King Pharmaceuticals announces total revenues of $463M for the third quarter of 2009

Nov 5 2009

King Pharmaceuticals, Inc. (NYSE:KG) announced today that total revenues were $463 million during the third quarter ended September 30, 2009, compared to $388 million in the third quarter of 2008. The Company reported net income of $42 million and diluted earnings per share of $0.17 during the third quarter of 2009, compared to net income of $82 million and diluted earnings per share of $0.34 in the third quarter of the prior year. Excluding certain special items and recurring non-GAAP adjustments, adjusted net income equaled $71 million and adjusted diluted earnings per share equaled $0.29 during the third quarter ended September 30, 2009, compared to adjusted net income of $95 million and adjusted diluted earnings per share of $0.39 in the third quarter of 2008.

Similar to its financial reporting in prior years, King reports financial results determined in accordance with Generally Accepted Accounting Principles (“GAAP”) and also adjusted financial results. However, beginning with the first quarter of 2009, King’s adjusted financial results exclude the amortization of intangible assets and non-cash imputed interest expense associated with the Company’s $400 million 1¼% Convertible Senior Notes, as well as special items. For more information, see the “About Adjusted Financial Results” paragraph below.

Brian A. Markison, Chairman, President and Chief Executive Officer of King, stated “The transformation of King to a fully integrated specialty pharmaceutical company was further supported by strong third quarter performances reported by each of our business segments.” Mr. Markison continued, "The highlights included the approval, launch and successful wholesaler stocking of EMBEDA™, record third quarter Animal Health revenues and the shipment of Meridian’s next generation EpiPen^® Auto-Injector. We believe that the combination of all three businesses will continue to contribute to our long-term growth strategy.”

Joseph Squicciarino, King’s Chief Financial Officer, stated, “Through measured financial progress against our previously stated goals, we continue to execute on our strategic plan to transform King into a leader in the specialty pharmaceutical sector.” He continued, “The Company’s reported third quarter results reflect strong cash flow from operations as well as a significant repayment of debt associated with the Alpharma acquisition, including complete repayment of the $200 million term loan in October. We remain committed to enhancing shareholder value through prudent financial management.”

As of September 30, 2009, the Company’s cash and cash equivalents totaled approximately $480 million.

Total Company revenue increased 19% to $463 million in the third quarter of 2009 compared to the third quarter of 2008 primarily due to branded pharmaceutical and Animal Health sales recorded as a result of the Alpharma acquisition and an increase in sales of Auto-Injectors in the Meridian business.

Net revenue from branded pharmaceuticals totaled $283 million for the third quarter of 2009, compared to $302 million during the third quarter of 2008. The decrease in revenues was primarily due to the sales declines of our THROMBIN-JMI^® product and the market entry of generic substitutes for ALTACE^® (ramipril) beginning in December 2007, offset by the addition of revenues from sales of FLECTOR^® PATCH and EMBEDA™.

Net sales of SKELAXIN^® (metaxalone) totaled $102 million during the third quarter of 2009, compared to $110 million during the same period of the prior year.

Net sales of our THROMBIN-JMI^® (thrombin, topical, bovine, USP) product totaled $43 million during the third quarter of 2009, compared to $67 million during the third quarter of 2008.

Net sales of AVINZA^® (morphine sulfate extended release) totaled $31 million during the third quarter of 2009, compared to $36 million during the third quarter of 2008.

Net sales of FLECTOR^® PATCH (diclofenac epolamine topical patch) 1.3% totaled $40 million during the third quarter of 2009. The Company obtained FLECTOR^® PATCH as a result of its acquisition of Alpharma on December 29, 2008.

Net sales of EMBEDA™ totaled $11 million during the third quarter of 2009. The Company announced the launch and commercial availability of EMBEDA™ on September 21, 2009.

Revenues from the Animal Health business were $96 million for the third quarter ended September 30, 2009. The Company added the Animal Health business as a result of its acquisition of Alpharma.

King’s Meridian Auto-Injector business contributed revenue totaling $72 million during the third quarter of 2009, compared to $68 million during the third quarter of 2008. During the third quarter of 2009, the next generation EpiPen^® Auto-Injector was shipped to Dey L. P. in preparation for a fourth quarter 2009 launch.

Royalty revenues, derived primarily from ADENOSCAN^® (adenosine), totaled $12 million during the third quarter of 2009 compared to $18 million during the third quarter of 2008.