2003 Revenues Grow 24 Percent to Surpass $1 Billion for First Time in Company History; 2003 Adjusted Net Earnings Jump 81 Percent Over 2002 2003 Highlights
- *Synagis(R) and Ethyol(R) sales increased 26 percent and 23 percent, respectively
- *2003 adjusted net earnings grew 81 percent to $192 million ($0.76 per diluted share) from 2002 adjusted net earnings of $107 million ($0.42 per diluted share)
- *2003 GAAP net earnings increased to $183 million ($0.72 per diluted share) from a 2002 GAAP net loss of $1.1 billion ($4.40 per diluted share)
- *Cash and marketable securities increased 34 percent to $1.9 billion
- *Synagis label expanded to include congenital heart disease infants in U.S. and Europe
- *FluMist(TM) approved in June; launched in September
- *Investigational New Drug applications filed for Numax(TM) and anti-IL-9 monoclonal antibody
- *Multiple Phase 2 trials initiated for Vitaxin(R) and Ethyol
- *In-licensed rights to technologies targeting B-cell lymphoma and inflammatory diseases
GAITHERSBURG, Md., Jan 29, 2004 /PRNewswire-FirstCall via COMTEX/ -- MedImmune, Inc.
(Nasdaq: MEDI) today announced that total revenues for the 2003 fourth quarter
grew to $408 million, driving total revenues for the full year up 24 percent
to $1.1 billion. Revenue growth was due primarily to the continued success of
Synagis (palivizumab), the company's flagship product used to prevent
respiratory syncytial virus in high-risk infants. Worldwide sales of Synagis
in 2003 were $849 million, a 26-percent increase over 2002 sales of $672
million. For the 2003 fourth quarter, worldwide sales of Synagis increased 14
percent to $358 million from $314 million in the 2002 fourth quarter. Sales
of Ethyol (amifostine), the company's first oncology product, were
approximately $100 million for the year, increasing 23 percent over worldwide
sales of $81 million in 2002. For the 2003 fourth quarter, Ethyol sales grew
12 percent to $29 million.
In 2003, MedImmune did not record any product sales-related revenue
(royalties or transfer payments) for FluMist (Influenza Virus Vaccine Live,
Intranasal) because the quantity and timing of doses sold, returned and
discounted for the entire 2003/2004 influenza season were not sufficiently
determinable. Once these variables can be determined for the season,
MedImmune estimates that it might be able to recognize approximately $30
million in sales-related revenues for FluMist. FluMist is the first
intranasal influenza vaccine, launched by MedImmune and its partner Wyeth in
September 2003.
Other revenues for 2003 were $62 million, of which $46 million was from
milestone and reimbursement payments from Wyeth for FluMist. In the fourth
quarter, other revenues were $9 million, of which $8 million was associated
with FluMist revenues not related to sales. In 2002, other revenues totaled
$62 million for the year and $33 million for the fourth quarter.
"MedImmune's core business remained strong throughout 2003, making
substantial progress on all fronts with one exception," said David Mott,
MedImmune's chief executive officer. "Offsetting a disappointing launch for
FluMist were a number of exciting accomplishments, which most importantly
included meeting our revenue and earnings goals due to solid growth from
Synagis and Ethyol and substantially advancing our development pipeline."
For the year ended December 31, 2003, MedImmune's net earnings on a GAAP
basis increased to $183 million, or $0.72 per diluted share, from a net loss
in 2002 of $1.1 billion, or $4.40 per diluted 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 fourth quarter of 2003, MedImmune reported net earnings of $77
million, or $0.30 per diluted share, on a GAAP basis, versus net earnings of
$85 million, or $0.33 per diluted share, in the 2002 fourth quarter.
Cash and marketable securities at December 31, 2003 grew to $1.9 billion,
a 34-percent increase over cash and marketable securities at the end of 2002,
primarily reflecting positive cash flow from the company's ongoing business
operations and the issuance of $500 million of convertible senior notes due
2023, partially offset by repurchases of approximately $230 million of our
common stock in 2003.
Adjusted Results
MedImmune also announced "adjusted" results today for 2002 and 2003, 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 for 2003 and 2002 are more indicative
of the underlying trends in the operations of the business. The accompanying
schedules present the reconciliation from GAAP results to adjusted results,
with additional details included in the notes to those schedules.
Adjusted Earnings for the Year 2003
MedImmune's 2003 adjusted earnings increased 81 percent to $192 million,
or $0.76 per diluted share, from $107 million, or $0.42 per diluted share, in
2002.
Gross margins on product sales for 2003 were 71 percent, down three
percentage points from last year, largely due to valuation adjustments for
FluMist inventory. Partially offsetting this decrease were lower costs for
CytoGam and Ethyol, and a favorable impact of a value-added tax refund for
transfers of Synagis manufactured in Europe.
