Zogenix Provides Corporate Update and Reports First Quarter 2015 Financial Results
Stephen J. Farr, Ph.D., previously serving as the Company's President, as the new Chief Executive Officer of Zogenix. Dr. Farr will also continue to serve as the President of Zogenixand will remain a member of the Company's Board of Directors. Roger Hawley, the previous CEO of Zogenix, will remain on the Board of Directors.
Successfully completed the sale of the Zohydro® ER pain franchise to
Pernix Therapeuticsfor $80 millionin cash, approximately 1.68 million shares of Pernixcommon stock, and potential regulatory and sales milestones that could total up to $283.5 million. This asset sale enables the Company to solely focus on its CNS clinical pipeline, substantially reduces its operating expenses and significantly strengthens the balance sheet.
The Company remains on track to commence its Phase 3 program for ZX008 in the third quarter of 2015. ZX008 is a low-dose formulation of fenfluramine, which has the potential to be a transformational treatment for Dravet syndrome, a rare and debilitating form of epilepsy that begins in infancy. Significant progress has been made on activities to initiate the clinical program, including a new synthetic manufacturing route for fenfluramine, the development of a new oral liquid formulation suitable for a pediatric population, and the selection of clinical and commercial suppliers of the drug substance and drug product.
Commenced dosing in patients enrolled in the Company's Relday™ Phase 1b, multi-dose, clinical study. Relday is a proprietary, subcutaneously injected, once-monthly formulation of risperidone designed to provide potentially significant improvements over current long-acting injection treatments for schizophrenia. Results from this study are expected in the third quarter of 2015.
Renee Tannenbaum, Pharm.D., currently Head of Global Customer Excellence of AbbVie, Inc., to the Zogenix Board of Directors.
"As we move forward with the continued clinical development of our CNS-focused pipeline, we are in a strong operating position," said
First Quarter 2015 Financial Results Compared to First Quarter 2014 Financial Results
As a result of the sale of the Zohydro ER business, all Zohydro ER revenue and expenses have been excluded from continuing operations for all periods herein and reported as discontinued operations. All prior period information has been recast to conform to this presentation.
Total revenue for the first quarter of 2015 was
$4.6 million, and reflected zero net product revenues (due to the sale of Zohydro ER, completed in April 2015), $4.2 millionof contract manufacturing revenue and $0.4 millionof service and other product revenue (comprised primarily of co-promotion fees earned for Migranal® sales under the Company's agreement with Valeant Pharmaceuticals). This compared with total revenue of $7.4 millionin the same quarter last year, which included $6.5 millionof net product revenue and $0.9 millionof services and other revenue. The increase in contract manufacturing revenue and decrease in net product revenue in the 2015 first quarter was due to the sale of the Sumavel® DosePro® business to Endo International Plcin May 2014and subsequent performance under the related supply agreement.
First quarter 2015 research and development expenses totaled
$5.2 million, up from $2.5 millionin the first quarter a year ago as the Company continued preparations for its two Phase 3 studies for ZX008, and a multi-dose clinical study for Relday, which commenced in February 2015.
First quarter 2015 selling, general and administrative expense totaled
$6.3 million, compared with $12.5 millionin the first quarter a year ago. The Company incurred selling expenses for Sumavel DosePro prior to its sale in May 2014.
Net loss from continuing operations was approximately
$10.2 million, compared with $5.0 millionin the same quarter a year ago. Total net loss, including discontinued operations, for the first quarter of 2015 was $22.9 million, or $0.15per basic share and fully diluted, compared with $20.9 million, or $0.15per basic share and $0.20fully diluted, for the first quarter a year ago.
Cash and cash equivalents at
March 31, 2015totaled $21.3 million, which did not reflect the cash proceeds of $70.0 million(net of $10.0 millionplaced in escrow) received subsequent to quarter's end related to the April 2015sale of Zohydro ER to Pernix.
The Company anticipates its current financial resources will provide sufficient cash to fund operations through several significant milestones, which include the U.S. and Europe Phase 3 studies for ZX008, a targeted NDA submission in the U.S. and MAA submission in
Europefor ZX008, and the end of Phase 2 meeting for Relday.
