SOURCE:
Theravance, Inc.
2008-07-24 15:05:00
Theravance Reports Second Quarter 2008 Financial Results
SOUTH SAN FRANCISCO, CA–(EMWNews – July 24, 2008) – Theravance, Inc. (
reported today its financial results for the quarter ended June 30, 2008.
Net loss for the second quarter of 2008 was $27.0 million, compared with
$45.1 million for the same period of 2007, a decrease of $18.1 million. Net
loss per share was $0.44 for the second quarter 2008 compared with a net
loss per share of $0.75 for the second quarter 2007.
“Theravance continued to make progress across our key clinical programs
this quarter,” said Rick E Winningham, Chief Executive Officer. “Recently,
we announced positive news from our bifunctional muscarinic
antagonist-beta2 agonist program with GSK, which successfully completed a
proof-of-concept Phase 2 study in COPD patients. Our Horizon program, in
collaboration with GSK, completed enrollment in the mild and the severe
asthma Phase 2b studies of inhaled corticosteroid ‘698. We expect to
complete enrollment in the third quarter of 2008 in the asthma study with
the long-acting beta agonist ‘444. We expect results from a study of ‘698
in moderate asthmatic patients in early 2009. Earlier this week, we
announced that the FDA has not yet made a decision regarding the NDA for
telavancin for the treatment of complicated skin and skin structure
infections. We are working diligently with the FDA to complete its review
of the skin application and are planning to submit the telavancin HAP NDA
in the fourth quarter of 2008.”
Program Highlights
Respiratory Programs
Horizon
We expect completion of enrollment in the Phase 2b asthma dose-ranging
study with GW642444 (‘444) in the third quarter 2008. The Phase 2b
dose-ranging studies with the lead inhaled corticosteroid (ICS) GW685698
(‘698) for patients with mild asthma and for patients with severe asthma
have recently completed enrollment. The Phase 2b study with ‘698 for
patients with moderate asthma continues to enroll patients with results now
expected in early 2009.
Enrollment remains on track for the large Phase 2b chronic obstructive
pulmonary disease (COPD) dose-ranging study with the lead long-acting beta
agonist (LABA), ‘444. We expect to report top-line data from this study in
the first half of 2009.
Inhaled Bifunctional Muscarinic Antagonist-Beta2 Agonist (MABA) Program
We recently reported positive clinical results from our Phase 2 study in
the MABA program with our lead investigational compound, GSK961081 (‘081),
for the treatment of COPD. ‘081 administered once daily to COPD patients
demonstrated 24-hour bronchodilation on day 14 that was statistically
greater than placebo, and comparable to a combination therapy active
control of salmeterol dosed twice daily plus tiotropium dosed once daily.
‘081 was generally well tolerated throughout the 14-day study. In
conjunction with the successful achievement of proof-of-concept in this
Phase 2 clinical study, we earned a milestone payment of $10 million from
GlaxoSmithKline (GSK).
Inhaled Long-Acting Muscarinic Antagonist (LAMA) Program
We recently reported clinical results from our Phase 1 study in the LAMA
program with our lead investigational compound, GSK1160724 (TD-4208), for
the treatment of COPD. TD-4208 administered as a single dose to healthy
volunteers was generally well tolerated, with a similar incidence of
adverse events to placebo. In addition, TD-4208 demonstrated evidence of
bronchodilation in volunteers sensitive to muscarinic antagonists. We also
announced GSK’s intent to return the LAMA program to the company because
the current formulation of the compound is incompatible with GSK’s
proprietary inhaler device. Both parties are currently discussing the
transfer of information and materials back to the company.
Bacterial Infections Programs
Telavancin
We plan on submitting to the U.S. Food and Drug Administration (FDA) a New
Drug Application (NDA) for telavancin in the treatment of hospital-acquired
pneumonia (HAP) caused by Gram-positive bacteria including resistant
pathogens such as methicillin-resistant Staphylococcus aureus (MRSA) in the
fourth quarter 2008.
Earlier this week, we announced that the FDA has not yet made a decision
regarding the NDA for telavancin for the treatment of complicated skin and
skin structure infections (cSSSI). The Prescription Drug User Fee Act
(PDUFA) date for action by FDA was July 21, 2008, and as of July 23, 2008,
the company had not received an action letter from the FDA.
As previously announced, the FDA had indicated that it did not expect to
take final action on the telavancin NDA prior to completing its further
evaluation of study site monitoring and study conduct in the ATLAS Phase 3
program, nor prior to resolution of the manufacturing issues not
specifically related to telavancin that were cited in the approvable letter
received in October 2007.
Telavancin is also under review for its safety and efficacy by regulatory
authorities in Europe for the treatment of complicated skin and soft tissue
infections and in Canada for the treatment of cSSSI.
