Highlights:
-- Announced clinically and statistically significant results from two
Phase III studies of lead product candidate, Zentase(tm), in April
2007
-- Granted fast track designation by FDA for Zentase and submitted
initial data for its rolling NDA in June 2007
-- Began build-out of Zentase sales and marketing team with opening of
new office near Philadelphia, PA
-- GlaxoSmithKline ("GSK") initiated a registration study on EUR-1048,
Eurand's co-development project with GSK
-- ECR received NDA approval for Amrix(r), formerly EUR-1002, a novel
formulation of cyclobenzaprine co-developed with Eurand, for an
expected late 2007 launch
-- Completed initial public offering of 7,000,000 shares at $16.00 per
share for net proceeds of approximately $100 million
-- Increased first half total revenues by 6 percent at constant
currency rates to Euro 43.7 million ($59.0 million)
AMSTERDAM, Netherlands, Aug. 3, 2007 (PRIME NEWSWIRE) -- Eurand N.V. (Nasdaq:EURX), a specialty pharmaceutical company that develops enhanced pharmaceutical and biopharmaceutical products based on its proprietary drug formulation technologies, today announced financial results for the six months ended June 30, 2007. These were the first financial results released since Eurand's initial public offering on May 16, 2007.
The Company also disclosed recent business and clinical developments related to its preparations for the commercial launch of its lead proprietary product candidate, Zentase, currently being developed for the treatment of exocrine pancreatic insufficiency (EPI), as well as an update on the Company's most advanced product candidates, both partnered and proprietary.
Gearoid Faherty, Chief Executive Officer of Eurand, commented, "The first half of 2007 has been an exceptional six months for Eurand. Most importantly, we announced the clinically and statistically significant results of our two Phase III studies on our lead product candidate, Zentase, and the commencement of registration studies on our lead collaboration project with GSK. We also began the process of building the U.S. sales and marketing organization for Zentase with the opening of our Philadelphia office and the recruitment of the initial members of our commercial team."
Mr. Faherty continued, "We also made progress on many other fronts including the growth of our established business through collaboration agreements with some of the world's leading pharmaceutical and biotechnology companies. We successfully completed an IPO, which allowed us to essentially eliminate our debt and increase our cash position in order to fuel our clinical initiatives and expand our research capabilities. We also made significant progress on many of our other development and co-development projects and look forward to updating investors on these projects in the near future."
PRODUCT DEVELOPMENT PIPELINE UPDATE:
ZENTASE (EUR-1008)
-- On August 1, 2007, Eurand received IRB approval and subsequently
activated the U.S. site for the gastrointestinal (GI)
bioavailability study of Zentase. The Company expects to complete
the study on schedule and finalize its NDA submission by the end of
2007, at which time it will request priority review from the Food
and Drug Administration (FDA). Eurand initiated its rolling NDA
submission in June 2007 and was granted fast-track designation by
the FDA.
-- On June 4, 2007, Eurand began the build-out of its Zentase sales
and marketing team with the opening of offices in Philadelphia,
Pennsylvania. The Company has hired the initial members of the
Zentase commercial team and recruitment efforts are progressing on
schedule. Eurand expects to launch Zentase in 2008.
-- In April 2007, Eurand reported results from two Phase III studies
of Zentase, showing a statistically and clinically significant
improvement in the absorption of fat, protein and nutrients in
patients suffering from EPI.
Zentase is a porcine-derived pancreatic enzyme replacement therapy used to treat EPI as associated with cystic fibrosis (CF), chronic pancreatitis and other conditions. The product is a highly stable formulation containing eight key enzymes and a number of coenzymes and cofactors and is biologically similar to endogenous human pancreatic secretions necessary for proper human digestion. To date, Zentase has demonstrated positive results in two Phase III trials, one pivotal trial, and a supportive trial in very young pediatric patients. We believe that the pediatric study was one of the first studies of its type and size conducted in such a young patient population in the United States.
EUR-1048 -- Co-Development Product with GSK
-- Eurand is co-developing a fast-dissolve formulation of an
undisclosed GSK compound using the Company's Microcap(tm)
taste-masking and AdvaTab(r) oral disintegrating tablet
technologies. The Company could potentially receive milestone
payments totaling up to $42 million. GSK expects to file an NDA in
the fourth quarter of 2007, with anticipated product launch in late
2008. Under the agreement, Eurand will manufacture the product for
GSK and receive royalty revenues.
