Adams reports fourth quarter net income of $6.3 million, up from $79.0 million net loss in 2005

By Jennifer Lanning Drey

Eugene, Ore., Aug. 24 - Adams Respiratory Therapeutics Inc. posted net income of $6.3 million, or $0.18 per basic share and $0.17 per diluted share, for the fourth quarter, up from a net loss of $79.0 million, or $11.20 per basic and diluted share, for the same period in 2005, according to a company news release.

The 2005 loss included accretion of preferred stock, a dividend and a discretionary performance bonus, said David P. Becker, chief financial officer of Adams, during a company conference call held Thursday.

"I am very pleased with the quality of our financial performance this quarter," Becker said.

The company's fourth quarter sales were driven by increased awareness of Mucinex D coupled with higher sales of other Mucinex (guaifenesin) products, said Michael J. Valentino, president and chief executive officer of Adams, during Thursday's call.

The company reported net sales for the quarter of $52.8 million, a 35% increase from the $39.2 million net sales reported for the fourth quarter 2005, according to a company news release.

Moving forward, the company is preparing to introduce a new line of Children's Mucinex products for this year's cough and cold season.

In addition, Adams is considering expanding the Mucinex business outside of the United States, Valentino said.

"We're intently focused on pursuing brand new opportunities for growth," he said.

An expansion of Mucinex into Europe would most likely involve a partnership, and the company has already been approached by several large companies interested in partnering in Europe, Valentino said.

Adams will further explore those opportunities in fiscal 2007, he said.

The company reported $652,000 in net sales of Delsym (dextromethorphan polistirex), which Adams acquired from UCB in June.

"We see several opportunities to add value tot his product and expand its position in the marketplace," Valentino said.

$35 million for product development

Adams expects to spend between $30 million and $35 million on product development in 2007, $10 million to $15 million of which will include development of erdosteine, a mucoregulator and antioxidant drug that the company in-licensed from Edmond Pharma, SRL for development in the United States.

Valentino said phase 2b clinical trials of erdosteine are progressing as planned and more than 300 patients have currently been enrolled.

One of the clinical endpoints in the 400-patient, placebo-controlled investigational study will be reduction in cough, and Adams expects top line results from the study by the end of the March 2007 calendar quarter, Valentino said.

"Assuming these are positive, we would expect to move forward with phase 3 development for erdosteine," he said.

The company also has three new guaifenesin-based products at various stages of development, Valentino said.

Although he did not disclose what types of products they are, Valentino did say Adams expects to file an Investigational New Drug application with the Food and Drug Administration for the first of the three products by the end of the year.

If approved, Adams believes it could have the new drug on the market in 2008, Valentino said.

Adams is a Chester, N.J., specialty pharmaceutical company focused on over-the-counter and prescription pharmaceuticals for the treatment of respiratory disorders.

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