IMPAX Laboratories, Inc. today announced the completion of the audits of the Company's 2004 through 2007 financial results and that it has filed a Form 10 registration statement with the Securities and Exchange Commission pursuant to section 12(g) of the Securities Exchange Act. Section 12(g) provides the registration statements thereunder shall become effective within 60 days after filing. The Company will issue a further announcement when the registration statement becomes effective and trading in the Company's stock resumes.

For the six months ended June 30, 2008, total revenues increased to $128.6 million (up 38%) and income before income taxes increased to $32.0 million (up more than 900%), compared with total revenues of $92.9 million and income before income taxes of $3.0 million for the same period last year. Net income per share on a diluted basis for the six months ended June 30, 2008 was $0.30, compared with tax-benefit aided net income per share on a diluted basis of $1.24 in the prior year period. The results for the first six months of 2007 include a reversal of a deferred tax asset valuation of $1.33 per diluted share ($81.5 million).

Larry Hsu, Ph.D., president and chief executive officer of IMPAX Laboratories, said, "We are obviously pleased that the audit work has been completed and that public trading of our shares is likely soon to resume. Despite this long ordeal, we successfully grew our business by continuing to execute our strategy of applying our formulation expertise and drug delivery technology to the development of controlled-release and specialty generics in addition to the development of brand products. At last count, we had 46 generic pharmaceutical products approved by the U.S. Food and Drug Administration ('FDA'), and a further 76 products pending FDA review or under development to target currently marketed products with more than $34 billion in U.S. brand and generic sales. We are also continuing to invest in our brand business, where we currently have one product in Phase III trials, have filed an IND on another product, and have four additional exploratory stage products."

Dr. Hsu continued, "Our improved first-half results indicate our ongoing commitment to invest in research and development programs which are driving, and should continue to drive, the growth of our business. Our ANDA filing goal in 2008 is eight to ten new applications with at least 25% of these having the potential to be first-to-file product opportunities. Year to date, we have filed five ANDAs and believe we will be able to achieve our goal in the fourth quarter."

Total net revenues for the six months ended June 30, 2008 increased 38% to $128.6 million, compared to $92.9 million in the prior year period driven by increases at the Company's RX Partner, Global and OTC Partner segments.

Global product net revenues for the six months ended June 30, 2008 increased 25% to $50.1 million, compared to $40.1 million in the prior year period primarily due to the Company's generic versions of Lofibra(R) capsules, a cholesterol-lowering drug of which the Company's product was the only generic version in a market experiencing increasing demand for drugs of this type, and Colestid(R) tablets due to the increasing demand for the tablet form of this drug.

Rx Partner revenues for the six months ended June 30, 2008 increased 51% to $62.7 million, compared to $41.6 million in the prior year period primarily attributable to sales of generic OxyContin(R) and generic Wellbutrin(R) XL 300 mg of which the Company's customers' inventories were relatively full during the first quarter of 2007 as a result of the product's launch in December 2006, and generic OxyContin. Under a litigation settlement agreement, the Company's product was one of only two generic versions of OxyContin(R) in the marketplace in January 2008, when we ceased further sales of this product.

Promotional Partner revenues for the six months ended June 30, 2008 were $6.5 million with nominal change to the same period in 2007.

Gross profit for the six months ended June 30, 2008 increased 90% to $84.5 million, compared to $44.6 million in the prior year period. Gross profit margin for the six months ended June 30, 2008 increased 18 percentage points to approximately 66% of total revenues, as compared to 48% of total revenue in the prior year period. The increase in profit margin was due almost entirely to sales of generic OxyContin(R) during the first quarter of 2008.

Total research and development expenses for the six months ended June 30, 2008 were $27.6 million, compared to $16.5 million in the prior year period. Generic project activity increased $7.1 million to $20.0 million primarily due to increased spending on bioequivalent studies related to five new and 23 pending ANDA filings, higher patent prosecution an opinion expenses and investment in additional human resources. Brand product activity relating to the Company's pipeline increased $4.0 million to $7.6 million due to expenses associated with 36 additional research personnel added during the period representing 65% of the total increase in brand R & D spending and higher spending on clinical trials.

Selling, general and administrative expenses for the six months ended June 30, 2008 were $22.0 million, up $3.3 million over the prior year period primarily attributable to additional marketing and sales promotional spending.

Interest income and other expenses was $1.5 million higher for the six months ended June 30, 2008, primarily due to higher cash balances as a result of the increase in net sales.

The provision for income taxes for the six months ended June 30, 2008 was a charge of $14.2 million, compared to a benefit of $76.0 million in 2007 related to the release of a valuation allowance of a deferred tax asset. The effective tax rate for the first six months of 2008 was 43%.

The Company had cash, cash equivalents and short-term marketable securities of $154.8 and total debt of $83.7 million as of June 30, 2008.

In August and September 2008, the Company repurchased in the aggregate $62.3 million principal amount of their 3.5% debentures.

A substantial portion of the Company's revenue is derived from alliance agreements with marketing partners and, in accordance with generally accepted accounting principles (GAAP), is deferred and recognized over the estimated remaining life of the related agreement. The Company believes it is useful to present supplemental information showing what results of operations would have been had such revenue not been deferred and instead recognized at the time marketing partners reported the revenue to the Company. The Company utilizes this information in the management of its business, including in defining performance goals for executives, and believe it may be useful to investors, drug wholesalers and others in understanding changes in the Company's cash position and in evaluating customer acceptance of the Company's products in comparison with its competitors that do not defer significant portions of their revenue. However, this non-GAAP financial information should not be considered by investors as an alternative to operating income or net income as an indicator of the Company's performance. We derive the non-GAAP results by adding the deferred revenues to our revenues determined in accordance with GAAP and deducting the amortized portion of previously deferred revenues. The following tables presents the Company's results as reported in accordance with GAAP and in accordance with this non-GAAP method.

