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DUSA Pharmaceuticals Reports Third Quarter 2010 Corporate Highlights and Financial Results

November 5, 2010

WILMINGTON, Mass., Nov. 5, 2010 /PRNewswire/ — DUSA Pharmaceuticals, Inc.® (NASDAQ GM: DUSA), a dermatology company that is developing and marketing Levulan® Photodynamic Therapy (PDT) and other products focused on patients with common skin conditions, reported today its corporate highlights and financial results for the third quarter ended September 30, 2010.

Third quarter and year-to-date financial highlights:

  • Domestic Kerastick® revenues totaled $6.7 million for the third quarter of 2010, representing a $0.9 million or 15% improvement as compared to the third quarter of 2009. Year-to-date 2010 domestic Kerastick® revenues totaled $21.8 million, representing a $4.7 million or 27% improvement year-over-year.
  • The Company experienced significant bottom line improvement on a GAAP basis for both the third quarter of 2010 and on a year-to-date basis.
    • The Company reached break-even on a GAAP basis for the third quarter of 2010, representing a $0.4 million improvement year-over-year.
    • The Company’s GAAP net loss on a year-to-date basis for 2010 was ($0.2) million, representing a $2.7 million improvement year-over-year.
  • The Company generated net income on a non-GAAP basis for both the third quarter of 2010 and on a year-to-date basis.
    • Non-GAAP net income for the third quarter of 2010 was $0.6 million, representing a $0.8 million improvement year-over-year.
    • Non-GAAP net income on a year-to-date basis for 2010 was $1.2 million, representing a $3.1 million year-over-year improvement.

Management Comments:

“We are pleased with the significant improvements we continue to achieve in our financial results,” stated Robert Doman, President and CEO. “Despite the typical seasonality that we experience in the third quarter of each year, and the absence of the positive impact that a price increase announcement had on our prior year quarterly volume, we were able to grow our domestic Kerastick® revenue and generate profitability during the third quarter of 2010.”

“In each of the last four reporting quarters, the Company has been cash flow positive and/or profitable, generating cumulative positive cash flow and non-GAAP profitability of $2.0 million and $2.1 million, respectively,” continued Doman.

“We have demonstrated our ability to achieve profitability and generate positive cash flow over a rolling twelve month period. As we exit the third quarter, we remain focused on achieving our goals of becoming both cash flow positive and profitable for the full calendar year 2010,” concluded Doman.

Third Quarter 2010 Financial Results:

Total product revenues were $8.0 million in the third quarter of 2010, an increase of $1.1 million or 16% from $6.9 million in the third quarter of 2009. PDT revenues totaled $7.8 million, an increase of $1.1 million or 17% from $6.7 million for the comparable 2009 period. The increase in PDT revenues was attributable to a $1.3 million increase in Kerastick® revenues which was partially offset by a $0.2 million decrease in BLU-U® revenues. The Kerastick® revenue improvement was driven by a 12% increase in our average selling price, as well as, the acceleration of the recognition of $0.6 million in deferred revenues and milestone payments associated with the termination of our Marketing, Distribution and Supply Agreement with Stiefel Laboratories, Inc. for Latin America. Kerastick® sales volumes increased slightly to 53,724 units sold in the third quarter of 2010 from 53,622 units sold in the comparable 2009 period. Domestic Kerastick® sales volumes increased by 2,742 units or 6% and were offset by a 2,640 unit decrease in our international sales volumes. BLU-U® revenues totaled $0.3 million, down $0.2 million year-over-year. There were 39 units sold during the third quarter, as compared to the 59 units sold in the comparable prior year quarter. Non-PDT revenues were relatively flat year-over-year at $0.2 million.

DUSA reached break-even on a GAAP basis for the third quarter of 2010, compared to a net loss of ($0.4) million or ($0.02) per common share in the third quarter of 2009.

Please refer to the section entitled “Use of Non-GAAP Financial Measures” and the accompanying financial table included at the end of this release for a reconciliation of GAAP to non-GAAP results for the three and nine-month periods ended September 30, 2010 and 2009, respectively.

