DOYLESTOWN, PA. - April 28, 2005 - The Quigley Corporation (Nasdaq: QGLY)
today reported net sales of $11.8 million for the first quarter of 2005, a
22.4% increase over the $9.6 million reported for the same period in 2004.
The increase in net sales for the first quarter of 2005 reflects a 39.7%
increase in the Company's Cold Remedy segment. Net sales of the Health and
Wellness segment include an increase of 15.8% in the segment's European sales
as compared to 2004. This increase partially offset an overall decrease in
Health and Wellness segment sales of 9% for the first quarter, due to a decline
in the number of active domestic independent representatives. Net sales also
reflects $1 million from the Company's Contract Manufacturing segment which has
no comparable amount in 2004 as operations of this segment were part of the
acquisition of the facilities that manufactured COLD-EEZE® during the
fourth quarter of 2004.
The Company's Cold Remedy net sales continued to far outpace the growth in its
category even as the incidence of colds during the quarter were greater than
the comparable period in 2004. The continued expansion of the Cold Remedy
segment reflects strategic advertising and marketing initiatives; new product
extensions of COLD-EEZE®; and an increase in consumer acceptance, as
indicated in a recent analysis demonstrating an expanded household penetration.
Guy J. Quigley, Chairman, President and Chief Executive Officer said, "We
are very pleased with our overall results for the first quarter which include a
major increase in sales and a significant reduction in the net loss for the
period. We continued to generate increased sales and greater market penetration
for our COLD-EEZE® Cold Remedy products, expanded our European Health and
Wellness sales, and recognized the benefits of our acquisition of the assets of
JoEL, Inc., which provided facilities for the manufacture of other brands and
contributed $1 million in sales for the quarter. We are well positioned to
further increase sales of our core products and garner greater market
penetration of our COLD-EEZE® cold remedy products."
The net loss for the first quarter of 2005 was $155,000, or ($0.01) per share,
compared to a net loss of $782,000, or ($0.07) per share, for the same period
last year. Gross profit percentage margins for the Cold Remedy and Health and
Wellness segments for the quarter were relatively consistent with margins
attained for the same period in 2004, while gross profit percentage margins
were substantially lower for the Contract Manufacturing segment than our other
operating segments. During the quarter, the Company incurred research and
development costs of $1.1 million as compared to $947,000 for the same period
last year.
The reduced net loss for the quarter compared with the same period last year
was primarily due to the gross profit gains of the Cold Remedy segment. These
gains were partially offset by increases in marketing, administrative, and
research and development costs associated with Quigley Pharma's clinical
studies. Additionally, net income margins for the Cold Remedy segment were
profitable in 2005 as compared to a loss for the same period in 2004 with a
marginal contribution by the Contract Manufacturing segment. Net income margins
for the Health and Wellness segment were relatively consistent with margins
attained for the same period in 2004.
No tax benefits to reduce losses are provided for the quarters ended March 31,
2005 and 2004, respectively, as the Company is in a net operating loss
carry-forward position from the cumulative effect of deductions attributed to
options, warrants and unrestricted stock from previous year's taxable income.
"The significant net loss reduction for the first quarter reflects, in
part, our ability to manufacture and market our cold remedy products with
greater cost efficiencies and enhanced volume production. We continue to invest
in research and development of Quigley Pharma. For example, Quigley Pharma
recently completed a double-blind placebo controlled study of its QR-340 Scar
Formula in which initial results demonstrated that the formula was safe,
effective and outperformed Mederma®, the top selling scar appearance
formula in the commercial marketplace," noted Mr. Quigley.
"We continue to implement strategic initiatives to generate growth and
increase profitability. We are committed to increasing sales of our core
products and capitalizing on the growing consumer demand for our COLD-EEZE®
Cold Remedy products. In addition, we remain focused on expanding our
wholly-owned Ethical Pharmaceutical subsidiary, Quigley Pharma, and are
confident that this segment of our business will be a source of future growth
for the Company," concluded Mr. Quigley.
