ImClone Systems Reports Fourth Quarter and Full Year 2007 Financial Results

Business Wire,  Jan 31, 2008  

Tags: ImClone Systems Inc.

• E-mail
• Print
• Link

-- ERBITUX[R] Sales Growth Continues; Fourth Quarter Global Net Sales of $371.0 Million and U.S. In-Market Sales of $185.0 Million; Full Year Global Sales Exceed $1.3 Billion --

-- Fourth Quarter Diluted Loss Per Share of $0.23; Fourth Quarter Non-GAAP Pro Forma Diluted Earnings Per Share of $0.41, Excluding Patent Litigation Settlement Charge of $60.0 Million and Partial Reinstatement of Valuation Allowance Against Deferred Tax Assets --

NEW YORK -- ImClone Systems Incorporated (NASDAQ: IMCL), a global leader in the development and commercialization of novel cancer therapeutics, today announced its financial results for the quarter and full year ended December 31, 2007.

Global net sales of ERBITUX([R]) for the fourth quarter of 2007 were $371.0 million, compared to $293.0 million in the fourth quarter of 2006, an increase of 27%. U.S. in-market net sales of ERBITUX for the fourth quarter of 2007 were $185.0 million compared to $167.2 million for the fourth quarter of 2006, an increase of 11%. Approximately $5.0 million of the increase in U.S. in-market sales was attributable to a change in distribution model by ImClone's ERBITUX commercialization partner Bristol-Myers Squibb (BMS) that resulted in wholesaler inventory build-up during the quarter. International, or non-U.S., net sales of ERBITUX were $186.0 million, compared to $125.8 million for the fourth quarter of 2006, an increase of 48%. As compared to the third quarter of 2007, worldwide ERBITUX in-market sales increased by $19.6 million, or 6%. The quarter-over-quarter increases in sales are due to increased demand for ERBITUX. U.S. in-market net sales of ERBITUX for the full year of 2007 were $691.7 million, a 6% increase over full year 2006 U.S. in-market net sales of $652.2 million.

Total revenues for the fourth quarter of 2007 were $151.4 million, compared to $132.2 million in the fourth quarter of 2006. Fourth quarter 2007 total revenues include the following:

* Royalty revenue of $89.8 million, compared to $77.1 million for the fourth quarter of 2006, an increase of 16%. Royalty revenue for the quarter consists of 39% of BMS' U.S. in-market ERBITUX net sales of $185.0 million and 9.5% of Merck KGaA's international ERBITUX net sales of $186.0 million;

* License fees and milestone revenue of $20.9 million, compared to $19.5 million for the fourth quarter of 2006, an increase of 7%;

* Manufacturing revenue of $23.7 million, compared to $17.9 million for the fourth quarter of 2006. This increase is due to higher demand for ERBITUX from the Company's corporate partners, partially offset by efficiencies achieved in the manufacturing process that resulted in a decrease in the price the Company charges its corporate partners; and

* Collaborative agreement reimbursement revenue of $16.9 million, compared to $17.7 million for the fourth quarter of 2006. This decrease is due to a reduction in the reimbursement rate for royalty expenses from BMS for third-party royalties from 4.5% to 2.5%, effective January 1, 2007, and reduced purchases of ERBITUX by Merck KGaA for use in clinical studies. This decrease was partially offset by increases in purchases of ERBITUX by BMS for use in clinical studies, reimbursements of clinical and regulatory expenses from BMS and royalty reimbursement from Merck KGaA due to higher commercial sales of U.S. manufactured product.

Total operating expenses for the fourth quarter of 2007 were $174.9 million, compared to $83.1 million in the fourth quarter of 2006. Fourth quarter 2007 operating expenses include the following:

* Research and development expense of $51.6 million, compared to $35.2 million for the fourth quarter of 2006. This expense line now includes the Company's clinical and regulatory expenses for both periods, which had previously been reported separately. The increase is primarily attributable to the transition of the Company's BB50 manufacturing facility from the production of ERBITUX to certain of the Company's pipeline products, effective July 1, 2007. In addition, there were increases in clinical trial expenses associated with ERBITUX and pipeline products, and professional services and other costs associated with pre-clinical research activities. These increases were partially offset by a decrease in the amount of clinical trial development costs that the Company is responsible to pay as a result of the Amendment to the Commercial Agreement with BMS;

* Selling, general and administrative expense of $22.9 million, compared to $16.2 million for the fourth quarter of 2006. This increase is primarily attributable to costs associated with the expansion of the Company's field sales force and an increase in legal expenses related to the patent litigation settlement agreement executed with Yeda Research and Development Company Ltd. ("Yeda") and Sanofi-Aventis in December 2007;

* Royalty expense of $16.4 million, compared to $17.4 million for the fourth quarter of 2006. This decrease is due to the partial reversal of royalties previously accrued but unpaid to Sanofi-Aventis in conjunction with the patent litigation settlement agreement. This decrease was partially offset by the accrual of royalties to Yeda in accordance with the terms of the patent litigation settlement agreement and increased royalties due to higher ERBITUX sales. Approximately $8.4 million and $8.5 million in the fourth quarter of 2007 and 2006, respectively, were reimbursed as a component of collaborative agreement reimbursement revenue, resulting in net royalty expenses of $8.0 million for the fourth quarter of 2007, compared to $8.9 million for the fourth quarter of 2006;