Columbia Laboratories Reports Third Quarter 2012 Financial Results

  Columbia Laboratories Reports Third Quarter 2012 Financial Results

          Management will host Conference Call at 11:00AM EST Today

Business Wire

LIVINGSTON, N.J. -- November 08, 2012

Columbia Laboratories, Inc. (Nasdaq: CBRX) today reported financial results
for the three- and nine-month periods ended September30, 2012. Highlights of
the third quarter include:

  *Total net revenues increased 35% to $6.7 million in the third quarter of
    2012, compared to $4.9 million in the third quarter of 2011.
  *Net product revenues were $5.6 million, compared to $4.1 million in the
    third quarter of 2011, due to higher sales of CRINONE^® (progesterone gel)
    to Merck Serono S.A. (“Merck Serono”) and Watson Pharmaceuticals, Inc.
    (NYSE:WPI)(“Watson”).
  *Gross profit on net product revenues was 43%, compared to 24% in the third
    quarter of 2011, due primarily to greater sales in higher-margin country
    markets.
  *Operating income was $1.4 million, versus an operating loss of $0.6
    million in the third quarter of 2011, reflecting the higher revenues and a
    $0.4 million decrease in operating expenses from prior year levels.
  *Cash, cash equivalents and short-term investments increased by $2.6
    million in the quarter to $25.6 million at September30, 2012.

“We are pleased to report our second consecutive quarter of positive operating
income and operating cash flows,” said Frank Condella, Columbia's President
and CEO. “Our third quarter results reflect our streamlined operations as well
as higher CRINONE net product revenues and royalties from our partners, Watson
and Merck Serono.”

“We are obviously disappointed that the FDA recently denied Watson's attempts
to determine a viable pathway to approval for PROCHIEVE to reduce the
incidence of preterm birth in women with a short cervix. In the near term, we
will continue to focus on maximizing income and cash generation from our base
business while we explore Columbia's strategic options,” Condella concluded.

Third Quarter Financial Results

Total net revenues for the third quarter of 2012 were comprised of net product
revenues primarily for domestic and international sales of CRINONE to Watson
and Merck Serono, respectively, and royalties from Watson.

Total net revenues for the third quarter of 2012 were $6.7 million, compared
to $4.9 million for the third quarter of 2011. The increase in total net
revenues was driven primarily by a $1.5 million increase in net product
revenues and, to a lesser extent, higher royalty revenues.

  *Net product revenues increased to $5.6 million in the third quarter of
    2012 as compared to $4.1 million in the third quarter of 2011, primarily
    due to higher sales to Merck Serono and Watson.
  *Total royalty revenues were $1.0 million in the third quarter of 2012,
    compared to $0.8 million in the third quarter of 2011, primarily
    reflecting royalty revenues from Watson on CRINONE products.
  *There were essentially no other revenues in the third quarter of 2012 or
    2011.

Gross profit margin on total net revenues was 52% for the third quarter of
2012, compared to 37% in the third quarter of 2011. Gross profit on net
product revenues for the third quarter of 2012 was 43% compared with 24% for
the same period in 2011. The higher profit margins in the 2012 quarter
resulted primarily from the shift in sales mix to Merck Serono in favor of
higher-margin country markets.

General and administrative costs were $1.9 million in the third quarter of
both 2012 and 2011. Higher professional fees for business development
activities and securities litigation costs were offset by lower personnel
costs following the 2012 workforce reduction.

Research and development costs were $0.1 million in the third quarter of 2012,
compared to $0.5 million in the 2011 quarter. The $0.4 million decrease
primarily reflects lower personnel costs following the 2012 workforce
reduction and lower project expenses.

As a result, total net operating expenses decreased to $2.0 million in the
third quarter of 2012 as compared to $2.4 million in the prior year period.

Operating income was $1.4 million in the third quarter of 2012, compared to an
operating loss of $0.6 million in the prior year period. The change primarily
reflects the $1.5 million increase in net product revenues and $0.2 million
increase in royalty revenues, coupled with the $0.4 million decrease in
operating expenses, in the third quarter of 2012.

Other income and expense aggregated to a net loss of $1.0 million for the
third quarter of 2012, compared to net income of $5.0 million in the third
quarter of 2011, primarily reflecting the recognition of the $1.1 million
change in the fair value of the warrants issued in conjunction with the
October 2009 stock issuance resulting from the increase in Columbia's stock
price from June 30, 2012 to September30, 2012.

As a result, the Company reported net income of $0.4 million, or $0.00 per
basic and diluted share, compared to net income of $4.4 million, or $0.05 per
basic and $(0.01) per diluted share, for the third quarter of 2011.

