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0000950153-09-000160.txt : 20090225
0000950153-09-000160.hdr.sgml : 20090225
20090225161751
ACCESSION NUMBER: 0000950153-09-000160
CONFORMED SUBMISSION TYPE: 8-K
PUBLIC DOCUMENT COUNT: 3
CONFORMED PERIOD OF REPORT: 20090225
ITEM INFORMATION: Results of Operations and Financial Condition
ITEM INFORMATION: Financial Statements and Exhibits
FILED AS OF DATE: 20090225
DATE AS OF CHANGE: 20090225
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: MEDICIS PHARMACEUTICAL CORP
CENTRAL INDEX KEY: 0000859368
STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834]
IRS NUMBER: 521574808
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 8-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-14471
FILM NUMBER: 09634119
BUSINESS ADDRESS:
STREET 1: 8125 NORTH HAYDEN ROAD
CITY: SCOTTSDALE
STATE: AZ
ZIP: 85258
BUSINESS PHONE: 2125992000
MAIL ADDRESS:
STREET 1: 8125 NORTH HAYDEN ROAD
CITY: SCOTTSDALE
STATE: AZ
ZIP: 85258
8-K
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p14220e8vk.htm
FORM 8-K
e8vk
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
February 25, 2009
Date of Report (Date of earliest event reported)
Medicis Pharmaceutical Corporation
(Exact name of registrant as specified in its charter)
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Delaware
(State of Incorporation)
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001-14471
(Commission File Number)
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52-1574808
(IRS Employer
Identification Number) |
7720 North Dobson Road
Scottsdale, Arizona 85256
(Address of principal executive offices) (Zip Code)
(602) 808-8800
(Registrants telephone number, including area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On February 25, 2009, Medicis Pharmaceutical Corporation issued a press release announcing its
financial results for the quarter and year ended December 31, 2008. A copy of the press release is
furnished herewith as Exhibit 99.1 and is incorporated by reference herein.
The information in this Current Report, including the accompanying exhibit, is being furnished
and shall not be deemed filed for the purposes of Section 18 of the Securities Exchange Act of
1934, as amended, or otherwise subject to the liabilities of that Section. The information in this
Current Report shall not be incorporated by reference into any registration statement or other
document filed pursuant to the Securities Act of 1933, as amended, regardless of any general
incorporation language in such filing.
Item 9.01 Exhibits.
(d) Exhibits
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99.1 |
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Press Release dated February 25, 2009. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
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Date: February 25, 2009 |
By: |
/s/ Richard D. Peterson
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Richard D. Peterson |
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Executive Vice President, Chief Financial Officer and Treasurer |
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EX-99.1
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p14220exv99w1.htm
EX-99.1
exv99w1
Exhibit 99.1
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7720 N Dobson Road |
CONTACT:
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Scottsdale, AZ 85256 |
Kara Stancell, Investor Relations & Corporate Communications,
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(602) 808-8800 |
(480) 291-5854
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www.Medicis.com |
MEDICIS REPORTS FOURTH QUARTER AND YEAR-END 2008
FINANCIAL RESULTS
COMPANY RECORDS RECORD ANNUAL REVENUES
SCOTTSDALE, Ariz.February 25, 2009
2008 Financial Highlights
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Revenues increased approximately 13.2% |
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Gross profit margin over 92% |
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Non-GAAP net income increased approximately 12.7% |
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Non-GAAP EPS increased 18% |
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Pro forma cash flow from operations of approximately $145.7 million |
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Dividend increase of 33% |
Medicis (NYSE:MRX) today announced net revenues of approximately $517.8 million for the twelve
months ended December 31, 2008, compared to net revenues of approximately $457.4 million for the
twelve months ended December 31, 2007, which represents an increase of approximately $60.4 million,
or approximately 13.2%.
Non-generally accepted accounting principles (non-GAAP) net income (defined below) for the twelve
months ended December 31, 2008, was approximately $94.4 million, compared to non-GAAP net income of
approximately $83.7 million for the twelve months ended December 31, 2007, which represents an
increase of approximately $10.7 million, or approximately 12.7%. Non-GAAP net income for the
twelve months ended December 31, 2008, excludes charges totaling approximately $109.4 million
(pre-tax), consisting of a $40.0 million (pre-tax) payment relating to the Impax transaction, a
$25.0 million (pre-tax) payment to Ipsen for the RELOXIN® Biologics License Application
(BLA) acceptance by the U.S. Food and Drug Administration (FDA), a $30.5 million (non-deductible)
acquired in-process research and development (R&D) charge associated with the LipoSonix
acquisition, a $9.1 million (non-deductible) charge related to our investment in Revance and a $4.8
million (pre-tax) charge associated with our lease exit costs.
