Par Pharmaceutical Reports EPS of $0.76 for Third Quarter 2009

Achieves Record Quarterly Gross Margin of $92 Million


WOODCLIFF LAKE, N.J., Nov. 6  /PRNewswire-FirstCall/ -- Par Pharmaceutical Companies, Inc. (NYSE:PRX) today reported results for the third quarter ended October 3, 2009.

For the third quarter ended October 3, 2009, Par reported total revenues of $294.8 million and net income of $26.3 million, or $0.76 per diluted share. This is compared to reported revenues of $149.0 million and net income of $0.5 million, or $0.01 per diluted share for the same period in 2008, which included several one-time items.

For the nine months ended October 3, 2009, total revenue was $902.8 million with net income of $66.2 million, or $1.95 per diluted share.  This is compared to total revenues of $416.8 million and a net loss of $19.3 million, or $0.57 per diluted share in the same period of 2008.

Third Quarter Highlights

Key Product Sales (Net sales comparisons at the product level are to second quarter 2009, which had 13 weeks of sales versus 14 weeks of sales in the third quarter 2009.)

  --  Metoprolol:  For the quarter ended October 3, 2009, net sales of
      metoprolol succinate were $161.1 million, a decrease of 47% from the
      second quarter 2009.  The decrease was driven by a decline in volume
      and price due to competition on the 25mg and 50mg strengths, as well
      as inventory adjustments that benefited the second quarter.  Par
      remained the exclusive supplier of the 100mg and 200mg strengths
      metoprolol succinate through the third quarter.  Par is the authorized
      generic for all strengths of AstraZeneca's Toprol® XL.


  --  Clonidine:  Net sales for the third quarter were $20.4 million.   Par
      launched the generic version of Catapres TTS® in August and was the
      only generic supplier of the product during the quarter.


  --  Sumatriptan: Net sales of sumatriptan succinate were $16.7 million in
      the third quarter, a decrease of 24% from the prior quarter due to the
      release of backorders during the second quarter.  Par remained the
      exclusive supplier of generic Imitrex® 4mg and 6mg starter kits and
      4mg prefilled cartridges and had one competitor in the 6mg prefilled
      cartridges throughout the third quarter.


  --  Meclizine: Net sales for the three months ended October 3, 2009 were
      $10.7 million compared to $8.9 million in the second quarter of 2009. 
      The increase was due primarily to the additional week of sales in the
      quarter.  Par was the exclusive supplier of meclizine through the
      first nine months of 2009.


  --  Dronabinol: Net sales for the third quarter 2009 were $6.6 million
      compared to $5.5 million in the second quarter.  The increase was due
      primarily to the additional week of sales in the quarter.


  --  Other generic products:  For the third quarter 2009, net sales from
      all other generic products were $54.0 million compared to $39.6
      million in the second quarter. The increase primarily reflects an
      increase in volume of certain products such as tramadol APAP,
      risperidone ODT, calcitonin, and doxycycline, as well as the launch of
      nateglinide in September 2009.


  --  Megace® ES:  Net sales were $19.1 million for the three months ended
      October 3, 2009 compared to $17.1 million in the second quarter.  The
      increase in net sales was due to an increase in price and volume.


  --  Nascobal® B12 Nasal Spray:  Net sales were $3.8 million for the three
      months ended October 3, 2009, compared to $2.2 million in the second
      quarter.  The increase is due to a full quarter of promotional
      activity following the re-launch of the product in June 2009 resulting
      in an increase in prescription volume and market share.




Total net revenues for the three months ended October 3, 2009, were $294.8 million, up $145.8 million, or nearly 98%, from the year ago period, principally driven by limited competition in metoprolol succinate, sumatriptan succinate, meclizine, and dronabinol, as well as the launches of nateglinide and clonidine in the third quarter 2009.

Gross margin for the third quarter 2009 was $92.1 million, or 31.3% of total revenue, an increase of $40.7 million from the comparable period in 2008.  Total generic gross margin in the third quarter 2009 was $72.9 million, or 27.1% of total generic revenue, compared to $35.9 million, or 27.8% of total generic revenue in the third quarter 2008.  This increase is due primarily to higher sales of metoprolol coupled with the launches of sumatriptan, dronabinol, and clonidine, partially offset by lower sales of fluticasone and amoxicillin.  The top five products, which include metoprolol, clonidine, sumatriptan, meclizine, and dronabinol, contributed $46.3 million of gross margin, or 21.5% of such generic revenue.  Gross margin of all other generic products was approximately $26.6 million, or 49.3% of other generic revenue.  This compares to $15.2 million, or 23.2% of other generic revenue, in the third quarter of 2008.  The increase in gross margin percentage was due to new product launches, increased volume of certain existing products, as well as the trimming of the generic product line as part of the resizing of Par's generic division in the fourth quarter of 2008. Strativa's gross margin of $19.2 million, or 75.7% of total Strativa revenue, increased compared to the second quarter of 2008 due to higher sales of Megace® ES and Nascobal®.

