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Filed by Medi-Ject Corporation
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Medi-Ject Corporation
Commission File No. 000-20945
Medi-Ject Corporation
161 Cheshire Lane
Minneapolis, MN 55441
(612) 475-7700
Nasdaq: MEDJ
AT THE COMPANY: AT THE FINANCIAL RELATIONS BOARD:
Lawrence Christian Larry Stein Mark Muehlfelt
Vice President, Finance & General Inquiries Analyst Inquiries
Administration/CFO (312) 266-7800 (312) 266-7800
(612) 475-7700
FOR IMMEDIATE RELEASE
WEDNESDAY, AUGUST 9, 2000
MEDI-JECT CORPORATION REPORTS SECOND QUARTER RESULTS
o MEDJ reduced its Q2 operating loss, as revenues rose 29% and margins
improved.
- Product sales increased 88%, as international sales of growth hormone
injectors and supplies tripled.
- Gross margin rose to 26.5% from 14.0%, due to higher sales and a shift
to in-house manufacturing.
- Cost control measures reduced operating expenses as a percentage of
sales.
o MEDJ's previously announced business combination plans with Permatec remain
on track.
- The two companies have begun joint product development projects.
- MEDJ continues to expect the transaction to close in the fall of 2000.
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Comparative Financial Highlights (Dollar amounts in thousands, except per share data)
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3 Months Ended 6 Months Ended
6/30/99 6/30/00 Change 6/30/99 6/30/00 Change
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<S> <C> <C> <C> <C> <C> <C>
Product sales $ 407 $ 767 88% $ 959 $ 1,228 28%
Licensing fees (1) $ 185 -- N/A $ 1,210 $ 23 (98)%
Total revenues $ 593 $ 767 29% $ 2,169 $ 1,251 (42)%
Net loss $ (1,023) $ (935) (9)% $ (1,313) $ (1,777) 35%
Net loss per share $ (0.72) $ (0.66) (8)% $ (0.92) $ (1.25) 36%
Average shares outstanding (2) 1,424,729 1,424,832 -- 1,424,733 1,424,781 --
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(1) Licensing fees for the six-month period ended June 30, 1999 reflect a
one-time settlement fee.
(2) Shares outstanding have been retroactively restated to reflect a 1 for 5
reverse stock split effective January 29, 1999.
Minneapolis, MN, August 9, 2000 - Medi-Ject Corporation (Nasdaq: MEDJ) today
reported a net loss of $934,500 or $0.66 per share for the second quarter ended
June 30, 2000, compared with a net loss of $1,023,007 or $0.72 per share in the
year-ago quarter.
The smaller net loss was due to higher revenues, increased gross margin and
lower operating expenses as a percentage of revenue. Revenues increased 29%, led
by an 88% rise in product sales, as international sales of growth hormone
injectors and supplies, primarily in Europe, tripled from last year's second
quarter. Insulin injector sales were similar to last year's second quarter
performance.
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Medi-Ject Corporation
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The trend toward higher gross margin continued from the previous quarter,
reflecting a shift to in-house manufacturing in August 1999 and a rise in
production volumes. Gross margin was 26.5% in the second quarter, up from 14.0%
in the year-ago quarter. Earnings also benefited from improved cost control, as
operating expenses decreased as a percentage of revenue.
"Medi-Ject's fundamentals continued to strengthen in the second quarter," said
Franklin Pass, M.D., Chairman and Chief Executive Officer. "Initiatives begun
late last year to build profitability continue to have a positive impact --
gross margin is up and cost control is improving. Moreover, higher product sales
and production in the second quarter added a further boost to gross margin. Our
prospects continue to be favorable, although it would be unrealistic to expect
product sales to continue growing at such strong rates."
Pass added, "We continue to move ahead on our previously announced business
combination plans with Permatec Holding AG. We have initiated joint product
development projects and are on track to close on the transaction in the fall."
For the six months ended June 30, 2000, Medi-Ject's net loss was $1.8 million or
$1.25 per share compared with a net loss of $1.3 million or $0.92 in the
year-ago period. Six-month revenues were $1.3 million compared with $2.2 million
in 1999's six-month period, which included a one-time settlement fee. Excluding
the one-time settlement fee from 1999 results, Medi-Ject would have reduced its
operating loss for the six-month 2000 period.
Balance Sheet
At June 30, 2000, cash and cash equivalents totaled $141,497 compared with
$85,136 at December 31, 1999. On January 25, 2000, we signed a non-binding
letter of intent with Permatec Holding AG, a privately-held drug delivery
company located in Basel, Switzerland, to purchase three subsidiaries from
Permatec in exchange for our Common Stock representing up to approximately 67%
of our outstanding Common Stock (the "Share Transaction"). On July 14, 2000, we
signed a definitive Stock Purchase Agreement involving the Share Transaction.
