News Release

Zogenix Provides Corporate Update and Reports Second Quarter 2020 Financial Results

08.05.20
  • FINTEPLA® (fenfluramine) in Dravet syndrome is now FDA approved and commercially launched in the U.S.

  • More than 230 prescribers have already completed FINTEPLA REMS enrollment and certification

  • FDA meeting scheduled in September to discuss planned sNDA for FINTEPLA in Lennox-Gastaut syndrome

  • Held productive meetings with FDA to discuss MT1621 development program

EMERYVILLE, Calif., Aug. 05, 2020 (GLOBE NEWSWIRE) -- Zogenix, Inc. (Nasdaq: ZGNX), a global biopharmaceutical company developing and commercializing rare disease therapies, today announced financial results for the three and six months ended June 30, 2020, and provided a corporate update. The Company will host a conference call today, Wednesday, August 5, at 4:30 PM Eastern Time/1:30 PM Pacific Time.

“In June, we were thrilled to receive U.S. Food and Drug Administration (FDA) approval for FINTEPLA® for the treatment of seizures associated with Dravet syndrome,” said Stephen J. Farr, Ph.D., President and CEO of Zogenix. “This was a significant milestone for Zogenix and those in the Dravet community seeking effective new treatment options. Last week, we commenced the commercial launch of FINTEPLA in the United States and are very pleased with our early progress. More than 230 U.S. healthcare providers have successfully completed the FINTEPLA Risk Evaluation and Mitigation Strategy (REMS) certification required to begin prescribing of FINTEPLA.”

“Despite the global pandemic, we have been able to continue advancing projects that will further support our growth as a commercial-stage rare disease company,” continued Dr. Farr. “We recently held positive meetings with the FDA to discuss the remaining development path to support a planned New Drug Application (NDA) submission for MT1621 for the treatment of thymidine kinase 2 deficiency. In addition, a meeting with the FDA has been scheduled in September to discuss next steps for our supplemental NDA (sNDA) for FINTEPLA in Lennox-Gastaut syndrome (LGS), another difficult-to-treat childhood onset epilepsy.”

Corporate Update

  • FINTEPLA for the treatment of seizures associated with Dravet syndrome:

    - Received FDA approval on June 25, 2020 and executed initial commercial launch on July 27, 2020

    - Over 230 prescribers have successfully completed REMS certification process to date

    - FINTEPLA Marketing Authorization Application (MAA) is under active review by the European Medicines Agency (EMA) and commercial launch preparations are ongoing in Europe

    - Last patient enrolled in pivotal Phase 3 study in Japan, with top-line data expected in the fourth quarter of this year; anticipate submission of a J-NDA to Japan’s Pharmaceutical and Medical Devices Agency in the first half of 2021

    - Eight U.S. patents (expiring between 2033-2039) added to the Orange Book listing for FINTEPLA
  • FINTEPLA for the treatment of seizures associated with LGS:

    - Primary endpoint achieved in Study 1601; patients taking FINTEPLA 0.7 mg/kg/day demonstrated a statistically significant greater reduction in monthly drop seizure frequency compared to placebo (p=0.0012). FINTEPLA was generally well-tolerated; the most common adverse events were decreased appetite, somnolence, fatigue, vomiting, diarrhea, and pyrexia. No cases of valvular heart disease or pulmonary arterial hypertension were observed.

    - Advancing non-clinical carcinogenicity and clinical Phase 1 pharmacokinetic (PK) studies in hepatic and renal impairment to support sNDA submission

    - FDA meeting scheduled in September 2020 to discuss requirements for sNDA submission
  • MT1621 for the treatment of thymidine kinase 2 (TK2) deficiency:

    - Recently held positive FDA meetings to discuss development path and required data to support planned NDA submission

    - Company expects availability of all required data by end of 2021, and anticipates the submission of an NDA in first half of 2022

Second Quarter 2020 Financial Results

  • The Company recorded $1.0 million in revenue for the second quarter ended June 30, 2020, as a result of its March 2019 collaboration with Nippon Shinyaku Co., Ltd. for FINTEPLA in Dravet syndrome and LGS in Japan. Zogenix recorded $1.1 million in revenue for the corresponding period of 2019.
  • Research and development expenses for the second quarter ended June 30, 2020, totaled $34.4 million, up from $27.1 million in the second quarter ended June 30, 2019, as the Company decreased spending in Dravet syndrome and expanded clinical activities in LGS and MT1621.
  • Selling, general and administrative expenses for the second quarter ended June 30, 2020, totaled $24.4 million, compared with $15.5 million in the second quarter ended June 30, 2019, as the Company continued investment related to the launch of FINTEPLA for the treatment of Dravet syndrome in the U.S. and prepared for prospective launch in Europe.
  • Net loss for the second quarter ended June 30, 2020, was $53.3 million, or a net loss of $0.96 per share, reflective of two offsetting non-cash items related to the approval of FINTEPLA, involving contingent consideration and the deferred tax liability, compared with a net loss of $37.8 million, or a net loss of $0.89 per share, in the second quarter ended June 30, 2019.

