1.42 $ 0.67 Shares used in calculation of earnings per share: Basic 20,779 19,892 20,527 19,779 Diluted 25,541 22,898 24,929 23,365 CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) September 30, December 31, 1999 1998 (unaudited) (audited) Assets Current assets: Cash, cash equivalents and securities available-for-sale $229,992 $ 73,502 Inventories 8,951 5,346 Other current assets 27,681 22,179 Total current assets 266,624 101,027 Property and equipment, net 20,345 20,897 Other non-current assets 7,595 3,349 Total assets $294,564 $125,273 Liabilities and Stockholders' Equity Current liabilities $ 18,175 $ 14,483 Non-current liabilities 124,595 4,362 Stockholders' equity 151,794 106,428 Total liabilities and stockholders' equity $294,564 $125,273 --30--jf/sd* jm/sd CONTACT: IDEC Pharmaceuticals Corporation Connie Matsui, 858/431-8656 KEYWORD: CALIFORNIA INDUSTRY KEYWORD: EARNINGS MEDICAL PHARMACEUTICAL BIOTECHNOLOGY
