-- In June 2008, the Company announced positive top-line efficacy and
safety results from the CORD I and CORD II phase III clinical trials for
XIAFLEX (clostridial collagenase for injection) in the treatment of
Dupuytren's contracture. Each of the CORD I and II trials successfully met
the primary endpoint, a reduction in the angle of a patient's joint
contracture to less than or equal to 5 degrees of normal, as measured by
digital goniometry, 30 days after the last injection. The Company also
released results of a Pharmacokinetic (PK) Study that demonstrated the lack
of systemic exposure of XIAFLEX in patients treated for Dupuytren's
contracture.
-- In September 2008, Auxilium announced that the first patients had been
dosed in the U.S. phase IIb trial of XIAFLEX for the treatment of
Peyronie's disease. In February 2009, the Company subsequently announced
that trial enrollment had been completed and that top line results are
expected to be released in the fourth quarter of 2009.
-- In December 2008, the Company and Pfizer, Inc. (NYSE : PFE ) announced
their strategic alliance for the development, commercialization and supply
of XIAFLEX for the treatment of Dupuytren's contracture and Peyronie's
disease in the 27 member states of the European Union (EU) and 19 other
European and Eurasian countries. Under the Pfizer agreement, Pfizer made an
up-front payment of $75 million to Auxilium and will make up to $410
million in potential milestone payments, with $150 million tied to
regulatory milestones and $260 million based on commercialization
milestones. Auxilium will also receive significant increasing, double-
digit, tiered royalties based on sales of XIAFLEX in Pfizer's territories.
TESTIM:
-- Testim revenues were up 31% over the prior year to $125.2 million.
-- Testim prescriptions grew by 26.5% in 2008 according to National
Prescription Audit (NPA) data from IMS Health, Inc. (IMS), a leading market
research firm.
-- Total prescriptions for the testosterone replacement gel market
segment grew 15.2% in 2008 according to NPA data from IMS.
-- In December 2008, Testim's market share of the gel segment reached a
record 22.3% versus 21.5% in December 2007, according to IMS.
-- In December 2008, Auxilium and Ferring International S.A. announced an
exclusive agreement for the European distribution and license rights to
Testim. The Company and Ipsen Pharma GmbH agreed to mutually terminate
their distribution agreement for Testim in Europe and other countries
outside North America and Japan.
-- In December 2008, after receiving a notice of an Abbreviated New Drug
Application (ANDA) filing by Upsher-Smith Laboratories, Inc. (Upsher-Smith)
containing a Paragraph IV certification for testosterone gel in October
2008, Auxilium and CPEX Pharmaceuticals, Inc. (CPEX) filed a lawsuit
against Upsher-Smith for infringement of CPEX's U.S. Patent No. 7,320,968,
which covers Testim, 1% testosterone gel.
COMPANY HIGHLIGHTS:
-- In 2008, the Company continued to build out its management team with
seasoned executives:
-- Dr. Anthony DelConte assumed the newly created position of Chief
Medical Officer;
-- Mr. Will Sargent assumed the newly created position of Vice
President, Investor Relations and Corporate Communications;
-- Dr. Laura Offutt joined as Vice President, Medical Affairs;
-- Dr. Wayne Herber assumed the newly created position of Vice
President, Process Development;
-- Mr. Michael Cowan was promoted to Senior Vice President,
Manufacturing; and
-- Mr. Scott Wilhoit was promoted to Vice President, XIAFLEX Marketing
and Managed Markets.
2009 Financial and Operational Guidance
For 2009, Auxilium anticipates that:
-- net revenues will be in the range of $150 million to $155 million;
-- research and development spending will be in the range of $49 million
to $53 million, which includes $4 million to $5 million of stock-based
compensation cost;
-- selling, general and administrative expenses will be in the range of
$116 million to $121 million, which includes $12 million to $14 million of
stock-based compensation cost;
-- net loss will be in the range of $50 million to $55 million; and
-- total stock-based compensation expense will be in the range of $16
million to $19 million.
With respect to the clinical and development program for XIAFLEX, Auxilium
expects to:
-- file the Biologics License Application (BLA) for approval of XIAFLEX
for the treatment of Dupuytren's contracture with the U.S. Food and Drug
Administration (FDA) in early 2009;
-- prepare the Company's commercial organization for a potential priority
review of the XIAFLEX BLA from the FDA; and
-- release top line results from the double-blind phase IIb clinical
trial for XIAFLEX for the treatment of Peyronie's in the fourth quarter of
2009.
Information concerning select assumptions will be discussed during the
conference call today, February 18, 2009 at 10:00 a.m. EST.
