Navigation Links
Par Pharmaceutical Companies Reports Second Quarter 2012 Results
Date:8/2/2012

WOODCLIFF LAKE, N.J., Aug. 2, 2012 /PRNewswire/ -- Par Pharmaceutical Companies, Inc. (NYSE: PRX) today reported results for the second quarter ended June 30, 2012.

For the second quarter ended June 30, 2012, the Company reported total revenues of $294.3 million and income from continuing operations of $51.3 million, or $1.38 per diluted share, which includes amortization expenses and certain transaction costs. On an adjusted cash basis (non-GAAP measure), which excludes amortization and transaction costs, income from continuing operations was $60.3 million, or $1.62 per diluted share for the second quarter 2012.  (Refer to attached reconciliation table between GAAP and adjusted non-GAAP amounts.)

Second Quarter HighlightsKey Product Sales (Net sales comparisons at the product level are to first quarter 2012.)

  • Modafinil:  Net sales for modafinal were $57.5 million in the second quarter.  Par launched the product on April 6, 2012.
  • Metoprolol:  For the quarter ended June 30, 2012, net sales of metoprolol succinate were $49.0 million compared to $61.8 million in the first quarter 2012.  The decrease was driven by non-recurrence of first quarter customer buying patterns.  Par Pharmaceutical, the Company's generic drug division, is the authorized generic for all strengths of AstraZeneca's Toprol XL®.
  • Budesonide EC:  Net sales for budesonide EC in the second quarter 2012 were $33.5 million compared to $38.0 million in the first quarter 2012.  The decrease was driven by non-recurrence of first quarter customer buying patterns.  Par Pharmaceutical is the authorized generic for AstraZeneca's Entocort® EC.
  • Propafenone Hydrochloride ER:  Net sales for propafenone hydrochloride ER in the second quarter were $17.9 million compared to $19.1 million in the first quarter 2012. Par Pharmaceutical remained the exclusive supplier of generic Rythmol SR® throughout the second quarter.
  • Sumatriptan:  Net sales of sumatriptan succinate were $13.9 million in the second quarter compared to $16.7 million in the prior quarter.  The decrease was driven by a reduction in customer orders in anticipation of Par's exit from the market in the third quarter.
  • Bupropion Hydrochloride ER:  Net sales of bupropion were $12.0 million in the second quarter 2012.  Par recorded $11.4 million of net sales in the first quarter.
  • Zolpidem Tartrate:  Net sales of zolpidem tartrate of $5.3 million in the second quarter 2012.  Par recorded $6.9 million of net sales in the first quarter. The reduction in sales was the result of a small decline in net pricing resulting from customer mix.
  • Fentanyl Citrate Lozenges:  Net sales for fentanyl for the second quarter were $2.6 million compared to $2.0 million in the first quarter.  The increase is due to customer buying patterns.
  • Other Generic Products:  For the second quarter 2012, net sales from all other generic products were $81.3 million. This compares to first quarter net sales of $95.3 million. The decline was primarily due to the seasonality of the Chlorpheniramine/Hydrocodone product.
  • Megace® ES:  Net sales were $14.2 million for the second quarter compared to $12.2 million in the first quarter.  The increase was due to non-recurrence of unfavorable first quarter customer buying patterns.  
  • Nascobal® B12 Nasal Spray:  Net sales were $5.4 million for the second quarter compared to $5.9 million in the first quarter.  The decrease was due to the timing of customer orders, despite higher prescription volume.
  • Revenues and adjusted gross margin for the second quarter 2012 were $294.3 million and $156.0 million, respectively, compared to $271.5 million in net sales and $110.7 million in adjusted gross margin during the prior quarter (Q1 2012). The adjusted gross margin rate on the Company's consolidated product portfolio was 53.0% versus 40.8% in the first quarter 2012, with this increase driven by the launch of modafinil.  (Par is now presenting non-GAAP gross margin on an adjusted basis. See detailed reconciliation table at the end of this press release.)