DUSA’s non-GAAP net income for the third quarter of 2010 was $0.6 million or $0.02 per common share, compared to a net loss of ($0.2) million or ($0.01) per common share in the prior year period. The improvement in the Company’s profitability was the result of the year-over-year increase in our PDT revenues and the recognition of $0.5 million in income from operations related to the termination of the Stiefel Agreement, both of which were partially offset by an increase in our operating costs.

Year-to-Date 2010 Financial Results:

Total product revenues for the nine-month period ended September 30, 2010 were $25.4 million, an increase of $4.4 million or 21% from $21.0 million in the comparable prior year period. PDT revenues totaled $24.5 million, an increase of $4.7 million or 24% from $19.8 million for the comparable 2009 period. The increase in PDT revenues was attributable to a $5.1 million increase in Kerastick® revenues which was partially offset by a $0.4 million decrease in BLU-U® revenues. The Kerastick® revenue improvement was driven by a 14% increase in volume, a 9% increase in average selling price; as well as, the acceleration of the recognition of $0.6 million in deferred revenues and milestone payments associated with the termination of our Marketing, Distribution and Supply Agreement with Stiefel Laboratories, Inc. for Latin America. Kerastick® sales volumes increased to 176,924 units in 2010 from 155,384 units sold in 2009. Domestic Kerastick® sales volumes increased by 27,384 units or 19% and were partially offset by a 5,844 decrease in our international sales volumes. The BLU-U® revenue decline was as result of a both lower sales volumes and a lower average selling price. There were 179 units sold during the first nine months of 2010, as compared to the 198 units sold in the comparable prior year period. The average selling price in 2010 is reflective of lower pricing offered to customers in advance of the introduction of the upgraded BLU-U® design which became available in April 2010. Non-PDT revenues totaled $0.9 million down $0.3 million from the prior year period due to the absence of Nicomide® royalties from River’s Edge Pharmaceuticals, LLC.

DUSA’s net loss on a GAAP basis for the nine-month period ended September 30, 2010 was ($0.2) million or ($0.01) per common share, compared to a net loss of ($2.9) million or ($0.12) per common share in 2009.

DUSA’s non-GAAP net income for the nine-month period ended September 30, 2010 was $1.2 million or $0.05 per common share in 2010, compared to a net loss of ($1.9) million or ($0.08) per common share in 2009. The improvement in the Company’s non-GAAP profitability was the result of the year-over-year increase in our PDT revenues and the recognition of $0.5 million in income from operations related to the termination of the Stiefel Agreement, both of which were partially offset by an increase in our operating costs.

As of September 30, 2010, total cash, cash equivalents, and marketable securities were $17.0 million, compared to $16.7 million at December 31, 2009. The Company generated $0.3 million in positive cash flow during the first nine months of 2010.

Other Updates:

  • On August 6, 2010, the Company reported that it had been notified by the U.S. Food and Drug Administration (FDA) that it had not been granted Orphan Drug Designation for the use of Levulan® (aminolevulinic acid HCl) Photodynamic Therapy (PDT) for the prevention of cutaneous squamous cell carcinomas (SCCs) in patients who have a proven history of multiple localized cutaneous SCCs over a 12 month period. The FDA acknowledged that cutaneous SCC is a serious problem in patients at high risk for developing SCCs, such as solid organ transplant recipients (SOTRs), and that aminolevulinic acid would be a potential preventative therapy in these patients. However, the FDA also stated that it believes there are other factors which place patients at high risk of developing SCCs that should be included in determining the target population which FDA determined would then exceed the maximum population permitted by orphan drug laws. As a result, the Company plans to close out its SOTR pilot clinical trial program for this indication.
  • On September 30, 2010, the Company terminated its Marketing, Distribution and Supply Agreement with Stiefel Laboratories, Inc. for Latin America. The termination of the agreement accelerated the recognition of deferred revenues for drug shipments made; as well as, the remaining unamortized balance of milestone payments received. This event caused the recognition of $0.5 million in income from operations, which was recorded during the third quarter of 2010.
  • On October 26, 2010, the Company announced that it had been named to Deloitte’s 2010 Technology Fast 500 list. For the third consecutive year, Deloitte recognized DUSA as one of the Top 500 fastest growing technology, media, telecommunications, life sciences, and clean technology companies in North America. Rankings are based on percentage of fiscal year revenue growth during the period 2005-2009.

