Eurand N.V. (NASDAQ: EURX)
Recent Highlights:
- Record revenues of EUR 41.7 million ($56.7 million), up 36%
from the third quarter of 2009
- Net income of EUR 5.5 million ($7.5 million) versus a net loss
of EUR 0.4 million ($0.5 million) in the third quarter of 2009
- Revenues of EUR 21.8 million ($29.7 million) for the ZENPEP
franchise, which includes ZENPEP® (pancrelipase) Delayed-Release
Capsules and its 5,000-unit dose authorized generic,
PANCRELIPASE™
- For the week ended October 22, 2010, the ZENPEP franchise held
20% of the total market for all pancreatic enzyme products (PEPs),
according to IMS Health Incorporated.
- Increased total cash, cash equivalents and marketable
securities to EUR 46.4 million ($63.1 million)
- Phase III ZENPEP study recently initiated in Europe in exocrine
pancreatic insufficiency (EPI) patients with cystic fibrosis
Eurand N.V. (NASDAQ: EURX), a global specialty pharmaceutical
company, today reported record revenues of EUR 41.7 million ($56.7
million) for the third quarter of 2010, an increase of 36%, or 33%
in constant currency, from the third quarter of 2009. Net income
was EUR 5.5 million ($7.5 million), or EUR 0.11 ($0.16) per diluted
share, compared with a net loss of EUR 0.4 million ($0.5 million),
or a net loss of EUR 0.01 ($0.01) per diluted share, in the third
quarter of 2009.
For the nine months ended September 30, 2010, revenues totaled
EUR 105.7 million ($143.8 million), up 17%, or 13% in constant
currency, from the same period of 2009. Net income for the first
nine months of 2010 was EUR 2.5 million ($3.4 million), or EUR 0.05
($0.07) per diluted share, compared with a net loss of EUR 2.0
million ($2.7 million), or a net loss of EUR 0.04 ($0.06) per
diluted share, for the same period in 2009.
"The third quarter was very strong for Eurand, with revenues and
profitability largely driven by the success of our ZENPEP
franchise," said Gearóid Faherty, Chairman and Chief Executive
Officer. "Less than a year after launch, ZENPEP is the second-most
prescribed product in the U.S. pancreatic enzyme market, and the
franchise currently holds a 20% share. We expect that the ZENPEP
franchise will continue to grow for the rest of this year and into
2011 as physician and patient awareness increases."
ZENPEP Launch Update
Market share for the ZENPEP franchise grew substantially during
the third quarter of 2010, with its share of total prescriptions in
the pancreatic enzyme market expanding from 12% to 19%. Beginning
with the week ended April 23, 2010 (prior to the FDA's enforcement
of its April 28, 2010 Stop Distribution Date for certain unapproved
PEPs) through the week ended October 22, 2010, ZENPEP's market
share has more than tripled, from 6% to 20%.
"Even with the launch of a third FDA-approved PEP in mid-July,
the ZENPEP franchise has continued to gain share at an impressive
pace, and we are especially pleased by the positive feedback from
physicians and patients regarding ZENPEP's ability to control the
signs and symptoms of EPI, in particular for those patients who
have switched from other PEPs," Faherty said. "We believe that
ZENPEP's product characteristics and dosing options, coupled with
broad access to the product through managed care and government
reimbursement, have led to its significant market acceptance."
PRODUCT DEVELOPMENT PIPELINE UPDATE:
Eurand recently initiated a Phase III ZENPEP study in Europe in
patients with EPI due to cystic fibrosis. The European Medicines
Agency (EMA) has deemed a ZENPEP Marketing Authorization
Application eligible for evaluation under the Centralized
Procedure, which enables a single marketing authorization to be
valid across the European Union and provides for 10 years of
marketing exclusivity once the product is approved. Eurand plans to
out-license the distribution rights for ZENPEP in Europe and other
regions of the world, and discussions are ongoing with potential
partners.
THIRD QUARTER 2010 FINANCIAL RESULTS
Total revenues were EUR 41.7 million ($56.7 million) in the
third quarter of 2010, an increase of approximately 36%, or 33% at
constant currency rates, compared with the third quarter of 2009.
Product sales rose 51%, or 47% at constant currency rates, to EUR
37.9 million ($51.6 million) in the third quarter of 2010 compared
with the same period of 2009. This increase is due to sales of
ZENPEP and its authorized generic of EUR 21.8 million ($29.7
million), which more than offset the complete absence of sales of
ULTRASE to Axcan and sales from Eurand's low-cost Pancrelipase.
Both ULTRASE and Pancrelipase generated significant sales in
2009.