Non-GAAP earnings per diluted share for the twelve months ended December 31, 2008, was $1.49,
compared to non-GAAP earnings per diluted share of $1.26 for the twelve months
1
ended December 31,
2007, which represents an increase of $0.23 per diluted share, or approximately 17.7%.
GAAP net income for the twelve months ended December 31, 2008, was approximately $10.3 million,
compared to GAAP net income of approximately $70.4 million for the twelve months ended December 31,
2007. GAAP earnings per diluted share for the twelve months ended December 31, 2008, was $0.18,
compared to GAAP earnings per diluted share of $1.08 for the twelve months ended December 31, 2007.
The Companys achievement of approximately $517.8 million in net revenues and non-GAAP earnings of
$1.49 per diluted share compares favorably to the Companys published guidance ranges of
approximately $506-$511 million in net revenues and $1.36-$1.39 in non-GAAP earnings per diluted
share for the twelve months ended December 31, 2008.
We are extremely pleased to announce another year of record revenues, despite economic pressures,
said Jonah Shacknai, Chairman and Chief Executive Officer of Medicis. Our 20th year
anniversary brought excitement with the acquisition of LipoSonix, FDAs acceptance of the
RELOXIN® BLA in aesthetics and patent listings in the Orange Book for both
SOLODYN® and ZIANA®. In response to widespread effects of a challenging
economic recession, we reached out to consumers with product incentives and tightened the Companys
belt with targeted, non-strategic cost reductions. As we enter 2009, we eagerly await FDA
approvals for RELOXIN® and follow-on forms of SOLODYN®, and issuance of a
Medical Device License (MDL) for LIPOSONIX®1 in Canada. Additionally, we remain focused
on the preservation of the SOLODYN® franchise and the continued development of
sophisticated pipeline projects we believe will provide meaningful benefits to our physicians and
their patients.
For the three months ended December 31, 2008, Medicis recorded net revenues of approximately $136.0
million, compared to net revenues of approximately $134.1 million for the three months ended
December 31, 2007, representing an increase of approximately $1.8 million, or approximately 1.4%.
Non-GAAP net income for the three months ended December 31, 2008, was approximately $25.8 million,
compared to non-GAAP net income of approximately $32.5 million for the three months ended December
31, 2007, which represents a decrease of approximately $6.7 million, or approximately 20.6%.
Non-GAAP net income for the three months ended December 31, 2008, excludes charges totaling $43.6
million (pre-tax), consisting of a $40.0 million (pre-tax) payment relating to the Impax
transaction and a $3.6 million (non-deductible) charge relating to our investment in Revance. The
decrease in non-GAAP net income was due primarily to the increase in operating expenses associated
with the acquisition and integration of LipoSonix, and the reduction in interest income due to
lower cash balances from the redemption of the 1.5% contingent convertible notes, purchases of
strategic assets and declining investment income rates.
Non-GAAP earnings per diluted share for the three months ended December 31, 2008, was $0.42,
compared to non-GAAP earnings per diluted share of $0.48 for the three months ended December 31,
2007, which represents a decrease of $0.06 per diluted share, or approximately 11.8%.
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The LIPOSONIX® technology is currently not
approved for sale or use in the U.S. |
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GAAP net loss for the three months ended December 31, 2008, was approximately ($8.6) million,
compared to GAAP net income of approximately $23.2 million for the three months ended December 31,
2007. GAAP net loss per diluted share for the three months ended December 31, 2008, was ($0.15),
compared to GAAP earnings per diluted share of $0.35 for the three months ended December 31, 2007.
The Companys achievement of approximately $136.0 million in net revenues and non-GAAP earnings of
$0.42 per diluted share compares favorably to the Companys published guidance ranges of
approximately $125-$130 million in net revenues and $0.30-$0.33 in non-GAAP earnings per diluted
share for the three months ended December 31, 2008. During the quarter, the Companys results were
positively impacted primarily by increasing sequential SOLODYN® prescriptions by
approximately 29%, sustaining the average selling
price levels for SOLODYN® within the guided range of $300-$320 per prescription,
maintaining consistent days of SOLODYN® inventory on hand at the wholesalers and
achieving targeted cost reductions in non-strategic operational spending.
