<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended Commission File Number: 1-10432
September 30, 1997
ROBERTS PHARMACEUTICAL CORPORATION
(Exact name of registrant as specified in its charter)
NEW JERSEY 22-2429994
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
MERIDIAN CENTER II
4 INDUSTRIAL WAY WEST
EATONTOWN, NEW JERSEY 07724
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code:
(908) 389-1182
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
Class Outstanding Shares at
October 31, 1997
Common Stock 29,312,502
<PAGE>
ROBERTS PHARMACEUTICAL CORPORATION
INDEX
Page
Part I
Item 1 - Financial Statements 2
Item 2 - Management's Discussion and Analysis 8
Part II
Item 1 - Legal Proceedings 12
Item 6 - Exhibits and Reports on Form 8-K 13
Signatures 16
Certain information included in this report and other Registrant filings
(collectively, "SEC filings") under the Securities Act of 1933, as amended,
and the Securities Exchange Act of 1934, as amended (as well as information
communicated orally or in writing between the dates of such SEC filings)
contains or may contain forward-looking information that is (i) based upon
assumptions which, if changed, could product significantly different results;
or (ii) subject to certain risks, trends and uncertainties that could cause
actual results to differ materially from expected results. Among these
risks, trends and uncertainties are matters related to national and local
economic conditions, the effect of certain governmental regulations and
programs on the Registrant and competitive conditions in the marketplace in
which the Registrant operates. See "Management's Discussion and analysis of
Financial Condition and Results of Operations."
<PAGE>
ROBERTS PHARMACEUTICAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands except per share data)
(Unaudited)
<TABLE>
<CAPTION>
September 30, 1997 December 31, 1996
------------------ -----------------
<S> <C> <C>
ASSETS:
Current assets:
Cash and cash equivalents $ 78,075 $ 87,125
Marketable securities 11,590 7,793
Accounts receivable, net 27,032 30,791
Inventory 16,790 16,665
Notes receivable, current 200 1,620
Deferred tax assets 9,040 9,040
Net assets held for sale 500 500
Other current assets 4,601 2,124
--------- ---------
Total current assets 147,828 155,658
Fixed assets, net 21,355 14,945
Intangible assets 177,975 183,579
Notes receivable 6,729 6,574
Deferred non-current tax asset 11,216 11,217
Other assets 456 251
--------- ---------
Total assets $365,559 $372,224
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 2 -
<PAGE>
ROBERTS PHARMACEUTICAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands except per share data)
(Unaudited)
<TABLE>
<CAPTION>
September 30, 1997 December 31, 1996
------------------ -----------------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current installments of
long-term debt $ 3,876 $ 6,376
Accounts payable 13,146 15,848
Income taxes payable 7,564 7,020
Dividends payable 148 679
Other current liabilities 19,016 21,559
--------- ---------
Total current liabilities 45,750 51,482
Long-term debt, excluding
current installments 7,077 10,639
Other liabilities 269 345
Shareholders' equity:
Class B preferred stock,
$.10 par 10,000,000 shares
authorized, 469,034
and 2,721,030 outstanding 47 272
Common stock, $.01 par,
100,000,000 shares authorized,
29,309,789 and 19,581,855
outstanding 298 223
Additional paid-in capital 371,366 365,160
Cumulative translation adjustments (565) (301)
Retained earnings (deficit) (56,446) (55,359)
Treasury stock, 387,594 shares
of common stock, at cost (237) (237)
--------- ---------
Total shareholders' equity 314,463 309,758
--------- ---------
Total liabilities and
shareholders' equity $365,559 $372,224
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 3 -
<PAGE>
ROBERTS PHARMACEUTICAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
(Unaudited)
<TABLE>
<CAPTION>
For the nine months For the three months
ended September 30, ended September 30,
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Sales and Revenue:
Sales $84,973 $65,683 $28,357 $21,676
Other revenue 285 36 285 12
--------- --------- --------- ---------
Total sales and revenue 85,258 65,719 28,642 21,688
--------- --------- --------- ---------
Operating costs and expenses:
Cost of sales 38,680 32,739 14,047 10,346
Research & development 4,747 2,941 2,090 945
Marketing & administration 42,534 41,555 15,472 13,919
--------- --------- --------- ---------
Total operating costs &
expenses 85,961 77,235 31,609 25,210
--------- --------- --------- ---------
Operating income (loss) (703) (11,516) (2,967) (3,522)
--------- --------- --------- ---------
Other income (expense):
Interest income 3,986 1,180 1,277 374
Interest expense (594) (1,597) (162) (426)
Foreign currency gain(loss) 7 (11) 71 2
Other income(expense), net (2,378) 0 (2,330) 1
--------- --------- --------- ---------
Total other income(expense) 1,021 (428) (1,144) (49)
--------- --------- --------- ---------
Income (loss) from continuing
operations before income
taxes 318 (11,944) (4,111) (3,571)
Provision (benefit) for income
taxes 455 (2,845) (1,116) (438)
--------- --------- --------- ---------
Income (Loss) from operations (137) (9,099) (2,995) (3,133)
Estimated income on disposal of
discontinued division, net of
of tax benefit of $2,045 0 3,969 0 0
--------- --------- --------- ---------
Net income (loss) $ (137) $ (5,130) $(2,995) $(3,133)
========= ========= ========= =========
Per share of common stock,
primary and fully diluted:
Income (loss) from continuing
operations $ (0.03) $ 0.71 $ (0.11) $ (0.40)
Income from discontinued
operations --- 0.20 --- ---
--------- --------- --------- ---------
Net income (loss) $ (0.03) $ (0.51) $ (0.11) $ (0.40)
========= ========= ========= =========
Weighted average number
of common shares
outstanding, primary
and fully diluted: 29,162,336 18,733,620 28,426,480 18,820,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 4 -
<PAGE>
ROBERTS PHARMACEUTICAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
For the nine months
ended September 30,
1997 1996
--------- ---------
<S> <C> <C>
Cash flows from operating activities: $ 2,653 $ 500
--------- ---------
Cash flows from investing activities:
(Purchase) redemption of marketable securities (3,797) 1,478
Purchases of intangible assets (2,020) (80)
Purchases of fixed assets (4,593) (101)
Collection of notes receivable 717 ---
--------- ---------
Net cash provided by (used in)
investing activities (9,693) 1,297
--------- ---------
Cash flows from financing activities:
Payments on notes payable and
long term debt (6,588) (36,191)
Net proceeds from issuance of common stock 1,013 9,985
Net proceeds from issuance of 5%
Preferred stock 5,042 99,549
5% preferred stock dividends paid (1,481) 0
--------- ---------
Net cash used in financing activities (2,014) 73,843
--------- ---------
Exchange rate changes on cash and
cash equivalents 4 (14)
--------- ---------
Change in cash and cash equivalents (9,050) 75,626
Beginning cash and cash equivalents 87,125 16,357
--------- ---------
Ending cash and cash equivalents $ 78,075 $ 91,983
========= =========
Supplemental cash flow information:
Interest paid $ 823 $ 2,363
Income taxes paid 8 (267)
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 5 -
<PAGE>
1. Summary of Significant Accounting Policies
------------------------------------------
Basis of Presentation
- ---------------------
In the opinion of management, the accompanying consolidated
financial statements include all necessary adjustments, consisting
of normal adjustments, necessary for a fair presentation of results
for the period reported. All dollar amounts are presented in
thousands, except per share data.
Foreign Currency Translation
- ----------------------------
Effective January 1, 1997, the functional currency of the United
Kingdom subsidiary, Monmouth Pharmaceutical, Ltd., was changed from
the U.S. Dollar to the British Pound as a result of a change in
circumstance. Monmouth's translation gains and losses will now be
accumulated as a separate component of Shareholders' Equity.
