- Strong Product Sales Growth and Recent FDA Approval of FluMist(TM)
Driving Positive Results -
2003 Six-Month Highlights
* Total revenues increased 41 percent to $554 million
* Worldwide Synagis(R) sales increased 37 percent to $447 million
* Ethyol(R) sales grew 49 percent to $52 million
* Adjusted net earnings more than doubled to $128 million ($0.50 per
diluted share); GAAP earnings grew to $123 million ($0.48 per
diluted share)
* FluMist(TM) approved for marketing by the FDA and recommended by
Advisory Committee on Immunization Practices
* Formed alliance with Micromet to develop MT103 for B cell lymphoma
GAITHERSBURG, Md., July 24 /PRNewswire-FirstCall/ -- MedImmune, Inc.
(Nasdaq: MEDI) today announced that total revenues for the first six months of
2003 increased 41 percent to $554 million from $393 million in the first six
months of 2002. Product sales for the 2003 six-month period grew 37 percent
to $518 million, driven primarily by a 37-percent increase in sales of
Synagis(R) (palivizumab) to $447 million and by a 49-percent increase in sales
of Ethyol(R) (amifostine) to $52 million.
MedImmune's total revenues for the 2003 second quarter increased 85
percent to $118 million from $64 million in the 2002 second quarter. Sales of
Synagis in the 2003 quarter increased 69 percent to $55 million, while sales
of Ethyol grew 49 percent to $25 million. Other revenues for the 2003 second
quarter included approximately $28 million in milestone payments for the
approval of FluMist(TM) (influenza virus vaccine live, intranasal) and for
exceeding $100 million in end-user sales of Synagis outside the U.S. in a
single respiratory syncytial virus (RSV) season.
"What a quarter for the company, and more importantly, what an exciting
time in our history," commented David M. Mott, MedImmune's chief executive
officer. "The second quarter of 2003 was incredibly productive on all fronts,
with Synagis and Ethyol performing well ahead of plan and FluMist receiving
marketing approval by the U.S. Food and Drug Administration and favorable
recommendations from the Advisory Committee on Immunization Practices. In
other parts of the business, we've recently completed an issuance of $500
million of Convertible Notes, and begun a multi-year stock repurchase program.
We also continue to build our pipeline with the recently announced alliance
with Micromet, a private German biotechnology company."
For the first six months of 2003, MedImmune reported net earnings of $123
million, or $0.48 per diluted share, computed in accordance with generally
accepted accounting principles (GAAP). For the first six months of 2002,
MedImmune reported a GAAP net loss of $1.1 billion, or $4.62 per share. The
2002 loss primarily reflects the impact of a $1.2 billion charge for acquired
in-process research and development associated with the acquisition of
MedImmune Vaccines, Inc. (formerly known as Aviron) in January 2002.
For the second quarter of 2003, MedImmune reported net earnings of $13
million, or $0.05 per diluted share on a GAAP basis. In the 2002 second
quarter, MedImmune reported a net loss of $29 million, or $0.12 per share, on
a GAAP basis.
Cash and marketable securities at June 30, 2003 were $1.6 billion, up from
$1.4 billion at December 31, 2002, primarily due to positive cash flow from
the company's ongoing business operations.
Adjusted Results
MedImmune also announced "adjusted" results today, which exclude certain
amounts associated with the acquisition of MedImmune Vaccines. MedImmune
computes adjusted earnings in both years by adding back amounts that are
related to the acquisition of MedImmune Vaccines. In 2003, these amounts
included: amortization of intangible assets; compensation expense associated
with the assumption and vesting of unvested stock options; retention payments;
and amortization of the premium on convertible subordinated notes acquired as
a part of the acquisition of MedImmune Vaccines. In 2002, the adjusted
amounts also included the acquired in-process research and development charge
and severance payments in addition to amounts for the items previously listed.
