May 8 2007, 7:00 AM EST
News source: Business Wire
Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP) today announced financial and operating results for the first quarter ended March 31, 2007.
Total product revenue was $59.8 million for the first quarter of 2007, a year-over-year increase of 43% compared to $41.9 million for the first quarter of 2006. MOVIPREP(R), OSMOPREP(TM) and VISICOL(R) combined, generated revenue of $11.0 million for the first quarter of 2007. Revenue from these three products, which comprise our bowel cleansing product line, contributed 18% of 1Q07 total product revenue. XIFAXAN(R) revenue for the first quarter of 2007 was $15.4 million, a 134% increase compared to the first quarter of 2006. COLAZAL(R) generated revenue of $30.1 million for the first quarter of 2007 compared to $22.8 million for the first quarter of 2006. The Company continued to make progress during the period in its effort to broaden and diversify its product line. The chart below reveals the changing product mix of our revenue base:
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More News REVENUE CONTRIBUTION
(First Quarter % of Total Product Revenue)
Product 2007 2006 2005
----------------------------------------------------------
COLAZAL 50% 55% 83%
XIFAXAN 26% 16% 9%
Bowel Cleansing 18% 23% na
Other 6% 6% 8%
Total cost of products sold was $12.0 million for the first quarter. Gross margin on total product revenue was 79.9% for the first quarter of 2007 compared to 80.2% for the first quarter of 2006. Research and development expenses were $21.8 million for the first quarter of 2007, compared to $10.1 million for the prior year period. Selling, general and administrative expenses were $21.4 million for the first quarter of 2007, compared to $19.4 million in the prior year period. The Company reported net income of $2.8 million, or $0.06 per share, fully diluted, for the first quarter of 2007.
Cash, cash equivalents and investments were $54 million on March 31, 2007.
Commenting on the performance of the Company, Adam Derbyshire, Senior Vice President and Chief Financial Officer, stated, "Total product revenue for the first quarter of 2007 increased 43% to $59.8 million yielding net income of $2.8 million, or $0.06 per share, fully diluted, with a 17% tax rate due to prior net operating loss carry forwards. Total product revenue for the quarter included five weeks of revenue for our newly-acquired PEPCID(R) Oral Suspension and DIURIL(R) Oral Suspension. We look forward to the contribution of a full quarter of product revenue from these products beginning in the next quarter.
"As planned, we invested substantial resources, approximately $21.8 million or 37% of revenue, in research and development efforts during the first quarter of 2007. As previously stated, we expect R&D expenditures will be approximately 25% of revenue for the entire year of 2007. We continue to believe that total product revenue for 2007 will be approximately $260 million and that we will be able to generate $0.85 in earnings per share, fully diluted, assuming a 17% tax rate, for the year ending December 31, 2007. The 2007 EPS of $0.85 represents a 50% increase, on a tax-adjusted basis, compared to 2006 EPS of $0.65. We believe our ability to significantly strengthen our product portfolio by means of product acquisition and label expansion of existing products while continuing to grow revenue and EPS at these rates distinguishes Salix from many of its peers and bodes well for our future."
Commenting on the Company and its performance, Carolyn Logan, President and Chief Executive Officer stated, "The solid year-over-year increase in revenue for each of our three major therapeutic areas demonstrate
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