Medicis Reports Second Quarter 2008 Financial Results

SCOTTSDALE, Ariz., Aug. 5, 2008 (PRIME NEWSWIRE) -- Medicis (NYSE:MRX) today
announced revenues for the three months ended June 30, 2008, of approximately
$132.5 million, compared to approximately $108.9 million for the three months
ended June 30, 2007, representing an increase of approximately 22%. This
increase was due primarily to the continued strength of SOLODYN(R).
Non-generally accepted accounting principles (non-GAAP) earnings per diluted
share for the three months ended June 30, 2008, adjusted only for the $25
million payment to Ipsen for the RELOXIN(R) Biologics License Application (BLA)
acceptance by the U.S. Food and Drug Administration (FDA), was approximately
$0.40 per diluted share. Comparatively, for the three months ended June 30,
2007, the Company reported non-GAAP earnings per diluted share of $0.28 per
diluted share, adjusted only for the write-down of the long-lived asset value
associated with OMNICEF(R).

GAAP net income for the three months ended June 30, 2008, was approximately
$10.0 million, or approximately $0.17 per diluted share, compared to GAAP net
income of $15.5 million, or $0.24 per diluted share, for the three months ended
June 30, 2007. This decrease is due to the $25 million payment to Ipsen for the
RELOXIN(R) BLA acceptance by FDA.

The Company's achievement of approximately $132.5 million in revenues is
consistent with the Company's previously published guidance range of
approximately $132-$135 million for the three months ended June 30, 2008.
Non-GAAP earnings of approximately $0.40 per diluted share compare favorably to
the Company's previously published guidance range of approximately $0.32-$0.35
in earnings per diluted share for the three months ended June 30, 2008.

"We are pleased to announce another solid quarter," said Jonah Shacknai,
Chairman and Chief Executive Officer of Medicis. "We are excited to be
broadening our aesthetic research and development pipeline and to be entering
the international aesthetic market with the addition of the LipoSonix
technology. We continue to actively pursue business development opportunities,
looking at technologies with the potential to grow our clients' businesses with
enhanced patient offerings and build long-term stockholder value. As we look to
the second half of 2008, we remain focused on furthering the development of
products currently in our pipeline and readying for a first quarter introduction
of RELOXIN(R), pending FDA approval."

Acne Products

Medicis recorded revenues of approximately $79.5 million associated with its
acne products in the three months ended June 30, 2008, which represents an
increase of approximately $24.0 million, or approximately 43%, compared to
revenues of approximately $55.5 million for the three months ended June 30,
2007. This increase is due primarily to increased revenues associated with
SOLODYN(R) in the second quarter of 2008. Medicis' acne products include
primarily DYNACIN(R), PLEXION(R), SOLODYN(R), TRIAZ(R) and ZIANA(R).

Non-Acne Products

Medicis recorded revenues of approximately $40.9 million associated with its
non-acne products in the three months ended June 30, 2008, which represents a
decrease of approximately $5.2 million, or approximately 11%, compared to
revenues of approximately $46.1 million for the three months ended June 30,
2007. This decrease is primarily due to the year-over-year change in the
economic and competitive environment affecting the non-acne products category.
The Company's recorded revenues associated with its non-acne products for the
three months ended June 30, 2008, increased approximately $3.2 million, or
approximately 8%, compared to approximately $37.8 million for the three months
ended March 31, 2008. This increase is primarily due to the strength of
RESTYLANE(R). Medicis' non-acne products include primarily LOPROX(R),
PERLANE(R), RESTYLANE(R) and VANOS(R).

Other Non-Dermatological Products

Medicis recorded revenues of approximately $12.1 million associated with its
other non-dermatological products during the three months ended June 30, 2008,
which represents an increase of $4.9 million, or approximately 67%, compared to
revenues of approximately $7.2 million for the three months ended June 30, 2007,
and an increase of $2.3 million, or approximately 23%, compared to revenues of
approximately $9.8 million for the three months ended March 31, 2008. This
increase is primarily due to the strength of AMMONUL(R) and BUPHENYL(R).
Medicis' other non-dermatological products include primarily AMMONUL(R),
BUPHENYL(R) and contract revenue.

Other Income Statement Items

Gross profit margins for the three months ended June 30, 2008, increased
approximately 6 percentage points to approximately 93.1%, compared to
approximately 87.1% for the three months ended June 30, 2007. The increase in
gross profit margins was primarily attributable to the strength of higher margin
products, such as SOLODYN(R), during the quarter.

