SAN DIEGO–(BUSINESS WIRE)–Oct. 14, 2003–IDEC Pharmaceuticals Corporation (Nasdaq: IDPH) today announced its financial results for the third quarter ended September 30, 2003. Net income was $45.5 million, or $0.26 per share on a diluted basis, compared to $38.4 million, or $0.22 per share on a diluted basis, for the same period in 2002.
Total revenues for the third quarter ended September 30, 2003 were $138.5 million, compared to $103.7 million for the third quarter of 2002. Revenues for the third quarter of 2003 included $134.0 million recorded for IDEC’s joint business arrangement with Genentech for the commercialization of Rituxan(R) (Rituximab), which IDEC copromotes in the U.S. with Genentech, compared to $98.6 million for the third quarter of 2002. Revenues in the third quarter of 2003 also included $4.4 million in U.S. net sales of Zevalin(R) (ibritumomab tiuxetan), which IDEC markets alone in the U.S. and was launched in April 2002, compared to $5.0 million for the third quarter of 2002.
Rituxan Revenues
U.S. net sales of Rituxan in the third quarter of 2003, as recorded by Genentech, were $354 million compared to $270 million for the same period in 2002.
“Rituxan sales produced another notable performance in the third quarter of this year,” said William R. Rohn, IDEC’s president and chief operating officer. “Net U.S. sales increased $84 million in the third quarter, representing a 31 percent increase from the same quarter last year.”
The net sales of Rituxan reported by Genentech in the third quarter included $18 million of ex-U.S. sales to its partners F. Hoffmann-La Roche Ltd. and Zenyaku Kogyo Co. Ltd. of Japan. IDEC’s royalty revenue on sales of Rituximab outside the U.S. is based on Roche’s and Zenyaku’s end-user sales and is recorded with a one-quarter lag. IDEC recognized, during the third quarter of 2003, $18.7 million in royalties from Roche’s and Zenyaku’s end-user sales during the second quarter of 2003.
Revenues from unconsolidated joint business reflect the financial results from the commercialization of Rituxan by IDEC and Genentech. Revenues from unconsolidated joint business includes various revenues associated with Rituxan commercialization such as IDEC’s share of pretax copromotion profits, reimbursements from Genentech for IDEC’s Rituxan-related sales force and development expenses, and royalty revenues on sales of Rituximab outside the United States by Roche and Zenyaku. Roche has marketing rights to Rituximab outside of the U.S., and copromotes Rituxan in Japan with Zenyaku.
Operating Costs and Expenses
Operating costs and expenses for the third quarter of 2003 increased to $67.1 million from $49.4 million for the third quarter of 2002. The higher 2003 operating expenses are primarily the result of increased legal expenses to protect IDEC’s intellectual property rights, increased sales and marketing expenses to support commercialization of Zevalin, increased personnel and facility expenses, and increased research and development expenses due to decreased capitalization of IDEC’s manufacturing costs, as our manufacturing facilities were primarily used to support products in development in the third quarter of 2003.
Cash Position
IDEC ended the third quarter of 2003 with cash, cash equivalents and securities available-for-sale totaling $1.5 billion.
General Information
IDEC Pharmaceuticals Corporation is a leader in the discovery, development, and commercialization of targeted immunotherapies for the treatment of cancer and autoimmune diseases. IDEC discovered and developed the first commercially available radioimmunotherapy product (Zevalin) approved in the United States, which is used to treat certain non-Hodgkin’s lymphomas. IDEC also discovered and, with co-promotion partner Genentech, Inc., developed the first monoclonal antibody product (Rituxan) approved in the United States for the treatment of cancer. Rituxan is approved in over 70 countries worldwide and is also used to treat various types of non-Hodgkin’s lymphomas. IDEC is a San Diego based, integrated biopharmaceutical company with multiple products in clinical stage development and strategic alliances in a variety of research platforms.
Today, interested parties can access a live webcast of management’s discussion of third quarter of 2003 results at IDEC’s website (http://idecpharm.cdmail.biz) at 1:30 p.m. Pacific Standard Time. The webcast will be archived on the IDEC website. For a menu of IDEC’s current news releases and quarterly reports or to retrieve a specific release, call 888-329-2309.
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 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, 2002 and its Quarterly Report on Form 10-Q for the six months ended June 30, 2003, 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, Rituxan and Zevalin are registered U.S. trademarks of the company. The company’s headquarters are located at 3030 Callan Road, San Diego, CA 92121.
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IDEC PHARMACEUTICALS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (Unaudited) Three months Nine months ended September 30, ended September 30, 2003 2002 2003 2002 Revenues: Product sales $4,427 $4,958 $15,069 $8,258 Revenues from unconsolidated joint business 133,960 98,613 363,236 269,250 Corporate partner revenues 143 127 1,032 3,062 Total revenues 138,530 103,698 379,337 280,570 Operating costs and expenses: Cost of sales 639 232 5,282 1,121 Research and development 36,295 25,367 113,122 67,596 Selling, general and administrative 30,195 23,798 83,247 65,865 Total operating costs and expenses 67,129 49,397 201,561 134,582 Income from operations 71,401 54,301 177,686 145,988 Interest income, net 1,986 4,838 8,549 13,237 Income before income taxes 73,387 59,139 186,235 159,225 Income taxes 27,887 20,699 70,769 55,729 Net income $45,500 $38,440 $115,466 $103,496 Earnings per share: Basic $0.29 $0.25 $0.74 $0.68 Diluted $0.26 $0.22 $0.67 $0.60 Shares used in calculation of earnings per share: Basic 155,498 152,679 155,117 152,977 Diluted 187,011 178,362 178,163 180,096 CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION (In thousands) (Unaudited) September 30, December 31, 2003 2002 ASSETS Cash, cash equivalents and securities available-for-sale $1,450,370 $1,447,865 Due from related parties 112,680 100,288 Property and equipment, net 444,207 264,537 Other 232,638 246,999 Total assets $2,239,895 $2,059,689 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities $66,447 $56,225 Non-current liabilities 911,504 893,774 Stockholders' equity 1,261,944 1,109,690 Total liabilities and stockholders' equity $2,239,895 $2,059,689
CONTACT: IDEC Pharmaceuticals, San Diego Vince Reardon, Director Corporate Communications 858-431-8656
SOURCE: IDEC Pharmaceuticals