Recent Highlights
-- Product sales increased 12 percent for both the third quarter and nine-month period ending September 30, 2004
-- Synagis(R) sales increased 25 percent in the 2004 third quarter and 10 percent for the first nine months of 2004
-- FluMist(R) price substantially reduced for the 2004/2005 flu season
-- Phase 3 trials initiated for CAIV-T, next-generation, refrigerator- stable formulation of FluMist
-- Phase 3 trials for Numax planned to start during fourth quarter 2004
-- Liquid Synagis approved by the U.S. Food and Drug Administration; launch anticipated in 2005/2006 season
-- Supplemental biological license application filed to use reverse genetics technology in manufacturing process for FluMist and CAIV-T
-- IL-9 antibody Phase 1 clinical trial initiated
-- TIRC7 technology for use in autoimmune diseases licensed from GenPat77
-- Preclinical data on EphA2's potential role in the progression of ovarian cancer published in August 1, 2004 issue of Clinical Cancer Research
GAITHERSBURG, Md., Oct 21, 2004 (PRNewswire-FirstCall via COMTEX) -- MedImmune, Inc. today announced that product sales for the 2004 third quarter increased 12 percent over the 2003 third quarter to $92 million, primarily due to a 25-percent increase in sales of Synagis (palivizumab) to $61 million. Sales of Ethyol(R) (amifostine) increased four percent to $21 million. Total revenues for the 2004 third quarter were $93 million versus $99 million in the 2003 third quarter. The 2003 quarter included $17 million in other revenues, comprised primarily of milestone and other payments for FluMist (Influenza Virus Vaccine Live, Intranasal) from Wyeth, the company's former co-promotion partner for the vaccine.
Product sales for the first nine months of 2004 grew 12 percent to $666 million, driven primarily by a 10-percent increase in sales of Synagis to $539 million. In the first nine months of 2004, sales of Ethyol were $71 million. Through September 30, 2004, FluMist revenues totaled $33 million, mostly from sales recognized in the first and second quarters of 2004 for vaccine sold in the 2003/2004 flu season. Total revenues for the 2004 nine-month period increased four percent to $675 million from $647 million in the 2003 nine-month period.
"We continue to make significant progress advancing our development-stage candidates," stated David M. Mott, president and chief executive officer. "We are particularly pleased to have initiated our Phase 3 studies for CAIV-T, which if successfully developed, could begin to contribute meaningfully to our revenues and earnings in 2007. We look forward to further expansion in our pipeline in the near future as we strive to introduce three new products to market by 2009."
In connection with the dissolution of MedImmune's relationship with Wyeth for the development and marketing of the company's influenza vaccine technology in the second quarter of 2004, MedImmune identified certain charges 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 third quarter and first nine months 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 Third Quarter
For the third quarter of 2004, MedImmune reported a net loss of $65 million, or $0.26 per share, compared to a net loss of $16 million, or $0.07 per share, for the third quarter of 2003. Excluding the charges associated with the termination of the Wyeth agreements, the net loss for the 2004 third quarter was $55 million, or $0.22 per share.
Gross margins on product sales were 56 percent in the 2004 quarter and 63 percent in the 2003 quarter. The decrease in gross margins is primarily due to the permanent write downs of 2004/2005 FluMist seasonal inventory produced in the 2004 third quarter.
Research and development (R&D) expenses increased to $73 million in the 2004 quarter from $54 million in the 2003 quarter. The increase in R&D expenses is related to a large number of new and ongoing clinical and preclinical studies, particularly for CAIV-T, Numax and Vitaxin.
Selling, general and administrative (SG&A) costs increased to $68 million in the 2004 third quarter from $52 million in the 2003 quarter. The increase is due primarily to increases in programs associated with the reacquisition of the influenza vaccines franchise from Wyeth, including the expansion of the pediatric commercial organization, as well as new marketing and medical education programs related to Synagis and FluMist.
