Zogenix Provides Corporate Update and Reports Second Quarter 2016 Financial Results
- Initiated second Phase 3 clinical trial, a multi-national study (Study 1502), for the Company’s lead product candidate, ZX008, as an adjunctive treatment of seizures in children with Dravet syndrome, at sites in Western Europe and Australia.
- Continued enrollment in the first Phase 3 clinical trial of ZX008 in
North America(Study 1501).
- Presented updated data from the ongoing open-label clinical trial in
Belgiumdemonstrating sustained effectiveness and cardiovascular-related safety, as well as high levels of sleep quality and quality of life, in the cohort of Dravet syndrome patients who began add-on treatment with ZX008 as early as 2010.
- Amended the Company’s term loan facility to provide additional loan proceeds, extend the principal repayment schedule, reduce the interest rate, and improve certain covenants. The amendment is expected to result in an increase of approximately $10 million to Zogenix's cash balance at the end of 2017.
- Completed the six-months ended
June 30, 2016, with $127.8 millionin cash and cash equivalents. Zogenix’s expected cash runway extends through 2017.
“We are pleased that both Studies, 1501 and 1502, in our ZX008 Phase 3 program for Dravet syndrome are now enrolling patients,” said
Second Quarter 2016 Financial Results Compared to Second Quarter 2015 Financial Results
As a result of the sale of the Zohydro ER business in
- Total revenue for the second quarter of 2016 was
$2.1 million, consisting almost entirely of contract manufacturing revenue. This compared with total revenue of $7.4 millionin the same quarter last year, which included $6.0 millionof contract manufacturing revenue and $1.4 millionof service and other product revenue. The decrease in contract manufacturing revenue in the second quarter of 2016 was due primarily to a decrease in deliveries to Endo International Plcunder the supply agreement between the two companies.
- Second quarter 2016 research and development expenses totaled
$10.4 million, up from $6.2 millionin the second quarter a year ago, as the Company progressed its two Phase 3 clinical trials for ZX008, initiating Study 1502 and continuing enrollment in Study 1501.
- Second quarter 2016 selling, general and administrative expenses totaled
$6.8 million, compared with $7.6 millionin the second quarter a year ago.
- Net loss from continuing operations for the second quarter of 2016 was
$18.2 million, compared with $6.7 millionin the second quarter a year ago.
- Net loss from discontinued operations was
$0.6 millionfor the second quarter of 2016, compared with net income of $79.2 millionin the second quarter a year ago, which included a gain on the sale of the Zohydro ER business of $75.6 millionnet of tax expense.
- Total net loss for the second quarter of 2016 was
$18.8 million, or $0.76per share, compared with net income of $72.5 million, or $3.78per share, for the second quarter a year ago, which included the net gain on the sale of the Zohydro ER business.
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.
- Total revenue for the six-months ended
June 30, 2016was $11.3 million, consisting almost entirely of contract manufacturing revenue. This compared with total revenue of $12.0 millionin the same period last year, which included $10.2 millionof contract manufacturing revenue and $1.8 millionof net product and other service revenue. The increase in contract manufacturing revenue for the six months ended June 30, 2016as compared to the same period in 2015 resulted primarily from an increase in recognition of deferred revenue of $0.8 millionbased upon estimated future production under the supply agreement with Endo.
- Research and development expenses for the six months ended
June 30, 2016totaled $18.4 million, up from $11.4 millionin the year ago period, as the Company initiated its two Phase 3 clinical trials for ZX008.
- Selling, general and administrative expense for the six months ended
June 30, 2016totaled $13.0 million, compared with $13.9 millionin the same period a year ago.
- Net loss from continuing operations was
$28.5 millionfor the six months ended June 30, 2016, compared with $16.9 millionin the same period a year ago.
- Net loss from discontinued operations was
$0.8 millionfor the six months ended June 30, 2016, compared to net income of $66.5 millionin the same period a year ago, which included the net gain on the sale of the Zohydro ER business.
