Medicis Announces License and Development Agreement with Dow Pharmaceutical Sciences
SCOTTSDALE, Ariz.--Sept. 26, 2002--Medicis (NYSE:MRX) today announced it signed an exclusive license and development agreement with Dow Pharmaceutical Sciences, Inc. ("Dow") to develop and commercialize an important, patented dermatologic product. Specific details regarding the nature of the development project were not disclosed.
Terms of the agreement include an initial non-refundable payment, or special charge, of $5.4 million payable to Dow. Two additional potential payments totaling $10.9 million are due Dow upon successful completion of various development milestones. A payment of $8.8 million will be due Dow upon the first successful clinical milestone, which could occur as early as the second half of fiscal 2003. A payment of $2.1 million will be due Dow upon successful completion of the final specified development milestone, which could occur as early as the second half of fiscal 2004. An additional payment of $1 million will be due Dow upon FDA approval.
"We are pleased to announce this license and development agreement with Dow Pharmaceutical Sciences," said Jonah Shacknai, chairman and chief executive officer of Medicis. "Dow has a proven track record of developing innovative dermatologic specialties, utilizing their clinical expertise to deliver numerous successful products to the market. We believe this sophisticated late-stage development project will supplement our existing rich pipeline of products."
"This agreement with Medicis, a leader in the field of dermatology, validates our expertise in the development of dermatological products," said Dr. Bhaskar Chaudhuri, chief executive officer of Dow Pharmaceutical Sciences. "We welcome the opportunity to work with such a well respected partner."
Medicis expects to record the initial license payment and fees associated with the transaction in research and development expenditures in the first quarter of fiscal 2003. This strategic alliance was not included in Medicis' previously provided fiscal 2003 guidance. The Company's previously stated fiscal 2003 guidance, excluding the research and development expenses associated with the Dow license and development agreement and the related payment in the first quarter of fiscal 2003, remains unchanged. Due to the uncertainty of the timing of the completion of the specified development milestones and their associated payments, the Company has not adjusted its fiscal 2003 quarterly guidance for the inclusion of the possible payment of $8.8 million, which could occur as early as the second half of fiscal 2003. Based upon the information available currently to the Company and inclusive of the special charge of $5.4 million, which is expected to occur in the first quarter of fiscal 2003, the Company's guidance is as follows:
Fiscal Year 2003
ending June 30, 2003
First Second Third Fourth Fiscal
Quarter Quarter Quarter Quarter Year
(9/30/02) (12/31/02) (3/31/03) (6/30/03) 2003
--------- ---------- --------- --------- ----------
Estimated revenue
objectives $58 mil. $59 mil. $62 mil. $65 mil. $244 mil.
Estimated EPS
objectives
excluding special
charge of $5.4
million $0.53 $0.53 $0.56 $0.62 $2.24
Estimated EPS
objectives including
special charge
of $5.4 million $0.40 $0.53 $0.56 $0.62 $2.11
At the time of this disclosure, Medicis believes these objectives are attainable based upon information currently available to the Company. The Company's business is subject to all risk factors outlined in the Company's Form 10-K, Form S-3 and other publicly filed documents. At the time of this release, the Company cannot, among other things, assess the forthcoming results of the Company's research and development projects and the risks associated with the FDA approval process, risks associated with significant competition within the Company's industry, nor can the Company validate its assumptions of the full impact on its business of the approval of competitive generic versions of the Company's core brands, or any future competitive product approvals that may affect the Company's brands. Additionally, Medicis may acquire and/or license products or technologies from third parties to enter into new strategic markets. The Company periodically makes up-front, non-refundable payments to third parties for research and development work which has been completed and periodically makes additional non-refundable payments for the achievement of various milestones. There can be no certainty which periods these potential payments could be made, nor if any payments such as these will be made at all. The above estimated future guidance does not include the potential payments associated with any such transactions, except for the first payment of the Dow transaction discussed earlier in this press release.