Earnings Per Share
- ------------------
Income (loss) per share was computed based on the weighted average
number of shares of Common Stock actually outstanding plus the
number of shares of Common Stock that would be outstanding assuming
the exercise of dilutive stock options. In 1996 the 5% Preferred
Stock dividends and the 10% discount to market upon conversion of
the 5% Preferred Stock into Common Stock were included in the
calculation. The 1997 income is adjusted by the 5% Preferred
dividends.
Pursuant to a new position taken by the SEC staff (the "Staff"),
effective March 13, 1997, on accounting for preferred stock which
is convertible at a discount to market, the Company adjusted its
calculation of Earnings Per Share for the third quarter 1996 by
$0.23 per share. This reflects the Staff's position that the 10%
discount available to holders of the Company's 5% Preferred Stock
should be incorporated in the calculation of Earnings Per Share.
New Accounting Pronouncements
- -----------------------------
In February 1997, the FASB issued SFAS No. 128, "Earnings Per
Share" which requires adoption in 1997. This statement generally
requires the presentation of basic and diluted earnings per share
on the face of the statement of operations.
The amount of basic and diluted earnings for the first quarter 1997
as recalculated under SFAS 128 was $0.05 per share as compared with
$0.04, primary and fully diluted, as reported under APB no. 15.
Earnings per share for the second and third quarters and year to
date are the same under SFAS 128 as reported under APB no. 15.
2. Inventory
---------
Inventory at September 30, 1997 consists of:
Raw Materials $ 2,835
Work in Progress 94
Finished Goods 13,861
---------
Total $16,790
=========
- 6 -
<PAGE>
3. Contingency
-----------
A shareholder class action suit was instituted March 24, 1995, in
the United States District Court for the District of New Jersey
against Roberts Pharmaceutical Corporation and certain of its
officers and a former officer for alleged violations of certain
federal securities laws. An agreement in principle to settle the
lawsuit has been reached. The net expenses of this settlement to
the Company will amount to approximately $2.3 million and have been
included in other expense for the third quarter.
4. Change in Accounting Estimate
-----------------------------
In second quarter 1997, management made several changes in
accounting estimates. The aggregate amount of these changes was
$1.7 million.
- 7 -
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Conditions and Results of Operations
Results of Operations
Nine months ended September 30, 1997 and 1996
Corporate Revenues
- ------------------
Total revenue for the nine months and quarter ended September 30,
1997 increased $19.5 million and $7.0 million respectively as
compared with the same time periods in 1996. This increase was due
to an increase in revenues from product sales.
Product Sales
- -------------
For the nine months ended September 30, 1997, product sales
increased $19.2 million from $65.7 million to $85.0 million
primarily as a result of the launch of AGRYLIN and PROAMATINE and
an increase in sales by the United Kingdom subsidiary.
U.S. product sales increased $13.4 million from $48.9 million to
$62.3 million. AGRYLIN and PROAMATINE provided $7.3 and $3.3
million, respectively, of this increase, and NOROXIN, NORETHIN, and
the COLACE line also posted significant increases of $2.3 million,
$1.5 million, and $2.8 million, respectively. These increases were
offset by the divestiture of the non-core product lines which
occurred in third quarter 1996. Sales of the Company's United
Kingdom subsidiary, Monmouth Pharmaceuticals, Ltd., increased $5.2
million from $8.3 million to $13.5 million. $3.6 million of this
increase is due to sales of LODINE which was launched in fourth
quarter 1996 and $1.2 million is due to an increase in the sales of
EMINASE. Sales of the Company's Canadian subsidiary increased
slightly by $0.7 million from $8.4 million to $9.1 million.
