Collagenex Pharmaceuticals Inc · 8-K · For 2/24/04 · EX-99

Filed On 2/24/04 9:27am ET   ·   SEC File 0-28308   ·   Accession Number 903100-4-98

Current Report   ·   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                         4     10K 
 2: EX-99       Press Release                                          7     32K 

EX-99   ·   Press Release

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For Immediate Release:                              Company Contact:            
---------------------                               ---------------             
February 24, 2004                                   Nancy C. Broadbent          

                                               Chief Financial Officer
                                      (215) 579-7388

                                           Investor Relations:
                                          ------------------
                                      Lisa M. Wilson
                                              In-Site Communications
                                      (212) 759-3929

COLLAGENEX PHARMACEUTICALS REPORTS RECORD REVENUES OF $14.1 
----------------------------------------------------------- 
MILLION AND NET INCOME ALLOCABLE TO COMMON STOCKHOLDERS OF $0.14
----------------------------------------------------------------
PER BASIC AND DILUTED SHARE IN THE FOURTH QUARTER OF 2003 
--------------------------------------------------------- 

 Net Income Allocable to Common Stockholders
for the year ended December 31, 2003 was
$0.38 per Diluted Share on Revenues of $52.9 Million

Newtown, PA, February 24, 2004 - CollaGenex Pharmaceuticals, Inc. (Nasdaq: CGPI)
today reported financial results for the fourth quarter and year ended December 
31, 2003.                                                                       

      In the fourth quarter of 2003, total revenues increased 21% to $14.1
million compared to $11.7 million in the fourth quarter of 2002. Net product    
sales were $13.1 million in the fourth quarter of 2003, an 18% increase over net
product sales of $11.1 million recorded in the fourth quarter of 2002.          

       Net income allocable to common stockholders for the fourth quarter of
2003 was $2.0 million, or $0.14 per basic and diluted share, compared to net    
income in the fourth quarter of 2002 of $688,000, or $0.06 per basic and diluted
share. There were approximately 14,444,000 weighted average diluted shares      
outstanding during the fourth quarter of 2003 compared to approximately         
11,889,000 weighted average diluted shares outstanding during the fourth quarter
of 2002.                                                                        

        Colin W. Stewart, president and chief executive officer of CollaGenex,
commented, "2003 was a strong year for CollaGenex, as evidenced by the company's
continued growth in revenues and earnings. Our specialty dental pharmaceutical  
business remains strong, with increasing acceptance of our products by the      
dental community. We maintained our momentum in the dermatology market as well, 
and were pleased with the continued growth of Pandel. We also made significant  
progress in the clinic, with the                                                

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completion  of our Phase III clinical  trial of Periostat  for the  treatment of
rosacea and the publication of data from additional trials supporting the use of
Periostat in dental and dermatological indications."                            

"With an eye toward future opportunities and challenges, we   
strengthened our management team to ensure that we continue to have a solid     
foundation for the execution of our growth strategy. Notable additions include  
Dr. Klaus Theobald, who as chief medical officer is leading our clinical        
development activities on current and new products. We are also actively        
recruiting a senior business development executive."                            

   Mr. Stewart continued, "CollaGenex took decisive steps in 2003 to
resolve the outstanding legal issues affecting the proprietary position of      
Periostat. The Company sought and was granted a preliminary injunction          
preventing the FDA from approving generic versions of Periostat until a federal 
court judge hears and decides on the merits of our case that Periostat was      
incorrectly denied the protections of the Hatch-Waxman Act when Periostat was   
approved by the FDA in 1998. Though CollaGenex previously anticipated the case  
would be heard in January 2004, a date has not yet been set."                   

         "In addition, we settled all litigation with West-ward Pharmaceuticals.
West-ward agreed that the Periostat patents are valid and infringed by the      
filing of West-ward's ANDA, and that these patents would be infringed by the    
manufacture and sale of a generic version of Periostat. We believe this industry
acquiescence by a potential generic competitor will support our patent          
infringement case against Mutual Pharmaceuticals, which has been scheduled to be
heard in the Eastern District Court of New York in mid-2005."                   

         "When I accepted the stewardship of CollaGenex at the end of 2003," Mr.
Stewart added, "I based my decision on the strength of the currently marketed   
products, the quality of the pipeline generated by the IMPACS and Restoraderm   
technologies, and the considerable opportunity to build from this strong        
foundation. I firmly believe that by continuing to invest in the future we can  
successfully build on the momentum generated to-date and maximize the long-term 
value of the company for our shareholders. I look forward to keeping everyone   
abreast of the exciting times that lay ahead."                                  