GAAP selling, general and administrative (SG&A) expense for the three months
ended June 30, 2008, was approximately $71.9 million, or approximately 54% of
revenues, compared to approximately $59.9 million, or approximately 55% of
revenues, for the three months ended June 30, 2007. The increase in SG&A was
primarily due to an increase in personnel costs, professional and legal expenses
and costs associated with the implementation of our new enterprise resource
planning system. Approximately $4.6 million was recorded in SG&A related to FAS
123R share-based compensation expense for the three months ended June 30, 2008,
as compared to $5.5 million for the three months ended June 30, 2007,
representing a year-over-year decrease of approximately 17%.

Non-GAAP research and development (R&D) expense for the three months ended June
30, 2008, adjusted only for the $25 million payment to Ipsen for the RELOXIN(R)
BLA acceptance by FDA, was approximately $8.0 million, or approximately 6% of
revenues, compared to approximately $7.1 million, or approximately 7% of
revenues, for the same period last year. R&D expense for the three months ended
June 30, 2008, consisted of ongoing expenses related to various R&D projects,
including RELOXIN(R) and SOLODYN(R). Approximately $0.1 million was recorded in
R&D related to FAS 123R share-based compensation expense for the three months
ended June 30, 2008, and for the three months ended June 30, 2007.

Cash Flow

Medicis recorded operating cash flow of approximately $15.3 million in the three
months ended June 30, 2008, which represents a decrease of approximately $38.0
million, or approximately 71%, compared to operating cash flow of approximately
$53.3 million for the three months ended June 30, 2007. This decrease includes
the $25 million payment to Ipsen for the RELOXIN(R) BLA acceptance by FDA during
the three months ended June 30, 2008.

2008 Guidance Update

Based upon information available currently to the Company, the Company's
financial guidance is as follows:

Calendar 2008
(in millions, except per share amounts)

First Second Third Fourth Quarter Calendar Year
Quarter Quarter Quarter (12/31/08) End 2008
(3/31/08)(6/30/08) (9/30/08) Estimated Estimated
Actual Actual Estimated
------------------------------------------------------------

Revenue $131 $133 $132-$135 $134-$137 $530-$536

Non-GAAP
diluted
earnings
per
share
objec-
tives $0.38(a) $0.40(a) $0.24-$0.27(b) $0.30-$0.33(b) $1.32-$1.38(b)

(a) A reconciliation of GAAP to non-GAAP is found in the financial
tables of this press release.

(b) The above guidance includes amortization associated with the
amortizable intangible assets related to the LipoSonix
acquisition. Amortization of the intangible assets is expected
to begin in the third quarter of 2008. The above guidance does
not include an anticipated approximately $30 million charge to
in-process R&D related to the acquisition of LipoSonix during
the third quarter of 2008.
The above guidance does not take into account potential special charges
associated with R&D milestones or contract payments, the financial impact of
changes in accounting or governmental pronouncements, the impact of a potential
generic launch to SOLODYN(R), revenues associated with a RELOXIN(R) approval,
and charges related to the accounting for our investment in Revance.

The Company is anticipating a strong third quarter for the acne products
category as historically there has been an increase in prescriptions for acne
products, such as ZIANA(R) and SOLODYN(R), correlating to the back-to-school
season. The third quarter revenue guidance assumes the seasonal increase in the
acne products category will offset the economic impact in the non-acne products
category. Significant changes in the U.S. economy or the seasonal trajectory of
acne prescriptions could have an impact on the revenue projections for the third
quarter and beyond.

Additionally, Medicis may acquire and/or license products or technologies from
third parties to enter into new strategic markets. The Company periodically
makes up-front, non-refundable payments to third parties for R&D work that has
been completed and periodically makes additional non-refundable payments for the
achievement of various milestones. There can be no certainty about the periods
in which these potential payments could be made, nor if any payments such as
these will be made at all. Any estimated future guidance does not include, among
other things, the potential payments associated with any such transactions.

At the time of this disclosure, Medicis believes these objectives are attainable
based upon information currently available to the Company's management. Medicis
disclaims any duty to update these projections, other than as required by law.

Diluted Earnings Per Share

Diluted earnings per share amounts are calculated using the "if-converted"
method of accounting regardless of whether the Company's outstanding convertible
bonds meet the criteria for conversion and regardless of whether the bondholders
actually convert their bonds into shares.

