8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

______________________

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): December 20, 2007 (December 20, 2007)

PAR PHARMACEUTICAL COMPANIES, INC.

(Exact name of registrant as specified in its charter)

Delaware	File Number 1-10827	22-3122182
(State or other jurisdiction of	(Commission File Number)	(I.R.S. Employer
incorporation or organization)		Identification No.)
300 Tice Boulevard, Woodcliff Lake, NJ		07677
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (201) 802-4000

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 (17CFR 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 December 20, 2007, Par Pharmaceutical Companies, Inc. (the “Company”) issued a press release announcing its financial results for the third quarter of 2007 and the filing of its quarterly report on Form 10-Q for the third quarter of 2007. The Company’s press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Current Report on Form 8-K, including Exhibit 99.1, is furnished pursuant to Item 2.02 and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits

(c) Exhibits

99.1Press Release Dated December 20, 2007

Certain statements in this Current Report on Form 8-K constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. To the extent that any statements made in this Current Report on Form 8-K contain information that is not historical, such statements are essentially forward-looking and are subject to certain risks and uncertainties, including the risks and uncertainties discussed from time to time in the Company’s filings with the SEC, including its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Any forward-looking statements included in this Current Report on Form 8-K are made as of the date hereof only, based on information available to the Company as of the date hereof, and, subject to any applicable law to the contrary, the Company assumes no obligation to update any forward-looking statements.

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SIGNATURES

Pursuant to the 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.

Dated as of: December 20, 2007

PAR PHARMACEUTICAL COMPANIES, INC.

(Registrant)

/s/ Thomas J. Haughey                                                   

Thomas J. Haughey, Executive Vice President

and General Counsel

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release Dated December 20, 2007

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EX-99.1

  

Contact:

Allison Wey

Senior Director

Investor Relations and Corporate Affairs

Par Pharmaceutical Companies, Inc.

(201) 802-4000

PAR PHARMACEUTICAL REPORTS THIRD-QUARTER 2007 RESULTS

Woodcliff Lake, N.J., December 20, 2007 - Par Pharmaceutical Companies, Inc. (NYSE:PRX) today filed with the U.S. Securities and Exchange Commission (SEC) its Form 10-Q for the third quarter of 2007. The filing of Par’s Form 10-Q for this period had been delayed due to the work involved in restating its consolidated financial statements for certain prior periods, which were filed earlier this year. As a result of today’s filing, the Company is now up-to-date on all of its reporting obligations with the SEC.

Third-Quarter and Nine-Month Results

For the third quarter ended September 29, 2007, Par reported total revenues of $212.7 million and net income of $1.3 million, or $0.04 per diluted share. This is compared with reported revenues of $174.0 million and net income of $4.4 million, or $0.13 per diluted share, for the same period

in 2006. For the nine months ended September 29, 2007, Par reported total revenues of $614.5 million and net income of $45.6 million, or $1.30 per diluted share. This is compared with reported revenues of $541.5 million and net income $1.7 million, or $0.05 per diluted share, for 2006.

Third-quarter 2007 reported, or GAAP, results include $16.2 million of costs related to business development activities in support of the Company’s branded division, Strativa, which are discussed in more detail below. Adjusting for this item, net income for the third quarter 2007 was $11.1 million, or $0.32 per diluted share. By comparison, third-quarter 2006 results included $7.1 million of severance costs and a $1.2 million net gain relating to the sale of certain product rights. Adjusting for these items, the Company posted net income of $8.0 million, or $0.23 per diluted share for the third-quarter of 2006.

In addition, Par’s reported, or GAAP, results for the first nine months of 2007, included a $20.0 million gain on the sale to Optimer Pharmaceutical, Inc. of marketing rights to the investigational drug Difimicin, a $1.4 million investment gain on the sale of shares of Optimer common stock, and net settlement gains of $0.6 million, tempered by a $6.0 million loss on investment, a $3.0 million license fee paid to Immtech Pharmaceuticals for commercialization rights to the developmental drug pafuramidine and $1.6 million of severance costs. Adjusting for these items, net income for the nine months ended September 29, 2007 was $48.5 million, or $1.39 per diluted share. By comparison, reported GAAP results for the nine months ended September 30, 2006 also included a write-off of approximately $10.0 million of accounts receivable relating to invalid customer deductions, the collection of which the Company determined that it would no longer pursue, severance costs, and net investment and arbitration settlement losses. Adjusting for these items, net income for the first nine months of 2006 was $14.6 million, or $0.42 per diluted share (see reconciliation between reported (GAAP) and adjusted net income at the end of this press release).

