CARY, NC--(Marketwire - March 03, 2011) - Cornerstone Therapeutics Inc. (NASDAQ: CRTX) today
reported full year and fourth quarter 2010 results. Total net revenues
were $125.3 million for the full year of 2010, representing a 14% increase
over the $109.6 million reported for the full year of 2009. Total net
revenues for the fourth quarter of 2010 were $32.5 million representing a
6% increase over the $30.8 million for the fourth quarter of 2009. Net
product sales from strategic products were 60% of total net revenues, or
$74.7 million, for the full year of 2010, an increase from the 36% of total
net revenues, or $39.0 million, for the full year of 2009. Net product
sales from strategic products were 66% of total net revenues, or $21.4
million, for the fourth quarter of 2010, an increase from the 52% of total
net revenues, or $16.0 million, for the fourth quarter of 2009.
Net income for 2010 was $6.2 million, or $0.24 per diluted share, compared
to net income of $10.2 million, or $0.54 per diluted share in 2009. Fourth
quarter net income was $0.8 million, or $0.03 per diluted share, compared
to $2.7 million, or $0.10 per diluted share, for the fourth quarter of
2009. On a non-GAAP basis, net income for 2010 was $18.9 million, or $0.73
per diluted share, compared to non-GAAP net income of $17.4 million, or
$0.93 per diluted share in 2009. On a non-GAAP basis, fourth quarter net
income was $5.2 million, or $0.20 per diluted share, compared to non-GAAP
net income of $5.5 million, or $0.21 per diluted share for the fourth
quarter of 2009. Non-GAAP net income and net income per diluted share
exclude amortization of product rights, acquisition-related expenses in
connection with the 2009 transaction with Chiesi Farmaceutici S.p.A., and
stock-based compensation.
"Cornerstone ended 2010 with record net sales, a strong cash position and a
more focused product portfolio," said Craig A. Collard, Cornerstone's
President and Chief Executive Officer. "As a result of the efforts of the
company's dedicated employees, we achieved another record year in net
revenues, including a new market share high with Curosurf; we also
successfully distributed the remaining inventory as the final phase in our
plan to cease manufacturing and distribution of AlleRx® and HyoMax® and
generated significant cash."
Mr. Collard continued, "We believe that the momentum built in 2010
positions us to build a portfolio of products that will leverage our
presence in the respiratory and hospital markets while we continue to
advance our internal pipeline."
A breakdown of net revenues by product for the fourth quarter and year
ended December 31, 2010 (in thousands, except percentages) follows:
Three Months
Ended Year Ended
December 31, Change December 31, Change
--------------- ----------- ----------------- ------------
2010 2009 $ % 2010 2009 $ %
------- ------- ------ ---- -------- -------- ------- ----
Net Product
Sales
Curosurf $ 9,854 $ 8,310 $1,544 19% $ 33,621 $ 10,463 $23,158 221%
Zyflo(R)
product
family 8,764 4,122 4,642 113 30,619 17,959 12,660 70
Factive(R) 963 1,087 (124) (11) 5,126 1,178 3,948 335
Spectracef(R)
product
family 1,849 2,494 (645) (26) 5,327 9,390 (4,063) (43)
AlleRx Dose
Pack
products 5,200 8,722 (3,522) (40) 27,305 31,707 (4,402) (14)
HyoMax
product
family 2,270 3,131 (861) (27) 10,071 28,148 (18,077) (64)
Other
Products(1) 3,582 2,883 699 24 11,675 10,443 1,232 12
------- ------- ------ ---- -------- -------- ------- ----
Total net
product
sales 32,482 30,749 1,733 6 123,744 109,288 14,456 13
License and
royalty
agreement
revenues 32 39 (7) (18) 1,573 276 1,297 470
------- ------- ------ ---- -------- -------- ------- ----
Net Revenues $32,514 $30,788 $1,726 6% $125,317 $109,564 $15,753 14%
======= ======= ====== ==== ======== ======== ======= ====
(1) Primarily propoxyphene/acetaminophen products.
