Par Pharmaceutical reports total revenues of $1,193.2 million for 2009

Par Pharmaceutical Companies, Inc. (NYSE: PRX) today reported results for the fourth quarter and full year ended December 31, 2009.

For the fourth quarter ended December 31, 2009, Par reported total revenues of $290.3 million and net income of $10.7 million, or $0.31 per diluted share, which includes pre-tax adjustments of $10.5 million of milestone payments to development partners, $3.5 million to settle preexisting litigation, and a $5.0 million loss on extinguishment of debt.  Adjusting for these items, net income was $22.8 million, or $0.65 per diluted share.  This is compared to reported revenues of $161.3 million and a net loss of $35.9 million, or $1.08 per diluted share for the same period in 2008, which included several one-time items. Adjusting for those one-time items, net income was $7.1 million, or $0.21 per diluted share for the fourth quarter 2008.  

For the full year ended December 31, 2009, total revenue was $1,193.2 million with net income of $76.9 million, or $2.25 per diluted share. Adjusting for one-time items, net income was $85.9 million, or $2.51 per diluted share.  This is compared to total revenues of $578.1 million and adjusted net income of $1.8 million, or $0.05 per diluted share for the full year 2008.

Fourth Quarter Highlights  

Key Product Sales (Net sales comparisons at the product level are to third quarter 2009, which had 14 weeks of sales versus 13 weeks of sales in the fourth quarter 2009.)

• Metoprolol:  For the quarter ended December 31, 2009, net sales of metoprolol succinate were $163.0 million, a slight increase from the third quarter 2009.  Par remained the exclusive supplier of the 100mg and 200mg strengths of metoprolol succinate through the fourth quarter.  Par is the authorized generic for all strengths of AstraZeneca's Toprol® XL.
  

• Sumatriptan: Net sales of sumatriptan succinate were $17.8 million in the fourth quarter compared to $16.7 million in the prior quarter.  The increase is due to additional volume driven by customer buying patterns.  Par remained the exclusive supplier of generic Imitrex® 4mg and 6mg starter kits and 4mg prefilled cartridges and had one competitor in the 6mg prefilled cartridges throughout the fourth quarter.
  

• Clonidine:  Net sales for the fourth quarter were $13.4 million compared to $20.4 million in the third quarter.  The decrease was due to unanticipated demand for the product as a result of being the only generic supplier coupled with a long lead time necessary to produce additional supply.
  

• Meclizine: Net sales for the three months ended December 31, 2009 were $9.4 million compared to $10.7 million in the previous quarter.  The decrease was due primarily to one less week of sales in the quarter.  Par was the exclusive supplier of meclizine throughout 2009.
  

• Dronabinol: Net sales for the fourth quarter 2009 were $5.9 million compared to $6.6 million in the third quarter.  The decrease was due primarily to one less week of sales in the quarter.
  

• Tramadol ER:  Net sales for the fourth quarter 2009 were $5.5 million.  Par launched tramadol ER in November 2009.
  

• Other generic products:  For the fourth quarter 2009, net sales from all other generic products were $49.5 million compared to $54.0 million in the third quarter. The decrease was due primarily to one less week of sales in the quarter.
  

• Megace® ES:  Net sales were $19.0 million for the three months ended December 31, 2009 compared to $19.1 million in the third quarter due to one less week of sales in the quarter tempered by the full impact of the third quarter price increase.
  

• Nascobal® B12 Nasal Spray:  Net sales were $4.2 million for the three months ended December 31, 2009, compared to $3.8 million in the third quarter.  The increase is due to an increase in prescription volume and market share.
  

Total net revenues for the three months ended December 31, 2009, were $290.3 million, up $129.0 million, or nearly 80%, from the year ago period, principally driven by limited competition in metoprolol succinate, sumatriptan succinate, meclizine, and dronabinol, as well as the launches of nateglinide and clonidine in the third quarter, and tramadol ER in the fourth quarter 2009.

Gross margin for the fourth quarter 2009 was $91.3 million, or 31.5% of total revenue, an increase of $40.9 million from the comparable period in 2008.  Total generic gross margin in the fourth quarter 2009 was $72.2 million, or 27.3% of total generic revenue, compared to $33.7 million, or 24.2% of total generic revenue in the fourth quarter 2008.  This increase is due primarily to higher sales of metoprolol and sumatriptan (launched November 2008) coupled with the new product launches in 2009, including nateglinide, clonidine and tramadol ER.  The top six products, which include metoprolol, clonidine, sumatriptan, meclizine, dronabinol, and tramadol ER contributed $47.1 million of gross margin, or 21.9% of such generic revenue.  Gross margin of all other generic products was approximately $25.1 million, or 50.6% of other generic revenue.  This compares to $10.4 million, or 19.1% of other generic revenue, in the fourth quarter of 2008.  The increase in gross margin percentage was due to new product launches, increased volume of certain existing products, as well as the trimming of the generic product line as part of the resizing of Par's generic division in the fourth quarter of 2008.  Strativa's gross margin of $19.2 million, or 74.6% of total Strativa revenue in the fourth quarter 2009, increased compared to the fourth quarter of 2008 due to the acquisition and launch of Nascobal® in the second quarter of 2009.

Research and development (R&D) expenses increased to $19.7 million in the fourth quarter of 2009 compared to the fourth quarter 2008 driven primarily by investments in development projects with third party partners, which totaled $10.5 million.

Selling, general and administrative (SG&A) expenses for the fourth quarter 2009 increased to $42.8 million compared to $39.2 million in the fourth quarter of 2008.  This increase primarily reflects on-going expenditures supporting Strativa sales and marketing, driven primarily by an increase in the field force and other activities related to the re-launch of Nascobal B12 Nasal Spray.

Cash and cash equivalents and marketable securities aggregate balance as of December 31, 2009, was $161.2 million and includes significant one-time cash outflows related to the purchase of Nascobal B12 Nasal Spray (approximately $55 million), the repurchase of $94 million face value of Par's convertible debt at a discount and, as previously reported in the first quarter, the settlement of litigation with Pentech (approximately $66 million).

Product and Pipeline Update

In November 2009, Par successfully launched the 100mg and 200mg strengths of tramadol ER.  Tramdol ER is the generic version of Ortho-McNeil's Ultram® ER product. Annual U.S. sales of the 100mg and 200mg strengths of Ultram® ER are approximately $150 million, according to IMS Health data.

In February 2010, Strativa Pharmaceuticals announced that due to a FDA foreign travel restriction to India, the FDA has been unable to perform a recent inspection of the clinical and analytical sites for the bioequivalence study related to Zuplenz™.  The NDA cannot be approved until the FDA receives a satisfactory inspection report.  The FDA restriction on foreign travel in India has been subsequently lifted and the inspection of the clinical and analytical sites for the bioequivalence study related to Zuplenz is in the process of being scheduled.  No issues related to the study data or film product were identified.

Par currently has approximately 27 ANDAs pending with the FDA, 12 of which Par believes to be first-to-file opportunities with a brand value of approximately $6.3 billion.

SOURCE Par Pharmaceutical Companies, Inc.