For the third quarter of 2010, product sales of ZENPEP and its
authorized generic included revenues from shipments made in prior
periods, which were deferred as of June 30, 2010 and amounted to
EUR 4.9 million ($6.7 million). ZENPEP and its authorized generic
revenues in excess of wholesalers' shipments to retail and
non-retail channels were deferred in prior periods since
wholesalers held inventories in excess of market needs due to the
initial launch shipments. In the third quarter of 2010,
wholesalers' inventories have been in line with market needs and
therefore revenues were recognized on the basis of Eurand's
shipments to wholesalers.
Royalties were EUR 2.2 million ($3.0 million), down 21% from the
third quarter of 2009 due to negligible royalties (approximately
EUR 0.1 million) from Axcan for ULTRASE. The currency exchange rate
had no significant impact on the royalty income.
Development fees for the third quarter of 2010 were EUR 1.5
million ($2.1 million), down 43% from the same period in 2009. The
currency exchange rate had no significant impact on the development
fees. Revenue from development fees can fluctuate from quarter to
quarter since a significant portion of fees is recognized upon
achievement of development milestones.
Cost of goods sold was EUR 16.1 million ($21.9 million) for the
three months ended September 30, 2010, up 4% from the same period
in 2009. Excluding the impact of exchange rates, cost of goods sold
would have been flat. The margin on product sales increased from
38.1% in the third quarter of 2009 to 57.4% in the third quarter of
2010, primarily as a result of higher-margin ZENPEP product sales.
During the third quarter of 2010, Eurand sold some ZENPEP inventory
that had been expensed in previous periods prior to receiving
regulatory approval in the third quarter of 2009 for commercial
launch in the U.S. If the related inventories were not expensed in
previous periods, cost of goods sold in the three months ended
September 30, 2010 would have been higher by approximately EUR 0.5
million ($0.7 million).
Research and development (R&D) expenses were EUR 5.7 million
($7.8 million) for the three months ended September 30, 2010, down
approximately 11%, or 12% at constant currency rates, compared with
the same period in 2009. Certain components of Eurand's R&D
expenses, notably clinical studies, can vary significantly from
quarter to quarter.
Selling, general and administrative (SG&A) expenses of EUR
13.6 million ($18.5 million) were up 73%, or 71% at constant
currency rates, compared with the third quarter of 2009. The
increase in SG&A expenses is primarily attributable to an
increase in direct sales and marketing expenses associated with the
November 2009 launch of ZENPEP, the expansion of the sales force,
and related marketing, patient support and managed-care
programs.
Net income was EUR 5.5 million ($7.5 million) for the third
quarter of 2010 compared with a net loss of EUR 0.4 million ($0.5
million) in the same period of 2009. Net income per diluted share
was EUR 0.11 ($0.16) versus a net loss of EUR 0.01 ($0.01) per
diluted share in the comparable period of 2009.
At September 30, 2010, cash, cash equivalents and marketable
securities were EUR 46.4 million ($63.1 million), and debt was EUR
2.8 million ($3.7 million).
YEAR-TO-DATE 2010 FINANCIAL RESULTS
Total revenues were EUR 105.7 million ($143.8 million) for the
nine months ended September 30, 2010, an increase of 17%, or 13% at
constant currency rates, compared with the same period in 2009. The
growth in revenues can be primarily attributed to sales of ZENPEP
and its authorized generic.
Product sales grew 29%, or 24% at constant currency rates, to
EUR 94.2 million ($128.1 million) year to date in 2010 compared
with the same period of 2009. Product sales of ZENPEP and its
authorized generic included revenues from sales made in 2009, which
were deferred as of December 31, 2009 and amounted to EUR 3.7
million ($5.0 million).
Royalties of EUR 6.9 million ($9.4 million) were down 15%, or
16% at constant currency rates, compared with the first nine months
of 2009 due to lower royalties from Axcan for ULTRASE. Development
fees were EUR 4.6 million ($6.3 million), down 49% from the prior
year period, which included a milestone payment from
GlaxoSmithKline related to the launch of LAMICTAL® ODT™.
Cost of goods sold was EUR 44.5 million ($60.5 million) for the
nine months ended September 30, 2010, down 2% from the prior year
period, or 5% at constant currency rates. During the nine months
ended September 30, 2010, Eurand sold some inventories of ZENPEP
that were expensed in previous periods prior to receiving
regulatory approval in the third quarter of 2009 for commercial
launch in the U.S. If the related inventories were not expensed in
previous periods, cost of goods sold in the nine months ended
September 30, 2010 would have been higher by approximately EUR 1.0
million ($1.4 million).