Gross margin percentage for the full year of 2010 was 74% compared to 82%
for the full year of 2009. The lower gross margin percentage compared to
the prior period was due to a relatively higher portion of our net product
sales in 2010 derived from products that have lower gross margins,
specifically Curosurf. Gross margin percentage for the fourth quarter was
70%, similar to the fourth quarter of 2009.
Selling, general and administrative expenses increased $7.5 million, or
16%, for the full year of 2010 compared to 2009. The increase was
primarily related to our incurring a full year of expenses in 2010 for our
hospital sales force that we created in September 2009, co-promotion
expenses relating to Zyflo CR and increased sample usage for both Zyflo CR
and Factive, partially offset by lower stock compensation and reduced legal
and consulting costs during 2010 as compared to 2009 when we incurred
significant expenses related to the Chiesi transaction. Selling, general
and administrative expenses during the fourth quarter increased $4.0
million, or 36%, compared to the fourth quarter of 2009. The increase was
primarily related to co-promotion expenses relating to Zyflo CR and AlleRx
and increased sample usage for both Zyflo CR and Factive.
Royalty expenses decreased $6.1 million, or 32%, during 2010 compared to
2009. The reduction in royalty expense was primarily due to lower net
revenues from our HyoMax products, partially offset by increased royalties
for Zyflo CR and Factive. Royalty expenses increased $0.6 million, or 28%
during the fourth quarter of 2010 compared to the fourth quarter of 2009
primarily due to product mix.
As of December 31, 2010, the Company had $50.9 million in cash and cash
equivalents, an increase of 170%, compared to $18.9 million as of December
31, 2009.
Conference Call Information
Cornerstone Therapeutics will host a conference call today at 8:30 AM ET to
discuss its financial results for the quarter and twelve months ended
December 31, 2010. To participate in the live conference call, please
dial 866-730-5770 (U.S. callers) or 857-350-1594 (international callers),
and provide passcode 99190634. A live webcast of the call will also be
available through the "Investors -- Webcasts & Presentations" section of
the Company's website at . Please allow extra time
prior to the webcast to register for the webcast and to download and
install any necessary audio software.
The conference call and the webcast will be archived for 30 days. The
telephone replay of the call will be available today at 11:30 AM ET, by
dialing 888-286-8010 (U.S. callers) or 617-801-6888 (international
callers), and providing passcode 56948345.
About Cornerstone Therapeutics
Cornerstone Therapeutics Inc. (NASDAQ: CRTX), headquartered in Cary, N.C.,
is a specialty pharmaceutical company focused on acquiring, developing and
commercializing products for the respiratory and related markets. Key
elements of the Company's strategy are to leverage commercial capabilities
by promoting respiratory and related products to high prescribing
physicians through its respiratory sales force and to hospital-based
healthcare professionals through its hospital sales force; acquire rights
to existing patent- or trade secret-protected, branded products, which can
be promoted through the same channels to generate on-going high-value
earnings streams; advance its development projects and further build a
robust pipeline; and generate revenues by marketing approved generic
products through its wholly owned subsidiary, Aristos Pharmaceuticals, Inc.
Use of Non-GAAP Financial Measures
This press release highlights the Company's financial results on both a
GAAP and a non-GAAP basis. The GAAP results include certain costs and
charges that are excluded from non-GAAP results. By publishing the
non-GAAP financial measures, management intends to provide investors with
additional information to further analyze the Company's performance and
underlying trends. Management evaluates results and makes operating
decisions using both GAAP and non-GAAP measures included in this press
release. Non-GAAP results are not prepared in accordance with GAAP, and
non-GAAP information should be considered a supplement to, and not a
substitute for, financial statements prepared in accordance with GAAP.
Investors and potential investors are encouraged to review the
reconciliation of non-GAAP financial measures to their most directly
comparable GAAP measures attached to this press release.
Safe Harbor Statement
Statements in this press release regarding the progress and timing of our
product development programs and related trials; our future opportunities;
our strategy, future operations, anticipated financial position, future
revenues and projected costs; our management's prospects, plans and
objectives; and any other statements about management's future
expectations, beliefs, goals, plans or prospects constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform
Act of 1995.
