King Pharmaceuticals Reports Year-End and Fourth-Quarter 2007 Financial Results

BRISTOL, Tenn.--(BUSINESS WIRE)--Feb 28, 2008 - King Pharmaceuticals, Inc. (NYSE:KG) announced today that total revenues increased 7% to a record high $2.14 billion during the year ended December 31, 2007, compared to $1.99 billion for 2006. Reported net income equaled $183 million and diluted earnings per share equaled $0.75 during the year ended December 31, 2007, compared to net income of $289 million and diluted earnings per share of $1.19 during the prior year. Excluding special items, net earnings increased to $476 million and diluted earnings per share increased to $1.95 for the twelve months ended December 31, 2007, from net earnings of $423 million and diluted earnings per share of $1.74 in 2006.

For the fourth quarter ended December 31, 2007, total revenues increased 4% to $533 million compared to $513 million in the fourth quarter of 2006. Reported net income equaled $43 million and diluted income per share equaled $0.18 during the fourth quarter of 2007, compared to net income of $37 million and diluted income per share of $0.15 in the same period of the prior year. Excluding special items, net earnings equaled $113 million and diluted earnings per share equaled $0.46 during the fourth quarter ended December 31, 2007, compared to net earnings of $99 million and diluted earnings per share of $0.41 in the fourth quarter of 2006.

Brian A. Markison, Chairman, President and Chief Executive Officer of King, stated, "Over the course of 2007, King successfully faced the challenges of a dynamic pharmaceutical marketplace. Thanks to the hard work of our management team and every member of our organization, we are effectively implementing our business strategy to enhance our market competitiveness, focusing on neuroscience, hospital and acute care medicines."

Mr. Markison emphasized, "The pipeline of promising products we have built is important to our long-term strategy and we have diligently advanced our key projects. I am especially excited about the opportunities in our neuroscience franchise, as we have assembled a robust pipeline of innovative, effective pain-treatment products. These include REMOXY(TM) (long-acting oral oxycodone) and ACUROX(TM) Tablets (oxycodone HCl, niacin, and a unique combination of other ingredients), extended-release and immediate-release pain medicines that are designed to resist or deter common methods of abuse associated with many currently available painkillers."

King is collaborating with Pain Therapeutics to develop up to four extended-release opioids for chronic pain that are designed to resist common methods of abuse, including REMOXY(TM) which has successfully completed its Phase III clinical trial program. Pain Therapeutics plans to file the New Drug Application for REMOXY(TM) with the U.S. Food and Drug Administration in the second quarter of 2008. Similarly, King has an alliance with Acura Pharmaceuticals to develop a wide range of immediate-release opioids for acute pain that are designed to deter or resist common methods of abuse, including ACUROX(TM) Tablets which is expected to complete its pivotal Phase III clinical trial program in the second half of this year.

Dr. Eric Carter, Chief Science Officer of King, added, "Opioid analgesics play a very important role in the effective management of moderate to severe pain. However, abuse and misuse of these medicines represents a major area of concern among physicians, pharmacists, patients, and the health-care sector. At King, we are committed to addressing this important public health issue and the needs of our customers by offering pain medicines that are proven effective and incorporate safe and appropriate means to discourage abuse and misuse."

Mr. Markison concluded, "These late-stage development products and the other potential products arising from these collaborations provide King with both near-term and long-term revenue opportunities. Our strong commitment to research and development, especially with respect to those initiatives that complement our neuroscience, hospital and acute care platforms, will continue as we increasingly leverage our core strengths, balance sheet and cash flow to further increase our presence in our key markets through business development."

As of December 31, 2007, the Company's cash and cash equivalents and investments in debt securities totaled approximately $1.4 billion. During the first quarter of 2008, King began converting its investments in debt securities to cash and, as of today, the Company has approximately $800 million in cash and cash equivalents. During the fourth quarter of 2007 and for the year ended December 31, 2007, the Company generated cash flow from operations of approximately $246 million and $673 million, respectively.

Joseph Squicciarino, King's Chief Financial Officer, stated, "2007 was a successful year financially, as we generated record high revenue of over $2.1 billion and strong cash flow. We were also very active in business development, as we effectively leveraged our core capabilities and assets to strengthen our neuroscience and hospital franchises. We will continue to utilize a disciplined and rigorous approach with respect to our business development activities as we aggressively execute our long-term growth strategy in 2008."

