MedImmune Reports Record Revenues for First Quarter 2002
- Worldwide Reported Sales of Synagis Grew 32 Percent to $293 Million -
MEDIMMUNE REPORTS RECORD REVENUES FOR FIRST QUARTER 2002
- Worldwide Reported Sales of Synagis Grew 32 Percent to $293 Million -
First Quarter 2002 Highlights
Gaithersburg, MD, April 25, 2002 – For the first quarter of 2002, MedImmune, Inc. (Nasdaq: MEDI) announced that total revenues increased 34 percent to $330 million from $245 million for the first quarter in 2001. Product sales grew 36 percent to $321 million in the 2002 quarter, driven primarily from strong sales of Synagis, which contributed $293 million ($287 million in the U.S.) in the 2002 first quarter. In the first quarter of 2001, product sales totaled $235 million on Synagis sales of $221 million ($212 million in the U.S.).
- Revenues increased 34 percent to $330 million from $245 million in 2001 first quarter
- Cash earnings per share, excluding one-time items, of $0.29 in line with guidance
- Ethyol® (amifostine) sales increased 27 percent from fourth quarter to $18 million
- Synagis® (palivizumab) approved for marketing in Japan
- Aviron acquisition and integration substantially completed
- FluMistTM response submitted to FDA on January 8, 2002; six month review period underway
“We are pleased to report another record quarter for revenues,” commented David M. Mott, chief executive officer. “Both Synagis and Ethyol are performing very well. During the quarter, we also closed the Aviron acquisition and substantially completed the integration process. We are making excellent progress toward being ready to launch FluMist if it is approved for marketing in advance of this year's flu season.”
Impact of Aviron Acquisition
On January 10, 2002, MedImmune completed its acquisition of Aviron through an exchange offer and merger transaction for $1.7 billion in stock. The acquisition was accounted for as a purchase. The results of Aviron's operations are included in the results of the combined entity after January 10, 2002; prior to that date, Aviron was a stand-alone public company, which had not yet become profitable.
Excluding Non-recurring and Non-cash Items Related to Acquisition
Cash earnings for the 2002 first quarter, excluding non-recurring and non-cash items related to the acquisition of Aviron, were $74 million, or diluted earnings of $0.29 per share. Net earnings for the 2001 quarter, which did not include the operations of Aviron, were $79 million, or $0.36 per diluted share.
Gross margins for the 2002 first quarter were 76 percent compared to 78 percent for the 2001 first quarter, due primarily to additional royalty payments made related to Synagis. Excluding the non-recurring and non-cash items related to the acquisition, selling, general and administrative costs rose 55 percent to $92 million from $60 million in the 2001 first quarter, due primarily to an increase in sales and marketing programs, co-promotion expenses for Synagis, and the inclusion of Aviron's ongoing selling, general and administrative-related expenses. Research and development expenses were $41 million in the 2002 period versus $19 million in the 2001 quarter due to a larger number of clinical programs and the inclusion of Aviron's ongoing research and development programs. Other operating expenses in the 2002 quarter were $14 million compared to $2 million in the 2001 first quarter, due primarily to costs associated with Aviron's start-up manufacturing operations.
Including Non-Recurring and Non-Cash Items Related to Acquisition
Actual results as reported under generally accepted accounting principles (GAAP) include several non-recurring and non-cash items (listed below) that result in a net loss of $1.1 billion, or $4.53 per share, for the 2002 first quarter.
Non-recurring items included in the loss are:
Several expense lines are affected by the charges listed above, as the charges have been allocated to each category according to the activity and individuals involved. Selling, general and administrative costs including the acquisition-related charges were $96 million versus $92 million when such charges are excluded. Research and development charges including the acquisition-related charges were $44 million versus $41 million when the charges are excluded. Other operating expenses were $22 million when including the charges and $14 million when excluding the charges.
- $1.2 billion for the non-cash in-process research and development charge*
- $1.9 million for retention payments
- $4.7 million for non-cash stock compensation for retained employees
Recurring non-cash items included in the loss are:
- $3.9 million for amortization of deferred stock compensation for retained employees
- $3.7 million for amortization of intangibles
*The in-process research and development charge of $1.2 billion represents the fair value of purchased in-process technology for projects that, as of the date of the acquisition, had not yet reached technological feasibility. This primarily relates to FluMist, which has not been approved by the U.S. Food and Drug Administration (FDA) and, as such, remains in the development stage.
Cash and marketable securities at March 31, 2002 increased 70 percent to $1.3 billion from $788 million at December 31, 2001 due to operations and the inclusion of Aviron's cash and marketable securities.