Fourth Quarter 2008 Financial Detail
For the quarter ended December 31, 2008, Auxilium reported net revenues of
$34.8 million compared to net revenues of $27.7 million in the fourth
quarter of 2007, an increase of 25%.
The net loss for the fourth quarter of 2008 was $(12.1) million, or $(0.29)
per share, compared to a net loss of $(11.9) million, or $(0.29) per share,
reported for the fourth quarter of 2007. Net loss for the fourth quarter of
2008 includes total stock-based compensation expense of $3.7 million,
compared to $1.8 million for the fourth quarter of 2007.
Gross margin on net revenues was 76.3% for the quarter ended December 31,
2008 compared to 73.9% for the comparable period in 2007. Gross margin
reflects the cost of product sold as well as royalty payments made to the
Company's licensor on the sales of Testim. The improvement in gross margin
reflects the impact of year-over-year price increases and the decline in
low margin international shipments, partially offset by an increase in
coupon usage.
Research and development spending for the quarter ended December 31, 2008
was $14.6 million, compared to $14.5 million for 2007. Although the
overall spending was comparable year over year, there was a significant
reduction in clinical development costs, offset by increases in regulatory
costs and manufacturing costs at Horsham.
Selling, general and administrative costs for the quarter ended December
31, 2008 were $24.4 million, compared to $18.9 million in the comparable
2007 period. The increase was primarily due to higher compensation costs
associated with FAS 123R, costs incurred in defense of our Testim
intellectual property and investments in preparing for the launch of
XIAFLEX.
As of December 31, 2008, Auxilium had $113.9 million in cash, cash
equivalents and short-term investments, compared to $46.4 million at
September 30, 2008.
Full Year 2008 Financial Detail
For the full year 2008, net revenues totaled $125.4 million, compared to
net revenues of $95.7 million for the year 2007, an increase of 31%.
Auxilium reported a net loss of $(46.3) million, or $(1.12) per share, for
the full year 2008, compared to a net loss of $(40.7) million, or $(1.07)
per share, for the full year 2007. Net loss for 2008 includes total
stock-based compensation expense of $11.7 million, compared to $6.0 million
for the full year 2007.
Gross margin on net revenues was 76.5% for the full year 2008, compared to
74.3 % for the full year 2007.
Research and development costs for the full year 2008 were $54.5 million
compared with $42.8 million for the full year 2007.
Selling, general and administrative expenses totaled $89.5 million for the
year ended December 31, 2008, compared with $72.8 million for the year-ago
period.
Conference Call
Auxilium will hold a conference call today, February 18, at 10:00 a.m. EST,
to discuss fourth quarter and full year 2008 results, as well as the
financial and operational guidance it has provided for 2009. The conference
call will be simultaneously web cast on Auxilium's web site and archived
for future review until March 18, 2009.
Conference call details: Date: Wednesday, February 18, 2009 Time: 10:00 a.m. EST Dial-in (U.S.): 800-597-1967 Dial-in (International): 617-597-5526 Web cast: http://www.auxilium.com Passcode: Auxilium To access an audio replay of the call: Access number (U.S.): 888-286-8010 Access number (International): 617-801-6888 Replay Passcode #: 24229893About Auxilium Auxilium Pharmaceuticals, Inc. is a specialty biopharmaceutical company with a focus on developing and marketing to urologists, endocrinologists, orthopedists and select primary care physicians. Auxilium markets Testim® 1%, a topical testosterone gel, for the treatment of hypogonadism through its approximately 190-person sales and marketing team. Auxilium has five projects in clinical development. XIAFLEX™ (clostridial collagenase for injection), formerly referred to as AA4500, has completed phase III clinical trials for the treatment of Dupuytren's contracture, is in phase IIb of development for the treatment of Peyronie's disease and is in phase II of development for treatment of Frozen Shoulder syndrome (Adhesive Capsulitis). Auxilium's transmucosal film product candidate for the treatment of overactive bladder (AA4010) is in phase I of development. Auxilium also has one pain product (fentanyl) using its transmucosal film delivery system in phase I of development. Auxilium has rights to additional pain products and products for hormone replacement and urologic disease using its transmucosal film delivery system. The Company is currently seeking a partner to further develop these product candidates. Auxilium also has options to all indications using XIAFLEX for non-topical formulations. For additional information, visit http://www.auxilium.com. SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 In addition to historical facts or statements of current condition, this release contains forward-looking statements within the meaning of the "Safe Harbor" provisions of The Private Securities Litigation Reform Act of 1995, including statements regarding
-- Auxilium's expected financial performance during 2009 and the
financial milestones that it may achieve for 2009, including 2009 net
revenues, research and development spending, selling, general and
administrative expenses, and net loss;
-- the receipt of milestone payments and royalties from Pfizer;
-- the timing of the release of top-line results from the phase IIb
clinical trial for XIAFLEX for the treatment of Peyronie's disease;
-- the timing of the filing of the Biologics License Application for
approval of XIAFLEX for the treatment of Dupuytren's contracture and the
request for a priority review of the XIAFLEX BLA from the FDA;
-- the potential for XIAFLEX to be a Company transforming product;
-- the interpretation of clinical data;
-- the protection for Testim afforded by U.S. Patent No. 7,320,968;
-- the impact of recent additions to and promotions within the management
team; and
-- the drivers of Testim sales and market share growth.