These subsidiaries develop and license certain pharmaceutical formulation
technologies, including transdermal patches and topical gels. Through July 31,
Permatec has invested $2.2 million in Medi-Ject in exchange for Medi-Ject
convertible promissory notes. Medi-Ject continues to explore opportunities to
strengthen its capital structure and develop new licensing opportunities.
Any statements in this press release that are forward looking, including
statements relating to terms of a business combination, merger, market
opportunity, future product development, product sales, development and
licensing agreements, and research activities, are made pursuant to the Safe
Harbor provisions of the Private Securities Litigation Reform Act of 1995.
Investors are cautioned that forward-looking statements involve risks and
uncertainties which may affect Medi-Ject's and the combined operations' business
and prospects, including changes in economic and market conditions, healthcare
legislation, changes in alliances with pharmaceutical companies, the development
of competing drug delivery systems, management of growth and other factors
discussed in the Medi-Ject's filings with the SEC. Investors are encouraged to
review Exhibit 99 to Medi-Ject's 10-K filed with the SEC and the risk factors in
the proxy statement.
Medi-Ject Corporation is the world's leading marketer of needle-free injectable
drug delivery systems. The Company manufactures hand-held injectors that deposit
pharmaceuticals, including insulin and growth hormone, under the skin without a
needle. Presently, these needle-free injection systems are distributed in over
20 countries. Headquartered in Minneapolis, the Company's common stock is traded
on the Nasdaq SmallCap Market under the symbol MEDJ.
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Medi-Ject Corporation
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Information Concerning Participants
Medi-Ject, its directors, and certain of its executive officers may be deemed to
be participants in the solicitation of proxies from Medi-Ject's shareholders to
approve the transaction. Please refer to Medi-Ject's definitive proxy statement
for its 2000 Annual Meeting of Shareholders for a discussion of all interests,
direct or indirect, by security holdings or otherwise, of such persons in
Medi-Ject.
All Medi-Ject shareholders should read the proxy statement concerning the
transaction that Medi-Ject has filed with the SEC and will mail to its
shareholders. The proxy statement contains important information that should be
considered before making any decision regarding the transaction. The proxy
statement, as well as other filings containing information about Medi-Ject, may
be obtained without charge, on SEC's Website at (http://www.sec.gov). Copies of
the proxy statement and Medi-Ject's SEC filings that will be incorporated by
reference in the proxy statement will also be obtainable, without charge, from
Medi-Ject's corporate secretary. Information can be found on the Internet under
Medi-Ject's site on the World Wide Web at http://www.mediject.com. For more
information on Medi-Ject via facsimile at no additional cost, simply dial
1-800-PRO-INFO and enter Medi-Ject's ticker symbol MEDJ.
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MEDI-JECT CORPORATION
STATEMENTS OF OPERATIONS
(unaudited)
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Three Months Ended Six Months Ended
June 30, June 30,
-------------------------- --------------------------
1999 2000 1999 2000
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues
Product sales $ 407,285 $ 766,854 $ 959,275 $ 1,228,113
Licensing & product development 185,291 0 1,209,608 22,788
----------- ----------- ----------- -----------
592,576 766,854 2,168,883 1,250,901
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Operating Expenses
Cost of sales 350,370 563,799 820,839 885,370
Research and development 525,063 288,840 1,185,585 562,708
General and administrative 488,526 661,828 974,209 1,219,427
Sales and marketing 237,433 167,425 488,235 339,380
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1,601,392 1,681,892 3,468,868 3,006,885
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Net operating loss (1,008,816) (915,038) (1,299,985) (1,755,984)
----------- ----------- ----------- -----------
Other income (expense)
Interest and other income 23,347 0 49,446 26
Interest and other expense (12,538) (2,002) (12,589) (3,554)
----------- ----------- ----------- -----------
10,809 (2,002) 36,857 (3,528)
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Net loss $ (998,007) $ (917,040) $(1,263,128) $(1,759,512)
=========== =========== =========== ===========
Preferred stock dividends (25,000) (17,460) (50,000) (17,460)
----------- ----------- ----------- -----------
Net loss applicable to common shares $(1,023,007) $ (934,500) $(1,313,128) $(1,776,972)
=========== =========== =========== ===========
Basic and diluted net loss per common
share $ (0.72) $ (0.66) $ (0.92) $ (1.25)
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Basic & diluted weighted average
common shares outstanding 1,424,729 1,424,832 1,424,733 1,424,781
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Balance Sheet Highlights
December 31, June 30,
1999 2000
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Assets
Cash and cash equivalents $ 85,136 $ 141,497
Other current assets 620,036 851,588
Property - net 1,002,554 848,502
Other assets 302,410 288,381
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$ 2,010,136 $ 2,129,968
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Liabilities and shareholders' equity
Total current liabilities 903,187 2,701,891
Notes payable 54,094 48,774
Total shareholders' equity 1,052,855 (620,697)
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$ 2,010,136 $ 2,129,968
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