EUR-1002 -- Amrix(r) Cyclobenzaprine Product
-- Eurand completed development of a new formulation of
cyclobenzaprine hydrochloride (Amrix), a muscle relaxant, for ECR
Pharmaceuticals. ECR received NDA approval for the product in
February 2007 and we understand that the product launch plans
remain on schedule for late 2007.
EUR-1000
-- Eurand has developed an AB-rated generic to Inderal LA, licensed to
Reliant Pharmaceuticals, for the treatment of hypertension and
migraines. Reliant submitted an ANDA and review is currently in
progress. If approved, a product launch could take place in 2008.
EUR-1025
-- Eurand is currently developing a once-daily formulation of
ondansetron, an anti-emetic typically used for cancer patients
undergoing chemotherapy and/or radiotherapy or other post-surgical
patients. The Company has started a healthy volunteer study to
confirm the new formulation, with the results expected in early
2008. If the study is successful Eurand will evaluate the
possibility of conducting a registration study and/or out-licensing
the product.
EUR-1047
-- On June 19, 2007, Eurand announced the termination of its
development agreement with McNeil for EUR-1047. The product, which
is a formulation of Benadryl(r), offers consumers clear advantages
over existing formulations including taste masking and rapid
release. Eurand is currently in discussions with a number of
alternative partners regarding the continuing development of this
innovative product. Termination of this development agreement will
have no material impact on Eurand's 2007 or 2008 financial results.
Eurand has many additional product candidates in various earlier stages of development, both on a proprietary basis and for co-development partners.
Eurand signed two co-development agreements in the first six months of the year and is in discussions on a number of other potential agreements with multinational pharmaceutical companies for the development of products using Eurand's drug formulation technologies.
FIRST HALF 2007 FINANCIAL RESULTS:
Total revenues were Euro 43.7 million ($59.0 million) for the six months ended June 30, 2007, representing growth of approximately 6 percent at constant currency rates compared to the same period in 2006. Product sales were Euro 37.5 million ($50.7 million), representing an increase of 6 percent at constant currency. Royalties were Euro 1.8 million ($2.5 million), representing a decrease of 9 percent at constant currency. The decrease in royalty revenues was due to unusually high royalties in first quarter 2006. Development fees were Euro 4.3 million ($5.8 million) for the six months ended June 30, 2007, representing an increase of 20 percent at constant currency.
Research and development expenses were Euro 7.7 million ($10.4 million) for the six months ended June 30, 2007, representing a decrease of 6 percent at constant currency rates compared to the same period in 2006. The decrease was primarily due to lower clinical costs as the costs of the Zentase Phase III trials were incurred in 2006.
Selling, general and administrative expenses were Euro 9.2 million ($12.4 million) for the six months ended June 30, 2007, representing an increase of 40 percent at constant currency rates compared to the same period in 2006. This increase was primarily due to increased head count and other costs associated with the build-out of the sales and marketing infrastructure for Zentase, the costs of public company compliance, and legal costs relating to the ongoing litigation between Eurand and UCB.
Operating profit decreased to Euro 1.9 million ($2.5 million) for the six months ended June 30, 2007, from Euro 3.6 million in the same period in 2006 due to increased SG&A costs.
Financial expenses were Euro 1.6 million ($2.1 million) for the six months ended June 30, 2007, compared to Euro 3.8 million in the same period of 2006. The reduction in financial costs was mainly due to the repayment of debt, using proceeds resulting from the May 2007 IPO.
For the six months ended June 30, 2007, the Company reported net loss of Euro 0.5 million (Euro 0.04 per share) or $0.6 million ($0.05 per share), based on weighted average shares outstanding of 12,835,416. Assuming the conversion of all of the Company's Series A and C preference shares into ordinary shares on January 1, 2007 rather than at the IPO date, pro-forma net loss was Euro 0.01 per share ($0.02 per share) based on weighted average shares outstanding of 38,628,882. For the six months ended June 30, 2006, the Company reported a loss of Euro 1.3 million. Lower financial costs as a result of debt repayment offset the reduction in operating profit.