Net revenue from branded pharmaceuticals totaled $469 million for the fourth quarter of 2007, a 3% increase from the fourth quarter of 2006, and equaled $1.86 billion for the year ended December 31, 2007, an 8% increase from $1.72 billion during the prior year.

ALTACE(R) (ramipril) net sales totaled $158 million during the fourth quarter and $646 million for the year ended December 31, 2007, compared to $181 million during the fourth quarter and $653 million during the twelve months ended December 31, 2006.

Net sales of SKELAXIN(R) (metaxalone) totaled $114 million during the fourth quarter and $440 million for the year ended December 31, 2007, compared to $113 million during the fourth quarter and $415 million during the twelve months ended December 31, 2006.

THROMBIN-JMI(R) (thrombin, topical, bovine, USP) net sales totaled $69 million during the fourth quarter and $267 million for the year ended December 31, 2007, compared to $56 million during the fourth quarter and $247 million during the twelve months ended December 31, 2006.

Net sales of AVINZA(R) (morphine sulfate extended release) totaled $32 million during the fourth quarter and $109 million for the year ended December 31, 2007. The Company acquired AVINZA(R) on February 26, 2007.

Net sales of SONATA(R) (zaleplon) totaled $20 million during the fourth quarter and $79 million for the year ended December 31, 2007, compared to $22 million during the fourth quarter and $86 million during the twelve months ended December 31, 2006.

LEVOXYL(R) (levothyroxine sodium tablets, USP) net sales totaled $32 million during the fourth quarter and $100 million for the year ended December 31, 2007, compared to $27 million during the fourth quarter and $112 million during the twelve months ended December 31, 2006.

King's Meridian Medical Technologies business contributed revenue totaling $42 million during the fourth quarter of 2007 and $184 million for the twelve months ended December 31, 2007, compared to $32 million during the fourth quarter and $165 million during the twelve months ended December 31, 2006.

Royalty revenues, derived primarily from ADENOSCAN(R) (adenosine), totaled $22 million during the fourth quarter of 2007 and $83 million for the year ended December 31, 2007.

Webcast Information

King will conduct a webcast today which may include discussion of the Company's marketed products, pipeline, strategy for growth, financial results and expectations, and other matters relating to its business. Interested persons may listen to the webcast on Thursday, February 28, 2008, at 11:00 a.m. E.S.T., by clicking the following link to register and then joining the live event with the same URL: http://www.kingpharm.com/web_casts.asp.

If you are unable to participate during the live event, the webcast will be archived on King's web site at the same link for not less than 30 days after the webcast.

About Special Items

Under Generally Accepted Accounting Principles ("GAAP"), reported "net earnings" and "diluted earnings per share" include special items. In addition to the reported results determined in accordance with GAAP, King provides its net earnings and diluted earnings per share results for the quarters and twelve months ended December 31, 2007 and 2006, excluding special items. These non-GAAP financial measures exclude special items which are those particular material income or expense items that King considers to be unrelated to the Company's ongoing, underlying business, non-recurring, or not generally predictable. Such items include, but are not limited to, merger and restructuring expenses; non-capitalized expenses associated with acquisitions, such as in-process research and development charges and inventory valuation adjustment charges; charges resulting from the early extinguishment of debt; asset impairment charges; expenses of drug recalls; and gains and losses resulting from the divestiture of assets. King believes the identification of special items enhances the analysis of the Company's ongoing, underlying business and the analysis of the Company's financial results when comparing those results to that of a previous or subsequent like period. However, it should be noted that the determination of whether to classify an item as a special item involves judgments by King's management. A reconciliation of non-GAAP financial measures referenced herein and King's reported financial results determined in accordance with GAAP is provided below.

About King Pharmaceuticals

King, headquartered in Bristol, Tennessee, is a vertically integrated branded pharmaceutical company. King, an S&P 500 Index company, seeks to capitalize on opportunities in the pharmaceutical industry through the development, including through in-licensing arrangements and acquisitions, of novel branded prescription pharmaceutical products in attractive markets and the strategic acquisition of branded products that can benefit from focused promotion and marketing and product life-cycle management.