MedImmune believes the adjusted results are more indicative of the underlying
trends in the operations of the business, and will continue to provide
adjusted results in addition to reporting earnings computed in accordance with
GAAP. The accompanying schedules present the reconciliation from GAAP results
to adjusted results, with additional details included in the notes to those
schedules.
2003 Six Month Adjusted Earnings
For the 2003 first half, MedImmune's adjusted net earnings more than
doubled over the 2002 first half to $128 million, or $0.50 per diluted share.
In the first six months of 2002, MedImmune's adjusted net earnings were $46
million, or $0.18 per diluted share.
Gross margins on product sales for the 2003 first half were 76 percent
compared to 75 percent in the 2002 first half, due to higher margins,
particularly for Synagis, which are largely a result of lower sales allowances
that increased net product sales.
Research and development (R&D) expenses decreased to $58 million in the
2003 first half from $74 million in the 2002 first half, due largely to the
completion of several late-stage clinical trials by the end of 2002, including
Phase 2 clinical trials with siplizumab, and the Phase 3 Synagis clinical
trial in congenital heart disease patients from which data were submitted to
the FDA in December 2002.
Selling, general and administrative (SG&A) costs in the 2003 first half
increased to $169 million from $137 million in the 2002 first half, due
primarily to increases in co-promotion expenses for Synagis.
Other operating expenses in the 2003 first half were $20 million compared
to $33 million in the 2002 first half. The decrease is due to the shift in
the costs of FluMist manufacturing that are in inventory this year, but were
expensed as other operating costs in the prior year.
MedImmune estimates its effective tax rate to be 37 percent for the 2003
period, compared to 36 percent in the first half of 2002. The increase is
largely due to a reduction in the amount of credits available for research and
development activities relative to the growth in earnings.
2003 Second Quarter Adjusted Earnings
For the 2003 second quarter, MedImmune's adjusted net earnings increased
to $15 million, or $0.06 per diluted share, compared to an adjusted loss of
$25 million, or $0.10 per share, for the 2002 second quarter. Gross margins
on product sales were 73 percent in both the 2003 and 2002 quarters.
R&D expenses decreased to $28 million in the 2003 second quarter from $33
million in the 2002 second quarter, due largely to the completion of several
late-stage clinical trials by the end of 2002, including Phase 2 clinical
trials with siplizumab, and the Phase 3 Synagis clinical trial in congenital
heart disease patients from which data were submitted to the FDA in December
2002.
SG&A costs in the 2003 second quarter increased to $53 million from $45
million in the comparable 2002 period, due primarily to increased co-promotion
expenses for Synagis associated with the product's domestic sales growth and a
modest increase in the size of the sales force associated with the marketing
launch of FluMist.
Other operating expenses in the 2003 second quarter were $1 million
compared to $19 million in the 2002 second quarter. The decrease is due to the
shift in the costs of FluMist manufacturing that are in inventory this year,
but were expensed as other operating costs in last year's quarter.
Looking Ahead in 2003
MedImmune is providing both GAAP and adjusted guidance, as well as a
reconciliation between the two, as a convenience to its investors. As
previously described in this press release, MedImmune's 2003 adjusted guidance
excludes certain amounts associated with the acquisition of MedImmune
Vaccines. To reconcile MedImmune's adjusted guidance to its GAAP guidance for
2003, the following acquisition-related expenses should be excluded from the
GAAP guidance: approximately $4 million in cost of sales; approximately $2
million in R&D; approximately $9 million in SG&A; and approximately $5 million
in other operating expenses. In addition, approximately $2 million of net
interest income should be excluded from the GAAP guidance to reconcile to the
adjusted guidance. The guidance and objectives provided below are projections
and are based upon numerous assumptions, many of which MedImmune cannot
control and that may not develop as MedImmune expects. Consequently, actual
results may differ materially from the guidance and objectives described in
this release. Please refer to the Disclosure Notice below.