Looking Ahead in 2002
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. The guidance and objectives assume both the continued growth and success of MedImmune's existing business, including sales of Synagis, Ethyol and CytoGam, and the regulatory approval and successful launch of FluMist in the U.S. in third quarter 2002. By offering this guidance, however, MedImmune is not predicting whether or when FluMist will receive regulatory approval. If FluMist were not approved and successfully launched in 2002, adjustments would be required to this guidance, including elimination of approximately $100 million of assumed FluMist revenue. FluMist was acquired as a part of MedImmune's acquisition of Aviron, a formerly public company whose 2001 financial results will be subsequently filed with the U.S. Securities and Exchange Commission through an 8-K submission. These projections are based upon numerous assumptions, many of which MedImmune cannot control and which may not develop as MedImmune expects. Consequently, actual results may differ materially from the guidance and objectives described herein. Please refer to the Disclosure Notice below. Guidance and objectives provided below refer to cash earnings per share, which exclude the impact of any in-process R&D write-offs, amortization of intangibles, transaction-related expenses and other one-time items.
For the quarter ending June 30, 2002:
MedImmune is offering a live webcast of a discussion by MedImmune management of its earnings and other business results on Thursday, April 25, 2002 at 8:00 a.m. EDT. The live webcast may be accessed on MedImmune's website at www.medimmune.com. A replay of the webcast will also be available via our website until May 1, 2002. An audio replay of the webcast will be available beginning at 10:30 a.m. EDT on April 25, 2002 until 8:00 a.m. May 1, 2002 by calling (888) 203-1112. The passcode for the audio replay is 526820.
- Cash loss per share is projected to range from ($0.12) to ($0.13)
- Total revenues are projected to range from $55 to $60 million
For the year ending December 31, 2002:
- Cash earnings per share before one-time items are projected to be in the range of $0.65 to $0.70
- Total revenues are projected to reach approximately $900 million
- Reported worldwide Synagis sales are expected to increase 20 to 23 percent to $620 million to $635 million
- Gross margins are projected to be approximately 75 percent
- Research and development expenses are projected to be 16 to 17 percent of total revenues
- Selling, general and administrative expenses are projected to be 28 to 29 percent of total revenues
- Other operating expense is expected to be $65 million to $70 million (driven by manufacturing start-up costs for FluMist in anticipation of possible regulatory approval)
- The tax rate is projected to be approximately 35 percent in 2002
MedImmune is a leading biotechnology company focused on researching, developing and commercializing products to prevent or treat infectious disease, autoimmune disease and cancer. MedImmune currently markets three products, Synagis® (palivizumab), Ethyol® (amifostine) and CytoGam® (cytomegalovirus immune globulin intravenous (human)), and has 11 products in clinical testing. MedImmune employs approximately 1,500 people, is headquartered in Gaithersburg, Maryland, and has additional operations in Frederick, Maryland, as well as Pennsylvania, California, the United Kingdom and the Netherlands. For more information on MedImmune, visit the company's website at www.medimmune.com.
Synagis® is marketed for the prevention of serious lower respiratory tract disease caused by respiratory syncytial virus in pediatric patients at high risk of RSV disease, which is prominent in the Northern Hemisphere from October through May (see full prescribing information at www.medimmune.com). Ethyol® is marketed for the reduction of both cumulative renal toxicity associated with repeated administration of cisplatin in patients with advanced ovarian cancer or non-small cell lung cancer (“NSCLC”) and moderate to severe xerostomia in patients undergoing post-operative radiation treatment for head and neck cancer, where the radiation port includes a substantial portion of the parotid (see full prescribing information at www.medimmune.com). CytoGam® is marketed for the prophylaxis against cytomegalovirus disease associated with transplantation of kidney, lung, liver, pancreas, and heart (see full prescribing information at www.medimmune.com). FluMistTM is MedImmune's investigational live attenuated intranasal influenza vaccine currently under review by the U.S. Food and Drug Administration.
DISCLOSURE NOTICE: The information contained in this document is as of April 25, 2002, and will not be updated as a result of new information or future events. This document contains forward - looking statements regarding MedImmune's future financial performance and business prospects. Those statements involve substantial risks and uncertainties. You can identify those statements by the fact that they contain words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “project” or other terms of similar meaning. Those statements reflect management's current beliefs and are based on numerous assumptions, which MedImmune cannot control and which may not develop as MedImmune expects. Consequently, actual results may differ materially from those projected in the forward - looking statements. Among the factors that could cause actual results to differ materially are: seasonal demand for and continued supply of our principal product, Synagis; whether FluMist receives clearance by the Food and Drug Administration and, if it does, whether it will be successfully launched; availability of competitive products in the market; availability of third-party reimbursement for the cost of our products; effectiveness and safety of our products; exposure to product liability, intellectual property or other types of litigation; foreign currency exchange rate fluctuations; changes in generally accepted accounting principles; growth in costs and expenses; the impact of acquisitions, divestitures and other unusual items; and the risks, uncertainties and other matters discussed in MedImmune's Annual Report on Form 10-K for the year ended December 31, 2001 and in its periodic reports on Forms 10-Q and 8-K (if any) filed with the U.S. Securities and Exchange Commission. MedImmune cautions that RSV disease occurs primarily during the winter months; MedImmune believes its operating results will reflect that seasonality for the foreseeable future. MedImmune is also developing several products (including FluMist) for potential future marketing. There can be no assurance that such development efforts will succeed, that such products will receive required regulatory clearance or that, even if such regulatory clearance were received, such products would ultimately achieve commercial success.
2002 Q1 Condensed Statements of Operations & Condensed Balance Sheets