Product sales in the third quarter increased $6.7 million from
$21.7 million in 1996 to $28.4 million in 1997. Third quarter
product sales in the U.S. increased $5.1 million from $15.9 million
in 1996 to $21.0 million in 1997. The two largest components of
this change are increases of $2.2 million and $2.9 million,
respectively, in AGRYLIN and NOROXIN sales. Sales in the U.K.
increased $1.5 million to $4.6 million in third quarter 1997 from
$3.1 million in 1996 primarily due to sales of LODINE. Canada's
third quarter sales increased to $2.8 million in 1997, a $0.2
million increase from 1996 third quarter sales of $2.6 million.
- 8 -
<PAGE>
Cost of Sales
- -------------
For the nine months ended September 30, 1997, cost of sales
amounted to 45.5% of product sales, a 4.3 percentage point decrease
as compared to the prior year's comparable period. This decrease
in cost of sales and corresponding increase in gross profit
percentage is primarily the result of the addition of AGRYLIN to
the product mix. AGRYLIN has a higher gross profit percentage as
it is a product the development of which was completed internally.
Also included in cost of sales is a credit of $1.5 million for
minimum royalty payments forgiven by Ortho Pharmaceutical
Corporation related to SUPPRELIN sales. This credit offsets the
$1.8 million charge taken in first quarter 1997 related to these
royalties.
Research and Development
- ------------------------
Research and Development expenses increased $1.8 million to $4.7
million and $0.9 million to $2.0 million during the nine and three
month periods, respectively, ended September 30, 1997 as compared
to the comparable prior year periods. The year to date increase is
due to $1.5 million for new programs related to the compounds
purchased in 1996 and a $0.5 million increase in registration and
user fees offset by a $0.2 million decrease in salaries and
benefits and grants.
Marketing and Administrative Expenses
- -------------------------------------
For the nine months ended September 30, 1997, Marketing and
Administrative expenses increased $1.0 million from $41.5 million
to $42.5 million. Marketing expenses decreased $0.4 million.
Contributing factors were a decrease in salaries and benefits of
$0.5 million, a decrease in advertising of $0.9 million, and a
decrease in consulting costs of $2.0 million, offset by increases
in samples of $0.8 million, market research and coupons of $1.0
million, and new product launch expenses of $0.4 million.
Administrative expense increased $1.3 million from $15.6 million to
$16.9 million. This increase was due to a number of factors
including an increase of $0.8 million related to salaries and
benefits, an increase of $0.3 for shareholder relations expenses,
increases in both insurance and bad debt expense of $0.1 million
and a $0.2 million increase related to outside services offset by
a decrease of $0.3 million in legal and accounting expenses.
For the quarter ended September 30, 1997, Marketing expenses
increased $0.4 million from $9.2 million in third quarter 1996 to
$9.6 million. Administrative expenses increased $1.1 million from
the third quarter 1996 to $5.9 million in third quarter 1997.
Included in the quarter and year to date changes are the impact of
changes in accounting estimate.
Interest Income and Expense
- ---------------------------
Interest income for the nine months ended September 30, 1997,
increased $2.8 million as a result of an increase in invested
marketable securities arising from the common and preferred stock
offerings in the third quarter of 1996. Interest expense for the
same period decreased by $1.0 million as a result of a decrease in
long-term debt related to product acquisitions.
- 9 -
<PAGE>
Income Taxes
- ------------
For the nine months ended September 30, 1997 and 1996, income tax
expense was calculated using a normal statutory rate for continuing
operations, except for certain taxes related to foreign operations.
The Company has recorded net deferred tax assets of approximately
$20.0 million. Realization is dependent upon generating sufficient
taxable income to utilize such items. Although realization is not
assured, management believes it is more likely than not that all of
the deferred tax assets will be realized; however, these assets
could be reduced at any time if estimates of future taxable income
are reduced.
Liquidity and Capital Resources
- -------------------------------
Operating activities provided $2.7 million in cash. The primary
components of cash provided by operating activities were a $4.2
million decrease in accounts receivable, net loss of $0.1 million,
which includes $5.3 million of non-cash charges, and increased
working capital requirements of $3.5 million.