Forward-looking statements often address Auxilium's expected future
financial position or business strategy and plans and objectives of
management for future operations, and often contain the words "believe,"
"may," "could," "will," "estimate," "continue," "anticipate," "intend,"
"should," "plan," "expect," and "potentially," and similar expressions.
Forward-looking statements provide Auxilium's current expectations or
forecasts of future events. Auxilium's performance and financial results
could differ materially from those reflected in these forward-looking
statements due to:
-- the success of research and development activities;
-- further evaluation of clinical data and results of clinical trials;
-- the performance of third-party manufacturers and suppliers;
-- decisions by regulatory authorities as to whether and when to approve
drug applications;
-- decisions by regulatory authorities as to whether and when to proceed
to the next phase of clinical trials;
-- difficulties or delays in manufacturing;
-- the outcome of pending litigation;
-- competition from currently marketed products, generic products, and
new products;
-- general financial, economic, regulatory and political conditions
affecting the biotechnology and pharmaceutical industries and the
jurisdictions in which Auxilium markets or seeks to market its products;
-- claims and concerns that may arise regarding the safety or efficacy of
its products; and
-- increase in costs or expenses.
A more detailed list and description of the risks and uncertainties that
Auxilium faces may be found under the heading "Risk Factors" in Auxilium's
Annual Report on Form 10-K for the year ended December 31, 2007 and in
Auxilium's Quarterly Report on Form 10-Q for the period ended September 30,
2008 which are on file with the Securities and Exchange Commission. Given
these risks and uncertainties, any or all of the forward-looking statements
contained in this release may prove to be incorrect. Therefore, you should
not rely on any such factors or forward-looking statements. Auxilium
undertakes no obligation to update publicly any forward-looking statement.
AUXILIUM PHARMACEUTICALS, INC.
Condensed Consolidated Statement of Operations
(In thousands, except share and per share amounts)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
---------- ---------- ---------- ----------
2008 2007 2008 2007
---------- ---------- ---------- ----------
Net revenues $ 34,775 $ 27,738 $ 125,377 $ 95,734
---------- ---------- ---------- ----------
Operating expenses:
Cost of goods sold 8,257 7,239 29,486 24,609
Research and
development* 14,591 14,545 54,497 42,802
Selling, general and
administrative* 24,358 18,902 89,482 72,768
---------- ---------- ---------- ----------
Total operating
expenses 47,206 40,686 173,465 140,179
---------- ---------- ---------- ----------
Loss from operations (12,431) (12,948) (48,088) (44,445)
Interest income (expense),
net 292 1,090 1,801 3,740
---------- ---------- ---------- ----------
Net loss $ (12,139) $ (11,858) $ (46,287) $ (40,705)
========== ========== ========== ==========
Basic and diluted net loss
per common share $ (0.29) $ (0.29) $ (1.12) $ (1.07)
========== ========== ========== ==========
Weighted average common
shares outstanding 41,972,506 40,331,967 41,272,557 38,187,662
========== ========== ========== ==========
*includes the following
amounts of stock-based
compensation expense:
Research and
development $ 1,084 $ 378 $ 3,140 $ 1,180
Selling, general and
administrative 2,581 1,378 8,602 4,857
AUXILIUM PHARMACEUTICALS, INC.
Selected Consolidated Balance Sheet Data
(In thousands)
(Unaudited)
December 31, December 31,
2008 2007
------------- -------------
Cash and cash equivalents $ 113,943 $ 70,290
Short-term investments - 5,800
Working capital 87,339 64,861
Long-term investments 3,419 -
Total assets 171,187 106,979
Other long-term liabilities 80,423 11,166
Total stockholders' equity 35,266 64,016
Contact Information: For More Information, Contact: James E. Fickenscher CFO Auxilium Pharmaceuticals, Inc. (484) 321-5900 William Q. Sargent Jr. VP IR Auxilium Pharmaceuticals, Inc. (484) 321-5926