Gastrointestinal (GI) Motility Dysfunction Program
We continue to evaluate the data and the study site audit from a previously
conducted thorough QTc study of TD-5108, our lead compound, which evaluated
the potential for QT prolongation. We currently intend to initiate a
drug-drug interaction (DDI) study later in 2008. We intend to meet with
the FDA later in 2008 to discuss the thorough QTc study and appropriate
next steps, including conducting another thorough QTc study if necessary.
We continue to evaluate the potential of this compound in chronic
constipation, constipation-predominant irritable bowel syndrome and other
indications.
Financial Results
Revenue
Revenue was $5.5 million for the second quarter of 2008 compared with $5.3
million for the same period of 2007. This increase was due to higher
amortization of milestone payments received from the company’s partnerships
with GSK and Astellas. All payments received to date under these agreements
are being amortized over the relevant performance periods rather than being
recognized when received.
Research and Development
Research and development expense for the second quarter of 2008 decreased
to $20.0 million from $43.5 million for the same period of 2007. Total
external research and development expense for the second quarter of 2008
was $4.9 million compared with $16.3 million for the same period in 2007.
The lower expenses in the second quarter of 2008 were primarily due to
decreased external clinical study costs associated with telavancin,
TD-5108, and TD-1792 as well as lower employee related costs. Total
research and development stock-based compensation expense for the second
quarter of 2008 was $1.9 million compared with $3.2 million in same period
of 2007.
General and Administrative
General and administrative expense for the second quarter of 2008 decreased
to $7.3 million from $9.5 million for the same period in 2007. The lower
expense in the second quarter of 2008 was due to lower employee related
costs due to the reduction in force announced in April 2008, and lower
external costs. Total general and administrative stock-based compensation
expense for the second quarter of 2008 was $1.9 million compared with
$2.3 million for the same period in 2007.
Restructuring Charges
The $5.1 million of restructuring charges in the second quarter of 2008
resulted from the company’s workforce restructuring initiated in April 2008
in response to the completion of its Phase 3 development activities with
telavancin and to reduce its overall cash burn rate. The charges consisted
of employee and severance benefits.
Cash and Cash Equivalents
Cash, cash equivalents and marketable securities totaled $232.3 million as
of June 30, 2008, a decrease of $26.3 million during the quarter. The
decrease was primarily due to cash used in operations and severance related
payments.
Conference Call and Webcast Information
As previously announced, the company has scheduled a conference call to
discuss this announcement beginning at 5:00 p.m. Eastern Daylight Time
today. To participate in the live call by telephone, please dial
877-681-3372 from the U.S., or 719-325-4931 for international callers.
Those interested in listening to the conference call live via the internet
may do so by visiting the company’s web site at www.theravance.com. To
listen to the live call, please go to the web site 15 minutes prior to its
start to register, download, and install any necessary audio software.
A replay of the conference call will be available on the company’s web site
for 30 days through August 23, 2008. An audio replay will also be available
through 11:59 p.m. Eastern Daylight Time on August 7, 2008 by dialing
888-203-1112 from the U.S., or 719-457-0820 for international callers, and
entering confirmation code 5381460.
About Theravance
Theravance is a biopharmaceutical company with a pipeline of internally
discovered product candidates. Theravance is focused on the discovery,
development and commercialization of small molecule medicines across a
number of therapeutic areas including respiratory disease, bacterial
infections and gastrointestinal motility dysfunction. The company’s key
programs include: telavancin for the treatment of serious Gram-positive
bacterial infections with Astellas Pharma Inc., the Horizon program with
GlaxoSmithKline plc, and the Gastrointestinal Motility Dysfunction program.
By leveraging its proprietary insight of multivalency toward drug discovery
focused primarily on validated targets, Theravance is pursuing a next
generation strategy designed to discover superior medicines in areas of
significant unmet medical need. For more information, please visit the
company’s web site at www.theravance.com.
THERAVANCE®, the Theravance logo, and MEDICINES THAT MAKE A DIFFERENCE®
are registered trademarks of Theravance, Inc.
This press release contains and the conference call will contain certain
“forward-looking” statements as that term is defined in the Private
Securities Litigation Reform Act of 1995 regarding, among other things,
statements relating to goals, plans, objectives and future events.
Theravance intends such forward-looking statements to be covered by the
safe harbor provisions for forward-looking statements contained in Section
21E of the Exchange Act and the Private Securities Litigation Reform Act of
1995. Examples of such statements include statements relating to the goals
and expected timing of clinical studies and data from studies, statements
regarding the potential benefits and mechanisms of action of drug
candidates, statements concerning the timing of seeking regulatory approval
of our product candidates (including with respect to telavancin statements
regarding any expectation (i) regarding the results of the additional site
evaluations underway by the FDA, (ii) that the third-party manufacturer
will successfully address the cGMP issues the FDA noted in the approvable
letter, or (iii) that the FDA will approve the telavancin NDA on the basis
of existing preclinical and clinical data or at all), the enabling
capabilities of Theravance’s approach to drug discovery and its proprietary
insights, statements concerning expectations for product candidates through
development and commercialization and projections of revenue or operating
cost savings and restructuring charges and other financial items. These
statements are based on the current estimates and assumptions of the
management of Theravance as of the date of this press release and the
conference call and are subject to risks, uncertainties, changes in
circumstances, assumptions and other factors that may cause the actual
results of Theravance to be materially different from those reflected in
its forward-looking statements. Important factors that could cause actual
results to differ materially from those indicated by such forward-looking
statements include, among others, risks related to delays or difficulties
in commencing or completing clinical studies, the potential that results of
clinical or preclinical studies indicate product candidates are unsafe or
ineffective, our dependence on third parties in the conduct of our clinical
studies, delays or failure to achieve regulatory approvals, risks of
relying on third-party manufacturers for the supply of our product
candidates and risks of collaborating with third parties to develop and
commercialize products. These and other risks are described in greater
detail under the heading “Risk Factors” contained in Item 1A of
Theravance’s Quarterly Report on Form 10-Q filed with the Securities and
Exchange Commission (SEC) on May 8, 2008 and the risks discussed in our
other periodic filings with the SEC. Given these uncertainties, you should
not place undue reliance on these forward-looking statements. Theravance
assumes no obligation to update its forward-looking statements.
THERAVANCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2008 2007 2008 2007
--------- --------- --------- ---------
(unaudited) (unaudited)
Revenue (1) $ 5,505 $ 5,305 $ 11,150 $ 10,703
Operating expenses:
Research and development (2) 19,996 43,497 46,775 92,355
General and administrative (2) 7,256 9,512 16,422 18,310
Restructuring charges 5,063 -- 5,063 --
--------- --------- --------- ---------
Total operating expenses 32,315 53,009 68,260 110,665
--------- --------- --------- ---------
Loss from operations (26,810) (47,704) (57,110) (99,962)
Interest and other income, net 1,295 2,603 2,967 5,441
Interest expense (1,511) (24) (2,647) (54)
--------- --------- --------- ---------
Net loss $ (27,026) $ (45,125) $ (56,790) $ (94,575)
========= ========= ========= =========
Net loss per share $ (0.44) $ (0.75) $ (0.93) $ (1.57)
========= ========= ========= =========
Shares used in computing
net loss per share 61,192 60,341 61,098 60,222
========= ========= ========= =========
(1) Revenue includes amounts from GSK, a related party, of $2.8 million and
$5.7 million for the three and six months ended June 30, 2008,
respectively, and $2.8 million and $5.6 million for the three and six
months ended June 30, 2007, respectively.
(2) Amounts include stock-based compensation expense for the three and six
months ended June 30 as follows (in thousands):
Three Months Six Months Ended
Ended June 30, June 30,
----------------- -----------------
2008 2007 2008 2007
-------- -------- -------- --------
(unaudited) (unaudited)
Research and development $ 1,870 $ 3,196 $ 4,592 $ 6,564
General and administrative 1,862 2,309 4,054 4,729
-------- -------- -------- --------
Total stock-based compensation expense $ 3,732 $ 5,505 $ 8,646 $ 11,293
======== ======== ======== ========
THERAVANCE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
June 30, December 31,
2008 2007
------------ ------------
(unaudited) (2)
Assets
Cash, cash equivalents and marketable
securities $ 232,347 $ 126,816
Other current assets 20,144 7,271
Marketable securities - non-current -- 2,456
Property and equipment, net 18,481 20,091
Other assets 10,418 5,349
------------ ------------
Total assets $ 281,390 $ 161,983
============ ============
Liabilities and stockholders equity (net
capital deficiency)
Current liabilities, net of current portion
of deferred revenue $ 26,176 $ 33,014
Deferred revenue (1) 188,505 188,655
Convertible subordinated notes 172,500 --
Other long-term liabilities 5,835 6,578
Stockholders equity (net capital deficiency) (111,626) (66,264)
------------ ------------
Total liabilities and stockholders equity (net
capital deficiency) $ 281,390 $ 161,983
============ ============
(1) Deferred revenue includes the current portion of $24.0 million and
$22.5 million as of June 30, 2008 and December 31, 2007, respectively.
Deferred revenue is the result of milestone payments that were earned
under the companys collaborations with Astellas and GSK.
(2) The condensed consolidated balance sheet amounts at December 31, 2007
are derived from audited financial statements.
Major Newsire & Press Release Distribution with Basic Starting at only $19 and Complete OTCBB / Financial Distribution only $89
Get Unlimited Organic Website Traffic to your Website
TheNFG.com now offers Organic Lead Generation & Traffic Solutions