Investing activities used $9.7 million, comprised primarily of $3.8
million in marketable securities redemptions and asset purchases of
$6.6 million offset by $0.7 million in collections of notes
receivable.
Financing activities used $2.0 million, including $6.6 million of
payments on notes payable and payment of $1.5 million of preferred
stock dividends paid offset by proceeds from the issuance of Common
and Preferred Stock of $6.1 million.
The Company will use its existing cash and securities balances and
cash generated from operations to fund its operating activities and
its near-term and long-term debt obligations from previous product
acquisitions. These balances will also be used to fund future
acquisitions of new products and the development of existing
pipeline products as well as the fourth quarter 1997 purchase of a
distribution facility and capital improvements scheduled for the
Canadian manufacturing facility.
Foreign Currency Fluctuations
- -----------------------------
Roberts has subsidiary operations outside the United States. As a
result, Roberts is subject to fluctuations in revenues and costs
reported in United States dollars as a consequence of changing
currency exchange rates, especially rates for the British pound and
Canadian dollar. Such fluctuations were not material for the third
quarter 1997.
Other
- -----
The Company has been pursuing a number of initiatives over the past
year which have contributed to the improvement in results over
1996. Some of these initiatives have already resulted in increased
sales and decreased expenses, while others are still in the early
phases. Several of these key initiatives are outlined below.
- 10 -
<PAGE>
PROAMATINE is undergoing Phase IV FDA clinical trials to eliminate
certain labeling restrictions on the drug. These trials are aimed
at establishing the clear clinical benefits of PROAMATINE, which,
if demonstrated, should result in increased sales. Additional
trials of ProAmatine for other indications, including urinary
stress incontinence, are planned.
Roberts expects AGRYLIN to receive approval for sale in Canada in
fourth quarter of 1997 and European approval is expected in mid-
1998. The European market could exceed that of the North American
market for this drug.
Several changes have been made in the sales force and overall
marketing plan to improve its efficiency. Sales territories have
been realigned and the sales force has been automated, both with
the aim of covering high prescribing physicians with fewer
salespeople. This realignment resulted in lower sales force
expenses, as evidenced by the fact that marketing expenses
decreased in the nine months ended September 30, 1997 over the nine
months ended September 30, 1996 despite the expenses incurred for
the two new drug launches.
The Company also changed the strategic direction of EMINASE.
Formerly, Roberts maintained a separate sales force for certain
products including EMINASE. That sales force has been merged into
the regular sales force and all sales reps have received Eminase
sales training. This change is expected to increase the number of
sales calls and decrease the effect of turnover within the sales
force.
In another strategic change, recognizing that managed health care
has become a dominant force in the marketplace, the Company has
taken steps to penetrate this portion of the market and is pursuing
managed care contracts and is working to increase the number of
formularies on which its drugs are listed.
The Company renewed its television advertising campaign as part of
its promotional efforts for its COLACE line of products. Such
efforts seem to have been successful as sales of COLACE for the
nine months ended September 30, 1997 increased by $2.8 million over
the comparable 1996 period. Sales of the COLACE line are expected
to be further enhanced by the removal of a major competitive brand
from the market due to a proposed FDA ban on an ingredient of the
competitor. The COLACE line does not contain this ingredient.
The purchase of the manufacturing and packaging facility, completed
in early July 1997, is expected to improve the Company's
profitability in future years as production costs should decrease
by producing in house. It is also projected that the recurring
problems of stock-outs and overstocks will be minimized by
controlling the production cycle. OTC sales may also be improved
due to the opportunity to process special packaging runs, such as
bonus packs of COLACE and PERI-COLACE. It has not been feasible to
produce such special packaging utilizing outside production
companies.