Guidance for the Year Ending December 31, 2003
MedImmune has increased its 2003 guidance for total revenues, product
sales and Synagis sales due to stronger than expected growth in Synagis in the
first half of the year. The company also increased its R&D guidance due to
costs associated with advancing and expanding the product pipeline. Other
than these specifically identified items, all other previously stated
financial guidance remains unchanged.
Revenue Guidance for 2003
* Total revenues: $1.1 billion to $1.15 billion (30% to 36% growth
over 2002)
-- Product sales: 27% to 31% over 2002
-- Synagis revenues: 23% to 27% over 2002
-- Ethyol revenues: 20% to 25% over 2002
-- Total FluMist revenues (product sales and other revenues,
primarily from milestones and royalties): $120 million to $140
million
GAAP Guidance for 2003
* Earnings per diluted share: $0.84 to $0.89 (compared to a 2002 loss
of $4.40 per share)
-- Gross margins: approximately 71% of product sales
-- R&D: $157 million to $162 million
-- SG&A: 34% to 35% of product sales
-- Other operating expenses: $21 million to $24 million
-- Tax rate: approximately 37%
Adjusted Guidance for 2003
* Earnings per diluted share: $0.88 to $0.93 (110% to 121% growth over
2002)
* Gross margins: approximately 71% of product sales
* R&D: $155 million to $160 million
* SG&A: 33% to 34% of product sales
* Other operating expenses: $17 million to $20 million
* Tax rate: approximately 37%
Guidance for the Quarter Ending September 30, 2003
For the first time, MedImmune is providing the following guidance for the
third quarter of 2003. The difference between the GAAP and adjusted guidance
is approximately $3 million of net expenses associated with the acquisition of
MedImmune Vaccines.
* Loss per share:
-- Adjusted: ($0.08) to ($0.11)
-- GAAP: $(0.09) to ($0.12)
* Total revenues: $85 million to $95 million
Conference Call & Webcast
MedImmune is offering a live webcast of a discussion by MedImmune
management of its earnings and other business results on Thursday, July 24,
2003 at 8:00 a.m. Eastern Time. The live webcast may be accessed in the
investor section of MedImmune's website, www.medimmune.com. A replay of the
webcast will also be available via our website until August 1, 2003. An audio
replay of the webcast will be available, beginning at 11:00 a.m. Eastern Time
on July 24, 2003 and ending at midnight August 1, 2003 by calling
(888) 286-8010. The pass code for the audio replay is 95451238.
About MedImmune
MedImmune is a leading biotechnology company focused on researching,
developing and commercializing products to prevent or treat infectious
disease, autoimmune disease and cancer. MedImmune actively markets four
products, Synagis(R) (palivizumab), FluMist(TM) (influenza virus vaccine live,
intranasal), Ethyol(R) (amifostine) and CytoGam(R) (cytomegalovirus immune
globulin intravenous (human)), and has additional products in clinical
testing. MedImmune employs approximately 1,700 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. FluMist is marketed for active immunization for the
prevention of disease caused by influenza A and B viruses in healthy children
and adolescents, 5-17 years of age, and healthy adults, 18-49 years of age.
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 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. CytoGam is marketed for the prophylaxis against cytomegalovirus
disease associated with transplantation of kidney, lung, liver, pancreas, and
heart. For full prescribing information of all of MedImmune's products, see
the company's website at www.medimmune.com.
DISCLOSURE NOTICE: The information contained in this document is as of
July 24, 2003 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 supply of Synagis and FluMist; whether FluMist will be
successfully launched at a favorable price; 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, 2002, its quarterly reports on Form 10-Q and its current reports
on Form 8-K filed with the U.S. Securities and Exchange Commission. MedImmune
cautions that RSV disease and influenza occur primarily during the winter
months; MedImmune believes its operating results will reflect that seasonality
for the foreseeable future. MedImmune is also developing several products 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. This press release
contains certain financial measures that are adjusted to exclude amounts
required by GAAP, and includes the most directly comparable GAAP measure for
each adjusted measure, as well as a reconciliation between the GAAP results
and the adjusted results. This press release can be found on MedImmune's
website at http://www.medimmune.com in the box marked "News" or with the
archived press releases on the Investor Summary page.