Use of Non-GAAP Financial Information

Medicis has provided in this release non-GAAP financial information which has
been adjusted for the charge related to our Revance investment. Adjusted
financial information is referred to as "non-GAAP." The Company has disclosed
non-GAAP financial information in this press release to provide meaningful
supplemental information regarding its operational performance and to enhance
its investors' overall understanding of its core financial performance.
Management measures the Company's performance using non-GAAP financial measures
such as those that are disclosed in this press release. This information
facilitates management's internal comparisons to the Company's historical core
operating results, facilitates management's comparisons to competitors' core
operating results and is a basis for financial decision making. Management
believes Medicis' investors benefit from seeing the Company's results on the
same basis as management, in addition to the GAAP presentation. In our view, the
non-GAAP financial measures are informative to investors, allowing them to focus
on the ongoing operations and the core results of Medicis' business.
Historically, Medicis has reported similar non-GAAP information to its investors
and believes the inclusion of comparative numbers provides consistency in the
Company's financial disclosures. This information is not in accordance with, or
an alternative to, information prepared using GAAP. It excludes items, such as
special charges for R&D, transaction costs, the impairment of long-lived assets,
and litigation reserves that may have a material effect on the Company's net
income and diluted net income per common share calculated in accordance with
GAAP. The Company excludes such charges and the related tax benefits when
analyzing its financial results as the items are distinguishable events.
Management believes that by viewing the Company's results of operations
excluding these charges, investors are given an indication of the ongoing
results of the Company's operations. A reconciliation of the non-GAAP financial
results and Medicis' GAAP financial results can be found below.

About Medicis

Medicis is the leading independent specialty pharmaceutical company in the
United States focusing primarily on the treatment of dermatological and
aesthetic conditions. The Company is dedicated to helping patients attain a
healthy and youthful appearance and self-image. Medicis has leading branded
prescription products in a number of therapeutic and aesthetic categories. The
Company's products have earned wide acceptance by both physicians and patients
due to their clinical effectiveness, high quality and cosmetic elegance.

The Company's products include the prescription brands RESTYLANE(R) (hyaluronic
acid), PERLANE(R) (hyaluronic acid), DYNACIN(R) (minocycline HCl), LOPROX(R)
(ciclopirox), PLEXION(R) (sodium sulfacetamide 10% and sulfur 5%), SOLODYN(R)
(minocycline HCl, USP) Extended Release Tablets, TRIAZ(R) (benzoyl peroxide),
LIDEX(R) (fluocinonide) Cream 0.05%, VANOS(R) (fluocinonide) Cream 0.1%, and
ZIANA(R) (clindamycin phosphate 1.2% and tretinoin 0.025%) Gel, BUPHENYL(R)
(sodium phenylbutyrate) Tablets and Powder and AMMONUL(R) (sodium phenylacetate
and sodium benzoate) Injection 10%/10%, prescription products indicated in the
treatment of Urea Cycle Disorder, and the over-the-counter brand ESOTERICA(R).
For more information about Medicis, please visit the Company's website at
www.medicis.com.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act. All statements included in this
press release that address activities, events or developments that Medicis
expects, believes or anticipates will or may occur in the future are
forward-looking statements, including:

-- Medicis' future prospects, including but not limited to the
statements above under the heading "2008 Guidance Update";
-- Medicis' ability to attain regulatory approvals of the product both
in the United States and worldwide and the expected timing of such
approvals;
-- information regarding business development activities and future
regulatory approval of the Company's products;
-- the expected costs to be incurred in connection with the research
and development, clinical trials, regulatory approvals,
commercialization and marketing of new products;
-- the commercial success of RESTYLANE(R), PERLANE(R), SOLODYN(R) and
ZIANA(R);
-- the potential for generic competition to LOPROX(R) Shampoo, SOLODYN
(R) and VANOS(R);
-- the future expansion of the aesthetics market; and
-- expectations relating to the Company's product development
pipeline, including the timing associated with the submission to,
or acceptance by, the FDA and other regulatory agencies of
submissions relating to products under development.
These statements are based on certain assumptions made by Medicis based on its
experience and perception of historical trends, current conditions, expected
future developments and other factors it believes are appropriate in the
circumstances. No assurances can be given, however, that these activities,
events or developments will occur or that such results will be achieved. Such
statements are subject to a number of assumptions, risks and uncertainties, many
of which are beyond the control of Medicis. The Company's business is subject to
all risk factors outlined in the Company's most recent annual report on Form
10-K for the year ended December 31, 2007, Quarterly Report on Form 10-Q for the
quarter ended March 31, 2008 and other documents we file with the Securities and
Exchange Commission. At the time of this press release, the Company cannot,
among other things, assess the likelihood, timing or forthcoming results of R&D
projects, the risks associated with the FDA approval process and risks
associated with significant competition within the Company's industry, nor can
the Company validate its assumptions of the full impact on its business of the
approval of competitive generic versions of the Company's primary brands, and
any future competitive product approvals that may affect the Company's brands,
including the RESTYLANE(R) franchise. The RESTYLANE(R) franchise currently
includes PERLANE(R) and RESTYLANE(R).