Conference Call Details and Dial-in Information:

In conjunction with this announcement, DUSA will host a conference call today:


                         Friday, November 5th - 8:30 a.m. EDT
               If calling from North America use the following toll-free
                                        number:
                                     800-647-4314
                              International callers use:
                                     502-719-4466
                                   Password - DUSA

            A recorded replay of the call will be available approximately
                            15 minutes following the call.
                             North American callers use:
                                     877-863-0350
                              International callers use:
                                     858-244-1268

The call will be accessible on our web site approximately six hours following the call at www.dusapharma.com.

Revenues Table, Condensed Consolidated Balance Sheets, Condensed Consolidated Statement of Operations and GAAP to Non-GAAP reconciliation follow:

Revenues for the three and nine-month periods were comprised of the following:


                                              Three-months ended
                                                September 30,
                                                ------------------
                                                2010              2009
                                         (Unaudited)       (Unaudited)
                                         -----------       -----------
    PDT Drug & Device Product
     Revenues
      Kerastick(R) Product Revenues:
       United States                      $6,663,000        $5,790,000
       Canada                                153,000           162,000
       Korea                                 109,000           201,000
       Latin America                         602,000            78,000
       Rest-of-world                          15,000            13,000
                                              ------            ------
         Subtotal Kerastick(R) Product
          Revenues                         7,542,000         6,244,000
      BLU-U(R) Product Revenues:
       United States                         295,000           456,000
       Canada                                      -                 -
                                                 ---               ---
         Subtotal BLU-U(R) Product
          Revenues                           295,000           456,000
    Total PDT Drug & Device Product
     Revenues                              7,837,000         6,700,000
    Total Non-PDT Product Revenues           179,000           230,000
           TOTAL PRODUCT REVENUES         $8,016,000        $6,930,000
                                          ==========        ==========


                                                  Nine-months ended
                                                    September 30,
                                                     -----------------
                                                    2010              2009
                                             (Unaudited)       (Unaudited)
                                             -----------       -----------
    PDT Drug & Device Product
     Revenues
      Kerastick(R) Product Revenues:
       United States                         $21,780,000       $17,096,000
       Canada                                    379,000           404,000
       Korea                                     322,000           498,000
       Latin America                             778,000           226,000
       Rest-of-world                              57,000            35,000
                                                  ------            ------
         Subtotal Kerastick(R) Product
          Revenues                            23,316,000        18,259,000
      BLU-U(R) Product Revenues:
       United States                           1,223,000         1,577,000
       Canada                                      5,000                 -
                                                   -----               ---
         Subtotal BLU-U(R) Product
          Revenues                             1,228,000         1,577,000
    Total PDT Drug & Device Product
     Revenues                                 24,544,000        19,836,000
    Total Non-PDT Product Revenues               886,000         1,198,000
           TOTAL PRODUCT REVENUES            $25,430,000       $21,034,000
                                             ===========       ===========

                                                Three-months ended September 30,     Nine-months ended September 30,
                                                --------------------------------     -------------------------------
                                                       2010             2009            2010             2009
                                                (Unaudited)      (Unaudited)     (Unaudited)      (Unaudited)
                                                -----------      -----------     -----------      -----------
    PDT Drug & Device Product Revenues
      Kerastick(R) Product Revenues:
       United States                             $6,663,000       $5,790,000     $21,780,000      $17,096,000
       Canada                                       153,000          162,000         379,000          404,000
       Korea                                        109,000          201,000         322,000          498,000
       Latin America                                602,000           78,000         778,000          226,000
       Rest-of-world                                 15,000           13,000          57,000           35,000
                                                     ------           ------          ------           ------
         Subtotal Kerastick(R) Product Revenues   7,542,000        6,244,000      23,316,000       18,259,000
      BLU-U(R) Product Revenues:
       United States                                295,000          456,000       1,223,000        1,577,000
       Canada                                             -                -           5,000                -
                                                        ---              ---           -----              ---
         Subtotal BLU-U(R) Product Revenues         295,000          456,000       1,228,000        1,577,000
    Total PDT Drug & Device Product Revenues      7,837,000        6,700,000      24,544,000       19,836,000
    Total Non-PDT Product Revenues                  179,000          230,000         886,000        1,198,000
           TOTAL PRODUCT REVENUES                $8,016,000       $6,930,000     $25,430,000      $21,034,000
                                                 ==========       ==========     ===========      ===========

DUSA Pharmaceuticals, Inc.

