- Company States Record Revenues for Six-Month Period -
2004 Six-Month Highlights
- Product sales increased 12 percent to $574 million
- Supplemental biological license application filed for liquid Synagis(R)
- Full ownership of FluMist(TM) franchise regained; vaccine price
substantially reduced; Henry Schein selected as exclusive distributor
for 2004-2005 influenza season
- Phase 3 data showing higher efficacy rate for CAIV-T, MedImmune's
development-stage, second-generation intranasal flu vaccine, than
traditional flu shot presented at Pediatric Academic Societies' (PAS)
Annual Meeting
- Phase 3 data showing long-term positive effects of Ethyol(R) in helping
to reduce xerostomia presented at American Society of Clinical Oncology
(ASCO) Annual Meeting
- Phase 3 studies initiated with human papillomavirus vaccine by partner
GlaxoSmithKline
- Rights to chitinase technology targeting asthma acquired from Yale
University; data published in June 11 issue of Science
- Preclinical data on EphA2 vaccine technology's potential to suppress
tumor growth presented at American Association for Cancer Research
(AACR) Annual Meeting
- Listeria-mediated technology acquired from Cerus Corporation for use in
developing EphA2-targeted cancer vaccines
- $168 million in MedImmune Vaccines 5.25% convertible debt redeemed
GAITHERSBURG, Md., July 22 /PRNewswire-FirstCall/ -- MedImmune, Inc.
(Nasdaq: MEDI) today announced that product sales for the 2004 second quarter
increased 13 percent over the 2003 second quarter to $91 million, primarily
due to a 10-percent increase in sales of Synagis (palivizumab) to $56 million.
Total revenues for the 2004 second quarter were $94 million versus the 2003
second quarter revenues of $113 million. The 2003 quarter included $32 million
in other revenues, primarily from one-time milestone payments associated with
the June 2003 approval of FluMist (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 season.
MedImmune's quarterly results are heavily impacted by the seasonal use of
two of its four marketed products, Synagis and FluMist, both of which are
prescribed to help prevent serious respiratory viruses that most commonly
occur in the fall and winter months. Sales in the 2004 second quarter of the
company's two other products, Ethyol (amifostine) and CytoGam(R)
(cytomegalovirus immune globulin intravenous (human)), grew by four percent to
$25 million and 123 percent to $8 million, respectively.
Total revenues in the first six months of 2004 grew to $583 million,
driven by a 12-percent increase in product sales to $574 million from $512
million in the first half of 2003. In the first six months of 2004, worldwide
sales of Synagis were $478 million; sales of Ethyol were $49 million; CytoGam
sales were $18 million; and FluMist revenues (including product sales,
royalties and reimbursements) totalled $33 million.
"During the first six months of 2004, we have made excellent progress in
several key areas of our business," commented David M. Mott, president and
chief executive officer. "We regained full ownership of the FluMist franchise
and all related technology, including CAIV-T (Cold Adapted Influenza Vaccine-
Trivalent) now in Phase 3 development. We began implementing our plan to
demonstrate that a live, attenuated vaccine delivered intranasally may be a
superior flu vaccine in children. In addition, we added exciting new targets
to our pipeline and continued to advance several important programs in the
clinic. We are encouraged about the direction our commercial and development-
stage pipeline is headed."
On April 27, 2004, MedImmune announced the dissolution of its relationship
with Wyeth for the development and marketing of the company's influenza
vaccine technology. At that time, MedImmune identified certain charges
associated with the termination of the collaboration with Wyeth that would
affect its results for the remainder of 2004. These included estimated costs
associated with the impairment of intangible assets and acquired in-process
research and development (IPR&D), as well as technology transfer and
transition expenses. In the discussion below, MedImmune has provided the
overall results for both the second quarter and first half of 2004 with and
without the impact of these charges, as well as a reconciliation in the
accompanying schedules so that the underlying trends in the operations of the
business can more readily be identified.
Additional Results for the 2004 Second Quarter
For the second quarter of 2004, MedImmune reported a net loss of $100
million, or $0.40 per share, compared to net earnings in the 2003 second
quarter of $13 million, or $0.05 per diluted share. Excluding the charges
associated with the termination of the Wyeth agreements, MedImmune's net loss
for the 2004 second quarter was $29 million, or $0.12 per share.
