Zogenix reports first quarter 2012 financial results (Globe Newswire) - May 14, 2012 - Sumavel DosePro(sumatriptan injection) highlights includes total revenues of $18.3M achieved in Q1 2012; Net product revenue increased to $9.9M in Q1 2012 up 32% over Q1 2011; During Q1 2012, company continued to achieve growth in Sumavel DosePro product sales and prescriptions; Company fully expect to capitalize on this market segment
Financial update • Migraine
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SUMAVEL(R) DosePro(R) (sumatriptan injection) Highlights
-- Total revenues of $18.3 million achieved in the first quarter 2012
-- Net product revenue increased to $9.9 million in the first quarter 2012, up 32% over the first quarter 2011
-- Contract revenue of
$8.5 million reflects final recognition of deferred revenue from conclusion of Astellas co-promotion
-- Increased total prescriptions to nearly 22,000 for the first quarter, up
50% over the first quarter 2011 and 3% over the fourth quarter 2011*
-- Maintained 39% refill rate for SUMAVEL DosePro*
-- Successfully completed transition of key primary care physician accounts
from Astellas; Zogenix, now fully responsible for the brand, launching
new campaign and Migraine Toolbox to those offices
Recent Highlights and Milestones
-- Submitted New Drug Application (NDA) for Zohydro(TM) (hydrocodone bitartrate) extended-release capsules on May 1, 2012, which, if approved, could be the first hydrocodone product to offer the benefit of less frequent dosing and the ability to treat patients with chronic pain without the risk of acetaminophen-related liver injury -- Entered exclusive co-marketing arrangement with Battelle to advance DosePro out-licensing efforts
SAN DIEGO, May 14, 2012 (GLOBE NEWSWIRE) -- Zogenix, Inc. (Nasdaq:ZGNX), a pharmaceutical company commercializing and developing products for the treatment of central nervous system disorders and pain, today reported financial results for the first quarter ended March 31, 2012.
Roger Hawley, chief executive officer of Zogenix, stated, "During the first quarter, we continued to achieve growth in SUMAVEL DosePro product sales and prescriptions. We also successfully executed our transition plan with Astellas, with our sales force now responsible for detailing the specialist and primary care segments as of April 1st. Our initial experience in the transition of primary care has been encouraging. We fully expect to capitalize on this market segment as we continue to actively engage with potential co-promotion partners."
Stephen J. Farr, Ph.D., president and chief operating officer of Zogenix, said, "We made considerable progress on our research and development programs. On May 1st, we achieved the significant milestone of submitting our NDA for Zohydro to the FDA. The submission was in-line with our timing expectations and puts Zohydro on track to potentially gain approval in the first half of 2013. In addition, we are in final preparations for submitting our Investigational New Drug (IND) application for our second DosePro product candidate, Relday(TM), within the next 30 days. Furthermore, our efforts with Battelle to launch their DosePro marketing campaign this quarter are rapidly progressing, providing the opportunity to continue to enhance the value of Zogenix through new product partnerships and technology out-licensing agreements."
First Quarter 2012 Financial Results
Total revenues for the first quarter 2012, which consist of net product revenue and contract revenue, were $18.3 million, up 103% from $9.0 million in the first quarter 2011. Net product revenue on sales of SUMAVEL DosePro for the first quarter 2012 was $9.9 million, up 32% from $7.5 million in the first quarter 2011. This increase was driven primarily by higher unit volume. Contract revenue for the first quarter 2012 was $8.5 million, reflecting the accelerated amortization of license and milestone payments received from Astellas based on the earlier termination date of the co-promotion agreement. This compares to contract revenue of $1.6 million in the first quarter of 2011. As a result of the termination of the co-promotion agreement with Astellas, no further contract revenue will be recognized related to this agreement.
Cost of sales for the first quarter 2012 was $5.1 million, compared to $4.9 million in the first quarter 2011. Product gross margin was 49% in the first quarter 2012, compared to 35% in the first quarter 2011. The improvement in gross margin was driven primarily by increased net product revenue for the quarter and a decrease in charges for underutilized capacity.
Royalty expense for the first quarter 2012 was $357,000, compared to $297,000 in the first quarter 2011, reflecting the impact of increased net product revenue.
Research and development expenses for the first quarter 2012 were $6.0 million, representing a 30% decrease from $8.5 million in the first quarter 2011. The decrease in research and development expenses was the result of lower clinical costs associated with the Company's Phase 3 clinical trials, which were completed in 2011.
Selling, general and administrative expenses for the first quarter 2012 were $14.6 million, compared to $12.9 million in the first quarter 2011. The 14% increase in selling, general and administrative expenses was due primarily to expansion of the Zogenix sales force completed in the fourth quarter 2011, higher sampling costs, higher service fees to Astellas, and higher stock-based compensation charges.
Other expenses for the first quarter 2012 were $2.6 million, which included the cost of interest expense on our debt obligations with Oxford and Silicon Valley Bank, as well as royalty payments and non-cash mark-to-market adjustments for derivatives and warrant liabilities related to the Company's July 2011 royalty financing and equity investment agreement with Cowen Healthcare Royalty Partners. The Company records interest expense on the Cowen debt obligation on an effective interest method at a rate in the mid-to-high teens, while actual quarterly royalty payments are made at a rate of 5% of net product revenues historically, increasing to 5.75% of net product revenues in April 2012.
Net loss for the first quarter 2012 was $10.3 million, or $0.16 per share, compared to a net loss of $19.0 million, or $0.56 per share, for the first quarter 2011.
The weighted average shares outstanding were 65,369,000 for the first quarter 2012.
Cash and cash equivalents as of March 31, 2012, were $39.8 million.
2012 Full Year Financial Guidance
The Company is reiterating its full year 2012 financial guidance and providing additional detail as follows:
-- Total revenue expected to be $45.5 - $48.5 million
-- Prescription
growth expected to be 25% - 30% over 2011
-- Net product revenue
expected to be $37 - $40 million
-- Product gross margin expected to increase to 46% - 50% from 37% for 2011
-- Research and development expenses expected to be $20 - $22 million
-- Second quarter expenses will include a $1.8 million NDA filing fee
to the FDA and a $1.0 million milestone payment to Alkermes Pharma
Ireland Ltd. related to the NDA submission for Zohydro
-- Selling, general and administrative expenses expected to decline to $48
- $50 million from $60.4 million in 2011 due to lower fees to
Astellas
-- Second quarter expenses expected to be higher than
subsequent quarters as a result of launching promotional activity in
primary care physician offices
-- Net interest expense is expected to be approximately $10 million for
2012, half of which represents non-cash borrowing costs including
amortization of debt discounts and debt acquisition costs
The Company's 2012 financial guidance does not include the impact of a potential new co-promotion partner for SUMAVEL DosePro.
Conference Call and Web Cast
Zogenix will hold a conference call today, May 14, 2012 at 4:30
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