Condensed Consolidated Balance Sheets


                                                 September
                                                     30,
                                                ----------
                                                        2010
                                                        ----
                                                (Unaudited)
                                                -----------
    ASSETS
    CURRENT ASSETS
      Cash and cash equivalents                   $6,184,261
      Marketable securities                       10,796,735
      Accounts receivable, net                     2,451,709
      Inventory                                    2,269,605
      Prepaid and other current assets               935,815
                                                     -------
           TOTAL CURRENT ASSETS                   22,638,125
    Restricted cash                                  174,587
    Property, plant and equipment, net             1,494,630
    Deferred charges and other assets                 68,099
                                                      ------
         TOTAL ASSETS                            $24,375,441
                                                 ===========

    LIABILITIES AND SHAREHOLDERS' EQUITY
    CURRENT LIABILITIES
      Accounts payable                              $675,870
      Accrued compensation                         1,029,035
      Other accrued expenses                       2,128,985
      Deferred revenue                               475,034
                                                     -------
         TOTAL CURRENT LIABILITIES                 4,308,924
    Deferred revenues                              2,255,650
    Warrant liability                              1,299,869
    Other liabilities                                 80,015
                                                      ------
         TOTAL LIABILITIES                         7,944,458

    SHAREHOLDERS' EQUITY
    Capital stock
    Authorized: 100,000,000 shares;
     40,000,000 shares designated                151,801,550
    as common stock, no par, and 60,000,000
     shares issuable in
    series or classes; and 40,000 junior
     Series A preferred shares.
    Issued and outstanding: 24,221,715 and
     24,108,908 shares of
    common stock, no par, at September 30,
     2010 and December 31,
    2009, respectively
    Additional paid-in capital                     9,077,912
    Accumulated deficit                         (144,562,682)
    Accumulated other comprehensive loss             114,203
                                                     -------
         TOTAL SHAREHOLDERS' EQUITY               16,430,983

    TOTAL LIABILITIES AND SHAREHOLDERS'
     EQUITY                                      $24,375,441
                                                 ===========


                                               December 31,
                                               ------------
                                                        2009
                                                        ----
    ASSETS
    CURRENT ASSETS
      Cash and cash equivalents                   $7,613,378
      Marketable securities                        9,055,959
      Accounts receivable, net                     2,629,189
      Inventory                                    2,170,275
      Prepaid and other current assets             1,561,467
                                                   ---------
           TOTAL CURRENT ASSETS                   23,030,268
    Restricted cash                                  174,255
    Property, plant and equipment, net             1,660,755
    Deferred charges and other assets                 68,099
                                                      ------
         TOTAL ASSETS                            $24,933,377
                                                 ===========

    LIABILITIES AND SHAREHOLDERS' EQUITY
    CURRENT LIABILITIES
      Accounts payable                              $630,144
      Accrued compensation                         1,260,609
      Other accrued expenses                       2,456,612
      Deferred revenue                               902,597
                                                     -------
         TOTAL CURRENT LIABILITIES                 5,249,962
    Deferred revenues                              2,906,020
    Warrant liability                                812,905
    Other liabilities                                123,016
                                                     -------
         TOTAL LIABILITIES                         9,091,903

