- Revenue up 17%, 36% at constant exchange rates
- GAAP EPS $0.37, adjusted Cash EPS $0.46
- Cash Flow from operations $51 million
- Increased guidance for 2009, Cash EPS to $1.70 - 1.90
ALISO VIEJO, Calif., - Valeant Pharmaceuticals International (NYSE: VRX) today announced first quarter financial results for 2009.
"This quarter demonstrated the strength of our core businesses and their product portfolios," stated J. Michael Pearson, chairman and chief executive officer. "The impact of the business changes implemented last year can begin to be seen in these financial results and show both the top line growth and the earnings potential of our various businesses."
Revenues:
Total revenue was $177.9 million in the first quarter of 2009 as compared to $152.0 million in the first quarter of 2008, an increase of 17%.
Specialty Pharmaceutical product sales were $86.3 million in the first quarter of 2009, as compared to $80.0 million in the first quarter of 2008, an increase of 8% primarily due to product sales of $11.4 million from acquisitions completed in 2008, partially offset by $8.1 million of generic erosion in Efudex and by unfavorable currency fluctuations. At constant exchange rates, specialty pharmaceutical product sales in the first quarter of 2009 increased 14% as compared to the first quarter of 2008. Product sales in the first quarter of 2008 included $3.5 million from operations divested later in 2008. Excluding the impact of acquisitions, divestitures and currency, specialty pharmaceutical product sales increased 5%.
Product sales in Branded Generics - Latin America in the 2009 first quarter increased 47% to $31.2 million as compared to $21.2 million in the same period in 2008. Product sales in the first quarter of 2008 were adversely affected by issues in our Mexican operations which have been addressed as a result of our turnaround plan. Product sales in the first quarter of 2009 were impacted by unfavorable currency fluctuations of $10.1 million as compared to the first quarter of 2008. At constant exchange rates, product sales in Latin America in the first quarter of 2009 increased 94% as compared to the first quarter of 2008.
Product sales in Branded Generics - Europe were $35.3 million in the 2009 first quarter as compared to $38.0 million in the same period in the prior year, a decrease of 7% due to unfavorable currency fluctuations of $13.9 million. At constant exchange rates, product sales in the first quarter of 2009 increased 30% as compared to the first quarter in 2008.
In December 2008, as part of our acquisition of Dow Pharmaceutical Sciences, Inc., (Dow), we acquired a services business that works with external sponsors for the formulation and development of topical therapies. Service revenue generated by Dow was $6.7 million in the first quarter of 2009. No service revenue was recorded in the same period in 2008.
Total alliance revenue, including $3.3 million in revenue from the GlaxoSmithKline (GSK) collaboration and $1.9 million from dermatology royalties related to the Dow acquisition, increased 44% to $18.4 million in the first quarter of 2009 as compared to $12.8 million in the first quarter of 2008.
Operating Expenses/Earnings:
The company’s cost of goods sold was 26% for both the first quarter of 2009 and the first quarter of 2008. The company’s cost of services was 64% for the first quarter of 2009, while no cost of services was recorded for the first quarter of 2008.
Selling, General and Administrative expenses decreased 8% in the first quarter of 2009 to $64.2 million as compared to $69.4 million in the first quarter of 2008, primarily attributable to the benefit of cost reduction activities, and to a lesser extent exchange rates, partially offset by SG&A at newly acquired Coria Laboratories Ltd., DermaTech Pty Ltd and Dow. First quarter 2009 SG&A charges included a $1.7 million write-down of an investment and a $1.6 million transfer tax.
Research and development costs decreased 70% to $8.7 million in the first quarter of 2009 as compared to $29.3 million reported in the same period in 2008. This decrease is due to the effect of the GSK collaboration, cost reduction efforts, our ability to leverage Dow Services and the timing of certain clinical trial activities. Under collaboration accounting, R&D spending in the quarter on the GSK collaboration was offset by a credit from the initial upfront payment.
Income from continuing operations was $30.8 million for the first quarter of 2009, or $0.37 per diluted share as compared to income from continuing operations of $2.5 million, or $0.03 per diluted share for the first quarter of 2008. On a non-GAAP Cash EPS basis, adjusted income from continuing operations was $38.1 million, or $0.46 per diluted share, in the first quarter of 2009 as compared to $7.0 million, or $0.08 per diluted share, in the first quarter of 2008.
Cash flow from operations for the first quarter of 2009 was $51.1 million.
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