Astex Pharmaceuticals Reports 2012 Second Quarter Financial Results
7/30/2012 4:00 PM EST
Astex Pharmaceuticals, Inc.
Press release
Astex Pharmaceuticals Reports 2012 Second Quarter Financial Results
Dacogen Royalty Revenue Increased 25% From Prior Year
$5.4 Million Earned on Phase I Trial Initiation of FGFR Kinase Inhibitor
Dacogen Receives Positive Regulatory Recommendation in the EU for Treatment of
Elderly AML
DUBLIN, Calif., 2012-07-30 21:15 CEST (GLOBE NEWSWIRE) -- Astex
Pharmaceuticals, Inc. (Nasdaq:ASTX), today reported financial results for the
second quarter ended June 30, 2012. The Company reported net income for the
2012 second quarter of $1.2 million, or $0.01 per basic and diluted share,
compared with $903,000, or $0.01 per basic and diluted share, for the same
prior year period. The Company reported net income for the six months ended
June 30, 2012 of $5.5 million, or $0.06 per basic and $0.05 per diluted share,
compared with a net income of $6.4 million, or $0.11 per basic and $0.10 per
diluted share, for the same prior year period.
Highlights of 2012 Second Quarter:
-- Dacogen® (decitabine) for Injection received a positive regulatory
recommendation in the European Union (EU) for the treatment of elderly
Acute Myeloid Leukemia (AML). If approved, Dacogen would receive 10 years
of market exclusivity in the EU and the Company would earn a milestone
payment of $5.0 million.
-- Dacogen second quarter royalty revenue increased 25% from the prior year's
second quarter, from $11.5 million to $14.4 million.
-- Earned $5.4 million on Phase I trial initiation of a Fibroblast Growth
Factor Receptor (FGFR) kinase inhibitor from the collaborative drug
discovery program with Janssen Pharmaceutica NV.
-- Ended 2012 second quarter with $121 million in cash & marketable
securities.
-- Revised 2012 financial guidance from a forecasted net loss of $15 million
to a net loss of $5 million with the potential to be operationally cash
flow positive.
"Astex's financial position remains strong, and our operating performance for
2012 to date is positive. Pipeline products in development continue to advance
in Phase II trials with expected trial result readouts in the near future,"
said James S.J. Manuso, PhD, chairman and chief executive officer of Astex
Pharmaceuticals. "We plan to initiate new Phase II clinical proof-of-concept
trials for our prioritized products, AT13387 and SGI-110, in solid tumors
during the second half of 2012."
Dr. Manuso continued, "We were pleased to learn that the Committee for Medical
Products for Human Use (CHMP) of the European Medicines Agency (EMA) issued a
positive opinion recommending approval of Dacogen for the treatment of elderly
AML. The CHMP's reference to the impact of Dacogen on overall survival in
elderly AML was gratifying. If Dacogen is approved in the EU it would become
the first drug ever to be approved for the elderly AML indication."
2012 Second Quarter Financial Results
Total revenues for the 2012 second quarter were $19.9 million compared with
$11.7 million for the same prior year period. Total revenues for the 2012
second quarter include royalty revenue of $14.4 million compared with $11.5
million for the same prior year period. Total revenues for the 2012 second
quarter also include development and license revenue of $5.4 million compared
with $127,000 for the same prior year period. Development and license revenue
for the 2012 second quarter reflects revenue earned from a collaborative drug
discovery program with Janssen Pharmaceutica NV and was triggered when the
partner received clearance to commence a Phase I clinical trial of a FGFR
kinase inhibitor.
Excluding the gain on sale of products, total operating expenses for the 2012
second quarter were $21.0 million, compared with $11.5 million for the same
prior year period. The primary reasons for the increase in total operating
expenses for the 2012 second quarter compared with the same prior year period
are the consolidation of research and development and general and
administrative costs related to the acquisition of Astex Therapeutics Limited
effective July 20, 2011, increased research and development activities from
product development and clinical trial programs associated with SGI-110,
AT13387, and amuvatinib, and the amortization of intangible assets related to
the acquisition. The non-cash amortization of intangible assets was $1.9
million for the 2012 second quarter while there was no amortization expense for
the same prior year period. Stock-based compensation expense, a non-cash
expense that is included in operating expenses, was $810,000 for the 2012
second quarter, compared with $744,000 for the same prior year period.