     2Q 20121Q 2012$%$%Key Par (Generic)

    Products (1)$   98.6

    51.4%$   46.4

    29.8%All Other (Generic)40.2

    49.4%47.8

    50.1%Total Par Generics$  138.8

    50.8%$   94.2

    37.5%Strativa (Branded) Products(2)$   17.2

    80.9%$   16.5

    81.5%Total (All Products) $ 156.0

    53.0%$ 110.7

    40.8%(1) Q2 2012 Key Par Products include modafinil, metoprolol, sumatriptan, budesonide,
    propafenone, bupropion, zolpidem, fentanyl lozenges.  (2) Strativa products consist primarily of Megace ES and Nascobal.
    Operating Expenses
    On a GAAP basis, total operating expenses fell during the second quarter of 2012 as compared to the prior quarter as follows:

  • Research and development expenses were $20.7 million in the second quarter 2012 compared to $29.9 million in the first quarter 2012.  The decrease was due primarily to a one-time upfront development payment in the first quarter.
  • Selling, general and administrative expenses for the second quarter 2012 decreased to $39.7 million compared to $42.2 million in the first quarter.
  • Cash and cash equivalents and marketable securities aggregate balance as of June 30, 2012 was $261.0 million.

    Product and Pipeline Update
    In July, Par Formulations Private Limited, (formerly Edict Pharmaceuticals Private Limited), received its first USFDA approval for Labetalol HCl Tablets 100 mg, 200 mg & 300 mg, the generic version of Trandate®.  Par anticipates the product to be available in August. Par Pharmaceutical acquired Edict Pharmaceuticals, based in Chennai, India, in February 2012.

    Par Pharmaceutical, along with third-party partners, currently has approximately 72 ANDAs pending with the FDA, 23 of which it believes to be first-to-file opportunities.

    Subsequent Event
    On July 14, 2012, we entered into an Agreement and Plan of Merger (the "Agreement") with Sky Growth Holdings Corporation, a Delaware corporation ("Parent"), and Sky Growth Acquisition Corporation, a Delaware corporation and a wholly owned subsidiary of Parent ("Merger Sub").  The Agreement provides for the merger of Merger Sub with and into the Company, with the Company surviving the Merger as a wholly-owned subsidiary of Parent (the "Merger").

    Parent and Merger Sub are beneficially owned by affiliates of TPG Capital, L.P. and were formed solely for the purposes of executing the Agreement and facilitating the Merger.  The Agreement provides for a purchase price of approximately $1.9 billion for our fully diluted equity.  We expect this transaction to close, subject to customary conditions, before the end of 2012.  Some of the customary conditions to closing include obtaining the approval of the holders of a majority of the outstanding shares of our common stock and the expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

    Under the Agreement, we may solicit superior proposals from third parties through August 24, 2012.  Parent has certain termination rights that could require us to pay Parent a termination fee of $24 million or $48 million, if and as applicable, based on the circumstances of the termination, plus in each case up to $7 million in Parent's expenses.  We also have certain termination rights in certain circumstances.

    On July 14, 2012, in conjunction with our execution of the Agreement, we modified our Rights Agreement dated as of October 27, 2004, with American Stock Transfer & Trust Company (the "Rights Agreement"), to render the Rights Agreement inapplicable to the Agreement and the Merger and to cause the Rights Agreement to terminate immediately prior to the effective time of the Merger.

    For more information about the Merger, the Agreement and our modification of the Rights Agreement, please see our Current Report on Form 8-K, filed July 16, 2012.

    Conference Call
    Par Pharmaceutical Companies, Inc. will host a conference call and live webcast on Thursday, August 2, 2012 at 9:00 AM EDT to review results for the second quarter 2012.

    Access to the live webcast can be made via the Company's website at www.parpharm.com.Dial-in InformationDomestic:

    866-356-3377International:

    617-597-5392Passcode:

    39276355A replay of the conference call will be available for two weeks approximately one hour after the call.  Replay InformationDomestic:

    888-286-8010International:

    617-801-6888Passcode:

    22276530Non-GAAP Measures
    Par Pharmaceutical Companies, Inc. ("the Company") believes it prepared its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) and pursuant to accounting requirements of the Securities and Exchange Commission.  In an effort to provide investors with additional information regarding the Company's results and to provide a meaningful period-over-period 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 attached schedules.  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 Company's results 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 Pharmaceutical Companies, Inc.
    Par Pharmaceutical Companies, Inc. is a US-based specialty pharmaceutical company.  Through its wholly-owned subsidiary's two operating divisions, Par Pharmaceutical and Strativa Pharmaceuticals, it develops, acquires, manufactures and markets higher-barrier-to-entry generic drugs and niche, innovative proprietary pharmaceuticals. For press release and other company information, visit www.parpharm.com.