Acne Products
Medicis recorded net revenues of approximately $92.2 million from sales of its acne products for
the three months ended December 31, 2008, compared to net revenues of approximately $77.4 million
for the three months ended December 31, 2007, which represents an increase of approximately $14.8
million, or approximately 19.1%. For the twelve months ended December 31, 2008, the Company
recorded net revenues of approximately $325.0 million from sales of its acne products, compared to
net revenues of approximately $243.4 million for the twelve months ended December 31, 2007, which
represents an increase of approximately $81.6 million, or approximately 33.5%. This increase is
due primarily to the strong demand for SOLODYN®, resulting in increased sales. Medicis
acne products include primarily PLEXION®, SOLODYN®,
TRIAZ® and ZIANA®.
Non-Acne Products
Medicis recorded net revenues of approximately $34.3 million associated with its non-acne products
for the three months ended December 31, 2008, compared to net revenues of approximately $42.8
million for the three months ended December 31, 2007, which represents a decrease of approximately
$8.6 million, or approximately 20.0%. For the twelve months ended December 31, 2008, the Company
recorded net revenues of approximately $148.0 million associated with its non-acne products,
compared to net revenues of approximately $172.9 million for the twelve months ended December 31,
2007, which represents a decrease of approximately $24.9 million, or approximately 14.4%. This
decrease is a result of the non-acne products category being more sensitive to weaknesses in the
U.S. economy than the acne products category. Medicis non-acne products include primarily
LOPROX®, PERLANE®, RESTYLANE® and VANOS®.
Other Non-Dermatological Products
Medicis recorded net revenues of approximately $9.5 million associated with its other
non-dermatological products for the three months ended December 31, 2008, compared to net revenues
of approximately $13.9 million for the three months ended December 31, 2007, which represents a
decrease of $4.4 million, or approximately 31.7%. This decrease is due primarily to lower sales of
AMMONUL® and BUPHENYL® and a reduction in contract revenue. For the twelve
months ended December 31, 2008, the Company recorded net revenues of approximately $44.8 million
associated with its other non-dermatological
3
products, compared to net revenues of approximately
$41.1 million for the twelve months ended December 31, 2007, which represents an increase of
approximately $3.7 million, or approximately 9.0%. This increase is due primarily to an increase
in sales of AMMONUL® and BUPHENYL® and an increase in contract revenue.
Medicis other non-dermatological products include primarily AMMONUL®,
BUPHENYL®, LIPOSONIX®1 and contract revenue.
Other Income Statement Items
Gross profit margin for the three months ended December 31, 2008, increased approximately 2.5
percentage points to approximately 94.5%, compared to approximately 92.0% for the three months
ended December 31, 2007. For the twelve months ended December 31, 2008, gross profit margin
increased approximately 4.8 percentage points to approximately 92.5%, compared to approximately
87.7% for the twelve months ended December 31, 2007. This
increase was due primarily to product mix, which included increased sales of the higher-margin
product SOLODYN®.
Selling, general and administrative (SG&A) expense for the three months ended December 31, 2008,
was approximately $64.3 million, or approximately 47.3% of net revenues, compared to approximately
$63.9 million, or approximately 47.7% of net revenues, for the three months ended December 31,
2007. For the twelve months ended December 31, 2008, the Company recorded SG&A expense of
approximately $279.8 million, or approximately 54.0% of net revenues, compared to approximately
$242.6 million, or approximately 53.0% of net revenues, for the twelve months ended December 31,
2007. Fluctuations in SG&A were primarily due to an increase in expenses associated with the
acquisition and integration of LipoSonix, patent litigation associated with SOLODYN®,
costs related to the restatement of our 2007 Form 10-K and our Forms 10-Q for the first and second
quarters of 2008, a lease retirement obligation, promotional programs for RESTYLANE®,
personnel, professional services and business development and costs related to the development and
implementation of our new enterprise resource planning system.
