IOMED Reports Fiscal Second Quarter Results; Product Sales Up 5%, Investment in Product Development Accelerates

Business Wire, Feb 8, 2001

Health/Medical & Business Editors

SALT LAKE CITY--(BW HealthWire)--Feb. 8, 2001

IOMED, Inc. (AMEX: IOX), a specialty pharmaceutical company focused on satisfying unmet medical needs in the local inflammation and ophthalmic markets, today reported financial results for the three and six months ended December 31, 2000.

For the quarter ended December 31, 2000, total revenues increased 5% over last year's second quarter to $2,816,000, and product margin remained strong at 66%. IOMED continues to expect downward pressure on its product margin during the second half of fiscal year 2001 due to higher fixed costs resulting from the Company's relocation to a new facility and from costs associated with the installation of automated manufacturing equipment.

The Company's investment in research and product development was $1,357,000 in the second quarter of fiscal 2001. These expenditures reflect the Company's strategic investment in Phase III clinical studies for its formulation of dexamethasone for the non-invasive, site-specific treatment of acute local inflammatory conditions. Also reflected are increased expenditures in support of the Company's other product development programs, most notably the OcuPhor(TM) System for the non-invasive, site-specific delivery of therapeutics to the back of the eye to treat ophthalmic diseases. Total research and product development costs for the full fiscal year are expected to exceed $5 million.

Selling, general and administrative expenses increased due to pre-launch market research activity for new pharmaceutical products to treat acute local inflammation, as well as increased patent related and other administrative costs associated with the Company's expanding business activities.

The net loss for the quarter was $1,410,000, or $0.22 per share, compared with a net loss of $174,000, or $0.03 per share, in the same quarter last year. With anticipated increases in internally funded research, product development, and pre-launch marketing activities, the Company expects to report a net loss for the full fiscal year.

"I am pleased to report that IOMED's key pharmaceutical development programs are moving forward, with funding provided by cash flow from our current product sales as well as from our cash reserves," said James R. Weersing, president and chief executive officer. At December 31, 2000, IOMED had cash and cash equivalents of $13,209,000.

"IOMED has a solid history of manufacturing high-quality products efficiently and profitably. We recently initiated our move to a new facility, where all Company functions will be under one roof. Also, we have nearly completed the installation and validation of new, highly automated equipment designed to increase our manufacturing efficiency and to prepare IOMED for commercial scale-up of new pharmaceutical products currently in the final stages of development," Weersing added.

"Our most advanced product development program for the treatment of acute local inflammation continues on plan. To date we have enrolled over 75% of the targeted number of patients at 25 active sites in our Phase III confirmatory trial, and we continue to expect to complete this study and file a new drug application (NDA) with the U.S. Food and Drug Administration (FDA) during calendar year 2001. On the ophthalmic front, we are actively speaking with pharmaceutical and biotechnology companies whose products stand to benefit from our non-invasive delivery technology, and look forward to signing additional collaborative agreements," Weersing concluded.

Other IOMED developments during the fiscal 2001 second quarter include:

-- A Phase I human tolerance study using IOMED's proprietary OcuPhor System is
proceeding on schedule. Preliminary results are encouraging and the Company
anticipates completing the study during the current fiscal quarter

-- Preparations are underway for an advanced in-vivo transport study using
EYE001, EyeTech Pharmaceuticals' lead compound. This study will be conducted
under the direction and supervision of Anthony Adamis, M.D. Dr. Adamis is an
Associate Professor of Ophthalmology at the Harvard Medical School and the
Director of the Ophthalmology Residency Training Program at the Massachusetts
Eye & Ear Infirmary at Harvard. EYE001 is an anti-VEGF aptamer targeting
age-related macular degeneration

For the six months ended December 31, 2000, total revenues increased 7% to $5,636,000 and product margin rose one percentage point to 66%. Research and product development expenditures of $2,236,000 were up 48%, while selling, general and administrative expenses rose 45% to $3,848,000. The net loss for the first half of fiscal year 2001 was $1,849,000, or $0.28 per share, compared with a net loss of $265,000, or $0.04 per share, for the first half of fiscal year 2000.

IOMED, Inc. is a specialty pharmaceutical company focused on satisfying unmet medical needs in large pharmaceutical markets. The Company is currently pursuing research, product development and commercialization activities in the local inflammation and ophthalmic markets, representing annual worldwide markets of $10 billion and $5 billion, respectively.