CARY, N.C., May 7 /PRNewswire-FirstCall/ -- Cornerstone
Therapeutics Inc. (Nasdaq CM: CRTX), a specialty pharmaceutical
company focused on acquiring, developing and commercializing
significant products primarily for the respiratory market, today
reported financial results for the first quarter ended March 31,
2009. Highlights: -- First quarter 2009 Net Revenues increased
$21.3 million to $30.7 Million, or 225% -- Income from Operations
increased $9.0 million to $10.4 Million, or 658% -- Net Income and
Diluted Earnings Per Share increased to $6.3 million and $0.48,
respectively As previously disclosed, Critical Therapeutics, Inc.
and Cornerstone BioPharma Holdings, Inc. (Cornerstone BioPharma)
completed their merger on October 31, 2008, and the combined
company was renamed Cornerstone Therapeutics Inc. (the Company).
Cornerstone BioPharma was deemed to be the acquiring company for
accounting purposes and the transaction was accounted for as a
reverse acquisition in accordance with generally accepted
accounting principles. Accordingly, the Company's financial
statements for periods prior to the merger reflect the historical
results of Cornerstone BioPharma, and not Critical Therapeutics,
and Cornerstone Therapeutics' financial statements for all
subsequent periods reflect the results of the combined company. In
addition, unless specifically noted otherwise, the Company's
financial results do not include the historical financial results
of Critical Therapeutics (including sales of ZYFLO CR(R) and
ZYFLO(R)) prior to the completion of the merger. Financial Results
for the Three Months Ended March 31, 2009 and 2008 First quarter
2009 net revenues increased $21.3 million over first quarter 2008,
or 225%, to $30.7 million. Net product sales were $30.5 million in
the first quarter of 2009, compared to $9.0 million in the same
period of 2008, an increase of $21.5 million, or 239%. Net product
sales in the first quarters of 2009 and 2008 consisted of revenues
from sales of the Company's AlleRx(R) family of products, which
increased $4.4 million in the most recent first quarter compared to
2008, Spectracef(R), which increased $3.5 million in the most
recent first quarter compared to 2008, Deconsal(R), and Balacet(R)
325 products. Additionally, net product sales in the 2009 first
quarter also included $8.6 million in sales of the HyoMax(R) line
of products, which was launched in May 2008, and $5.3 million in
sales of ZYFLO CR and ZYFLO. Gross profit was $27.5 million in the
quarter ended March 31, 2009, compared to $8.8 million in the
corresponding period of 2008. Gross margin (exclusive of
amortization of product rights of $511,000 and $739,000 the three
months ended March 31, 2009 and 2008, respectively) was 90% in the
first quarter of 2009 and 94% in the first quarter of 2008. Sales
and marketing expenses were $5.4 million in the 2009 first quarter,
compared to $3.9 million in the 2008 first quarter, an increase of
approximately $1.5 million, or 38%, which includes a $776,000
increase in co-promotion expenses primarily relating to ZYFLO CR.
Royalty expenses were $6.3 million in the first quarter of 2009,
compared to $1.2 million in the corresponding period of 2008, an
increase of approximately $5.1 million, or 405%. This increase was
primarily due to the launch of the HyoMax line of products, which
took place in May 2008, increased net product sales of the AlleRx
family of products and royalties relating to ZYFLO CR and ZYFLO.
General and administrative expenses were $3.8 million in the
quarter ended March 31, 2009, compared to $1.5 million in the
quarter ended March 31, 2008, an increase of approximately $2.3
million, or 147%. This increase was primarily due to a $1.0 million
increase related to public company legal and accounting costs and a
$0.6 million increase in employee and travel expenses resulting
from our growth. Research and development expenses were $1.2
million in the 2009 first quarter, compared to $98,000 in the 2008
first quarter, an increase of approximately $1.1 million, or 1086%.
