Dusa Pharma (Dusa)

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DUSA Pharmaceuticals Reports Second Quarter 2009 Corporate Highlights and Financial Results
Q2 Domestic PDT revenues up 24% year over year; Kerastick margins reach a record high of 85%
Press Release
Source: DUSA Pharmaceuticals, Inc.
On Tuesday August 11, 2009, 6:30 am EDT

Companies:DUSA Pharmaceuticals Inc.
WILMINGTON, Mass., Aug. 11 /PRNewswire-FirstCall/ -- DUSA Pharmaceuticals, Inc.(®) (NASDAQ GM: DUSA), a dermatology company that is developing and marketing Levulan(®) Photodynamic Therapy (PDT) and other products focused on patients with common skin conditions, reported today its corporate highlights and financial results for the second quarter ended June 30, 2009.

Financial highlights for the second quarter and first half of the year include:

Domestic PDT revenues totaled $6.1 million for the second quarter of 2009, representing a $1.2 million, or 24%, improvement as compared to the second quarter of 2008. First half 2009 domestic PDT revenues totaled $12.4 million, representing a $2.3 million, or 22%, improvement year over year.
Domestic Kerastick(®) revenues totaled $5.6 million for the second quarter of 2009, representing a $1.0 million, or 23%, improvement as compared to the second quarter of 2008. First half 2009 domestic Kerastick(® )revenues totaled $11.3 million, representing a $2.0 million, or 21%, improvement year over year.
Domestic BLU-U(®) revenues totaled $0.5 million for the second quarter of 2009, representing a $0.1 million, or 38%, improvement as compared to the second quarter of 2008. First half 2009 domestic BLU-U(®) revenues totaled $1.1 million, representing a $0.3 million, or 36%, improvement year over year.
Kerastick(®) gross margins for the second quarter of 2009 reached a record high of 85%.

Management Comments:

"While overall revenues were down for the quarter, due to the loss of Nicomide(®) sales, continued growth in our core PDT business helped to partially offset the year over year shortfall," stated Robert Doman, President and CEO. "In the face of a challenging economic environment, our domestic PDT business experienced strong growth in the second quarter. Domestic PDT growth was driven by increased penetration and utilization of our therapy in the medical dermatology and hospital segments of our business."

"We are pleased to announce another successful BLU-U(®) sales quarter. Despite a difficult capital equipment market, first half BLU-U(®) unit sales were up 43% as compared to the prior year," continued Doman.

"For the second half of the year, we expect to see expanded adoption of our therapy by the marketplace. While we expect that adverse economic conditions will negatively impact the international markets and the non-reimbursed cosmetic/medi spa segment of our business in the U.S., the medical dermatology segment of our business continues to demonstrate robust growth. We also look forward to the further advancement of our solid organ transplant recipients (SOTRs) clinical trial which was initiated in May," concluded Doman.

Second Quarter 2009 Financial Results:

Total product revenues were $7.0 million in the second quarter of 2009, down 14% from $8.1 million in the second quarter of 2008. PDT revenues totaled $6.4 million, up $1.0 million, or 18%, from $5.4 million for the comparable 2008 period. The increase in PDT revenues was attributable to a 17% increase in Kerastick(®) revenues and a 38% increase in BLU-U(®) revenues. The Kerastick(® )revenue increase was driven by an 11% increase in our domestic Kerastick(®) volume and an overall 14% increase in our average selling price. Kerastick(®) sales volumes increased to 49,815 in the second quarter of 2009 from 48,478 units sold in the second quarter of 2008. Domestic Kerastick(®) sales volumes increased by 4,662 units, or 11%, and were partially offset by a 3,325 unit decrease in our international sales volumes. The BLU-U(®) revenue increase was driven by a 41% increase in sales volume. There were 58 units sold during the quarter, representing a 17 unit increase over the prior year quarterly total of 41 units. Non-PDT revenues totaled $0.5 million versus $2.7 million for the comparable 2008 period. Non-PDT revenues were adversely impacted by the absence of Nicomide(® )sales in 2009. In response to discussions with the Food and Drug Administration (FDA) regarding our marketing of certain products considered by the FDA to be marketed unapproved drugs, the Company stopped shipping Nicomide(® )into the wholesale channel in June of 2008.

DUSA's net loss on a GAAP basis for the second quarter of 2009 was ($0.9) million, or ($0.04) per common share, compared to a net loss of ($0.1) million, or ($0.01) per common share, in the second quarter of 2008.

DUSA's non-GAAP net loss for the second quarter of 2009, after adjustments for stock-based compensation expense, consideration provided to the former Sirius shareholders, and the non-cash change in fair value of warrants, was ($0.4) million, or ($0.02) per common share, compared to a net loss of ($0.2) million, or ($0.01) per common share, in the prior year period. The increase in our net loss was primarily the result of the year over year shortfall in our Non-PDT revenues, which was partially offset by incremental PDT revenues, lower operating costs due to the absence of spending on our Phase IIb acne clinical trial which concluded in 2008 and lower promotional expenses associated with the non-PDT product segment.

Please refer to the section entitled "Use of Non-GAAP Financial Measures" and the accompanying financial table included at the end of this release for a reconciliation of GAAP to non-GAAP results for the three and six month periods ending June 30, 2008 and 2009, respectively.

First Half 2009 Financial Results:

Total product revenues for the six month period ended June 30, 2009 were $14.1 million, down 12% from $16.0 million in comparable prior year period. PDT revenues totaled $13.1 million, up $1.9 million, or 17% from $11.3 million for the comparable 2008 period. The increase in PDT revenues was attributable to a 15% increase in Kerastick(®) revenues and a 36% increase in BLU-U(®) revenues. The Kerastick(® )revenue increase was driven by a 9% increase in our domestic Kerastick(®) volume and an overall 14% increase in our average selling price. Kerastick(®) sales volumes increased to 101,762 in the first half of 2009 from 100,588 units sold in the first half of 2008. Domestic Kerastick(®) sales volumes increased by 8,028 units, or 9%, and were partially offset by a 6,854 unit decrease in our international sales volumes. The BLU-U(®) revenue increase was driven by a 43% increase in sales volume. There were 139 units sold during the first half of 2009, representing a 42 unit increase over the prior year first half total of 97 units. Non-PDT revenues totaled $1.0 million versus $4.8 million for the comparable 2008 period. Non-PDT revenues were adversely impacted by the absence of Nicomide(® )sales in 2009.

DUSA's net loss on a GAAP basis for the six months ended June 30, 2009 was ($2.5) million or ($0.10) per common share, compared to a net loss of ($1.4) million or ($0.06) per common share in the first half of 2008.

DUSA's non-GAAP net loss, after adjustments for stock-based compensation expense, consideration provided to the former Sirius shareholders, and the non-cash change in fair value of warrants, for the six months ending June 30, 2009 was ($1.7) million, or ($0.07) per common share, in 2009, compared to ($0.9) million, or ($0.04) per common share, in 2008. The increase in our net loss was primarily the result of the year over year shortfall in our Non-PDT revenues and the absence of damages payments from River's Edge, which were partially offset by incremental PDT revenues, lower operating costs due to the absence of spending on our Phase IIb acne clinical trial which concluded in 2008, a Prescription Drug User Fee Act (PDUFA) charge accrued in the prior year period, and lower promotional expenses associated with the non-PDT product segment.

As of June 30, 2009, total cash, cash equivalents, and marketable securities were $16.4 million, compared to $18.9 million at December 31, 2008.

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