For the year ended December 31, 2003, CollaGenex achieved total       

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revenues of $52.9 million,  an 18% increase over total revenues of $44.6 million
for the year ended  December  31,  2002.  Net  product  sales in 2003 were $49.0
million,  a 16% increase over the $42.1  million in net product  sales  recorded
during 2002.                                                                    

       Net income allocable to common stockholders in 2003 was $4.8 million,
or $0.38 per diluted share, compared to a net loss allocable to common          
stockholders of $727,000, or $0.06 per diluted share, in 2002. The weighted     
average diluted number of shares outstanding increased from approximately       
11,235,000 in 2002 to approximately 12,836,000 in 2003.                         

        CollaGenex made significant progress with its lead product, Periostat,
in 2003. Canada and Switzerland approved Periostat as a treatment for           
periodontitis, contributing to a total of 11 countries that have granted        
regulatory and marketing approval of Periostat. In addition, the Company        
initiated a multi-center, double-blinded, placebo-controlled Phase 4 clinical   
study to evaluate the combined efficacy of Periostat and Atridox in the         
treatment of adult periodontitis.                                               

         The body of clinical data supporting the potential utility of Periostat
in treating rosacea continued to grow. Positive data was reported from several  
trials, including a Phase 2 clinical study evaluating Periostat as adjunctive   
therapy to MetroLotion and an open-label study published in Skin Med, the       
peer-reviewed dermatology journal.                                              

     CollaGenex also made significant progress in building the Periostat
franchise through the development of a new, modified release, once-daily        
formulation. Clinical studies conducted during 2003 established the             
pharmacokinetics of the Company's lead formulation and confirmed that it falls  
within the Company's pre-defined criteria for maximum serum concentration and   
total dose delivered. CollaGenex expects to begin Phase 3 clinical trials of    
this new formulation in periodontitis and rosacea patients during the first and 
second quarters of 2004, respectively.                                          

        The Company also advanced the clinical study of other IMPACS compounds
including COL-3, its novel, non-antimicrobial tetracycline derivative.          
CollaGenex initiated a double-blinded, placebo-controlled Phase 2 clinical study
to evaluate the safety and efficacy of this compound in treating rosacea.       

     At higher doses, COL-3 is the active ingredient in Metastat,  the Company's
compound currently undergoing Phase 2                                           

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clinical studies in the treatment of HIV-related Kaposi's sarcoma. This study is
being  sponsored  by  the  National  Cancer  Institute  (NCI),  pursuant  to the
Cooperative  Research and Development  Agreement between  CollaGenex and the NCI
for  Metastat.  CollaGenex  expects  the  results of this study to be  announced
during the second quarter of 2004.                                              

CONFERENCE CALL                                                                 

    As previously announced, CollaGenex will hold a conference call on
Tuesday, February 24, 2004, at 11:00 a.m. Eastern Standard Time to discuss the  
company's fourth quarter and fiscal year 2003 operating and financial results   
and provide a corporate update. Investors and other interested parties can      
access the conference call by dialing (800) 695-6803 in the U.S. or (706)       
643-1452 internationally, or via a live Internet broadcast on the company's     
website at WWW.COLLAGENEX.COM.                                                  

     For those who cannot listen to the live broadcast, a replay will be
available shortly after the call at the aforementioned URL for 90 days. A       
dial-in replay of the call will be available until 11:59 p.m. on March 9, 2004  
by dialing (800) 642-1687 and entering access code 5366311.                     

ABOUT COLLAGENEX                                                                

        CollaGenex Pharmaceuticals, Inc. is a specialty pharmaceutical company
focused on providing innovative medical therapies to the dental and dermatology 
markets. Currently, the Company's 115-person professional pharmaceutical sales  
force markets Periostat(R), which is indicated as an adjunct to scaling and root
planing for the treatment of adult periodontitis. Periostat is the first and    
only pharmaceutical to treat periodontal disease by inhibiting the enzymes that 
destroy periodontal support tissues, and by enhancing bone protein synthesis.   
The sales force also promotes Atridox(R), Atrisorb(R), FreeFlow(TM) and         
Atrisorb-D FreeFlow, Atrix Laboratories Inc.'s products for the treatment of    
adult periodontitis, to the dental market, and Pandel(R), a prescription topical
corticosteriod licensed from Altana, Inc., to the dermatology market.           

     Research  has shown that certain  unique  properties  of the  tetracyclines
discovered  during the  development  of  Periostat  may be  applicable  to other
diseases  involving  inflammation  and/or  destruction of the body's  connective
tissues,  including acne,  rosacea,  meibomianitis and cancer metastases,  among
others. CollaGenex is further evaluating Periostat, as well as the new IMPACS(R)
compounds, to assess whether they are safe and effective                        

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in these applications.  In addition, CollaGenex has licensed the Restoraderm(TM)
technology,  a unique,  proprietary  dermal drug  delivery  system,  in order to
develop a range of topical  dermatological  products with enhanced pharmacologic
and cosmetic properties.                                                        

    To receive additional information on the Company, please visit our
website at WWW.COLLAGENEX.COM which does not form part of this press release.   

