Pharmaceutical company reports Q1 revenue drop of 14%; withdraws 2004 guidance.

2004 JUN 3 - (NewsRx.com & NewsRx.net) -- King Pharmaceuticals, Inc., (KG) announced that total revenues decreased 14% to $290.6 million during the first quarter ending March 31, 2004, compared to $338.4 million in the first quarter of 2003.

Including special items, King reported a net loss of $111.1 million and a diluted loss per share of $0.46 during the first quarter of 2004, compared to a net loss of $7.2 million and a diluted loss per share of $0.03 in the same period of the prior year. Excluding special items, net earnings decreased 69% to $25.9 million and diluted earnings per share decreased 68% to $0.11 during the first quarter ending March 31, 2004, compared to net earnings of $82.3 million and diluted earnings per share of $0.34 in the first quarter of 2003.

Jefferson J. Gregory, CEO of King, stated, "As we previously disclosed, during the first quarter of 2004 King was actively negotiating inventory management agreements with our key wholesale customers. While negotiating these agreements, we anticipated that net sales of our key branded pharmaceutical products would be negatively affected during the first half of 2004, particularly in the first quarter. As we also previously disclosed, the effect on first-quarter net sales of branded pharmaceutical products was even greater than we originally anticipated."

Gregory continued, "Our financial results during the first quarter of 2004 were disappointing, as net sales of most of the company's key products during the quarter ending March 31, 2004, were well below the level that prescription demand would indicate. However, I am pleased to announce that following the end of the first quarter we successfully entered into an inventory management agreement with each of our three key wholesale customers covering all of our branded pharmaceutical products. The execution of these inventory management agreements represents an important achievement for our company, as they should facilitate enhanced management of wholesale channel inventories of our products going forward."

Net revenue from branded pharmaceuticals, including royalty income, totaled $250.0 million for the first quarter of 2004, an 18% decrease over the first quarter of 2003. Meridian contributed $34.5 million to the company's total revenues during the first quarter of 2004, an increase of 35% over the same period of the prior year. During the first quarter ending March 31, 2004, net revenue from contract manufacturing and other equaled $6.2 million.

Altace (ramipril) net sales equaled $72.3 million during the first quarter of 2004, a decrease of 53% from $153.6 million during the first quarter of 2003. This decrease was primarily due to significant wholesale channel inventory reductions of the product during the first quarter ending March 31, 2004, as total prescriptions increased 14% over the same period of the prior year according to IMS America monthly prescription data.

Net sales of Skelaxin (metaxalone) and Sonata (zaleplon) totaled $46.0 million and $16.5 million, respectively, during the first quarter of 2004.