The gain on sale of products for the 2012 second quarter was $700,000 compared
with the same amount for the same prior year period. The gain on sale of
products relates to the receipt of the last contractual payment resulting from
the 2007 sale of the worldwide rights for Nipent® (pentostatin for injection)
to Mayne Pharma (acquired by Hospira, Inc. in February 2007).
The Company reported net income for the 2012 second quarter of $1.2 million, or
$0.01 per basic and diluted share, compared with net income of $903,000, or
$0.01 per basic and diluted share, for the same prior year period. The net
income for the 2012 second quarter includes an income tax benefit of $1.6
million compared with an income tax provision of $6,000 for the same prior year
period. The income tax benefit for the 2012 second quarter was primarily due to
the recognition of a tax benefit associated with the amortization of deferred
tax liabilities resulting from the acquisition and foreign research and
development tax credits related to the UK subsidiary.
Financial Position
As of June 30, 2012, the Company had $120.8 million in cash, cash equivalents,
and current and non-current marketable securities compared to $126.2 million at
March 31, 2012.
Operational Highlights
During April 2012, the Company presented interim Phase I/II clinical data
showing that subcutaneous SGI-110, a novel hypomethylating agent and follow on
to Dacogen, demonstrated a differentiated pharmacokinetic (PK) profile, good
tolerability, and preliminary complete responses in heavily pretreated AML
patients enrolled in the Phase I segment of the trial. The data were presented
at an oral session at the American Association for Cancer Research (AACR) 2012
Annual Meeting in Chicago, IL and were featured in a joint AACR-Stand Up To
Cancer (SU2C) media forum. SU2C has provided funding for the Epigenetics Dream
Team that is collaborating on the scientific and clinical evaluation of
SGI-110.
During June 2012, the Company announced it had initiated the Phase II dose
expansion segment of the clinical trial of SGI-110 in patients with
intermediate-2 or high risk myelodysplastic syndromes (MDS) or elderly AML.
Treatment-naive MDS and AML (=65 years) will be enrolled in the dose expansion.
Enrollment in the Phase II segment is currently open, and the first patient has
been dosed. The Phase II segment includes expansion to approximately 90
patients treated on the five day subcutaneous dosing schedule to better
evaluate both efficacy and safety in MDS and AML patients.
In June 2012, the Company and the National Cancer Institute (NCI) presented
data from the two Phase I trials of our HSP90 inhibitor AT13387 at the 2012
American Society of Clinical Oncology (ASCO) Annual Meeting held in Chicago,
IL. The trials defined the maximum tolerated dose (MTD) of the drug using
different schedules and demonstrated that the drug was well tolerated at the
MTD. In study AT13387-01, three of the seven refractory gastrointestinal
stromal tumor (GIST) patients recruited into the study achieved Partial
Response or Stable Disease for more than 6 months.
Also in June 2012, the Company announced that Janssen Pharmaceutica NV had
received clearance to commence a Phase I clinical trial of a FGFR kinase
inhibitor from its cancer drug discovery collaboration with Astex. The
regulatory approval required to take the compound into Phase I triggered a
payment obligation to Astex of £3.5 million (US$5.4 million). Astex is eligible
to receive further milestones during clinical development and royalties on
commercialization of products derived from the collaboration. The FGFR
inhibitor program originated from a collaboration between Astex, the Cancer
Research UK Drug Discovery Group at the Newcastle Cancer Centre (NCC), and the
Northern Institute for Cancer Research, Newcastle University, UK. As part of
the collaboration, the Company applied its fragment-based drug discovery
approach, Pyramid™, to identify lead compounds inhibiting FGFR kinase. The
partnership with Janssen was entered into in June 2008. Janssen is responsible
for the clinical and regulatory development of all products arising from the
collaboration and for their global commercialization.
