-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LpK7EaR9SYzUpbkhJ+9xF/+00KZxkjwsHfkI7m90bPVlePNSaZKuuMdjS16/OJSn JPTkhlpKFGjkUBHm365tpQ== 0000916641-99-000868.txt : 19991115 0000916641-99-000868.hdr.sgml : 19991115 ACCESSION NUMBER: 0000916641-99-000868 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MEDCO RESEARCH INC CENTRAL INDEX KEY: 0000723385 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 953318451 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-09771 FILM NUMBER: 99749061 BUSINESS ADDRESS: STREET 1: 85 T W ALEXANDER DRIVE P O BOX 13886 STREET 2: STE 308 CITY: RESEARCH TRIANGLE PA STATE: NC ZIP: 27709 BUSINESS PHONE: 9195498117 MAIL ADDRESS: STREET 1: 85 T W ALEXANDER DRIVE STREET 2: STE 308 CITY: RESEARCH TRIANGLE PA STATE: NC ZIP: 27709 10-Q 1 THIRD QUARTER REPORT Medco Research, Inc. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 1999 OR [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission file number 1-9771 MEDCO RESEARCH, INC. (Exact name of registrant as specified in its charter) Delaware 95-3318451 -------- ---------- (State or other Jurisdiction of (I.R.S. Identification No.) Employer incorporation or organization) 7001 Weston Parkway, Suite 300, Cary, North Carolina 27513 ---------------------------- ----- (Address of principal executive offices) (Zip Code) (919) 653-7001 -------------- (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Common Stock together with associated Common Stock Purchase Rights New York Stock Exchange ---------------------------- ----------------------- (Title of Class) (Name of each exchange on which registered) Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (b) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO --------- --------- Indicate the number of shares outstanding of common stock, as of the latest practical date 10,473,295 as of October 29, 1999. Pursuant to the Securities Exchange Act of 1934 Release 15502 and Rule 240.03 (b), the pages of this document have been numbered sequentially. The total pages contained herein are 14. 1 Medco Research, Inc. PART I - FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets
September 30, December 31, 1999 1998* -------------------------------------------------- (in thousands except share data) (Unaudited) Assets Current assets: Cash and cash equivalents $ 4,407 $ 4,742 Investments held to maturity 18,508 21,434 Accounts and notes receivable: Royalties 9,699 8,349 Other 72 85 Accrued interest income 885 578 Prepaid expenses and other 591 243 Deferred tax asset - current portion 458 458 -------------------------------------------------- Total current assets 34,620 35,889 Investments held to maturity 32,162 25,074 Property and equipment, at cost, net of accumulated depreciation and amortization 607 465 Patent, trademark and distribution rights, at cost, net of accumulated amortization 1,166 1,629 Deferred tax asset 1,228 1,228 -------------------------------------------------- Total assets $69,783 $64,285 ================================================== Liabilities and stockholders' equity Current liabilities: Accounts payable and accrued expenses $3,013 $3,401 Accrued royalties 1,916 2,166 Accrued compensation 348 509 -------------------------------------------------- Total current liabilities 5,277 6,076 Other long-term liabilities - 150 -------------------------------------------------- Total liabilities 5,277 6,226 Stockholders' equity, Common stock, no par value, authorized 40,000,000 shares; shares issued of 11,427,595 and 11,298,732 at September 30, 1999 and December 31, 1998, respectively; shares outstanding of 10,353,295 and 10,409,332 at September 30, 1999 and December 31, 1998, respectively 55,288 53,806 Retained earnings 24,482 15,061 Cost of stock held in treasury, 1,074,300 and 889,400 shares at September 30, 1999 and December 31, 1998, respectively (15,264) (10,808) -------------------------------------------------- Total stockholders' equity 64,506 58,059 -------------------------------------------------- Commitments and contingencies -------------------------------------------------- Total liabilities and stockholders' equity $69,783 $64,285 ================================================== See accompanying notes to consolidated financial statements. *Abstracted from audited year-end financial statements.