At September30, 2012, Columbia had cash, cash equivalents and short-term
investments of $25.6 million, compared to cash, cash equivalents and
short-term investments of $23.0 million at June 30, 2012, and $25.1 million at
December 31, 2011. The Company believes its cash, cash equivalents and
short-term investments will sustain its operations for the foreseeable future.

On October 26, 2012, it was confirmed that the FDA has denied Watson's Formal
Dispute Resolution Request (FDRR) related to its New Drug Application (NDA
22-139) for PROCHIEVE for the prevention of preterm birth in women with a
short cervical length. Watson filed its FDRR in August of 2012.

Financial Outlook

Columbia has streamlined the organization to operate as cash flow
neutral-to-positive. The Company is currently evaluating potential strategic
transactions to add value for its stockholders. Any significant expenses
resulting from pursuing a possible strategic transaction could affect cash
flow in the quarters incurred.

Conference Call

As previously announced, Columbia Laboratories will hold a conference call to
discuss financial results for the third quarter ended September30, 2012, as
follows:

                   
Date:                  Thursday, November 8, 2012
Time:                  11:00 am EST
Dial-in numbers:       (877) 303-9483 (U.S. & Canada) or (760) 666-3584
Conference ID:         57130054
Live webcast:          www.columbialabs.com, under 'Investor'
                       

The teleconference replay will be available two hours after completion through
Thursday, November 15, 2012, at (855) 859-2056 (U.S. & Canada) or (404)
537-3406. The conference ID for the replay is 57130054. The archived webcast
will be available for one year on the Company's website, www.columbialabs.com,
in the 'Investor' section under 'Events'.

About Columbia Laboratories

Columbia Laboratories, Inc. is a publicly traded specialty pharmaceutical
company with a successful history of developing proprietary, vaginally
administered products for women’s health indications. The Company receives
sales and royalty revenues from CRINONE^® 8% (progesterone gel), which is
marketed by Watson Pharmaceuticals, Inc. in the United States and by Merck
Serono S.A. in over 60 foreign countries.

Columbia's press releases and other company information are available online
at www.columbialabs.com.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of
1995: This communication contains forward-looking statements, which statements
are indicated by the words “may,” “will,” “plans,” “believes,” “expects,”
“intends,” “anticipates,” “potential,” “should,” and similar expressions. Such
forward-looking statements involve known and unknown risks, uncertainties, and
other factors that may cause actual results to differ materially from those
projected in the forward-looking statements. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as
of the date on which they are made. Factors that might cause future results to
differ include, but are not limited to, the following: Watson's and Merck
Serono's success in marketing CRINONE for use in infertility in their
respective markets; Columbia's ability to timely regain compliance with the
Nasdaq minimum closing bid price rule; successful development by Watson of a
next-generation vaginal progesterone product; difficulties or delays in
manufacturing; the availability and pricing of third-party sourced products
and materials; successful compliance with FDA and other governmental
regulations applicable to manufacturing facilities, products and/or
businesses; changes in the laws and regulations, including Medicaid; the
ability to obtain and enforce patents and other intellectual property rights;
the impact of competitive products and pricing; the evaluation of potential
strategic transactions; the strength of the United States dollar relative to
international currencies, particularly the euro; competitive economic and
regulatory factors in the pharmaceutical and healthcare industry; general
economic conditions; and other risks and uncertainties that may be detailed,
from time-to-time, in Columbia's reports filed with the SEC. Columbia does not
undertake any responsibility to revise or update any forward-looking
statements contained herein.

CRINONE^® and PROCHIEVE^® are registered trademarks of Watson Pharmaceuticals,
Inc.

                                                      
COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
                                                                
                                       September 30,
                                                              December 31,
                                       2012                   2011

                                       (unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents              $  10,185,582         $  10,114,163
Short-term investments                   15,379,011             15,023,999
Accounts receivable, net                 4,866,249              4,695,410
Inventories                              3,706,702              3,635,730
Prepaid expenses and other              503,731              667,927      
current assets
Total current assets                    34,641,275           34,137,229   
Property and equipment, net              2,019,996              1,481,071
Other assets                            38,878               464,286      
TOTAL ASSETS                           $  36,700,149        $  36,082,586 
                                                                