Gross margins on product sales were 59 percent in the 2004 quarter and 71
percent in the 2003 quarter. The decline in gross margins is primarily related
to the write-down of 2004/2005 FluMist seasonal inventory produced in the
second quarter of 2004.
Research and development (R&D) expenses increased to $57 million in the
2004 second quarter from $30 million in the 2003 second quarter, due to a
larger number of new and ongoing clinical and preclinical studies,
particularly for FluMist, CAIV-T, Numax and Vitaxin.
Selling, General and Administrative (SG&A) costs in the 2004 second
quarter increased to $58 million from $49 million in the comparable 2003
period, due primarily to additional ongoing costs associated with reacquiring
the influenza vaccines franchise from Wyeth, including the related expansion
of the pediatric sales and marketing organization.
Cash and marketable securities as of June 30, 2004 were $1.8 billion, down
from $1.9 billion as of December 31, 2003, as operating cash flow was more
than offset by the retirement of $168 million of MedImmune Vaccines'
convertible debt, capital expenditures and by payments associated with
reacquiring the influenza vaccines franchise.
Additional Results for Six-Month Period Ended June 30, 2004
For the first six months of 2004, MedImmune reported net earnings of $11
million, or $0.04 per diluted share, compared to net earnings of $123 million,
or $0.48 per diluted share in the first six months of 2003. Excluding the
charges associated with the termination of the Wyeth agreements, MedImmune's
net earnings for the 2004 first half were $82 million or $0.33 per diluted
share.
Gross margins on product sales for the 2004 first half were 66 percent
compared to 75 percent in the 2003 first half, due to the impact of 2003/2004
FluMist seasonal sales and the related cost of sales recognized in the first
quarter of 2004. Gross margins for the 2004 first half were also reduced by
the write-down of the 2004/2005 FluMist seasonal inventory produced in the
first half of 2004.
R&D expenses increased to $107 million in the 2004 first half from $61
million in the 2003 first half due to the larger number of clinical and
preclinical studies. Reflecting the company's increased commitment to
bringing products to market as a part of its five-year plan, MedImmune's R&D
expenditures in the first six months of 2004 were 19 percent of product sales
as compared to 12 percent in the first half of 2003.
SG&A costs in the 2004 first half increased to $182 million from $164
million in the 2003 first half, due primarily to additional costs associated
with reacquiring the influenza vaccines franchise from Wyeth, including the
expansion of the pediatric sales and marketing organization, as well as
increased legal costs. In both the 2004 and 2003 six-month periods, SG&A
costs were 32 percent of product sales.
Other operating expenses in the 2004 first half dropped to $4 million from
$23 million in the 2003 first half due to the shift in certain costs of
FluMist manufacturing that are in inventory and cost of goods sold this year,
but were expensed as other operating costs in the first quarter of last year.
Looking Ahead in 2004
As a convenience to investors, MedImmune is providing below its guidance
for the 2004 third quarter for the first time. The company is also
reconfirming its previously stated annual guidance for 2004 issued on April
27, 2004. Guidance and objectives provided by the company 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 Quarter Ending September 30, 2004
* Revenues: projected to range from $85 million to $90 million
* Loss per share: projected to range from $0.26 to $0.29 (or loss per
share of $0.22 to $0.25, excluding approximately $5 million in IPR&D
costs and approximately $12 million in transition expenses associated
with the termination of the Wyeth collaboration)
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 22,
2004 at 8:00 a.m. eastern time. The live webcast may be accessed in the
investor section of MedImmune's website, http://www.medimmune.com. A replay of
the webcast will also be available via our website until July 29, 2004. An
audio replay of the webcast will be available, beginning at 10:00 a.m. eastern
time on July 22, 2004 and ending at midnight on July 29, 2004 by calling (888)
286-8010. The passcode for the audio replay is 13886622.
About MedImmune, Inc.
MedImmune strives to provide better medicines to patients, new medical
options for physicians, rewarding careers for employees, and increased value
to shareholders. Dedicated to advancing science and medicine to help people
live better lives, the company is focused on pediatric infectious diseases,
cancer and inflammatory diseases. With approximately 1,800 employees
worldwide, MedImmune is headquartered in Maryland. For more information, visit
the company's website at http://www.medimmune.com.