Additional Results for Nine-Month Period Ended September 30, 2004
For the first nine months of 2004, MedImmune reported a net loss of $54 million, or $0.22 per share, compared to net income of $107 million, or $0.42 per diluted share in the first nine months of 2003. Excluding the charges associated with the termination of the Wyeth agreements, MedImmune's net earnings in the first nine months of 2004 were $27 million, or $0.11 per diluted share.
Gross margins on product sales for the 2004 nine-month period were 65 percent compared to 73 percent for the 2003 nine-month period. The decline in gross margins is primarily related to the cost of sales for 2003/2004 seasonal sales of FluMist in the first quarter of 2004 and the permanent write downs of 2004/2005 FluMist inventory produced in the first nine months of 2004.
R&D expenses for the first nine months of 2004 were $179 million versus $115 million in the 2003 period. The increase in R&D expenses is related to a large number of new and ongoing clinical and preclinical studies, particularly for CAIV-T, Numax and Vitaxin.
SG&A expenses in the 2004 nine-month period increased to $250 million from $216 million in the 2003 nine-month period, due primarily to costs associated with expanding the pediatric commercial organization and increased marketing activities, as well as increased legal costs.
Other operating expenses in the 2004 nine-month period decreased to $6 million from $25 million in the 2003 nine-month period due to the shift in costs of FluMist manufacturing that are included in inventory and cost of goods sold this year, but were expensed as other operating costs in the first quarter of 2003.
Cash and marketable securities at September 30, 2004 were $1.6 billion, down from $1.9 billion at December 31, 2003, primarily due to the redemption of $169 million in MedImmune Vaccines convertible debt in the 2004 first quarter, payments associated with the reacquisition and transition of the influenza vaccines franchise, capital expenditures, and the repurchase of approximately $15 million of our common stock during the 2004 third quarter.
Looking Ahead in 2004
As a convenience to investors, MedImmune is providing an update to its previously issued guidance for 2004. For the first time, the company is also providing its guidance for the 2004 fourth quarter. 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 Year Ending December 31, 2004
-- Revenues: projected to range from $1.11 billion to $1.15 billion
-- Product sales: approximately low double-digit increase over 2003
* Synagis: approximately 10 percent increase over 2003
* Ethyol: comparable to 2003 sales levels
-- Total revenues associated with FluMist: $45 million to $57 million
-- Gross margins: approximately 68 percent to 69 percent
-- R&D: approximately 31 percent of product sales (or 28 percent excluding
about $35 million in expenses associated with the Wyeth transition
activities)
-- SG&A: approximately 36 percent of product sales
-- Tax rate: approximately 30 percent (or 37 percent excluding
approximately $7 million of non-deductible IPR&D costs)
-- Earnings per share: projected to range from a loss of $0.07 to a loss
of $0.11 (or diluted EPS of $0.25 to $0.29 excluding the estimated $30
million in IPR&D costs, $35 million in transition expenses, and $73
million for the one-time charge associated with the termination of the
Wyeth collaboration)
Guidance for the Quarter Ending December 31, 2004
-- Revenues: projected to range from $435 million to $475 million
-- Earnings per share: projected to range from $0.11 to $0.15 (or $0.14 to
$0.18 excluding approximately $1 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, October 21, 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 October 28, 2004. An audio replay of the webcast will be available, beginning at 11:00 a.m. eastern time on October 21, 2004 and ending at midnight October 28, 2004 by calling (888) 286-8010. The passcode for the audio replay is 31165399.
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 1,900 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 September 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, as amended, 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 GAAP measures, 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.