- 11 -
<PAGE>
Item 1. Legal Proceedings
The Company previously reported in its Current Reports on Form 8K
dated April 10, 1995 and June 26, 1995, respectively, and its
Quarterly Report on Form 10-Q for the quarter ended June 30, 1995,
that two shareholder class action suits had been instituted against
it and certain of its officers in the United States District Court
for the District of New Jersey. The second suit filed by Dieter
Zander has been voluntarily dismissed by the plaintiff. The first
complaint, as amended, was filed by Grace Cowit on behalf of all
persons who purchased shares of the Company's Common Stock between
November 7, 1994 and May 31, 1995.
The Company reported in its current report on Form 8K dated July
31, 1997, that an agreement in principle to settle the above
referenced lawsuit had been reached. The net expenses of this
settlement to the Company will amount to approximately $2.3
million.
- 12 -
<PAGE>
Item 6. Exhibits and Reports on Form 8K
Reports on Form 8K
Date of Report
July 25, 1997 Roberts Pharmaceutical Corporation announced that it has
filed with the Food and Drug Administration an
Investigational New Drug Application (IND) for LY315535,
one of the new gastrointestinal (GI) compounds recently
acquired from Lilly. Roberts plans to develop the
compound for the treatment of Functional Bowel Disorders
(FBD).
LY315535 is an orally administrated drug that can act as
both a muscarinic receptor antagonist and as a serotonin
(5-HT) receptor agonist with a high degree of selectivity
for the 5-HT1A receptor subtype. Because of these two
different modes of action on the GI tract, the compound
offers the potential to treat a broad spectrum of FBD
symptoms with a single drug.
It has been estimated that 15% - 20% of the world
population had FBD and current therapies such as over-
the-counter medicines and prescription antispasmodics
tend to provide limited or erratic treatment response.
Roberts noted that LY315535 is one of the first new
compounds acquired by the Company to be internally
advanced towards clinical development, thus an important
new phase in Roberts R&D program.
July 25, 1997 Roberts Pharmaceutical Corporation notes that it is not
aware of any specific reason to account for the current
decline in the price of the Company's common stock.
Roberts financial health is strong with over $90 million
in cash. The Company recently reported first-half 1997
results reflecting a significant strengthening in
fundamentals. During the first six months of 1997,
Roberts revenues advanced 29% to $56.6 million from $44.0
million in the comparable period a year earlier.
Correspondingly, per share earnings in the first-half
1997 were reported at $0.08 compared to a loss from
continuing operation of ($0.32) in the same period a year
earlier.
August 5, 1997 Roberts Pharmaceutical Corporation (the "Company")
previously reported that in April 1995 a shareholders
class action suit (the "Class Action") had been
instituted against it and certain of its current and
former officers by Grace Cowit (the "Plaintiff) on behalf
of persons who purchased shares of the Company's Common
Stock between November 7, 1994 and May 31, 1995. The
Class Action alleged certain violations of the Federal
securities laws by the Company and certain of its
officers and a former officer and sought damages in an
unspecified amount.
- 13 -
<PAGE>
The Company believes that it has compiled with all of its
obligations under the Federal securities laws and
considers the Plaintiff's allegations to be without
merit; however, in order to avoid the disadvantages of
protracted litigation and the expense associated with it,
the Company has reached an agreement in principle to
settle the Class Action. The net expense of the
settlement to Roberts will amount to approximately $1.8
million, before taxes, and will be recorded as a non-
operating, one time charge in the third quarter of 1997.
The Company stated that after including this non-
recurring charge, the third quarter of 1997 appears to be
on track toward becoming the Company's fourth consecutive
quarter of profitability.
Finalization of the proposed settlement is subject to the
negotiation and signing of a definitive stipulation of
settlement, notice to the members of the class of the
proposed settlement and approval of the settlement by the
court in which the Class Action was instituted.
September 12, 1997 Roberts Pharmaceutical Corporation (the "Company")
announced today a change in management structure. Dr.
Robert A. Vukovich will continue as Chairman of the
Board, but will forego his day-to-day activities as
President and CEO to concentrate on Roberts' long-term
strategic business and product development programs. The
Company's Board of Directors has approved the change and
has elected John T. Spitznagel as President and Chief
Executive Officer, effective immediately. Mr.
