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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report March 1, 2000
DURAMED PHARMACEUTICALS, INC.
_________________________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 0-15242 11-2590026
_________________________________________________________________
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
7155 East Kemper Road, Cincinnati, Ohio 45249 (513) 731-9900
_________________________________________________________________
(Address of principal executive offices)
INFORMATION TO BE INCLUDED IN THE REPORT
Items 1, 2, 3, 4, 6 and 8 are not applicable and are omitted from
this Report.
Item 5. Other Events
____________
The Company's press releases dated March 1, 2000 are
attached hereto as Exhibits 99.1 and 99.2 and are
incorporated herein by reference.
Item 7. Financial Statements and Exhibits
_____________________________________________
(a) Financial Statements of Businesses Acquired.
Not Applicable
(b) Pro Forma Financial Information.
Not Applicable
(c) Exhibits.
The following exhibits are filed with this Report
on Form 8-K:
Regulation S-K
Exhibit No. Exhibit
______________ _______
99.1 Press release dated
March 1, 2000 relating to
Solvay Pharmaceuticals,
Inc.
99.2 Press release dated March
1, 2000 relating to
preliminary financial
results
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SIGNATURES
__________
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
Date: March 7, 2000 DURAMED PHARMACEUTICALS, INC.
By: /s/ Timothy J. Holt
______________________
Timothy J. Holt
Senior Vice President-Finance
and Administration
Exhibit 99.1
DURAMED EXPANDS MARKETING ALLIANCE
WITH SOLVAY PHARMACEUTICALS, INC.
Solvay Pharmaceuticals to Lead Marketing of
Cenestin Synthetic Conjugated Estrogens
Solvay Pharmaceuticals to Assume Advertising, Sales Promotion
Costs for Cenestin as Duramed Recovers Cenestin Investment
10-Year Agreement to Act as Catalyst for
New Duramed Growth Opportunities
Solvay America Provides Loan Guarantee
CINCINNATI, OH AND MARIETTA, GA (MARCH 1, 2000) - DURAMED
PHARMACEUTICALS, INC. (NASDAQ: DRMD) AND SOLVAY PHARMACEUTICALS,
Inc. today announced they have entered into a 10-year marketing
agreement whereby the two companies will share in the marketing
and profits of Duramed's Cenestin (registered trademark)
(synthetic conjugated estrogens, A) Tablets.
"This alliance deepens the existing co-promotion agreement
between Duramed and Solvay Pharmaceuticals," said Duramed
Chairman and Chief Executive Officer E. Thomas Arington. "This
is a highly significant beneficial alliance and gives Duramed
renewed strength and a fresh start as we work with Solvay
Pharmaceuticals to make Cenestin (registered trademark) top of
mind among physicians and consumers."
"Since the alliance between Solvay Pharmaceuticals and Duramed
Pharmaceuticals began, total prescriptions for Cenestin
(registered trademark) from OB/GNYs have increased almost five-
fold," said David A. Dodd, Solvay Pharmaceuticals President and
Chief Executive Officer. "The expansion of our co-promotion
alliance is a reaffirmation of our shared commitment to offer
women a variety of sale and effective hormone replacement therapy
treatments."
Effective January 1, 2000, Solvay Pharmaceuticals, the second
largest pharmaceutical company in the U.S. hormone replacement
therapy market, assumed responsibilities for the marketing of
Cenestin (registered trademark). This responsibility also
includes assuming all advertising and sales promotion expenses
for Cenestin (registered trademark), including all expenses
associated with Duramed's sales force. During this initial stage
of the marketing agreement, Solvay Pharmaceuticals will receive
80 percent of the gross profit from Cenestin (registered
trademark) and Duramed will receive 20 percent of Cenestin
(registered trademark)'s gross profit until Solvay
Pharmaceuticals has recovered all of the ongoing advertising and
marketing expenses and Cenestin (registered trademark) becomes an
income-producing product.
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The agreement then moves into a second stage, where Duramed will
receive 80 percent of Cenestin (registered trademark)r net profit
dollars and Solvay Pharmaceuticals will receive 20 percent, until
Duramed recovers the $38 million it invested in Cenestin
(registered trademark) since the product was approved in March
1999.