Six Months Ended June 30, 2020 Financial Results Compared to Six Months Ended June 30, 2019

  • The Company recorded $2.3 million in revenue for the six months ended June 30, 2020, as a result of its March 2019 collaboration with Nippon Shinyaku Co., Ltd. for FINTEPLA in Dravet syndrome and LGS in Japan. Zogenix recorded $1.1 million in revenue for the corresponding period of 2019.
  • Research and development expenses for the six months ended June 30, 2020, totaled $67.6 million, up from $51.4 million in the six months ended June 30, 2019, as the Company decreased spending in Dravet syndrome and expanded clinical activities in LGS and MT1621.
  • Selling, general and administrative expenses for the six months ended June 30, 2020, totaled $45.7 million, up from $26.4 million in the six months ended June 30, 2019, as the Company continued investment related to the launch of FINTEPLA for the treatment of Dravet syndrome in the U.S. and prepared for prospective launch in Europe.
  • Net loss for the six months ended June 30, 2020, was $79.1 million, or a net loss of $1.53 per share, compared with a net loss of $73.0 million, or a net loss of $1.72 per share, in the six months ended June 30, 2019.
  • As of June 30, 2020, the Company had $390.2 million in cash, cash equivalents, and marketable securities, compared to $251.2 million at December 31, 2019.

Conference Call

Wednesday, August 5, at 4:30 PM Eastern Time / 1:30 PM Pacific Time
Toll Free:  866-269-4260
International:  323-347-3612
Conference ID:  8881331
Webcast: http://public.viavid.com/index.php?id=141049


About Zogenix

Zogenix is a global biopharmaceutical company committed to developing and commercializing therapies with the potential to transform the lives of patients and their families living with rare diseases. The company’s first rare disease therapy, FINTEPLA® (fenfluramine) oral solution, C-IV has been approved by the U.S. FDA and is under review in Europe for the treatment of seizures associated with Dravet syndrome, a rare, severe childhood onset epilepsy. In addition, the company has two late-stage development programs underway: one for FINTEPLA for the treatment of seizures associated with Lennox-Gastaut syndrome, a rare childhood-onset epilepsy and another for MT1621, an investigational novel substrate enhancement therapy for the treatment of TK2 deficiency, a rare genetic disorder. MT1621 is being developed through Modis Therapeutics, a Zogenix company.

Forward Looking Statements

Zogenix cautions you that statements included in this press release and the conference call that are not a description of historical facts are forward-looking statements. Words such as “believes,” “anticipates,” “plans,” “expects,” “indicates,” “will,” “intends,” “potential,” “suggests,” “assuming,” “designed,” and similar expressions are intended to identify forward-looking statements. These statements include: FINTEPLA providing a treatment option for patients with Dravet syndrome; Zogenix’s plans to commercialize FINTEPLA; the timing of review by EMA with respect to the MAA for FINTEPLA for the treatment of patients with Dravet syndrome; Zogenix’s plans to finalize the studies and data required to support an sNDA for FINTEPLA in LGS; and the timing of regulatory submissions and meetings or other interactions with regulatory agencies related to FINTEPLA and MT1621. These statements are based on Zogenix’s current beliefs and expectations. The inclusion of forward-looking statements should not be regarded as a representation by Zogenix that any of its plans will be achieved. Actual results may differ from those set forth in this release due to the risks and uncertainties inherent in Zogenix’s business, including, without limitation: Zogenix’s ability to successfully launch FINTEPLA in the U.S.; EMA may disagree that existing safety and efficacy data, or Zogenix’s analysis of such data, is sufficient to support marketing approval in Europe; the COVID-19 pandemic may disrupt Zogenix’s business operations, impairing the ability to commercialize FINTEPLA and Zogenix’s ability to generate product revenue; unexpected adverse side effects or inadequate therapeutic efficacy of FINTEPLA that could limit commercialization, or that could result in recalls or product liability claims; additional data from Zogenix’s ongoing studies may contradict or undermine the data reported for LGS; Zogenix may not be successful in executing its sales and marketing strategy for the commercialization of FINTEPLA; Zogenix’s dependence on third parties for the manufacture of FINTEPLA; Zogenix’s ability to achieve and maintain adequate levels of coverage and reimbursement for FINTEPLA; the scope and validity of patent protection or regulatory exclusivity protection for FINTEPLA and Zogenix’s ability to commercialize FINTEPLA without infringing the patent rights of others; and other risks described in Zogenix’s prior press releases as well as in public periodic filings with the U.S. Securities & Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and Zogenix undertakes no obligation to revise or update this press release to reflect events or circumstances after the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement. This caution is made under the safe harbor provisions of Section 21E of the Private Securities Litigation Reform Act of 1995.

