Avanir Pharmaceuticals Reports Fiscal 2011 Second Quarter Results

ALISO VIEJO, Calif., May 9, 2011 /PRNewswire/ -- Avanir Pharmaceuticals, Inc. (NASDAQ: AVNR) today reported financial results for the three and six months ended March 31, 2011.

Financial Highlights

  • Total net revenues of $1.4 million (deferred royalty revenue and recognized NUEDEXTA® revenue)
  • Gross revenue for NUEDEXTA of $505,000
  • Total NUEDEXTA net shipments of $3.1 million
  • Quarter end cash, cash equivalents, and investments of $105.1 million

Commenting on the financial results and recent events, Keith A. Katkin, president and CEO of Avanir, said, "With the mid-February launch of NUEDEXTA, the only FDA approved treatment for pseudobulbar affect, we have become a commercial stage biopharmaceutical company. I believe we are off to a promising start with over 1,000 new prescriptions through the end of March, representing the first seven weeks of launch. With a strong balance sheet, dedicated and talented employees, and plans for further clinical development, I believe Avanir is poised for a successful fiscal 2011."

Fiscal 2011 Second Quarter Results

  • Total net revenues for the quarter ended March 31, 2011 totaled $1.4 million, compared with $1.0 million for the comparable quarter in 2010.
  • Total operating expenses were $15.8 million in the second quarter of fiscal 2011, compared with $7.4 million in the comparable period in fiscal 2010.
  • Cash used in operations was $13.9 million in the second quarter of fiscal 2011.
  • Net loss for the fiscal 2011 second quarter was $14.5 million, or $0.12 per share, compared with a net loss of $6.4 million, or $0.08 per share, for the same period in fiscal 2010.

Six-Month Results

  • Total net revenue for the first six-months of fiscal 2011 totaled $3.3 million compared with $2.5 million for the first six months of fiscal 2010.
  • Total operating expenses were $29.7 million in the first six-months of fiscal 2011 compared to $13.8 million in the comparable period for fiscal 2010.
  • Cash used in operations was $28.0 million in the first six months of fiscal 2011.
  • Net loss for the first six-months of fiscal 2011 was $26.6 million, or $0.23 per share, compared with a net loss of $11.3 million, or $0.14 per share for the comparable period in fiscal 2010.

NUEDEXTA Revenue

For the quarter ended March 31, 2011, the company reported NUEDEXTA gross and net revenue of $505,000 and $462,000 respectively. NUEDEXTA revenue is recognized using a deferred revenue recognition model, meaning that NUEDEXTA capsule shipments to wholesalers are initially recorded as deferred revenue and later recognized as revenue when the product has left the distribution channel and is no longer subject to a right of return, effectively representing reported end-user prescriptions and non-retail shipments of NUEDEXTA capsules.

Total NUEDEXTA net shipments for the quarter ended March 31, 2011 were $3.1 million. Net deferred revenue for the second quarter of fiscal 2011 was $2.6 million.

Business Highlights

On February 7, 2011, Avanir launched NUEDEXTA, the first and only U.S. Food and Drug Administration (FDA) approved therapy for pseudobulbar affect (PBA).

In addition to the launch of NUEDEXTA, other recent highlights for the company include:

  • Filed an Investigational New Drug (IND) application with the FDA to begin a large Phase II clinical trial of AVP-923 for the treatment of central neuropathic pain in patients with multiple sclerosis. The company expects to enroll the first patient by the end of 2011.
  • Announced the PRISM patient registry, a 10,000 patient registry to further quantify the prevalence and quality of life impact of PBA in patients with a variety of underlying neurologic conditions.
  • Announced results from a Multiple Sclerosis Association of America survey of approximately 5,000 of their members indicating that approximately 48% of respondents exhibited symptoms of PBA.
  • Further enhanced commercial expertise of the Avanir executive team with the addition of Bill Sibold to position of chief commercial officer, the promotion of Greg Flesher to chief business officer and the addition of Elona Kogan, Esq to the position of vice president, legal affairs.

Cash, Cash Equivalents & Marketable Securities

As of March 31, 2011 Avanir had cash, cash equivalents and investments in securities totaling $105.1 million, including cash and cash equivalents of $103.0 million and restricted investments in securities of $2.1 million.