Third-Quarter Review

For the third quarter ended September 29, 2007, total revenues increased 22.2 percent compared with the same period in 2006 due primarily to new product introductions. The third quarter launch of three additional strengths of metoprolol succinate ER (50mg, 100mg, and 200mg), coupled with the fourth quarter 2006 launch of the 25mg strength, drove $71.7 million of sales and corresponding year-over-year gains. Par markets metoprolol in the U.S. through supply and distribution agreements with AstraZeneca Plc. In addition, the first quarter 2007 introductions of propranolol HCl extended release (ER) capsules and ranitidine HCl syrup benefited the third-quarter by $12.1 million and $4.4 million, respectively. Partially offsetting the increases were lower sales of certain existing products due to competitive pressures, including fluticasone, various amoxicillin products, quinapril, megestrol oral suspension, and doxycycline. Revenues of branded products for the third quarter of 2007 of $24.6 million, an increase of 72.5 percent over the prior year period, were driven by increased sales of Megace^® ES (megestrol acetate) oral suspension, and fees related to the co-promotion of AndroGel^®.

Par’s third-quarter gross margin was 31.2 percent of sales, compared to 31.6 percent in 2006. The Company’s gross margin reflects the impact of increased metoprolol succinate ER sales, which have significantly lower gross margin percentages than many of the other products sold by the Company. This impact was offset by increased sales of higher margin products such as propranolol ER and Megace ES, lower inventory write-offs and reduced sales on other lower margin products, including fluticasone.

Research and development (R&D) expenses increased 161.0 percent for the third quarter 2007 compared with the third quarter 2006. The increase was due primarily to costs associated with the in-license of two Phase III products in support of the Company’s branded division, Strativa. In July, the Company paid $15 million to BioAlliance Pharma for the US commercialization rights to Loramyc. In August, the Company acquired the North American commercial rights from Hana Biosciences, Inc. (“HANA”) for Zensana™, at which time the Company made a $5.0 million equity investment in Hana at a contractually agreed premium. Of this amount, $1.2 million representing the premium paid was charged to R&D expense in the quarter. In support of the Company’s generic business, Par made a $5.0 million equity investment in IntelliPharmaCeutics Ltd. (IPC), a privately held corporation, to develop and market four controlled release generic drug products. Of this amount, approximately $2.5 million, representing the premium paid, was charged to R&D in the third quarter.

Third-quarter selling, general and administrative (SG&A) expense decreased 15.3 percent to $33.9 million. The decrease in 2007 SG&A expense was primarily due to the non-recurrence of severance costs incurred in 2006 for executives of $7.1 million, partially offset by increased costs associated with the expansion of finance and accounting functions and increased professional costs related to the Company’s restatement of prior periods.

2007 Financial Outlook

Par has adjusted its previously announced guidance for full-year 2007 earnings per diluted share of $1.45-$1.50 from $1.35-$1.50. Total net revenue is expected to be between $760-$780 million. SG&A is expected to be $130-$133 million, including approximately $2 million in severance costs. Research and development cost is projected to be in the range of $75-$80 million, including approximately $19 million in branded milestone payments. Total projected expenses for the full-year include approximately $18-20 million of share-based compensation and $24-$26 million of depreciation and amortization expenses. Adjusting for non-GAAP items highlighted on the summary of estimated operating results for full year 2007 at the end of this press release, full year earnings per diluted share is projected to be $1.50-$1.55.

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Stock Repurchase Program

Since October 1, 2007, Par has repurchased 1,643,094 shares of its common stock at a total cost of $31.5 million. On September 28, 2007, Par announced that its Board of Directors had authorized the repurchase of up to $75 million of the Company’s common stock.

Conference Call

Par has scheduled a conference call for Thursday, December 20, 2007 at 9:00 am EST to discuss results for the third quarter of 2007. Par invites investors and the general public to listen to a webcast of the conference call. Access to the live webcast can be made via the Company’s website at http://www.parpharm.com and will be available for at least 30 days. The dial-in number is 800-265-0241for domestic callers and 617-847-8704 for international callers. The access number is 56870475. A replay of the conference call will be available commencing approximately one hour after the call. The replay dial-in number is 888-286-8010for domestic callers and 617-801-6888 for international callers. The access number is 95070288.

