IVAX' Strong Growth of Sales and Earnings Continues in Third Quarter; 3Q2001 Diluted EPS Up 99% To $.30 Per Share; 3Q2001 Net Revenue Up 76% To $322 Million

Business Wire, Oct 25, 2001

Business Editors & Health/Medical Writers

MIAMI--(BUSINESS WIRE)--Oct. 25, 2001

IVAX Corporation (AMEX:IVX) (LSE:IVX.L) today reported net income for the third quarter of 2001 of $61.5 million, or $.30 per diluted share, an increase of 99% over the $30.9 million, or $.15 per diluted share, reported in the third quarter of 2000. For the nine months ended September 30, 2001, net income rose by 133% to $189.5 million, or $.91 per diluted share, versus net income of $81.3 million, or $.40 per diluted share, for the same period a year earlier.

Net revenue for the third quarter increased by 76% to $322 million compared to net revenue of $182.6 million in the third quarter of last year. Net revenue for the first nine months of 2001 increased by 60% to $883.7 million compared to net revenue of $550.7 million in the prior year. These revenue gains resulted from strong worldwide sales of the company's brand and brand equivalent (generic) pharmaceutical products, contributions from acquisitions made over the past year, higher respiratory products sales in the U.S. and abroad, and sales of brand equivalent paclitaxel.

"I am pleased to report these increases for the third quarter of 2001, which mark our 15th consecutive quarter of significant year-over-year earnings growth. These improvements underscore our strategy for diversification of earnings sources. Sales of existing brand and brand equivalent products, new product introductions, strategic acquisitions, licensing arrangements of our innovative products, prudent investment decisions and a favorable tax structure all contributed to our growth over the years and we expect each of these activities to contribute even more in the future," said Phillip Frost, M.D., chairman and chief executive officer of IVAX Corporation. "These outstanding results demonstrate the strength and diversity of our global pharmaceutical business. For example, our worldwide respiratory business grew significantly in the third quarter over the same quarter a year ago. With the addition of Laboratorio Chile to our operations in Latin America, IVAX has become one of the largest, most important pharmaceutical groups in this region. We expect our Latin American operations to contribute significantly to our future income. Additionally, although Onxol(TM) sales were less than expected due to increased competition, we believe it will be an important product for IVAX long term," Dr. Frost added.

Neil Flanzraich, vice-chairman and president of IVAX Corporation said, "We anticipate that 2001 will be another successful year for IVAX with our net revenue expected to reach approximately $1.2 billion. In the third quarter, we experienced sales growth in our brand and brand equivalent respiratory products in the U.S. and overseas, as well as sales growth in our core U.S. brand equivalent products. Acquisitions also contributed to our sales growth in the quarter. Net revenues increased 98.2% in North America, 16.6% in Europe and 304.7% in Latin America, after adjusting for a negative currency impact of approximately 3.6%. Our gross profit margin for the third quarter of 2001 improved to 53.3% of net revenues compared to 48.3% in the same quarter a year earlier. This resulted primarily from sales of higher margin products. The substantial growth in our third quarter net income was achieved even as total operating expenses increased by 71%. This increase includes operating expenses from recently acquired companies and a 55% increase in research and development spending, which we estimate will reach approximately $100 million for this year. Our net income also includes nearly $7.1 million in gains on the early retirement of debt."

Mr. Flanzraich also noted that, "Another IVAX strategy for future growth is the acquisition of products that complement our existing product line, such as our recent acquisition of the currently marketed intranasal steroid brand products, Nasarel(R) and Nasalide(R), for the treatment of allergic rhinitis. We believe these products have significant growth potential as allergic rhinitis affects more than 25% of the U.S. population and the domestic intranasal steroid market is growing rapidly toward $1.5 billion in annual revenues. We expect to continue purchasing brand products as part of a plan to expand our domestic proprietary sales force in anticipation of the approval of our own innovative products."

Continuing, Mr. Flanzraich said, "In response to recent incidents following the September 11th terrorist attacks on America, IVAX, as a leading manufacturer of brand equivalent antibiotics, has increased production and sales of several of these, such as generic doxacycline, one of several antibiotics approved to treat anthrax. We also have an application pending with the FDA for our ciprofloxacin, the generic equivalent of Cipro(R), the antibiotic most commonly used to treat anthrax."

IVAX continues to repurchase shares under its current 12.5 million share repurchase program authorized in August 2000. Approximately 5.25 million shares remain available for repurchase under the current authorization, with approximately 7.25 million shares repurchased to date at prices ranging from $17.99 to $35.05 per share. Since February 1998, IVAX has repurchased approximately 48.4 million of its shares. As previously announced, certain IVAX executives also recently purchased the company's securities.