Q-Med's six months report

Q-MED's interim report for the first half of 1999 - continued strong growth *Sales increased by 83% to SEK 66 (36) million *Income after financial items increased to SEK 12.5 (7.9) million *Launch of the urology product Deflux® for vesicoureteral reflux (VUR) *Distribution agreement for Restylane® reached for several new markets Revenues and income Q-Med's sales during the first half of 1999 amounted to SEK 65.9 million, an increase of 83% compared with the previous year. Sales for the second quarter amounted to SEK 36.3 million, an increase of 58% from the previous year and 22% from the first quarter of 1999. [REMOVED GRAPHICS] Q-Med has continued to have great success with the product Restylane - the company's product within the area of aesthetics for filling out lips, facial wrinkles and facial folds. Sales of Restylane increased during the first half year by 108% to SEK 56.9 (27.4) million. Sales of Restylane during the second quarter increased by 25% compared with the first quarter of 1999. The increase is due both to increased demand in existing markets and to the introduction of the product in new markets. During the first half of the year distribution agreements have been signed for Argentina, Venezuela, Chile, Uruguay, India, Austria and South Korea, amongst others. Q-Med's product Deflux for the treatment of vesicoureteral reflux, a common malformation of the urinary bladder in small children, was approved in December 1998 for the European market and a launch of the product is being carried out in selected markets during 1999. A registration file for Deflux for the indication SUI - Stress Urinary Incontinence - has been submitted with a view to obtaining CE-marking and sales approval in Europe. Operating income for the period amounted to SEK 13.4 (8.2) million. In the income for the first six months of 1999 is included an extraordinary revenue of SEK 2.2 million. This comprised the write-off of a debt in connection with the signing of a royalty agreement regarding a patent which does not affect the company's core business. The effect of this item, which is reported among other operating revenues, has been completely counteracted by a drop in revenues from the terminated co-operation with an American company within the area of urology. Amortisation and depreciation of SEK 2.9 (1.2) million have been charged against income, of which SEK 0.4 (0.4) million was amortisation of goodwill. Income after financial items amounted to SEK 12.5 (7.9) million. Investments in the building up of Q-Med's marketing organisation and extended research and development, with increased costs as a consequence, are reflected in the unchanged income between the second quarter for 1999 and that of 1998. Jan - Apr - Whole June June year (SEK million) 1999 1998 @ % 1999 1998 @ % 1998 Net Sales 65.9 36.1 + 83 36.3 23.0 + 58 85,2 Operating income 13.4 8.2 + 63 6.7 6.8 - 1 12,5 Earnings after 12.5 7.9 + 59 6.3 6.4 - 1 11,9 financial items Investments and cash flow Investments in machinery and equipment during the period amounted to SEK 10.7 (15.0) million, and these were largely attributable to Q-Med's production and office building in Uppsala. Furthermore, during the period Q-Med has invested SEK 2.5 (0.0) million in an American research company, Ixion, Inc., which in collaboration with Q-Med and usage of the NASHA technology carries out research into the cultivation and transplantation of insulin-producing cells with a view to treating diabetes. Q-Med's operating working capital (current receivables and inventories minus interest-free current liabilities) increased by SEK 11.8 (2.4) million due to the company's growth. The cash flow after the investments made during the first half of 1999 was negative, SEK -13.5 (-17.4) million. Financing has been through the use of existing and increased bank credit. Extra-ordinary shareholders' meeting - employees' warrants At an extra-ordinary meeting with the share-holders of Q-Med AB (publ) on August 27, 1999, it was decided to issue subscription options for the employees during 1999. The programme would comprise a total of 350,000 options. Personnel Q-Med has further strengthened its organisation during 1999 and employed people for its marketing organisation, research and development and quality assurance. The total number of employees at the end of the period was 95, with 75 in Sweden. New member of the Board At the Annual General Meeting on May 4, 1999 Ugo Grondelli, former Deputy Managing Director of Gambro, was elected as a new member of Q-Med's Board. Biomatrix lawsuit As earlier reported, a US lawsuit has been filed against Q-Med by its competitor Biomatrix, Inc. The Q-Med's Board of Directors believes that the lawsuit is entirely without merit. Q-Med AB (publ) The Board Appendix: Income statement, balance sheet and financial analysis for January - June 1999. Queries should be addressed to Per-Olof Wallström, Managing Director, on +46 18 474 90 00 or +46 70 974 90 70. Q-Med AB (publ), Seminariegatan 21, SE-752 28 Uppsala, Sweden. Tel: +46(0)18-474 90 00. Fax: +46(0)18-474 90 01. Corporate identity number 556258-6882. ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1999/08/27/19990827BIT00270/bit0001.doc The Full Report http://www.bit.se/bitonline/1999/08/27/19990827BIT00270/bit0002.pdf The Full Report