CONTACTS:

Zogenix
Melinda Baker
Senior Director, Corporate Communications
+1 (510) 788-8732
corpcomms@zogenix.com

Investors
Brian Ritchie
Managing Director, LifeSci Advisors LLC
+1 (212) 915-2578
britchie@lifesciadvisors.com

Media
Stefanie Tuck
Vice President, Porter Novelli
+1 (978) 390-1394
stefanie.tuck@porternovelli.com

Zogenix, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands)

  June 30, 2020   December 31, 2019
Assets:      
Current assets:      
Cash and cash equivalents $ 136,871       $ 62,070    
Marketable securities 253,378       189,085    
Inventory, net 475          
Prepaid expenses and other current assets 10,833       11,084    
Acquisition holdback placed in escrow 25,000       25,000    
Total current assets 426,557       287,239    
Property and equipment, net 9,300       9,424    
Operating lease right-of-use assets 8,266       7,774    
Intangible asset 102,500       102,500    
Goodwill 6,234       6,234    
Other noncurrent assets 2,250       1,079    
Total assets $ 555,107       $ 414,250    
Liabilities and stockholders’ equity:      
Current liabilities:      
Accounts payable $ 8,518       $ 7,979    
Accrued and other current liabilities 40,176       30,117    
Acquisition holdback liability 24,444       24,444    
Deferred revenue, current 5,303       5,927    
Current portion of operating lease liabilities 1,633       1,322    
Current portion of contingent consideration 13,000       25,600    
Total current liabilities 93,074       95,389    
Deferred revenue, noncurrent 5,768       7,425    
Operating lease liabilities, net of current portion 11,022       10,752    
Contingent consideration, net of current portion 40,100       38,200    
Deferred tax liability       17,425    
Total liabilities 149,964       169,191    
Commitments and contingencies      
Stockholders’ equity:      
Common stock 55       45    
Additional paid-in capital 1,599,047       1,360,092    
Accumulated deficit (1,194,581 )     (1,115,457 )  
Accumulated other comprehensive income 622       379    
Total stockholders’ equity 405,143       245,059    
Total liabilities and stockholders’ equity $ 555,107       $ 414,250    

Zogenix, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except per share amounts)

  Three Months Ended June 30,   Six Months Ended June 30,
  2020   2019   2020   2019
Collaboration revenue $ 1,032       $ 1,069       $ 2,281       $ 1,069    
Operating expenses:              
Research and development 34,373       27,096       67,613       51,448    
Selling, general and administrative 24,431       15,459       45,749       26,377    
Acquired in-process research and development expense 1,500             3,000          
Change in fair value of contingent consideration 12,200       (700 )     4,300       2,300    
Total operating expenses 72,504       41,855       120,662       80,125    
Loss from operations (71,472 )     (40,786 )     (118,381 )     (79,056 )  
Other (expense) income, net (157 )     40       19,864       (48 )  
Interest income 880       2,983       1,968       6,139    
Loss before income taxes (70,749 )     (37,763 )     (96,549 )     (72,965 )  
Income tax benefit (17,425 )           (17,425 )        
Net loss $ (53,324 )     $ (37,763 )     $ (79,124 )     $ (72,965 )  
               
Net loss per share, basic and diluted $ (0.96 )     $ (0.89 )     $ (1.53 )     $ (1.72 )  
               
Weighted average number of shares used in the calculation of basic and diluted net loss per common share 55,355       42,458       51,770       42,348    

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Source: Zogenix, Inc