Research and development (R&D) expenses increased to $154 million in 2003
from $139 million in 2002. The increase is due largely to payments made in
2003 associated with gaining access to new data and technologies, and costs
associated with the initiation of four Phase 2 studies for Vitaxin. In 2002,
the company completed several late-stage clinical trials, including Phase 2
clinical trials with siplizumab, and the Phase 3 Synagis clinical trial in
congenital heart disease patients that led to approval of an expanded
indication by the U.S. Food and Drug Administration in September 2003.
Selling, general and administrative (SG&A) costs in 2003 increased to $333
million from $288 million in 2002 due primarily to an increase in co-promotion
expenses for Synagis associated with the product's sales growth. As a
percentage of product sales, SG&A costs decreased to 34 percent in 2003 from
36 percent in 2002 due to product sales growing at a faster rate than
expenses.
Other operating expenses in 2003 were $23 million compared to $79 million
in 2002. The decrease is due to the shift in the costs of FluMist
manufacturing that are included in inventory and cost of goods sold in 2003,
but were expensed as other operating costs in 2002.
MedImmune estimates its effective tax rate to be 37 percent for 2003,
consistent with 2002.
2003 Fourth Quarter Adjusted Earnings
For the 2003 fourth quarter, MedImmune's adjusted net earnings decreased
to $80 million, or $0.32 per diluted share, from adjusted net earnings of $92
million, or $0.36 per diluted share, in the 2002 fourth quarter.
Gross margins on product sales for the 2003 fourth quarter decreased to 67
percent, compared to 76 percent in the 2002 quarter, largely due to valuation
adjustments to FluMist inventory during the fourth quarter of 2003.
R&D expenses increased to $41 million in the 2003 fourth quarter from $31
million in the 2002 fourth quarter, primarily due to the initiation of four
Phase 2 trials for Vitaxin.
SG&A costs in the 2003 fourth quarter increased to $123 million from $103
million in the comparable 2002 period, due primarily to increases in marketing
and co-promotion programs, largely for Synagis, and higher legal costs.
Other operating expenses in the 2003 fourth quarter were $1 million
compared to $26 million in the 2002 fourth quarter due to the shift in the
costs of FluMist manufacturing that are included in inventory and cost of
goods sold in 2003, but were expensed as other operating cost in the 2002
quarter.
Conference Call & Webcast
MedImmune is offering a live webcast of a discussion by MedImmune
management of its earnings and other business results on Thursday, January 29,
2004 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 February 5, 2004. An
audio replay of the webcast will be available, beginning at 11:00 a.m. Eastern
Time on January 29, 2004 and ending at midnight February 5, 2004 by calling
(888) 286-8010. The passcode for the audio replay is 12142375.
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), Ethyol(R) (amifostine), FluMist(TM)
(Influenza Virus Vaccine Live, Intranasal), and CytoGam(R) (cytomegalovirus
immune globulin intravenous (human)), and has additional products in clinical
testing. MedImmune employs approximately 1,800 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 and its products, 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. 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 gland. 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. 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
December 31, 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; the commercial viability of
FluMist; 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 and interest 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, its current reports on Form 8-K and other filings 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.
- Tables Follow -
MedImmune, Inc.
Condensed Consolidated Statements of Operations (1)
(in thousands, except per share data)
Three Months Ended Year Ended
December 31, December 31,
2003 2002 2003 2002
(Unaudited)
Revenues:
Product sales $398,566 $351,003 $992,554 $790,906
Other revenue 9,258 33,020 61,780 61,778
407,824 384,023 1,054,334 852,684
Costs and expenses:
Cost of sales 132,227 83,371 289,756 201,841
Research and
development 41,169 34,784 156,318 147,942
Selling, general
and administrative 124,823 106,076 340,902 299,562
Other operating
expenses 1,332 31,918 26,138 100,029
Acquired in-process
research and
development - - - 1,179,321
299,551 256,149 813,114 1,928,695
Interest income, net 11,070 10,028 46,519 40,245
Gain (loss) on
investment
activities 2,620 (3,408) 3,438 (14,074)
Earnings (loss) before
income taxes 121,963 134,494 291,177 (1,049,840)
Provision for income
taxes 45,364 49,903 107,973 48,175
Net earnings (loss) $76,599 $84,591 $183,204 $(1,098,015)
Basic earnings (loss)
per share $0.31 $0.34 $0.73 $(4.40)
Shares used in computing
basic earnings (loss)
per share 247,654 251,078 250,144 249,625
Diluted earnings (loss)
per share $0.30 $0.33 $0.72 $(4.40)
Shares used in computing
diluted earnings (loss)
per share 251,240 255,297 253,817 249,625
(1) Certain prior year amounts have been reclassified to conform to the
current presentation.
