PAR FY 1990 SALES DOWN 52% TO $49 MIL. WITH LOSS OF $14.8 MIL.; QUAD REGULATORY AUDIT IS IN "EARLY STAGE" BUT ORAL SOLID LINE IS 95% BACK ON LINE

Executive Summary

Par Pharmaceutical sales dropped 52.3% to $49 mil. for the year ended Sept. 29. Sales in the fourth quarter from the company's existing oral solid product line were 58.6% lower than in FY 1989 at $7 mil. Plagued in 1990 by regulatory problems, Par took a loss for the fourth quarter of $3.9 mil. and for the year of $14.8 mil. By comparison, in fiscal 1989, the company reported net income of $311,000 for the quarter and $4.1 mil. for the year, declines of 88% and 62.5%, respectively. Par President Kenneth Sawyer commented in a Nov. 27 press release that the fourth quarter loss was "wholly attributable to losses and write-offs" incurred by its injectable drug subsidiary Quad Pharmaceuticals. Pretax, Par reported losses of $6.2 mil. in the three months and $25.3 mil. in the 12 months ended Sept. 29. The losses include charges of $1.1 mil. and $11.5 mil. in the three and 12-month periods of FY 1990 related to product recalls and "related matters." An internal product-by-product audit of Quad's injectable product line is in "an early stage," Sawyer said, and is expected to continue for "several more months." However, at the end of September, Quad had roughly 15%-20% of its products back on line. Par continues to bring back its oral solid product line. Sawyer reported that "well over 95%" of the products reviewed on a case-by-case basis under an independent audit have been cleared for re-introduction. At the end of September, 75% of Par's oral dosage generics were back on line. The remainder of the audit is expected to be completed by the end of December, Par said. The firm halted distribution of all of its approximately 150 solid oral dosage products in August 1989 while it reviewed the corresponding ANDAs. The audit was initiated after an FDA inspection revealed manufacturing irregularities and falsified data. Chart omitted.