2015 Financial Guidance
Below is the Company's financial guidance for the remainder of 2015, reflecting continuing operations following the sale of Zohydro ER.
Research and development expenses are expected to be
$25.0 million to $28.0 millionfor the second through fourth quarters of 2015, reflecting the initiation of ZX008 clinical studies and the recent commencement of the Relday multi-dose clinical study.
General and administrative expenses are expected to be
$21.0 million to $23.0 millionfor the second through fourth quarters of 2015.
Contract manufacturing revenue from the supply of Sumavel DosePro to
Endowill continue at a low single-digit markup over cost of contract manufacturing.
Additionally, the pre-tax net gain on sale of Zohydro ER of approximately
Conference Call Details
Investors interested in participating in today's live call can dial 888-430-8694 from the U.S. and international callers can dial 1-719-325-2308 and use conference ID: 6728810. A telephone replay will be available approximately two hours after the call and will run through
Forward Looking Statements
DosePro ® is a registered trademark and Relday™ is a trademark of
All other trademarks are of the associated companies.
|Consolidated Statements of Operations|
|(in thousands, except per share amounts)|
|Three Months Ended|
|Net product revenue||$ --||$ 6,485|
|Contract manufacturing revenue||4,181||--|
|Service and other revenue||433||904|
|Operating (income) expense:|
|Cost of goods sold||--||3,333|
|Cost of contract manufacturing||3,923||--|
|Research and development||5,150||2,541|
|Selling, general & administrative||6,268||12,528|
|Change in fair value of contingent consideration||(1,000)||--|
|Total operating expense||14,413||18,669|
|Income (loss) from operations||(9,799)||(11,280)|
|Other income (expense):|
|Change in fair value of warrant liabilities||410||8,269|
|Change in fair value of embedded derivatives||--||(14)|
|Other income (expense)||(120)||(47)|
|Total other income (expense)||(353)||6,328|
|Net income (loss) before income taxes||(10,152)||(4,952)|
|Provision for income taxes||(13)||--|
|Net income (loss) from continuing operations||(10,165)||(4,952)|
|Income (loss) from discontinued operations, net of applicable tax||(12,696)||(15,980)|
|Net loss||$ (22,861)||$ (20,932)|
|Net loss per share, basic||$ (0.15)||$ (0.15)|
|Net loss per share, diluted||$ (0.15)||$ (0.20)|
|Weighted average shares outstanding, basic||153,362||139,309|
|Weighted average shares outstanding, diluted||153,362||145,323|
|Condensed Consolidated Balance Sheets|
|March 31,||December 31,|
|Cash and cash equivalents||$ 21,314||$ 42,205|
|Trade accounts receivable, net||1,624||6,078|
|Prepaid expenses and other current assets||4,007||2,555|
|Current assets of discontinued operations||6,636||7,196|
|Total current assets||55,183||77,978|
|Property and equipment, net||10,276||10,618|
|Noncurrent assets of discontinued operations||3,405||2,673|
|Total assets||$ 180,244||$ 202,835|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Accounts payable||$ 5,191||$ 4,742|
|Common stock warrant liabilities||4,683||5,093|
|Revolving credit facility||2,565||1,450|
|Long term debt, current portion||1,881||--|
|Current liabilities of discontinued operations||21,397||22,307|
|Total current liabilities||44,972||44,237|
|Long term debt, less current portion||17,447||19,242|
|Contingent purchase consideration||52,000||53,000|
|Deferred tax liability||20,500||20,500|
|Deferred revenue, less current portion||7,345||7,063|
|Other long-term liabilities||1,138||1,053|
|Total liabilities and stockholders' equity||$ 180,244||$ 202,835|
Ann RhoadsChief Financial Officer Zogenix, Inc.858-436-9208 firstname.lastname@example.org Andrew McDonaldFounding Partner LifeSci Advisors, LLC646-597-6987 Andrew@LifeSciAdvisors.com