2 Medco Research, Inc. Consolidated Statements of Operations (Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED ---------------------------------------------------------------------------------------- September 30, September 30, September 30, September 30, (in thousands, except per share data) 1999 1998 1999 1998 ---------------------------------------------------------------------------------------- Royalty revenue $ 9,210 $ 6,426 $25,713 $19,191 Royalty expense 1,810 1,063 4,718 3,246 ---------------------------------------------------------------------------------------- Gross margin 7,400 5,363 20,995 15,945 ---------------------------------------------------------------------------------------- Operating expenses: Research & development costs 2,484 1,379 6,836 6,942 General and administrative expenses 701 635 2,232 1,832 ---------------------------------------------------------------------------------------- 3,185 2,014 9,068 8,774 ---------------------------------------------------------------------------------------- Operating income 4,215 3,349 11,927 7,171 Other income: Interest income 778 722 2,249 1,995 Other income - - - 4,000 ---------------------------------------------------------------------------------------- Income before taxes 4,993 4,071 14,176 13,166 Provision for income taxes 1,675 362 4,755 1,064 ---------------------------------------------------------------------------------------- Net income $ 3,318 $ 3,709 $ 9,421 $12,102 ======================================================================================== Basic earnings per share $ 0.32 $ 0.35 $ 0.91 $ 1.15 ======================================================================================== Diluted earnings per share $ 0.31 $ 0.34 $ 0.88 $ 1.11 ======================================================================================== Weighted average shares outstanding 10,347 10,586 10,347 10,554 ======================================================================================== Net effect of dilutive stock options based on treasury stock method using average market price 411 396 400 340 ======================================================================================== Weighted average shares outstanding Assuming dilution 10,758 10,982 10,747 10,894 ======================================================================================== See accompanying notes to consolidated financial statements.
3 Medco Research, Inc. Consolidated Statements of Stockholders' Equity (Unaudited) NINE MONTHS ENDED SEPTEMBER 30, 1999 (in thousands)
Common Stock ---------------------------------- Cost of Number of Retained stock held shares Amount Earnings in treasury Total --------------------------------------------------------------------------------------------- Balance at December 31, 1998 10,409 $53,806 $15,061 $(10,808) $58,059 Stock options exercised 89 942 - - 942 Stock warrants exercised 40 540 - - 540 Purchase of stock held in treasury (185) - - (4,456) (4,456) Net income - - 9,421 - 9,421 --------------------------------------------------------------------------------------------- Balance at September 30, 1999 10,353 $55,288 $24,482 $(15,264) $64,506 =============================================================================================
See accompanying notes to consolidated financial statements. 5 Medco Research, Inc. Consolidated Statements of Cash Flows (Unaudited)
NINE MONTHS ENDED ----------------------------------------------- September 30, September 30, 1999 1998 ----------------------------------------------- (in thousands) Operating activities: Net income $9,421 $12,102 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation of property and equipment 150 72 Amortization of patent, trademark and distribution rights 463 450 Net amortization of investment discount (9) (276) Changes in operating assets and liabilities: Accounts receivable (1,337) (277) Prepaid expenses (348) (140) Accounts payable and accrued expenses (699) (415) Accrued royalty expense (250) (199) Accrued interest income (307) (104) Deferred tax asset - 321 Deferred royalty payments - (1,101) ----------------------------------------------- Net cash provided by operating activities $7,084 $10,433 -----------------------------------------------
(Continued) 6 Medco Research, Inc. Consolidated Statements of Cash Flows (Unaudited)
NINE MONTHS ENDED ----------------------------------------------- September 30, September 30, 1999 1998 ----------------------------------------------- (in thousands) Investing activities: Purchase of investments held to maturity (21,153) (34,293) Maturity of investments held to maturity 17,000 24,922 Purchases of property and equipment (292) (19) Purchases of patents - (713) ----------------------------------------------- Net cash (used in) investing activities (4,445) (10,103) ----------------------------------------------- Financing activities: Proceeds from exercise of options 942 871 Proceeds from exercise of warrants 540 - Purchase of stock held in treasury (4,456) - ----------------------------------------------- Net cash provided by (used in) financing activities (2,974) 871 ----------------------------------------------- Increase (decrease) in cash and cash equivalents (335) 1,201 Cash and cash equivalents at beginning of period 4,742 2,726 ----------------------------------------------- Cash and cash equivalents at end of period $4,407 $3,927 ===============================================