    Safe Harbor Statement
    Certain statements in this news 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 known and unknown risks, uncertainties and contingencies, many of which are beyond the control of the Company, which could cause actual results and outcomes to differ materially from those expressed herein.  Risk factors that might affect such forward-looking statements include those set forth in Item 1A of the Company's most recent Annual Report on Form 10-K and Quarterly Report on 10-Q for the second quarter of 2012 which the Company intends to file today, as well as in other of the Company's filings with the SEC from time to time, including other Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and on general industry and economic conditions.  Any forward-looking statements included in this news 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.

     

     PAR PHARMACEUTICAL COMPANIES, INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (In Thousands, Except Share and Per Share Data)
    (Unaudited)June 30,
    2012
    December 31,
    2011
    ASSETSCurrent assets:Cash and cash equivalents

    $

    241,527$

    162,516Available for sale marketable debt securities

    19,45925,709Accounts receivable, net  

    156,067125,940Inventories

    89,247106,250Prepaid expenses and other current assets

    24,45020,475Deferred income tax assets

    45,08055,966Income taxes receivable

    11,35827,049Total current assets

    587,188523,905Property, plant and equipment, net

    102,37397,790Intangible assets, net

    289,037311,669Goodwill

    309,551283,432Other assets

    13,56714,657Total assets

    $

    1,301,716$

    1,231,453LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Current portion of long-term debt

    $

    30,625$

    21,875Accounts payable

    37,20333,000Payables due to distribution agreement partners

    64,97169,359Accrued salaries and employee benefits

    13,84016,174Accrued government pricing liabilities

    28,46839,614Accrued legal fees

    7,2374,150Accrued legal settlements

    82,80037,800Payable to former Anchen securityholders

    12,63020,620Accrued expenses and other current liabilities

    21,9839,604Total current liabilities

    299,757252,196Long-term liabilities

    24,21119,952Non-current deferred tax liabilities

    26,72225,974Long-term debt, less current portion

    306,250323,750Commitments and contingencies

    ——Stockholders' equity:Common stock, par value $0.01 per share, authorized 90,000,000 shares; issued39,989,734 and 39,677,291 shares

    400397Additional paid-in capital

    403,883389,166Retained earnings

    325,538302,984Accumulated other comprehensive income

    3713Treasury stock, at cost 3,229,853 and 3,201,858 shares

    (85,082)(82,979)Total stockholders' equity

    644,776609,581Total liabilities and stockholders' equity

    $

    1,301,716$

    1,231,453 

     PAR PHARMACEUTICAL COMPANIES, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (In Thousands, Except Per Share Data)
    (Unaudited)Three months endedSix months endedJune 30,
    2012
    June 30,
    2011
    June 30,
    2012
    June 30,
    2011
    Revenues:Net product sales

    $

    285,797$

    215,018$

    549,920$

    435,807Other product related revenues

    8,5369,17015,88521,333Total revenues

    294,333224,188565,805457,140Cost of goods sold, excluding amortization expense

    138,371122,556303,175243,094Amortization expense

    12,8082,60621,6305,367Total cost of goods sold

    151,179125,162324,805248,461Gross margin

    143,15499,026241,000208,679Operating expenses:Research and development

    20,7168,07750,61618,787Selling, general and administrative

    39,66746,15681,82693,101Intangible asset impairment

    ——2,000—Settlements and loss contingencies, net

    ——45,000190,560Restructuring costs

    —26,986—26,986Total operating expenses

    60,38381,219179,442329,434Operating income (loss)

    82,77117,80761,558(120,755)Interest income

    140382276805Interest expense

    (3,069)(150)(6,163)(301)Income (loss) from continuing operations beforeprovision (benefit) for income taxes

    79,84218,03955,671(120,251)Provision (benefit) for income taxes

    28,5378,85933,062(20,587)Income (loss) from continuing operations

    51,3059,18022,609(99,664)Discontinued operations:Provision for income taxes

    2812755253Loss from discontinued operations

    (28)(127)(55)(253)Net income (loss)

    $

    51,277$

    9,053$

    22,554$

    (99,917)Basic earnings (loss) per share of common stock:Income (loss) from continuing operations

    $

    1.41$

    0.26$

    0.62$

    (2.79)Loss from discontinued operations

    —(0.01)—(0.01)Net income (loss)

