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Astex Pharmaceuticals Reports 2012 Second Quarter Financial
Results
GlobeNewswire
2012-07-31
Dacogen Royalty Revenue Increased 25% From Prior Year
$5.4 Million Earned on Phase I Trial Initiation of FGFR Kinase Inhibitor
Dacogen Receives Positive Regulatory Recommendation in the EU for
Treatment of Elderly AML
DUBLIN, Calif., July 30, 2012 (GLOBE NEWSWIRE) -- Astex
Pharmaceuticals, Inc. (Nasdaq:ASTX), today reported financial results
for the second quarter ended June 30, 2012. The Company reported net
income for the 2012 second quarter of $1.2 million, or $0.01 per basic
and diluted share, compared with $903,000, or $0.01 per basic and
diluted share, for the same prior year period. The Company reported net
income for the six months ended June 30, 2012 of $5.5 million, or $0.06
per basic and $0.05 per diluted share, compared with a net income of
$6.4 million, or $0.11 per basic and $0.10 per diluted share, for the
same prior year period.
Highlights of 2012 Second Quarter:
-- Dacogen(R) (decitabine) for Injection received a positive regulatory
recommendation in the European Union (EU) for the treatment of elderly
Acute Myeloid Leukemia (AML). If approved, Dacogen would receive 10
years of market exclusivity in the EU and the Company would earn a
milestone payment of $5.0 million.
-- Dacogen second quarter royalty revenue increased 25% from the prior
year's second quarter, from $11.5 million to $14.4 million.
-- Earned $5.4 million on Phase I trial initiation of a Fibroblast Growth
Factor Receptor (FGFR) kinase inhibitor from the collaborative drug
discovery program with Janssen Pharmaceutica NV.
-- Ended 2012 second quarter with $121 million in cash & marketable
securities.
-- Revised 2012 financial guidance from a forecasted net loss of $15
million to a net loss of $5 million with the potential to be
operationally cash flow positive.
"Astex's financial position remains strong, and our operating
performance for 2012 to date is positive. Pipeline products in
development continue to advance in Phase II trials with expected trial
result readouts in the near future," said James S.J. Manuso, PhD,
chairman and chief executive officer of Astex Pharmaceuticals. "We plan
to initiate new Phase II clinical proof-of-concept trials for our
prioritized products, AT13387 and SGI-110, in solid tumors during the
second half of 2012."
Dr. Manuso continued, "We were pleased to learn that the Committee for
Medical Products for Human Use (CHMP) of the European Medicines Agency
(EMA) issued a positive opinion recommending approval of Dacogen for
the treatment of elderly AML. The CHMP's reference to the impact of
Dacogen on overall survival in elderly AML was gratifying. If Dacogen
is approved in the EU it would become the first drug ever to be
approved for the elderly AML indication."
2012 Second Quarter Financial Results
Total revenues for the 2012 second quarter were $19.9 million compared
with $11.7 million for the same prior year period. Total revenues for
the 2012 second quarter include royalty revenue of $14.4 million
compared with $11.5 million for the same prior year period. Total
revenues for the 2012 second quarter also include development and
license revenue of $5.4 million compared with $127,000 for the same
prior year period. Development and license revenue for the 2012 second
quarter reflects revenue earned from a collaborative drug discovery
program with Janssen Pharmaceutica NV and was triggered when the
partner received clearance to commence a Phase I clinical trial of a
FGFR kinase inhibitor.
Excluding the gain on sale of products, total operating expenses for
the 2012 second quarter were $21.0 million, compared with $11.5 million
for the same prior year period. The primary reasons for the increase in
total operating expenses for the 2012 second quarter compared with the
same prior year period are the consolidation of research and
development and general and administrative costs related to the
acquisition of Astex Therapeutics Limited effective July 20, 2011,
increased research and development activities from product development
and clinical trial programs associated with SGI-110, AT13387, and
amuvatinib, and the amortization of intangible assets related to the
acquisition. The non-cash amortization of intangible assets was $1.9
million for the 2012 second quarter while there was no amortization
expense for the same prior year period. Stock-based compensation
expense, a non-cash expense that is included in operating expenses, was
$810,000 for the 2012 second quarter, compared with $744,000 for the
same prior year period.