Consolidated Statements of Operations (Unaudited) (1)
(in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
Revenues:
Product sales $92,276 $82,283 $666,229 $593,988
Other revenue 306 17,076 9,030 52,522
92,582 99,359 675,259 646,510
Costs and expenses:
Cost of sales 40,379 30,526 235,900 157,529
Research and
development 72,553 53,654 179,478 115,149
Selling, general
and administrative 67,922 51,994 249,734 216,079
Other operating
expenses 2,502 1,935 6,361 24,806
Impairment of
intangible asset -- -- 72,957 --
Acquired in-process
research and
development (IPR&D) 3,790 -- 28,503 --
Technology transfer
and transition
expenses 11,916 -- 23,456 --
199,062 138,109 796,389 513,563
Interest income, net 15,241 11,552 43,724 35,449
(Loss) gain on
investment activities (11,919) 1,214 (4,748) 818
(Loss) earnings before
income taxes (103,158) (25,984) (82,154) 169,214
(Benefit) provision
for income taxes (2) (38,122) (9,614) (27,833) 62,609
Net (loss) earnings $ (65,036) $(16,370) $(54,321) $106,605
Basic (loss) earnings
per share $(0.26) $(0.07) $(0.22) $0.42
Shares used in
computing basic
(loss) earnings per
share 248,869 249,371 248,590 250,981
Diluted (loss) earnings
per share $(0.26) $(0.07) $(0.22) $0.42
Shares used in
computing diluted
(loss) earnings
per share 248,869 249,371 248,590 254,684
(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 of 2004 is not deductible for income
tax purposes causing the year-to-date effective rate to differ from
the projected annual effective rate. All remaining IPR&D charges
during 2004 are 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):
Nine Months
Three Months Ended Ended
March 31 June 30 September 30 September 30
Earnings (loss)
before income taxes $ 176.2 $(155.2) $(103.2) $(82.2)
Calculated ordinary
income tax expense
(benefit) based on
an effective rate of
37%, excluding
non-deductible IPR&D
charge $ 65.2 $(57.4) $(38.1) $(30.4)
Nondeductible IPR&D
charge (tax effected
at 37%) $ 0.0 $2.5 $0.0 $2.5
Net earnings/(loss) $ 111.0 $(100.3) $(65.0) $(54.3)
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% 37% 34%
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 Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
Item:
Net (loss) earnings,
as reported (1) $(65,036) $(16,370) $(54,321) $106,605
Impairment of
intangible asset (2) -- -- 72,957 --
Acquired in-process
research and
development (3) 3,790 -- 28,503 --
Technology transfer
and transition
expenses (4) 11,916 -- 23,456 --
Income tax benefit (5) (5,765) -- (43,655) --
Net (loss) earnings,
as adjusted $(55,095) $(16,370) $26,940 $106,605
Basic (loss) earnings
per share, as
reported $(0.26) $(0.07) $(0.22) $0.42
Diluted (loss) earnings
per share, as reported $(0.26) $(0.07) $(0.22) $0.42
Basic (loss) earnings
per share, as adjusted $(0.22) $(0.07) $0.11 $0.42
Diluted (loss) earnings
per share, as adjusted $(0.22) $(0.07) $0.11 $0.42
Shares used to compute
(loss) earnings
per share:
Basic, as reported 248,869 249,371 248,590 250,981
Diluted, as reported 248,869 249,371 248,590 254,684
Basic, as adjusted 248,869 249,371 248,590 250,981
Diluted, as adjusted 248,869 249,371 251,087 254,684
(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 in-process research and development (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, deductible portion of IPR&D and
the technology transfer and transition charges.
MedImmune, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
September 30, December 31,
2004 2003
(unaudited)
Assets:
Cash and marketable securities $1,582,441 $1,900,149
Trade and contract receivables, net 70,055 166,220
Inventory, net 79,660 91,703
Deferred taxes, net 220,738 180,602
Property and equipment, net 306,887 273,597
Goodwill and intangible assets, net 28,885 110,308
Other assets 47,913 72,091
$2,336,579 $2,794,670
Liabilities and shareholders' equity:
Accounts payable $20,600 $22,116
Accrued expenses 143,248 299,843
Advance from Wyeth -- 51,910
Other liabilities 30,972 39,507
Long term debt 507,323 682,076
Shareholders' equity 1,634,436 1,699,218
$2,336,579 $2,794,670
Common shares outstanding 248,658 248,036
SOURCE MedImmune, Inc.
Investors: Peter Vozzo, +1-301-398-4358, or John Filler, +1-301-398-4086, Media: Jamie Lacey, +1-301-398-4035, all for MedImmune, Inc.
http://www.medimmune.com/