Upon completion of these two stages, when both Duramed and Solvay
Pharmaceuticals have recovered the specified investments, the two
companies each will receive 50 percent of Cenestin (registered
trademark) net profit dollars on a moving-forward basis.
Duramed also granted Solvay Pharmaceuticals a worldwide exclusive
license to Cenestin (registered trademark) outside the United
States. The global rights to Cenestin (registered trademark)
include all countries except Puerto Rico and Eastern Europe
countries that are currently covered by other established
marketing partners. Solvay Pharmaceuticals and Duramed will
enter into mutually agreed upon license and supply agreements for
each country as opportunities arise. Solvay Pharmaceuticals has
also been granted the option to an exclusive worldwide license to
Verapamil SR, a calcium channel blocker for the treatment of
hypertension, which has been previously approved by the FDA.
This agreement deepens an alliance Solvay Pharmaceuticals and
Duramed established in October 1999 when the two companies
jointly promote Duramed's Cenestin (registered trademark)
(synthetic conjugated estrogens, A) Tablets and Solvay
Pharmaceuticals' Estratest (registered trademark)/Estrates
(registered trademark) H.S. Tablets (esterified estrogens and
methyltestosterone) and Prometrium (registered trademark)
(progesterone) Capsules*. Starting October 11, 1999, an expanded
national sales force of approximately 300 Duramed and Solvay
Pharmaceuticals sales representatives began calling on
obstetricians and gynecologists across the United States,
providing product information, samples and patient education
materials.
SOLVAY AMERICA, INC. PROVIDES LOAN GUARANTEE FOR DURAMED
In addition, Solvay America, Inc. the parent company of Solvay
Pharmaceuticals, Inc., will provide a 10-year, $20 million loan
guarantee for Duramed through The Provident Bank. Proceeds from
the loan will be used to payoff an existing long-term loan of
$7.7 million leaving $6.65 million available to pay Schein
Pharmaceutical the balance due under a settlement agreement
signed in October 1999 and $5.65 million for Duramed's working
capital purposes.
On October 22, 1999, Duramed announced it had reached a
settlement with Schein Pharmaceutical, Inc. pertaining to
litigation between Duramed and Schein related to a 1992 agreement
regarding Cenestin (registered trademark). Under terms of the
settlement agreement, Duramed made an initial $7.5 million
payment to Schein in October 1999 and additional payments in 2000
reducing the balance due to $6.65 million. Per the terms of the
settlement agreement Duramed may choose to make the final payment
in cash or Schein may require the final payment to be made in
cash or Duramed common stock at the lesser of the closing price
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of the stock on October 22, 1999 ($8.75) or the closing price on
the date Schein requests settlement in stock. Duramed and Schein
have agreed the $6.65 million available to pay Schein will be
held in escrow until final determination is made regarding
ultimate payment in stock or cash.
Arington comment that Duramed has had a relationship with Provide
Bank dating back to 1985. "Provident has been a strong supporter
of Duramed and we're pleased they are a part of this financing."
ABOUT SOLVAY PHARMACEUTICALS, INC.
Solvay Pharmaceuticals, Inc., based in Marietta, Ga., is a
research-based pharmaceuticals company, active in the therapeutic
areas of cardiology, gastroenterology, mental health and women's
health. Solvay Pharmaceuticals is the second largest
pharmaceutical company in the U.S. hormone replacement therapy
market, having advanced from its previous standing of sixth in
the industry in 1996. It is a member of the worldwide Solvay
Group of chemical and pharmaceutical companies, headquartered in
Brussels, Belgium. The Group's members employ some 33,000 people
in 46 countries. Its 1999 revenue worldwide was 7.9 billion EUR
($7.9 billion) from four operating sectors: Chemicals, Plastics,
Processing, and Pharmaceuticals. Additional information about
the Group can be found on the World Wide Web at
http://www.solvay.com.
_____________________
ABOUT DURAMED PHARMACEUTICALS, INC.
Duramed Pharmaceuticals, Inc. develops, manufactures and markets
prescription drug products. The company's business strategy
emphasizes products with attractive market opportunities and
potentially limited competition due to technological barriers to
entry, focusing on women's health and the hormone replacement
therapy market.
The company's stock is traded on Nasdaq using the symbol DRMD.