For a copy of Par’s Form 10-Qs for the quarterly period ended September 29, 2007, visit Investors/SEC Filings on the Par web site at www.parpharm.com.

Non-GAAP Measures

Par prepares its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). In an effort to provide investors with additional information regarding the Company’s results and to provide a meaningful year-over-year comparison of the Company’s financial performance, the Company sometimes uses non-GAAP financial measures as defined by the Securities and Exchange Commission. The differences between the U.S. GAAP and non-GAAP financial measures are reconciled in the attached. In presenting comparable results, the Company discloses non-GAAP financial measures when it believes such measures will be useful to investors in evaluating the Company’s underlying business performance. Management uses the non-GAAP financial measures to evaluate the Company’s financial performance against internal budgets and targets. In addition, management internally reviews the results of the Company excluding the impact of certain items, as it believes that these non-GAAP financial measures are useful for evaluating the Company’s core operating results and facilitating comparison across reporting periods. Importantly, the Company believes non-GAAP financial measures should be considered in addition to, and not in lieu of, U.S. GAAP financial measures. The Company’s non-GAAP financial measures may be different from non-GAAP financial measures used by other companies.

About Par

Par Pharmaceutical Companies, Inc. develops, manufactures and markets generic drugs and innovative branded pharmaceuticals for specialty markets. For press release and other company information, visit www.parpharm.com.

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Safe Harbor Statement

Certain statements in this press release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. To the extent any statements made in this news release contain information that is not historical, these statements are essentially forward-looking and, as such, are subject to risks and uncertainties, including the extent and impact of litigation arising out of the accounting issues described in the Company’s filings with the Securities and Exchange Commission (SEC), the difficulty of predicting FDA filings and approvals, acceptance and demand for new pharmaceutical products, the impact of competitive products and pricing, new product development and launch, reliance on key strategic alliances, uncertainty of patent litigation filed against the Company, availability of raw materials, the regulatory environment, fluctuations in operating results and other risks and uncertainties detailed from time to time in the Company's filings with the SEC, such as the Company's reports on Form 10-K, Form 10-Q and Form 8-K, and amendments thereto. Any forward-looking statements included in this press release are made as of the date hereof only, based on information available to the Company as of the date hereof, and, subject to any applicable law to the contrary, the Company assumes no obligation to update any forward-looking statements.

# # #

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PAR PHARMACEUTICAL COMPANIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Share Data)

(Unaudited)

	September 29,			December 31,
ASSETS	2007			2006
Current assets:
Cash and cash equivalents	$	114,161		$	120,991
Available for sale debt and marketable equity securities		173,544			92,120
Accounts receivable, net		108,182			99,043
Inventories		81,049			106,322
Prepaid expenses and other current assets		13,623			15,833
Deferred income tax assets		72,105			72,105
Income taxes receivable		6,605			12,422
Total current assets		569,269			518,836
Property, plant and equipment, at cost less accumulated depreciation and amortization		81,902			89,155
Available for sale debt and marketable equity securities		7,233			7,652
Investment in joint venture		5,774			5,292
Other investments		2,500			16,588
Intangible assets, net		38,719			47,880
Goodwill		63,729			63,729
Deferred charges and other assets		2,879			16,000
Non-current deferred income tax assets, net		57,485			49,545
Total assets	$	829,490		$	814,677
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term and current portion of long-term debt	$	200,019		$	204,469
Accounts payable		30,546			48,297
Payables due to distribution agreement partners		65,586			89,585
Accrued salaries and employee benefits		13,413			15,510
Accrued expenses and other current liabilities		25,168			18,833
Income taxes payable		58			16,974
Total current liabilities		334,790			393,668
Long-term debt, less current portion		-			-
Other long-term liabilities		13,718			-
Commitments and contingencies		-			-
Stockholders’ equity:
Preferred Stock, par value $0.0001 per share, authorized 6,000,000 shares; none issued and outstanding		-			-
Common Stock, par value $0.01 per share, authorized 90,000,000 shares, issued 36,421,650 and 35,901,276 shares		364			359
Additional paid-in-capital		267,994			254,013
Retained earnings		245,837			200,256
Accumulated other comprehensive income (loss)		1,351			(431	)
Treasury stock, at cost 942,716 and 889,245 shares		(34,564	)		(33,188	)
Total stockholders’ equity		480,982			421,009
Total liabilities and stockholders’ equity	$	829,490		$	814,677

