Zogenix Provides Corporate Update and Reports Third Quarter Financial Results

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Zogenix Provides Corporate Update and Reports Third Quarter Financial Results

  • Reported positive top-line results from second pivotal Phase 3 trial of FINTEPLA® (ZX008) in patients with Dravet syndrome, Study 1504
  • Initiated rolling NDA submission to FDA for FINTEPLA
  • Continued to advance enrollment of global Phase 3 trial of FINTEPLA for treatment of Lennox-Gastaut syndrome, Study 1601
  • Completed successful public offering of $293 million in net proceeds to position Company well for next stage of growth

EMERYVILLE, Calif., Nov. 08, 2018 (GLOBE NEWSWIRE) -- Zogenix, Inc. (NASDAQ: ZGNX), a pharmaceutical company developing therapies for the treatment of rare central nervous system (CNS) disorders, today provided a corporate update and announced financial results for the third quarter and nine months ended September 30, 2018.

“Following the completion of our positive, confirmatory Study 1504 Phase 3 trial of our investigational drug, FINTEPLA, in patients with Dravet syndrome, we began submission of a New Drug Application (NDA) for rolling review by the U.S. Food and Drug Administration (FDA) under a previously agreed NDA rolling submission plan,” said Stephen J. Farr, Ph.D., President and CEO of Zogenix. “We also recently held a successful pre-NDA meeting with the FDA to discuss certain aspects of the FINTEPLA NDA. Based on discussions at the meeting, we will conduct some additional analyses of our clinical data that could positively impact our product label. As a result, we now anticipate that the submission of the final sections of the NDA will occur in early first quarter 2019 versus the previously anticipated end of this year. Our centralized Marketing Authorization Application (MAA) submission to the European Medicines Agency (EMA) will occur shortly following the NDA submission.”

“In parallel to our work on regulatory submissions, we continue to actively prepare for the potential launch of FINTEPLA in the U.S. and Europe,” continued Dr. Farr.  “Moreover, we are pleased with the pace of enrollment in our Phase 3 trial of FINTEPLA in Lennox-Gastaut Syndrome (LGS), Study 1601.  There are over 30 sites open for patient enrollment, primarily located in the U.S, and we are now focused on the addition of study sites in Europe and Japan over the next several months. With our recently completed public offering raising $293 million in net proceeds, we believe Zogenix is now in a strong position to create significant long-term shareholder value with our advancing FINTEPLA programs in Dravet syndrome, Lennox Gastaut syndrome and other pipeline program opportunities.”

Corporate Update

  • Reported positive top-line results from Study 1504, the second pivotal Phase 3 clinical trial of FINTEPLA in Dravet syndrome. The study achieved statistical significance on the primary and all key secondary endpoints. 
     
  • Conducted positive pre-NDA meeting with FDA; began rolling submission of NDA for FINTEPLA for the treatment of seizures associated with Dravet syndrome.
     
  • Continued U.S. and European commercial preparations for FINTEPLA.
     
  • Continued enrollment in global Phase 3 trial of FINTEPLA for treatment of seizures associated with LGS, Study 1601.
     
  • Successfully raised approximately $293 million in net proceeds in a public offering of common stock.
     
  • Presented new findings from multiple studies assessing the psychological and socioeconomic impact of epileptic encephalopathies, such as Dravet syndrome, in the U.S. and Europe, as well as new results from an ongoing open-label prospective study of FINTEPLA in Dravet syndrome, at the 13th European Congress on Epileptology.
     
  • Detailed results of the Phase 2, open-label study evaluating FINTEPLA for the treatment of refractory patients with LGS were published in the September 2018 issue of Epilepsia.

Third Quarter 2018 Financial Results

  • Research and development expenses for the third quarter ended September 30, 2018, totaled $27.6 million, up from $21.2 million in the third quarter ended September 30, 2017, as the Company expanded clinical trial activities related to its ongoing Phase 3 development programs of FINTEPLA in Dravet syndrome and LGS.
     
  • Selling, general and administrative expenses for the third quarter ended September 30, 2018, totaled $11.0 million, compared with $6.1 million in the third quarter ended September 30, 2017.
     
  • Net loss for the third quarter ended September 30, 2018, was $42.3 million, or a net loss of $1.08 per share, compared with a net loss of $42.8 million, or a net loss of $1.68 per share, in the third quarter ended September 30, 2017.

Nine Months Ended September 30, 2018 Financial Results Compared to Nine Months Ended September 30, 2017

  • Due to the wind-down of Sumavel DosePro manufacturing operations in September 2017, the Company recorded no revenue for the nine months ended September 30, 2018. This compares with total revenue of $9.8 million in the nine month period ended September 30, 2017, consisting entirely of contract manufacturing revenue for Sumavel DosePro.
     
  • Research and development expenses for the nine months ended September 30, 2018, totaled $77.3 million, up from $49.4 million in the nine months ended September 30, 2017, as the Company expanded clinical trial activities related to its ongoing Phase 3 development programs of FINTEPLA in Dravet syndrome and LGS.
     
  • Selling, general and administrative expenses for the nine months ended September 30, 2018, totaled $27.7 million, compared with $18.1 million in the nine months ended September 30, 2017.
     
  • Net loss for the nine months ended September 30, 2018, was $101.5 million, or a net loss of $2.78 per share, compared with a net loss of $87.1 million, or a net loss of $3.48 per share, in the nine months ended September 30, 2017.
     
  • As of September 30, 2018, the Company had $539.1 million in cash and cash equivalents and marketable securities, compared to $293.5 million at December 31, 2017.