Note to Investors: As previously announced, Avanir will hold a conference call to discuss fiscal 2011 second quarter financial results today, May 9, 2011, beginning at 1:30 p.m. Pacific Time. You can listen to this call by dialing 1-877-558-3407 for domestic callers or +1-706-679-1941 for international callers, and entering passcode 62329359. Those interested in listening to the conference call live via the internet may do so by visiting http://www.avanir.com.

About NUEDEXTA

NUEDEXTA® is the first and only FDA-approved treatment for pseudobulbar affect (PBA). NUEDEXTA is an innovative combination of two well-characterized components; dextromethorphan hydrobromide (20 mg), the ingredient active in the central nervous system, and quinidine sulfate (10 mg), a metabolic inhibitor enabling therapeutic dextromethorphan concentrations. NUEDEXTA acts on sigma-1 and NMDA receptors in the brain, although the mechanism by which NUEDEXTA exerts therapeutic effects in patients with PBA is unknown.

NUEDEXTA is indicated for the treatment of pseudobulbar affect (PBA). PBA occurs secondary to a variety of otherwise unrelated neurological conditions, and is characterized by involuntary, sudden, and frequent episodes of laughing and/or crying. PBA episodes typically occur out of proportion or incongruent to the patient's underlying emotional state. Studies to support the effectiveness of NUEDEXTA were performed in patients with amyotrophic lateral sclerosis (ALS) and multiple sclerosis (MS). NUEDEXTA has not been shown to be safe and effective in other types of emotional lability that can commonly occur, for example, in Alzheimer's disease and other dementias. The primary outcome measure, laughing and crying episodes, was significantly lower in the NUEDEXTA arm compared to placebo. The secondary outcome measure, the Center for Neurologic Studies Lability Scale (CNS-LS), demonstrated a significantly greater mean decrease in CNS-LS score from baseline for the NUEDEXTA arm compared to placebo.

NUEDEXTA Important Safety Information

NUEDEXTA can interact with other medications causing significant changes in blood levels of those medications and/or NUEDEXTA. NUEDEXTA is contraindicated in patients receiving drugs that both prolong QT interval and are metabolized by CYP2D6 (e.g., thioridazine and pimozide) and should not be used concomitantly with other drugs containing quinidine, quinine, or mefloquine. NUEDEXTA is contraindicated in patients taking monoamine oxidase inhibitors (MAOIs) or in patients who have taken MAOIs within the preceding 14 days. NUEDEXTA is contraindicated in patients with a known hypersensitivity to its components.

NUEDEXTA may cause serious side effects, including possible changes in heart rhythm. NUEDEXTA is contraindicated in patients with a prolonged QT interval, congenital long QT syndrome or a history suggestive of torsades de pointes, in patients with heart failure as well as patients with, or at risk of, complete atrioventricular (AV) block, unless the patient has an implanted pacemaker.

NUEDEXTA causes dose-dependent QTc prolongation. When initiating NUEDEXTA in patients at risk of QT prolongation and torsades de pointes, electrocardiographic (ECG) evaluation of QT interval should be conducted at baseline and 3-4 hours after the first dose.

The most common adverse reactions in patients taking NUEDEXTA are diarrhea, dizziness, cough, vomiting, weakness, swelling of feet and ankles, urinary tract infection, flu, elevated liver enzymes, and flatulence.

NUEDEXTA may cause dizziness. Precautions to reduce the risk of falls should be taken, particularly for patients with motor impairment affecting gait or a history of falls.

Patients should take NUEDEXTA exactly as prescribed. Patients should not take more than 2 capsules in a 24-hour period, make sure that there is an approximate 12-hour interval between doses, and not take a double dose after they miss a dose.

These are not all the risks from use of NUEDEXTA. For additional important safety information about NUEDEXTA, please see the full Prescribing Information at www.NUEDEXTA.com.

About PBA

Patients suffering from existing neurological disease or brain injury may also suffer the added burden of pseudobulbar affect, or PBA. PBA occurs secondary to a variety of otherwise unrelated neurological conditions, and is characterized by involuntary, sudden, and frequent episodes of laughing and/or crying. PBA episodes typically occur out of proportion or incongruent to the patient's underlying emotional state. PBA outbursts result from a "short circuit" in the brain caused by another neurologic condition--such as multiple sclerosis (MS), amyotrophic lateral sclerosis (ALS), stroke, or traumatic brain injury. PBA can have a debilitating impact on the lives of patients, caregivers and loved ones. For more information about PBA, please visit www.PBAinfo.org.