    $

    1.41$

    0.25$

    0.62$

    (2.80)Diluted earnings (loss) per share of common stock:Income (loss) from continuing operations

    $

    1.38$

    0.25$

    0.61$

    (2.79)Loss from discontinued operations

    ———(0.01)Net income (loss)

    $

    1.38$

    0.25$

    0.61$

    (2.80)Weighted average number of common sharesoutstanding:Basic

    36,47835,98336,39235,742Diluted

    37,19436,70837,12235,742 

     Reconciliation Between Reported (GAAP); Adjusted Income (Loss) from Continuing Operations and "Cash EPS"
    (In Thousands, Except Per Share Data)
    (Unaudited)
    Three Months EndedJune 30, 2012GAAP 10-Q P&L
    CONSOLIDATED
    ADJUSTMENTSNON-GAAPRevenues:
    Net product sales

    $285,797$285,797
    Other product related revenues

    8,5368,536Total revenues

    294,333294,333Cost of goods sold, excluding amortization expense

    138,371138,371Amortization expense

    12,808(12,808)

    a

    -Total cost of goods sold

    151,179(12,808)138,371
    Gross margin

    143,15412,808155,962
    Gross margin %

    49%53%Operating expenses:
    Research and development

    20,71620,716
    Selling, general and administrative

    39,667(1,204)

    b

    38,463
    Intangible assets impairment

    --
    Settlements and loss contingencies, net

    --Total operating expenses

    60,383(1,204)59,179Operating income

    82,77114,01296,783Interest income

    140140Interest expense

    (3,069)(3,069)Income from continuing operations before

    provision for income taxes

    79,84214,01293,854Provision for income taxes

    28,5375,044

    c

    33,581Income from continuing operations

    51,3058,96860,273Discontinued operations:Provision for income taxes

    28(28)-Loss from discontinued operations

    (28)28-Net income

    $51,277$8,996$60,273Basic earnings per share of common stock:Income from continuing operations

    $1.41$1.65Loss from discontinued operations

    (0.00)0.00Net income

    $1.41$1.65Diluted earnings per share of common stock:Income from continuing operations$1.38$1.62Loss from discontinued operations

    (0.00)0.00Net income

    $1.38$1.62Weighted average number of common shares

    outstanding:
      Basic

    36,47836,478  Diluted

    37,19437,194a - Amortization expense ($12,808)b - Transaction costs ($732), amortization expense for Megace  ($472)c -  Estimated tax on adjustments ($5,044) Reconciliation Between Reported (GAAP); Adjusted Income (Loss) from Continuing Operations and "Cash EPS"
    (In Thousands, Except Per Share Data)
    (Unaudited)
    Six Months EndedJune 30, 2012GAAP 10-Q P&L
    CONSOLIDATED
    ADJUSTMENTSNON-GAAPRevenues:
    Net product sales

    $549,920$549,920
    Other product related revenues

    15,88515,885Total revenues

    565,805565,805Cost of goods sold, excluding amortization expense

    303,175(4,048)

    a

    299,127Amortization expense

    21,630(21,630)

    b

    -Total cost of goods sold

    324,805(25,678)299,127
    Gross margin

    241,00025,678266,678
    Gross margin %

    43%47%Operating expenses:
    Research and development

    50,616(10,000)

    c

    40,616
    Selling, general and administrative

    81,826(3,506)

    d

    78,320
    Intangible assets impairment

    2,000(2,000)

    e

    -
    Settlements and loss contingencies, net

    45,000(45,000)

    f

    -Total operating expenses

    179,442(60,506)118,936Operating income

    61,55886,184147,742Interest income

    276276Interest expense

    (6,163)(6,163)Income from continuing operations before

    provision for income taxes

    55,67186,184141,855Provision for income taxes

    33,06218,741

    g

    51,803Income from continuing operations

    22,60967,44390,052Discontinued operations:Provision for income taxes

    55(55)-Loss from discontinued operations

    (55)55-Net income

    $22,554$67,498$90,052Basic earnings per share of common stock:Income from continuing operations

    $0.62$2.47Loss from discontinued operations

    (0.00)0.00Net income

    $0.62$2.47Diluted earnings per share of common stock:Income from continuing operations$0.61$2.43Loss from discontinued operations

