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King Pharma Loses $548M in 4Q, Cites Buyout Costs

Thu, 02/26/2009 - 4:30am
BRISTOL, Tenn. (AP) — King Pharmaceuticals Inc. said Thursday it lost almost $550 million in the fourth quarter, largely due to the costs of acquiring rival Alpharma Inc. The company also lost patent protection on its painkiller Altace a year ago, which caused sales to drop. King reported a loss of $548.5 million, or $2.25 per share, for the last three months of 2008 compared with a profit of $42.8 million, or 18 cents per share, a year ago. The company bought Alpharma for $1.6 billion in December, bolstering its lineup of painkilling drugs. The buyout of Alpharma gives King control of the drug candidate Embeda. The product is a morphine-based painkiller for chronic pain. Embeda is intended to be abuse-resistant, with the effects of the morphine blocked if the pills are crushed, chewed or dissolved. Excluding the research and development charge and other one-time items, King said it earned $58.9 million, or 24 cents per share. That compares with an adjusted profit of $113 million, or 46 cents per share a year ago. Revenue fell 35 percent to $347.7 million from $533.3 million. On average, analysts expected a profit of 23 cents per share and $345.2 million in revenue, according to Thomson Reuters. Sales of Altace dropped to $14 million from $158 million a year ago, but sales of other top drugs were also flat or down. Revenue from the hemostatic product Thrombin-JMI fell to $57 million from $69 million and sales of painkiller Avinza edged up to $33 million from $32 million. Revenue from Levoxyl, a thyroid supplement, declined to $20 million from $32 million. Sales of muscle relaxant Skelaxin slipped to $113 million from $114 million. A U.S. District Court overturned the patents protection Skelaxin in January, paving the way for low-cost generics to enter the market. Earlier this month, King responded by saying it will restructure its business and cut 22 percent of its jobs. King lost $333.1 million, or $1.37 per share, for all of 2008. A year earlier, it reported a profit of $183 million, or 75 cents per share. Revenue slid 28 percent to $1.56 billion from $2.14 billion due to the patent loss for Altace and increasing generic competition to Thrombin-JMI.
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