TheraTech Inc. Reports Continued Earnings Gains; Firm Posts 10th Successive Profitable Quarter

Business Wire, Oct 21, 1998

SALT LAKE CITY--(BUSINESS WIRE)--Oct. 21, 1998--TheraTech Inc. (Nasdaq:THRT) Wednesday reported third quarter earnings of $2,421,000 or $0.11 per share for the three months ended Sept. 30, 1998.

The company's net income for the quarter represented a 38% increase over the $1,755,000, or $0.08 per share earned in the corresponding 1997 quarter. Total revenues for the quarter were $13,177,000, a 19% increase over the $11,053,000 in total revenues reported in third quarter 1997.

Year-to-date, TheraTech has earned $4,941,000, or $0.23 per share, a 28% gain over the $3,863,000, or $0.18 per share earned in the first nine months of 1997. Total revenues year-to-date rose 21% to $35,163,000, compared to $29,092,000 in the 1997 period.

Increases in product sales as well as research and development (R&D) revenues were the principal contributors to the quarter's earnings increases. Product sales revenues were $4,710,000 in third quarter 1998, up 15% from the $4,103,000 reported for third quarter 1997. Year-to-date, sales revenues rose 31% to $14,007,000, compared to $10,680,000 in the first nine months of 1997.

R&D revenues for the period rose 24% to $8,110,000 compared to $6,556,000 in third quarter 1997. Year-to-date, R&D revenues were $20,075,000, a 16% increase over the $17,268,000 year-to-date R&D revenues in 1997.

"As evidenced by this quarter's performance, TheraTech continues to meet its growth and earnings goals, with gains in both of our major revenue sources," stated Dinesh C. Patel, Ph.D. TheraTech's chairman, president and chief executive officer.

"Product sales revenues continued to grow," Dr. Patel said, "in part because of the increasing markets in which our products are becoming available. This month's kick off of co-promotion of Androderm(R) by the newly established TheraTech U.S. sales and marketing team is expected to further strengthen sales revenue growth."

TheraTech Inc. is a leading drug delivery company that develops, manufactures and markets innovative products based on its patented and proprietary technologies and systems.

These include: a variety of transdermal patches; oral transmucosal systems for delivery of peptides and other drugs requiring rapid onset (i.e. pain medications); a range of oral controlled-release systems; pulmonary technologies for local and systemic drug administration; topical preparations; and cell targeted delivery technologies.

TheraTech has four products on the market, over 20 products in its development pipeline and holds 50 issued, allowed and/or pending U.S. patents, with international counterparts granted and/or filed.

TheraTech has research, development and/or marketing agreements, with leading multi-national as well as regional pharmaceutical companies, including: Eli Lilly, Procter & Gamble, Pfizer, SmithKline Beecham, Wyeth-Ayerst, Astra AB, CEPA, Lavipharm S.A., Schwarz Pharma AG, Samyang, Meiji, and Sankyo.

For additional information, visit TheraTech Inc.'s Web Site at www.thrt.com, or e-mail requests to investor@thrt.com

Statements contained in this release that are not purely historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including TheraTech's beliefs, expectations, hopes or intentions regarding the future. All forward-looking statements included in this release are made as of the date hereof and are based on information available to TheraTech as of such date.

TheraTech assumes no obligation to update any forward-looking statement. It is important to note that actual outcomes and TheraTech's actual results could differ materially from those in such forward-looking statements. Readers and editors should refer to the risks and other disclosures outlined in TheraTech's filings with the Securities and Exchange Commission on Forms 10-K and 10-Q. -0-

Condensed Consolidated Financial Information (unaudited)

                         Three Months Ended       Nine Months Ended
                             Sept. 30,                Sept. 30,
                          1998       1997          1998       1997

Revenues:
 Research,
  development
  and licensing        $8,109,782 $6,556,125  $20,075,044 $17,267,823
 Product sales          4,709,502  4,103,436   14,007,137  10,680,235
 Interest and other       357,279    393,562    1,080,684   1,144,406
   Total revenues      13,176,563 11,053,123   35,162,865  29,092,464

Costs and expenses:
 Research and
  development           5,496,358  5,008,120   14,900,267  13,073,518
 Cost of products sold  3,241,916  2,749,597    9,467,842   7,559,779
 General and
  administrative        1,956,265  1,319,738    5,496,851   3,880,957
 Interest and other        61,156    220,938      357,404     715,225
   Total costs and
    expenses           10,755,695  9,298,393   30,222,364  25,229,479
Net income             $2,420,868 $1,754,730   $4,940,501  $3,862,985
Net income per
 share - basic              $0.11      $0.08        $0.23       $0.19
Net income per
 share - diluted            $0.11      $0.08        $0.23       $0.18

                                ASSETS

                                      Sept. 30,        Dec. 31,
                                        1998             1997
Current assets:
 Cash, cash equivalents
  and short-term investments(a)     $23,223,502     $24,377,413
 Contracts and accounts receivable    6,715,111       4,847,106
 Inventories                          2,516,604       2,830,270
 Prepaid expenses                       372,529          66,095
   Total current assets              32,827,746      32,120,884
Investments in long-term
  securities(a)                       2,004,995       3,001,938
Plant and equipment, net             18,263,419      19,318,101
Other assets                          7,485,059       7,419,887
    Total assets                    $60,581,219     $61,860,810

                 LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Accounts payable and accrued
  liabilities                        $4,721,349      $3,459,427
 Current portion of notes payable
  and capital lease obligations       1,224,281       1,397,763
 Unearned revenue                     1,462,052       2,553,237
   Total current liabilities          7,407,682       7,410,427

Notes payable and capital lease
 obligations, less current portion    1,242,578       7,260,935
Other liabilities                     3,040,000       3,420,000
Unearned revenue                        212,000         212,000
Stockholders' equity:
 Common stock                           212,893         210,193
 Additional paid-in capital          71,973,368      70,840,782
 Unrealized loss on investments
  held as available-for-sale           (954,546)             --
 Accumulated deficit                (22,269,913)    (27,210,414)
 Cumulative translation adjustment     (282,843)       (283,113)
   Total stockholders' equity        48,678,959      43,557,448
    Total liabilities and
     stockholders' equity           $60,581,219     $61,860,810

(a)  TheraTech's total cash position as of Sept. 30, 1998 and Dec. 31,
     1997 was $25,228,497 and $27,379,351, respectively, which
     includes cash, cash equivalents, and short- and long-term
     investments.