The following is a list of formulations currently in the Quigley Pharma pipeline:
Influenza A -- QR435: Retroscreen LTD. at The University of London has
started a final animal model influenza study in preparation for a proposed
human Proof Of Concept Study to start in mid- 2005. The study
"Prophylactic potential of different QR-435 antiviral nasal spray
formulations in the Influenza A/Panama/2007/99 (H3N2) virus ferret transmission
model" will determine if there is any efficacy or safety issues with
different dose forms of this naturally derived broad-spectrum anti-viral
compound.
Systemic Radiation -- QR336: There were encouraging results seen in a
preliminary non-GLP animal study of this naturally derived radio protective
compound against ionizing radiation. A pre- IND meeting was held at the FDA in
October with the Division of Medical Imaging and Radiopharmaceutical Drug
Products. A GLP controlled animal study of the QR 336 formulation for the
Radioprotection/Treatment of Radiation Lethality Induced by Four MeV Photons in
the C3H Mouse will start this year, and predicated upon positive results will
be followed by a second animal study.
Diabetic Neuropathy -- QR 333: Per the FDA's instructions at the last
Pre-IND Meeting for the continued development of this drug; the compound is
undergoing a series of toxicity studies to support the safety of this naturally
derived compound for the relief of symptoms of diabetic peripheral neuropathy,
prior to beginning a human Phase IIB dose ranging study. The company hopes to
begin pivotal studies on this compound in 2005.
Virucidal Compound -- QR437: Ongoing pre-clinical research activities
include: the completion of a second in vitro experiment to determine virucidal
or virustatic properties against the HIV virus by QR437. The results of the
first in vitro study determined that this naturally derived compound has
significant dose dependant virucidal properties with a probable rapid mode of
action. This type of compound might be used with condoms or intravaginal, oral
and other topical dose forms as a first line defense against infection. Ongoing
plans for this compound are pending; the company expects to announce next steps
some time in 2005.
Quigley Pharma is also conducting research on their previously announced
patented compound for the treatment of rheumatoid arthritis and similar
diseases.
It has conducted one positive pre-clinical in vitro study on Avian Flu,
demonstrating antiviral activity when tested in a virustatic test. Ongoing
plans for this compound are pending; the company expects to announce next steps
some time in 2005.
The Quigley Corporation makes no representation that the US Food and Drug
Administration or any other regulatory agency will grant an Investigational New
Drug ("IND") or take any other action to allow its formulations to be
studied or marketed. Furthermore, no claim is made that potential medicine
discussed herein is safe, effective, or approved by the Food and Drug
Administration. Additionally, data that demonstrates activity or effectiveness
in animals or in vitro tests do not necessarily mean the formula test compound,
referenced herein will be effective in humans. Safety and effectiveness in
humans will have to be demonstrated by means of adequate and well-controlled
clinical studies before the clinical significance of the formula test compound
is known. Readers should carefully review the risk factors described in filings
the Company files from time to time with the Securities and Exchange
Commission.
The Quigley Corporation (Nasdaq: QGLY, http://www.Quigleyco.com) is a leading
developer and marketer of diversified health products including the
COLD-EEZE® family of patented zinc gluconate glycine (ZIGG™) lozenges
and sugar free tablets. COLD-EEZE is the only (ZIGG) lozenge proven in two
double-blind studies to reduce the duration of the common cold from 7.6 to 4.4
days or by 42%. In addition to Over-The-Counter (OTC) products, the Company has
formed Quigley Pharma Inc. (http://www.QuigleyPharma.com), a wholly owned
ethical pharmaceutical subsidiary, to introduce a line of naturally derived
patented prescription drugs. The Quigley Corporation's customers include
leading national wholesalers and distributors, as well as independent and chain
food, drug and mass merchandise stores and pharmacies.
Forward-Looking Statements
Certain statements in this press release are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform
Act of 1995 and involve known and unknown risk, uncertainties and other factors
that may cause the Company's actual performance or achievements to be
materially different from the results, performance or achievements expressed or
implied by the forward-looking statement. Factors that impact such
forward-looking statements include, among others, changes in worldwide general
economic conditions, changes in interest rates, government regulations, and
worldwide competition.
