RNS NO 1691P
ELAN CORPORATION
7th November 1997
Contact: David Kelly Judy Brennan
Group Vice President - Finance Sard Verbinnen & Co
Warner Chilcott, plc 212 687 8080
353 1 709 4278 (Dublin)
James G. Andress
Chief Executive Officer
Warner Chilcott, plc
212 755 0111 (New York)
Warner Chilcott, plc Announces Third Quarter 1997 Results
Net Loss Reduced by 28%
Dublin Ireland, November 7, 1997 - Warner Chilcott, plc ("Warner Chilcott")
(NASDAQ: WCRXY today announced for the quarter ended September 30, 1997 (the
"the third quarter"), an improving net loss of ($6.9 million) or (-$.65) per
share, compared with ($9.7 million) and ($2.04) per share for the same period
in the prior year. For the nine month period ended September 30, 1997, net
loss and loss per share were ($19.9 million) and ($2.84) respectively,
compared with ($34.1 million) and ($9.25) for the same period in the prior
year.
The nine month results ended September 30, 1996 do not include operating
results for the multi-source generics medicines business acquired from
Warner-Lambert Company on March 28, 1997 ("The Warner Chilcott Division").
Revenues for the three months ended September 30, 1997, were $21.5 million
compared with $21.7 million in the same period in the prior year. Revenues
were $61.2 million for the nine months ending September 30, 1997 compared with
$46.7 million for the same period in the prior year. If the first quarter
1996 revenues for the Warner Chilcott Division were included on a pro forma
basis, comparisons would be $61.2 million for the first nine months of 1997,
compared with $62.0 million for the same period in 1996.
Declining revenues in generics were offset by sales from higher gross margin
speciality branded pharmaceuticals launched during the quarter ended June 30,
1997. These products were LoCholest, Warner Chilcotts promoted cholestyramine
powder for treating elevated cholesterol levels, and Vectrin, Warner Chilcotts
brand of minocycline, being promoted for treatment of mild to moderate acne.
Year-to-date, these products, together with five products acquired from
Warner-Lambert Company in July 1997, have generated revenues of approximately
$6.0 million and in the latest quarter, their sales were approximately $1.9
million.
Sales from the multi-source generics business acquired with the Warner
Chilcott Division continued to decline as expected - $19.6 million vs. $21.7
million in the third quarters of 1997 and 1996, respectively, and $54.9
million vs. $62.0 million for the nine months ending September 30, in both
1997 and 1996 (pro forma), respectively.
As a result of the change in sales mix from lower margin generics to higher
margin promoted brands, gross margins have improved from 14.3% in 1996 to
17.5% in 1997 in the respective third quarters.
Warner Chilcott highlighted significant operating and strategic milestones
during the third quarter:
* The successful completion of an Initial Public Offering ("IPO" of
4,025,000 common shares, generating gross proceeds of $70 million,
making it one of the largest IPOs in the history of the US
pharmaceutical industry.
* The sale of 250,000 shares to Barr Laboratories, Inc., as part of a
strategic alliance between the two companies focused on
commercialisation of selected Barr generic products as branded
specialists by Warner Chilcott.
* The acceptance by the Food and Drug Administration ("FDA") of Warner
Chilcotts Abbreviated New Drug Application ("ANDA") for a generic
equivalent to Adalat CC (a sustained release form of nifedipine
registered to Bayer AG). Warner Chilcott filed an ANDA for a generic
equivalent to Imdur (a long-acting nifedipine registered by Schering-
Plough) earlier in the year, which was also accepted for filing and is
presently under review by the FDA.
* The completion of the acquisition of five branded products from the
Warner-Lambert Company. These products are already on the market and
generating sales and prescriptions, but are scheduled to be promoted
during 1998.
* The continued growth in sales and prescriptions for Warner
Chilcotts two new branded products launched in 1997 - Vectrin (an
antibiotic for treatment of acne) and LoCholest (a strawberry flavoured,
smooth-textured cholestyramine for lowering elevated LDL cholesterol).
* The recruitment, training and development of 160 professional sales
representatives to support the launch of Warner Chilcotts new branded
pharmaceutical specialities in three niche areas: dermatology,
cardiovascular medicine and womens healthcare.
General and administrative costs for the third quarters of 1997 and 1996 were
$9.3 million and $5.8 million, an increase of approximately 66%. These
increases result primarily from the recruitment of a professional sales force
to promote Warner Chilcotts branded pharmaceutical speciality products. By
the end of October, 1997, Warner Chilcott had 160 field representatives,
compared with none in all of 1996, since Warner Chilcotts business at that
time was entirely generic medicines, requiring no promotion to physicians.
Research and development expenses for the third quarter were $1.3 million in
1997, compared with $3.8 million in third quarter 1996, a decrease of 67%.
