AVANIR Pharmaceuticals Reports Results for Third Quarter of Fiscal 2002
SAN DIEGO, Aug 13, 2002 /PRNewswire-FirstCall via COMTEX/ --AVANIR Pharmaceuticals (Amex: AVN), a biopharmaceutical drug discovery and development company with a commercialized FDA-approved product on the market, today reported financial results for the third fiscal quarter ended June 30, 2002. The Company also provided a progress report on expansion of its docosanol franchise worldwide and other major programs.
Third quarter milestone achievements included obtaining international regulatory approvals for the Company's first product, docosanol 10% cream, as an over-the-counter cold sore treatment in Canada, South Korea and Israel. In June, the Company's partner in South Korea launched docosanol 10% cream under the brand name Herepair. AVANIR also submitted a new drug application to Swedish regulatory authorities seeking marketing approval of the drug in Sweden. The Company selected Sweden as the lead country for establishing its European franchise and plans to pursue the process of mutual recognition in obtaining regulatory review throughout the European Union.
"In addition to receiving several international approvals for docosanol 10% cream, we are happy to announce that on June 22nd, Boryung Pharmaceuticals launched Herepair in the Korean market," said AVANIR President and Chief Executive Officer Gerald J. Yakatan, Ph.D. "We congratulate our partner on this milestone and wish them success. Through the establishment of new international markets for docosanol and additional market penetration of Abrevaa in the U.S. by GlaxoSmithKline, we look forward to incremental increases in our revenue stream that will further help to fund our product discovery and development initiatives."
During the third fiscal quarter, AVANIR also announced the successful completion and positive results of its Phase II/III clinical trial investigating the safety and effectiveness of its lead investigational new drug Neurodex in the treatment of pseudobulbar affect (also known as emotional lability, or pathological laughing or crying) in patients with amyotrophic lateral sclerosis (ALS). "The successful outcome of this trial validates AVANIR'S core strengths in drug discovery and development including our experience in designing and executing effective clinical trials that advance the process for bringing a potential drug to market," Yakatan noted. AVANIR will engage in additional Neurodex trials for pseudobulbar affect this year. AVANIR has exclusive worldwide rights to develop four patented indications for Neurodex and recently initiated a Phase II clinical trial of Neurodex for neuropathic pain. Neurodex for pseudobulbar affect is the most advanced indication in development and could reach the FDA for review by 2004.
Third Fiscal Quarter Operating Performance
Revenues for the third quarter of fiscal 2002 were $819,000, compared to revenues of $514,000 for the same period last year. Revenues in both periods consisted primarily of royalties on Abreva(TM) sales, which increased by 50% from the same period a year ago. Consumer demand for Abreva continued to increase, represented by an increase in sales and growth in the share of the market for over-the-counter lip remedies. For the third quarter of fiscal 2002, AVANIR's net loss attributable to common shareholders was $4.9 million, compared to $2.0 million for the same period a year ago. Net loss per share was $0.08, compared to $0.03 for the same period a year ago.
The increased loss is primarily due to planned costs associated with completing a Phase II/III clinical trial of Neurodex in the treatment of pseudobulbar affect in patients with ALS. Costs associated with ongoing toxicology testing of the Company's lead compound in the allergy and allergic asthma program, and to a lesser extent, increased headcount to support the Company's current development programs also contributed to the net loss. The Company expects R&D expenses to increase moderately during the remainder of the calendar year 2002 as it makes progress towards future goals.
Goals remaining for calendar year 2002 include completion of the Phase II clinical trial for the treatment of neuropathic pain in diabetic neuropathy patients, initiation of a Phase III clinical trial of pseudobulbar affect in multiple sclerosis patients, and completion of toxicology work and other advanced preclinical research on the lead compound for treating allergy and allergic asthma. The Company also intends to continue other preclinical research in the areas of anti-inflammation and cholesterol reduction, and drug discovery through antibody generation research currently in progress by its subsidiary Xenerex Biosciences.
Fiscal Year-to-Date Results
Revenues for the first nine months of fiscal 2002 amounted to $7.7 million, compared to $6.9 million for the same period a year ago. The 12% increase in revenues was due primarily to increased royalties earned by AVANIR from Abreva(TM) sales generated by GlaxoSmithKline. The net loss attributable to common shareholders for the first nine months of fiscal 2002 was $5.9 million, compared to $1.6 million for the same period a year ago. Net loss per share was $0.10 for the first nine months of fiscal 2002, compared to $0.03 for the same period a year ago.
A $4.5 million increase in spending on R&D programs, including increases associated with allergy and asthma research, clinical trials of Neurodex, and the addition of anti-inflammatory research (MIF program) accounted for most of the increase in net loss compared with the same period a year ago.
