MONTREAL, Feb. 17 /CNW/ - Paladin Labs Inc. (TSX: PLB), a leading
Canadian specialty pharmaceutical company, today reported its financial
results for the fourth quarter and year ended December 31, 2004. Supported by
strong fourth quarter financial performance, the Company exceeded its 2004
financial guidance for revenue, EBITDA(1) and net income.

2004 Highlights
- Revenues totaled a record $28.0 million, a 17% increase compared
to 2003
- EBITDA(1) increased 67% to $7.6 million compared to $4.6 million
in 2003
- Net income increased to $3.2 million, up from a net loss of
$4.2 million in 2003
- Sales of the Company's key promoted brands including, Dostinex(R),
Estring(R), Oxytrol(R) and Plan B(R) increased 36% compared to
2003
- New drug submissions were filed with Health Canada for GlucaGen(R)
and Histrelin Hydrogel Implant
- Signed an exclusive Canadian marketing and promotion agreement
with Duramed Pharmaceuticals, Inc., a wholly-owned subsidiary of
Barr Pharmaceuticals, Inc., for Loestrin(R) and Minestrin(R), two
oral contraceptive pharmaceutical products
- Canadian market launch of Oxytrol(R)

"We achieved our ninth consecutive year of record revenue. Our key
promoted brands performed well in 2004 and with our recent market launch of
Oxytrol(R), we look forward to building on this momentum throughout 2005,"
said Jonathan Ross Goodman, President and CEO of Paladin Labs.

Financial Results
Revenue for the fourth quarter of 2004 increased 17% to a record
$8.1 million compared to $6.9 million in the fourth quarter of 2003. For the
year ended December 31, 2004, revenue increased 17% to a record $28.0 million
compared to $23.9 million in 2003. Combined sales of the Company's key
promoted brands including, Dostinex(R), Estring(R), Oxytrol(R) and Plan B(R)
increased 36% in 2004 compared to 2003.
Paladin's 2004 fourth quarter earnings before interest, taxes,
depreciation, and amortization (EBITDA(1)) increased to $1.7 million compared
to EBITDA(1) of $974,000 in the fourth quarter of 2003. For the year ended
December 31, 2004, EBITDA(1) increased to $7.6 million compared to EBITDA(1)
of $4.6 million in 2003.
Net income for the fourth quarter of 2004 was $1.2 million or $0.08 per
fully diluted share compared to a net loss of $5.0 million or $0.34 per share
in the fourth quarter a year ago. Net income for the year ended December 31,
2004 was $3.2 million or $0.22 per fully diluted share compared to a net loss
of $4.2 million or $0.28 per share in 2003.
Gross profit, as a percentage of revenues, for the fourth quarter and
twelve months ended December 31, 2004 totalled 71% and 73% respectively,
compared to 71% and 74% respectively for the fourth quarter and twelve months
ended December 31, 2003.
Selling and marketing expense for the fourth quarter of 2004 decreased
24% to $2.4 million from $3.2 million in the fourth quarter of 2003. Selling
and marketing expense for 2004 decreased 32% to $7.5 million from
$11.1 million in 2003. Decreased selling and marketing expense in 2004
resulted primarily from reduced promotion activities for Androderm(R).
Research and development expense for the fourth quarter of 2004 increased
to $1.2 million from $429,000 in the same period a year ago. Research and
development expense for 2004 increased to $3.6 million from $1.3 million in
2003. Increased research and development expense resulted from new drug
submissions, an increased number of research and development projects in 2004,
and $396,000 in-license payments for unapproved products in the first quarter.
Amortization expense for the fourth quarter of 2004 increased to $941,000
from $569,000 in the corresponding period a year ago. For the twelve months
ended December 31, 2004, amortization expense increased to $4.0 million from
$1.9 million in 2003. Increased amortization expense in 2004 reflects the
Company's decision to reduce the estimated useful life of the carrying value
of the intellectual property associated with products that face a heightened
risk of generic competition.
At December 31, 2004, Paladin's cash, cash equivalents and investments in
marketable securities totalled $42.1 million.