Additional information about the company can be found on the
World Wide Web at http://www.duramed.com and www.cenestin.com.
______________________ ________________
*Estratest and Prometrium are trademarks of Solvay
Pharmaceuticals.
Like all estrogen drug products, CENESTIN (registered trademark),
and ESTRATES (registered trademark)/ESTRATEST (registered
trademark) H.S. Brand Tablets should not be used in women with
known or suspected pregnancy, breast cancer, or estrogen-
dependent neoplasia, undiagnosed abnormal genital bleeding,
active thrombophlebitis, or thromboembolic disorders. Estrogens
have been reported to increase the risk of endometrial carcinoma
in postmenopausal women with an intact uterus. The most common
adverse events reported in clinical experience with CENESTIN
(registered trademark) included headache, insomnia, asthenia,
nervousness, paresthesia, and depression. The most common
adverse events reported with ESTRATEST (registered
trademark)/ESTRATEST (registered trademark) H.S. Brand Tablets
included those typical of estrogen therapy (such as breast
tenderness, headache, nausea, edema and abdominal pain) and of
androgen treatment (including hair loss, acne and hirsutism).
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Common side effects of PROMETRIUM (registered trademark) Capsules
are breast tenderness, dizziness, abdominal bloating, and vaginal
discharge. For additional information on CENESTIN (registered
trademark), ESTRATEST (registered trademark) Brand Tablets or
PROMETRIUM (registered trademark) Capsules, please see full
prescribing information.
The Securities and Exchange Commission (SEC) encourages companies
to disclose forward-looking information so that investors can
better understand a company's future prospects and make informed
investment decisions. Due to changing market conditions, product
competition, the nature of product development and regulatory
approval processes, the achievement of forward-looking statements
contained in this press release are subject to risks and
uncertainties. For further details and a discussion of these
risks and uncertainties, see Duramed's SEC filings, including its
annual report on Form 10-K/A.
Exhibit 99.2
DURAMED ANNOUNCES PRELIMINARY Q4 1999 RESULTS
AND COMMENTS ON 2000 OUTLOOK
Expanded Marketing Partnership with Solvay Pharmaceuticals
Announced Earlier Today
FDA Approvable Letter Received for 1.25 Cenestin
CINCINNATI, MARCH 1, 2000 -- DURAMED PHARMACEUTICALS, INC.
(NASDAQ: DRMD) today said that it anticipates reporting net sales
for its fourth quarter ended December 31, 1999 of approximately
$15.9 million. The company expects to report a net loss for the
period in the range of $12 million, or approximately 53 cents per
share. Fourth quarter results included approximately $10 million
in marketing expenses related to Cenestin (registered trademark)
(synthetic conjugated estrogens, A) Tablets.
In the third quarter of 1999, Duramed reported a net loss of
$11.9 million, or 55 cents per share, excluding a $15 million
charge related to the company's settlement with Schein
Pharmaceutical, Inc., on net sales of $11.1 million. In the
fourth quarter of 1998, the company reported a previously
restated net loss of $2.9 million, or 15 cents per share, on net
sales of $14.1 million.
In keeping with the company's conservative position regarding
revenue recognition, approximately $2 million in sales of
Cenestin will be recognized in the fourth quarter of 1999, based
on end-user prescription data. Management believes the company's
conservative approach to revenue recognition for Cenestin is
prudent due to: the limited time Cenestin has been promoted by
the joint Solvay Pharmaceuticals/Duramed sales force; recognition
that Cenestin is Duramed's first introduction of a brand product;
the more than 600,000 sample packages that have been supplied to
the sales force and, the large pipeline fill of Cenestin.
E. Thomas Arington, Duramed Chairman and Chief Executive Officer,
commented, "The fourth quarter 1999 was marked by significant
events that could accelerate Duramed's return to profitability.
We initiated a co-promotion agreement with Solvay
Pharmaceuticals, which included Duramed's Cenestin and Solvay
Pharmaceuticals' Estratest/Estratest (registered trademark) H.S.
Tablets1 (esterified estrogens and methyltestosterone) and
Prometrium (registered trademark) (progesterone) Capsules2. In
addition, we began promoting Apri (trademark) (desogestrel and
ethinyl estradiol) Tablets and also finalized a settlement with
Schein Pharmaceutical, Inc. More recently we received from the
Food and Drug Administration an approvable letter for the 1.25 mg
Cenestin Tablet strength and have been informed that all issues
have been satisfactorily resolved and approval is expected soon.