Research and development expenses in the most recent first quarter
included additional expenses related to on-going pipeline
development. For the three months ended March 31, 2009, the Company
had operating income of $10.4 million, or 33.9% of net revenues,
compared with operating income of $1.4 million, or 14.9% of net
revenues, for the same period in 2008, an increase of approximately
658%. The Company's first quarter 2009 net income and diluted
earnings per share were $6.3 million and $0.48, respectively. "We
are extremely pleased with our financial performance in the first
quarter, as we delivered substantial growth in operating income,
and further strengthened our balance sheet," said Craig A. Collard,
Cornerstone's President and Chief Executive Officer. "Also, our
sales and marketing strategies for key products, including
SPECTRACEF, ZYFLO CR and ALLERX, continued to gain traction with
net product sales more than tripling year-over-year. In addition,
our existing product pipeline continues to move forward." As of
March 31, 2009, the Company had $10.7 million in cash and cash
equivalents, an increase of $1.5 million compared to December 31,
2008. 2009 Outlook Following this strong start to the year, the
Company is raising its full year guidance for net revenues from
over $80 million to over $95 million. In addition, the Company is
increasing its income from operations estimate from in excess of
$10 million to in excess of $17 million. It should be noted that
during the first quarter, the Company enjoyed limited competition
within the market for its HYOMAX products, but the Company now
faces generic competition across a number of HYOMAX product lines.
To reiterate, the Company's guidance assumes an increase of
approximately $4.5 million in clinical development spend over 2008.
Conference Call Information Cornerstone Therapeutics will host a
conference call today at 8:30 AM ET to discuss its financial
results for the quarter ended March 31, 2009. To participate in the
live conference call, please dial 866-783-2137 (U.S. callers) or
857-350-1596 (international), and provide passcode 84050385. A live
webcast of the call will also be available through the Investor
Relations section of the Company's Web site. Please allow extra
time prior to the webcast to register, download and install any
necessary audio software. The webcast will be archived for 30 days,
and a telephone replay of the call will be available for seven
days, beginning today at 11:30 AM ET at 888-286-8010 (U.S. callers)
or 617-801-6888 (international), and provide passcode 21539068.
About Cornerstone Therapeutics Cornerstone Therapeutics Inc.
(NASDAQ CM: CRTX), headquartered in Cary, N.C., is a specialty
pharmaceutical company focused on acquiring, developing and
commercializing products primarily for the respiratory and related
markets. The Company currently promotes multiple marketed products
in the United States to respiratory-focused physicians and key
retail pharmacies with its specialty sales force. The Company also
has a late-stage clinical pipeline with five regulatory approval
submissions targeted within the next three years. Key elements of
the Company's strategy are to in-license or acquire rights to
underpromoted, patent-protected, branded respiratory or related
pharmaceutical products, or late-stage product candidates;
implement life cycle management strategies to maximize the
potential value and competitive position of the Company's currently
marketed products, newly acquired products and product candidates
that are currently in development; grow product revenue through the
Company's specialty sales force which is focused on the respiratory
and related markets; and maintain and strengthen the intellectual
property position of the Company's currently marketed products,
newly acquired products and product candidates. Safe Harbor
Statement Statements in this press release regarding the progress
and timing of our product development programs and related trials;
our future opportunities; our strategy, future operations,
financial position, future revenues and projected costs; our
management's prospects, plans and objectives; and any other
statements about management's future expectations, beliefs, goals,
plans or prospects constitute forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Any statements that are not statements of historical fact
(including, without limitation, statements containing the words
