Pharmion Corporation Reports Net Sales of $65.8 Million for Q2 2007

Record sales quarter, up nine percent over Q2 2006

GAAP net loss of $9.3 million, or $(0.27) per share

    BOULDER, Colo., July 25 /PRNewswire-FirstCall/ -- Pharmion Corporation
 ( PHRM) today reported financial results for its quarter ended June
 30, 2007. Second quarter net sales totaled $65.8 million, compared to $60.4
 million in the second quarter of 2006. Worldwide sales of Vidaza(R)
 (azacitidine for injection) totaled $40.5 million in the second quarter of
 2007, compared to $36.1 million in the same quarter of 2006. In the U.S.,
 sales of Vidaza totaled $32.5 million in the second quarter of 2007,
 compared to $33.7 million in the same quarter of 2006, reflecting
 relatively constant sales despite the entry of two competitive products to
 the U.S. Myelodysplastic Syndromes (MDS) market during 2006. Named patient
 and compassionate use sales of Vidaza in Europe and other international
 markets totaled $8.0 million in the second quarter of 2007, compared to
 $2.4 million in the second quarter of 2006. Sales of Thalidomide, including
 named patient and compassionate use sales in Europe, totaled $20.4 million
 in the second quarter of 2007, compared to $19.1 million in the same period
 of 2006.
     For the six months ended June 30, 2007, net sales totaled $128.5
 million, compared to net sales of $117.0 million for the six months ended
 June 30, 2006. Worldwide sales of Vidaza totaled $78.2 million in the first
 six months of 2007, compared to $69.0 million in the same period in 2006.
 U.S. sales of Vidaza totaled $63.8 million in the first six months of 2007,
 compared to $65.4 million in the same period in 2006. Named patient and
 compassionate use sales of Vidaza in Europe and other international markets
 totaled $14.4 million in the first half of 2007, compared to $3.6 million
 in the first half of 2006. Sales of Thalidomide totaled $40.5 million in
 the first six months of 2007, compared to $38.6 million in the same period
 in 2006.
     "We are pleased with our financial results for the quarter, achieving
 record sales in total and for Vidaza," said Patrick J. Mahaffy, Pharmion's
 president and CEO. "Our core business is strong and growing and we see the
 potential for significant revenue growth beginning in 2008 based on
 European product approvals. In fact, we are currently accelerating
 pre-launch activities for Thalidomide Pharmion. And, most important to our
 near term growth prospects, we look forward to seeing the results from our
 Vidaza survival study in higher-risk MDS, which are expected in the next
 three to six weeks. In addition, we intend to initiate the Phase 3 pivotal
 study for Amrubicin in second-line SCLC later this year, and follow with a
 registrational program for MGCD0103 in 2008."
     Q2 2007 Financial Highlights
     Pharmion reported a net loss of $(9.3) million, or $(0.27) per share
 for the second quarter of 2007. For the six months ended June 30, 2007, the
 Company's net loss totaled $(14.9) million, or $(0.45) per share. The net
 loss for the second quarter of 2006 was $(3.5) million, or $(0.11) per
 share. For the six months ended June 30, 2006, the Company's net loss
 totaled $(23.3) million, or $(0.73) per share. These net losses include
 stock compensation expense for the second quarters of 2007 and 2006 of $1.4
 million and $0.8 million, respectively, and $2.6 million and $1.6 million,
 respectively, for the six months ended June 30, 2007 and 2006.
     Research and development (R&D) expenses totaled $22.8 million for the
 second quarter of 2007, compared to R&D expenses for the second quarter of
 2006 of $18.4 million. For the six months ended June 30, 2007, research and
 development costs totaled $42.9 million, compared to $33.5 million for the
 six-month period ended June 30, 2006. These increases in R&D spending were
 expected and were driven primarily by the expanded clinical development
 activities for Amrubicin, Thalidomide, oral Azacitidine and MGCD0103 during
 2007.
     Selling, general and administrative expenses totaled $32.1 million for
 the second quarter of 2007, compared to selling, general and administrative
 expenses for the second quarter of 2006 of $26.0 million. For the first
 half of 2007, selling, general and administrative expenses totaled $60.7
 million, compared to $48.5 million in the first six months of 2006. These
 increases in selling, general and administrative expenses are primarily due
 to expanded commercial activities for Vidaza in the U.S. in response to the
 expanding and more competitive U.S. MDS market and the Company's investment
 in pre-approval activities in Europe for Thalidomide, Satraplatin and
 Vidaza.
     In connection with the acceptance of the marketing authorization
 application for Satraplatin in the E.U., the Company will pay an $8 million
 milestone fee to GPC Biotech. This charge will be paid and reflected in the
 Company's third quarter financial results.
     As of June 30, 2007, the Company had $259.2 million in cash, cash
 equivalents and short-term investments, and no outstanding debt.
     2007 Milestones and Objectives
     Pharmion has a number of important clinical, regulatory and development
 objectives planned or underway in 2007 for each of its key products, and
 made significant progress against those objectives during the second
 quarter:
     Thalidomide
 