DISCLOSURE NOTICE: The information contained in this document is as of
June 30, 2004 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, 2003, 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
respiratory syncytial virus (RSV) disease and influenza occur primarily during
the fall and 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 is received, such products will ultimately achieve commercial
success. This press release, including the reconciliation of certain data
presented in this release to their most comparable measures reported in
accordance with generally accepted accounting principles (GAAP), 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.
Consolidated Statements of Operations (Unaudited)(1)
(in thousands, except per share data)
Three Months Ended June 30,
2004 2003
Revenues:
Product sales $ 90,744 $ 80,596
Other revenue 2,932 31,935
93,676 112,531
Costs and expenses:
Cost of sales 37,328 23,663
Research and development 57,161 29,824
Selling, general and administrative 58,080 48,841
Other operating expenses 2,041 1,415
Impairment of intangible asset 72,957 -
Acquired in-process research and
development (IPR&D) 24,713 -
Technology transfer and transition
expenses 11,540 -
263,820 103,743
Interest income, net 14,449 12,706
Gain/(loss) on investment activities 464 (139)
(Loss)/earnings before income taxes (155,231) 21,355
(Benefit)/provision for income taxes(2) (54,918) 7,901
Net (loss)/earnings $ (100,313) $ 13,454
Basic (loss)/earnings per share $ (0.40) $ 0.05
Shares used in computing basic
(loss)/earnings per share 248,722 252,106
Diluted (loss)/earnings per share $ (0.40) $ 0.05
Shares used in computing diluted
(loss)/earnings per share 248,722 258,200
Six Months Ended June 30,
2004 2003
Revenues:
Product sales $ 573,953 $ 511,705
Other revenue 8,724 35,446
582,677 547,151
Costs and expenses:
Cost of sales 195,521 127,003
Research and development 106,925 61,495
Selling, general and administrative 181,812 164,085
Other operating expenses 3,859 22,871
Impairment of intangible asset 72,957 -
Acquired in-process research and
development (IPR&D) 24,713 -
Technology transfer and transition
expenses 11,540 -
597,327 375,454
Interest income, net 28,483 23,897
Gain/(loss) on investment activities 7,171 (396)
(Loss)/earnings before income taxes 21,004 195,198
(Benefit)/provision for income taxes(2) 10,289 72,223
Net (loss)/earnings $ 10,715 $ 122,975
Basic (loss)/earnings per share $ 0.04 $ 0.49
Shares used in computing basic
(loss)/earnings per share 248,455 251,836
Diluted (loss)/earnings per share $ 0.04 $ 0.48
Shares used in computing diluted
(loss)/earnings per share 249,812 257,390
(1) Certain prior period amounts have been reclassified to conform to the
current presentation.
(2) Income tax expense (benefit) is recognized using the company's
projected effective tax rate, which is based on projections of income
and expense for the entire year. As required by GAAP, the tax effect
of separately reported discrete items is recognized in the period in
which they occur. Approximately $6.9 million of the acquired IPR&D
recognized in the second quarter is not deductible for income tax
purposes causing the quarterly effective rate to differ from the
projected annual effective rate. Additional IPR&D charges during 2004
are all expected to be deductible. Depending upon the company's
reported earnings before taxes for the remainder of 2004, the impact
of the nondeductible IPR&D may cause the company's year-to-date
effective tax rate to fluctuate. The chart below details the
company's quarterly and year-to-date tax rates for 2004 (in millions):
Three Months Ended Six Months Ended
March 31 June 30 June 30
Earnings/(loss) before
income taxes $ 176.2 $ (155.2) $ 21.0
Calculated ordinary income tax
expense (benefit) based on an
effective rate of 37%, excluding
non-deductible IPR&D charge $ 65.2 $ (57.4) $ 7.8
Nondeductible IPR&D charge (tax
effected at 37%) $ 0.0 $ 2.5 $ 2.5
Net earnings/(loss) $ 111.0 $ (100.3) $ 10.7
Projected effective tax rate
(calculated as ordinary income tax
expense (benefit) plus the tax
effect of the nondeductible IPR&D
divided by pre-tax income) 37% 35% 49%
MedImmune, Inc.