In May 2007, Eurand completed its initial public offering of 7,000,000 shares of common stock at a price of $16 per share, for net proceeds to the Company of approximately $100 million after offering expenses.
The Company's financial position improved significantly as proceeds from the IPO were used to reduce gross debt from Euro 63.1 million to Euro 2.1 million (from $85.4 million to $2.9 million) while cash increased from Euro 5.8 million to Euro 20.1 million (from $7.8 million to $27.1 million).
Attached to this earnings press release are three tables:
1. Selected consolidated statements of operations for the six months
ended June 30, 2007 compared to the same period in 2006
2. Selected balance sheet data
3. Selected consolidated statements of operations for the past six
quarters
This press release contains translations of Euros into U.S. dollars at a convenience rate of 1.3520 U.S. dollars per Euro, the noon buying rate at the Federal Reserve Bank of New York on June 30, 2007.
Percentage variances quoted in "Constant Currency" represent the increase or decrease recomputed as if Euro/Dollar exchange rates had been the same in the six months ended June 30, 2007 as they were in the same period in 2006. As a guide, average exchange rates were Euro 1=1.3297$ in 1H 2007, and Euro 1=1.2292/$ in 1H 2006
Conference Call Information
The Company will host a conference call on Friday, August 3, 2007 at 8:30 a.m. Eastern Daylight Time, 2:30 p.m. Central Europe Summer Time covering these first half 2007 financial results.
To participate in the conference call, U.S. Participants dial 1-888-935-4575, International Participants dial +1-718-354-1387.
A replay of the call will be available until August 10, 2007. The passcode to access the replay is 1123416#, U.S. Participants dial 1-888-883-4489, International Participants dial +1-718-354-1112. Additionally, a live audio of the conference call will be simultaneously broadcast over the Internet and can be accessed by visiting http://ir.eurand.com/eventdetail.cfm
About Eurand
Eurand is a specialty pharmaceutical company that develops enhanced pharmaceutical and biopharmaceutical products based on its proprietary drug formulation technologies. Eurand has had four products approved by the FDA since 2000 and has a pipeline of product candidates in development for itself and its collaboration partners. Eurand has completed two Phase III clinical trials on its lead product candidate, Zentase, for the treatment of exocrine pancreatic insufficiency (EPI) and filed the first segment of its rolling NDA for this product in June 2007. Eurand's technology platforms include bioavailability enhancement of poorly soluble drugs, customized release, taste-making/fast-dissolving formulations and drug conjugation.
Eurand is a global company with facilities in the USA and Europe. For more information, visit Eurand's website at www.eurand.com.
This certain statements made in this release, and oral statements made with respect to information contained in this release, may constitute forward-looking statements. Such forward-looking statements include those which express, plan, anticipation, intent, contingency, goals, targets or future development and/or otherwise are not statements of historical fact. The words "potentially", "anticipates", "expects" and similar expressions will some times identify forward-looking statements. These statements include, but not limited to, those relating to our anticipated funding needs for the marketing of Zentase and other future operations and the scientific robustness of any of our products, our plans or our collaborators' plans for our NDA filing, enrollment and future plans for our clinical trials, progress of and reports of results from clinical studies, clinical development plans and product development activities. These statements are based upon management's current expectations and are subject to risks and uncertainties, known and unknown, which could cause actual results and developments to differ materially from those expressed or implied in such statements. Forward-looking statements contained in this press release are made as of this date, and we undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Actual events could differ materially from those anticipated in the forward-looking statements.
EURAND N.V. SELECTED FINANCIAL DATA
Selected Consolidated Statement of Operations Data
Six months ended June 30,
---------------------------------------- % Change
2007 2007 2006 in in
current constant
$'000(1) Euro '000 Euro '000 currency currency
Product
sales $ 50,746 37,534 36,816 2% 6%
Royalty
income $ 2,455 1,816 2,143 -15% -9%
Development
fees $ 5,837 4,317 3,854 12% 20%
---------- ---------- ---------- ---------------
Total
revenues $ 59,038 43,667 42,813 2% 6%
---------- ---------- ---------- ---------------
Cost of
goods
sold $ (33,188) (24,547) (23,712) 4% 7%
R & D
expenses $ (10,412) (7,701) (8,379) -8% -6%
S G & A
expenses $ (12,426) (9,191) (6,793) 35% 40%
Amortization
of intan-
gibles $ (485) (359) (365) -2% -1%
---------- ---------- ---------- ---------------
Operating
profit $ 2,527 1,869 3,564 -48% -35%
---------- ---------- ---------- ---------------
Financial
(income)
expense $ (2,139) (1,582) (3,833) -59% N.M.