Total net revenues for 2007 increased 102% to $273.8 million, compared to $135.2 million in the prior year period driven by an increase in the Company's Rx Partner, Global and Promotional Partner segments.

Global product net revenues for 2007 increased 13% to $88.0 million, compared to $78.2 million in the prior year period primarily due to the launch of the Company's generic version of Colestid(R) tablets and increased sales of its generic version of Lofibra(R) capsules, as it was the only generic version in the market. These increases were partially offset by lower sales of the generic versions of Brethine(R) and Minocin(R) due to increasing price competition.

Rx Partner revenues for 2007 increased to more than 300% to $161.1 million, compared to $36.8 million in the prior year period primarily attributable to sales of the Company's generic version of OxyContin(R). Under a litigation settlement agreement, the Company's product was one of only two generic versions of OxyContin(R) in the marketplace during the second and fourth quarters of 2007. Higher sales of new generic versions of Ditropan(R) XL 5 mg, 10 mg and 15 mg tablets and Wellbutrin(R) XL 300 mg were partially offset by a decline in sales of generic Wellbutrin(R) SR 100 mg & 150 mg tablets, and generic Prilosec(R) 10 mg and 20 mg capsules due to a declining market which contributed to both lower volume and pricing as competitors sought to maintain or grow market share.

OTC Partner revenues for 2007 declined 14% to $11.9 million, compared to $13.8 million in the prior year period due to lower demand.

Promotional Partner revenues for 2007 nearly doubled to $12.8 million, compared to $6.4 million in 2006 due to the fact that the Company did not begin providing promotional services until mid-2006.

Gross profit for 2007 increased 164% to $166.1 million, compared to $63.0 million in 2006. Gross margin for 2007 increased 14 percentage points to approximately 61% of total revenues, compared to 47% of total revenue in 2006. Of the total 2007 increase of 14 percentage points, nine percentage points resulted from the relatively high margins associated with sales of generic OxyContin(R) and the balance resulted from operational efficiencies.

Total research and development expenses for 2007 were $40.0 million, compared to $29.6 million for 2006. Generic project activity increased $6.8 million to $31.2 million, primarily due to increased spending on bioequivalent studies related to submission of 13 new ANDA filings in 2007 as compared to seven filings in 2006. Brand product activity relating to the Company's pipeline increased $3.5 million to $8.8 million due to higher spending on clinical trials.

Patent litigation expenses for 2007 were $10.0 million, up $0.3 million due to higher expenses related to our generic Effexor XR(R) litigation.

Selling, general and administrative expenses for 2007 were $39.6 million, up $7.2 million primarily attributable to $1.7 million in professional fees related to legal, accounting, and audit services and $3.9 million in incentive compensation.

There were no material litigation settlement expenses in 2007, as compared with $2.6 million for interest expense and legal fees related to a litigation settlement in 2006 of a suit brought against the Company in 2003 by Solvay Pharmaceuticals, Inc.

Income tax benefit for 2007 was $48.8 million with an effective tax rate of 35% before the change in valuation allowance. There was a nominal income tax expense in 2006 as we reported a loss from operations.

The Company had cash, cash equivalents and short-term marketable securities of $143.5 and total debt of $89.7 million as of December 31, 2007.

The Company will host a conference call at 2:00 p.m. EDT on Tuesday, October 14, 2008 to discuss its results. The number to call from within the United States is 888-803-7396 and 706-634-1052 Internationally. The call can also be accessed via a live Webcast through the Investor Relations section of the Company's Web site, www.impaxlabs.com. A replay of the conference call will be available 3:00 p.m EDT on October 14, 2008 through 11:59 p.m. EDT October 16, 2008 and can be accessed by dialing 800-642-1687 in the United States or 706-645-9291 Internationally and using the access code 68978658.

IMPAX Laboratories, Inc. is a technology based specialty pharmaceutical company applying its formulation expertise and drug delivery technology to the development of controlled-release and specialty generics in addition to the development of branded products. IMPAX markets its generic products through its Global Pharmaceuticals division and markets its branded products through the IMPAX Pharmaceuticals division. Additionally, where strategically appropriate, IMPAX has developed marketing partnerships to fully leverage its technology platform. IMPAX Laboratories is headquartered in Hayward, California, and has a full range of capabilities in its Hayward and Philadelphia facilities. For more information, please visit the Company's Web site at: www.impaxlabs.com.

To the extent any statements made in this news release contain information that is not historical, these statements are forward-looking in nature and express the beliefs and expectations of management. Such statements are based on current expectations and involve a number of known and unknown risks and uncertainties that could cause IMPAX's future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to, possible adverse effects resulting from the delisting of and suspension of trading in IMPAX's stock, the actual time that will be required to obtain effectiveness of IMPAX's registration statement on Form 10 and resumption of trading in its stock, IMPAX's ability to obtain sufficient capital to fund its operations, the difficulty of predicting FDA filings and approvals, consumer acceptance and demand for new pharmaceutical products, the impact of competitive products and pricing, IMPAX's ability to successfully develop and commercialize pharmaceutical products, IMPAX's reliance on key strategic alliances, the uncertainty of patent litigation, the availability of raw materials, the regulatory environment, dependence on patent and other protection for innovative products, exposure to product liability claims, fluctuations in operating results and other risks detailed from time to time in IMPAX's filings with the Securities and Exchange Commission. Forward-looking statements speak only as to the date on which they are made, and IMPAX undertakes no obligation to update publicly or revise any forward-looking statement, regardless of whether new information becomes available, future developments occur or otherwise.

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