Bio-Technology General Corp. Reports 1999 Earnings Results -- In Line With Previously Announced Anticipated Earnings
BusinessWire, Friday, February 11, 2000 at 11:00
ISELIN, N.J.--(BUSINESS WIRE)--Feb. 11, 2000--Bio-Technology General Corp. (NASDAQ:BTGC) today announced its earnings and financial results for 1999. In line with the Company's previously announced anticipated earnings, EPS for 1999 was $0.26. As also reported earlier, the Company's earnings for 1999 were impacted by a significant reduction in Oxandrin(R) inventory by Olsten Health Services, Inc., the Company's distributor for the product. This resulted in net income of $13.9 million, or $0.26 per share in 1999, compared to $17.7 million, or $0.36 per share in 1998. Diluted shares used in computation were 54.2 million in 1999, vs. 49.8 million the previous year. Total revenues grew 11% to $85.3 million in 1999 compared to $76.9 million in 1998. Revenues from product sales were $62.3 million in 1999 compared to $68.2 million in 1998, and revenues from contract fees were $14.8 million compared to $2.7 million. The significant increase in contract fees relates primarily to the initial $10 million fee from Teva Pharmaceutical Industries Ltd., with whom BTG entered into a key strategic alliance in September 1999.
Expenses increased 28% from $52.1 million in 1998 to $66.6 million in 1999. The most significant increases in expenses were recorded in R&D, G&A, marketing and sales, and commissions and royalties. These increases relate primarily to: product formulation activity; legal fees, an increase in salary expenses, and the write-off of previously capitalized expenses relating to the development of Androtab-SL(R); promotion of marketed products; and payments to licensors, respectively. The legal expenses incurred were in large part due to litigation costs relating to the Company's patent suit against Genentech, Inc. (NYSE:DNA). On January 18, 2000, a Federal Court invalidated Genentech's U.S. Patent No. 4,601,980 relating to a method for producing recombinant human growth hormone. As a result, the preliminary injunction that prohibited the commercial introduction in the United States of the Company's recombinant human growth hormone,
Bio-Tropin(TM)was vacated. In commenting on the 1999 results, Sim Fass, Chairman and Chief Executive Officer of Bio-Technology General Corp., stated: "1999 results essentially reflect the impact of a previously announced inventory adjustment situation. With Oxandrin prescriptions up by 27% in 1999 compared to 1998, and end user sales up by 25%, our Oxandrin business continued to demonstrate robust year to year growth in 1999. This should positively impact Oxandrin sales to our distributor in 2000 as the absorption of the excess inventory is completed, and the Company's sales to Olsten start to reflect end user sales. Moreover, we anticipate further development of the commercial potential for Oxandrin to be accomplished by an increase in the size of the Company's sales force and expansion of sales activity into the wound care sector."