    SHAREHOLDERS' EQUITY
    Capital stock
    Authorized: 100,000,000 shares;
     40,000,000 shares designated                151,683,399
    as common stock, no par, and 60,000,000
     shares issuable in
    series or classes; and 40,000 junior
     Series A preferred shares.
    Issued and outstanding: 24,221,715 and
     24,108,908 shares of
    common stock, no par, at September 30,
     2010 and December 31,
    2009, respectively
    Additional paid-in capital                     8,291,805
    Accumulated deficit                         (144,359,217)
    Accumulated other comprehensive loss             225,487
                                                     -------
         TOTAL SHAREHOLDERS' EQUITY               15,841,474

    TOTAL LIABILITIES AND SHAREHOLDERS'
     EQUITY                                      $24,933,377
                                                 ===========

                                                                    September 30, December 31,
                                                                    ------------- ------------
                                                                             2010          2009
                                                                             ----          ----
                                                                     (Unaudited)
                                                                     -----------
    ASSETS
    CURRENT ASSETS
      Cash and cash equivalents                                        $6,184,261    $7,613,378
      Marketable securities                                            10,796,735     9,055,959
      Accounts receivable, net                                          2,451,709     2,629,189
      Inventory                                                         2,269,605     2,170,275
      Prepaid and other current assets                                    935,815     1,561,467
                                                                          -------     ---------
           TOTAL CURRENT ASSETS                                        22,638,125    23,030,268
    Restricted cash                                                       174,587       174,255
    Property, plant and equipment, net                                  1,494,630     1,660,755
    Deferred charges and other assets                                      68,099        68,099
                                                                           ------        ------
         TOTAL ASSETS                                                 $24,375,441   $24,933,377
                                                                      ===========   ===========

    LIABILITIES AND SHAREHOLDERS' EQUITY
    CURRENT LIABILITIES
      Accounts payable                                                   $675,870      $630,144
      Accrued compensation                                              1,029,035     1,260,609
      Other accrued expenses                                            2,128,985     2,456,612
      Deferred revenue                                                    475,034       902,597
                                                                          -------       -------
         TOTAL CURRENT LIABILITIES                                      4,308,924     5,249,962
    Deferred revenues                                                   2,255,650     2,906,020
    Warrant liability                                                   1,299,869       812,905
    Other liabilities                                                      80,015       123,016
                                                                           ------       -------
         TOTAL LIABILITIES                                              7,944,458     9,091,903

    SHAREHOLDERS' EQUITY
    Capital stock
    Authorized: 100,000,000 shares; 40,000,000 shares designated      151,801,550   151,683,399
    as common stock, no par, and 60,000,000 shares issuable in
    series or classes; and 40,000 junior Series A preferred shares.
    Issued and outstanding: 24,221,715 and 24,108,908 shares of
    common stock, no par, at September 30, 2010 and December 31,
    2009, respectively
    Additional paid-in capital                                          9,077,912     8,291,805
    Accumulated deficit                                             (144,562,682) (144,359,217)
    Accumulated other comprehensive loss                                  114,203       225,487
                                                                          -------       -------
         TOTAL SHAREHOLDERS' EQUITY                                    16,430,983    15,841,474

    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                        $24,375,441   $24,933,377
                                                                      ===========   ===========

DUSA Pharmaceuticals, Inc.

Consolidated Statement of Operations


                                               Three-months ended
                                                  September 30,
                                                 ------------------
                                                2010              2009
                                         (Unaudited)       (Unaudited)
                                         -----------       -----------
    Product revenues                      $8,015,546        $6,930,110
    Cost of product revenues and
     royalties                             1,627,782         1,594,692
                                           ---------         ---------
        Gross margin                       6,387,764         5,335,418
    Operating costs:
      Research and development             1,283,771           963,245
      Marketing and sales                  2,792,780         3,013,351
      General and administrative           2,208,898         1,877,928
        Settlements, net                           -                 -
                                                 ---               ---
    Total operating costs                  6,285,449         5,854,524
                                           ---------         ---------
    Income/(loss) from operations            102,315          (519,106)
                                             -------          --------
    Other income:
      Gain/(loss) on change in fair
       value of warrants                    (130,674)           24,051
      Other income, net                       61,183            79,815
                                              ------            ------
    Net income/(loss)                        $32,824         $(415,240)
                                             =======         =========
    Basic and diluted net income/
     (loss) per common share                   $0.00            $(0.02)
    Weighted average number of basic
     common shares                        24,209,215        24,108,908
                                          ==========        ==========
    Weighted average number of diluted
     common shares                        24,658,844        24,108,908
                                          ==========        ==========