During July 2012, the Company announced that Janssen-Cilag International NV was
notified that the CHMP of the EMA granted a positive opinion recommending
approval of Dacogen for the treatment of adult patients (age 65 years and
above) with newly diagnosed de novo or secondary AML that according to the
World Health Organization (WHO) classification are not candidates for standard
induction chemotherapy. Janssen is the licensee for Dacogen in territories
outside of the United States, Canada and Mexico. The CHMP is the committee
responsible for the scientific assessment of products seeking centralized
marketing authorization throughout the EU. The CHMP's positive opinion is now
referred for approval to the European Commission. Janssen anticipates receiving
the regulatory decision from the Commission later in the 2012 third quarter. If
approved, Dacogen will become the first drug to be approved for the elderly AML
indication, and clinicians and patients in Europe would have access to this new
treatment option. As an Orphan Drug, Dacogen would have ten years of market
exclusivity for the elderly AML indication in the EU. In addition, Astex would
earn a $5.0 million milestone payment upon first commercialization of the drug
in addition to earning future royalty revenue.
2012 Revised Financial Guidance
The revised financial guidance for 2012 is presented in the table below:
2012 Financial
Guidance
(In $000's)
Prior Revised
----------------------
Revenues:
Royalty revenue $ 67,000 $ 70,000
Development & license revenue 1,400 6,900
----------------------
68,400 76,900
----------------------
Operating expenses: **
Research & development 67,000 65,000
Amortization of intangibles 8,500 8,500
General & administrative 15,000 15,000
Gain on sale of products (700) (700)
----------------------
89,800 87,800
----------------------
Loss from operations (21,400) (10,900)
Other income (expense), net 400 (100)
Income tax benefit 6,000 6,000
----------------------
Net income (loss) $ (15,000) $ (5,000)
======================
Weighted average shares outstanding 93,000 93,000
======================
** Includes recurring non-cash charges of approximately
$12 million.
Conference Call Information
Astex Pharmaceuticals will host a conference call to discuss the 2012 second
quarter financial results today at 1:30 p.m. PT / 4:30 p.m. ET. A live webcast
of the conference call is accessible via the investor relations section of the
Company's website at http://www.astx.com. A webcast replay of the conference
call will be available for 30 days.
About Astex Pharmaceuticals
Astex Pharmaceuticals is dedicated to the discovery and development of novel
small molecule therapeutics with a focus on oncology. The Company is developing
a proprietary pipeline of novel therapies and is creating de-risked products
for partnership with leading pharmaceutical companies. Astex Pharmaceuticals
developed Dacogen and receives significant royalties on global sales.
For more information about Astex Pharmaceuticals, Inc., please visit
http://www.astx.com.
The Astex Pharmaceuticals, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=12273
Forward-Looking Statements
This press release contains "forward-looking" statements within the meaning of
Section 21A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, and is subject to the safe harbor
created thereby. Actual results could differ materially from those projected in
the forward-looking statements as a result of a number of risks and
uncertainties. These forward-looking statements include, but are not limited
to, statements regarding expectations regarding the completion of drug
candidate optimization and advancement of drug candidates in the clinic;
expectations regarding our clinical trials including the production and timing
of clinical data from these trials; expectations regarding the potential growth
of worldwide sales of Dacogen, expectations regarding the ability of the
Company to expand and develop our pipeline of products in the years ahead; the
Company's ability to develop the current and future pipeline into commercially
viable drugs; the expectations regarding our clinical trials including the
timing of clinical proof of concept data from these trials; the sufficiency of
our operating cash to fund our development initiatives this year and
thereafter; expectations about increases in royalty revenue; expectations
regarding research and development expenses and general and administrative
expenses; expectations regarding development and license revenue; estimates of
2012 net income or losses and anticipated tax benefits; statements about
expected losses or profitability; estimates regarding our total expected shares
outstanding; and expectations regarding Eisai's and Janssen's plans for Dacogen
including with respect to submissions to the EMA. Important factors that could
cause actual results to differ materially from the expectations reflected in
the forward-looking statements include, but are not limited to: the ultimate
outcome of the submission of the European regulatory filing; the ability of
Eisai and Janssen to generate global sales of Dacogen; the outcomes of the
on-going clinical trials; risks and uncertainties related to the achievement of
developmental milestones with respect to the compounds in development; the
research and development of amuvatinib, AT13387, SGI-110, and other programs;
the decision by certain strategic partners whether or not to license and then
develop and commercialize the products that are the subject of our
collaboration with them and whether any of those products will be commercially
successful. In general, our future success is dependent upon numerous factors,
including our ability to generate pre-clinical development candidates for
selection into clinical testing, obtaining regulatory approval of product
development programs, conducting and completing clinical trials, obtaining
regulatory approval of our products and product candidates, our ability to
successfully partner with leading pharmaceutical companies, and creating
opportunities for future commercialization of compounds. Our future revenue and
operating and net loss or income could be worse than anticipated if demand for
our products is less than expected, if our partnerships and collaborations with
other parties are not successful, if our drug pipeline does not progress, or if
the introductions of new products are delayed, for any reason, including
regulatory delay. References made to the discussion of risk factors are
detailed in the Company's filings with the Securities and Exchange Commission
including reports on its most recently filed Form 10-K and Form 10-Q. These
forward-looking statements are made only as of the date hereof, and we disclaim
any obligation to update or revise the information contained in any such
forward-looking statements, whether as a result of new information, future
events or otherwise.