The margin on product sales was 52.7% year to date in 2010
versus 38.0% in the first nine months of 2009 as a result of
higher-margin ZENPEP sales in 2010.
R&D expenses were EUR 16.7 million ($22.7 million) for the
nine months ended September 30, 2010, down 8%, or 10% in constant
currency rates, compared with the same period in 2009. SG&A
expenses of EUR 38.7 million ($52.6 million) were up 58%, or 53% at
constant currency, compared with the year to date in 2009 due
primarily to the increased direct sales and marketing costs
associated with the launch of ZENPEP and expansion of the sales
force.
Net income was EUR 2.5 million ($3.4 million) for the first nine
months of 2010 compared with a net loss of EUR 2.0 million ($2.7
million) in the same period of 2009. Net income per diluted share
was EUR 0.05 ($0.07) versus a net loss of EUR 0.04 ($0.06) per
diluted share in the comparable period of 2009.
Attached to this earnings release are the following items:
1. Selected unaudited consolidated statements of operations for
the three months ended September 30, 2010 compared with the same
period in 2009
2. Selected unaudited consolidated statements of operations for
the nine months ended September 30, 2010 compared with the same
period in 2009
3. Selected unaudited balance sheet data as of September 30,
2010 and December 31, 2009
Note on Currency Presentation
This press release contains translations of euros into U.S.
dollars at a convenience rate of EUR 1=$1.360, the noon buying rate
at the Federal Reserve Bank of New York on September 30, 2010.
Percentage variances quoted in "Constant Currency" represent the
increase or decrease recomputed as if euro/dollar exchange rates
had been the same in the three and nine months ended September 30,
2010 as they were in the same period in 2009. As a guide, average
exchange rates were EUR 1=$1.291 in the three months to September
30, 2010, EUR1=$1.316 in the nine months to September 30, 2010, EUR
1=$1.431 in the three months to September 30, 2009, and EUR1=$1.365
in the nine months to September 30, 2009.
Conference Call Information
Eurand will host a conference call today, Friday, November 5,
2010, at 8:30 a.m. Eastern Time, 1:30 p.m. Central Europe Time,
covering the third quarter and nine-months 2010 financial
results.
To participate in the conference call, U.S. participants dial
1-877-407-9039, international participants dial +1-201-689-8470. A
replay of the call will be available until December 5, 2010. For a
replay of the call, U.S. participants dial 1-877-870-5176,
international participants dial +1-858-384-5517. The conference ID
number is 358370.
A live webcast of the call also will be available from the
investor relations section of the company website at
www.eurand.com. Following the live webcast, the archived version of
the call will be available at the same URL until December 5,
2010.
About Eurand
Eurand is a specialty pharmaceutical company that develops,
manufactures and commercializes enhanced pharmaceutical and
biopharmaceutical products based on its proprietary pharmaceutical
technologies. Eurand has had six products approved by the FDA since
2001 and has a pipeline of product candidates in development for
itself and its collaboration partners. Its technology platforms
include bioavailability enhancement of poorly soluble drugs, custom
release profiles and taste-masking orally disintegrating tablet
(ODT) formulations. Eurand is a global company with facilities in
the U.S. and Europe. For more information, visit
www.eurand.com.
Forward-Looking Statements
This release and oral statements made with respect to
information contained in this release, including statements about
the market potential of ZENPEP, constitute forward-looking
statements. Such forward-looking statements include those which
express plan, anticipation, intent, contingency, goals, targets or
future development and/or otherwise are not statements of
historical fact. The words "expects," "potentially," "anticipates,"
"could," "calls for" and similar expressions also identify
forward-looking statements. These statements are based upon
management's current expectations and are subject to risks and
uncertainties, known and unknown, which could cause actual results
and developments to differ materially from those expressed or
implied in such statements. Factors that could affect actual
results include, risks associated with our ability to market,
commercialize and achieve market acceptance for ZENPEP, or for any
of the products that we are developing or commercializing or may
develop or commercialize in the future. A non-exclusive list of
important factors that may affect future results may be found in
Eurand's filings with the Securities and Exchange Commission,
including its annual report on Form 20-F and periodic reports on
Form 6-K. Investors should evaluate any statement in light of these
important factors. Forward-looking statements contained in this
press release are made as of this date, and we undertake no
obligation to publicly update any forward-looking statement,
whether as a result of new information, future events or otherwise.
Actual events could differ materially from those anticipated in the
forward-looking statements.