About Medicis
Medicis is the leading independent specialty pharmaceutical company in the United States focusing primarily on the treatment of dermatological, pediatric and podiatric conditions. Medicis develops and markets leading prescription products in a number of therapeutic categories, including acne, asthma, eczema, fungal infections, head lice, hyperpigmentation, photoaging, psoriasis, rosacea, seborrheic dermatitis and skin and skin-structure infections. The Company's products have earned wide acceptance by both physicians and patients due to their clinical effectiveness, high quality and cosmetic elegance.
The Company's products include the prescription brands DYNACIN(R) (minocycline HCl), LOPROX(R) (ciclopirox), LUSTRA(R) (hydroquinone), LUSTRA-AF(R) (hydroquinone) with sunscreen, ALUSTRA(R) (hydroquinone) with retinol, OMNICEF(R) (cefdinir), ORAPRED(R) (prednisolone sodium phosphate), OVIDE(R) (malathion), PLEXION(R) Cleanser (sodium sulfacetamide/sulfur), PLEXION TS(R) (sodium sulfacetamide/sulfur), PLEXION SCT(R) (sodium sulfacetamide/sulfur), TRIAZ(R) (benzoyl peroxide), LIDEX(R) (fluocinonide), SYNALAR(R) (fluocinolone acetonide) and TOPICORT(R) (desoximetasone); the over-the-counter brand ESOTERICA(R); and BUPHENYL(R) (sodium phenylbutyrate), a prescription product indicated in the treatment of Urea Cycle Disorder.
About Dow Pharmaceutical Sciences
Dow Pharmaceutical Sciences, Inc., a privately held company started in 1977 by Dr. Gordon Dow, develops topical products for pharmaceutical and biotechnology clients. Services include formulation development, skin permeation studies, analytical and stability testing, and manufacturing and labeling of clinical trial materials. Dow also offers regulatory, pre-clinical and clinical services to take dermatology products through FDA approval. In addition to providing expert development services, Dow maintains an internal technology development program, which has yielded opportunities to license internally developed products to key pharmaceutical concerns such as Medicis for the eventual launch and promotion to the dermatological industry.
Except for historical information, this press release includes "forward-looking statements" within the meaning of the Securities Litigation Reform Act. All statements included in this press release that address activities, events or developments that Medicis expects, believes or anticipates will or may occur in the future are forward-looking statements. This includes earnings estimates, future financial performance and other matters. These statements are based on certain assumptions made by Medicis based on its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. The Company cannot validate its assumptions of the full impact on its business of the approval of competitive generic versions of the Company's core brands, or any future competitive product approvals that may affect the Company's brands. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of Medicis. Any such projections or statements include the current views of Medicis with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that such results will be achieved and there are a number of important factors that could cause actual results to differ materially from those projected, including the ability to realize anticipated synergies and benefits of the Ascent transaction, the risks and uncertainties normally incident to the pharmaceutical industry, dependence on sales of key products, the uncertainty of future financial results and fluctuations in operating results, dependence on Medicis' strategy including the uncertainty of license payments and/or other payments due from third parties, the timing and success of new product introductions and other risks described from time to time in Medicis' SEC filings including its Annual Report on Form 10-K for the year ended June 30, 2001. In addition, Medicis recently sold $400 million of 2.5% Contingent Convertible Notes Due 2032. There can be no assurance as to when or if any of the Notes will be converted, and what impact the increase in the number of shares outstanding will have on our results of operations. Forward-looking statements represent the judgment of Medicis' management as of the date of this release, and Medicis disclaims any intent or obligation to update any forward-looking statements.
NOTE: Full prescribing information for any Medicis prescription product is available by contacting the Company. OMNICEF(R)is a registered trademark of Abbott Laboratories, Inc. under a license from Fujisawa Pharmaceutical Co., Ltd. All other marks (or brands) and names are the property of Medicis or its affiliates.
Contacts: Medicis, Scottsdale Libby Ivy, 602/808-3854 www.medicis.com or Dow Pharmaceutical Sciences, Petaluma, Calif. Steve Smith, 707/665-4672