R&D expense for the three months ended December 31, 2008, was $50.6 million, compared to
approximately $16.9 million for the three months ended December 31, 2007. This increase in R&D is
due primarily to a $40.0 million purchased R&D charge associated with the Impax transaction. R&D
expense for the twelve months ended December 31, 2008, was $130.4 million, compared to
approximately $39.4 million for the twelve months ended December 31, 2007. This increase in R&D is
due primarily to the $40.0 million purchased R&D charge relating to the Impax transaction, a $30.5
million acquired in-process R&D charge associated with the LipoSonix transaction and a $25.0
million payment to Ipsen for the RELOXIN® BLA acceptance by FDA.
Other expense for the three months ended December 31, 2008, was $10.0 million, which consisted of a
$3.6 million (non-deductible) charge related to our investment in Revance and a $6.4 million
other-than-temporary impairment loss recognized related to our auction rate securities investments.
For the twelve months ended December 31, 2008, other expense was $15.5 million, which consisted of
a $9.1 million (non-deductible) charge related to our investment in Revance and a $6.4 million
other-than-temporary impairment loss recognized related to our auction rate securities investments.
Cash Flow
The Companys cash flow from operations was approximately $45.8 million for the twelve months ended
December 31, 2008. This includes cash payments of $40.0 million to Impax,
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$25.0 million to Ipsen
and $34.9 million relating to the tax liability for the repurchase of the Companys 1.5% contingent
convertible notes.
2009 Guidance
Based upon information available currently to the Companys management, the Companys financial
guidance for 2009 is anticipated as follows:
Calendar 2009
(in millions, except per share amounts)
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First |
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Second |
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Third |
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Fourth |
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Calendar |
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Quarter |
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Quarter |
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Quarter |
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Year-End |
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(3/31/09) |
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(6/30/09) |
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(9/30/09) |
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(12/31/09) |
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2009 |
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Estimated |
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Estimated |
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Estimated |
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Estimated |
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Estimated |
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Revenue |
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$ |
125-$130 |
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$ |
137-$142 |
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$ |
160-$165 |
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$ |
178-$183 |
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$ |
600-$620 |
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Non-GAAP diluted
earnings per share
objectives |
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$ |
0.15-$0.18 |
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$ |
0.20-$0.23 |
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$ |
0.41-$0.44 |
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$ |
0.61-$0.64 |
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$ |
1.37-$1.49 |
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Additional 2009 Guidance Considerations
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Revenue and non-GAAP diluted earnings per share objectives include a full year of
SOLODYN® revenue with no generic entry and revenue associated with the
anticipated FDA approval and subsequent launch of RELOXIN® in the second
half of 2009; |
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gross profit margins of approximately 90% of revenues; |
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SG&A expenses of approximately 52-54% of revenues; |
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R&D expenses of approximately 8-10% of revenues; |
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depreciation and amortization of approximately $32-$35 million for the year; |
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effective tax rate of approximately 38-39%; |
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the non-GAAP diluted earnings per share figures above incorporate the impact of FAS
123R, totaling approximately $14-$15 million for the year; and |
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fully diluted weighted average shares outstanding of approximately 64-65 million
shares. |
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The above guidance does not take into account the following:
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potential special charges associated with R&D milestones or contract payments; |
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potential additional recognized losses on our auction rate securities investments; |
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the financial impact of changes in accounting or governmental pronouncements; |
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charges related to the accounting for our investment in Revance; |
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the impact of a potential generic launch to SOLODYN®; |
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the timing of additional SOLODYN® patent allowances, if any; |
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the outcome of the Companys Citizen Petition filed with FDA in February 2009, which
may affect the timing of potential approvals of generic versions of
SOLODYN®; |
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the deployment of certain wholesaler inventory reduction strategies for
SOLODYN® which may continue into 2009 in anticipation of FDA approval for
follow-on forms of SOLODYN®; |
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uncertainty relating to the reduction of the average selling price for
SOLODYN® as a result of the SOLODYN® Patient Access Card intended
to stimulate demand for SOLODYN®; and |
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the impact of the U.S. economy on the Companys aesthetic and therapeutic
franchises. |
At the time of this disclosure, Medicis believes these objectives are attainable based upon
information currently available to the Companys management.
Diluted Earnings Per Share
Diluted earnings per share amounts are calculated using the if-converted method of accounting
regardless of whether the Companys outstanding convertible bonds meet the criteria for conversion
and regardless of whether the bondholders actually convert their bonds into shares.