Forward-looking Statements

This release contains forward-looking statements which reflect management's current views of future events and operations, including, but not limited to, statements pertaining to the expected filing of a New Drug Application ("NDA") for REMOXY(TM) with the U.S. Food and Drug Administration ("FDA") in 2008; statements pertaining to the expected timetable for completion of the ACUROX(TM) Tablets Phase III clinical trial program; statements pertaining to the Company's plan to continue enhancing its platforms and presence in neuroscience, hospital and acute care; statements pertaining to the Company's expected business development activities; and statements pertaining to the Company's planned webcast to discuss its fourth-quarter and year-end 2007 results. These forward-looking statements involve certain significant risks and uncertainties, and actual results may differ materially from the forward-looking statements. Some important factors which may cause actual results to differ materially from the forward-looking statements include dependence on the future level of demand for and net sales of King's branded pharmaceutical products; dependence on King's ability to successfully market its branded pharmaceutical products; dependence on King's ability to increase its presence in its targeted specialty driven markets; dependence on King's ability to continue to acquire branded pharmaceutical products, including products in development; dependence on King's ability to continue to successfully execute the Company's strategy and to continue to capitalize on strategic opportunities in the future for sustained long-term growth; dependence on King's ability to successfully integrate its acquisitions; dependence on the Company's ability to continue to advance the development of its pipeline products as planned; dependence on the high cost and uncertainty of research, clinical trials, and other development activities involving pharmaceutical products in which King has an interest; dependence on the successful development and commercialization of ACUROX(TM) Tablets; dependence on whether the NDA for REMOXY(TM) is filed with the FDA during the planned timeframe; dependence on the unpredictability of the duration and results of the FDA's review of Investigational New Drug applications ("IND"), NDAs, and Abbreviated New Drug Applications ("ANDA") and/or the review of other regulatory agencies worldwide that relate to those projects; dependence on the availability and cost of raw materials; dependence on no material interruptions in supply by contract manufacturers of King's products; dependence on the potential effect on sales of the Company's existing branded pharmaceutical products as a result of the potential development and approval of a generic substitute for any such product or other new competitive products; dependence on the potential effect of future acquisitions and other transactions pursuant to the Company's growth strategy; dependence on King's compliance with FDA and other government regulations that relate to the Company's business; dependence on King's ability to conduct its webcast as currently planned on February 28, 2008; dependence on changes in general economic and business conditions; changes in current pricing levels; changes in federal and state laws and regulations; changes in competition; unexpected changes in technologies and technological advances; and manufacturing capacity constraints. Other important factors that may cause actual results to differ materially from the forward-looking statements are discussed in the "Risk Factors" section and other sections of King's Form 10-K for the year ended December 31, 2006 and Form 10-Q for the quarter ended September 30, 2007, which are on file with the U.S. Securities and Exchange Commission. King does not undertake to publicly update or revise any of its forward-looking statements even if experience or future changes show that the indicated results or events will not be realized. -0-

                      KING PHARMACEUTICALS, INC.

                     CONSOLIDATED BALANCE SHEETS

                  (in thousands, except share data)


                                             December 31, December 31,

                                                 2007         2006

                                             ------------ ------------


ASSETS

Current assets:

   Cash and cash equivalents                 $     20,009 $   113,777

   Investments in debt securities               1,344,980     890,185

   Marketable securities                            1,135           -

   Accounts receivable, net                       183,664     265,467

   Inventories                                    110,308     215,458

   Deferred income tax assets                     100,138      81,991

   Income tax receivable                           20,175           -

   Prepaid expenses and other current assets       39,245     106,595

                                             ------------ ------------

         Total current assets                   1,819,654   1,673,473

                                             ------------ ------------

Property, plant and equipment, net                257,093     307,036

Intangible assets, net                            780,974     851,391

Goodwill                                          129,150     121,152

Deferred income tax assets                        343,700     271,554

Marketable securities                                   -      11,578

Other assets                                       96,251      93,347

                                             ------------ ------------

         Total assets                        $  3,426,822 $ 3,329,531

                                             ============ ============


LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

   Accounts payable                          $     76,481 $    77,158

   Accrued expenses                               376,604     510,137

   Income taxes payable                                 -      30,501

                                             ------------ ------------

         Total current liabilities                453,085     617,796

                                             ------------ ------------


Long-term debt                                    400,000     400,000

Other liabilities                                  62,980      23,129

                                             ------------ ------------

         Total liabilities                        916,065   1,040,925

                                             ------------ ------------


Commitments and contingencies

Shareholders' equity:

      Common shares no par value,

       600,000,000 shares authorized,

       245,937,709 and 243,151,223 shares

       issued and outstanding, respectively     1,283,440   1,244,986

      Retained earnings                         1,225,360   1,043,902

      Accumulated other comprehensive income

       (loss)                                       1,957        (282)

                                             ------------ ------------

         Total shareholders' equity             2,510,757   2,288,606

                                             ------------ ------------

         Total liabilities and shareholders'

          equity                             $  3,426,822 $ 3,329,531

                                             ============ ============


-0-
                      KING PHARMACEUTICALS, INC.