MedImmune, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data)
Three Months Ended June 30, Six Months Ended June 30,
2003 2002 2003 2002
Revenues:
Product sales $85,864 $57,330 $518,299 $377,998
Other revenue 31,935 6,392 35,446 15,357
117,799 63,722 553,745 393,355
Costs and expenses:
Cost of sales 23,197 15,642 126,028 95,519
Research and
development 28,904 34,545 59,568 78,614
Selling, general
and administrative 55,495 47,354 173,581 142,994
Other operating
expenses 1,415 22,152 22,871 43,993
Acquired in-process
research and
development - - - 1,179,321
109,011 119,693 382,048 1,540,441
Interest income, net 12,706 10,096 23,897 19,268
Loss on investment
activities (139) (109) (396) (109)
Earnings (loss)
before income taxes 21,355 (45,984) 195,198 (1,127,927)
Provision (benefit)
for income taxes 7,901 (16,528) 72,223 18,387
Net earnings (loss) $13,454 $(29,456) $122,975 $(1,146,314)
Basic earnings (loss)
per share $0.05 $(0.12) $0.49 $(4.62)
Shares used
in computing
basic earnings (loss)
per share 252,106 250,161 251,836 248,110
Diluted earnings (loss)
per share $0.05 $(0.12) $0.48 $(4.62)
Shares used in
computing diluted
earnings (loss)
per share 258,200 250,161 257,390 248,110
MedImmune, Inc.
Selected Financial Information -- Reconciliation of GAAP
to Adjusted Results (Unaudited)
(in thousands, except per share data)
Three Months Ended June 30, 2003
Acquisition-related
GAAP (1) Adjustments (2) Adjusted
Revenues:
Product sales $85,864 $ - $85,864
Other revenue 31,935 - 31,935
117,799 - 117,799
Costs and expenses:
Cost of sales 23,197 - 23,197
Research and development 28,904 (1,154) (3) 27,750
Selling, general
and administrative 55,495 (2,057) (4) 53,438
Other operating expenses 1,415 - 1,415
Acquired in-process
research and development - - -
109,011 (3,211) 105,800
Interest income, net 12,706 (466) (5) 12,240
Loss on investment
activities (139) - (139)
Earnings (loss) before
income taxes 21,355 2,745 24,100
Provision for income taxes 7,901 1,016 8,917
Net earnings (loss) $13,454 $1,729 $15,183
Basic earnings (loss)
per share $0.05 $0.01 $0.06
Shares used in computing
basic earnings (loss)
per share 252,106 252,106
Diluted earnings (loss)
per share $0.05 $0.01 $0.06
Shares used in computing
diluted earnings (loss)
per share 258,200 258,200
Three Months Ended June 30, 2002
Acquisition-related
GAAP (1) Adjustments (2) Adjusted
Revenues:
Product sales $57,330 $ - $57,330
Other revenue 6,392 - 6,392
63,722 - 63,722
Costs and expenses:
Cost of sales 15,642 - 15,642
Research and development 34,545 (1,278) (6) 33,267
Selling, general
and administrative 47,354 (2,607) (7) 44,747
Other operating expenses 22,152 (3,448) (8) 18,704
Acquired in-process
research and development - - -
119,693 (7,333) 112,360
Interest income, net 10,096 (886) (9) 9,210
Loss on investment
activities (109) - (109)
Earnings (loss) before
income taxes (45,984) 6,447 (39,537)
Provision for income taxes (16,528) 2,281 (14,247)
Net earnings (loss) $(29,456) $4,166 $(25,290)
Basic earnings (loss)
per share $(0.12) $0.02 $(0.10)
Shares used in computing
basic earnings (loss)
per share 250,161 250,161
Diluted earnings (loss)
per share $(0.12) $0.02 $(0.10)
Shares used in computing
diluted earnings (loss)
per share 250,161 250,161
(1) GAAP results are the company's historical results that were prepared
in accordance with accounting principles generally accepted in the
United States of America and include the results of operations for
MedImmune Vaccines, Inc. beginning January 10, 2002.