Spitznagel, with more than 30 years experience in the
ethical pharmaceutical business, has served as Roberts'
Executive Vice President, Worldwide Sales and Marketing,
since March 1996 and as a member of the Company's Board
of Directors since July 1996.
In addition to the regular duties of a Chairman, Dr.
Vukovich will devote substantial time to issues of long-
term strategic importance to the Company, including the
identification of new product opportunities and
expediting the development of Roberts' pipeline compounds
which are vital aspects of the Company's growth.
Mr. Spitznagel served as President of Reed and Carnick
Pharmaceutical from September 1990 through July 1995. In
1989 and 1990, he served as Chief Executive Officer of
BioCryst Pharmaceuticals, Inc. From 1979 through 1989,
Mr. Spitznagel held various positions with Wyeth-Ayerst
Laboratories, advancing from Marketing Director to Senior
Vice President of Marketing and Sales. Mr. Spitznagel
was employed by Roche Laboratories from 1966 through 1971
in various sales, marketing and management positions.
Mr. Spitznagel received his undergraduate degree from
Rider University and an M.B.A. from Fairleigh Dickinson
University.
- 14 -
<PAGE>
Dr. Vukovich founded Roberts Pharmaceutical Corporation
in 1983 and has served as President, CEO and Chairman
ever since. Under his leadership, Roberts became a
public company in 1990 and has raised over $400MM in
equity capital.
September 22, 1997 Roberts Pharmaceutical Corporation indicated that, as a
result of several recent developments, the Company
expects to report a net loss approximating $0.07 to $0.11
per share for the third quarter ending September 30,
1997. In addition to the one-time, pre-tax charge of
$12.8 million associated with the settlement of a
shareholder class action lawsuit announced on July 31,
new factors accounting for the revised outlook include:
higher than expected legal expenses associated with the
settlement; a decision to increase marketing expenditures
in response to a specific product opportunity; delayed
sales of certain products due to back orders with third-
party manufacturers; and slower than expected wholesaler
pull-through of ProAmatine(R) and Agrylin(TM).
The Company stated that it has reported an operating
profit for three consecutive quarters and given the non-
recurring nature of a significant portion of the factors
impacting the third quarter, the Company expects to
resume profitability in the fourth quarter of the year.
- 15 -
<PAGE>
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this
amendment to be signed on its behalf by the undersigned,
thereunto duly authorized.
Date: 11/7/97 /s/ Peter M. Rogalin
------------------- ----------------------------
Peter M. Rogalin
Vice President and Treasurer
Date: 11/7/97 /s/ Peter M. Rogalin
------------------- ----------------------------
Peter M. Rogalin
Chief Accounting Officer
- 16 -
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
form 10-Q for the quarter ended September 30, 1997 and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 78,075
<SECURITIES> 11,590
<RECEIVABLES> 27,032
<ALLOWANCES> 0
<INVENTORY> 16,790<F1>
<CURRENT-ASSETS> 147,828
<PP&E> 21,355
<DEPRECIATION> 0
<TOTAL-ASSETS> 365,559
<CURRENT-LIABILITIES> 45,753
<BONDS> 7,077
0
47
<COMMON> 298
<OTHER-SE> 314,118
<TOTAL-LIABILITY-AND-EQUITY> 365,559
<SALES> 84,973
<TOTAL-REVENUES> 85,258
<CGS> 38,680
<TOTAL-COSTS> 38,680
<OTHER-EXPENSES> 4,747
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (594)
<INCOME-PRETAX> 318
<INCOME-TAX> 455
<INCOME-CONTINUING> (137)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (137)
<EPS-PRIMARY> (0.03)
<EPS-DILUTED> (0.03)
<FN>
<F1>Includes Raw Material and Work in Process Inventory of $2,929.
</FN>
</TABLE>