Research and development (R&D) expenses decreased 53% to $6.5 million in the third quarter of 2009 compared to the third quarter 2008 due primarily to the resizing of the generic division, which included a headcount reduction and lower development and biostudy costs.

Selling, general and administrative (SG&A) expenses for the third quarter 2009 increased to $45.3 million compared to $30.7 million in the third quarter 2008.  This increase primarily reflects on-going expenditures supporting Strativa sales and marketing, driven primarily by an increase in the field force and other activities related to the re-launch of Nascobal B12 Nasal Spray, as well as accruals of higher bonus compensation expenses related to significantly better year-to-date financial performance through the first nine months of 2009.

Cash and cash equivalents and marketable securities aggregate balance as of October 3, 2009, was $210.5 million and includes significant one-time cash outflows related to the purchase of Nascobal B12 Nasal Spray (approximately $55 million), the first nine months repurchase of $63.5 million face value of Par's convertible debt at a discount and, as previously reported in the first quarter, the settlement of litigation with Pentech (approximately $66 million).

On October 14, 2009 Par announced a "Modified Dutch Auction" tender offer for up to $65 million of its outstanding 2.875% Senior Subordinated Convertible Notes due September 30, 2010, at a price not greater than $990.00 nor less than $982.50 per $1,000 principal amount.  As of that date, there was approximately $78.6 million aggregate principal amount of notes outstanding.  The tender offer is scheduled to expire at 12:00 midnight, EST on Wednesday, November 11, 2009, unless the tender offer is extended.  Par expects to fund the purchase of the convertible notes tendered in the tender offer with available cash on hand.

Product and Pipeline Update

Par successfully launched the 60mg and 120mg strengths of nateglinide in the third quarter.  Nateglinide is a generic version of Novartis' Starlix®.  Annual U.S. sales of Starlix® are approximately $124 million, according to IMS Health data.

In August, Par announced that the U.S. District Court for the District of Delaware ruled in favor of Par in its challenge of Purdue's patents relating to extended-release tramadol, which are listed in the Orange Book for Ortho-McNeil's Ultram® ER product. Par has been awarded 180 days of marketing exclusivity, commencing at launch, for being the first to file an ANDA containing a paragraph IV certification for the product.  Par currently has tentative approval on two of the three strengths (100mg and 200mg) of tramadol ER.  Par intends to review its options with respect to its tramadol ER ANDA.

Par currently has approximately 27 ANDAs pending with the FDA, 13 of which Par believes to be first-to-file and/or first-to-market opportunities with a brand value of approximately $6.5 billion.

Conference Call

Par has scheduled a conference call for Friday, November 6 at 9:00 am EST to discuss results for the third quarter of 2009.  Par invites investors and the general public to listen to a webcast of the conference call.  Access to the live webcast can be made via the Company's website at http://www.parpharm.com/ and will be available for two weeks.  The dial-in number is 866-783-2144 for domestic callers and 857-350-1603 for international callers.  The access number is 72513859.  A replay of the conference call will be available commencing approximately one hour after the call.  The replay dial-in number is 888-286-8010 for domestic callers and 617-801-6888 for international callers.  The access number is 97865258.

Non-GAAP Measures

Par believes it prepared its condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) and pursuant to accounting requirements of the Securities and Exchange Commission applicable to quarterly reports on Form 10-Q.  In an effort to provide investors with additional information regarding Par's results and to provide a meaningful period-over-period comparison of Par's financial performance, the Company sometimes uses non-GAAP financial measures as defined by the Securities and Exchange Commission.  The differences between the U.S. GAAP and non-GAAP financial measures are reconciled in an attached schedule.  In presenting comparable results, the Company discloses non-GAAP financial measures when it believes such measures will be useful to investors in evaluating Par's underlying business performance.  Management uses the non-GAAP financial measures to evaluate Par's financial performance against internal budgets and targets.  In addition, management internally reviews Par's results excluding the impact of certain items, as it believes that these non-GAAP financial measures are useful for evaluating Par's core operating results and facilitating comparison across reporting periods.  Importantly, Par believes non-GAAP financial measures should be considered in addition to, and not in lieu of, U.S. GAAP financial measures.  Par's non-GAAP financial measures may be different from non-GAAP financial measures used by other companies.