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PAR PHARMACEUTICAL COMPANIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands, Except Per Share Data)

(Unaudited)

	Three months ended						Nine months ended
	September 29,			September 30,			September 29,			September 30,
	2007			2006			2007			2006
Revenues:
Net product sales	$	206,923		$	168,951		$	589,526		$	528,571
Other product related revenues		5,753			5,028			25,000			12,964
Total revenues		212,676			173,979			614,526			541,535
Cost of goods sold		146,248			118,919			403,854			382,540
Gross margin		66,428			55,060			210,672			158,995
Operating expenses:
Research and development		32,815			12,574			61,131			43,983
Selling, general and administrative		33,910			40,053			100,466			111,337
Settlements, net		(367	)		-			(945	)		1,250
Total operating expenses		66,358			52,627			160,652			156,570
Gain on sale of product rights		-			3,054			20,000			3,054
Operating income		70			5,487			70,020			5,479
Other (expense) income, net		-			(38	)		(49	)		66
Equity in loss of joint venture		(107	)		(18	)		(335	)		(497	)
Loss on marketable securities, net		-			-			(4,643	)		(3,773	)
Interest income		3,680			2,098			10,265			6,055
Interest expense		(1,691	)		(1,681	)		(5,136	)		(5,069	)
Income before provision for income taxes		1,952			5,848			70,122			2,261
Provision for income taxes		683			1,461			24,541			565
Net income	$	1,269		$	4,387		$	45,581		$	1,696
Earningsper share of common stock:
Basic	$	0.04		$	0.13		$	1.31		$	0.05
Diluted	$	0.04		$	0.13		$	1.30		$	0.05
Weighted average number of common shares outstanding:
Basic		34,738			34,468			34,677			34,401
Diluted		34,906			34,566			34,949			34,636

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Reconciliation Between Reported (GAAP) and Adjusted Net Income
(In thousands, except per share data)
(Unaudited)
	Three Months Ended
	September 29,			September 30,
	2007			2006
Reported Net Income	$	1,269		$	4,387
Branded License Fees and Premium Paid on Equity Investment		16,150			─
Gain on Sale of Product Rights*		─			(1,150	)
Severance Costs		─			7,106
Estimated Tax on Adjustments		(6,299	)		(2,323	)
Adjusted Net Income (non-GAAP measure)	$	11,121		$	8,020
Diluted Earnings Per Share:
Reported	$	0.04		$	0.13
Adjusted (non-GAAP measure)	$	0.32		$	0.23

	Nine Months Ended
	September 29,			September 29,
	2007			2006
Reported Net Income	$	45,581		$	1,696
Gain on Sales of Product Rights*		(20,000	)		(1,150	)
Net Investment Loss		4,643			3,773
Branded License Fees and Premium Paid on Equity Investments		19,150			─
Severance Costs		1,643			7,106
Net Settlements (Gain) Losses		(578	)		1,502
Write-off of Accounts Receivable Relating to Invalid
Customer Deductions		─			9,965
Estimated Tax on Adjustments		(1,895	)		(8,266	)
Adjusted Net Income (non-GAAP measure)	$	48,544		$	14,626
Diluted Earnings Per Share:
Reported	$	1.30		$	0.05
Adjusted (non-GAAP measure)	$	1.39		$	0.42

*2006 amounts represent $3,054 gain on sale of product rights net of $1,904 loss on the return of inventory from a customer relating to the same agreement.

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Estimated Operating Results for Full Year 2007

ESTIMATED REPORTED GAAP RESULTS (in millions, except per share amounts)	FY 2007
Total Revenue	$760 - $780
SG&A	$130 - $133
R&D	$75 - $80
Reported GAAP EPS (fully diluted)	$1.45 - $1.50
Other supplemental information
Depreciation & amortization	$24 - $26
Share-based compensation	$18 - $20

IMPACT OF NON-GAAP ITEMS (in millions, except per share amounts)	FY 2007
Reported GAAP EPS (fully diluted)	$1.45 - $1.50
Severance	$2
Branded Milestone Payments	$19
High Yield Investment Loss	$6
PAR 101	$(24)
Estimated Tax on Adjustments	$(1)
Total Non-GAAP Items	$2
EPS Impact (fully diluted)	$0.05
EPS (fully diluted) adjusted for non-GAAP items	$1.50 - $1.55

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