Balance Sheet Highlights
At June 30, 2002, AVANIR had cash and investments of $17.5 million and a net working capital balance of $5.7 million. This compares to cash and investments of $21.9 million and a net working capital balance of $16 million at September 30, 2001. The decline in net working capital was primarily due to the loss incurred through the first nine months of the fiscal year and a $4.0 million net increase in long-term investments.
Conference Call and Webcast
Management will host a conference call with a simultaneous webcast on August 13, 2002, at 1:30 p.m. Pacific/ 4:30 p.m. Eastern, to discuss third fiscal quarter 2002 operating performance and outlook. The webcast will be available live via the Internet by accessing Avanir's web site at www.avanir.com or CCBN's www.companyboardroom.com . Please go to either web site at least ten minutes early to register, download and install any necessary audio software. Replays of the webcast will be available for 90 days, or a phone replay will be available through August 20, 2002, by dialing 800-642-1687 or 706-645-9291 and entering the passcode 5210215.
AVANIR Pharmaceuticals, based in San Diego, is a biopharmaceutical drug discovery and development company with an FDA-approved product. AVANIR is engaged in research, discovery, development and licensing of innovative drug products and, through its subsidiary Xenerex Biosciences, antibody generation services and antibody product development. The Company's website is http://www.avanir.com .
Except for the historical information presented herein, matters discussed in this press release contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Statements that are not historical facts, including statements that are preceded by, followed by, or that include such words like "estimate," "anticipate," "believe," "intend," "plan," or "expect" or similar statements are forward-looking statements. In regard to financial projections, risks and uncertainties include risks associated with royalties earned on product sales of Abreva(TM) by GlaxoSmithKline, and results of clinical trials or product development efforts, as well as risks shown in AVANIR's most recent annual report on Form 10-K and quarterly report on Form 10-Q and from time-to-time in other publicly available information regarding the company. Copies of such information are available from AVANIR upon request. Such publicly available information sets forth many risks and uncertainties related to AVANIR's business and technology. The company disclaims any intent or obligation to update these forward-looking statements.
For further information, please contact: General Information, Kristen McNally, +1-310-407-6548, email@example.com, or Analyst/Investor, Tricia Ross, +1-310-407-6540, firstname.lastname@example.org, or Media, Tim Grace, +1-312-640-6667, email@example.com, all of FRB/Weber Shandwick for AVANIR Pharmaceuticals; or Patrice Saxon, Investor Relations of AVANIR Pharmaceuticals, +1-858-622-5202, firstname.lastname@example.org.
- tables to follow - AVANIR PHARMACEUTICALS Summary Consolidated Financial Information (Unaudited) Three months Nine months ended June 30, ended June 30, Consolidated Statement of Operations Data: 2002 2001 2002 2001 Revenues $819,340 $513,739 $7,687,933 $6,851,675 Operating expenses: Cost of product sales 4,731 -- 4,731 -- Product launch expense -- 235,919 -- 728,148 Research and development 4,119,526 1,394,732 9,631,293 5,165,822 General and administrative 1,343,075 799,002 3,376,114 2,620,613 Sales and marketing 392,881 360,550 1,073,678 866,844 Total operating expenses 5,860,213 2,790,203 14,085,816 9,381,427 Loss from operations (5,040,873) (2,276,464) (6,397,883) (2,529,752) Interest income 150,833 284,975 519,659 960,474 Other income 8,649 -- 95,597 -- Interest expense (13,874) (870) (46,717) (5,308) Net loss $(4,895,265) $(1,992,359) $(5,829,344) $(1,574,586) Net loss attributable to common shareholders $(4,906,074) $(2,003,151) $(5,861,771) $(1,606,961) Net loss per share: Basic $(0.08) $(0.03) $(0.10) $(0.03) Diluted $(0.08) $(0.03) $(0.10) $(0.03) Weighted average number of common shares: Basic 58,275,445 57,542,291 58,180,998 57,368,194 Diluted 58,275,445 57,542,291 58,180,998 57,368,194 Consolidated Balance Sheet Data: June 30, 2002 September 30, 2001 Cash and cash equivalents $7,526,453 $16,542,545 Short and long-term investments 9,973,898 5,308,691 Total cash and investments $17,500,351 $21,851,236 Net working capital $5,691,956 $16,027,577 Total assets $23,476,476 $27,053,953 Total liabilities $4,505,929 $2,592,490 Convertible preferred stock $516,579 $502,903 Shareholders' equity $18,453,959 $23,958,560SOURCE AVANIR Pharmaceuticals
General Information, Kristen McNally, +1-310-407-6548, email@example.com, or Analyst/Investor, Tricia Ross, +1-310-407-6540, firstname.lastname@example.org, or Media, Tim Grace, +1-312-640-6667, email@example.com, all of FRB/Weber Shandwick for AVANIR Pharmaceuticals; or Patrice Saxon, Investor Relations of AVANIR Pharmaceuticals, +1-858-622-5202, firstname.lastname@example.org /Company News On-Call: http://www.prnewswire.com/comp/509050.html
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