MedImmune, Inc.
Selected Financial Information - Reconciliation of GAAP to Adjusted
Results (10) (Unaudited)
(in thousands, except per share data)
Three Months Ended December 31, 2003
Acquisition-related
GAAP (1) Adjustments Adjusted (2)
Revenues:
Product sales $398,566 $- $398,566
Other revenue 9,258 - 9,258
407,824 - 407,824
Costs and expenses:
Cost of sales 132,227 (2,703)(3) 129,524
Research and
development 41,169 (243)(4) 40,926
Selling, general
and administrative 124,823 (1,983)(5) 122,840
Other operating
expenses 1,332 - 1,332
Acquired in-process
research and
development - - -
299,551 (4,929) 294,622
Interest income, net 11,070 (425)(6) 10,645
Gain (loss) on
investment activities 2,620 - 2,620
Earnings before income
taxes 121,963 4,504 126,467
Provision for income
taxes 45,364 1,429 46,793
Net earnings $76,599 $3,075 $79,674
Basic earnings per share $0.31 $0.01 $0.32
Shares used in computing
basic earnings per
share 247,654 247,654
Diluted earnings per
share $0.30 $0.02 $0.32
Shares used in
computing diluted
earnings per share 251,240 251,240
Three Months Ended December 31, 2002
Acquisition-related
GAAP (1) Adjustments Adjusted (2)
Revenues:
Product sales $351,003 $- $351,003
Other revenue 33,020 - 33,020
384,023 - 384,023
Costs and expenses:
Cost of sales 83,371 - 83,371
Research and
development 34,784 (3,730)(7) 31,054
Selling, general
and administrative 106,076 (3,225)(8) 102,851
Other operating
expenses 31,918 (6,366)(9) 25,552
Acquired in-process
research and
development - - -
256,149 (13,321) 242,828
Interest income, net 10,028 (466)(6) 9,562
Gain (loss) on
investment activities (3,408) - (3,408)
Earnings before income
taxes 134,494 12,855 147,349
Provision for income
taxes 49,903 5,296 55,199
Net earnings $84,591 $7,559 $92,150
Basic earnings per share $0.34 $0.03 $0.37
Shares used in computing
basic earnings per
share 251,078 251,078
Diluted earnings per
share $0.33 $0.03 $0.36
Shares used in computing
diluted earnings per
share 255,297 255,297
(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 costs included in FluMist inventory, principally $1.7
million for amortization of intangible assets and $1.0 million
relating to stock compensation expense for acceleration of stock
options and retention payments in connection with a retention plan.
(4) Represents stock compensation expense for unvested stock options
assumed in conjunction with the merger transaction.
(5) Represents amortization of intangible assets and stock compensation
expense for unvested stock options assumed in conjunction with the
merger transaction.
(6) Represents the amortization of premium on MedImmune Vaccines'
Convertible Subordinated Notes.
(7) Consists of $0.7 million, principally for stock compensation expense
for unvested stock options assumed in conjunction with the merger
transaction; $1.7 million for retention payments; and $1.3 million
for stock compensation expense for acceleration of stock options in
connection with a retention plan.
(8) Consists of $2.5 million, principally for amortization of intangible
assets and stock compensation expense for unvested stock options
assumed in conjunction with the merger transaction; $0.5 million for
retention payments; and $0.2 million for stock compensation expense
for acceleration of stock options in connection with a retention
plan.
(9) Consists of $2.8 million, principally for amortization of intangible
assets and stock compensation expense for unvested stock options
assumed in conjunction with the merger transaction; $2.2 million for
retention payments; and $1.3 million for stock compensation expense
for acceleration of stock options in connection with a retention
plan.
(10) Certain prior year amounts have been reclassified to conform to the
current presentation.
MedImmune, Inc.