Use of Non-GAAP Financial Information
The Company has disclosed non-GAAP financial information in this press release to provide
meaningful supplemental information regarding its operational performance and to enhance its
investors overall understanding of its core financial performance. Management measures the
Companys performance using non-GAAP financial measures such as those that are disclosed in this
press release. This information facilitates managements internal comparisons to the Companys
historical core operating results and competitors core operating results, and is a basis for
financial decision making. Management believes that Medicis investors benefit from seeing the
Companys results on the same basis as management, in addition to the GAAP presentation. In our
view, the non-GAAP financial measures are informative to investors, allowing them to focus on the
ongoing operations and core results of Medicis business. Historically, Medicis has reported
similar non-GAAP
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information to its investors and believes that the inclusion of comparative
numbers provides consistency in the Companys financial disclosures. This information is not in
accordance with, or an alternative for, information prepared using GAAP. Non-GAAP net income
excludes certain items, such as charges for R&D, transaction costs, the impairment of long-lived
assets and litigation reserves. These items may have a material effect on the Companys net income
and diluted net income per common share calculated in accordance with GAAP. The Company excludes
such charges and the related tax benefits when analyzing its financial results as the items are
distinguishable events. Management believes that, by viewing the Companys results of operations
excluding these charges, investors are given an indication of the ongoing results of the Companys
operations.
About Medicis
Medicis is the leading independent specialty pharmaceutical company in the United States focusing
primarily on the treatment of dermatological and aesthetic conditions. The Company is dedicated to
helping patients attain a healthy and youthful appearance and self-
image. Medicis has leading branded prescription products in a number of therapeutic and aesthetic
categories. The Companys products have earned wide acceptance by both physicians and patients due
to their clinical effectiveness, high quality and cosmetic elegance.
The Companys products include the brands RESTYLANE® (hyaluronic acid),
PERLANE® (hyaluronic acid), DYNACIN® (minocycline HCl), LOPROX®
(ciclopirox), PLEXION® (sodium sulfacetamide 10% and sulfur 5%), SOLODYN®
(minocycline HCl, USP) Extended Release Tablets, TRIAZ® (benzoyl peroxide),
LIDEX® (fluocinonide) Cream 0.05%, VANOS® (fluocinonide) Cream 0.1%, and
ZIANA® (clindamycin phosphate 1.2% and tretinoin 0.025%) Gel, BUPHENYL®
(sodium phenylbutyrate) Tablets and Powder and AMMONUL® (sodium phenylacetate and sodium
benzoate) Injection 10%/10%, the LIPOSONIX®1 technology and the over-the-counter brand
ESOTERICA®.
For more information about Medicis, please visit the Companys website at www.Medicis.com. Printed
copies of the Companys complete audited financial statements are available free of charge upon
request.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private
Securities Litigation Reform Act. All statements included in this press release that address
activities, events or developments that Medicis expects, believes or anticipates will or may occur
in the future are forward-looking statements, including:
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Medicis future prospects; |
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revenues, gross profit margin, expense, tax rate and earnings guidance; |
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information regarding business development activities and future regulatory approval of the
Companys products; |
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the commercial success of the Companys products; |
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the patentability of certain intellectual property; |
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the potential for generic competition to SOLODYN® and other Medicis products; |
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the future expansion of the aesthetics market; and |
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expectations relating to the Companys product development pipeline, including the timing
on FDAs granting of the BLA for RELOXIN®. |
These statements are based on certain assumptions made by Medicis based on its experience and
perception of historical trends, current conditions, expected future developments and other factors
it believes are appropriate in the circumstances. No assurances can be given, however, that these
activities, events or developments will occur or that such results will be achieved. Such
statements are subject to a number of assumptions, risks and uncertainties, many of which are
beyond the control of Medicis. The Companys business is subject to all risk factors outlined in
the Companys most recent annual report on Form 10-K/A for the year ended December 31, 2007, and
other documents we file with the Securities and Exchange Commission (SEC). At the time of this press
release, the Company cannot, among other things, assess the likelihood, timing or forthcoming
results of R&D projects, the risks associated with the FDA approval process and risks associated
with
significant competition within the Companys industry, nor can the Company validate its assumptions
of the full impact on its business of the approval of competitive generic versions of the Companys
primary brands, and any future competitive product approvals that may affect the Companys brands,
including the RESTYLANE® franchise. The RESTYLANE® franchise currently
includes PERLANE® and RESTYLANE®.