Any statements that are not statements of historical fact (including,
without limitation, statements containing the words "anticipate,"
"believe," "could," "estimate," "expect," "intend," "may," "plan,"
"should," "target," "will," "would" and similar expressions) should also be
considered to be forward-looking statements.
There are a number of important factors that could cause our actual results
or events to differ materially from those indicated by such forward-looking
statements, including risks relating to our ability to develop and maintain
the necessary sales, marketing, supply chain, distribution and
manufacturing capabilities to commercialize our products; our ability to
replace the revenues from our marketed unapproved products, which we ceased
manufacturing and distributing at the end of 2010, and from our
propoxyphene products, which we voluntarily withdrew from the U.S. market
in November 2010 at the request of the U.S. Food and Drug Administration,
or FDA; patient, physician and third-party payor acceptance of our products
as safe and effective therapeutic products; our heavy dependence on the
commercial success of a relatively small number of currently marketed
products; our ability to maintain regulatory approvals to market and sell
our products with FDA-approved marketing applications; our ability to
obtain FDA approval to market and sell our products under development; our
ability to enter into additional strategic licensing product acquisition,
collaboration or co-promotion transactions on favorable terms, if at all;
our ability to maintain compliance with NASDAQ listing requirements;
adverse side effects experienced by patients taking our products; our
ability to develop and commercialize our product candidates before our
competitors develop and commercialize competing products; difficulties
relating to clinical trials, including difficulties or delays in the
completion of patient enrollment, data collection or data analysis; the
results of preclinical studies and clinical trials with respect to our
product candidates and whether such results will be indicative of results
obtained in later clinical trials; our ability to satisfy FDA and other
regulatory requirements; our ability to obtain, maintain and enforce patent
and other intellectual property protection for our products and product
candidates and the other factors described in Item 1A (Risk Factors) of our
Annual Report on Form 10-K filed with the Securities and Exchange
Commission (the SEC) on March 4, 2010 and in our subsequent filings with
the SEC. If one or more of these factors materialize, or if any underlying
assumptions prove incorrect, our actual results, performance or
achievements may vary materially from any future results, performance or
achievements expressed or implied by these forward-looking statements.
In addition, the statements in this press release reflect our expectations
and beliefs as of the date of this release. We anticipate that subsequent
events and developments will cause our expectations and beliefs to change.
However, while we may elect to update these forward-looking statements
publicly at some point in the future, we specifically disclaim any
obligation to do so, whether as a result of new information, future events
or otherwise. Our forward-looking statements do not reflect the potential
impact of any acquisitions, mergers, dispositions, business development
transactions, joint ventures or investments that we may make or enter into.
These forward-looking statements should not be relied upon as representing
our views as of any date after the date of this release.
Trademarks
Curosurf® is owned by Chiesi Farmaceutici S.p.A. Spectracef® is owned
by Meiji Seika Kaisha Ltd. Factive® is owned by LG Life Sciences, Ltd.
Curosurf, Spectracef and Factive are licensed to Cornerstone Therapeutics
for sales and marketing purposes in the United States and, with respect to
Factive, certain other countries.