Selected Financial Information - Reconciliation of GAAP to Adjusted
Results (12) (Unaudited)
(in thousands, except per share data)
Year Ended December 31, 2003
Acquisition-related
GAAP (1) Adjustments Adjusted (2)
Revenues:
Product sales $992,554 $- $992,554
Other revenue 61,780 - 61,780
1,054,334 - 1,054,334
Costs and expenses:
Cost of sales 289,756 (2,703)(3) 287,053
Research and
development 156,318 (2,610)(4) 153,708
Selling, general
and administrative 340,902 (8,196)(5) 332,706
Other operating
expenses 26,138 (3,164)(6) 22,974
Acquired in-process
research and
development - - -
813,114 (16,673) 796,441
Interest income, net 46,519 (2,387)(7) 44,132
Gain (loss) on investment
activities 3,438 - 3,438
Earnings (loss) before
income taxes 291,177 14,286 305,463
Provision for income
taxes 107,973 5,048 113,021
Net earnings (loss) $183,204 $9,238 $192,442
Basic earnings (loss)
per share $0.73 $0.04 $0.77
Shares used in computing
basic earnings (loss)
per share 250,144 250,144
Diluted earnings (loss)
per share $0.72 $0.04 $0.76
Shares used in computing
diluted earnings (loss)
per share 253,817 253,817
Year Ended December 31, 2002
Acquisition-related
GAAP (1) Adjustments Adjusted (2)
Revenues:
Product sales $790,906 $- $790,906
Other revenue 61,778 - 61,778
852,684 - 852,684
Costs and expenses:
Cost of sales 201,841 - 201,841
Research and
development 147,942 (9,386)(8) 138,556
Selling, general
and administrative 299,562 (11,857)(9) 287,705
Other operating
expenses 100,029 (20,815)(10) 79,214
Acquired in-process
research and
development 1,179,321 (1,179,321)(11) -
1,928,695 (1,221,379) 707,316
Interest income, net 40,245 (1,818)(7) 38,427
Gain (loss) on
investment activities (14,074) - (14,074)
Earnings (loss) before
income taxes (1,049,840) 1,219,561 169,721
Provision for income
taxes 48,175 14,972 63,147
Net earnings (loss) $(1,098,015) $1,204,589 $106,574
Basic earnings (loss)
per share $(4.40) $4.83 $0.43
Shares used in
computing basic
earnings (loss) per
share 249,625 249,625
Diluted earnings (loss)
per share $(4.40) $4.82 $0.42
Shares used in computing
diluted earnings (loss)
per share 249,625 252,653
(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 costs included in FluMist inventory, principally $1.7
million for amortization of intangible assets and $0.8 million
relating to stock compensation expense for acceleration of stock
options and retention payments in connection with a retention plan.
(4) Consists of $1.4 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.
(5) Represents amortization of intangible assets and stock compensation
expense for unvested stock options assumed in conjunction with the
merger transaction.
(6) Consists of $2.9 million, principally for amortization of intangible
assets and stock compensation expense for unvested stock options
assumed in conjunction with the merger transaction and $0.2 million
for stock compensation expense for acceleration of stock options in
connection with a retention plan.
(7) Represents the amortization of premium on MedImmune Vaccines'
Convertible Subordinated Notes.
(8) Consists of $4.6 million, principally for stock compensation expense
for unvested stock options assumed in conjunction with the merger
transaction; $1.7 million for retention payments; $1.3 million for
stock compensation expense for acceleration of stock options in
connection with a retention plan; and $1.8 million relating to
retention payments and stock compensation expense for acceleration of
stock options for certain executives of the acquired entity.
(9) Consists of $11.1 million, principally for amortization of intangible
assets and stock compensation expense for unvested stock options
assumed in conjunction with the merger transaction; $0.5 million
retention payments; and $0.2 million for stock compensation expense
for acceleration of stock options in connection with a retention
plan.
(10) Consists of $13.2 million, principally for amortization of intangible
assets and stock compensation expense for unvested stock options
assumed in conjunction with the merger transaction; $2.2 million for
retention payments; $1.3 million for stock compensation expense for
acceleration of stock options in connection with a retention plan;
and $4.0 million relating to retention payments and stock
compensation expense for acceleration of stock options for certain
executives of the acquired entity.
(11) Represents the fair value of purchased in-process technology of $1.2
billion, primarily related to MedImmune Vaccines' lead product
candidate, FluMist, which had not been approved by the FDA at the
time of the acquisition.
(12) Certain prior year amounts have been reclassified to conform to the
current presentation.
MedImmune, Inc.
Condensed Consolidated Balance Sheets (1)
(in thousands)
December 31, December 31,
2003 2002
Assets:
Cash and marketable securities $1,900,149 $1,423,056
Trade and contract receivables, net 166,220 124,172
Inventory, net 91,703 59,963
Deferred taxes, net 180,602 247,773
Property and equipment, net 273,597 183,992
Goodwill and intangible assets, net 110,308 129,245
Other assets 72,091 20,088
$2,794,670 $2,188,289
Liabilities and shareholders' equity:
Accounts payable $22,116 $19,773
Accrued expenses 299,843 231,407
Advance from Wyeth 51,910 -
Other liabilities 39,507 41,519
Long term debt 682,076 218,356
Shareholders' equity 1,699,218 1,677,234
$2,794,670 $2,188,289
Common shares outstanding 248,036 251,262
(1) Certain prior year amounts have been reclassified to conform to the
current presentation.
SOURCE MedImmune, Inc.
Investors: Will Roberts, +1-301-527-4358, John Filler,
+1-240-632-4086, Media: Jamie Lacey, +1-240-632-4035, all of MedImmune, Inc.
http://www.medimmune.com