Nine Month Highlights
- Revenues reach $326 million
- Net earnings increase 59 percent to $50 million
- Sales of Synagis® grow 24 percent; new outcomes data show broader use
- Acquisition of U.S. rights to Ethyol® completed
- Nine clinical trials initiated and enrollment in ten trials completed
- FDA approval of Enhanced Yield Process for Synagis granted in August
Gaithersburg, MD, October 18, 2001 -- MedImmune, Inc. (Nasdaq: MEDI) today announced that net earnings for the first nine months of 2001 increased 59 percent to $50 million, or $0.23 per diluted share, on total revenues of $326 million. Net earnings for the first nine months of 2000 were $32 million, or $0.14 per diluted share, on total revenues of $302 million. Product sales for the 2001 nine-month period grew to $304 million from $268 million in the 2000 period, primarily due to growth of Synagis (palivizumab). Sales of Synagis to wholesalers and distributors during the 2001 nine-month period grew 24 percent to $267 million ($241 million in the U.S.) from $215 million ($198 million in the U.S.) for the same period in 2000.
"We continue to make excellent progress in building our business," stated David M. Mott, MedImmune's chief executive officer. "We completed the reacquisition of Ethyol rights in the U.S. and the expansion of our oncology business unit ahead of schedule. Effective October 1, we began recording 100 percent of sales rather than the thirty-five percent transfer price we previously recorded on shipments to ALZA. The national launch meeting for Ethyol and our new oncology sales force will take place next week.
"We are entering this year's RSV season in a strong position with the Pediatric Specialty Sales force, which we hired last year, now fully trained and established in the field," continued Mott. "Recent data from our outcomes registry leads us to believe the long-term market potential for Synagis may be greater than we had previously anticipated. Finally, we have been making substantial progress in research and development. During the first nine months of 2001: we initiated nine new clinical studies and completed enrollment in ten; presented clinical data on siplizumab at two international psoriasis meetings; received FDA's approval to produce Synagis with our proprietary Enhanced Yield Process that quadruples fermentation yields; and made tremendous progress with our preclinical anti-asthma IL-9 program."
Additional Results for Nine Months Ended September 30, 2001
Gross margins for the first nine months of 2001 improved to 75 percent from 73 percent for the comparable 2000 period due to a change in product mix and improved manufacturing efficiencies for Synagis. Selling, general and administrative costs increased to $128 million in the 2001 period from $98 million in 2000 due primarily to costs associated with the reacquisition of U.S. rights to Ethyol in the third quarter, and an increase in sales support for Synagis. Total research and development costs increased to $62 million in the 2001 period from $49 million in the 2000 period due to a larger number of active clinical trials. Other operating expenses increased to $8 million in the first nine months of 2001 from $6 million in 2000.
Results for the Quarter Ended September 30, 2001
As previously announced on September 10, 2001, MedImmune's results for the third quarter were substantially impacted by the reacquisition of U.S. rights to Ethyol from ALZA Corporation. Total revenues for the 2001 quarter were $47 million compared to $62 million for the 2000 third quarter. Product sales for the 2001 quarter decreased to $40 million from $47 million in the 2000 quarter due primarily to a charge to revenues for the reacquisition of ALZA's unsold Ethyol inventory at September 30, 2001, coupled with a cessation of supply sales to ALZA for the quarter. Sales of Synagis in the 2001 third quarter were modest as projected, since prophylaxis for respiratory syncytial virus (RSV) disease, for which Synagis is used, does not typically commence in the Northern Hemisphere until September or October. In the 2001 third quarter, wholesalers and distributors began preparing for the upcoming RSV season as MedImmune's sales of Synagis to them totaled $30 million ($22 million in the U.S.) consistent with the 2000 third quarter when sales to wholesalers and distributors were $32 million ($22 million in the U.S.). Resales of Synagis by wholesalers and distributors to end-users during the 2001 third quarter are estimated to have grown 61 percent to $21 million ($18 million in the U.S.) from an estimated $13 million ($11 million in the U.S.) for the 2000 third quarter.
For the 2001 third quarter, MedImmune recorded a net loss of $19 million, or $0.09 per diluted share, compared to net earnings of $8 million, or $0.04 per diluted share, in the 2000 third quarter. Gross margins in the 2001 third quarter were 59 percent compared to 67 percent for the 2000 quarter due to Ethyol charges and product mix. Selling, general and administrative costs grew to $44 million for the 2001 quarter, including approximately $15 million in costs associated with the reacquisition and relaunch of Ethyol in the United States. In the 2000 third quarter, selling, general and administrative costs were $24 million. As a result of a greater number of active research, development and clinical programs, research and development expenses increased to $21 million in the 2001 quarter from $15 million in the 2000 quarter. Other operating expenses decreased to $2 million in the 2001 quarter compared to $3 million in the 2000 quarter.
Looking Ahead in 2001
The following forward-looking information is being provided as a convenience to investors. Investors should note that sales of Synagis occur primarily during the fourth and first quarters when RSV is most prevalent in the community. Results for the second and third quarters will reflect this seasonality. These projections are based upon numerous assumptions, which MedImmune cannot control and which may not develop as MedImmune expects. Consequently, actual results may differ materially from the projections made here. Please refer to the Disclosure Notice below.
For the quarter ending December 31, 2001:
- Diluted earnings per share are projected to be $0.45 to $0.46
- Total revenues are projected to range from $275 to $290 million
- Gross margins are projected to improve modestly from 2000
- R&D expenses are projected to increase approximately 25 percent over 2000
- SG&A expenses are projected to decrease modestly from 2000 as a percent of total revenues
- Tax rate is projected to be approximately 33 percent