See accompanying notes to consolidated financial statements. 7 Medco Research, Inc. NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS ---------------------------------------------------- General The accompanying interim financial statements have been prepared by Medco Research, Inc. (the "Company") in accordance with generally accepted accounting principles. Certain disclosures and information normally included in financial statements have been condensed or omitted. In the opinion of the management of the Company, these financial statements contain all adjustments (all of a recurring nature) necessary for a fair presentation for the interim periods. These statements should be read in conjunction with the financial statements and notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 1998. Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Adoption of New Accounting Pronouncements The Company adopted Statement of Financial Accounting Standards No. 130 "Reporting Comprehensive Income" ("SFAS No. 130") for its fiscal year ending December 31, 1998. SFAS No. 130 requires the Company to display an amount representing the total comprehensive income for the period in a financial statement which is displayed with the same prominence as other financial statements. The Company has no items of other comprehensive income in any period presented and therefore is not required to report comprehensive income. The Company will adopt Statement of Financial Accounting Standards No. 133 "Accounting for Derivative Investments and Hedging Activities" ("SFAS No. 133") for its fiscal year ending December 31, 2000. SFAS No. 133 establishes a new model for accounting for derivatives and hedging activities and supersedes and amends a number of existing standards. The adoption of this pronouncement is expected to have no impact on the Company's results of operations or financial condition. Contracts In May 1999, the Company terminated a Clinical Study Agreement with ClinTrials Research, Inc. The parties are in the process of negotiating the amount of the final payment, if any, due to ClinTrials Research under the agreement. The Company has accrued its best estimate of the amount of any such possible final payment at September 30, 1999 and does not believe that any payment required will have a material adverse affect on its financial condition or results of operations. 8 Medco Research, Inc. Contingency There are no legal proceedings pending against the Company. However, on October 3, 1997, Richard A. Wilson, Debra A. Angello, and Paul S. Angello ("Plaintiffs") filed a complaint against Fujisawa, USA, Inc. ("Fujisawa") in the United States District Court, District of Oregon, alleging that Fujisawa's sale of Adenoscan in the United States induces, or contributes to, the infringement of plaintiffs' U.S. Patent No. 4,824,660 ("the `660 patent"), entitled "Method of Determining the Viability of Tissue in an Organism" which the Patent Office issued on April 25, 1989. This action has been settled. The plaintiffs granted Fujisawa a world-wide, exclusive, paid-up license for the use of adenosine under the `600 patent in consideration for Fujisawa's agreement to pay fixed sub-license fees over the seven year remaining life of the`660 patent. Fujisawa sub-licensed the Company under the `660 patent and the Company agreed to pay Fujisawa sub-license fees equal to 50%, or an aggregate of $2.25 million, of the `660 patent license fees. The Company does not believe that payment of these fees will have any material effect on its financial condition or results of operations. The `660 license and sub-license are royalty-free. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS Third Quarter and Nine Months of 1999 Compared to Third Quarter and Nine Months of 1998 Net Revenues. The Company's third quarter and first nine months of 1999 royalty revenues increased to $9.210 million and $25.713 million from $6.426 million and $19.191 million, an increase of 43% and 34% respectively, due to year-over-year increases in unit sales of Adenoscan and Adenocard by Fujisawa Healthcare, Inc. ("Fujisawa"), the Company's North American licensee. Substantially all of the royalty revenue of the Company is generated by Fujisawa from its sales of Adenoscan and Adenocard in the United States and Canada. Gross Margin. The Company's third quarter and first nine months of 1999 gross margin from adenosine revenues increased to $7.400 million and $20.995 million from $5.363 million and $15.945 million, an increase of 38% and 32% respectively, due to an increase in the Company's third quarter and first nine months of 1999 royalty revenues of 43% and 34% respectively. Royalty expense for the third quarter and first nine months from