SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): October 14, 2003

 

IDEC PHARMACEUTICALS CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

 

ITEM 7. Financial Statements and Exhibits.

 

(c) Exhibits

 

99.1    Press release dated October 14, 2003.

 

ITEM 9. Regulation FD Disclosure.

 

                On October 14, 2003, IDEC Pharmaceuticals Corporation issued a press release announcing its financial results for the three months ended September 30, 2003.  A copy of this press release is attached hereto as Exhibit 99.1.  This Form 8-K and the attached exhibit are provided under Item 12, Results of Operation and Financial Condition, and are furnished to, but not filed with, the Securities and Exchange Commission.

 

 

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SIGNATURE

 

                Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: October 14, 2003

 

IDEC PHARMACEUTICALS CORPORATION
By	/s/ EDWARD M. RODRIGUEZ
Name:	Edward M. Rodriguez
Title:	Vice President, Finance and Controller

 

 

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Exhibit 99.1

 

IDEC PHARMACEUTICALS REPORTS THIRD QUARTER 2003 RESULTS

Rituxan Sales Increase 31% Over Third Quarter 2002 and Earnings Increase to $0.26 Per Diluted Share

SAN DIEGO, California, (October 14, 2003): IDEC Pharmaceuticals Corporation (Nasdaq: IDPH) today announced its financial results for the third quarter ended September 30, 2003.  Net income was $45.5 million, or $0.26 per share on a diluted basis, compared to $38.4 million, or $0.22 per share on a diluted basis, for the same period in 2002.

Total revenues for the third quarter ended September 30, 2003 were $138.5 million, compared to $103.7 million for the third quarter of 2002.  Revenues for the third quarter of 2003 included $134.0 million recorded for IDEC’s joint business arrangement with Genentech for the commercialization of Rituxan® (Rituximab), which IDEC copromotes in the U.S. with Genentech, compared to $98.6 million for the third quarter of 2002.  Revenues in the third quarter of 2003 also included $4.4 million in U.S. net sales of Zevalin® (ibritumomab tiuxetan), which IDEC markets alone in the U.S. and was launched in April 2002, compared to $5.0 million for the third quarter of 2002.

Rituxan Revenues

U.S. net sales of Rituxan in the third quarter of 2003, as recorded by Genentech, were $354 million compared to $270 million for the same period in 2002.

“Rituxan sales produced another notable performance in the third quarter of this year,”  said William R. Rohn, IDEC’s president and chief operating officer. “Net U.S. sales increased $84 million in the third quarter, representing a 31 percent increase from the same quarter last year.”

 

The net sales of Rituxan reported by Genentech in the third quarter included $18 million of ex-U.S. sales to its partners F. Hoffmann-La Roche Ltd. and Zenyaku Kogyo Co. Ltd. of Japan.  IDEC’s royalty revenue on sales of Rituximab outside the U.S. is based on Roche’s and Zenyaku’s end-user sales and is recorded with a one-quarter lag.  IDEC recognized, during the third quarter of 2003, $18.7 million in royalties from Roche’s and Zenyaku’s end-user sales during the second quarter of 2003.

 

Revenues from unconsolidated joint business reflect the financial results from the commercialization of Rituxan by IDEC and Genentech.  Revenues from unconsolidated joint business includes various revenues associated with Rituxan commercialization such as IDEC’s share of pretax copromotion profits, reimbursements from Genentech for IDEC’s Rituxan-related sales force and development expenses, and royalty revenues on sales of Rituximab outside the United States by Roche and Zenyaku.  Roche has

 

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marketing rights to Rituximab outside of the U.S., and copromotes Rituxan in Japan with Zenyaku.

 

Operating Costs and Expenses

 

Operating costs and expenses for the third quarter of 2003 increased to $67.1 million from $49.4 million for the third quarter of 2002.  The higher 2003 operating expenses are primarily the result of increased legal expenses to protect IDEC’s intellectual property rights, increased sales and marketing expenses to support commercialization of Zevalin, increased personnel and facility expenses, and increased research and development expenses due to decreased capitalization of IDEC’s manufacturing costs, as our manufacturing facilities were primarily used to support products in development in the third quarter of 2003.