Product Developments
Paladin's most significant product development in 2004 was the Canadian
launch of Oxytrol(R), a novel transdermal patch for the treatment of
overactive bladder. Launched in October, Oxytrol(R) significantly strengthens
Paladin's urology franchise. According to IMS Canada, the total Canadian
market for overactive bladder in 2004 was $50 million.
Other branded product developments in 2004 included: i) an exclusive
Canadian distribution agreement with Transkaryotic Therapies, Inc. for
Replagal(TM), an innovative, long-term enzyme replacement therapy for the
treatment of Fabry disease; ii) an exclusive Canadian distribution agreement
with Ovation Pharmaceuticals for Sabril(R) and Frisium(R), two central nervous
system pharmaceutical products; iii) an exclusive Canadian marketing and
promotion agreement with Duramed Pharmaceuticals, Inc., for Loestrin(R) and
Minestrin(R), two oral contraceptive pharmaceutical products; and, iv) a
Health Canada announcement that it is moving forward with a proposal to amend
regulations, which if approved, would allow Plan B(R), an emergency
contraceptive pill, to be sold in Canada on a "behind-the-counter" (BTC) basis
without a physician prescription.
In addition, Paladin filed a new drug submission (NDS) with Health Canada
in 2004 for GlucaGen(R) (recombinant glucagon), an emergency treatment of
hypoglycemia in insulin-dependent diabetics. According to IMS Canada,
GlucaGen(R) will compete in a market that was valued at approximately
$5.8 million in 2004 and grew by 43% over the prior year. Paladin also filed
an NDS for Histrelin Hydrogel Implant, a unique, once-yearly luteinizing
hormone-releasing implant for the treatment of prostate cancer. According to
IMS Canada, the total LHRH for prostate cancer agonist market was $127 million
in 2004, and had a compound annual growth rate of 12% since 1999. Pending
Health Canada approvals, the timeline for Paladin's Canadian market launch of
Histrelin Hydrogel Implant will likely be in 2006 and GlucaGen(R) will follow
in 2007.

Financial Outlook
Late in 2004, Paladin's management team, supported by its Board of
Directors, engaged in an extensive strategic review to accelerate the growth
of the business. As a result of this strategic review, starting in 2005,
Paladin will increase its capabilities to internally develop and commercialize
innovative products.
For fiscal 2005, Paladin expects to generate $25 million to $26 million
in revenue. This forecast excludes the impact of acquisitions and/or new
product launches that may be made by the Company between now and the end of
2005.
"Supported by more than $42 million in cash and marketable securities,
strong cash flow from our extensive product portfolio, and proven
pharmaceutical development and marketing expertise, we believe we are well
positioned to add this new competency to our business," said Mr. Goodman.

Notice of Conference call and Web cast
Paladin's senior management team, including: Jonathan Ross Goodman,
President & Chief Executive Officer; Samira Sakhia, Chief Financial Officer;
Mark Beaudet, VP Sales and Marketing; and Mark Nawacki, VP Business
Development, will host an Investor Conference to discuss the Company's year
end financial results, strategic direction and 2005 revenue guidance on
Friday, February 18, 2005 at 9:30 a.m. (EST). The dial-in number for the
conference call is 1-877-272-5574. The presentation will also be audio-cast
live via www.financialdisclosure.ca and www.paladinlabs.com.

(1) EBITDA does not have any standardized meaning prescribed by generally
accepted accounting principles (GAAP) and therefore may not be
comparable to similar measures presented by other public issuers.
EBITDA performance is presented herein because Paladin management
believes that, in addition to net income, EBITDA is a useful
supplemental measure of the Company's financial performance.

About Paladin Labs
Paladin Labs Inc., headquartered in Montreal, Canada, is a specialty
pharmaceutical company focused on acquiring or in-licensing innovative
pharmaceutical products for the Canadian market. With this strategy, a focused
national sales team and proven marketing expertise, Paladin has evolved into
one of Canada's leading specialty pharmaceutical companies. Paladin's shares
trade on the Toronto Stock Exchange under the symbol PLB. For more information
about Paladin, please visit the Company's web site at www.paladinlabs.com.

This news release may contain forward-looking statements or predictions.
These statements represent our judgement as of this date and are subject to
risks and uncertainties that could cause actual results or events to differ
materially from those expressed in such forward-looking statements. Potential
risks and uncertainties include, without limitation, those associated with
product development, clinical trials, future revenues and profitability, and
obtaining marketing approval and other factors that are discussed in the
Management Discussion and Analysis section of the Company's Annual Report and
Annual Information Form.
http://www.cnw.ca/fr/releases/archive/February ...