(2) Acquisition-related adjustments are the amounts listed in notes (3)
through (9) that are related to the company's acquisition of MedImmune
Vaccines, Inc.
(3) Consists of $0.4 million, principally for stock compensation expense
for unvested stock options assumed in conjunction with the merger
transaction, $0.3 million for retention payments, and $0.4 million for
stock compensation expense for acceleration of stock options in
connection with a retention plan.
(4) Consists of $2.1 million, principally for amortization of intangible
assets and stock compensation expense for unvested stock options
assumed in conjunction with the merger transaction.
(5) Consists of $0.5 million relating to the amortization of premium on
MedImmune Vaccines' Convertible Subordinated Notes.
(6) Consists of $1.3 million, principally for stock compensation expense
for unvested stock options assumed in conjunction with the merger
transaction
(7) Consists of $2.6 million, principally for amortization of intangible
assets and stock compensation expense for unvested stock options
assumed in conjunction with the merger transaction.
(8) Consists of $3.4 million, principally for amortization of intangible
assets and stock compensation expense for unvested stock options
assumed in conjunction with the merger transaction.
(9) Consists of $0.9 million relating to the amortization of premium on
MedImmune Vaccines' Convertible Subordinated Notes.
MedImmune, Inc.
Selected Financial Information -- Reconciliation of GAAP
to Adjusted Results (Unaudited)
(in thousands, except per share data)
Six Months Ended June 30, 2003
Acquisition-related
GAAP (1) Adjustments (2) Adjusted
Revenues:
Product sales $518,299 $ - $518,299
Other revenue 35,446 - 35,446
553,745 - 553,745
Costs and expenses:
Cost of sales 126,028 - 126,028
Research and development 59,568 (2,052) (3) 57,516
Selling, general
and administrative 173,581 (4,207) (4) 169,374
Other operating expenses 22,871 (3,164) (5) 19,707
Acquired in-process
research and development - - -
382,048 (9,423) 372,625
Interest income, net 23,897 (932) (6) 22,965
Loss on investment
activities (396) - (396)
Earnings (loss) before
income taxes 195,198 8,491 203,689
Provision for income taxes 72,223 3,142 75,365
Net earnings (loss) $122,975 $5,349 $128,324
Basic earnings (loss)
per share $0.49 $0.02 $0.51
Shares used in computing
basic earnings (loss)
per share 251,836 251,836
Diluted earnings (loss)
per share $0.48 $0.02 $0.50
Shares used in computing
diluted earnings (loss)
per share 257,390 257,390
Six Months Ended June 30, 2002
Acquisition-related
GAAP (1) Adjustments (2) Adjusted
Revenues:
Product sales $377,998 $ - $377,998
Other revenue 15,357 - 15,357
393,355 - 393,355
Costs and expenses:
Cost of sales 95,519 - 95,519
Research and development 78,614 (4,564) (7) 74,050
Selling, general
and administrative 142,994 (5,903) (8) 137,091
Other operating expenses 43,993 (11,018) (9) 32,975
Acquired in-process
research and development 1,179,321 (1,179,321) (10) -
1,540,441 (1,200,806) 339,635
Interest income, net 19,268 (886) (11) 18,382
Loss on investment
activities (109) - (109)
Earnings (loss) before
income taxes (1,127,927) 1,199,920 71,993
Provision for income taxes 18,387 7,354 25,741
Net earnings (loss) $(1,146,314) $1,192,566 $46,252
Basic earnings (loss)
per share $(4.62) $4.81 $0.19
Shares used in computing
basic earnings (loss)
per share 248,110 248,110
Diluted earnings (loss)
per share $(4.62) $4.80 $0.18
Shares used in computing
diluted earnings (loss)
per share 248,110 254,781
(1) GAAP results are the company's historical results that were prepared
in accordance with accounting principles generally accepted in the
United States of America and include the results of operations for
MedImmune Vaccines, Inc. beginning January 10, 2002.