"anticipate," "believe," "could," "estimate," "intend," "may,"
"plan," "expect," "should," "target," "will," "would," and similar
expressions) should also be considered to be forward-looking
statements. There are a number of important factors that could
cause our actual results or events to differ materially from those
indicated by such forward-looking statements, including risks
relating to our critical accounting estimates and risks relating to
our ability to realize anticipated synergies and cost savings from
our October 2008 merger; our ability to develop and maintain the
necessary sales, marketing, supply chain, distribution and
manufacturing capabilities to commercialize our products, including
difficulties relating to the manufacture of ZYFLO CR tablets; the
possibility that the Food and Drug Administration (the FDA) will
take enforcement action against us or one or more of our marketed
drugs that do not have FDA-approved marketing applications;
patient, physician and third-party payor acceptance of our products
as safe and effective therapeutic products; our heavy dependence on
the commercial success of a relatively small number of currently
marketed products; our ability to obtain and maintain regulatory
approvals to market and sell our products that do have FDA approved
marketing applications; our ability to enter into additional
strategic licensing, collaboration or co-promotion transactions on
favorable terms, if at all; our ability to maintain compliance with
NASDAQ listing requirements; adverse side effects experienced by
patients taking our products; difficulties relating to clinical
trials, including difficulties or delays in the completion of
patient enrollment, data collection or data analysis; the results
of preclinical studies and clinical trials with respect to our
products under development and whether such results will be
indicative of results obtained in later clinical trials; our
ability to satisfy FDA and other regulatory requirements; our
ability to obtain, maintain and enforce patent and other
intellectual property protection for our products and product
candidates; and the other factors described in Item 1A (Risk
Factors) of our Annual Report on Form 10K, filed with the
Securities and Exchange Commission (the SEC) on March 26, 2009, and
other filings that we make with the SEC. If one or more of these
factors materialize, or if any underlying assumptions prove
incorrect, our actual results, performance or achievements may vary
materially from any future results, performance or achievements
expressed or implied by these forward-looking statements. In
addition, the statements in this press release reflect our
expectations and beliefs as of the date of this release. We
anticipate that subsequent events and developments will cause our
expectations and beliefs to change. However, while we may elect to
update these forward-looking statements publicly at some point in
the future, we specifically disclaim any obligation to do so,
whether as a result of new information, future events or otherwise.
Our forward-looking statements do not reflect the potential impact
of any future acquisitions, mergers, dispositions, business
development transactions, joint ventures or investments that we may
make. These forward-looking statements should not be relied upon as
representing our views as of any date after the date of this
release. ZYFLO CR(R), ZYFLO(R), AlleRx(R), Deconsal(R), Balacet(R)
and HyoMax(R) are trademarks of Cornerstone Therapeutics Inc.
SPECTRACEF is a trademark of Meiji Seika Kaisha, Ltd. and is
licensed to the Company. FINANCIAL TABLES FOLLOW CORNERSTONE
THERAPEUTICS INC. CONDENSED STATEMENTS OF INCOME (UNAUDITED) (In
thousands, except share and per share data) Three months ended
March 31, ---------------------- 2009 2008 ---------- --------- Net
revenues $30,705 $9,445 Costs and expenses: Cost of product sales
(exclusive of amortization of product rights) 3,201 565 Sales and
marketing 5,395 3,908 Royalties 6,291 1,245 General and
administrative 3,760 1,523 Research and development 1,162 98
Amortization of product rights 511 739 Other charges 26 --
---------- --------- Total costs and expenses 20,346 8,078
---------- --------- Income from operations 10,359 1,367 ----------
--------- Other expenses: Interest expense, net (72) (379)
---------- --------- Total other expenses (72) (379) ----------
--------- Income before income taxes 10,287 988 Provision for