                CONSOLIDATED STATEMENTS OF OPERATIONS

                (in thousands, except per share data)


                          Three Months Ended     Twelve Months Ended

                              December 31            December 31

                            2007       2006       2007        2006

                         ----------- --------- ----------- -----------

REVENUES:

   Total revenues        $  533,272  $512,914  $2,136,882  $1,988,500

                         ----------- --------- ----------- -----------

OPERATING COSTS AND

 EXPENSES:

   Cost of revenues ,

    exclusive of

    depreciation,

    amortization and

    impairments shown

    below                   109,424   113,883     458,514     419,808

   Excess purchase

    commitment                  731         -      25,363           -

   Excess inventory

    reserve                  21,634         -      78,812           -

   Contract termination           -         -       3,845           -

                         ----------- --------- ----------- -----------

         Total cost of

          revenues          131,789   113,883     566,534     419,808

                         ----------- --------- ----------- -----------

   Selling, general and

    administrative,

    exclusive of co-

    promotion fees          125,567   130,465     509,168     450,982

   Special legal and

    professional fees         1,412     1,142       2,135         105

   Arbitration

    settlement                    -    45,128           -      45,128

   Co-promotion fees         37,278    55,135     179,731     217,750

                         ----------- --------- ----------- -----------

         Total selling,

          general, and

          administrative

          expense           164,257   231,870     691,034     713,965

                         ----------- --------- ----------- -----------

   Depreciation and

    amortization             59,125    35,318     166,874     144,591

   Accelerated

    depreciation              1,886     1,486       6,989       2,958

   Research and

    development              44,910    40,665     149,425     143,596

   Research and

    development-In-

    process upon

    acquisition              32,010         -      35,310     110,000

   Asset impairments            377    47,563     223,025      47,842

   Restructuring charges     49,444         -      70,178       3,194

                         ----------- --------- ----------- -----------

         Total operating

          costs and

          expenses          483,798   470,785   1,909,369   1,585,954

                         ----------- --------- ----------- -----------


OPERATING INCOME             49,474    42,129     227,513     402,546

OTHER INCOME:

   Interest expense          (2,148)   (1,932)     (7,818)     (9,857)

   Interest income           14,030     9,310      42,491      32,152

   Loss on investment        (1,138)        -     (11,591)          -

   (Loss) gain on early

    extinguishment of

    debt                          -       (70)          -         628

   Other, net                   904      (544)        223      (1,157)

                         ----------- --------- ----------- -----------

         Total other

          income             11,648     6,764      23,305      21,766

                         ----------- --------- ----------- -----------

INCOME FROM CONTINUING

 OPERATIONS BEFORE

 INCOME TAXES                61,122    48,893     250,818     424,312

      Income tax expense     18,290    11,799      67,600     135,730

                         ----------- --------- ----------- -----------

INCOME FROM CONTINUING

 OPERATIONS                  42,832    37,094     183,218     288,582

                         ----------- --------- ----------- -----------

DISCONTINUED OPERATIONS

   (Loss) income from

    discontinued

    operations                  (18)     (203)       (369)        572

   Income tax (benefit)

    expense                      (7)      (73)       (132)        205

                         ----------- --------- ----------- -----------

         Total (loss)

          income from

          discontinued

          operations            (11)     (130)       (237)        367

                         ----------- --------- ----------- -----------

NET INCOME               $   42,821  $ 36,964  $  182,981  $  288,949

                         =========== ========= =========== ===========


Basic net income per

 common share            $     0.18  $   0.15  $     0.75  $     1.19

                         =========== ========= =========== ===========


Diluted net income per

 common share            $     0.18  $   0.15  $     0.75  $     1.19

                         =========== ========= =========== ===========


Shares used in basic net

 income per share           243,162   242,298     242,854     242,196

Shares used in diluted

 net income per share       244,091   243,062     244,129     242,799





                      KING PHARMACEUTICALS, INC.