adenosine sales increased to $1.810 million and $4.718 million from $1.063 million and $3.246 million, an increase of 70% and 45% respectively, primarily due to a 99% increase in third quarter 1999 net sales of Adenocard, a drug for which the Company pays a royalty of 12.5% of net sales to the University of Virginia Alumni Patents Foundation. Operating Expenses. The Company's third quarter and first nine months of 1999 total operating expenses increased to $3.185 million and $9.068 million from $2.014 million and $8.774 million, an increase of 58% and 3% respectively. Research and development ("R&D") expenditures for the third quarter of 1999 increased to $2.484 million from $1.379 million in 1998, an increase of 80% related to the initiation of AMISTAD II, a phase III study to further investigate the safety and efficacy of PallacorTM, as well as the completion of a phase I study and the initiation of a phase II study of MRE0470, a selective coronary vasodilator during myocardial perfusion imaging procedures to diagnose coronary artery disease. R&D expenditures for the first nine months of 1999 decreased to $6.836 million from $6.942 million in 1998, a decrease of 2%, due 9 Medco Research, Inc. to a one-time charge of $2.361 million to R&D in the second quarter of 1998 for the purchase of Fujisawa's commercialization rights and related intellectual properties for the cardioprotection application of intravenous adenosine offset by increased expenditures in 1999 related to the initiation of AMISTAD II, as well as the initiation and completion of a phase I study and the initiation of a phase II study of MRE0470. General and administrative expenditures for third quarter and the first nine months of 1999 increased to $.701 million and $2.232 million from $.635 million and $1.832 million, an increase of 10% and 22%, primarily due to an increase in expenses in third quarter 1999 related to investor relations and the Company's move to new office space in December 1998. Other Income. Interest income for the third quarter and first nine months of 1999 increased 8% and 13% over the comparable periods in 1998 primarily due to higher investment balances. Other income for the first nine months of 1999 decreased $4 million as a result of the Company's receipt of a $4 million payment in second quarter 1998 from Fujisawa for the assistance provided by the Company to Fujisawa in connection with the contract manufacturing of Adenoscan and Adenocard by a third party and the transfer of the Adenoscan and Adenocard NDAs to Fujisawa. Provision For Income Taxes. The Company recognized tax expense at a rate of 34% during the third quarter and first nine months of 1999 versus 9% and 8% in the third quarter and first nine months of 1998 as a result of the Company fully utilizing its income tax net operating loss carryforward in the fourth quarter of 1998. Earnings Per Share. In the third quarter and first nine months of 1999, the Company had net income of $3.318 million and $9.421 million or $0.31 and $0.88 diluted earnings per share compared to $3.709 million and $12.102 million or $0.34 and $1.11 diluted earnings per share for the year earlier period. This apparent decline in earnings is due to the non-recurring increase in income in the second quarter of 1998 of $1.639 million and the Company recognizing tax expense at a rate of 34% during the third quarter and first nine months of 1999 versus 9% and 8% in the third quarter and first nine months of 1998 as a result of the Company fully utilizing its income tax net operating loss carryforward in the fourth quarter of 1998. On a pro forma basis, excluding the non-recurring increase in income and assuming that the Company had fully utilized its net operating loss carryforward prior to the first quarter of 1998, diluted earnings per share for the third quarter and first nine months of 1998 would have been $0.25 and $0.70 respectively. Third quarter and first nine months earnings per share increased 24% and 26%, respectively, compared to the third quarter and first nine months of 1998 on a pro forma basis. Weighted average common shares and common share equivalents outstanding for third quarter and the first nine months of 1999 were 10.758 million and 10.747 million, respectively, versus 10.982 million and 10.894 million for the comparable periods of the prior year. 10 Medco Research, Inc. LIQUIDITY AND CAPITAL RESOURCES As of September 30, 1999, the Company had total cash and investments of $55.077 million made up of $4.407 million of cash and cash equivalents and $50.670 million of investments in U.S. Treasury Notes, debt securities of various federal governmental agencies, and high quality corporate debt securities. The Company's working capital as of September 30, 1999 was $29.343 million, compared to $29.813 million as of December 31, 1998. The Company will not generate revenues, other than license and milestone payments, from its other products unless and until it or its licensees receive marketing clearance from the FDA and appropriate governmental agencies in other countries. The Company cannot predict