Medicis Pharmaceutical (MRX)

[Investorman]

Medicis Reports First Quarter Fiscal 2003 Financial Results
October 17, 2002 4:12:00 PM ET


SCOTTSDALE, Ariz.--(BUSINESS WIRE)--Oct. 17, 2002--Medicis MRX today announced first quarter fiscal 2003 net revenue growth of 29% to $58.7 million with net income of $15.3 million, or $0.54 per diluted share, absent a $3.4 million tax-effected special charge reported in the first quarter associated with a research and development collaboration. Net income including the special charge associated with the research collaboration was $11.9 million, or $0.42 per diluted share. In the first quarter of fiscal 2002, Medicis reported net revenues of $45.5 million with net income of $13.8 million, or $0.44 per diluted share.

In the first quarter of fiscal 2003, revenues increased primarily due to growth in several of the Company's eight core brands, including LOPROX(R) (ciclopirox), PLEXION(R) (sodium sulfacetamide/sulfur) and TRIAZ(R) (benzoyl peroxide). The Company's eight core brands include: DYNACIN(R) (minocycline HCl), LOPROX(R) (ciclopirox), LUSTRA(R) (hydroquinone), OMNICEF(R) (cefdinir), ORAPRED(R) (prednisolone sodium phosphate), OVIDE(R) (malathion), PLEXION(R) (sodium sulfacetamide/sulfur) and TRIAZ(R) (benzoyl peroxide). Prescription volume growth for the Company's eight core brands increased 49% in total prescriptions and 69% in new prescriptions first quarter 2003 over first quarter 2002. Additionally, the Company's gross profit margins increased 1.2 percentage points, primarily due to changes in the Company's product mix.

"We are pleased to announce another strong quarter's growth in revenues and earnings," said Jonah Shacknai, Chairman and Chief Executive Officer of Medicis. "Impressive prescription trends for several of the Company's core dermatologic products have resulted from intensive efforts of our sales and marketing organization. We have also received encouraging clinical data on several key development projects that continue to progress toward commercialization. We are also pleased by the new collaborative relationships formed with several highly regarded organizations whose development expertise we expect to complement the strength of our pipeline."

The Company is raising its fiscal year 2003 earnings per share guidance by $0.02. Based upon information available currently to the Company, its guidance is as follows:

Fiscal Year 2003
ending June 30, 2003
(in millions, except per share amounts)

First Second Third Fourth Fiscal
Quarter Quarter Quarter Quarter Year
(9/30/02) (12/31/02)(3/31/03) (6/30/03) 2003
Actual Estimated Estimated Estimated Estimated
--------- --------- --------- --------- ---------
Current revenue
objectives $58.7 $59.0 $62.0 $65.0 $244.7
EPS guidance
prior to beginning
of fiscal year $0.53 $0.53 $0.56 $0.62 $2.24
Current EPS objectives
excluding special
charge of $5.4 million
in 1Q '03 $0.54 $0.54 $0.56 $0.62 $2.26
Current EPS objectives
including special
charge of $5.4 million
in 1Q '03 $0.42 $0.54 $0.56 $0.62 $2.13

At the time of this disclosure, Medicis believes these objectives are attainable based upon information currently available to the Company. The Company's business is subject to all risk factors outlined in the Company's most recent annual report on Form 10-K, its Form S-3 registration statement and other filed documents with the Securities and Exchange Commission. At the time of this release, the Company cannot, among other things, assess the forthcoming results of the Company's research and development projects and the risks associated with the FDA approval process, risks associated with significant competition within the Company's industry, nor can the Company validate its assumptions of the full impact on its business of the approval of competitive generic versions of the Company's core brands, or any future competitive product approvals that may affect the Company's brands. Additionally, Medicis may acquire and/or license products or technologies from third parties to enter into new strategic markets. The Company periodically makes up-front, non-refundable payments to third parties for research and development work which has been completed and periodically makes additional non-refundable payments for the achievement of various milestones. There can be no certainty which periods these potential payments could be made, nor if any payments such as these will be made at all. The above estimated future guidance does not include the potential payments associated with any such transactions, except for the first payment of the Dow transaction previously announced. Due to the uncertainty of the timing of the completion of the specified Dow development milestones and their associated payments, the Company has not adjusted its fiscal 2003 quarterly guidance for the inclusion of the possible payment of $8.8 million, which could occur as early as the second half of fiscal 2003.

On October 16, 2002, Joseph P. Cooper, Executive Vice President, Business Development, tendered his resignation to the Company. Mr. Cooper expects to remain with the Company through the end of the month before departing to assume the role of Chief Executive Officer and Director of a privately held, Arizona-based biotechnology company. During this transition period, Jonah Shacknai, Chairman and Chief Executive Officer of Medicis and Mark A. Prygocki, Sr., Executive Vice President, Chief Financial Officer of Medicis, will assume business development responsibilities previously managed by Mr. Cooper. In addition, the Company's Executive Committee has always been, and will continue to maintain an active role in the assessment, pursuit and execution of the numerous business development opportunities available to the Company.

Medicis is the leading independent specialty pharmaceutical company in the United States focusing primarily on the treatment of dermatological, pediatric and podiatric conditions. Medicis has leading prescription products in a number of therapeutic categories, including acne, asthma, eczema, fungal infections, head lice, hyperpigmentation, photoaging, psoriasis, rosacea, seborrheic dermatitis and skin and skin-structure infections. The Company's products have earned wide acceptance by both physicians and patients due to their clinical effectiveness, high quality and cosmetic elegance.

The Company's products include the prescription brands DYNACIN(R) (minocycline HCl), LOPROX(R) (ciclopirox), LUSTRA(R) (hydroquinone), LUSTRA-AF(R) (hydroquinone) with sunscreen, ALUSTRA(R) (hydroquinone) with retinol, OMNICEF(R) (cefdinir), ORAPRED(R) (prednisolone sodium phosphate), OVIDE(R) (malathion), PLEXION(R) Cleanser (sodium sulfacetamide/sulfur), PLEXION TS(R) (sodium sulfacetamide/sulfur), PLEXION SCT(R) (sodium sulfacetamide/sulfur), TRIAZ(R) (benzoyl peroxide), LIDEX(R) (fluocinonide), SYNALAR(R) (fluocinolone acetonide) and TOPICORT(R) (desoximetasone); the over-the-counter brand ESOTERICA(R); and BUPHENYL(R) (sodium phenylbutyrate), a prescription product indicated in the treatment of Urea Cycle Disorder.