The 1.25 mg strength represents a $200 million market, accounting
for 19 percent of all conjugated estrogens prescriptions written
<PAGE>
and 23 percent of total conjugated estrogens revenues in the U.S.
last year."
The introduction of Apri, Duramed's entry into the oral
conceptive market, was significant because it is expected to be a
major contributor to the company's 2000 results. "We are
encouraged by the performance of Apri thus far in 2000, as
prescription data for the week ending February 18, 2000 indicates
that the product has achieved a 25 percent new prescription
market share for desogestrel products. We believe this is an
impressive performance based on four months of sales activity,"
Arington said.
Earlier today, Duramed announced an agreement with Solvay
Pharmaceuticals, that calls for Solvay Pharmaceuticals to assume,
effective January 1, 2000, all responsibility for Cenestin
marketing plan, including payment of all expenses, in exchange
for a share of the Cenestin profits. The terms of the agreement
also permit Duramed to recover the $38 million invested in
Cenestin during 1999, after Cenestin reaches a level of
profitability sufficient to cover Solvay Pharmaceuticals'
marketing expenses.
The companies noted that since October, when Solvay
Pharmaceuticals and Duramed began joint marketing efforts, total
prescriptions for Cenestin from OB/GYNs have increased almost
five-fold. Arington commented, "Solvay Pharmaceuticals' strong
commitment to Cenestin's success is evidence in the expansion of
our relationship. We believe that continued marketing efforts
led by Solvay Pharmaceuticals will position Cenestin as a leader
in this market segment and we expect the Cenestin income stream
to grow steadily during 2000 based on currently available market
data."
Regarding Duramed's financial condition and available resources
Arington commented, "The launch of Cenestin placed a heavy burden
on the company's financial resources throughout 1999. The
additional working capital provided by the new Provident Bank
financing announced earlier today, the encouraging performance of
Apri, the growing market penetration of Cenestin, the expected
approval of the 1.25 mg strength of Cenestin as well as Solvay
Pharmaceuticals' assumption of the Cenestin marketing expenses
will positively impact the company's working capital needs for
2000."
"The actions taken during the fourth quarter along with early
developments in 2000 help set the stage for Duramed to achieve
the growth and performance levels needed to substantially improve
quarterly performance throughout the year 2000. While the
company does not expect to be profitable for the first quarter of
2000, we believe the performance improvement could be sufficient
to position the company for profitability in the second quarter,"
Arington added.
<PAGE>
Arington commented that additional funds will be required to meet
existing obligations resulting from the 1999 Cenestin launch and,
depending on the continued rate of growth of key products, to
satisfy 2000 operating requirements. The company is considering
a number of different options and believes that it will be
successful in meeting its cash needs. At this time no definitive
agreements have been reached and a failure to obtain necessary
funding could have a materially adverse effect on Duramed and its
prospects and business plans. The company is continuing to
monitor a number of current business activities that may improve
its working capital position.
Arington added that Duramed expects to place heavy emphasis on
partnering high profile projects. "Our business development plan
calls for active discussions with other companies, including
Solvay Pharmaceuticals on mutually beneficial business projects."
Excluding Cenestin-related sales and expenses, in the fourth
quarter of 1999, Duramed anticipates it would have generated a
net loss of approximately $4 million, or 18 cents per share, on
net sales of about $13.9 million. Apri, which Duramed began
promoting on October 26, 1999, represented approximately 41
percent of that total. Methylprednisolone, formerly Duramed's
most significant product, represented approximately 13 percent of
net sales in the period.
FULL YEAR RESULTS
For full-year 1999, Duramed anticipates reporting a net loss of
approximatelY $51 million, or $2.35 per share. Excluding
Cenestin-related sales of $2 million and expenses of $21 million
as well as the charge of $15 million charge related to the
company's settlement with Schein Pharmaceutical, Inc., the net
loss would be in the range of $17 million, or 79 cents per share.
In 1998, the company reported a previously restated net loss of
$13.8 million, or 76 cents per share. Net sales for 1999 are
expected to be in the rage of $50 million essentially unchanged
from the $49.8 million reported in 1998.
