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KV Pharmaceutical Company Reports Record Revenues for Fiscal 2008 Second Quarter and Six Months on a Preliminary Basis
ST. LOUIS
(Map)
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All financial data presented herein is preliminary and subject to change
until completion of our consolidated financial statements for all such
periods, which is dependent on the completion of our previously announced
restatement of the Company's financial statements for fiscal years 1996
through 2006 and the quarter ended
Second Quarter Results
Net revenues for the second quarter increased 61% to
The improvement in net revenues was due to the
Consolidated gross profit margin for the second quarter was 74.2%,
compared with 63.8% in the year ago period. Net income for the quarter was
Six-Month Results
Net revenues for the fiscal 2008 six-month period improved 40% to
During the first six months of fiscal 2008, the Company's consolidated
gross margin was 70.8%, compared to 64.7% for the corresponding period of
fiscal 2007. Gross margin for the branded business remained strong at 89.2%
for the first six months of the current fiscal year, compared to 88.5% for the
first six months of fiscal 2007. ETHEX Corporation, with the contribution from
Metoprolol Succinate Extended Release Tablets launched in
Net income for the six-month period included a write-off of
Marc S. Hermelin, Chairman of the Board and Chief Executive Officer stated, "While the numbers reported today are preliminary, we are exceedingly pleased with the performance of the Company through the first six months of fiscal 2008. We anticipate that the continued performance of Metoprolol Succinate Extended Release Tablets at ETHEX Corporation, coupled with the exciting launch of Evamist(TM) planned for Ther-Rx after the first of the upcoming calendar year, will result in a time of extraordinary growth at KV for fiscal 2008 and beyond."
Stock Option Review Results
As the Company has previously reported, KV's Board of Directors has accepted a final report on the findings of an internal investigation of historical stock option granting practices conducted by a special committee of independent board members.
The Company will restate its financial statements for fiscal years 1996 - 2006 to record additional non-cash stock compensation expense, as well as additional tax expense, as a result of the above-noted investigation. In addition, income tax expense, unrelated to stock compensation expense, will also be included in the restatement of the Company's consolidated financial statements for the fiscal periods 2004 through 2006.
Due to the pending restatement, the financial results reported for the
second quarter and six-month period for fiscal 2008 are preliminary and
subject to change as discussed above and will be reviewed by the Company's
independent auditors. The Company is working diligently to complete the
Business Segment Highlights:
ETHEX Corporation
-- Launch during the Second Quarter of 100 mg and 200 mg Metoprolol
Succinate Extended Release Tablets with 180-day exclusivity
-- Net revenue contribution of $50.4 million from initial launch of 100 mg
and 200 mg Metoprolol Succinate Extended Release Tablets
-- In the first three months since launch we have captured 47% and 48%
market share, respectively, on the 100 mg and 200 mg strengths of
Metoprolol Succinate Extended Release Tablets, according to IMS week
ended September 28, 2007 NPA audited TRx data
-- Higher volume in pain management and cardiovascular product lines
-- Continued growth of Diltiazem HCl Extended Release Capsules
(Tiazac(R) - Forest Pharmaceuticals, Inc.) with a 37% market share and
$6.5 million net revenue contribution during the quarter
-- Improvement in average gross margin from 56.7% in the second quarter of
fiscal 2007 to 70.5% in the second quarter of fiscal 2008
Net revenues for the Company's specialty generic/non-branded business
increased 102% for the second quarter to
Net revenue growth in the current year periods was due to increased volume
in the Company's pain management and cardiovascular lines, as well as the
launch in the second quarter of the 100 mg and 200 mg strengths of Metoprolol
Succinate Extended Release Tablets (Toprol-XL(R) - AstraZeneca) which
contributed approximately
The Company expects increased contribution from both Diltiazem HCl Extended Release Capsules and its two strengths of Metoprolol Succinate Extended Release Tablets for the remainder of fiscal 2008 and beyond.
KV believes it has a solid pipeline of new products and continues to anticipate new approvals for ETHEX throughout the remainder of fiscal 2008. The Company also has been sued by Purdue Pharma L.P. on its ANDA filing on all strengths of Oxycontin and by Novartis and Celgene on its ANDA filing on all strengths of Ritalin LA. The Company plans to defend such suits vigorously but cannot give assurance as to the outcome of these pending suits.
Ther-Rx Corporation
-- 14% net revenue growth year-to-date
-- Clindesse(R) total prescription volume grew by 35.1% in the current
quarter from the year-ago period
-- Women's anti-infective net revenues up 17.2% year-to-date
-- Prenatal line capturing over 20.7% for fiscal year 2008 year-to-date of
total prescriptions
-- Second quarter anemia line net revenues up 34% compared to the year-ago
period.