   This press release contains forward-looking statements within the
meaning of Section 21E of the Securities and Exchange Act of 1934, as amended.  
Investors are cautioned that forward-looking statements involve risks and       
uncertainties, which may affect the Company's business and prospects. The       
Company's business of selling, marketing and developing pharmaceutical products 
is subject to a number of significant risks, including risks relating to the    
implementation of the Company's sales and marketing plans for Periostat(R) and  
other products that the Company markets, the outcome and consequences of the    
patent litigation against Mutual and the outcome of litigation initiated by     
Mutual, risks that the FDA will approve generic products, such as Mutual's      
products, that will compete with and limit the market for Periostat, risks      
inherent in research and development activities, risks associated with          
conducting business in a highly regulated environment and uncertainty relating  
to clinical trials of products under development, all as discussed in the       
Company's periodic filings with the U.S. Securities and Exchange Commission.    

Periostat(R), IMPACS(R) and Metastat(R) are registered trademarks, and          
Restoraderm(R) is a trademark, of CollaGenex Pharmaceuticals, Inc.              

All other trade names, trademarks or service marks are the property of their    
respective owners and are not the property of CollaGenex Pharmaceuticals, Inc.  
or any of our subsidiaries.                                                     

Pandel(R) is a trademark of Taisho Pharmaceuticals.                             

Atridox(R), Atrisorb(R) and Atrisorb-D(R) are trademarks of Atrix Laboratories, 
Inc.                                                                            

 Financial Statements Follow

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                                                        [Enlarge/Download Table]


                             Summary Financial Data                                                                  
                      (In thousands, except share amounts)                                                           

                                                                    Quarter Ended                  Year Ended        
                                                                     December 31,                 December 31,       
                                                               2003                 2002       2003           2002   
                                                               ----                 ----       ----           ----   

Statement of Operations Data:                                                                                        
Revenues:                                                                                                            
                                                                                                                     
         Net product sales                                  $ 13,121             $ 11,085   $ 49,038        $ 42,111 
         Contract revenues                                       958                  563      3,122           2,332 
         License revenues                                         20                   14        699             176 
                                                             -------               ------     ------          ------ 
                  Total revenues                              14,099               11,662     52,859          44,619 

Operating Expenses:                                                                                                  
     Cost of product sales                                     1,802                1,822      7,362           6,713 
     Research and development                                  1,042                1,261      5,439           4,394 
     Selling, general and administrative                       8,862                7,530     33,691          32,699 
                                                             -------               ------     ------          ------ 
                  Total operating expenses                    11,706               10,613     46,492          43,806 

Other Income (Expense):                                                                                              
         Interest income                                          64                   22        148              77 
         Interest expense                                         --                   --         --              (5)
         Other income (expense)                                   (1)                  17         (3)             17 
                                                              -------               ------     ------          ------
Income before taxes                                            2,456                1,088      6,512             902 

Income tax provision                                              85                   --         85              -- 
                                                              -------               ------     ------          ------

Net income                                                     2,371                1,088      6,427             902 
         Preferred stock dividend                                400                  400      1,600           1,629 
                                                              -------               ------     ------          ------

Net income (loss) allocable to common                                                                                
stockholders                                                 $ 1,971               $  688    $ 4,827          $ (727)
                                                             =======                ======   =======           ======

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                                                        [Enlarge/Download Table]


Net income (loss) per basic share                                                         
                                                                                          
allocable to common stockholders              $  0.14      $ 0.06     $  0.40      $(0.06)
                                              =======      ======     =======       ======
Weighted average shares used in computing                                                 
income (loss) per basic share allocable                                                   
to common stockholders                     13,795,864  11,369,128  12,094,638  11,234,652 
Net income (loss) per diluted share                                                       
allocable to common stockholders              $  0.14      $ 0.06     $  0.38      $(0.06)
                                              =======      ======     =======       ======
Weighted average shares used in computing                                                 
income (loss) per diluted share allocable                                                 
to common stockholders                     14,444,266  11,889,338  12,836,364  11,234,652 

Selected Balance Sheet Data:         December 31, 2003        December 31, 2002 
---------------------------          -----------------        ----------------- 

Cash and cash equivalents               $    32,670              $   10,112     
Total current assets                         41,033                  14,713     
    Total assets                        43,305                  17,634

Total current liabilities                     9,023                   8,721     
Long-term liabilities                           326                     561     
    Total liabilities                    9,349                   9,282

Total stockholders' equity                   33,956                   8,352     

 ###

Dates Referenced Herein   and   Documents Incorporated By Reference

				Referenced-On Page
This 8-K Filing		Date		First		Last			Other Filings
		12/31/02		3		7			10-K
		12/31/03		1		7			10-K
Filed On / Filed As Of / For The Period Ended		2/24/04		1		4
		3/9/04		4					4
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