SOURCE: Alpharma Inc.

December 11, 2007 16:00 ET

Alpharma Announces Preliminary Financial Outlook for 2008

BRIDGEWATER, NJ--(Marketwire - December 11, 2007) - Alpharma Inc. (NYSE: ALO), a global specialty pharmaceutical company, announced today that the company expects 2008 revenue growth in the range of 13% to 15%, and 2008 diluted earnings per share ("EPS") in the range of $0.30 to $0.50, excluding the EPS impact of potential milestone payments associated with the company's recent licensing agreements. The 2008 outlook is based on the following key assumptions:

--  Revenue growth in the company's Pharmaceuticals business in the range
    of 35% to 40% driven by the expected January 2008 launch of its topical
    NSAID (non-steroidal anti-inflammatory drug) product, the FLECTOR® Patch,
    in addition to continued KADIAN® growth.  The outlook also assumes 6% to
    8% year-over-year combined revenue growth in the company's Active
    Pharmaceutical Ingredients and Animal Health businesses.
--  Consolidated gross profit margins consistent with 2007 levels of
    approximately 57%.
--  Research and development investment consistent with 2007 levels of
    approximately 11% of revenues.
--  Selling, general and administrative expenses increasing over 2007
    levels by $75 million to $85 million, primarily reflecting investments in
    the Pharmaceuticals business to support the company's FLECTOR® Patch
    launch. These investments include a major sales force expansion, the
    engagement of a contract sales organization, and significant advertising
    and promotion.
--  Potential milestone payments associated with the company's recent
    licensing agreements have been excluded from the full year 2008 EPS outlook
    of $0.30 to $0.50.  These milestones include potential payments related to
    ketoprofen in Transfersome® gel totaling up to $77 million (approximately
    $1.75 EPS).

Alpharma's President and Chief Executive Officer, Dean Mitchell, commented, "In 2007, we developed an excellent foundation for growth, and as a result, we remain confident in our ability to achieve the strategic goals we announced in December 2006. With a combination of internal clinical success and licensing agreements, our Pharmaceuticals business has developed a strong new product pipeline, and our Active Pharmaceutical Ingredients and Animal Health businesses have continued to perform well against their initiatives to drive future growth. In 2008, our priority will be execution, beginning with an intense focus on our expected January launch of the FLECTOR® Patch, followed by our NDA filing with the FDA for approval of our abuse-deterrent extended release opioid, ALO-01."

Excluding potential milestone payments, earnings before interest, taxes, depreciation and amortization ("EBITDA") is projected to be in a range of approximately $78 million to $92 million, and the company is targeting positive free cash flow for 2008. Free cash flow represents operating cash flow less capital expenditures.

The company's 2008 outlook does not include any potential EPS dilution from the company's convertible notes and stock warrants, based on the company's current stock price.

Presentation of Information in this Press Release

In an effort to provide investors with additional information regarding Alpharma's expected results as determined by U.S. Generally Accepted Accounting Principles (GAAP), the company also has provided certain non-GAAP information which management utilizes in its analysis of its business and which it believes also provides useful information to investors. This information includes earnings before interest, taxes, depreciation, and amortization (EBITDA), and free cash flow (FCF) representing operating cash flow, less capital expenditures.

Statements made in this release include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements, including those relating to future financial expectations, involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. The 2008 outlook assumes no material adverse events contemplated by the risk factors described in the Company's SEC filings. Information on other important potential risks and uncertainties not discussed herein may be found in the Company's filings with the Securities and Exchange Commission, including its Form 10-K for the year ended December 31, 2006, and its Form 10-Q for the quarter ended September 30, 2007.

Conference Call Information

Alpharma management will hold a conference call to discuss the preliminary financial outlook for 2008 at 5:00 P.M. Eastern Standard Time on December 11, 2007. The link, which includes a presentation to accompany the call, can be accessed through the Alpharma website. The call will be open to all interested parties and may be accessed by using the following information:

                          CONFERENCE CALL ACCESS
              U.S. Dial In:                    (800) 351-4892
              International Dial In:           (334) 323 7224
              Conference ID:                         ALPHARMA

Investors can access the call in a "listen only" mode via the Internet at or

In addition, for those unable to participate at the time of the call, a rebroadcast will be available following the call from December 11, 2007 at 9:00 PM Eastern Standard Time until December 25, 2007 at midnight Eastern Standard Time. The rebroadcast may be accessed on the Internet at or by telephone using the following information:

                           REBROADCAST ACCESS
              U.S. Dial In:                 (877) 919-4059
              International Dial In:        (334) 323-7226
              Participant Code:                   21709203

About Alpharma

Alpharma Inc. (NYSE: ALO) is a global specialty pharmaceutical company with leadership positions in products for humans and animals. Alpharma is presently active in more than 60 countries. Alpharma has a growing branded pharmaceutical franchise in the U.S. pain market with its KADIAN® (morphine sulfate extended-release) Capsules, and an innovative pharmaceutical product pipeline that consists of several novel approaches to treat pain, including the FLECTOR® Patch (diclofenac epolamine topical patch), which is expected to launch in January 2008. In addition, Alpharma is among the world's leading producers of several specialty pharmaceutical-grade bulk antibiotics and is internationally recognized as a leading provider of pharmaceutical products for poultry and livestock.