Selected Financial Information (Unaudited)
(in thousands, except per share data)
Presented in the following table is a reconciliation of reported net
earnings (loss) under GAAP to net earnings (loss) excluding items related to
the termination of the Wyeth collaboration for FluMist. The transition
activities associated with Wyeth's exit from the collaboration are expected to
be complete by the end of 2004. MedImmune's management excludes the impact of
the charges associated with the termination of the Wyeth collaboration when
evaluating the company's ongoing performance, and provides the following
reconciliation to aid investors in their understanding of underlying
performance trends.
Three Months Ended June 30,
2004 2003
Item:
Net (loss) earnings, as reported(1) $ (100,313) $ 13,454
Impairment of intangible asset(2) 72,957 -
Acquired in-process research and
development (IPR&D)(3) 24,713 -
Technology transfer and transition
expenses(4) 11,540 -
Income tax benefit(5) (37,890) -
Net (loss) earnings, as adjusted $ (28,993) $ 13,454
Basic (loss) earnings per share,
as reported $ (0.40) $ 0.05
Diluted (loss) earnings per share,
as reported $ (0.40) $ 0.05
Basic (loss) earnings per share,
as adjusted $ (0.12) $ 0.05
Diluted (loss) earnings per share,
as adjusted $ (0.12) $ 0.05
Shares used to compute
(loss)/earnings per share:
Basic 248,722 252,106
Diluted 248,722 258,200
Six Months Ended June 30,
2004 2003
Item:
Net (loss) earnings, as reported(1) $ 10,715 $ 122,975
Impairment of intangible asset(2) 72,957 -
Acquired in-process research and
development (IPR&D)(3) 24,713 -
Technology transfer and transition
expenses(4) 11,540 -
Income tax benefit(5) (37,890) -
Net (loss) earnings, as adjusted $ 82,035 $ 122,975
Basic (loss) earnings per share,
as reported $ 0.04 $ 0.49
Diluted (loss) earnings per share,
as reported $ 0.04 $ 0.48
Basic (loss) earnings per share,
as adjusted $ 0.33 $ 0.49
Diluted (loss) earnings per share,
as adjusted $ 0.33 $ 0.48
Shares used to compute
(loss)/earnings per share:
Basic 248,455 251,836
Diluted 249,812 257,390
(1) Prepared in accordance with accounting principles generally accepted
in the United States (GAAP).
(2) Represents the addback of the noncash impairment charge associated
with the termination of our collaboration with Wyeth for the
unamortized portion of the intangible asset initially recorded upon
our acquisition of MedImmune Vaccines, Inc.
(3) Represents the addback of the portion of the amounts paid to Wyeth for
the reacquisition of the influenza vaccines franchise that was
allocated to IPR&D.
(4) Represents the addback of the payments for certain transition
activities, largely comprised of amounts paid to Wyeth for the
manufacture of CAIV-T clinical trial materials, transition of clinical
trial data, and transfer of manufacturing technology knowledge.
(5) Represents the subtraction of the income tax benefit associated with
the impairment of intangible asset, the deductible portion of IPR&D
and the technology transfer and transition charges.
MedImmune, Inc.
Condensed Consolidated Balance Sheets(1)
(in thousands)
June 30, December 31,
2004 2003
(unaudited)
Assets:
Cash and marketable securities $ 1,774,886 $ 1,900,149
Trade and contract receivables, net 20,994 166,220
Inventory, net 68,361 91,703
Deferred taxes, net 183,510 180,602
Property and equipment, net 294,307 273,597
Goodwill and intangible assets, net 31,067 110,308
Other assets 54,638 72,091
$ 2,427,763 $ 2,794,670
Liabilities and shareholders' equity:
Accounts payable $ 19,035 $ 22,116
Accrued expenses 162,296 299,843
Advance from Wyeth - 51,910
Other liabilities 33,981 39,507
Long term debt 507,545 682,076
Shareholders' equity 1,704,906 1,699,218
$ 2,427,763 $ 2,794,670
Common shares outstanding 249,023 248,036
(1) Certain prior period amounts have been reclassified to conform to the
current presentation.
SOURCE MedImmune, Inc.
-0- 07/22/2004
/CONTACT: John Filler, +1-301-398-4086, or Media: Jamie Lacey,
+1-301-398-4035, both of MedImmune, Inc./
/Web site: http://www.medimmune.com /
(MEDI)
CO: MedImmune, Inc.
ST: Maryland
IN: BIO HEA MTC
SU: ERN ERP CCA
RJ-MV
-- DCTH017 --
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