Impax Pharmaceuticals Licenses Exclusive U.S. Commercialization Rights to Zomig® (zolmitriptan) from AstraZeneca
Expected to be Immediately Accretive to Impax's Non-GAAP EPS in 2012
Impax Provides Updated 2012 Financial Outlook
HAYWARD, Calif.--(BUSINESS WIRE)--Impax Pharmaceuticals, the branded products business unit of Impax Laboratories, Inc. (NASDAQ: IPXL), announced today that it has licensed from AstraZeneca the exclusive United States (U.S.) commercial rights to Zomig® (zolmitriptan) tablet, orally disintegrating tablet, and nasal spray formulations. As part of a Distribution, License, Development and Supply Agreement, Impax will also have non-exclusive rights to develop new products containing zolmitriptan and to exclusively commercialize these products in the U.S. in connection with the Zomig® brand. Under terms of the Agreement, Impax will pay AstraZeneca quarterly payments totaling $130 million during 2012, and thereafter, Impax will pay AstraZeneca tiered royalties on future sales of zolmitriptan products. Impax will receive the benefit of the gross profit on U.S. Zomig® sales commencing from January 1, 2012.
The transaction is expected to be immediately accretive on a non-Generally Accepted Accounting Principles (GAAP) basis to Impax's earnings per share (EPS) in 2012 and potentially accretive on a GAAP basis depending upon GAAP purchase price treatment, which will be determined in due course.
"We are pleased to obtain a licensing agreement for Zomig®, consistent with our goal to increase the revenue and financial contribution of our Impax Pharmaceuticals business to Impax Labs," said Michael Nestor, president of Impax Pharmaceuticals. "Zomig®, with U.S. net sales for the twelve months ended September 30, 2011 of $163 million, is a strong neurology brand, and the nasal spray form has U.S. patents expiring as late as 2021. The Zomig® product franchise fits well with the capabilities of our neurology focused specialty sales force. It will support the growth of our commercial organization as we prepare for the potential launch of IPX066, our leading brand product candidate for Parkinson's Disease, and beyond."
"We expect Zomig® will contribute meaningfully to our total company revenues and earnings in 2012 and 2013. For the longer term profitability of the brand business unit, we look to build sales of the Zomig® nasal spray dosage form," stated Larry Hsu, president and CEO of Impax Laboratories. "The Zomig® license is the latest effort in our active pursuit of additional long term growth opportunities for our generic and brand businesses."
Zomig® and Zomig-ZMT® are registered trademarks of the AstraZeneca group of companies and are exclusively licensed in the U.S. to Impax in connection with Impax's commercialization of Zomig®. For more information about Zomig®, go to www.zomig.com.
Impax Laboratories 2012 Financial Outlook
On January 9, 2012, Impax provided its 2012 financial outlook. The Company has updated its 2012 financial outlook as noted below to reflect the impact of the Distribution, License, Development and Supply Agreement with AstraZeneca for Zomig®.
(Updated) - Gross margins as a percent of total revenues of approximately 60%.
Total research and development (R&D) expenses across the generic and brand divisions to approximate $89 million with generic R&D of approximately $48 million and brand R&D of approximately $41 million.
Patent litigation expenses of approximately $10 million.
(Updated) - Selling, general and administrative (SG&A) expenses of approximately $113 million. The Company expects to add approximately 20 sales representatives to its existing contract sales force of 64 reps to assist in the detailing of Zomig® and expects to incur promotional costs to detail the product. In anticipation of approval and launch of IPX066, the Company will be adding marketing, managed markets and trade, medical affairs and compliance personnel, in addition to spending on various marketing research. Included in the $113 million estimate is approximately $6 million of expenses for the existing contract sales force (approximately one-half of the annual cost) which will continue to be reported as cost of goods sold through June 30, 2012 as part of the Company's co-promotion of Lyrica®. Beginning July 1, 2012, upon expiration of the Company's detailing agreement of Lyrica®, the existing sales force costs will be accounted for within SG&A.
Effective tax rate of approximately 36%.
Capital expenditures of approximately $78 million.
About Impax Laboratories, Inc.
Impax Laboratories, Inc. is a technology-based specialty pharmaceutical company applying its formulation expertise and drug delivery technology to the development of controlled-release and specialty generics in addition to the development of branded products. Impax markets its generic products through its Global Pharmaceuticals division and markets its branded products through the Impax Pharmaceuticals division. Additionally, where strategically appropriate, Impax has developed marketing partnerships to fully leverage its technology platform. Impax is headquartered in Hayward, California, with a full range of capabilities located in its Hayward, Philadelphia and Taiwan facilities. For more information, please visit the Company's Web site at: www.impaxlabs.com.
"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995:
To the extent any statements made in this news release contain information that is not historical, including the statements about expected 2012 and 2013 revenues and earnings from Zomig®, these statements are forward-looking in nature and express the beliefs and expectations of management. Such statements are based on current expectations and involve a number of known and unknown risks and uncertainties that could cause the Company's future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to, the effect of current economic conditions on the Company's industry, business, financial position and results of operations, the ability to maintain an effective system of internal control over financial reporting, fluctuations in revenues and operating income, the ability to successfully develop and commercialize pharmaceutical products, reductions or loss of business with any significant customer or a reduction in sales of any significant product, the impact of competition, the ability to sustain profitability and positive cash flows, any delays or unanticipated expenses in connection with the operation of the Taiwan facility, the effect of foreign economic, political, legal and other risks on operations abroad, the uncertainty of patent litigation, consumer acceptance and demand for new pharmaceutical products, the difficulty of predicting Food and Drug Administration filings and approvals, the inexperience of the Company in conducting clinical trials and submitting new drug applications, the ability to successfully conduct clinical trials, reliance on alliance and collaboration agreements, the availability of raw materials, the ability to comply with legal and regulatory requirements governing the pharmaceuticals and healthcare industries, the regulatory environment, the ability to protect the Company's intellectual property, exposure to product liability claims and other risks described in the Company's periodic reports filed with the Securities and Exchange Commission. Forward-looking statements speak only as to the date on which they are made, and Impax undertakes no obligation to update publicly or revise any forward-looking statement, regardless of whether new information becomes available, future developments occur or otherwise.
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