Alpharma Inc. published its third quarter results today and those results show the company has advanced towards meeting its goal announced earlier this year of producing positive earnings for the last half of 2008. Alpharma makes and sells specialty pharmaceuticals worldwide for humans and animals. Increases in livestock sales and the resulting need for additional products boosting animal health in the United States helped push Alpharma into the black. Both revenue and operating income increased, leading to higher earnings per share. Alpharma recorded revenue of $175.7 million, a 32% increase in revenue from the third quarter of 2007. Operating income reached $9.7 million after subtracting costs from King Pharmaceuticals, Inc.’s unsolicited takeover bid for all of Alpharma’s common stock. Excluding the extraordinary costs for the takeover bid, operating income was $13.9 million. Earnings per share were $0.10, or $0.16 when the takeover costs are excluded.
According to Dean Mitchell, President and Chief Executive Officer, Alpharma’s results are “in line with our guidance to deliver positive earnings in the second half of 2008. While significant investments during the first half of this year were necessary to expand our commercial infrastructure and to support the launch of the FLECTOR® Patch, our third quarter results demonstrate initial returns on those investments. In addition to its successful launch, prescription growth of FLECTOR® Patch has continued as a result of enhanced formulary coverage and ongoing promotional activities. Performance in our Animal Health business has strengthened in the third quarter as demand for our U.S. livestock products has improved, reflecting some easing of input cost pressures on our customers.”
He continued, “We also recently announced that the new drug application for EMBEDA™ Capsules has been accepted for priority review by the U.S. Food and Drug Administration, and will be reviewed at a joint meeting of the Anesthetic and Life Support Drugs Advisory Committee and the Drug Safety and Risk Management Advisory Committee on November 14, 2008.”
The company is continuing with its repurchase of shares as authorized by the Board of Directors last April. In the third quarter, Alpharma spent $35.5 million and bought back 1.5 million shares of common stock. In light of the company’s third quarter results, it has revised its forecast for diluted earnings per share on a yearly basis to a range of $0.25 to $0.35.
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