Arthritis Advisory Committee for XIAFLEX(TM) on September 16, 2009; $30 Million Revolving Credit Line Obtained; Total Revenues of $39.2 MM, up 26.8% Versus Q2 of 2008; Increasing Guidance
-- On April 28, the Company was notified that the FDA had accepted the
XIAFLEX BLA filing for Dupuytren's contracture and granted Priority review
with a Prescription Drug User Fee Act ("PDUFA") goal date of August 28,
2009.
-- On June 18, the Company announced that an FDA Arthritis Advisory
Committee had been tentatively set for September 16, 2009 to review XIAFLEX
for Dupuytren's contracture.
-- Key Commercial and Medical personnel have been added in anticipation
of a potential launch within 60 days of approval.
-- The Company's phase IIb study of XIAFLEX for Peyronie's disease
continued to follow patients, and Auxilium expects to announce top-line
results in the fourth quarter of 2009.
TESTIM:
-- According to IMS Health, Inc., a pharmaceutical research firm ("IMS"),
a total of 150,830 prescriptions for Testim were dispensed in the second
quarter of 2009, a growth of 15.7% over the second quarter of 2008.
-- Total prescriptions within the gel segment of the testosterone
replacement therapy market in the U.S. grew 15.6% versus the second quarter
of 2008, according to IMS.
-- Testim ended the month of June 2009 with a 21.9% share of total
prescriptions for testosterone gels in the U.S., unchanged from the 21.9%
share at the end of June 2008, according to IMS.
SUBSEQUENT EVENTS:
-- On July 31, the FDA's Arthritis Advisory Committee confirmed it will
review XIAFLEX during an advisory committee hearing at the Holiday Inn in
Gaithersburg, MD on September 16, 2009. The FDA has not updated its PDUFA
goal date of August 28, 2009 for completion of its review of the XIAFLEX
BLA.
-- On August 5, the Company announced that it had secured a $30 million
revolving credit line from Silicon Valley Bank.
-- The Company is today announcing that it has enrolled the first
patients in a long-term clinical trial for Dupuytren's contracture patients
who participated in XIAFLEX's Phase III clinical trials to track recurrence
and safety data over 2-5 years after initial treatment with XIAFLEX. The
Company expects to continue to enroll patients into the first half of 2010.
Second Quarter 2009 Financial Details
For the quarter ended June 30, 2009, Auxilium reported net revenues of
$39.2 million compared to net revenues of $30.9 million in the second
quarter of 2008, an increase of 26.8%. Sales of Testim in the U.S. were
$37.0 million, a 22.1% increase over the $30.3 million recognized in the
second quarter of 2008. There was $1.3 million of ex-U.S. partner
milestone revenue recognition and shipments of Testim in the second quarter
of 2009, compared to $0.6 million in the second quarter of 2008. The
Company also recognized $0.9 million in revenues in the second quarter from
the amortization of upfront payments related to the out-licensing of
XIAFLEX. The net loss for the second quarter of 2009 was $(13.4) million,
or $(0.32) per share, compared to a net loss of $(11.7) million, or $(0.29)
per share, reported for the second quarter of 2008. Net loss for the second
quarter of 2009 includes total stock-based compensation expense of $4.9
million, compared to $2.8 million for the second quarter of 2008.
Gross margin on net revenues was 76.4% for the quarter ended June 30, 2009
compared to 76.0% for the comparable period in 2008. Gross margin reflects
the cost of product sold and royalty obligations due to the Company's
licensor on the sales of Testim, and the amortization of deferred costs
associated with the XIAFLEX out-licensing. The increase in the gross
margin rate is the result of the impact of year-over-year price increases
on U.S. Testim revenues and the increase in amortization of upfront and
milestone payments, partially offset by higher coupon usage in 2009.
Research and development spending for the quarter ended June 30, 2009 was
$13.7 million, compared to $13.4 million for 2008. Although the overall
spending was comparable year over year, there was a significant reduction
in clinical development costs primarily related to the completion of
XIAFLEX clinical trials that were conducted in 2008, offset by increases in
regulatory costs for XIAFLEX and costs at our Horsham manufacturing
facility.
Selling, general and administrative expenses totaled $29.4 million for the
quarter ended June 30, 2009 compared with $22.2 million for the year-ago
quarter. The increase was primarily due to investments in preparing for the
potential U.S. launch of XIAFLEX and increases in compensation costs
associated with FAS 123R.
As of June 30, 2009, Auxilium had $80.4 million in cash and cash
equivalents compared to $90.2 million on March 31, 2009.