Additionally, Medicis may acquire and/or license products or technologies from third parties to
enter into new strategic markets. The Company periodically makes up-front, non-refundable payments
to third parties for R&D work that has been completed and periodically makes additional
non-refundable payments for the achievement of various milestones. There can be no certainty about
the periods in which these potential payments could be made, nor if any payments such as these will
be made at all. Any estimated future guidance does not include, among other things, the potential
payments associated with any such transactions.
There are a number of additional important factors that could cause actual results to differ
materially from those projected, including:
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the anticipated size of the markets and demand for Medicis products; |
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the availability of product supply or changes in the costs of raw materials; |
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the receipt of required regulatory approvals; |
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competitive developments affecting our products, such as the FDA approvals of Elevess,
Evolence®, Juvederm® Ultra, Juvederm® Ultra Plus, Prevelle
Silk, Radiesse® and Sculptra®, competitors to RESTYLANE® and
PERLANE®, and generic forms of our DYNACIN® Tablets, LOPROX®,
PLEXION®, SOLODYN® or TRIAZ® products; |
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product liability claims; |
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the introduction of federal and/or state regulations relating to the Companys business; |
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dependence on sales of key products; |
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changes in the treatment practices of physicians that currently prescribe the Medicis
products, including prescription levels; |
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the uncertainty of future financial results and fluctuations in operating results, and the
factors that may attribute to such fluctuations as set forth in our SEC filings; |
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dependence on Medicis strategy (including the uncertainty of license payments and/or other
payments due from third parties); |
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changes in reimbursement policies of health plans and other health insurers; |
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the timing and success of new product development by Medicis or third parties; |
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the inability to secure patent protection from filed patent applications, inadequate
protection of Medicis intellectual property or challenges to the validity or enforceability
of the Medicis proprietary rights; |
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the risks of pending and future litigation or government investigations; and |
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other risks described from time to time in Medicis filings with the SEC. |
Forward-looking statements represent the judgment of Medicis management as of the date of this
release and Medicis disclaims any intent or obligation to update any forward-looking statements
contained herein, which speak as of the date hereof.
NOTE: Full prescribing information for any of Medicis prescription products is available by
contacting the Company. RESTYLANE® and PERLANE® are trademarks of HA North
American Sales AB, a subsidiary of Medicis Pharmaceutical Corporation. All other trademarks are
the property of their respective owners.
9
Medicis Pharmaceutical Corporation
Summary Statements of Operations (Unaudited)
(in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Twelve months ended |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2008 |
|
|
2007 |
|