The gain on sale of products for the 2012 second quarter was $700,000
compared with the same amount for the same prior year period. The gain
on sale of products relates to the receipt of the last contractual
payment resulting from the 2007 sale of the worldwide rights for
Nipent(R) (pentostatin for injection) to Mayne Pharma (acquired by
Hospira, Inc. in February 2007).
The Company reported net income for the 2012 second quarter of $1.2
million, or $0.01 per basic and diluted share, compared with net income
of $903,000, or $0.01 per basic and diluted share, for the same prior
year period. The net income for the 2012 second quarter includes an
income tax benefit of $1.6 million compared with an income tax
provision of $6,000 for the same prior year period. The income tax
benefit for the 2012 second quarter was primarily due to the
recognition of a tax benefit associated with the amortization of
deferred tax liabilities resulting from the acquisition and foreign
research and development tax credits related to the UK subsidiary.
Financial Position
As of June 30, 2012, the Company had $120.8 million in cash, cash
equivalents, and current and non-current marketable securities compared
to $126.2 million at March 31, 2012.
Operational Highlights
During April 2012, the Company presented interim Phase I/II clinical
data showing that subcutaneous SGI-110, a novel hypomethylating agent
and follow on to Dacogen, demonstrated a differentiated pharmacokinetic
(PK) profile, good tolerability, and preliminary complete responses in
heavily pretreated AML patients enrolled in the Phase I segment of the
trial. The data were presented at an oral session at the American
Association for Cancer Research (AACR) 2012 Annual Meeting in Chicago,
IL and were featured in a joint AACR-Stand Up To Cancer (SU2C) media
forum. SU2C has provided funding for the Epigenetics Dream Team that is
collaborating on the scientific and clinical evaluation of SGI-110.
During June 2012, the Company announced it had initiated the Phase II
dose expansion segment of the clinical trial of SGI-110 in patients
with intermediate-2 or high risk myelodysplastic syndromes (MDS) or
elderly AML. Treatment-naive MDS and AML ( greater than or equal to 65
years) will be enrolled in the dose expansion. Enrollment in the Phase
II segment is currently open, and the first patient has been dosed. The
Phase II segment includes expansion to approximately 90 patients
treated on the five day subcutaneous dosing schedule to better evaluate
both efficacy and safety in MDS and AML patients.
In June 2012, the Company and the National Cancer Institute (NCI)
presented data from the two Phase I trials of our HSP90 inhibitor
AT13387 at the 2012 American Society of Clinical Oncology (ASCO) Annual
Meeting held in Chicago, IL. The trials defined the maximum tolerated
dose (MTD) of the drug using different schedules and demonstrated that
the drug was well tolerated at the MTD. In study AT13387-01, three of
the seven refractory gastrointestinal stromal tumor (GIST) patients
recruited into the study achieved Partial Response or Stable Disease
for more than 6 months.
Also in June 2012, the Company announced that Janssen Pharmaceutica NV
had received clearance to commence a Phase I clinical trial of a FGFR
kinase inhibitor from its cancer drug discovery collaboration with
Astex. The regulatory approval required to take the compound into Phase
I triggered a payment obligation to Astex of GBP3.5 million (US$5.4
million). Astex is eligible to receive further milestones during
clinical development and royalties on commercialization of products
derived from the collaboration. The FGFR inhibitor program originated
from a collaboration between Astex, the Cancer Research UK Drug
Discovery Group at the Newcastle Cancer Centre (NCC), and the Northern
Institute for Cancer Research, Newcastle University, UK. As part of the
collaboration, the Company applied its fragment-based drug discovery
approach, Pyramid(TM), to identify lead compounds inhibiting FGFR
kinase. The partnership with Janssen was entered into in June 2008.
Janssen is responsible for the clinical and regulatory development of
all products arising from the collaboration and for their global
commercialization.
During July 2012, the Company announced that Janssen-Cilag
International NV was notified that the CHMP of the EMA granted a
positive opinion recommending approval of Dacogen for the treatment of
adult patients (age 65 years and above) with newly diagnosed de novo or
secondary AML that according to the World Health Organization (WHO)
classification are not candidates for standard induction chemotherapy.
