Impax Laboratories Inc. (IPXL)
Q1 2010 Earnings Conference Call
May 4, 2010 11:00 AM ET
Mark Donohue – SVP, IR
Larry Hsu – President and CEO
Art Koch – CFO
Ken Cacciatore – Cowen & Company
Michael Tong – Wells Fargo Securities
David Amsellem – Piper Jaffray
David Risinger – Morgan Stanley
Elliot Wilbur – Needham & Co.
Corey Davis – Jefferies & Co.
Louise Chen – Collins Stewart
Dewy (ph) – JPMorgan
Sumant Kulkarni – Bank of America Merill Lynch
Lane Yaffi (ph)
Tim Chiang – FTN Midwest Securities
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Good morning. My name is Mitchell [ph] and I will be your conference operator today. At this time, I would like to welcome everyone to the Impax Laboratories First Quarter 2010 Earnings Conference call. All lines have been placed on mute to prevent any background noise. (Operator Instructions). Thank you Mr. Mark Donohue. You may begin your conference.
Thank you. Good morning everyone, welcome to our first quarter 2010 earnings conference call and webcast at
. And on the call today we have with us Dr. Larry Hsu, our President and Chief Executive Officer and our Arthur Koch, our Chief Financial Officer. Following their prepared remarks both will be available to take any questions you may have as time permits.
Should you have any questions after the call, please feel free to telephone Mark Donohue. Investor Relations at 215-933-3526. A replay of today’s call will be available starting at 2:00 PM today through May 11. Please refer to our first quarter earnings release for replay details.
Our discussion today may include certain forward looking statements and actual results may differ from those presented here. The factors that could cause such a difference are outlined in our SEC filings and on our websites. A quarterly income statement with segment information and a reconciliation with deferred revenue and deferred manufacturing costs has been posted on the Investor Relations homepage of our website. And with that, it’s a pleasure to turn our call over to Dr. Larry Hsu.
Thank you, Mark. Good morning and thanks for joining us. We are off to a great start in 2010, as we reported significant growth in our first quarter financial results. Our ability to capitalize our new and existing product opportunities let us to $264 million increase in first quarter 2010 revenue to $323 million and a $2.02 increase in earning per diluted share to $2.06 per share.
This was a breaking quarter our previously record fourth quarter 2009 performance and it has put us on a path for tremendous year for impacts. Our strong first quarter result benefited significantly from our exclusive launch on March 2 of generic Flomax, which contributed more than $176 million in revenue and $168 million in gross profits in the quarter. We were fortunate to be the only company to launch the product during the eight week period, before the approval of several competing products.
With growth in the managed the demand for our product during the show window of opportunity to maximized profit and as reported by (inaudible) we achieved a significant market penetration of more than 77% as of April 23. In addition to realizing the benefits of this short term generic Flomax opportunity, we continued to see strong first quarter 2010 sales of our generic Adderall XR product. And to a lesser extent, fenofibrate product.
I will have more to say about these products in shortened. As always we forecast much of our effort on high margin opportunities with a limited competition. Our recent performance of further proof that our ongoing strategy to invest in our – I’m sorry in R&D to develop high value, limited competition opportunities has paid dividends and we’ll continue to provide the potential for earning growth in the future.
The generic Flomax launch represented significant short time opportunities that will provide plenty of cash opportunity to development activities. Our already healthy balance sheet has been enhanced and will contribute significantly to our ongoing business development activities. The range over development activities we can now consider is expanding as our resource increase significantly and our resolve to complete a transaction that meets our focused objectives remain very high.
We are aggressively looking at a generic and brand opportunities to acquire products, technologies or companies with a strategic value to create long-term growth opportunities. On the generic R&D side, we previously reported that we submitted 10 ANDAs in 2009 achieving the upper end of our 2009 ANDA filing objective of 8 to 10 new applications with the continuing focus on controlled release product. To-date we have been sued on five of these filings, generics of TriCor, Oracea Welchol, and most recently Trilipix, and (inaudible). We believe we are first to file on Welchol, Trilipix, and (inaudible). These 2009 filings further enhanced our pipeline where we currently have 32 pending ANDA and an additional 55 product under development.
We expect 2010 will be another exciting year for our generic business. We anticipate maintaining our investment in generic R&D, would continue to work on products in our development pipeline. Our 2010 ANDA filing goal remains consistent with our goals in the past several years. We will continue to focus on filing 8 to 10 new applications with two to three of these being first to file or first to market opportunities. We are confident that we can achieve or exceed our 2010 goals as we have done in the past several years.