- Third Quarter
Highlights -
Generated $1.2 million net income
and positive cash flow for Q3 2003
Increased
Visicol® prescriptions
by 58%
compared
to Q3 2002
Realized revenue growth for seven
consecutive quarters
Decreased operating expenditures by
14% compared to Q3 2002
Initiated
Phase IV Study using Visicol® tablets
to treat
constipated
patients
BLUE BELL, PA October
30,
2003
--
InKine
Pharmaceutical
Company,
Inc.
(Nasdaq:
INKP) today announced its third quarter financial
results,
reporting
net income
of $1.2 million
for the quarter
ending September 30, 2003, compared to net losses of ($1.5)
million for the same period a year ago and ($0.9) million
and ($2.4) million for the two preceding quarters ending
March 31, 2003 and June 30, 2003, respectively. For
the quarter and nine-months
ending September
30, 2003
net income (loss) per share was $0.02 and ($0.05), compared
to net losses per share of ($0.04) and ($0.17) for the
same periods a year ago. The
Company recognized
product revenues
of $4.3 million
for the third
quarter ending September 30, 2003, compared to $2.5 million
and $3.3 million for the two preceding quarters ending
March 31, 2003 and June 30, 2003,
respectively. Third quarter
2003 revenue
was a 95%
increase
over revenues
of $2.2 million
for the same
period a year ago.
"Our crossover into profitability is a significant achievement
for InKine and the biopharmaceutical sector," said Leonard
S. Jacob, M.D., Ph.D., Chairman and Chief Executive Officer
of InKine. "We continue to steadily grow our share
of the ethical purgative market, with Visicol® reaching
12% market share in one of our most recent unaudited weeks. During
the third quarter we commenced and are currently enrolling
patients in our Phase IV study for the use of Visicol ® as
a laxative in patients with chronic constipation. We
expect to finish the 2003-year having met or exceeded our
guidance and analysts' expectations for the year and are well
positioned for continued strong growth in 2004 and beyond," added
Dr. Jacob.
"Our financial condition has never been more secure and our
future has never been more promising than it stands today," said
Robert F. Apple, Chief Operating and Financial Officer. "We
are a profitable company, with positive cash flow from operations
and a strong balance sheet. We have a growth opportunity
to further develop Visicol® in the purgative marketplace
along with significant upside in expansion markets, such as
constipation and surgery. Additionally, we continue to
seek strategic and business development opportunities to leverage
our established and recognized gastrointestinal sales force,
which currently stands at 41 professionals," added Mr. Apple.
Product Sales and Gross Profit:
- Product revenues for the third quarter in
2003
were
$4.3 million, compared to $2.5 million and $3.3 million
for the two preceding quarters ending March 31, 2003
and June 30, 2003, respectively. Third quarter
2003 revenue increased by 95% from revenues of approximately
$2.2 million for the same period a year ago. Prescription
levels continue to increase on a monthly basis, resulting
in increased orders from wholesalers and large retail chains. Increased
prescription levels have been fueled by increased market
awareness and acceptance of Visicol®. Approximately
96,000 prescriptions were filled for Visicol® during
the third quarter of 2003 as compared to approximately
89,000, 80,000, 69,000 and 61,000 during the four preceding
quarters. The continued quarter-to-quarter growth
in Visicol® prescriptions of approximately 7% for
the
third quarter occurred
in
spite of the summer purgative market decline.
- Gross profit as a
percentage
of product sales was 86% for the quarter ending
September 30, 2003, compared to 80% for the same
period a year ago. The increase
was
the
result of savings realized from manufacturer
volume discounts, use of a more cost effective
packaging
partner, internalization of product distribution,
and an increased sales price per unit. The
Company expects to be able
to
maintain or increase these margins as sales volume
continues to increase.
Costs and Expenses:
- Research and development
costs
were $0.5 million and $1.3 million for the quarter
and nine-months ending September 30, 2003, compared
to $0.5 million and $2.9 million for the same
periods a year ago. The
decrease
for the nine-month period was the result of
internalizing the management of previously outsourced
functions related to the ongoing clinical trial
for Colirest(TM). Research
and
development
costs
are expected
to be in the range of $1.5 million to $1.7 million
for the 2003-year.