R&D spending during third quarter 1996 was unusually high due to
accomplishment of a number of key milestones in development of generic forms
of Imdur and Adalat CC for Warner Chilcott by Elan Corporation, plc. These
products were submitted for approval to the FDA in 1997. Current year R&D
spending levels reflect more normal flow of product formulation activity for
both branded and generics medicines.
Net interest expense in the third quarter has declined from ($3.2 million) in
1996 to ($0.01 million) in 1997. The sharp decline is due primarily to
conversion of senior subordinated debt to common equity prior to Warner
Chilcotts recently completed IPO. Weighted average shares outstanding
increased from 4,765,000 to 10,590,000 as a result of the IPO.
Commenting on the results for the third quarter and year-to-date, James G.
Andress, Chief Executive Officer of Warner Chilcott said, "We are solidly on
track with all that we set out to accomplish leading up to and immediately
after out public offering. We have put in place all of the resources and
actions that should be necessary to complete our transaction from a simple
multi-source generics company into a fully integrated speciality
pharmaceutical company. We have the management, organisation infrastructure,
unique product development support from Elan and Barr - and a great 100 year
old name and heritage in Warner Chilcott. With tools like these, I look
forward with great enthusiasm to what lies ahead".
Warner Chilcott is a fully integrated speciality pharmaceutical company and
its principal operations are in Dublin, Ireland and Rockaway, New Jersey.
Statements made in this press release that are not descriptions of historical
fact may be forward-looking statements that are subject to risks and
uncertainties. Warner Chilcotts actual results could differ materially from
those currently anticipated due to a number of factors including, but not
limited to, those identified in Form F-1 as filed with the SEC.
WARNER CHILCOTT PUBLIC LIMITED COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Three months ended September 30, Nine months ended September 30,
1996 1997 1996 1997
US$000s US$000s US$000s US$000s
Revenues
21,731 21,523 Net sales 46,671 61,172
----------------------- -----------------------
21,731 21,523 Total Revenues 46,671 61,172
----------------------- -----------------------
Costs and expenses:
18,605 17,742 Costs of goods sold 38,217 51,028
5,857 9,342 Selling, general and 9,969 19,208
administrative
3,832 1,258 Research and development 11,200 5,829
One time charge
- - - acquired in process 16,000 -
research and development
----------------------- -----------------------
28,294 28,342 Total operating expenses 75,386 76,065
----------------------- -----------------------
(6,563) (6,819) Operating loss (28,715) (14,893)
42 397 Interest income 401 461
(3,203) (504) Interest expense (5,827) (5,476)
----------------------- -----------------------
(9,724) (6,926) Loss before provision (34,141) (19,908)
for income taxes
- - Provision for income taxes - -
----------------------- -----------------------
(9,724) (6,926) Net loss (34,141) (19,908)
======================= =======================
Weighted average number
of ordinary and equivalent
shares outstanding
4,765 10,590 (in thousands) 3,691 7,014
(US$2.04) (US$0.65) (Loss) per ordinary and (US$9.25) (US$2.84)
and equivalent share
Notes:
The financial statements included in this press release have been compiled in
accordance with United States generally accepted accounting principles.
WARNER CHILCOTT PUBLIC LIMITED COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
December 31, September 30,
1996 1997
US$000s US$000s
(audited) (unaudited)
ASSETS
Current Assets:
Cash and cash receivables 2,663 58,356
Accounts receivable 21,419 24,990
Inventories 23,300 16,340
Prepayments 1,668 3,295
---------- ----------
Total current assets 49,050 102,981
---------- ----------
Fixed Assets:
Property, plant and equipment (net) 2,098 1,192
---------- ----------
Intangible assets 72,520 85,475
---------- ----------
Total assets 123,668 189,648
========== ==========
LIABILITIES AND SHAREHOLDERS EQUITY
Current Liabilities:
Accounts payable 12,031 12,792
Accrued liabilities 1,737 7,716
Short term debt 18,200 18,483
Current portion of long term debt :
Elan Corporation plc 1,000 -
Due to Elan Corporation plc and subsidiaries 5,584 9,977
---------- ----------
Total current liabilities 38,552 48,968
---------- ----------
Other Liabilities:
Long term debt, convertible into
Ordinary Shares 53,204 7,634
Long term debt : Elan Corporation plc 3,729 -
---------- ----------
56,933 7,634
---------- ----------
Shareholders Equity
Ordinary shares 238 618
Deferred shares 45 45
Additional paid in capital 82,807 209,051
Accumulated deficit (54,907) (74,815)
Deferred compensation - (1,853)
---------- ----------
Shareholders equity 28,183 133,046
---------- ----------
Total liabilities and shareholders
equity 123,668 189,648
========== ==========
Notes:
The financial statements included in this press release have been compiled in
accordance with United States generally accepted accounting principles.
END
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