About Par

Par Pharmaceutical Companies, Inc. develops, manufactures and markets generic drugs and innovative branded pharmaceuticals for specialty markets.  For press release and other company information, visit http://www.parpharm.com/.

Safe Harbor Statement

Certain statements in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.  To the extent any statements made in this news release contain information that is not historical, these statements are essentially forward-looking and, as such, are subject to known and unknown risks, uncertainties and contingencies, many of which are beyond the control of the Company, which could cause actual results and outcomes to differ materially from those expressed herein.  Risk factors that might affect such forward-looking statements include those set forth in Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2008, in other of the Company's filings with the SEC from time to time, including Current Reports on Form 8-K, and on general industry and economic conditions.  Any forward-looking statements included in this news release are made as of the date hereof only, based on information available to the Company as of the date hereof, and, subject to any applicable law to the contrary, the Company assumes no obligation to update any forward-looking statements.

                     PAR PHARMACEUTICAL COMPANIES, INC.
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                      (In Thousands, Except Share Data)
                                  (Unaudited)

                                                   October 3,   December 31,
                                                      2009          2008
                                                      ----          ----
        ASSETS
  Current assets:
      Cash and cash equivalents                     $170,686      $170,629
      Available for sale marketable debt and
       equity securities                              39,767        93,097
      Accounts receivable, net                       104,851        83,408
      Inventories                                     75,361        42,504
      Prepaid expenses and other current assets       16,593        20,040
      Deferred income tax assets                      37,474        53,060
      Income taxes receivable                         15,311        35,397
                                                      ------        ------
      Total current assets                           460,043       498,135

  Property, plant and equipment, at cost less
   accumulated depreciation and amortization          75,862        79,439
  Available for sale marketable debt and
   equity securities                                   1,600         1,949
  Intangible assets, net                              74,108        35,208
  Goodwill                                            63,729        63,729
  Deferred financing costs and other assets              434         1,159
  Non-current deferred income tax assets, net         67,934        68,618
                                                      ------        ------
  Total assets                                      $743,710      $748,237
                                                    ========      ========

        LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities:
      Current portion of long-term debt              $74,373      $130,141
      Accounts payable                                35,286        22,879
      Payables due to distribution agreement
       partners                                       53,980        91,451
      Accrued salaries and employee benefits          16,328        11,850
      Accrued expenses and other current
       liabilities                                    37,438        38,352
                                                      ------        ------
      Total current liabilities                      217,405       294,673

  Long-term debt, less current portion                     -             -
  Other long-term liabilities                         42,866        41,581
  Commitments and contingencies                            -             -
  Stockholders' equity
      Common Stock, par value $0.01 per share,
       authorized 90,000,000 shares; issued
       37,620,354 and 37,392,469 shares                  375           374
      Additional paid-in capital                     326,042       319,976
      Retained earnings                              225,698       159,470
      Accumulated other comprehensive gain             1,132           122
      Treasury stock, at cost 2,802,266 and
       2,716,010 shares                              (69,808)      (67,959)
                                                     -------       -------
      Total stockholders' equity                     483,439       411,983
                                                     -------       -------
  Total liabilities and stockholders' equity        $743,710      $748,237
                                                    ========      ========



                     PAR PHARMACEUTICAL COMPANIES, INC.
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    (In Thousands, Except Per Share Data)
                               (Unaudited)