 

Cash Position

 

IDEC ended the third quarter of 2003 with cash, cash equivalents and securities available-for-sale totaling $1.5 billion.

 

General Information

 

IDEC Pharmaceuticals Corporation is a leader in the discovery, development, and commercialization of targeted immunotherapies for the treatment of cancer and autoimmune diseases. IDEC discovered and developed the first commercially available radioimmunotherapy product (Zevalin) approved in the United States, which is used to treat certain non-Hodgkin’s lymphomas.  IDEC also discovered and, with co-promotion partner Genentech, Inc., developed the first monoclonal antibody product (Rituxan) approved in the United States for the treatment of cancer. Rituxan is approved in over 70 countries worldwide and is also used to treat various types of non-Hodgkin’s lymphomas.  IDEC is a San Diego based, integrated biopharmaceutical company with multiple products in clinical stage development and strategic alliances in a variety of research platforms.

 

Today, interested parties can access a live webcast of management’s discussion of third quarter of 2003 results at IDEC’s website (http://www.idecpharm.com) at 1:30 p.m. Pacific Standard Time. The webcast will be archived on the IDEC website. For a menu of IDEC’s current news releases and quarterly reports or to retrieve a specific release, call (888) 329-2309.

 

The statements made in this press release contain certain forward-looking statements that involve a number of risks and uncertainties. Actual events or results may differ from IDEC’s expectations. For example, the risk factors listed from time to time in IDEC’s SEC filings including but not limited to its Annual Report on Form 10-K for the year ended December 31, 2002 and its Quarterly Report on Form 10-Q for the six months ended June 30, 2003, may affect the actual results achieved by IDEC. These forward-looking statements represent the company’s judgment as of the date of this release. The company disclaims, however, any intent or obligation to update these forward-looking statements.

 

IDEC Pharmaceuticals, Rituxan and Zevalin are registered U.S. trademarks of the company. The company’s headquarters are located at 3030 Callan Road, San Diego, CA 92121.

 

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IDEC PHARMACEUTICALS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

 

		Three months						Nine months
		ended September 30,						ended September 30,
		2003			2002			2003			2002
Revenues:
Product sales		$	4,427		$	4,958		$	15,069		$	8,258
Revenues from unconsolidated joint business		133,960			98,613			363,236			269,250
Corporate partner revenues		143			127			1,032			3,062
Total revenues		138,530			103,698			379,337			280,570
Operating costs and expenses:
Cost of sales		639			232			5,282			1,121
Research and development		36,295			25,367			113,122			67,596
Selling, general and administrative		30,195			23,798			83,247			65,865
Total operating costs and expenses		67,129			49,397			201,561			134,582
Income from operations		71,401			54,301			177,686			145,988
Interest income, net		1,986			4,838			8,549			13,237
Income before income taxes		73,387			59,139			186,235			159,225
Income taxes		27,887			20,699			70,769			55,729
Net income		$	45,500		$	38,440		$	115,466		$	103,496
Earnings per share:
Basic		$	0.29		$	0.25		$	0.74		$	0.68
Diluted		$	0.26		$	0.22		$	0.67		$	0.60
Shares used in calculation of earnings per share:
Basic		155,498			152,679			155,117			152,977
Diluted		187,011			178,362			178,163			180,096

 

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CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION

(In thousands)

(Unaudited)

		September 30,			December 31,
		2003			2002
ASSETS
Cash, cash equivalents and securities available-for-sale		$	1,450,370		$	1,447,865
Due from related parties		112,680			100,288
Property and equipment, net		444,207			264,537
Other		232,638			246,999
Total assets		$	2,239,895		$	2,059,689
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities		$	66,447		$	56,225
Non-current liabilities		911,504			893,774
Stockholders’ equity		1,261,944			1,109,690
Total liabilities and stockholders’ equity		$	2,239,895		$	2,059,689

 

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For further information contact:

Vince Reardon, Director,

Corporate Communications

(858) 431-8656