-- FDA approval on acquired product, Evamist(TM), with launch planned for
second half of fiscal 2008
Net revenues for the Ther-Rx brand marketing division increased 13% for
the quarter to
Anti-Infective Products:
During the second quarter, Ther-Rx's anti-infective product Clindesse(R)
continued to show net revenue growth. Clindesse(R) remains the fastest growing
branded intra-vaginal prescription product to treat bacterial vaginosis (BV)
in the
For the second quarter of fiscal 2008, Gynazole-1(R) contributed
Prenatal Line of Products:
Ther-Rx prenatal vitamins comprised more than 40.5% of the total branded
prescription prenatal vitamin market as of the end of
The PrimaCare(R) brand continues to be the #1 brand among prescription
prenatal vitamins containing essential fatty acids (EFA) in the
Oral Iron Supplementation Products:
Ther-Rx anemia franchise saw new prescriptions grow 3.9% for the second
quarter of fiscal 2008, compared to the second quarter of fiscal 2007. KV's
newest entrant into the oral iron supplementation market, Repliva 21/7(TM),
remains the fastest growing branded oral iron product in the
Food and Drug Administration Approval Granted to Market Acquired Product - Evamist(TM):
During the second quarter of fiscal 2008, the Company announced the approval by the U.S. Food and Drug Administration (FDA) for the marketing of Evamist(TM), for which KV acquired exclusive U.S. marketing rights. This approval marks the FDA's first approval of an estradiol transdermal spray. KV will market the product as part of its Ther-Rx women's health product line.
Evamist(TM) is a metered dose transdermal estradiol spray for the
treatment of moderate to severe vasomotor symptoms due to menopause. The
Company expects to launch the product after the first of the upcoming calendar
year. The product targets an annual
About KV Pharmaceutical Company
KV Pharmaceutical Company is a fully integrated specialty pharmaceutical company that develops, manufactures, markets and acquires technology-distinguished branded and generic/non-branded prescription pharmaceutical products. The Company markets its technology-distinguished products through ETHEX Corporation, a national leader in pharmaceuticals that compete with branded products, and Ther-Rx Corporation, its branded prescription pharmaceutical subsidiary.
For further information about KV Pharmaceutical Company, please visit the Company's corporate website at www.kvpharmaceutical.com.
Safe Harbor
The information in this release may contain various forward-looking
statements within the meaning of the
All statements that address expectations or projections about the future, including without limitation, statements about the Company's strategy for growth, product development, product launches, regulatory approvals, market position, market share increases, acquisitions, revenues, expenditures and other financial results, are forward-looking statements.
All forward-looking statements are based on current expectations and are subject to risk and uncertainties. In connection with the "safe harbor" provisions, KV provides the following cautionary statements identifying important economic, political and technology factors, which among others, could cause actual results or events to differ materially from those set forth or implied by the forward-looking statements and related assumptions.
Such factors include (but are not limited to) the following: (1) changes
in the current and future business environment, including interest rates and
capital and consumer spending; (2) the difficulty of predicting FDA approvals,
including timing, and that any period of exclusivity may not be realized; (3)
acceptance and demand for new pharmaceutical products; (4) the impact of
competitive products and pricing, including as a result of so-called
authorized-generic drugs; (5) new product development and launch, including
the possibility that any product launch may be delayed or that product
acceptance may be less than anticipated, (6) reliance on key strategic
alliances; (7) the availability of raw materials; (8) the regulatory
environment, including regulatory agency and judicial actions and changes in
applicable law or regulations; (9) fluctuations in revenues; (10) the
difficulty of predicting international regulatory approval, including timing;
(11) the difficulty of predicting the pattern of inventory movements by the
Company's customers; (12) the impact of competitive response to the Company's
sales, marketing and strategic efforts; (13) risks that the Company may not
ultimately prevail in litigation; (14) the proposed restatement of the
Company's financial statements for fiscal periods from 1996 through 2006 and
for the quarter ended
This discussion is by no means exhaustive, but is designed to highlight important factors that may impact the Company's outlook. We are under no obligation to update any of the forward-looking statements after the date of this release.
Reconciliation of GAAP based earnings and earnings per Class A Common
share to adjusted non-GAAP earnings and earnings per Class A
Common share
for the six months ended September 30, 2007
(unaudited)
Income Effect
Per Share Amount
Income as reported (GAAP) $.84 $48,400,000
After-tax effect of write-off of
acquired in-process research and
development $.11 $6,500,000
Earnings and Earnings per Class A
common share - assuming dilution,
excluding effect of acquired
in-process research and development
write-off $.95 $54,900,000
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