About KADIAN® Capsules

KADIAN® (morphine sulfate extended-release) Capsules are an extended-release formulation of morphine sulfate indicated for the management of moderate-to-severe chronic pain, when a continuous, around-the-clock opioid analgesic is needed for an extended period of time. Capsules can be taken once-daily (q24h) or twice-daily (q12h), as prescribed, to provide up to 24 hours of pain relief. Capsules will now be available in eight strengths: 10 mg, 20 mg, 30 mg, 50 mg, 60 mg, 80 mg, 100 mg and 200 mg. KADIAN® offers flexible dosing and administration options that allow physicians to fine tune titration schedules and tailor treatment for individual patient needs.

KADIAN® is a Schedule II controlled substance, with an abuse liability similar to other opioid analgesics. The 100 mg and 200 mg capsules are for use in opioid-tolerant patients only. KADIAN® capsules are to be swallowed whole. The pellets in the capsules are not to be chewed, crushed, or dissolved due to the risk of rapid release and absorption of a potentially fatal dose of morphine. Serious adverse reactions that may be associated with KADIAN® therapy include: respiratory depression, respiratory arrest, circulatory depression, cardiac arrest, hypotension, and/or shock.

About Ketoprofen in Transfersome® Gel

The licensed product candidate combines ketoprofen and IDEA AG's ("IDEA") novel proprietary Transfersome® technology. In August 2006, IDEA reported the positive outcome of a Phase III efficacy and safety trial of osteoarthritis of the knee. In May 2007, IDEA submitted a regulatory filing to the European Agency for the Evaluation of Medicinal Products (EMEA) for approval of the product for the short and long-term treatment of osteoarthritis, including data from four Phase II and Phase III clinical studies in over 2000 patients.

In June 2007, IDEA received an approval for ketoprofen in Transfersome® gel from Swiss regulators for the treatment of inflammation and pain related to osteoarthritis. This approval was based on the first pivotal European trial, which demonstrated that both ketoprofen in Transfersome® gel and Celebrex® (celecoxib), improved patient's conditions comparably and progressively over the six-week study period and are both statistically superior to placebo. The much broader EMEA submission package also included a long-term open-label, safety and efficacy trial with patients treated with ketoprofen in Transfersome® gel for up to 18 months.

Alpharma believes that IDEA's EMEA filing package, including the positive Phase III trial in Europe will be helpful for its U.S. NDA filing strategy. IDEA plans, and will fund and conduct, two additional late stage clinical studies: a second pivotal, placebo-controlled, Phase III US study in osteoarthritis patients, and a multi-arm, placebo-controlled, Phase III European study, which will also compare Ketoprofen in Transfersome® gel to Celebrex® in a sub-study. The latter is anticipated to help evaluate ketoprofen in Transfersome® gel as a viable alternative to oral NSAIDs, including COX-2 products.

About the FLECTOR® Patch

The FLECTOR® Patch is a 10x14 cm adhesive patch containing 180 mg of diclofenac epolamine applied on a non-woven felt backing and covered with a polypropylene release liner. FLECTOR® Patch contains 1.3% epolamine salt of diclofenac, and has been approved by the FDA for the treatment of acute pain due to minor strains, sprains and contusions. Since its initial approval by Swiss regulatory authorities in 1993, FLECTOR® Patch has been approved for sale in 39 countries throughout the world. IBSA's patented diclofenac epolamine was specifically developed to achieve a significant release of active from the patch and promote subsequent absorption through the skin. Application to the injured area twice a day results in a local analgesic and anti-inflammatory effect with only minor systemic exposure to diclofenac. FLECTOR® Patch is contraindicated for the treatment of peri-operative pain in the setting of coronary artery bypass graft surgery.

Safety Aspects of NSAIDs

NSAIDs may cause an increased risk of serious cardiovascular thrombotic events, myocardial infarction, and stroke, which can be fatal. This risk may increase with duration of use. Patients with cardiovascular disease or risk factors for cardiovascular disease may be at greater risk. NSAIDs cause an increased risk of serious gastrointestinal adverse events including bleeding, ulceration, and perforation of the stomach or intestines, which can be fatal. These events can occur at any time during use and without warning symptoms. Elderly patients are at greater risk for serious gastrointestinal events. Topically applied NSAIDS, such as FLECTOR® Patch and ketoprofen in Transfersome® gel, are designed to minimize systemic exposure and may provide physicians with expanded options to treat pain.

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