                                                   Nine-months ended
                                                     September 30,
                                                      -----------------
                                                     2010              2009
                                              (Unaudited)       (Unaudited)
                                              -----------       -----------
    Product revenues                          $25,430,363       $21,033,920
    Cost of product revenues and
     royalties                                  5,228,075         4,973,782
                                                ---------         ---------
        Gross margin                           20,202,288        16,060,138
    Operating costs:
      Research and development                  3,643,849         3,225,049
      Marketing and sales                       9,544,564         9,460,766
      General and administrative                6,919,128         6,360,325
        Settlements, net                                -            75,000
                                                      ---            ------
    Total operating costs                      20,107,541        19,121,140
                                               ----------        ----------
    Income/(loss) from operations                  94,747        (3,061,002)
                                                   ------        ----------
    Other income:
      Gain/(loss) on change in fair
       value of warrants                         (486,964)          (37,679)
      Other income, net                           188,752           223,801
                                                  -------           -------
    Net income/(loss)                           $(203,465)      $(2,874,880)
                                                =========       ===========
    Basic and diluted net income/
     (loss) per common share                       $(0.01)           $(0.12)
    Weighted average number of basic
     common shares                             24,173,399        24,099,786
                                               ==========        ==========
    Weighted average number of diluted
     common shares                             24,173,399        24,099,786
                                               ==========        ==========

                                                         Three-months ended September 30,     Nine-months ended September 30,
                                                         --------------------------------     -------------------------------
                                                                2010             2009            2010              2009
                                                         (Unaudited)      (Unaudited)     (Unaudited)      (Unaudited)
                                                         -----------      -----------     -----------      -----------
    Product revenues                                      $8,015,546       $6,930,110     $25,430,363       $21,033,920
    Cost of product revenues and royalties                 1,627,782        1,594,692       5,228,075         4,973,782
                                                           ---------        ---------       ---------         ---------
        Gross margin                                       6,387,764        5,335,418      20,202,288        16,060,138
    Operating costs:
      Research and development                             1,283,771          963,245       3,643,849         3,225,049
      Marketing and sales                                  2,792,780        3,013,351       9,544,564         9,460,766
      General and administrative                           2,208,898        1,877,928       6,919,128         6,360,325
        Settlements, net                                           -                -               -            75,000
                                                                 ---              ---             ---            ------
    Total operating costs                                  6,285,449        5,854,524      20,107,541        19,121,140
                                                           ---------        ---------      ----------        ----------
    Income/(loss) from operations                            102,315         (519,106)         94,747        (3,061,002)
                                                             -------         --------          ------        ----------
    Other income:
      Gain/(loss) on change in fair value of warrants       (130,674)          24,051        (486,964)          (37,679)
      Other income, net                                       61,183           79,815         188,752           223,801
                                                              ------           ------         -------           -------
    Net income/(loss)                                        $32,824        $(415,240)      $(203,465)      $(2,874,880)
                                                             =======        =========       =========       ===========
    Basic and diluted net income/(loss) per common share       $0.00           $(0.02)         $(0.01)           $(0.12)
    Weighted average number of basic common shares        24,209,215       24,108,908      24,173,399        24,099,786
                                                          ==========       ==========      ==========        ==========
    Weighted average number of diluted common shares      24,658,844       24,108,908      24,173,399        24,099,786
                                                          ==========       ==========      ==========        ==========

Use of Non-GAAP Financial Measures

In addition to reporting financial results in accordance with GAAP, DUSA has provided in the table below non-GAAP financial measures adjusted to exclude stock-based compensation expense, consideration provided to the former Sirius shareholders, and the non-cash change in fair value of warrants. The Company believes that this presentation is useful to help investors better understand DUSA’s financial performance, competitive position and prospects for the future. Management believes that these non-GAAP financial measures assist in providing a more complete understanding of the Company’s underlying operational results and trends, and in allowing for a more comparable presentation of results. Management uses these measures along with their corresponding GAAP financial measures to help manage the Company’s business and to help evaluate DUSA’s performance compared to the marketplace. However, the presentation of non-GAAP financial measures is not meant to be considered in isolation or as superior to or as a substitute for financial information provided in accordance with GAAP. The non-GAAP financial measures used by the Company may be calculated differently from, and, therefore, may not be comparable to, similarly titled measures used by other companies.