LIABILITIES AND SHAREHOLDER'S
EQUITY
CURRENT LIABILITIES:
Accounts payable                       $  2,183,304          $  3,526,171
Accrued expenses                         2,431,629              3,016,596
Series C redeemable shares               550,000                600,000
Deferred revenues                       —                    93,750       
Total current liabilities               5,164,933            7,236,517    
Deferred revenue                         36,760                 46,416
Common stock warrant liability          2,769,277            8,168,846    
TOTAL LIABILITIES                       7,970,970            15,451,779   
SHAREHOLDERS' EQUITY:
Preferred stock, $.01 par
value; 1,000,000 shares
authorized,
Series B convertible preferred
stock,130 shares issued
                                         1                      1
and outstanding (liquidation
preference of $13,000)
Series E convertible preferred
stock, 22,740 shares issued
and                                      227                    227

outstanding (liquidation
preference of $2,274,000)
Common Stock $.01 par value;
150,000,000 shares authorized;
                                         875,437                873,673
87,543,781 and 87,367,313
shares issued in 2012 and
2011, respectively
Capital in excess of par value           278,695,861            278,060,138
Less cost of 36,448 treasury             (125,381     )         (125,381     )
shares
Accumulated deficit                      (250,996,822 )         (258,282,753 )
Accumulated other                       279,856              104,902      
comprehensive income
TOTAL SHAREHOLDERS' EQUITY              28,729,179           20,630,807   
TOTAL LIABILITIES AND                  $  36,700,149        $  36,082,586 
SHAREHOLDERS' EQUITY
                                                                             

                                                       
COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)
                                                                                             
                       Nine Months Ended                     Three Months Ended
                       September 30,                         September 30,
                       2012              2011               2012             2011
REVENUES
Net product
revenues
(including
amounts from
related party:
2012 -
$3,590,073;            $  16,101,350     $  12,536,141     $  5,620,889     $  4,129,112
2011 -
$1,513,296)
Royalties
(including
amounts from
related party:
2012 -
$2,232,397;              2,532,197          2,070,226          1,017,609         782,694
2011 -
$1,845,154)
Other revenues
(including
amounts from
related party:
2012 - $0;
2011 -                  103,568          22,078,785       34,540          34,888      
$21,974,383)
Total net               18,737,115       36,685,152       6,673,038       4,946,694   
revenues
COST OF
PRODUCT
REVENUES
Cost of
product
revenues
(including
amounts from
related party:
2012 -
$3,263,376;             9,655,624        8,161,210        3,186,792       3,124,284   
2011 -
$1,453,720)
Gross profit            9,081,491        28,523,942       3,486,246       1,822,410   
OPERATING
EXPENSES:
Selling and              —                  87,669             —                 —
distribution
General and              6,376,561          6,765,420          1,901,880         1,908,616
administrative
Research and
development
(net of
reimbursement
from related
party: 2012 -
$435,199; 2011           856,545            2,362,434          143,795           508,884
- $2,690,163)
Net gain on
U.S. sale of            —                (2,533,127)      —               —           
STRIANT
Total
operating               7,233,106        6,682,396        2,045,675       2,417,500   
expenses
Income (loss)
from                    1,848,385        21,841,546       1,440,571       (595,090)   
operations
OTHER INCOME
(EXPENSE):
Interest                 181,084            36,395             58,339            31,868
income
Interest                 (22,459)           (11,663)           (22,459)          (3,887)
expense
Change in fair
value of                 —                  (2,721,205)        —                 —
redeemable
warrants
Change in fair
value of stock           5,399,569          2,790,337          (1,065,498)       5,050,520
warrants
Other, net              (115,629)         (353,151)        (19,882)        (32,964)    
Total other
income                  5,442,565         (259,287)        (1,049,500)     5,045,537   
(expense)
Income before            7,290,950          21,582,259         391,071           4,450,447
taxes
Provision for           (5,018)          (37,710)         (2,342)         (33,206)    
income taxes
NET INCOME             $  7,285,932     $  21,544,549    $  388,729      $  4,417,241 
                                                                                             
NET INCOME PER
COMMON SHARE:
Basic                  $  0.08          $  0.25          $  0.00         $  0.05      
Diluted                $  0.02          $  0.20          $  0.00         $  (0.01)    
                                                                                             
WEIGHTED
AVERAGE NUMBER
OF COMMON
SHARES

OUTSTANDING:
Basic                   87,310,752       85,998,197       87,330,865      87,269,433  
Diluted                 88,451,364       92,561,710       88,542,827      89,240,246  
                                                                                             

Contact:

Columbia Laboratories, Inc.
Lawrence A. Gyenes, 973-486-8860
Senior Vice President, CFO & Treasurer
or
The Trout Group LLC
Seth Lewis, 646-378-2952
Vice President
 
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