                                       Three Months Ended  Nine Months Ended
                                       ------------------ ------------------
                                       October  September October  September
                                         3,        27,       3,        27,
                                        2009      2008      2009      2008
                                        ----      ----      ----      ----
  Revenues:
      Net product sales              $290,961  $144,765  $891,333  $404,291
      Other product related revenues    3,841     4,202    11,505    12,541
                                        -----     -----    ------    ------
  Total revenues                      294,802   148,967   902,838   416,832
  Cost of goods sold                  202,664    97,505   660,223   290,741
                                      -------    ------   -------   -------
      Gross margin                     92,138    51,462   242,615   126,091
  Operating expenses:
      Research and development          6,458    13,784    19,567    46,897
      Selling, general and
       administrative                  45,306    30,664   122,383    98,701
      Settlements and loss
       contingencies, net                  62     4,592    (3,253)    4,592
      Restructuring costs                (230)        -     1,252         -
                                         ----       ---     -----       ---
  Total operating expenses             51,596    49,040   139,949   150,190
                                       ------    ------   -------   -------
  Gain on sale of product rights and
   other                                1,835     2,200     3,200     4,325
                                        -----     -----     -----     -----
  Operating income (loss)              42,377     4,622   105,866   (19,774)
  Gain on bargain purchase                  -         -     3,021         -
  Gain on extinguishment of senior
   subordinated convertible notes       1,615         -     2,364         -
  Equity in loss of joint venture           -         -         -      (330)
  Loss on marketable securities and
   other investments, net                   -    (2,507)      (55)   (2,940)
  Interest income                         504     2,285     2,328     7,428
  Interest expense                     (1,773)   (3,579)   (6,935)  (10,633)
                                       ------    ------    ------   -------
  Income (loss) from continuing
   operations before provision
   (benefit) for income taxes          42,723       821   106,589   (26,249)
  Provision (benefit) for income
   taxes                               16,209       196    39,833    (7,298)
                                       ------       ---    ------    ------
  Income (loss) from continuing
   operations                          26,514       625    66,756   (18,951)
  Discontinued operations:
  Gain from discontinued operations         -         -         -       505
  Provision for income taxes              176       150       528       863
                                          ---       ---       ---       ---
  Gain (loss) from discontinued
   operations                            (176)     (150)     (528)     (358)
                                         ----      ----      ----      ----
  Net income (loss)                   $26,338      $475   $66,228  ($19,309)
                                      =======      ====   =======  ========

  Basic earnings (loss) per share of
   common stock:
  Income (loss) from continuing
   operations                           $0.79     $0.01     $1.98    ($0.56)
  Gain (loss) from discontinued
   operations                           (0.01)    (0.00)    (0.02)    (0.01)
                                        -----     -----     -----     -----
  Net income (loss)                     $0.78     $0.01     $1.96    ($0.57)
                                        =====     =====     =====    ======

  Diluted earnings (loss) per share
   of common stock:
  Income (loss) from continuing
   operations                           $0.77     $0.01     $1.97    ($0.56)
  Gain (loss) from discontinued
   operations                           (0.01)    (0.00)    (0.02)    (0.01)
                                        -----     -----     -----     -----
  Net income (loss)                     $0.76     $0.01     $1.95    ($0.57)
                                        =====     =====     =====    ======

  Weighted average number of common
   shares outstanding:
    Basic                              33,710    33,322    33,647    33,282
                                       ======    ======    ======    ======
    Diluted                            34,245    33,366    33,930    33,282
                                       ======    ======    ======    ======



   Reconciliation Between Reported (GAAP) and Adjusted Net Income (Loss)
                   (In thousands, except per share data)
                                (Unaudited)

                                               Three Months Ended
                                            -------------------------
                                            Oct. 3,         Sept. 27,
                                             2009              2008
                                             ----              ----

  Reported Net Income                      $26,338              $475
  Write-offs relating to 2008 Trimming
   of Generic Portfolio                          -             5,422
  Contingent Liabilities                         -             4,592
  Loss on Marketable Security                    -             2,506
  Development Milestone Payments                 -             1,250
  Restructuring Costs                         (230)                -
  Estimated Tax on Adjustments                  85            (5,233)
                                               ---            ------
  Adjusted Net Income (non-GAAP measure)   $26,193            $9,012
                                           =======            ======

  Diluted Earnings Per Share:
          Reported                           $0.76             $0.01
                                             =====             =====
          Adjusted (non-GAAP measure)        $0.76             $0.27
                                             =====             =====


                                                 Nine Months Ended
                                             -------------------------
                                             Oct. 3,         Sept. 27,
                                              2009              2008
                                              ----              ----

  Reported Net Income (Loss)               $66,228          ($19,309)
  Change in Estimate Related
   to Final Pentech Settlement              (3,412)                -
  Gain on Bargain Purchase                  (3,021)                -
  Development Milestone Payments             1,000             7,500
  Write-offs relating to 2008
   Trimming of Generic Portfolio                 -             5,422
  Contingent Liabilities                         -             4,592
  Net Investment Loss on
   Marketable Securities                         -             2,929
  Restructuring Costs                        1,252                 -
  Estimated Tax on Adjustments               1,547            (7,768)
                                             -----            ------
  Adjusted Net Income (Loss)
   (non-GAAP measure)                      $63,594           ($6,634)
                                           =======           =======

  Diluted Earnings (Loss) Per Share:
          Reported                           $1.95            ($0.57)
                                             =====            ======
          Adjusted (non-GAAP measure)        $1.87            ($0.20)
                                             =====            ======


DATASOURCE: Par Pharmaceutical Companies



CONTACT:  Allison Wey, Senior Director, Investor Relations and Corporate

Affairs, Par Pharmaceutical Companies, Inc., [phone]



Web Site:  http://www.parpharm.com/ 

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