     -- The Company announced that the French regulatory authority has granted
        an Autorisation Temporaire d'Utilisation (ATU), or Temporary
        Authorization for Use, for Thalidomide for the treatment of untreated
        multiple myeloma.  An ATU is the regulatory mechanism used by the
        French Health Products and Safety Agency to make non-approved drugs
        available to patients in France when a genuine public health need
        exists.  This ATU allows Pharmion to supply Thalidomide to elderly
        patients with untreated multiple myeloma on a cohort basis, and expands
        the ATU previously granted for Thalidomide for the treatment of
        relapsed/refractory multiple myeloma patients to include previously
        untreated multiple myeloma patients.
 
     -- Pharmion continues to work toward a potential recommendation for
        approval from the European Medicines Agency (EMEA) by the end of 2007
        for Thalidomide in combination with standard chemotherapy for the
        treatment of untreated multiple myeloma. The Company's marketing
        authorization application (MAA) was submitted in January. Based on this
        progress, the Company is accelerating its pre-launch activities for
        Thalidomide Pharmion.
 
 
     Vidaza, MGCD0103 and oral Azacitidine
 
     -- The Company expects to announce top line results from the Vidaza
        survival study, the largest MDS study completed to date, within the
        next three to six weeks.  The study of 358 patients with higher-risk
        MDS is expected to serve as the basis for the Company's MAA to the
        European Medicines Agency (EMEA), which the Company plans to file by
        the end of 2007.
 
     -- The Company announced the initiation of a second multi-dose Phase 1
        trial of oral Azacitidine, which is a multi-center, open label dose
        escalation trial that will assess the maximum tolerated dose, dose
        limiting toxicities and safety of a seven day, multi-cycle dosing
        regimen in patients with MDS and AML.  The trial will examine
        pharmacokinetics and pharmacodynamic effects of orally administered
        Azacitidine, as compared with the FDA-approved parenteral regimen,
        which is marketed by Pharmion as Vidaza(R) (azacitidine for injection).
        In addition, Pharmion announced the results of a pilot study
        demonstrating the bioavailability of oral Azacitidine at the ASCO
        annual meeting.
 
     -- Pharmion and its partner MethylGene Inc. announced strong interim Phase
        2 results for HDAC inhibitor MGCD0103 in Hodgkin's lymphoma at the ASCO
        Annual Meeting, and the Companies are planning to initiate a pivotal
        registration program in the near term for MGCD0103 either as
        monotherapy or in combination with Vidaza in a hematological
        malignancy.
 
 
     Amrubicin
 
     -- The Company expects to initiate a pivotal registration program for
        Amrubicin in the treatment of second-line small cell lung cancer during
        the second half of 2007, following the completion of a special protocol
        assessment submitted to the U.S. FDA earlier this year.  In parallel,
        the Company is currently seeking scientific advice from European
        regulators. The Company also plans to initiate a clinical program for
        Amrubicin in breast cancer. Amrubicin has been approved in Japan for
        the treatment of lung cancer since 2002.
 