Janssen is the licensee for Dacogen in territories outside of the
United States, Canada and Mexico. The CHMP is the committee responsible
for the scientific assessment of products seeking centralized marketing
authorization throughout the EU. The CHMP's positive opinion is now
referred for approval to the European Commission. Janssen anticipates
receiving the regulatory decision from the Commission later in the 2012
third quarter. If approved, Dacogen will become the first drug to be
approved for the elderly AML indication, and clinicians and patients in
Europe would have access to this new treatment option. As an Orphan
Drug, Dacogen would have ten years of market exclusivity for the
elderly AML indication in the EU. In addition, Astex would earn a $5.0
million milestone payment upon first commercialization of the drug in
addition to earning future royalty revenue.
2012 Revised Financial Guidance
The revised financial guidance for 2012 is presented in the table
below:
2012 Financial Guidance
(In $000's)
Prior Revised
----------- ----------
Revenues:
Royalty revenue $ 67,000 $ 70,000
Development & license revenue 1,400 6,900
----------- ----------
68,400 76,900
----------- ----------
Operating expenses: **
Research & development 67,000 65,000
Amortization of intangibles 8,500 8,500
General & administrative 15,000 15,000
Gain on sale of products (700) (700)
----------- ----------
89,800 87,800
----------- ----------
Loss from operations (21,400) (10,900)
Other income (expense), net 400 (100)
Income tax benefit 6,000 6,000
----------- ----------
Net income (loss) $ (15,000) $ (5,000)
=========== ==========
Weighted average shares
outstanding 93,000 93,000
=========== ==========
** Includes recurring
non-cash charges of
approximately $12 million.
Conference Call Information
Astex Pharmaceuticals will host a conference call to discuss the 2012
second quarter financial results today at 1:30 p.m. PT / 4:30 p.m. ET.
A live webcast of the conference call is accessible via the investor
relations section of the Company's website at http://www.astx.com. A
webcast replay of the conference call will be available for 30 days.
About Astex Pharmaceuticals
Astex Pharmaceuticals is dedicated to the discovery and development of
novel small molecule therapeutics with a focus on oncology. The Company
is developing a proprietary pipeline of novel therapies and is creating
de-risked products for partnership with leading pharmaceutical
companies. Astex Pharmaceuticals developed Dacogen and receives
significant royalties on global sales.
For more information about Astex Pharmaceuticals, Inc., please visit
http://www.astx.com.
The Astex Pharmaceuticals, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=12273
Forward-Looking Statements
This press release contains "forward-looking" statements within the
meaning of Section 21A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, and is
subject to the safe harbor created thereby. Actual results could differ
materially from those projected in the forward-looking statements as a
result of a number of risks and uncertainties. These forward-looking
statements include, but are not limited to, statements regarding
expectations regarding the completion of drug candidate optimization
and advancement of drug candidates in the clinic; expectations
regarding our clinical trials including the production and timing of
clinical data from these trials; expectations regarding the potential
growth of worldwide sales of Dacogen, expectations regarding the
ability of the Company to expand and develop our pipeline of products
in the years ahead; the Company's ability to develop the current and
future pipeline into commercially viable drugs; the expectations
regarding our clinical trials including the timing of clinical proof of
concept data from these trials; the sufficiency of our operating cash
to fund our development initiatives this year and thereafter;
expectations about increases in royalty revenue; expectations regarding
research and development expenses and general and administrative
expenses; expectations regarding development and license revenue;
estimates of 2012 net income or losses and anticipated tax benefits;
statements about expected losses or profitability; estimates regarding
our total expected shares outstanding; and expectations regarding
Eisai's and Janssen's plans for Dacogen including with respect to
submissions to the EMA. Important factors that could cause actual
results to differ materially from the expectations reflected in the
forward-looking statements include, but are not limited to: the
ultimate outcome of the submission of the European regulatory filing;
the ability of Eisai and Janssen to generate global sales of Dacogen;
the outcomes of the on-going clinical trials; risks and uncertainties
related to the achievement of developmental milestones with respect to
the compounds in development; the research and development of
amuvatinib, AT13387, SGI-110, and other programs; the decision by
certain strategic partners whether or not to license and then develop
and commercialize the products that are the subject of our
collaboration with them and whether any of those products will be
commercially successful. In general, our future success is dependent
upon numerous factors, including our ability to generate pre-clinical
development candidates for selection into clinical testing, obtaining
regulatory approval of product development programs, conducting and
completing clinical trials, obtaining regulatory approval of our
products and product candidates, our ability to successfully partner
with leading pharmaceutical companies, and creating opportunities for
future commercialization of compounds. Our future revenue and operating
and net loss or income could be worse than anticipated if demand for
our products is less than expected, if our partnerships and
collaborations with other parties are not successful, if our drug
pipeline does not progress, or if the introductions of new products are
delayed, for any reason, including regulatory delay. References made to
the discussion of risk factors are detailed in the Company's filings
with the Securities and Exchange Commission including reports on its
most recently filed Form 10-K and Form 10-Q. These forward-looking
statements are made only as of the date hereof, and we disclaim any
obligation to update or revise the information contained in any such
forward-looking statements, whether as a result of new information,
future events or otherwise.