There are a number of additional important factors that could cause actual
results to differ materially from those projected, including:

-- the anticipated size of the markets and demand for Medicis'
products;
-- Increases or decreases in the expected costs to be incurred in
connection with the research and development, clinical trials,
regulatory approvals, commercialization and marketing of the
Company's products;
-- competitive developments affecting our products, such as the recent
FDA approvals of ARTEFILL(R), RADIESSE(R), ELEVESS(TM), EVOLENCE(R),
JUVEDERM(TM) Ultra, JUVEDERM(TM) Ultra Plus and PREVELLE(R) Silk,
competitors to RESTYLANE(R) and PERLANE(R), and generic forms of
our DYNACIN(R) Tablets, LOPROX(R), PLEXION(R), SOLODYN(R), VANOS(R)
or TRIAZ(R) products;
-- the Company's ability to successfully integrate the operations of
LipoSonix and commercialize the LipoSonix technology;
-- Medicis' ability to effectively compete in the marketplace in which
we compete today or in the future;
-- the inability to secure patent protection from filed patent
applications, inadequate protection of Medicis' intellectual
property or challenges to the validity or enforceability of the
Medicis' proprietary rights;
-- the availability of product supply or changes in the costs of raw
materials;
-- the receipt of required regulatory approvals;
-- product liability claims;
-- the introduction of federal and/or state regulations relating to
the Company's business;
-- dependence on sales of key products;
-- changes in the treatment practices of physicians that currently
prescribe Medicis' products;
-- the failure of prescription levels for our acne products to meet
the Company's quarterly expectations;
-- the uncertainty of future financial results and fluctuations in
operating results, and the factors that may attribute to such
fluctuations as set forth in our SEC filings;
-- the uncertainty of license payments and/or other payments due from
third parties;
-- changes in reimbursement policies of health plans and other health
insurers;
-- the timing and success of new product development by Medicis or
third parties;
-- the risks of pending and future litigation or government
investigations; and
-- other risks described from time to time in Medicis' filings with
the Securities and Exchange Commission.
Forward-looking statements represent the judgment of Medicis' management as of
the date of this release and Medicis disclaims any intent or obligation to
update any forward-looking statements contained herein, which speak as of the
date hereof.

NOTE: Full prescribing information for any of Medicis' prescription products is
available by contacting the Company. RESTYLANE(R) and PERLANE(R) are trademarks
of HA North American Sales AB, a subsidiary of Medicis Pharmaceutical
Corporation. All other marks are the property of their respective owners.

Medicis Pharmaceutical Corporation

Summary Statements of Operations (Unaudited)
--------------------------------------------
(in thousands, except per share data)

Three months ended Six months ended
June 30, June 30,
-------------------- --------------------
2008 2007 2008 2007
-------------------- --------------------

Product revenues $128,121 $105,902 $255,577 $198,273
Contract revenues 4,410 2,962 8,260 5,705

--------- --------- --------- ---------
Total revenues 132,531 108,864 263,837 203,978
Cost of revenues 9,121 14,011 20,223 24,508

--------- --------- --------- ---------
Gross profit 123,410 94,853 243,614 179,470

Operating expenses:
Selling, general and
administrative 71,872 59,894 143,934 122,155
Impairment of
intangible assets -- 4,067 -- 4,067
Research and
development 33,000 7,148 42,189 15,154
Depreciation and
amortization 6,780 5,878 13,502 11,332

--------- --------- --------- ---------
Total operating 111,652 76,987 199,625 152,708
expenses

Operating income 11,758 17,866 43,989 26,762

Other expense -- -- 2,871 --

Interest income, net (5,301) (6,683) (12,094) (13,032)

Income tax expense 7,061 9,026 21,160 14,983

--------- --------- --------- ---------
Net income $9,998 $15,523 $32,052 $24,811
========= ========= ========= =========