 
     Satraplatin
 
     -- The Company submitted and has had accepted for review an MAA with
        European regulatory authorities for Satraplatin in combination with
        prednisone for the treatment of second-line hormone-refractory prostate
        cancer (HRPC) in June which has been accepted for review.  There are
        currently no approved drugs for second-line use and limited
        satisfaction with existing treatment options for HRPC.  The MAA is
        based on the progression-free survival (PFS) data and will be
        supplemented with the overall survival data from the double-blind,
        randomized Phase 3 registrational trial, SPARC (Satraplatin and
        Prednisone Against Refractory Cancer).
     2007 Financial Outlook
     Updating its financial guidance announced in April, Pharmion expects to
 report total net sales for 2007 in a range of $250 to $260 million, up from
 the previous guidance of $245 to $255 million. Research and development
 expenses for 2007 are expected to total approximately $85 to $95 million,
 adjusted from the previous guidance of $90 to $100 million. Selling,
 general and administrative expense for 2007 is expected to total
 approximately $120 million, up from a range of $115 to $120 million. The
 Company expects to record a charge of $8 million for acquired in-process
 research in the third quarter of 2007 for the payment of a regulatory
 milestone to GPC Biotech upon the acceptance of the filing of the MAA in
 the EU for Satraplatin. Finally, the Company expects to end 2007 with
 approximately $225 to $235 million of cash, cash equivalents and short-term
 investments, an increase from previous guidance of $80 to $90 million. This
 increase is primarily due to the addition of the $130 million in net
 proceeds from the Company's equity offering completed in June 2007.
     Pharmion will hold a conference call to discuss second quarter 2007
 results later this afternoon, July 25, at 5:00 p.m. ET. The conference call
 will be simultaneously webcast on the Company's web site at
 http://www.pharmion.com, and archived for future review. Dial-in numbers
 for the conference call for institutional investors and analysts are as
 follows: participants from the U.S. 866.713.8564, International
 participants 617.597.5312, passcode: 71816892.
     About Pharmion
     Pharmion is a leading global oncology company focused on acquiring,
 developing and commercializing innovative products for the treatment of
 hematology and oncology patients in the U.S., Europe and additional
 international markets. Pharmion has a number of products on the market
 including the world's first approved epigenetic drug, Vidaza(R), a DNA
 demethylating agent. For additional information about Pharmion, please
 visit the company's website at http://www.pharmion.com.
     Safe Harbor Statement under the Private Securities Litigation Reform
 Act of 1995: This release contains forward-looking statements, which
 express the current beliefs and expectations of management, including
 Pharmion's plans for clinical development and regulatory submissions of
 Pharmion's products and product candidates, and Pharmion's anticipated
 financial results for 2006. Such statements are based on current
 expectations and involve a number of known and unknown risks and
 uncertainties that could cause Pharmion's future results, performance or
 achievements to differ significantly from the results, performance or
 achievements expressed or implied by such forward-looking statements.
 Important factors that could cause or contribute to such differences
 include the outcome of ongoing clinical trials, the status and timing or
 regulatory approvals for Pharmion's product candidates; the impact of
 competition from other products under development by Pharmion's
 competitors; the regulatory environment and changes in the health policies
 and structure of various countries; uncertainties regarding market
 acceptance of products newly launched, currently being sold or in
 development; Pharmion's ability to successfully acquire rights to, develop
 and commercialize additional pharmaceutical products; failure of
 third-party manufacturers to produce the product volumes required on a
 timely basis, fluctuations in currency exchange rates, and other factors
 that are discussed in Pharmion's filings with the U.S. Securities and
 Exchange Commission. Forward-looking statements speak only as of the date
 on which they are made, and Pharmion undertakes no obligation to update
 publicly or revise any forward-looking statement, whether as a result of
 new information, future developments or otherwise.
                                PHARMION CORPORATION
                           CONSOLIDATED FINANCIAL RESULTS
                    (In thousands, except for per share amounts)
                                     Unaudited
 
                                         Three Months Ended  Six Months Ended
                                              June 30,           June 30,
                                           2007     2006      2007      2006
 
     Net sales                            $65,838  $60,366  $128,519  $116,960
 
     Operating expenses:
      Cost of sales, inclusive of
       royalties, exclusive of
       product rights amortization         18,167   16,672    35,105    31,885
      Research and development             22,838   18,386    42,874    33,519
      Acquired in-process research             --       --        --    20,480
      Selling, general and administrative  32,086   25,986    60,652    48,498
      Product rights amortization           2,470    2,451     4,932     4,890
     Total operating expenses              75,561   63,495   143,563   139,272
     Operating loss                        (9,723)  (3,129)  (15,044)  (22,312)
 
     Interest and other income, net         2,249    1,755     3,457     3,416
     Loss before taxes                     (7,474)  (1,374)  (11,587)  (18,896)
 
     Income tax expense                     1,814    2,140     3,357     4,354
     Net loss                             $(9,288) $(3,514) $(14,944) $(23,250)
 
     Net loss per common share:
      Basic and Diluted                    $(0.27)  $(0.11)   $(0.45)   $(0.73)
 
     Weighted average number of common
      and common equivalent shares used to
      calculate net loss per common share:
 
      Basic and Diluted                    34,339   32,007    33,241    31,963
 
 
 
                          CONSOLIDATED BALANCE SHEET DATA
 
                                            June 30, 2007   December 31, 2006
 
     Cash, cash equivalents and short-term
      investments                                $259,245            $136,213
     Total assets                                 451,413             326,732
     Total liabilities                             58,831              53,650
     Total stockholders' equity                   392,582             273,082
 
 

SOURCE Pharmion Corporation