Condensed Consolidated Statements of Operations and Balance Sheets to follow
ASTEX PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
---------------------------------------
2012 2011 2012 2011
---------------------------------------
Revenues:
Royalty revenue $ 14,441 $ 11,539 $ 35,035 $ 28,510
Development and license revenue 5,439 127 6,868 254
---------------------------------------
Total revenues 19,880 11,666 41,903 28,764
Operating expenses:
Research and development 15,394 7,992 29,458 15,985
General and administrative 3,650 3,532 7,992 7,152
Amortization of intangibles 1,941 -- 4,098 --
Gain on sale of products (700) (700) (700) (700)
---------------------------------------
Total operating expenses 20,285 10,824 40,848 22,437
---------------------------------------
Income (loss) from operations (405) 842 1,055 6,327
Interest income 45 57 87 106
Other income (expense) (31) 10 (75) 10
---------------------------------------
Income (loss) before income taxes (391) 909 1,067 6,443
Income tax benefit (provision) 1,630 (6) 4,413 (50)
---------------------------------------
Net income $ 1,239 $ 903 $ 5,480 $ 6,393
=======================================
Net income per common share:
Basic $ 0.01 $ 0.01 $ 0.06 $ 0.11
=======================================
Diluted $ 0.01 $ 0.01 $ 0.05 $ 0.10
=======================================
Weighted average shares outstanding:
Basic 93,135 60,399 93,103 60,382
=======================================
Diluted 102,722 61,070 103,355 61,044
=======================================
ASTEX PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
June 30, December 31,
2012 2011
------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 26,338 $ 39,788
Marketable securities 92,942 86,444
Accounts receivable 6,041 5,189
Income tax receivable 4,413 2,963
Prepaid expenses and other current assets 2,329 2,186
------------------------
Total current assets 132,063 136,570
Marketable securities, non-current 1,518 1,819
Property, plant and equipment, net 6,870 7,013
Goodwill 45,256 44,794
Other intangible assets, net 83,045 86,198
Other assets 554 554
------------------------
Total assets $ 269,306 $ 276,948
========================
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,113 $ 7,529
Accrued compensation 3,703 5,324
Other accrued liabilities 613 613
Deferred acquisition consideration 4,404 17,353
Deferred tax liability 3,377 3,342
Deferred revenue -- 509
------------------------
Total current liabilities 19,210 34,670
Warrant liability 195 187
Deferred acquisition consideration, non-current 14,586 11,624
Deferred tax liability, non-current 6,915 9,545
Deferred revenue, non-current -- 921
------------------------
Total liabilities 40,906 56,947
Total stockholders' equity 228,400 220,001
------------------------
Total liabilities and stockholders' equity $ 269,306 $ 276,948
========================
CONTACT: Timothy L. Enns
Astex Pharmaceuticals, Inc.
Senior Vice President
Corporate Communications & Marketing
Tel: +1 (925) 560-2810
E-mail:
Alan Roemer
The Trout Group
Managing Director
Tel: +1 (646) 378-2945
E-mail:
Susanna Chau
Astex Pharmaceuticals, Inc.
Manager
Investor Relations
Tel: +1 (925) 560-2845
E-mail:
Kari Watson
MacDougall Biomedical Communications
Senior Vice President
Tel: +1 (781) 235-3060
E-mail: