Zogenix Provides Corporate Update and Reports Third Quarter 2016 Financial Results
- Continued enrollment in the two Phase 3 safety and efficacy clinical trials of ZX008 (low-dose fenfluramine) (Studies 1501 and 1502) in
North America, Europeand Australia, with top-line results anticipated in Q2 2017.
- Company remains on-track for potential regulatory submissions by year-end 2017.
- Initiated Cohort 1 (pharmacokinetic assessment) in Study 1504, a trial evaluating the pharmacokinetics, efficacy and safety of ZX008 in patients who have responded poorly to a stiripentol regimen. Cohort 2 (efficacy and safety assessment) is expected to begin by the end of this year.
- Effectiveness and safety results of ZX008 from the ongoing open-label prospective study of patients with Dravet syndrome published in the
European Journal of Neurology. The study demonstrated a robust median reduction in seizures of 75% (range, 28–100%) during the treatment period with no cardiovascular abnormalities. Schoonjans, A. S., Paelinck, B. P., Marchau, F., Gunning, B., Gammaitoni, A., Galer, B. S., Lagae, L. and Ceulemans, B. (2016). Eur J Neurol. doi:10.1111/ene.13195
- Presented further data at the 12th
European Congress on Epileptologyrelated to understanding the burden Dravet syndrome causes for the patient and their family, and also on identifying clinically relevant outcome measures to assess the quality of life impact on Dravet syndrome patients and their caregivers.
- Multiple abstracts accepted for presentation at the upcoming
American Epilepsy SocietyAnnual Meeting ( December 2-6, 2016) highlighting new clinical and pre-clinical findings, including an interim analysis of an on-going investigator initiated open-label Phase 2 trial in Lennox Gastaut syndrome.
- Completed the nine-months ended
September 30, 2016, with $109.9 millionin cash and cash equivalents. Zogenixexpects its cash runway to extend through 2017.
“During the third quarter, we continued to accelerate the clinical development of our lead product, ZX008 for Dravet syndrome,” said
Third Quarter 2016 Financial Results Compared to Third Quarter 2015 Financial Results
As a result of the sale of the Zohydro ER business in
- Total revenue for the third quarter of 2016 was
$6.6 million, consisting almost entirely of contract manufacturing revenue. This compared with total revenue of $9.1 millionin the same quarter last year, which included $8.9 millionof contract manufacturing revenue. The decrease in contract manufacturing revenue in the third quarter of 2016 was due primarily to a decrease in deliveries to Endo International Plc under the supply agreement between the two companies.
- Third quarter 2016 research and development expenses totaled
$10.1 million, up from $7.9 millionin the third quarter a year ago, as the Company progressed its two Phase 3 clinical trials for ZX008, continuing enrollment in Study 1501 and Study 1502.
- Third quarter 2016 selling, general and administrative expenses totaled
$6.5 million, compared with $5.7 millionin the third quarter a year ago.
- Net loss from continuing operations for the third quarter of 2016 was
$16.6 million, compared with $13.0 millionin the third quarter a year ago.
- Net loss from discontinued operations was
$0.4 millionfor the third quarter of 2016, compared with net loss of $1.6 millionin the third quarter a year ago.
- Total net loss for the third quarter of 2016 was
$17.0 million, or $0.69per share, compared with net loss of $14.6 million, or $0.65per share, for the third quarter a year ago.
- Total revenue for the nine-months ended
September 30, 2016was $17.9 million, consisting almost entirely of contract manufacturing revenue. This compared with total revenue of $21.1 millionin the same period last year, which included $19.0 millionof contract manufacturing revenue and $2.1 millionof service and other product revenue.
- Research and development expenses for the nine months ended
September 30, 2016totaled $28.4 million, up from $19.3 millionin the year ago period, as the Company enrolled patients into two Phase 3 clinical trials for ZX008.
- Selling, general and administrative expense for the nine months ended
September 30, 2016totaled $19.5 million, flat as compared to the same period a year ago.
- Net loss from continuing operations was
$45.1 millionfor the nine months ended September 30, 2016, compared with $29.8 millionin the same period a year ago.
- Net loss from discontinued operations was
$1.1 millionfor the nine months ended September 30, 2016, compared to net income of $64.8 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 nine months ended
September 30, 2016was $46.2 million, or $1.87per basic share and fully diluted, compared with net income of $35.0 million, or $1.72per 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
September 30, 2016totaled $109.9 million, as compared to $155.3 millionat December 31, 2015.
2016 Financial Guidance
- Research and development expenses are now expected to be
$42-44 millioncompared to prior guidance of $54-$59 million, reflecting slower site initiation and ramp-up of ZX008 clinical studies than expected;
- Selling, general and administrative expenses are unchanged and expected to be
$25-27 million; and
- Contract manufacturing revenue from the supply of Sumavel DosePro to
Endois expected at a low single-digit markup over cost of contract manufacturing.
Conference Call Details
Investors interested in participating in today’s live call can dial 877-675-4749 from the U.S. and international callers can dial 719-325-4826 and use conference ID: 1385531. A telephone replay will be available approximately two hours after the call and will run through
For more information, visit www.zogenix.com.
Forward Looking Statements
|Condensed Consolidated Statements of Operations|
|(in thousands, except per share amounts)|
|Three Months Ended||Nine Months Ended|
|September 30,||September 30,|
|Contract manufacturing revenue||$||6,345||$||8,860||$||17,537||$||19,044|
|Service and other product revenue||225||260||327||2,057|
|Cost of contract manufacturing||6,391||7,780||16,256||17,506|
|Research and development||10,076||7,919||28,447||19,310|
|Selling, general & administrative||6,538||5,696||19,506||19,547|
|Change in fair value of contingent consideration||200||(300||)||2,800||(1,900||)|
|Total operating expense||23,283||21,201||67,233||54,712|
|Loss from operations||(16,713||)||(12,081||)||(49,369||)||(33,611||)|
|Other income (expense):|
|Interest expense, net||(567||)||(718||)||(1,788||)||(2,259||)|
|Change in fair value of warrant liabilities||(356||)||(296||)||5,148||(861||)|
|Loss on short-term investments||-||(5,485||)||-||(5,485||)|
|Other (income) expense||25||103||2||(55||)|
|Total other income (expense)||(898||)||(6,396||)||3,362||(8,660||)|
|Net loss from continuing operations before income taxes||(17,611||)||(18,477||)||(46,007||)||(42,271||)|
|Income tax benefit||993||5,496||922||12,428|
|Net loss from continuing operations||(16,618||)||(12,981||)||(45,085||)||(29,843||)|
|Net income (loss) from discontinued operations, net of applicable tax||(379||)||(1,635||)||(1,130||)||64,829|
|Net income (loss)||$||(16,997||)||$||(14,616||)||$||(46,215||)||$||34,986|
|Net income (loss) per share, basic and diluted||$||(0.69||)||$||(0.65||)||$||(1.87||)||$||1.72|
|Weighted average shares outstanding, basic and diluted||24,791||22,613||24,780||20,332|
|Condensed Consolidated Balance Sheets|
|September 30,||December 31,|
|Cash and cash equivalents||$||109,866||$||155,349|
|Trade accounts receivable, net||6,524||1,396|
|Prepaid expenses and other current assets||9,467||5,518|
|Current assets of discontinued operations||6||208|
|Total current assets||135,275||184,503|
|Property and equipment, net||8,358||9,254|
|LIABILITIES AND STOCKHOLDERS’ EQUITY|
|Common stock warrant liabilities||1,048||6,196|
|Long-term debt, current portion||-||6,321|
|Current liabilities of discontinued operations||1,203||2,906|
|Total current liabilities||14,125||29,986|
|Long-term debt, less current portion||21,845||15,899|
|Deferred revenue, less current portion||4,986||6,139|
|Contingent purchase consideration||53,800||51,000|
|Deferred income taxes||17,425||18,450|
|Other long-term liabilities||1,739||1,588|
|Total liabilities and stockholders’ equity||$||255,837||$||305,822|
Andrew McDonaldFounding Partner, LifeSci Advisors LLC646-597-6987 | Andrew@lifesciadvisors.com