                CONSOLIDATED STATEMENTS OF OPERATIONS

                  EXCLUDING SPECIAL ITEMS - NON GAAP

                (in thousands, except per share data)

                             (Unaudited)


                          Three Months Ended     Twelve Months Ended

                              December 31            December 31

                            2007       2006       2007        2006

                         ----------- --------- ----------- -----------

REVENUES:

   Total revenues        $  533,272  $512,914  $2,136,882  $1,988,500

                         ----------- --------- ----------- -----------

OPERATING COSTS AND

 EXPENSES:

   Cost of revenues,

    exclusive of

    depreciation and

    amortization            109,424   113,883     458,514     419,808

                         ----------- --------- ----------- -----------

   Selling, general and

    administrative,

    exclusive of co-

    promotion fees          125,567   130,465     509,168     450,982

   Co-promotion fees         37,278    55,135     179,731     217,750

                         ----------- --------- ----------- -----------

         Total selling,

          general, and

          administrative

          expense           162,845   185,600     688,899     668,732

                         ----------- --------- ----------- -----------

   Depreciation and

    amortization             59,125    35,318     166,874     144,591

   Research and

    development              44,910    40,665     149,425     143,596

                         ----------- --------- ----------- -----------

         Total operating

          costs and

          expenses          376,304   375,466   1,463,712   1,376,727

                         ----------- --------- ----------- -----------


OPERATING INCOME            156,968   137,448     673,170     611,773

OTHER INCOME:

   Interest expense          (2,148)   (1,932)     (7,818)     (9,857)

   Interest income           14,030     9,310      42,491      32,152

   Other, net                   904      (544)        223      (1,157)

                         ----------- --------- ----------- -----------

         Total other

          income             12,786     6,834      34,896      21,138

                         ----------- --------- ----------- -----------

INCOME BEFORE INCOME

 TAXES                      169,754   144,282     708,066     632,911

      Income tax expense     56,781    45,532     231,726     210,222

                         ----------- --------- ----------- -----------

NET INCOME               $  112,973  $ 98,750  $  476,340  $  422,689

                         =========== ========= =========== ===========



Basic net income per

 common share            $     0.46  $   0.41  $     1.96  $     1.75

                         =========== ========= =========== ===========


Diluted net income per

 common share            $     0.46  $   0.41  $     1.95  $     1.74

                         =========== ========= =========== ===========


Shares used in basic net

 income per share           243,162   242,298     242,854     242,196

Shares used in diluted

 net income per share       244,091   243,062     244,129     242,799





                      KING PHARMACEUTICALS, INC.

                 RECONCILIATION OF NON-GAAP MEASURES

                (in thousands, except per share data)

                             (Unaudited)


The following tables reconcile Non-GAAP measures to amounts reported

 under GAAP:


                          Three Months Ended    Twelve Months Ended

                           December 31, 2007      December 31, 2007

                         --------------------- -----------------------

                         (Unaudited)    EPS                    EPS

                         ----------- ---------             -----------


Net income, excluding

 special items           $  112,973            $  476,340

Diluted income per

 common share, excluding

 special items                       $   0.46              $     1.95

SPECIAL ITEMS:

   Excess purchase

    commitment (cost of

    revenues)                  (731)    (0.00)    (25,363)      (0.10)

   Contract termination

    (cost of revenues)            -         -      (3,845)      (0.02)

   Excess inventory

    reserve (cost of

    revenues)               (21,634)    (0.09)    (78,812)      (0.32)

   Special legal and

    professional fees

    (selling, general,

    and administrative)      (1,412)    (0.01)     (2,135)      (0.01)

   Accelerated

    depreciation (other

    operating costs and

    expenses)                (1,886)    (0.01)     (6,989)      (0.03)

   Research and

    development -In

    -process upon

    acquisition (other

    operating costs and

    expenses)               (32,010)    (0.13)    (35,310)      (0.14)

   Asset impairments

    (other operating

    costs and expenses)        (377)    (0.00)   (223,025)      (0.91)

   Restructuring charges

    (other operating

    costs and expenses)     (49,444)    (0.20)    (70,178)      (0.29)

   Loss on investment

    (other income)           (1,138)    (0.00)    (11,591)      (0.05)

   Loss from

    discontinued

    operations                  (18)    (0.00)       (369)      (0.00)

                         ----------- --------- ----------- -----------

Total special items

 before income taxes       (108,650)    (0.44)   (457,617)      (1.87)

Income tax benefit from

 special items               38,498      0.16     164,258        0.67

                         -----------           -----------

Net income               $   42,821            $  182,981

                         =========== --------- =========== -----------

Diluted income per

 common share, as

 reported under GAAP                 $   0.18              $     0.75

                                     =========             ===========



                          Three Months Ended    Twelve Months Ended

                           December 31, 2006      December 31, 2006

                         --------------------- -----------------------

                         (Unaudited)    EPS                    EPS

                         ----------- ---------             -----------


Net income, excluding

 special items           $   98,750            $  422,689

Diluted income per

 common share, excluding

 special items                       $   0.41              $     1.74

SPECIAL ITEMS:

   Special legal and

    professional fees

    (selling, general,

    and administrative)      (1,142)    (0.00)       (105)      (0.00)

   Arbitration

    settlement (selling,

    general, and

    administrative)         (45,128)    (0.19)    (45,128)      (0.19)

   Accelerated

    depreciation (other

    operating costs and

    expenses)                (1,486)    (0.01)     (2,958)      (0.01)

   Research and

    development-In-

    process upon

    acquisition (other

    operating costs and

    expenses)                     -         -    (110,000)      (0.45)

   Asset impairments

    (other operating

    costs and expenses)     (47,563)    (0.20)    (47,842)      (0.20)

   Restructuring charges

    (other operating

    costs and expenses)           -         -      (3,194)      (0.01)

   (Loss) gain on early

    extinguishment of

    debt (other income)         (70)    (0.00)        628        0.00

   (Loss) income from

    discontinued

    operations                 (203)    (0.00)        572        0.00

                         ----------- --------- ----------- -----------

Total special items

 before income taxes        (95,592)    (0.40)   (208,027)      (0.86)

Income tax benefit from

 special items               33,806      0.14      74,287        0.31

                         -----------           -----------

Net income               $   36,964            $  288,949

                         =========== --------- =========== -----------

Diluted income per

 common share, as

 reported under GAAP                 $   0.15              $     1.19

                                     =========             ===========

KING PHARMACEUTICALS, INC.

SUMMARY RECONCILIATION OF SPECIAL ITEMS FOR THE FOURTH QUARTERS ENDED DECEMBER 31, 2007 AND 2006

King recorded special items during the fourth quarter ended December 31, 2007, resulting in a net charge of $109 million, or $70 million net of tax, primarily due to (i) a restructuring charge totaling $49 million related to the Company's accelerated strategic shift, (ii) a $32 million charge for acquired in-process research and development associated with King's entry into a strategic collaboration with Acura Pharmaceuticals to develop and commercialize immediate release opioid products, and (iii) charges of $22 million primarily related to the impaired value of raw material inventory and related contracts associated with Altace(R).

During the fourth quarter ended December 31, 2006, King recorded special items resulting in a net charge of $96 million, or $62 million net of tax, primarily due to (i) an intangible asset impairment charge totaling $48 million related to Intal(R) and Tilade(R), and (ii) a $45 million charge for an arbitration award liability arising from the Company's termination of a Sonata(R) development agreement.

KING PHARMACEUTICALS, INC.

SUMMARY RECONCILIATION OF SPECIAL ITEMS FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

King recorded special items during the year ended December 31, 2007, resulting in a net charge of $458 million, or $293 million net of tax, primarily due to (i) a charge totaling $146 million related to the impaired value of the intangible assets associated with ALTACE(R), (ii) charges totaling $104 million primarily related to the impaired value of raw material inventory and related contracts associated with ALTACE(R), (iii) a restructuring charge totaling $70 million related to the Company's accelerated strategic shift, (iv) an impairment charge totaling $46 million related to the Company's sale of its Rochester, Michigan sterile manufacturing facility and certain legacy branded products, (v) a $35 million charge for acquired in-process research and development primarily associated with King's entry into a strategic collaboration with Acura Pharmaceuticals to develop and commercialize immediate release opioid products, and (vi) an impairment charge totaling $29 million related to Intal(R) and Tilade(R) as a result of the Company's decision to no longer pursue the development of a new formulation of Intal(R) utilizing HFA as a propellant.

During the year ended December 31, 2006, King recorded special items resulting in a net charge of $208 million, or $134 million net of tax, primarily due to (i) a $110 million charge for acquired in-process research and development associated with King's entry into a strategic collaboration with Arrow and certain of its affiliates to commercialize novel formulations of ramipril, (ii) an intangible asset impairment charge totaling $48 million related to Intal(R) and Tilade(R), and (iii) a $45 million charge for an arbitration award liability arising from the Company's termination of a Sonata(R) development agreement.

EXECUTIVE OFFICES

KING PHARMACEUTICALS, INC.

501 FIFTH STREET, BRISTOL, TENNESSEE 37620

Contact

King Pharmaceuticals, Inc.
James E. Green, 423-989-8125
Executive Vice President, Corporate Affairs
or
David E. Robinson, 423-989-7045
Senior Director, Corporate Affairs

Posted: February 2008


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