Income
before
taxes $ 388 287 (269) N.M. N.M.
Income
taxes $ (1,034) (765) (1,035) -26% N.M.
---------- ---------- ---------- ---------------
Net Income $ (646) (478) (1,304) N.M. N.M.
---------- ---------- ---------- ---------------
Basic and
diluted
net loss
per share $ (0.05) Euro (0.04) Euro (0.59)
========== ========== ==========
Weighted
average
number of
shares 12,835,416 12,835,416 2,216,608
Pro Forma
Basic and
diluted
net loss
per share $ (0.02)(2) Euro (0.01)(2) Euro (0.04)(3)
========== ========== ==========
Pro forma
weighted
average
number of
shares 38,628,882(2) 38,628,882(2) 34,704,548(3)
(1) Figures in U.S. Dollars are translated from the euro, for
convenience, at a rate of 1Euro=$1.3520, the noon buying rate at
the Federal Reserve Bank of New York on June 30, 2007.
(2) Presumes the conversion of all Series A preference shares into
32,487,940 ordinary shares and the conversion of all Series C
preference shares into 2,029,786 ordinary shares, as if these
had occurred on January 1, 2007 rather than at the IPO date.
(3) Presumes the conversion of all Series A preference shares into
32,487,940 ordinary shares, as if this had occurred on January 1,
2006. There were no Series C preference shares during the six
months ended June 30, 2006.
EURAND N.V. SELECTED FINANCIAL DATA - Continued
Selected Consolidated Balance Sheet Data
December 31,
June 30, 2007 2006
$'000(1) Euro '000 Euro '000
Cash and cash equivalents $ 27,122 Euro 20,061 Euro 5,810
Total assets $ 153,736 113,710 102,946
Total debt $ 2,878 2,129 63,144
Total liabilities $ 37,267 27,564 90,213
Series A redeemable
preference shares -- -- 26,844
Series C redeemable
preference shares -- -- 23,000
Total shareholders'
equity (deficit) $ 116,469 Euro 86,146 Euro (37,111)
(1) Figures in U.S. Dollars are translated from the euro, for
convenience, at a rate of 1Euro=$1.3520, the noon buying rate at
the Federal Reserve Bank of New York on June 30, 2007.
EURAND N.V. SELECTED FINANCIAL DATA - Continued
Selected Consolidated Statement of Operations Data
for the Last Six Quarters
(in Euro '000)
Mar 31 June 30 Sept 30 Dec 31 Mar 31 June 30
2006 2006 2006 2006 2007 2007
Product
Sales 17,927 18,889 16,329 16,626 18,706 18,828
Royalties 1,283 860 811 942 974 842
Development
Fees 1,968 1,886 3,399 1,929 2,210 2,107
---------------------------------------------------------
Revenues 21,178 21,635 20,539 19,497 21,890 21,777
Cost of
goods
sold (11,138) (12,574) (12,610) (11,236) (12,555) (11,992)
Research and
development
expenses
attributable to
development
fees (1,249) (1,303) (1,497) (1,541) (1,231) (1,319)
Other
research and
development
expenses (3,425) (2,402) (2,306) (2,564) (2,648) (2,503)
Selling,
general and
administrative
costs (3,235) (3,558) (3,751) (4,242) (4,481) (4,710)
Other
expenses -- -- 280 74 -- --
Amortization of
intangibles (183) (182) (181) (181) (180) (179)
---------------------------------------------------------
Operating
income 1,948 1,616 474 (193) 795 1,074
Interest
expense,
net (1,876) (1,936) (1,970) (1,479) (1,228) (468)
Foreign
exchange
gains, net 38 (59) 32 1 28 86
---------------------------------------------------------
Loss before
taxes 110 (379) (1,464) (1,671) (405) 692
Income tax
expense (365) (670) (212) (346) (377) (388)
---------------------------------------------------------
Net loss (255) (1,049) (1,676) (2,017) (782) 304
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