Condensed Consolidated Statements of Operations and Balance Sheets to
follow
ASTEX PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
-------------------- --------------------
2012 2011 2012 2011
--------- --------- --------- ---------
Revenues:
Royalty revenue $ 14,441 $ 11,539 $ 35,035 $ 28,510
Development and license
revenue 5,439 127 6,868 254
--------- --------- --------- ---------
Total revenues 19,880 11,666 41,903 28,764
Operating expenses:
Research and development 15,394 7,992 29,458 15,985
General and administrative 3,650 3,532 7,992 7,152
Amortization of intangibles 1,941 -- 4,098 --
Gain on sale of products (700) (700) (700) (700)
--------- --------- --------- ---------
Total operating expenses 20,285 10,824 40,848 22,437
--------- --------- --------- ---------
Income (loss) from operations (405) 842 1,055 6,327
Interest income 45 57 87 106
Other income (expense) (31) 10 (75) 10
--------- --------- --------- ---------
Income (loss) before income
taxes (391) 909 1,067 6,443
Income tax benefit
(provision) 1,630 (6) 4,413 (50)
--------- --------- --------- ---------
Net income $ 1,239 $ 903 $ 5,480 $ 6,393
========= ========= ========= =========
Net income per common share:
Basic $ 0.01 $ 0.01 $ 0.06 $ 0.11
========= ========= ========= =========
Diluted $ 0.01 $ 0.01 $ 0.05 $ 0.10
========= ========= ========= =========
Weighted average shares
outstanding:
Basic 93,135 60,399 93,103 60,382
========= ========= ========= =========
Diluted 102,722 61,070 103,355 61,044
========= ========= ========= =========
ASTEX PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
December
June 30, 31,
2012 2011
---------- ----------
ASSETS
Current assets:
Cash and cash equivalents $ 26,338 $ 39,788
Marketable securities 92,942 86,444
Accounts receivable 6,041 5,189
Income tax receivable 4,413 2,963
Prepaid expenses and other
current assets 2,329 2,186
---------- ----------
Total current assets 132,063 136,570
Marketable securities,
non-current 1,518 1,819
Property, plant and
equipment, net 6,870 7,013
Goodwill 45,256 44,794
Other intangible assets, net 83,045 86,198
Other assets 554 554
---------- ----------
Total assets $ 269,306 $ 276,948
========== ==========
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,113 $ 7,529
Accrued compensation 3,703 5,324
Other accrued liabilities 613 613
Deferred acquisition
consideration 4,404 17,353
Deferred tax liability 3,377 3,342
Deferred revenue -- 509
---------- ----------
Total current liabilities 19,210 34,670
Warrant liability 195 187
Deferred acquisition
consideration, non-current 14,586 11,624
Deferred tax liability,
non-current 6,915 9,545
Deferred revenue, non-current -- 921
---------- ----------
Total liabilities 40,906 56,947
Total stockholders' equity 228,400 220,001
---------- ----------
Total liabilities and
stockholders' equity $ 269,306 $ 276,948
========== ==========
CONTACT: Timothy L. Enns
Astex Pharmaceuticals, Inc.
Senior Vice President
Corporate Communications & Marketing
Tel: +1 (925) 560-2810
E-mail: tim.enns@astx.com
Alan Roemer
The Trout Group
Managing Director
Tel: +1 (646) 378-2945
E-mail: aroemer@troutgroup.com
Susanna Chau
Astex Pharmaceuticals, Inc.
Manager
Investor Relations
Tel: +1 (925) 560-2845
E-mail: susanna.chau@astx.com
Kari Watson
MacDougall Biomedical Communications
Senior Vice President
Tel: +1 (781) 235-3060
E-mail: kwatson@macbiocom.com
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