- Total net loss for the six months ended
June 30, 2016was $29.2 million, or $1.18per basic share and fully diluted, compared with net income of $49.6 million, or $2.59per share, for the same period a year ago, which included the net gain on the sale of the Zohydro ER business.
- Cash and cash equivalents at
June 30, 2016totaled $127.8 million, as compared to $155.3 millionat December 31, 2015.
2016 Financial Guidance
- Research and development expenses are expected to be
$54-59 million, reflecting initiation and ramp-up of ZX008 clinical studies;
- Selling, general and administrative expenses are expected to be
$25-27 million; and
- Contract manufacturing revenue from the supply of Sumavel DosePro to
Endois expected at a low single-digit markup over cost of contract manufacturing.
Conference Call Details
Investors interested in participating in today’s live call can dial 888-378-0320 from the U.S. and international callers can dial 719-325-2354 and use conference ID: 3485336. A telephone replay will be available approximately two hours after the call and will run through
For more information, visit www.zogenix.com.
Forward Looking Statements
DosePro® and Relday® are registered trademarks of
|Condensed Consolidated Statements of Operations|
|(in thousands, except per share amounts)|
|Three Months Ended||Six Months Ended|
|June 30,||June 30,|
|Contract manufacturing revenue||$||1,986||$||6,003||$||11,192||$||10,184|
|Service and other product revenue||102||1,364||102||1,797|
|Cost of contract manufacturing||2,061||5,803||9,865||9,726|
|Research and development||10,384||6,241||18,371||11,390|
|Selling, general & administrative||6,844||7,582||12,968||13,851|
|Change in fair value of contingent consideration||1,300||(600||)||2,600||(1,600||)|
|Total operating expense||20,664||19,097||43,950||33,510|
|Loss from operations||(18,576||)||(11,730||)||(32,656||)||(21,529||)|
|Other income (expense):|
|Interest expense, net||(623||)||(898||)||(1,221||)||(1,541||)|
|Change in fair value of warrant liabilities||977||(975||)||5,504||(564||)|
|Total other income (expense)||339||(1,912||)||4,260||(2,265||)|
|Net loss from continuing operations before income taxes||(18,237||)||(13,642||)||(28,396||)||(23,794||)|
|Income tax benefit (expense)||(9||)||6,946||(71||)||6,932|
|Net loss from continuing operations||(18,246||)||(6,696||)||(28,467||)||(16,862||)|
|Net income (loss) from discontinued operations, net of applicable tax||(582||)||79,160||(751||)||66,464|
|Net income (loss)||$||(18,828||)||$||72,464||$||(29,218||)||$||49,602|
|Net income (loss) per share, basic and diluted||$||(0.76||)||$||3.78||$||(1.18||)||$||2.59|
|Weighted average shares outstanding, basic and diluted||24,777||19,176||24,774||19,173|
|Condensed Consolidated Balance Sheets|
|June 30,||December 31,|
|Cash and cash equivalents||$||127,797||$||155,349|
|Trade accounts receivable, net||2,112||1,396|
|Prepaid expenses and other current assets||7,750||5,518|
|Current assets of discontinued operations||-||208|
|Total current assets||149,519||184,503|
|Property and equipment, net||8,659||9,254|
|LIABILITIES AND STOCKHOLDERS’ EQUITY|
|Common stock warrant liabilities||692||6,196|
|Long-term debt, current portion||-||6,321|
|Current liabilities of discontinued operations||1,537||2,906|
|Total current liabilities||14,134||29,986|
|Long-term debt, less current portion||21,602||15,899|
|Deferred revenue, less current portion||4,987||6,139|
|Contingent purchase consideration||53,600||51,000|
|Deferred income taxes||18,450||18,450|
|Other long-term liabilities||1,696||1,588|
|Total liabilities and stockholders’ equity||$||271,414||$||305,822|
Ann RhoadsChief Financial Officer Zogenix, Inc.858-436-9208 firstname.lastname@example.org Andrew McDonaldFounding Partner LifeSci Advisors, LLC646-597-6987 Andrew@LifeSciAdvisors.com