Conference Call

Thursday, November 8th @ 4:30 PM Eastern Time/1:30 PM Pacific Time

Toll Free:      877-407-9716
International:    201-493-6779
Conference ID:   13684016 
Webcast:    http://public.viavid.com/index.php?id=131731
     
Replays available through November 22nd:
Domestic:      844-512-2921
International:    412-317-6671
Replay PIN:    13684016

About Zogenix

Zogenix (Nasdaq: ZGNX) is focused on developing therapies for patients with rare central nervous system (CNS) conditions that have limited or no treatment options, but face a critical need. For more information, visit www.zogenix.com

Forward Looking Statement

Zogenix cautions you that statements included in this press release 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 are based on the Zogenix's current beliefs and expectations. These forward-looking statements include statements regarding the timing of the NDA and MAA submissions for FINTEPLA in Dravet syndrome; the potential that additional data analyses could lead to enhanced product labeling; continued enrollment and the addition of clinical sites for Study 1601; potential regulatory approval and commercial launches of FINTEPLA in the U.S. and Europe; and the potential for Zogenix to create significant long-term shareholder value. 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: the uncertainties associated with the clinical development and regulatory approval of product candidates such as FINTEPLA, including potential delays in the timing of regulatory submissions; the top-line data Zogenix has reported is based on preliminary analysis of key efficacy and safety data, and such data may change following a more comprehensive review of the data related to the clinical trial and such top-line data may not accurately reflect the complete results of the trial, and the FDA and other regulatory authorities may not agree with Zogenix’s interpretation of such results; potential delays in the commencement, enrollment and completion of clinical trials; Zogenix’s reliance on third parties to conduct its clinical trials, enroll patients, manufacture its preclinical and clinical drug supplies and manufacture commercial supplies of its drug products, if approved; unexpected adverse side effects or inadequate therapeutic efficacy of FINTEPLA may limit regulatory approval and/or commercialization, or may result in recalls or product liability claims; and other risks described in Zogenix's prior press releases as well as in public periodic filings with the Securities and 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.

CONTACT:
Investors:  Andrew McDonald
Founding Partner, LifeSci Advisors LLC
646-597-6987 | Andrew@lifesciadvisors.com 

Media: David Polk
Senior Media Relations Strategist, Syneos Health
310-309-1029 | david.polk@syneoshealth.com 




Zogenix, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands, except par value)
 
  September 30,
 2018
  December 31,
 2017
Assets      
Current assets:      
Cash and cash equivalents $ 163,038     $ 293,503  
Marketable securities 376,087      
Prepaid expenses 6,861     5,994  
Other current assets 1,286     5,206  
Total current assets 547,272     304,703  
Property and equipment, net 244     245  
Intangible assets 102,500     102,500  
Goodwill 6,234     6,234  
Other assets 3,380     3,931  
Total assets $ 659,630     $ 417,613  
Liabilities and stockholders’ equity      
Current liabilities:      
Accounts payable $ 4,110     $ 3,356  
Accrued clinical trial expenses 10,674     8,657  
Accrued compensation 5,039     6,616  
Other accrued liabilities 2,413     1,842  
Current portion of contingent consideration 32,500      
Common stock warrant liabilities 607     512  
Total current liabilities 55,343     20,983  
Contingent consideration 47,600     76,900  
Deferred income taxes 17,425     17,425  
Other long-term liabilities 482     784  
Total liabilities 120,850     116,092  
Commitments and contingencies      
Stockholders’ equity:      
Preferred stock, $0.001 par value; 10,000 shares authorized; none issued and outstanding      
Common stock, $0.001 par value; 50,000 shares authorized; 41,925 and 34,808
shares issued and outstanding at September 30, 2018 and December 31, 2017,
respectively
42     35  
Additional paid-in capital 1,212,305     873,526  
Accumulated deficit (673,521 )   (572,040 )
Accumulated other comprehensive loss (46 )    
Total stockholders’ equity 538,780     301,521  
Total liabilities and stockholders’ equity $ 659,630     $ 417,613  




Zogenix, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except per share amounts)
 
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
  2018   2017   2018   2017
Contract manufacturing revenue $     $     $     $ 9,821  
Costs and expenses:              
Cost of contract manufacturing             10,729  
Research and development 27,608     21,178     77,329     49,369  
Selling, general and administrative 11,016     6,073     27,663     18,129  
Loss on contract termination     478         478  
Asset impairment charges     196         1,116  
Change in fair value of contingent consideration 5,700     10,500     3,200     11,600  
Total costs and expenses 44,324     38,425     108,192     91,421  
Loss from operations (44,324 )   (38,425 )   (108,192 )   (81,600 )
Other income (expense):              
Interest income 2,133     121     3,995     332  
Interest expense     (702 )   (6 )   (2,065 )
Loss on extinguishment of debt     (3,378 )       (3,378 )
Change in fair value of common stock warrant liabilities (64 )   (380 )   (95 )   360  
Other (expense) income, net (9 )   62     3,015     71  
Total other income (expense) 2,060     (4,277 )   6,909     (4,680 )
Loss from continuing operations before income taxes (42,264 )   (42,702 )   (101,283 )   (86,280 )
Income tax benefit     42         41  
Net loss from continuing operations (42,264 )   (42,660 )   (101,283 )   (86,239 )
Loss from discontinued operations, net of taxes     (134 )   (198 )   (870 )
Net loss $ (42,264 )   $ (42,794 )   $ (101,481 )   $ (87,109 )
Net loss per share, basic and diluted:              
Continuing operations $ (1.08 )   $ (1.68 )   $ (2.78 )   $ (3.45 )
Discontinued operations             (0.03 )
Total $ (1.08 )   $ (1.68 )   $ (2.78 )   $ (3.48 )

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Source: Zogenix, Inc.