Investors are encouraged to review the reconciliations of these non-GAAP financial measures to the comparable GAAP results, contained in the table below.


                                             Three-months ended
                                                September 30,
                                              2010              2009
                                       (Unaudited)       (Unaudited)
                                       -----------       -----------
    GAAP net income/(loss)                 $32,824         $(415,240)
    Stock-based compensation (a)           432,723           207,178
    Consideration to former Sirius
     shareholders (b)                        4,500             5,000
    Change in fair value of warrants
     (c)                                   130,674           (24,051)
                                           -------           -------
    Non-GAAP adjusted net income/
     (loss)                               $600,721         $(227,113)
                                          ========         =========
    Non-GAAP basic and diluted net
     income/(loss) per common share          $0.02            $(0.01)
                                             =====            ======
    Weighted average number of basic
     common shares                      24,209,215        24,108,908
                                        ==========        ==========
    Weighted average number of
     diluted common shares              24,658,844        24,108,908
                                        ==========        ==========


                                                  Nine-months ended
                                                    September 30,
                                                   2010              2009
                                            (Unaudited)      (Unaudited)
                                            -----------      -----------
    GAAP net income/(loss)                    $(203,465)      $(2,874,880)
    Stock-based compensation (a)                920,756           631,770
    Consideration to former Sirius
     shareholders (b)                            13,500           310,000
    Change in fair value of warrants
     (c)                                        486,964            37,679
                                                -------            ------
    Non-GAAP adjusted net income/
     (loss)                                  $1,217,755       $(1,895,431)
                                             ==========       ===========
    Non-GAAP basic and diluted net
     income/(loss) per common share               $0.05            $(0.08)
                                                  =====            ======
    Weighted average number of basic
     common shares                           24,173,399        24,099,786
                                             ==========        ==========
    Weighted average number of
     diluted common shares                   24,596,729        24,099,786
                                             ==========        ==========

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(a) Stock-based compensation expense resulting from the application of SFAS 123(R).

(b) Consideration for the release, consent and the third amendment to the merger agreement between DUSA and the former Sirius shareholders. $100K was paid in the second quarter of 2009, with an additional $250K being accrued through the fourth quarter of 2011.

(c) Non-cash gain/loss on change in fair value of warrants.

About DUSA Pharmaceuticals

DUSA Pharmaceuticals, Inc. is an integrated dermatology pharmaceutical company focused primarily on the development and marketing of its Levulan® PDT technology platform, and other dermatology products. Levulan® Kerastick® for topical solution plus DUSA’s BLU-U® blue light photodynamic therapy illuminator is currently approved for the treatment of minimally to moderately thick actinic keratoses (AKs) of the face or scalp. DUSA also markets other dermatology products, including ClindaReach®. DUSA is based in Wilmington, Mass. Please visit our website at www.dusapharma.com.

Except for historical information, this news release contains certain forward-looking statements that represent our current expectations and beliefs concerning future events, and involve certain known and unknown risk and uncertainties. These forward-looking statements relate to the continuing improvement in financial results, 2010 financial goals of positive cash flow and profitability, plans for the SOTR study and management’s beliefs concerning non-GAAP financial measures. These forward-looking statements are further qualified by important factors that could cause actual results to differ materially from future results, performance or achievements expressed or implied by those in the forward-looking statements made in this release. These factors include, without limitation, marketing of competitive products, actions by health regulatory authorities, changing economic conditions, the status of our patent portfolio, reliance on third parties, including sole source vendors, sufficient funding, and other risks and uncertainties identified in DUSA’s Form 10-K for the year ended December 31, 2009.

SOURCE DUSA Pharmaceuticals, Inc.


Source: newswire



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