    (0.00)0.00Net income

    $0.61$2.43Weighted average number of common shares

    outstanding:
      Basic

    36,39236,392  Diluted

    37,12237,122a - Amortization of inventory step up established with Anchen purchase accounting ($4,048)b - Amortization expense ($21,630)c - Upfront and development milestone paymentsd - Transaction costs ($2,180), amortization expense for Megace ($852), and Anchen-related severance costs ($474)e - Impairment of Anchen IPR&D intangible assetsf -  Contingent lossg -  Estimated tax on adjustments ($18,741) 

     


    '/>"/>
    SOURCE Par Pharmaceutical Companies, Inc.
    Copyright©2012 PR Newswire.
    All rights reserved


    Related medicine technology :

    1. Onyx Pharmaceuticals Reports Second Quarter 2012 Financial Results
    2. Save Up To 25% on International Biotech and Healthcare, and Pharmaceutical Conferences by Registering Through GII
    3. MAP Pharmaceuticals, Inc. Prices Public Offering of Common Stock
    4. Avanir Pharmaceuticals Announces Date Of Fiscal 2012 Third Quarter Financial Results And Conference Call
    5. AcelRx Pharmaceuticals Receives Two Additional U.S. Patents for Small-Volume Oral Transmucosal Dosage Forms
    6. Actinium Pharmaceuticals Announces The Addition of The Fred Hutchinson Cancer Research Center To Actiniums Multicenter Clinical Trial For Patients With Acute Myeloid Leukemia
    7. Synergy Pharmaceuticals to Present Scientific Posters at the Upcoming Gastroenterology Society Meetings in the U.S. and Europe
    8. Inovio Pharmaceuticals Inc. to Webcast, Live, at RetailInvestorConferences.com on August 2nd
    9. Nouveau Life Pharmaceuticals (NOUV) Releases Krill Oil to Support Healthy Cholesterol Levels and Reduce Inflammation
    10. Kinex Pharmaceuticals Receives Substantial Strategic Investment
    11. Auxilium Pharmaceuticals, Inc. Announces Second Quarter 2012 Financial Results
    Post Your Comments:
    *Name:
    *Comment:
    *Email:
    (Date:2/8/2016)... 2016   Intarcia Therapeutics, Inc. today announced ... into the newly created role of Vice President, Head ... has two decades of leadership experience at leading pharmaceutical, ... academic medical center. Most recently Dr. Yee served as ... US Head Medical Officer at AstraZeneca, where he led ...
    (Date:2/8/2016)... PAOLI, Pa. , Feb. 8, 2016  As part ... Ltd has announced today the appointment of Lori Chmura ... more than 20 years in the industry, Chmura,s extensive experience ... in the advancement of Dune Medical Devices. ... Lori will be responsible for leading all sales, marketing and ...
    (Date:2/8/2016)... 2016  Avista Pharma Solutions ("Avista Pharma") announced today ... Financial Officer (CFO). Mr. Setzer is a finance and ... various roles within growing technology and life science companies. ... Executive Director of Finance at INC Research, a publicly ... . Previously, Mr. Setzer served as CFO of ...
    Breaking Medicine Technology:
    (Date:2/8/2016)... ... February 08, 2016 , ... GrassrootsHealth published data from ... type 2 diabetes in the GrassrootsHealth cohort with substantially higher vitamin D levels ... in public health,” states Carole Baggerly, Director of GrassrootsHealth, “the safety and ...
    (Date:2/8/2016)... ... February 08, 2016 , ... Guruji Mahendra Kumar Trivedi ... and 11th, 2016 in honor of his birthday on February 10th. During this ... Mahendra Trivedi is known by over 250,000 people from over 40 different countries as ...
    (Date:2/7/2016)... ... February 07, 2016 , ... Women's Excellence staff, in all ... Day. National Wear Red Day is the first Friday each February and a ... stroke cause 1 in 3 deaths among women each year – more than all ...
    (Date:2/6/2016)... ... , ... US Sports Camps is proud to sponsor the Bay Area Disc ... non-profit leaders, ultimate organizations, and coaches from around the US. The theme for this ... Director of Youth and Education, describes this year YUCC as “an important conversation we ...
    (Date:2/5/2016)... ... February 05, 2016 , ... Steven Tonkinson, 36, of ... completed every year since it started in 2003. This year, he ran all 26.2 ... fellow runners and NBA team the Miami Heat. , This Sunday, while many are ...
    Breaking Medicine News(10 mins):