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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
(763) 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
(763) 475-7700
FOR IMMEDIATE RELEASE
WEDNESDAY, NOVEMBER 15, 2000
MEDI-JECT CORPORATION REPORTS THIRD QUARTER RESULTS
o MEDJ reduced its Q3 operating loss as margin improvement continued.
- Unit sales increased 70%; however, product sales revenue decreased 8% due
to a shift to an external domestic distributor from self-distribution,
which as expected, reduced average sales prices and also reduced
sales/marketing expenses.
- Gross margin rose to 23.0% from 14.3%, continuing the improvement in
manufacturing cost control.
- With stronger cost control, MEDJ is significantly improving its product
profitability.
o MEDJ's previously announced business combination plans with Permatec are
progressing.
- The two companies continue to engage in joint product development
projects.
- Medi-Ject expects the transaction to close by year-end 2000.
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Comparative Financial Highlights (Dollar amounts in thousands, except per share data)
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3 Months Ended 9 Months Ended
9/30/99 9/30/00 Change 9/30/99 9/30/00 Change
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<S> <C> <C> <C> <C> <C> <C>
Product sales $ 482 $ 445 (8)% $ 1,441 $ 1,673 16%
Licensing fees (1) $ 27 $ 10 (63)% $ 1,237 $ 33 (97)%
Total revenues $ 509 $ 455 (11)% $ 2,678 $ 1,706 (36)%
Net loss $ (1,192) $ (1,165) (2)% $ (2,505) $ (2,864) 14%
Net loss per share $ (0.84) $ (0.82) (2)% $ (1.76) $ (2.01) 14%
Average shares outstanding (2) 1,424,729 1,426,733 -- 1,424,731 1,425,436 --
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(1) Licensing fees for the nine-month period ended September 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, November 14, 2000 - Medi-Ject Corporation (Nasdaq: MEDJ) today
reported a net loss of $1,164,568 or $0.82 per share for the third quarter ended
September 30, 2000, compared with a net loss of $1,192,048 or $0.84 per share in
the year-ago quarter.
The reduction in Medi-Ject's third quarter net loss was mainly due to higher
gross margins. Revenues decreased 11%, with product sales down 8%. Although unit
product sales increased 70% in the third quarter, the lower dollar revenue
amount reflected a 23% lower average sales price for Medi-Ject's domestic
product sales, which was expected, given Medi-Ject's shift to a domestic
distributor for its injector products in February 2000, rather than self
distribution.
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Medi-Ject Corporation
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The trend toward higher gross margins from a year ago continued, reflecting a
shift to in-house manufacturing in August 1999 and a rise in production volumes.
Gross margin was 23.0% in the third quarter, up from 14.3% in the year-ago
quarter. Earnings also benefited from improved cost control, as operating
expenses decreased by 2% from the year-ago quarter. Excluding business
combination expenses, operating expenses decreased by 34% from the year-ago
quarter.
"We continue to significantly improve the economics of our manufacturing
operations," said Franklin Pass, M.D., Chairman and Chief Executive Officer.
"Moreover, with our shift to a domestic distributor rather than
self-distribution, we have substantially reduced our sales and marketing
expenses. Overall, the combination of higher gross margins and stronger cost
control is beginning to have a very real impact on our profitability and
returns, and we expect further improvement in the future."
Pass noted, "We continue to make progress on our previously announced business
combination plans with Permatec Holding AG and engage in joint product
development projects. We expect to close on the transaction by year-end 2000."
For the nine months ended September 30, 2000, Medi-Ject's net loss was $2.9
million or $2.01 per share compared with a net loss of $2.5 million or $1.76 in
the year-ago period. Nine-month revenues were $1.7 million compared with $2.7
million in 1999's nine-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 nine-month 2000 period by approximately 12%.
Balance Sheet
At September 30, 2000, cash and cash equivalents totaled $229,792 compared with
$85,136 at December 31, 1999. On January 25, 2000, Medi-Ject 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 2,900,000 shares of Medi-Ject's common stock
representing up to approximately 67% of Medi-Ject's outstanding common stock
(the "Share Transaction"). On July 14, 2000, Medi-Ject 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 October 31, 2000, Permatec has
invested $3.4 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.
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Medi-Ject Corporation
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Headquartered in Minneapolis, Medi-Ject Corporation is the world's leading
marketer of needle-free injectable drug delivery systems. Medi-Ject 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. Medi-Ject's common stock is traded
on the Nasdaq SmallCap Market under the symbol MEDJ.
Information Concerning Participants
The proxy statement relating to approval of the Share Transaction between
Medi-Ject and Permatec Holding AG is currently under review by the U.S.
Securities and Exchange Commission ("SEC"). Once it is issued, please refer to
the Medi-Ject definitive proxy statement for information.
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
to be filed 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 once there is a definitive proxy statement. 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 may also be obtained, 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
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MEDI-JECT CORPORATION
STATEMENTS OF OPERATIONS
(unaudited)
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Three Months Ended Nine Months Ended
September 30, September 30,
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1999 2000 1999 2000
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<S> <C> <C> <C> <C>
Revenues
Product sales $ 481,914 $ 444,900 $ 1,441,189 $ 1,673,013
Licensing & product development 27,144 10,000 1,236,752 32,788
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509,058 454,900 2,677,941 1,705,801
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Operating Expenses
Cost of sales 412,854 344,210 1,233,693 1,229,580
Research and development 559,552 302,823 1,745,137 865,531
General and administrative 367,725 765,316 1,341,934 1,850,743
Sales and marketing 312,046 164,959 800,281 504,339
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1,652,177 1,577,308 5,121,045 4,450,193
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Net operating loss (1,143,119) (1,122,408) (2,443,104) (2,744,392)
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Other income (expense)
Interest and other income 13,751 -- 63,197 26
Interest and other expense 117 (2,874) (12,472) (6,428)
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13,868 (2,874) 50,725 (6,402)
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Net loss $(1,129,251) $(1,125,282) $(2,392,379) $(2,750,794)
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Preferred stock dividends (62,797) (39,286) (112,797) (113,096)
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Net loss applicable to common shares
$(1,192,048) $(1,164,568) $(2,505,176) $(2,863,890)
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Basic and diluted net loss per common
share $ (0.84) $ (0.82) $ (1.76) $ (2.01)
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Basic & diluted weighted average
common shares outstanding 1,424,729 1,426,733 1,424,731 1,425,436
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Balance Sheet Highlights
December 31, September 30,
1999 2000
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Assets
Cash and cash equivalents $ 85,136 $ 229,792
Other current assets 620,036 719,540
Property - net 1,002,554 796,069
Other assets 302,410 279,394
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$ 2,010,136 $ 2,024,795
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Liabilities and shareholders' equity
Total current liabilities 903,187 3,573,614
Notes payable 54,094 44,566
Mandatorily redeemable preferred stock 250,000 250,000
Total shareholders' equity 802,855 (1,843,385)
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$ 2,010,136 $ 2,024,795
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