|
2008 |
|
|
2007 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product revenues |
|
$ |
132,309 |
|
|
$ |
128,207 |
|
|
$ |
500,977 |
|
|
$ |
441,867 |
|
Contract revenues |
|
|
3,662 |
|
|
|
5,932 |
|
|
|
16,773 |
|
|
|
15,526 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
|
135,971 |
|
|
|
134,139 |
|
|
|
517,750 |
|
|
|
457,393 |
|
Cost of revenues |
|
|
7,529 |
|
|
|
10,699 |
|
|
|
38,714 |
|
|
|
56,109 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
128,442 |
|
|
|
123,440 |
|
|
|
479,036 |
|
|
|
401,284 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative |
|
|
64,259 |
|
|
|
63,921 |
|
|
|
279,768 |
|
|
|
242,633 |
|
Impairment of intangible
assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,067 |
|
Research and
development |
|
|
50,584 |
|
|
|
16,920 |
|
|
|
99,916 |
|
|
|
39,429 |
|
In-process research
and development |
|
|
|
|
|
|
|
|
|
|
30,500 |
|
|
|
|
|
Depreciation and
amortization |
|
|
7,118 |
|
|
|
6,755 |
|
|
|
27,698 |
|
|
|
24,548 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses |
|
|
121,961 |
|
|
|
87,596 |
|
|
|
437,882 |
|
|
|
310,677 |
|
Operating income |
|
|
6,481 |
|
|
|
35,844 |
|
|
|
41,154 |
|
|
|
90,607 |
|
Other expense |
|
|
(10,006 |
) |
|
|
|
|
|
|
(15,470 |
) |
|
|
|
|
Interest income, net |
|
|
2,251 |
|
|
|
7,894 |
|
|
|
16,722 |
|
|
|
28,372 |
|
Income tax expense |
|
|
(7,327 |
) |
|
|
(20,518 |
) |
|
|
(32,130 |
) |
|
|
(48,544 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Twelve months ended |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2008 |
|
|
2007 |
|
|
2008 |
|
|
2007 |
|
|
|
|
|
|
Net (loss) income |
|
$ |
(8,601 |
) |
|
$ |
23,220 |
|
|
$ |
10,276 |
|
|
$ |
70,435 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net (loss) income per common share |
|
$ |
(0.15 |
) |
|
$ |
0.41 |
|
|
$ |
0.18 |
|
|
$ |
1.26 |
|
Diluted net (loss) income per common share |
|
$ |
(0.15 |
) |
|
$ |
0.35 |
|
|
$ |
0.18 |
|
|
$ |
1.08 |
|
Shares used in basic net (loss) income per common share |
|
|
56,718 |
|
|
|
56,263 |
|
|
|
56,567 |
|
|
|
55,988 |
|
Shares used in diluted net (loss) income per common share |
|
|
56,718 |
|
|
|
70,980 |
|
|
|
57,323 |
|
|
|
71,246 |
|
Cash flow from operations |
|
$ |
5,045 |
|
|
$ |
31,406 |
|
|
$ |
45,770 |
|
|
$ |
158,944 |
|
11
Medicis Pharmaceutical Corporation
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Twelve months ended |
|
|
|
December 31, 2008 |
|
|
December 31, 2008 |
|
|
|
Dollar Value |
|
|
EPS Impact |
|
|
Dollar Value |
|
|
EPS Impact |
|
GAAP net (loss) income |
|
$ |
(8,601 |
) |
|
$ |
(0.15 |
) |
|
$ |
10,276 |
|
|
$ |
0.18 |
|
Interest expense and associated
bond offering costs (tax-effected) |
|
|
667 |
{a} |
|
|
|
|
|
|
4,202 |
{a} |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP if-converted net (loss) income and diluted
EPS |
|
|
(7,934 |
) |
|
|
(0.13 |
) |
|
|
14,478 |
|
|
|
0.22 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
expense related to our
collaboration with IMPAX |
|
|
40,000 |
|
|
|
0.64 |
|
|
|
40,000 |
|
|
|
0.60 |
|
In-process research and
development expense
related to our acquisition
of LipoSonix |
|
|
|
|
|
|
|
|
|
|
30,500 |
|
|
|
0.46 |
|
Charge related to our
investment in Revance |
|
|
3,606 |
|
|
|
0.06 |
|
|
|
9,070 |
|
|
|
0.14 |
|
Lease exit costs related to
our former headquarters
facility |
|
|
|
|
|
|
|
|
|
|
4,813 |
|
|
|
0.07 |
|
Research and development
expense related to
milestone payment to Ipsen
upon the FDAs acceptance
of RELOXIN® BLA |
|
|
|
|
|
|
|
|
|
|
25,000 |
|
|
|
0.38 |
|
Income tax effects |
|
|
(9,169 |
) |
|
|
(0.15 |
) |
|
|
(25,293 |
) |
|
|
(0.38 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP if-converted net income and diluted EPS |
|
$ |
26,503 |
|
|
$ |
0.42 |
|
|
$ |
98,568 |
|
|
$ |
1.49 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in basic net
income per common share |
|
|
56,718 |
|
|
|
|
|
|
|
56,567 |
|
|
|
|
|
Shares used in diluted net