About Avanir Pharmaceuticals, Inc.

Avanir Pharmaceuticals, Inc. is a biopharmaceutical company focused on bringing innovative medicines to patients with central nervous system disorders of high unmet medical need. As part of our commitment, we have extensively invested in our pipeline and are dedicated to advancing medicines that can substantially improve the lives of patients and their loved ones. For more information about Avanir, please visit www.avanir.com.

AVANIR™ and NUEDEXTA® are trademarks owned by Avanir Pharmaceuticals, Inc.

©2011 Avanir Pharmaceuticals, Inc. All Rights Reserved.

Forward Looking Statements

Except for the historical information contained herein, the matters set forth in this press release, including statements regarding the ongoing launch of NUEDEXTA, the future clinical development of NUEDEXTA for other indications and the expected timing for enrollment of patients in these trialsare forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the occurrence of adverse safety events with NUEDEXTA, that NUEDEXTA may not gain acceptance by the medical field, our dependence on third parties for manufacturing and distribution of NUEDEXTA, that we may not adequately build or maintain the necessary sales, marketing, supply chain management and reimbursement capabilities on our own or enter into arrangements with third parties to perform these functions in a timely manner or on acceptable terms, and other risks detailed from time to time in the Company's most recent Annual Report on Form 10-K and other documents subsequently filed with or furnished to the Securities and Exchange Commission. These forward-looking statements are based on current information that may change and you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement, and the Company undertakes no obligation to revise or update any forward-looking statement to reflect events or circumstances after the issuance of this press release.


March 31,


September 30,


2011


2010


(unaudited)


(audited)

ASSETS

Current assets:




Cash and cash equivalents

$ 103,047,047


$ 38,771,469

Trade receivables

3,215,758


-

Inventories

671,001


652,628

Other current assets

1,544,677


1,066,482

Current portion of restricted investments in marketable securities

467,100


200,000

Total current assets

108,945,583


40,690,579

Restricted investments in marketable securities, net of current portion

1,634,625


401,550

Property and equipment, net

674,436


449,712

Non-current inventories

258,182


228,207

Other assets

795,978


371,150

TOTAL ASSETS

$ 112,308,804


$ 42,141,198





LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:




Accounts payable, accrued expenses and other liabilities

$ 5,342,842


$ 5,323,542

Deferred product revenues, net

2,647,091


-

Current portion of deferred royalty revenues

2,087,226


2,399,849

Total current liabilities

10,077,159


7,723,391

Accrued expenses and other liabilities, net of current portion

241,158


334,269

Deferred royalty revenues, net of current portion

5,274,870


6,076,982

Total liabilities

15,593,187


14,134,642

Total stockholders' equity

96,715,617


28,006,556

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$ 112,308,804


$ 42,141,198




Three Months Ended March 31,


Six Months Ended March 31,


2011


2010


2011


2010

REVENUES FROM PRODUCT SALES








Gross product sales

$ 504,966


$ -


$ 504,966


$ -

Less: discount and allowances

(42,952)


-


(42,952)


-

Net product sales

462,014


-


462,014


-

Cost of product sales (1)

114,327


-


114,327


-

Product gross margin

347,687


-


347,687


-









OTHER REVENUES








Revenues from royalties

974,489


994,494


2,792,976


2,479,428

Total gross margin

1,322,176


994,494


3,140,663


2,479,428









OPERATING EXPENSES








Research and development

2,519,390


3,815,613


6,363,179


7,262,503

Selling, general and administrative

13,278,773


3,622,704


23,372,211


6,489,182

Total operating expenses

15,798,163


7,438,317


29,735,390


13,751,685









Loss from operations

(14,475,987)


(6,443,823)


(26,594,727)


(11,272,257)









OTHER INCOME








Interest income

10,051


2,357


17,183


8,161

Other, net

348


1,004


37


677









Net loss

$ (14,465,588)


$ (6,440,462)


$ (26,577,507)


$ (11,263,419)









Basic and diluted net loss per share

$ (0.12)


$ (0.08)


$ (0.23)


$ (0.14)









Basic and diluted weighted average number of common shares outstanding

121,635,339


83,419,640


114,943,284


83,288,078









(1) Cost of product sales includes a write-down of inventory of approximately $82,000.



SOURCE Avanir Pharmaceuticals, Inc.

May 09, 2011