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BRISTOL, Tenn. — King Pharmaceuticals, Inc. (NYSE:KG) announced today that total revenues increased 8% to $500 million during the second quarter ended June 30, 2006, compared to $463 million in the second quarter of 2005. Including special items, net earnings increased to $111 million and diluted earnings per share increased to $0.46 during the second quarter ended June 30, 2006, compared to net income of $20 million and diluted earnings per share of $0.08 in the same period of the prior year. Excluding special items, net earnings increased to $112 million and diluted earnings per share increased to $0.46 during the second quarter ended June 30, 2006, compared to net earnings of $107 million and diluted earnings per share of $0.44 in the second quarter of 2005.

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Brian A. Markison, President and Chief Executive Officer of King, stated, “We are very pleased with the success of our activities during the second quarter of 2006 which enabled us to deliver positive financial results while investing incrementally in Research and Development and Commercial Operations.” Mr. Markison added, “For the remainder of 2006, we will continue to focus on maximizing the value of our currently marketed branded pharmaceutical products and further advancing the development of new products in our pipeline. Additionally, we plan to continue our aggressive business development initiatives which are designed to further expand our pipeline and better ensure long-term growth.”
Steve Andrzejewski, Chief Commercial Officer of King, noted, “Our activities during the second quarter of 2006 included the successful restructuring of our Co-promotion Agreement covering our leading branded ACE inhibitor, Altace(R) (ramipril). The restructuring of this agreement is yet another example of King effectively managing the life-cycle of its branded products.”
Mr. Andrzejewski continued, “With the restructuring of the Altace(R) agreement, our experienced commercial operations group has the opportunity to manage and implement a marketing strategy designed to reinvigorate demand for Altace(R). Additionally, this opportunity, coupled with the recent addition of Glumetza(TM) (metformin hydrochloride extended-release tablets), enables us to continue strengthening our presence in the cardiovascular/metabolics therapeutic area and advances our vision to be a recognized leader and partner of choice in bringing innovative, clinically-differentiated therapies and technologies to market in our key therapeutic areas. As previously announced, we are expanding our existing commercial capability with the addition of a cardiovascular/metabolics specialty sales force, providing even greater strength to our promotion of Altace(R) and Glumetza(TM).”
Net revenue from branded pharmaceuticals totaled $419 million for the second quarter of 2006, a 5% increase from $400 million during the second quarter of 2005. This increase was primarily due to price increases taken in the second half of 2005.
Altace(R) net sales totaled $154 million during the second quarter of 2006, an increase of 7% from $144 million during the second quarter of 2005.
Net sales of Skelaxin(R) (metaxalone) totaled $97 million during the second quarter of 2006, an increase of 12% compared to $87 million during the same period of the prior year.
Thrombin-JMI(R) (thrombin, topical, bovine, USP) net sales totaled $62 million during the second quarter of 2006, a 17% increase from $53 million during the second quarter of 2005.
Net sales of Sonata(R) (zaleplon) totaled $24 million during the second quarter of 2006, an increase of 24% compared to $19 million during the second quarter of the prior year.
Levoxyl(R) (levothyroxine sodium tablets, USP) net sales totaled $29 million during the second quarter ended June 30, 2006, a decrease of 30% from $41 million during the second quarter of 2005.
King’s Meridian Medical Technologies business contributed revenue totaling $54 million during the second quarter of 2006, an increase of 52% from $35 million during the same period of the prior year. As the Company has previously disclosed, revenue from Meridian may fluctuate significantly from quarter-to-quarter as buying patterns of government and commercial customers vary. Accordingly, the Company expects Meridian revenue to be significantly lower in second half of 2006 compared to the first half of 2006.
Royalty revenues, derived primarily from Adenoscan(R) (adenosine), totaled $21 million during the second quarter ended June 30, 2006, compared to $20 million during the second quarter of 2005. During the second quarter ended June 30, 2006, net revenue from contract manufacturing equaled $6 million.
As of June 30, 2006, the Company’s cash and cash equivalents and investments in debt securities totaled approximately $803 million.
Joseph Squicciarino, King’s Chief Financial Officer, commented, “King generated strong cash flow from operations of $176 million during the second quarter of 2006. We plan to utilize our cash position to fuel our business development initiatives and aggressively invest in the further development of products in our pipeline. Accordingly, we expect to continue increasing our R&D investment in each of the remaining quarters of this year, as our total investment for the full year of 2006 could exceed $150 million.”