ABOUT SOLVAY PHARMACEUTICALS, INC.
Solvay Pharmaceuticals, Inc., based in Marietta, Ga., is a
research-based pharmaceuticals company, active in the therapeutic
areas of cardiology, gastroenterology, mental health and women's
health. Solvay Pharmaceuticals is the second largest
pharmaceutical company in the U.S. hormone replacement therapy
market, having advanced from its previous standing of sixth in
the industry in 1996. It is a member of the worldwide Solvay
Group of chemical and pharmaceutical companies, headquartered in
Brussels, Belgium. The Group's members employ some 33,000 people
in 46 countries. Its 1999 revenue worldwide was 7.9 billion EUR
($7.9 billion) from four operating sectors: Chemicals, Plastics,
Processing, and Pharmaceuticals. Additional information about
the Group can be found on the World Wide Web at
http://www.solvay.com.
_____________________
<PAGE>
ABOUT THE COMPANY
Duramed Pharmaceuticals develops, manufactures and markets
prescription drug products. The company's business strategy
emphasizes products with attractive market opportunities and
potentially limited competition due to technological barriers to
entry, focusing on women's health and the hormone replacement
therapy market. On March 24, 1999, the FDA approved the
company's first branded product, Cenestin (registered trademark)
(synthetic conjugated estrogens, A) Tablets, for the treatment of
moderate-to-severe vasomotor symptoms associated with menopause.
On October 6, 1999, Duramed entered into an alliance with Solvay
Pharmaceuticals, Inc. to jointly promote three of the companies'
hormone products to obstetricians and gynecologists across the
United States: Duramed Pharmaceuticals' Cenestin and Solvay
Pharmaceuticals' Estratest (registered trademark) and Prometrium
(registered trademark.
Duramed's containment manufacturing facility for the production
of hormones -- with enclosed product flow and state-of-the-art
environmental controls -- ensures purity, stability and tablet
uniformity for Cenestin and other hormone products. While
Duramed's primary focus will be solid oral dose hormones, the
company's other areas of concentration -- controlled release
technology and oncology -- continue to represent attractive
market opportunities that will be pursued, as appropriate.
The company's stock is traded on Nasdaq using the symbol DRMD.
Additional information about the company can be found on the
World Wide Web at http://www.duramed.com and http://cenestin.com.
______________________ ___________________
1 Estratest is a trademark of Solvay Pharmaceuticals.
2 Prometrium is a trademark of Solvay Pharmaceuticals.
Like all estrogen drug products, CENESTIN (registered trademark),
and ESTRATEST (registered trademark)/ESTRATEST (registered
trademark) H.S. Brand Tablets should not be used in women with
known or suspected pregnancy, breast cancer, or estrogen-
dependent neoplasia, undiagnosed abnormal genital bleeding,
active thrombophlebitis, or thromboembolic disorders. Estrogens
have been reported to increase the risk of endometrial carcinoma
in postmenopausal women with an intact uterus. The most common
adverse events reported in clinical experience with CENESTIN
included headache, insomnia, asthenia, nervousness, paresthesia,
and depression. The most common adverse events reported with
ESTRATEST (registered trademark)/ESTRATEST (registered trademark)
H.S. Brand Tablets include those typical of estrogen therapy
(such as breast tenderness, headache, nausea, edema and abdominal
pain) and of androgen treatment (including hair loss, acne and
hirsutism). Common side effects of PROMETRIUM (registered
trademark) Capsules are breast tenderness, dizziness, abdominal
bloating, and vaginal discharge. For additional information on
CENESTIN (registered trademark), ESTRATEST (registered trademark)
Brand Tablets or PROMETRIUM (registered trademark) Capsules,
please see full prescribing information.
<PAGE>
The Securities and Exchange Commission (SEC) encourages companies
to disclose forward-looking information sot hat investors can
better understand a company's future prospects and make informed
investment decisions. Due to changing market conditions, product
competition, the nature of product development and regulatory
approval processes, the achievement of forwarding-looking
statements contained in this press release are subject to risks
and uncertainties. For further details and a discussion of these
risks and uncertainties, see Duramed's SEC filings, including its
annual report on Form 10-K/A.