income per common share |
|
|
62,676 |
|
|
|
|
|
|
|
66,270 |
|
|
|
|
|
12
|
|
|
{a} |
|
In order to determine if-converted net income, the tax-effected net interest on the 2.5%
and 1.5% contingent convertible notes and the associated bond offering costs of $0.7 million
and $4.2 million are added back to GAAP net income for the three months and twelve months
ended December 31, 2008, respectively. |
13
Medicis Pharmaceutical Corporation
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Twelve months ended |
|
|
|
December 31, 2007 |
|
|
December 31, 2007 |
|
|
|
Dollar Value |
|
|
EPS Impact |
|
|
Dollar Value |
|
|
EPS Impact |
|
GAAP net income |
|
$ |
23,220 |
|
|
$ |
0.41 |
|
|
$ |
70,435 |
|
|
$ |
1.26 |
|
Interest expense and associated
bond offering costs (tax-effected) |
|
|
1,504 |
{a} |
|
|
|
|
|
|
6,306 |
{a} |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP if-converted net income and diluted EPS |
|
|
24,724 |
|
|
|
0.35 |
|
|
|
76,741 |
|
|
|
1.08 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
expense related to our
strategic collaboration with
Revance |
|
|
8,043 |
|
|
|
0.11 |
|
|
|
8,043 |
|
|
|
0.11 |
|
Professional fees related to
Revance strategic collaboration
agreement |
|
|
1,277 |
|
|
|
0.02 |
|
|
|
1,277 |
|
|
|
0.02 |
|
Professional fees related to
Hyperion strategic collaboration
agreement |
|
|
|
|
|
|
|
|
|
|
2,150 |
|
|
|
0.03 |
|
Impairment of intangible assets |
|
|
|
|
|
|
|
|
|
|
4,067 |
|
|
|
0.05 |
|
Income tax effects |
|
|
|
|
|
|
|
|
|
|
(2,257 |
) |
|
|
(0.03 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP if-converted net income and diluted EPS |
|
$ |
34,044 |
|
|
$ |
0.48 |
|
|
$ |
90,021 |
|
|
$ |
1.26 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in basic net income
per common share |
|
|
56,263 |
|
|
|
|
|
|
|
55,988 |
|
|
|
|
|
Shares used in diluted net
income per common share |
|
|
70,980 |
|
|
|
|
|
|
|
71,246 |
|
|
|
|
|
|
|
|
{a} |
|
In order to determine if-converted net income, the tax-effected net interest on the 2.5%
and 1.5% contingent convertible notes and the associated bond offering costs of $1.5 million
and $6.3 million are added back to GAAP net income for the three months and twelve months
ended December 31, 2007, respectively. |
14
Medicis Pharmaceutical Corporation
Balance Sheets
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2008 |
|
|
2007 |
|
Assets |
|
|
|
|
|
|
|
|
Cash, cash equivalents & short-term
investments |
|
$ |
343,885 |
|
|
$ |
794,680 |
|
Accounts receivable, net |
|
|
52,588 |
|
|
|
22,205 |
|
Inventory, net |
|
|
24,226 |
|
|
|
29,973 |
|
Deferred tax asset |
|
|
53,161 |
|
|
|
9,190 |
|
Other current assets |
|
|
19,676 |
|
|
|
18,049 |
|
|
|
|
|
|
|
|
Total current assets |
|
|
493,536 |
|
|
|
874,097 |
|
Property & equipment, net |
|
|
26,300 |
|
|
|
13,850 |
|
Intangible assets, net |
|
|
161,429 |
|
|
|
173,086 |
|
Goodwill |
|
|
156,762 |
|
|
|
63,107 |
|
Deferred tax asset |
|
|
77,149 |
|
|
|
59,577 |
|
Long-term investments |
|
|
55,333 |
|
|
|
17,072 |
|
Other assets |
|
|
2,925 |
|
|
|
12,622 |
|
|
|
|
|
|
|
|
Total assets |
|
$ |
973,434 |
|
|
$ |
1,213,411 |
|
|
|
|
|
|
|
|
Liabilities and stockholders equity
|
|
|
|
|
|
|
|
|
Contingent convertible senior notes 1.5%,
due 2033 |
|
$ |
|
|
|
$ |
283,910 |
|
Other current liabilities |
|
|
185,901 |
|
|
|
167,216 |
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
185,901 |
|
|
|
451,126 |
|
Contingent convertible senior notes 1.5%,
due 2033 |
|
|
181 |
|
|
|
|
|
Contingent convertible senior notes 2.5%,
due 2032 |
|
|
169,145 |
|
|
|
169,145 |
|
Other liabilities |
|
|
14,513 |
|
|
|
9,839 |
|
Stockholders equity |
|
|
603,694 |
|
|
|
583,301 |
|
|
|
|
|
|
|
|
Total liabilities and stockholders equity |
|
$ |
973,434 |
|
|
$ |
1,213,411 |
|
|
|
|
|
|
|
|
Working capital |
|
$ |
307,635 |
|
|
$ |
422,971 |
|
|
|
|
|
|
|
|
15
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-----END PRIVACY-ENHANCED MESSAGE-----