Updated 2009 Financial Guidance
Auxilium has updated its 2009 financial guidance. As with its previously
announced guidance, the Company is not including any sales of XIAFLEX in
the U.S. or costs of the 75 to 100 person XIAFLEX sales force that it
anticipates hiring, including certain training and marketing costs in its
updated guidance because the amount of such sales and costs that may be
realized in 2009, if any, are dependent upon the launch date of XIAFLEX and
certain other key launch variables which are not yet determinable. The
Company anticipates:
-- net revenues will be in the range of $155 million to $165 million for
2009, an increase from the previously announced guidance of $150 million to
$155 million, driven by higher than anticipated Testim revenues;
-- research and development investment will remain unchanged in the range
of $45 million to $50 million, which includes $4 million to $5 million of
stock-based compensation cost;
-- selling, general and administrative expenses will remain unchanged in
the range of $120 million to $130 million, which does not include the costs
of hiring and training the XIAFLEX sales force, and includes $12 million to
$14 million of stock-based compensation cost;
-- net loss will be in the range of $50 million to $55 million compared
to the previous guidance of $55 million to $60 million; and
-- total stock-based compensation expense will remain unchanged in the
range of $16 million to $19 million.
Conference Call
Auxilium will hold a conference call today, August 6, 2009 at 10:00 a.m.
EDT, to discuss second quarter 2009 financial results and operational
highlights. The conference call will be simultaneously web cast on
Auxilium's web site and archived for future review until September 6, 2009.
Conference call details: Date: Thursday, August 6, 2009 Time: 10:00 a.m. EDT Dial-in (U.S.): 866-730-5763 Dial-in (International): 857-350-1587 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 #: 57985572About 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™ (collagenase clostridium histolyticum), formerly referred to as AA4500, has completed phase III clinical trials for the treatment of Dupuytren's contracture, and the biologics license application is under review at the FDA for the treatment of Dupuytren's contracture. XIAFLEX 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) and its fentanyl pain product using its transmucosal delivery system are in phase I of development. The Company is currently seeking a partner to further develop these transmucosal film product candidates. Auxilium has rights to additional pain products and products for hormone replacement and urologic disease using its transmucosal film delivery system. 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, net loss and stock-based compensation expense;
-- Testim revenues for the second half of 2009;
-- the timing of the U.S. Food and Drug Administration ("FDA") Arthritis
Advisory Committee to review XIAFLEX for Dupuytren's contracture;
-- the timing of enrollment of patients in a long-term clinical trial for
Dupuytren's contracture patients who participated in XIAFLEX's Phase III
clinical trials;
-- 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 approval by FDA of the filing of the Biologics License Application
for XIAFLEX for the treatment of Dupuytren's contracture and the timing of
such approval;
-- the impact of commercial and medical personnel that have been added to
support the potential launch of XIAFLEX;
-- the Company's preparedness for the launch of XIAFLEX in the U.S. and
the timing of such launch; and
-- the interpretation of clinical data.
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;
-- the timing, cost and degree of success of the U.S. launch of XIAFLEX;
-- 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, 2008, which is
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 Six Months Ended
June 30, June 30,
---------------------- ----------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
Net revenues $ 39,194 $ 30,901 $ 73,869 $ 58,019
---------- ---------- ---------- ----------
Operating expenses:
Cost of goods sold 9,239 7,409 17,117 13,409
Research and
development* 13,734 13,435 27,267 26,628
Selling, general and
administrative* 29,383 22,173 55,785 43,193
---------- ---------- ---------- ----------
Total operating
expenses 52,356 43,017 100,169 83,230
---------- ---------- ---------- ----------
Loss from operations (13,162) (12,116) (26,300) (25,211)
Interest income 105 390 323 1,171
---------- ---------- ---------- ----------
Loss before income taxes (13,057) (11,726) (25,977) (24,040)
Provision for income taxes 317 - 631 -
---------- ---------- ---------- ----------
Net loss $ (13,374) $ (11,726) $ (26,608) $ (24,040)
========== ========== ========== ==========
Basic and diluted net loss
per common share $ (0.32) $ (0.29) $ (0.63) $ (0.59)
========== ========== ========== ==========
Weighted average common
shares outstanding 42,008,009 41,050,599 42,399,560 40,888,477
========== ========== ========== ==========
*includes the following
amounts of stock-based
compensation expense:
Research and development $ 1,752 $ 648 $ 2,885 $ 1,164
Selling, general and
administrative 3,117 2,128 6,515 3,725
AUXILIUM PHARMACEUTICALS, INC.
Selected Consolidated Balance Sheet Data
(In thousands)
(Unaudited)
June 30, December 31,
2009 2008
----------- -----------
Cash and cash equivalents $ 80,352 $ 113,943
Working capital 63,385 87,339
Long-term investments 3,419 3,419
Total assets 141,930 171,187
Other long-term liabilities 76,292 80,423
Total stockholders' equity 20,092 35,266
Contact Information: CONTACT: James E. Fickenscher Chief Financial Officer Auxilium Pharmaceuticals, Inc. +1-484-321-5900 or William Q. Sargent Jr. Vice-President, Investor Relations and Corporate Communications +1-484-321-5900