FINANCIAL TABLES FOLLOW
CORNERSTONE THERAPEUTICS INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share and per share data)
Three Months Ended Year Ended
December 31, December 31,
---------------------- ----------------------
2010 2009 2010 2009
---------- ---------- ---------- ----------
(Unaudited)
Net revenues $ 32,514 $ 30,788 $ 125,317 $ 109,564
Costs and expenses:
Cost of product sales
(exclusive of
amortization of product
rights) 9,599 9,212 32,313 19,457
Selling, general and
administrative 15,109 11,112 53,198 45,731
Royalties 2,856 2,240 12,702 18,775
Research and development 740 1,163 4,488 3,608
Amortization of product
rights 3,943 3,587 14,728 6,115
---------- ---------- ---------- ----------
Total costs and expenses 32,247 27,314 117,429 93,686
---------- ---------- ---------- ----------
Income from operations 267 3,474 7,888 15,878
---------- ---------- ---------- ----------
Other expenses:
Interest expense, net (38) (15) (85) (128)
Other expense, net -- -- (25) --
---------- ---------- ---------- ----------
Total other expenses (38) (15) (110) (128)
---------- ---------- ---------- ----------
Income before income taxes 229 3,459 7,778 15,750
Benefit from (provision
for) income taxes 563 (771) (1,609) (5,547)
---------- ---------- ---------- ----------
Net income $ 792 $ 2,688 $ 6,169 $ 10,203
========== ========== ========== ==========
Net income per share, basic $ 0.03 $ 0.11 $ 0.24 $ 0.58
========== ========== ========== ==========
Net income per share,
diluted $ 0.03 $ 0.10 $ 0.24 $ 0.54
========== ========== ========== ==========
Weighted-average common
shares, basic 25,463,467 24,972,954 25,412,636 17,651,668
========== ========== ========== ==========
Weighted-average common
shares, diluted 26,093,755 25,751,756 26,036,544 18,776,588
========== ========== ========== ==========
CORNERSTONE THERAPEUTICS INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
December 31, December 31,
2010 2009
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 50,945 $ 18,853
Accounts receivable, net 76,476 16,548
Inventories, net 15,174 18,106
Prepaid and other current assets 5,111 4,808
Income tax receivable 197 --
Deferred income tax asset 6,599 3,507
------------ ------------
Total current assets 154,502 61,822
------------ ------------
Property and equipment, net 1,486 1,312
Product rights, net 112,328 126,806
Goodwill 13,231 13,231
Amounts due from related parties 38 38
Long-term accounts receivable and other assets 8,553 113
------------ ------------
Total assets $ 290,138 $ 203,322
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 7,671 $ 7,172
Accrued expenses 46,599 23,703
Current portion of license agreement
liability 1,368 1,019
Current portion of capital lease 83 10
Current portion of deferred revenue 37,616 --
Income taxes payable -- 1,606
------------ ------------
Total current liabilities 93,337 33,510
------------ ------------
License agreement liability, less current
portion -- 1,341
Capital lease, less current portion 146 39
Deferred revenue, less current portion 19,578 --
Deferred income tax liability 4,679 4,564
------------ ------------
Total liabilities 117,740 39,454
------------ ------------
Stockholders' equity
Preferred stock -- $0.001 par value,
5,000,000 shares authorized; no shares
issued and outstanding -- --
Common stock -- $0.001 par value, 90,000,000
shares authorized; 25,472,963 and 25,022,644
shares issued and outstanding as of December
31, 2010 and December 31, 2009, respectively 25 25
Additional paid-in capital 160,106 157,745
Retained earnings 12,267 6,098
------------ ------------
Total stockholders' equity 172,398 163,868
------------ ------------
Total liabilities and stockholders' equity $ 290,138 $ 203,322
============ ============
CORNERSTONE THERAPEUTICS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Year Ended December 31,
-------------------------
2010 2009
----------- -----------
Cash flows from operating activities
Net income $ 6,169 $ 10,203
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization and depreciation 14,778 6,392
Provision for prompt payment discounts 3,903 3,157
Provision for inventory allowances 1,340 1,474
Loss on sale of property and equipment 25 --
Impairment of product rights 350 --
Stock-based compensation 1,339 3,291
Benefit from deferred income taxes (2,977) (3,632)
Changes in operating assets and liabilities:
Accounts receivable (63,831) (6,718)
Inventories 1,592 (8,202)
Prepaid expenses, long-term accounts receivable
and other assets (8,743) (3,121)