Item 1. Selected unaudited consolidated statements of operations
for the three months ended September 30, 2010 compared with same
period in 2009
Three months ended September 30,
2010 2010 2009 % Change
At At
current constant
$'000(a) euro'000 euro'000 currency currency
Product sales 51,576 37,921 25,053 51% 47%
Royalty income 3,043 2,237 2,815 -21% -22%
Development fees 2,099 1,543 2,723 -43% -44%
---------- ---------- ---------- --------- ----------
Total revenues 56,718 41,701 30,591 36% 33%
Cost of goods sold (21,945) (16,135) (15,517) 4% 0%
R & D expenses (7,796) (5,732) (6,473) -11% -12%
S,G & A expenses (18,479) (13,586) (7,855) 73% 71%
Amortization of
intangibles (422) (310) (336) -8% -9%
Other expenses (49) (36) - N.M. N.M.
---------- ---------- ---------- --------- ----------
Operating income 8,027 5,902 410 N.M. N.M.
Financial income 57 42 117 N.M. N.M.
---------- ---------- ---------- --------- ----------
Income before taxes 8,084 5,944 527 N.M. N.M.
Income taxes (593) (436) (921) N.M. N.M.
---------- ---------- ---------- --------- ----------
Net income (loss) 7,491 5,508 (394) N.M. N.M.
========== ========== ========== ========= ==========
Basic net income
(loss) per share $0.16 EUR 0.11 EUR (0.01)
Diluted net income
(loss) per share $0.16 EUR 0.11 EUR (0.01)
Weighted average
number of shares used
to compute basic
income (loss) per
share 47,949,373 47,949,373 45,775,720
Weighted average
number of shares used
to compute diluted
income (loss) per
share 48,233,508 48,233,508 45,775,720
(a) Figures in U.S. dollars are translated from the euro for convenience, at
a rate of 1Euro=$1.360, the noon buying rate at the Federal Reserve Bank
of New York on September 30, 2010.
Item 2. Selected unaudited consolidated statements of operations
for the nine months ended September 30, 2010 compared with the same
period in 2009
Nine months ended September 30,
2010 2010 2009 % Change
At At
current constant
$'000(a) euro'000 euro'000 currency currency
Product sales 128,132 94,208 73,151 29% 24%
Royalty income 9,363 6,884 8,113 -15% -16%
Development fees 6,263 4,605 9,035 -49% -51%
---------- ---------- ---------- --------- ----------
Total revenues 143,758 105,697 90,299 17% 13%
Cost of goods sold (60,543) (44,514) (45,327) -2% -5%
R & D expenses (22,677) (16,673) (18,196) -8% -10%
S,G & A expenses (52,611) (38,682) (24,505) 58% 53%
Amortization of
intangibles (1,262) (928) (1,038) -11% -13%
Other expenses (690) (507) - N.M. N.M.
---------- ---------- ---------- --------- ----------
Operating income 5,975 4,393 1,233 N.M. N.M.
Financial income
(loss) 760 559 (52) N.M. N.M.
---------- ---------- ---------- --------- ----------
Income before taxes 6,735 4,952 1,181 N.M. N.M.
Income taxes (3,342) (2,457) (3,151) N.M. N.M.
---------- ---------- ---------- --------- ----------
Net income (loss) 3,393 2,495 (1,970) N.M. N.M.
========== ========== ========== ========= ==========
Basic net income
(loss) per share $0.07 EUR 0.05 EUR (0.04)
Diluted net income
(loss) per share $0.07 EUR 0.05 EUR (0.04)
Weighted average
number of shares used
to compute basic
income (loss) per
share 47,907,096 47,907,096 45,761,056
Weighted average
number of shares used
to compute diluted
income (loss) per
share 48,381,986 48,381,986 45,761,056
(a) Figures in U.S. dollars are translated from the euro for convenience, at
a rate of 1Euro=$1.360, the noon buying rate at the Federal Reserve Bank
of New York on September 30, 2010.
Item 3. Selected unaudited balance sheet data as of September
30, 2010 and December 31, 2009
September 30, December 31,
2010 2010 2009
$'000 (1) euro'000 euro'000
Cash and cash equivalents 37,883 27,853 16,893
Marketable securities 25,216 18,540 23,049
Total debt 3,740 2,750 207
Total shareholders' equity 157,644 115,906 111,574
(1) Figures in U.S. dollars are translated from the euro for convenience, at a
rate of 1Euro=$1.360, the noon buying rate at the Federal Reserve Bank of
New York on September 30, 2010.
Contacts: Bill Newbould Vice President, Investor
Relations Eurand N.V. +1 267-759-9335 Email Contact Nick
Laudico/Sara Pellegrino The Ruth Group +1 646-536-7030/7002 Email
Contact Email Contact
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