income taxes (3,972) (319) ---------- --------- Net income $6,315
$669 ---------- --------- Net income per share, basic $0.53 $0.11
---------- --------- Net income per share, diluted $0.48 $0.10
========== ========= Weighted-average common shares, basic
12,023,747 5,934,496 ---------- --------- Weighted-average common
shares, diluted 13,114,505 6,837,122 ========== =========
CORNERSTONE THERAPEUTICS INC. CONDENSED BALANCE SHEETS (In
thousands, except share and per share data) March 31, December 31,
2009 2008 (Unaudited) (Audited) ----------- ------------ Assets
Current assets: Cash and cash equivalents $10,736 $9,286 Marketable
securities - 300 Accounts receivable, net 16,981 13,660
Inventories, net 12,840 11,222 Prepaid expenses 1,985 1,081
Deferred income tax asset 2,839 2,428 ------- ------- Total current
assets 45,381 37,977 ------- ------- Property and equipment, net
979 895 Product rights, net 17,191 17,702 Goodwill 13,231 13,231
Amounts due from related parties 38 38 Deposits 46 46 -------
------- Total assets $76,866 $69,889 ------- ------- Liabilities
and Stockholders' Equity Current liabilities: Accounts payable
$8,723 $10,288 Accrued expenses 20,088 19,052 Current portion of
license agreement liability 2,654 2,543 Current portion of capital
lease 9 - Income taxes payable 3,580 2,937 ------- ------- Total
current liabilities 35,054 34,820 ------- ------- Long-term
liabilities: License agreement liability, less current portion
2,313 2,313 Capital Lease, less current portion 47 - Deferred
income tax liability 3,457 3,330 ------- ------- Total long-term
liabilities 5,817 5,643 ------- ------- Total liabilities 40,871
40,463 ------- ------- Commitments and contingencies Stockholders'
equity Preferred stock - $0.001 par value, 5,000,000 shares
authorized; no shares issued and outstanding - - Common stock -
$0.001 par value, 90,000,000 shares authorized; 12,023,747 shares
issued and outstanding as of March 31, 2009 and December 31, 2008,
respectively 12 12 Additional paid-in capital 33,773 33,519
Retained Earning / accumulated deficit 2,210 (4,105) -------
------- Total stockholders' equity 35,995 29,426 ------- -------
Total liabilities and stockholders' equity $76,866 $69,889 =======
======= CORNERSTONE THERAPEUTICS INC. CONDENSED STATEMENTS OF CASH
FLOWS (In thousands) (UNAUDITED) Three months ended March 31,
---------------- Cash flows from operating activities 2009 2008
------- ------ Net income $6,315 $669 Adjustments to reconcile net
income to net cash provided by operating activities: Amortization
and depreciation 564 758 Change in allowance for prompt payment
discounts 63 15 Change in allowance for inventory obsolescence 77
(32) Stock-based compensation 254 84 Benefit for deferred income
taxes (284) - Changes in operating assets and liabilities: Accounts
receivable (3,384) 609 Inventories (1,695) (824) Prepaid expenses
(904) (169) Accounts payable (1,565) (5) Accrued expenses 1,147 807
Income taxes payable 643 281 ------- ------ Net cash provided by
operating activities 1,231 2,193 ------- ------ Cash flows from
investing activities Advances to related parties - (13) Proceeds
from the sale of marketable securities 300 - Purchase of property
and equipment (79) (15) Purchase of product rights - (1,000)
Collection of deposits - 10 ------- ------ Net cash provided by /
(used in) investing activities 221 (1,018) ------- ------ Cash
flows from financing activities Proceeds from line of credit -
4,000 Principal payments on line of credit - (5,000) Principal
payments on capital lease obligation (2) - ------- ------ Net cash
used in financing activities (2) (1,000) ------- ------ Net
increase in cash and cash equivalents 1,450 175 Cash and cash
equivalents as of beginning of period 9,286 241 ------- ------ Cash
and cash equivalents as of end of period $10,736 $416 =======
====== Supplemental disclosure of cash flow information Cash paid
during the period for interest $3 $24 ======= ====== Cash paid
during the period for income taxes $3,613 $38 ======= ======
Supplemental schedule of non-cash investing and financing
activities Purchase of equipment under capital lease obligation $58
$- ======= ====== DATASOURCE: Cornerstone Therapeutics Inc.
CONTACT: Investor Relations: Evan Smith, , or Brian Ritchie, , both
of FD, +1-212-850-5600; Media Relations: Robert Stanislaro, FD,
+1-212-850-5600,
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