the timing of any potential marketing clearance nor can assurances be given that the FDA or such agencies will approve any of the Company's products. For the near term the Company expects to receive substantially all of its royalty revenues from sales of its products in the U.S. by Fujisawa. IMPACT OF INFLATION Although it is difficult to predict the impact of inflation on costs and revenues of the Company in connection with the Company's products, the Company does not anticipate that inflation will materially impact its costs of operation or the profitability of its products when marketed. IMPACT OF YEAR 2000 Readiness - --------- The Year 2000 ("Y2K") issue results from programmers using only two digits to indicate the century, decade and year in date fields. This generally affects older software and embedded systems of the Company and third parties with which it does business, thereby threatening operations and the existence and validity of data. The team that the Company assembled to address the Y2K issue brings to bear knowledge from all areas of the Company and helps minimize the potential impact to the Company. The Company has categorized the Y2K issue into three parts: internal business systems software; internal non-business software/embedded systems; and external vendors. The Company's reliance on an outsourcing philosophy, which encourages the use of partnering agreements with third parties to accomplish many business functions, eases the Y2K issue as the Company does not have a large number of internal business systems applications or embedded systems. However, given that the Company receives substantially all of its royalty revenues from Fujisawa, the Y2K issue is still a threat and is being given full attention by the Company, especially in assessing the Company's third party relationships. 11 Medco Research, Inc. Internal Business Systems - ------------------------- The Company does not rely on custom developed solutions for its business systems. The software that it uses is mass-produced and has been inventoried. The providers have advised the Company that it has been made Y2K compliant through normal manufacturer upgrades and updates to the software. Accordingly, all software and hardware is Y2K compliant. Internal Non-Business Software/Embedded Systems - ----------------------------------------------- All internal non-business software and embedded systems have been inventoried. The providers have been queried regarding Y2K compliance. At this time all software and systems are Y2K compliant. External Vendors - ---------------- A database has been established to track progress the Company's vendors are making in becoming Y2K compliant. The Company has closely monitored the progress and potential impact of vendors that may fail to become Y2K compliant by year-end 1999. The Company has submitted questionnaires to its licensees and material vendors, including Fujisawa, relative to their Y2K compliance. To date, Fujisawa represents that it has completed replacement of non-compliant web server equipment and operating systems and installation of a compliant system for trading with outside customers. Fujisawa has completed replacement of its servers and upgrade of its operating systems including business system hardware and software. Fujisawa has completed all server upgrades, migration of all its R&D applications and upgrade of its telephone switch. Fujisawa represented it would complete testing of its R&D applications and rollover testing of its corporate business applications by October 1999, and continues to apply all Y2K Microsoft patches to its laptop and desktop PCs. The Company has completed all of its assessment of Y2K risks relative to its outside vendors. Planning for contingencies relating to third party relationships has also been completed; however, depending on factors beyond the Company's control that may affect the Y2K readiness of its vendors, additional planning may be necessary. Costs - ----- The costs of addressing the Y2K issue are not expected to be material to the operation of the Company. The costs of software and hardware inventories are currently being absorbed in the normal course of business. The Company has incurred less than $2,000 for mailing and reviewing Y2K status reports for external vendors. The costs anticipated by the Company to replace or upgrade software or hardware are not being accelerated due to Y2K compliance. These costs totaled approximately $36,000 at September 30, 1999. Risks - ----- At this stage of its assessment, the Company does not anticipate that Y2K issues will materially impact any of its operations, including research and development, manufacturing, supply and distribution and financial control. All internal systems are expected to be operational at the Century Date Change (CDC). However, due to the large number of the Company's vendors (including utility companies and governmental bodies) and their reliance, in turn, on other vendors (including hospitals and distributors), it is impossible for the impact of the CDC to be fully known. The Company is unable to determine at this time whether it will be materially impacted by unknown factors beyond the Company's control affecting third parties or their vendors including royalties the Company receives from Fujisawa. The Company's Y2K plan is expected to significantly reduce the Company's level of uncertainty about Y2K issues and, in particular, about Y2K compliance and readiness of its material vendors. The Company believes that, with the completion of the plan as scheduled, the possibility of significant interruptions of normal operations should be reduced. 