Basic net income per
common share $0.18 $0.28 $0.57 $0.44

Diluted net income per
common share $0.17 $0.24 $0.50 $0.39

Shares used in basic net
income per common share 56,493 55,936 56,425 55,782

Shares used in diluted
net income per common
share 68,443 71,318 69,343 71,466

Cash flow from
operations $15,273 $53,325 $48,376 $79,080

Medicis Pharmaceutical Corporation
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands, except per share data)

Three months ended Six months ended
June 30, 2008 June 30, 2008
---------------------- ---------------------
Dollar EPS Dollar EPS
Value Impact Value Impact
-------- -------------------- --------
GAAP net income $9,998 $0.18 $32,052 $0.57

Interest expense and
associated
bond offering costs
(tax-effected) 1,353 (a) 2,870 (a)

-------- --------
GAAP "if-converted"
net income and
diluted EPS $11,351 $0.17 $34,922 $0.50

Non-GAAP adjustments:

Research and
development
expense related to
milestone payment
to Ipsen upon the
FDA's acceptance of
RELOXIN(R) BLA 25,000 0.36 25,000 0.36

Charge related to
our investment in
Revance -- -- 2,871 0.05

Income tax effects (9,000) (0.13) (9,000) (0.13)

-------- -------- -------- --------
Non-GAAP "if-
converted" net
income and diluted
EPS $27,351 $0.40 $53,793 $0.78
======== ======== ======== ========

Shares used in basic
net income per
common share 56,493 56,425

Shares used in
diluted net income
per common share 68,443 69,343

(a) In order to determine "if-converted" net income, the tax-
effected net interest on the 2.5% and 1.5% contingent
convertible notes and the associated bond offering costs of
$1.4 million and $2.9 million are added back to GAAP net income
for the three months and six months ended June 30, 2008,
respectively.

Medicis Pharmaceutical Corporation
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands, except per share data)

Three months ended Six months ended
June 30, 2007 June 30, 2007
---------------------- ---------------------
Dollar EPS Dollar EPS
Value Impact Value Impact
-------- -------------------- --------

GAAP net income $15,523 $0.28 $24,811 $0.44

Interest expense and
associated bond
offering costs
(tax-effected) 1,618 (a) 3,292 (a)

-------- --------
GAAP "if-converted"
net income and
diluted EPS $17,141 $0.24 $28,103 $0.39

Non-GAAP adjustments:

Impairment of
intangible assets 4,067 0.06 4,067 0.06

Income tax effects (1,477) (0.02) (1,477) (0.02)

-------- -------- -------- --------
Non-GAAP "if-
converted" net
income and diluted
EPS $19,731 $0.28 $30,693 $0.43
======== ======== ======== ========

Shares used in basic
net income per
common share 55,936 55,782

Shares used in diluted
net income per
common share 71,318 71,466

(a) In order to determine "if-converted" net income, the tax-
effected net interest on the 2.5% and 1.5% contingent
convertible notes and the associated bond offering costs of $1.6
million and $3.3 million are added back to GAAP net income for
the three months and six months ended June 30, 2007,
respectively.

Medicis Pharmaceutical Corporation
Balance Sheets
(in thousands)

June 30, December 31,
2008 2007
---------- ----------
Assets
Cash, cash equivalents & short-term
investments $470,455 $794,680
Accounts receivable, net 23,422 12,377
Inventory, net 23,859 29,973
Deferred tax asset 18,731 --
Other current assets 17,586 18,049
---------- ----------
Total current assets 554,053 855,079
Property & equipment, net 24,981 13,850
Intangible assets, net 226,278 236,561
Deferred tax asset 63,688 59,445
Long-term investments 98,200 17,072
Other assets 12,706 12,622
---------- ----------
Total assets $979,906 $1,194,629
========== ==========

Liabilities and stockholders' equity
Contingent convertible senior notes 1.5%,
due 2033 $181 $283,910
Other current liabilities 138,290 111,090
---------- ----------
Total current liabilities 138,471 395,000
Contingent convertible senior notes 2.5%,
due 2032 169,145 169,145
Other liabilities 12,825 8,529
Stockholders' equity 659,465 621,955
---------- ----------
Total liabilities and stockholders' equity $979,906 $1,194,629
========== ==========

Working capital $415,582 $460,079
========== ==========
-0-
CONTACT: Medicis
Kara Stancell
(480) 291-5854