- Sales and marketing costs
were
$1.4
million and $4.3 million for the quarter and
nine-months ending September 30, 2003, compared
to $1.7 million and $4.1 million for the same
periods a year ago. Sales
and
marketing
costs
included expenses associated with the Company's
sales
force, which currently stands at 36 sales representatives
and three district managers, along
with
marketing campaigns related to Visicol® and
IB-Stat®. Sales
and
marketing
costs
are expected
to be
in the range of $5.4 million to $6.0 million
for the
2003-year.
- General and administrative
costs
were $0.6 million and $1.9 million for the quarter
and nine-months ending September 30, 2003, compared
to $0.5 million and $1.7 million for the same
periods a year ago. General
and administrative
costs are
expected
to
remain
relatively consistent during 2003 and should
be in
the range of $2.3 million to $2.5 million
for the
2003-year.
- Interest and other expense
was minimal
for the
three-month period and $0.6 million for the
nine-month period ended September 30, 2003,
compared to $0.2 million and $0.7 million for
the same periods a year ago. Interest
and
other
expense
is expected
to remain
consistent with the third quarter
of 2003
due to
the conversion of the Company's previously
outstanding
June 2005 convertible notes on June 30, 2003.
- Non-cash
accretion
and
debt
premium
charges
of $2.8 million for the nine-month period ended
September 30, 2003 related to the Company's
previously outstanding June 2005 convertible
notes which converted to shares of the Company's
common stock on June 30, 2003. The
Company
did
not incur
any
charges
after June 30, 2003 related to the previously
outstanding
convertible notes.
Balance Sheet:
- The
Company had
$11.5 million
in cash
at
September 30,
2003 compared
to $10.9
million
at
June 30,
2003. The
increase
in
cash
occurred despite
approximately a $2.9
million
pay
down of
the Company's
credit line
and
a
$0.7 million
decrease in
trade accounts
payable.
The Company
will be hosting a conference call today
at 11:00 AM EDT to further discuss the
third quarter 2003 financial results. To
participate please dial (877) 709-8150
about five to ten minutes prior to the
initiation of the teleconference. The
conference call will also be available
on replay starting at 1:00 pm EDT on
October 30, 2003, and ending at 1:00
pm EDT on October 31, 2003. For
the replay, please dial (877) 660-6853
(replay account # 2658, replay conference
# 80750). The access number
for
the replay for international callers
is
(201)
612-7415 (replay account # 2658, replay
conference # 80750).
About InKine Pharmaceutical
InKine Pharmaceutical Company, Inc. is a publicly traded biopharmaceutical company focused on the diagnosis and treatment of cancer and autoimmune diseases. The Company's development strategy is to acquire late-stage drug candidates with short time lines to commercialization. The Company's first product, Visicol™ is the first and only tablet purgative preparation indicated for bowel cleansing prior to colonoscopy. InKine's second product, IBStat™, is a novel oral hysocyamine spray for the treatment of Irritable Bowel Syndrome (IBS) and spasm of the colon. Additionally, the Company is developing other clinical compounds such as Colirest™, which is in clinical trials for the treatment of Crohn's disease and completed Phase II trials for the treatment of ulcerative colitis. For further information, please visit InKine on their web site http://www.inkine.com.
In addition to historical facts or statement of current condition, this press release may contain forward-looking statements. Forward-looking statements provide InKine's current expectations or forecasts of future events. These may include statements regarding anticipated scientific progress on its research programs, development of potential pharmaceutical products, interpretation of clinical results, prospects for regulatory approval, manufacturing development and capabilities, market prospects for its products, sales and earnings projections, and other statements regarding matters that are not historical facts. You may identify some of these forward-looking statements by the use of words in the statements such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe" or other words and terms of similar meaning. InKine's performance and financial results could differ materially from those reflected in these forward-looking statements due to general financial, economic, regulatory and political conditions affecting the biotechnology and pharmaceutical industries as well as more specific risks and uncertainties such as those set forth in its reports on Form 10-Q and 10-K filed with the U.S. Securities and Exchange Commission. Given these risks and uncertainties, any or all of these forward-looking statements may prove to be incorrect. Therefore, you should not rely on any such factors or forward-looking statements. Furthermore, InKine does not intend (and it is not obligated) to update publicly any forward-looking statements. This discussion is permitted by the Private Securities Litigation Reform Act of 1995.
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