12 Medco Research, Inc. Contingency Plans - ----------------- Contingency plans have been put in place relative to the Company's material vendors, banking operations and governmental bodies. Such plans have been reviewed and updated based on information received from vendors on their Y2K readiness. The Company's contingency planning takes into account the fact that the Company's agreements obligate Fujisawa to maintain six months of finished product and six months of work-in-process inventories of Adenocard and Adenoscan based on orders received. In addition, in the event Fujisawa cannot fulfill orders for such drugs on a timely basis consistent with U.S. industry practice for any period in excess of 30 calendar days, Fujisawa is obligated to pay royalties to the Company during such "outage" periods based on the average daily net sales of the drug during the prior twelve months, except if such outage results from force majeure events. Disclaimer - ---------- The discussion of the Company's efforts and management's expectations relating to the Year 2000 are forward-looking statements. The Company's ability to achieve Y2K compliance, to verify external vendors' Y2K compliance, and the costs associated with those activities are subject to change as the Company's Y2K plan is implemented. Completion of the plan is dependent on the Company's ability to discover and correct the potential Y2K sensitive problems which could have a serious impact on operations and the ability of third party vendors to bring their systems into Y2K compliance. CAUTIONARY STATEMENT The Company operates in a highly competitive environment that involves a number of risks, some of which are beyond the Company's control. The following statement highlights some of these risks. Statements contained in Management's Discussion and Analysis of Financial Conditions and Results of Operations which are not historical facts are or may constitute forward looking statements under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Although the Company believes the expectations reflected in such forward looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Forward looking statements involve known and unknown risks that could cause the Company's actual results to differ materially from expected results. Factors that could cause actual results to differ materially from the Company's expectations include, among others, the high cost and uncertainty of the research, clinical trials and other development activities involving pharmaceutical products; the Company's ability to fund its activities internally or through additional financing, if necessary; the unpredictability of the duration and results of regulatory review of New Drug Applications and Investigational New Drug Applications; the possible impairment of, or inability to obtain, intellectual property rights and the cost of obtaining such rights from third parties; intense competition; the uncertainty of obtaining, and the Company's dependence on, third parties to manufacture and sell its products; 13 Medco Research, Inc. results of pending or future litigation and other risk factors detailed from time to time in the Company's Securities and Exchange Commission filings. The Company does not undertake any obligation to release publicly any revisions to these statements to reflect later events or circumstances or to reflect the occurrence of unanticipated events. Part II: OTHER INFORMATION -------------------------- Item 1. Legal Proceedings Incorporated herein by reference is the contingency described in the Notes to the Financial Statements set forth in Item 1 of Part I of this Report, set forth on pages 7 and 8 hereof. Item 6. Exhibits and Reports on Form 8-K a. Exhibits: None. b. Reports on Form 8-K: None. 14 Medco Research, Inc. SIGNATURES Pursuant to requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Medco Research, Inc. Date: November 12, 1999 By: /s/ Glenn C. Andrews - ----------------------- -------------------- Glenn C. Andrews Executive Vice President, Finance and Administration Chief Financial Officer and Treasurer Date: November 12, 1999 By: /s/ Adam C. Derbyshire - ----------------------- ---------------------- Adam C. Derbyshire Vice President, Corporate Controller and Secretary 15 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 9-MOS DEC-31-1999 SEP-30-1999 4,407 18,508 11,705 0 0 34,620 1,201 594 69,783 5,277 0 55,288 0 0 9,218 69,783 0 27,962 0 13,786 13,786 0 0 14,176 4,755 9,421 0 0 0 9,421 0.91 0.88
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