BRISTOL, Tenn.-- (BUSINESS WIRE) -- King Pharmaceuticals, Inc. (NYSE:KG) announced today that total revenues increased 11% to $545 million during the third quarter ended September 30, 2007, compared to $492 million in the third quarter of 2006. As a result of the special charges detailed below, the reported net loss equaled $41 million and diluted loss per share equaled $0.17 during the third quarter of 2007, compared to net earnings of $90 million and diluted earnings per share of $0.37 in the third quarter of the prior year. Excluding special items, net earnings equaled $128 million and diluted earnings per share equaled $0.52 during the third quarter ended September 30, 2007, compared to net earnings of $106 million and diluted earnings per share of $0.44 in the third quarter of 2006.

Brian A. Markison, Chairman, President and Chief Executive Officer of King, stated, “We are pleased with the Company’s continued strong quarterly revenue and cash flow from operations. In light of recent developments, we have moved quickly to accelerate our planned strategic shift to emphasize our neuroscience, hospital and acute care medicine platforms. As a result, we recorded a number of special items in the third quarter. This included a restructuring of our organization, particularly our sales force, to best support our strategic priorities.”

Mr. Markison added, “Consistent with the strategic shift initiated in 2005, we have sharpened our focus on specialty driven markets where we have a strong presence and a demonstrated commitment to meeting the needs of our customers. By leveraging King’s solid financial position, we will continue to enhance our presence in our targeted markets and opportunistically expand into other attractive specialty markets. Our recently announced alliance with Acura Pharmaceuticals to develop and commercialize ACUROX^™ Tablets and other products utilizing Acura’s Aversion^® Technology platform exemplifies this strategy, significantly strengthening King’s pain management franchise.”

Mr. Markison concluded, “We are confident that our focus on specialty driven markets will maximize King’s potential for long-term growth, enabling us to deliver on the expectations of our shareholders.”

As of September 30, 2007, the Company’s cash and cash equivalents and investments in debt securities totaled approximately $1.1 billion. The Company generated cash flow from operations of $174 million during the third quarter of 2007.

Net revenue from branded pharmaceuticals totaled $472 million for the third quarter of 2007, a 9% increase from $433 million during the third quarter of 2006.

ALTACE^® (ramipril) net sales totaled $169 million during the third quarter of 2007, compared to $159 million during the third quarter of 2006.

Net sales of SKELAXIN^® (metaxalone) totaled $106 million during each of the third quarters of 2007 and 2006.

THROMBIN-JMI^® (thrombin, topical, bovine, USP) net sales totaled $69 million during the third quarter of 2007, compared to $70 million during the third quarter of 2006.

Net sales of AVINZA^® (morphine sulfate extended release) totaled $32 million during the third quarter of 2007. The Company acquired AVINZA^® in February 2007.

Net sales of SONATA^® (zaleplon) totaled $18 million during the third quarter of 2007, compared to $19 million during the third quarter of the prior year.

LEVOXYL^® (levothyroxine sodium tablets, USP) net sales decreased to $21 million during the third quarter ended September 30, 2007 from $25 million during the third quarter of 2006.

King’s Meridian Medical Technologies business contributed revenue totaling $48 million during the third quarter of 2007, compared to $37 million during the same period of the prior year.

Royalty revenues, derived primarily from ADENOSCAN^® (adenosine), totaled $20 million during the third quarter ended September 30, 2007. For the third quarter ended September 30, 2007, net revenue from contract manufacturing equaled $2 million.

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, November 8, 2007, 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 third quarters and nine months ended September 30, 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 one-time 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 Company’s plan to continue enhancing its presence in target, specialty driven markets; statements pertaining to the Company’s potential for long-term growth and ability to deliver on the expectations of its shareholders; and statements pertaining to the Company’s planned webcast to discuss its third-quarter 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 unpredictability of the duration and results of the U.S. Food and Drug Administration’s (“FDA”) review of Investigational New Drug applications (“IND”), New Drug Applications (“NDA”), 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 November 8, 2007; 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 June 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.

KING PHARMACEUTICALS, INC.

SUMMARY RECONCILIATION OF SPECIAL ITEMS

FOR THE THIRD QUARTERS ENDED SEPTEMBER 30, 2007 AND 2006

King recorded special items during the third quarter ended September 30, 2007 resulting in a net charge of $264 million, or $168 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^®, (ii) charges totaling $82 million primarily related to the impaired value of raw material inventory and related contracts associated with ALTACE^®, and (iii) a charge totaling $20 million related to the restructuring of the Company’s workforce. With respect to the restructuring, the Company expects to incur an additional special charge of approximately $50 million in the fourth quarter of this year.

During the third quarter ended September 30, 2006, King recorded special items resulting in a net charge of $23 million, or $15 million net of tax, primarily due to a $25 million charge related to acquired in-process research and development associated with King’s collaboration with Arrow and certain of its affiliates to commercialize novel formulations of Altace^®.

KING PHARMACEUTICALS, INC.

SUMMARY RECONCILIATION OF SPECIAL ITEMS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006

King recorded special items during the nine months ended September 30, 2007 resulting in a net charge of $349 million, or $223 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^®, (ii) charges totaling $82 million primarily related to the impaired value of raw material inventory and related contracts associated with ALTACE^®, (iii) an impairment charge totaling $47 million related to the Company’s sale of its Rochester, Michigan sterile manufacturing facility and certain legacy branded products, (iv) an impairment charge totaling $29 million related to Intal^® and Tilade^® as a result of the Company’s decision to no longer pursue the development of a new formulation of Intal^® utilizing HFA as a propellant, and (v) a charge totaling $21 million related to the restructuring of the Company’s workforce. With respect to the restructuring, the Company expects to incur an additional special charge of approximately $50 million in the fourth quarter of this year.

King recorded special items during the nine months ended September 30, 2006, resulting in a net charge of $112 million, or $72 million net of tax, primarily due to $110 million in charges related to 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 Altace^®.