Accounts payable 499 (3,116)
Accrued expenses 23,154 2,053
Income taxes payable/receivable (1,803) (1,331)
Deferred revenue 57,194 --
----------- -----------
Net cash provided by operating activities 32,989 450
----------- -----------
Cash flows from investing activities
Proceeds from sale of marketable securities -- 300
Proceeds from sale of property and equipment 2 --
Purchase of property and equipment (375) (635)
Purchase of product rights (250) (5,169)
----------- -----------
Net cash used in investing activities (623) (5,504)
----------- -----------
Cash flows from financing activities
Proceeds from exercise of common stock options
and warrants 544 437
Proceeds from issuance of shares of common stock -- 15,465
Payments for cancellation of warrants -- (41)
Excess tax benefit from stock-based compensation 478 1,269
Principal payments on license agreement liability (1,250) (2,500)
Principal payments on capital lease obligation (46) (9)
----------- -----------
Net cash (used in) provided by financing
activities (274) 14,621
----------- -----------
Net increase in cash and cash equivalents 32,092 9,567
Cash and cash equivalents as of beginning of year 18,853 9,286
----------- -----------
Cash and cash equivalents as of end of year $ 50,945 $ 18,853
=========== ===========
Supplemental disclosure of cash flow information
Cash paid during the year for interest $ 318 $ 531
=========== ===========
Cash paid during the year for income taxes $ 6,780 $ 9,260
=========== ===========
Supplemental schedule of non-cash investing and
financing activities
Purchase of property and equipment with capital
leases $ 226 $ -
=========== ===========
Acquisition of product rights through equity
issued and liabilities assumed $ -- $ 110,050
=========== ===========
CORNERSTONE THERAPEUTICS INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(In thousands, except share and per share data - unaudited)
The following table shows the non-GAAP financial measures used in this
press release reconciled to the most directly comparable GAAP financial
measures.
Three Months Ended Year Ended
December 31, December 31,
2010 2009 2010 2009
---------- ---------- ---------- ----------
GAAP income from Operations $ 267 $ 3,474 $ 7,888 $ 15,878
Add: stock-based
compensation(1) 369 321 1,339 1,478
Add: amortization of
product rights 3,943 3,587 14,728 6,115
Add: acquisition-related
expenses(2) -- -- -- 3,563
---------- ---------- ---------- ----------
Non-GAAP income from
operations $ 4,579 $ 7,382 $ 23,955 $ 27,034
========== ========== ========== ==========
GAAP net income $ 792 $ 2,688 $ 6,169 $ 10,203
Add: stock-based
compensation(1) 369 321 1,339 1,478
Add: amortization of
product rights 3,943 3,587 14,728 6,115
Add: acquisition-related
expenses(2) -- -- -- 3,563
Less: tax effects related
to above items(3) 58 (1,108) (3,324) (3,927)
---------- ---------- ---------- ----------
Non-GAAP net income $ 5,162 $ 5,488 $ 18,912 $ 17,432
========== ========== ========== ==========
GAAP net income per share,
diluted $ 0.03 $ 0.10 $ 0.24 $ 0.54
========== ========== ========== ==========
Non-GAAP net income per
share, diluted $ 0.20 $ 0.21 $ 0.73 $ 0.93
========== ========== ========== ==========
Shares used in diluted net
income per share
calculation:
GAAP net income 26,093,755 25,751,756 26,036,544 18,776,588
========== ========== ========== ==========
Non-GAAP net income 26,093,755 25,751,756 26,036,544 18,776,588
========== ========== ========== ==========
(1) Stock-based compensation excludes stock-based compensation charges
incurred in connection with the Chiesi transaction, which are included
in acquisition-related expenses.
(2) Acquisition-related expenses include stock-based compensation charges
and legal, accounting and related costs that resulted from or were
incurred in connection with the Chiesi transaction. During 2009,
acquisition-related stock-based compensation charges include $1.8
million of charges that were included in selling, general and
administrative expenses.
(3) Tax effects for the three months ended December 31, 2010 and 2009 are
calculated using effective tax rates of (1.3)% and 28.4%, respectively.
Tax effects for 2010 and 2009 are calculated using effective tax rates
of 20.7% and 35.2%, respectively.
Contacts
Investor Relations Contacts:
Westwicke Partners
John Woolford
+1-443-213-0506
Email Contact
or
Westwicke Partners
Stefan Loren, Ph.D.
+1-443-213-0507
Email Contact
Media Relations Contact:
Fleishman-Hillard
Andrea Moody
+1-919-457-0743
Email Contact