(2) Acquisition-related adjustments are the amounts listed in notes (3)
through (11) that are related to the company's acquisition of
MedImmune Vaccines, Inc.
(3) Consists of $0.9 million, principally for stock compensation expense
for unvested stock options assumed in conjunction with the merger
transaction, $0.5 million for retention payments, and $0.7 million
for stock compensation expense for acceleration of stock options in
connection with a retention plan.
(4) Consists of $4.2 million, principally for amortization of intangible
assets and stock compensation expense for unvested stock options
assumed in conjunction with the merger transaction.
(5) Consists of $2.7 million, principally for amortization of intangible
assets and stock compensation expense for unvested stock options
assumed in conjunction with the merger transaction, $0.2 million for
retention payments, and $0.2 million for stock compensation expense
for acceleration of stock options in connection with a retention
plan.
(6) Consists of $0.9 million relating to the amortization of premium on
MedImmune Vaccines' Convertible Subordinated Notes.
(7) Consists of $2.8 million, principally for stock compensation expense
for unvested stock options assumed in conjunction with the merger
transaction, and $1.8 million relating to retention payments and
stock compensation expense for acceleration of stock options for
certain executives of the acquired entity.
(8) Consists of $5.1 million, principally for amortization of intangible
assets and stock compensation expense for unvested stock options
assumed in conjunction with the merger transaction, and $0.8 million
relating to retention payments and stock compensation expense for
acceleration of stock options for certain executives of the acquired
entity.
(9) Consists of $7.0 million, principally for amortization of intangible
assets and stock compensation expense for unvested stock options
assumed in conjunction with the merger transaction, and $4.0 million
relating to retention payments and stock compensation expense for
acceleration of stock options for certain executives of the acquired
entity.
(10) Represents the fair value of purchased in-process technology of $1.2
billion, primarily related to MedImmune Vaccines' lead product
candidate, FluMist, which was approved by the FDA on June 17, 2003
(11) Consists of $0.9 million relating to the amortization of premium on
MedImmune Vaccines' Convertible Subordinated Notes.
MedImmune, Inc.
Condensed Consolidated Balance Sheets (1)
(in thousands)
June 30, December 31,
2003 2002
(unaudited)
Assets:
Cash and marketable securities $1,587,973 $1,423,056
Trade and contract receivables, net 40,073 124,172
Inventory, net 81,379 59,963
Deferred taxes, net 185,768 247,773
Property and equipment, net 215,520 183,992
Goodwill and intangible assets, net 120,925 129,245
Other assets 28,387 20,088
$2,260,025 $2,188,289
Liabilities and shareholders' equity:
Accounts payable $12,300 $19,773
Accrued expenses 149,253 231,407
Other liabilities 38,124 41,519
Long term debt 217,029 218,356
Shareholders' equity 1,843,319 1,677,234
$2,260,025 $2,188,289
Common shares outstanding 252,391 251,262
(1) Certain prior year amounts have been reclassified to conform to the
current presentation.
SOURCE MedImmune, Inc.
-0- 07/24/2003
/CONTACT: Investors: William Roberts, Senior Manager, Investor Relations,
+1-301-527-4358, or John Filler, Senior Analyst, Investor Relations,
+1-240-632-4086, or Media: Jamie Lacey, Associate Director, Public Relations,
+1-240-632-4035, all of MedImmune, Inc./
/Web site: http://www.medimmune.com/
(MEDI)
CO: MedImmune, Inc.
ST: Maryland
IN: BIO MTC
SU: ERN CCA ERP
CD-MV
-- DCTH007 --
6060 07/24/2003 06:30 EDT http://www.prnewswire.com