AVANIR Reports Third Quarter Fiscal 2007 Financial Results
Announces Progress on Zenvia Clinical Programs
AVANIR Pharmaceuticals (NASDAQ:AVNR) today reported financial results for the three and nine months ended June 30, 2007.
For the third fiscal quarter of 2007, AVANIR reported a net loss of $9.2 million, or $0.23 per share, compared with a net loss of $17.6 million, or $0.56 per share, for the comparable quarter in 2006. Revenues for the third quarter of fiscal 2007 were $7.1 million, compared with $2.4 million for the third quarter of fiscal 2006. Revenues in the third quarter of fiscal 2007 included FazaClo® net revenues of $4.9 million. Gross margins for the third quarter of fiscal 2007 were $4.2 million, compared with $568,000 in the same period a year ago. Total operating expenses were $14.6 million in the third quarter of fiscal 2007, compared with $18.5 million in the same period in fiscal 2006.
"We have made considerable progress toward our objective of transforming AVANIR into a CNS-focused specialty pharmaceutical company," said Keith Katkin, AVANIR's President and CEO. "We have gained additional clarity on the regulatory path forward for our core CNS asset Zenvia™, secured non-dilutive operating capital by divesting FazaClo, a non-core asset, and taken significant steps to lower our net cash burn rate. Our resources are now squarely aligned around the clinical development of our late-stage drug candidate Zenvia for the treatment of pseudobulbar affect (PBA), also known as involuntary emotional expression disorder, and diabetic peripheral neuropathic (DPN) pain – both indications are significant unmet medical needs and represent large market opportunities."
"Through our ongoing dialog with the U.S. Food and Drug Administration (FDA), we have developed a protocol for a confirmatory Phase III clinical study of Zenvia in PBA that we believe addresses the issues raised by the FDA in its October 2006 approvable letter. We look forward to sharing details of this study design later in the year and expect to enroll the first PBA patient by the end of this calendar year," stated Randall Kaye, MD, Chief Medical Officer of AVANIR.
2007 FISCAL THIRD QUARTER - RECENT HIGHLIGHTS AND UPCOMING MILESTONES:
CLINICAL PROGRAMS AND PIPELINE
Zenvia in Pseudobulbar Affect (PBA)/Involuntary Emotional Expression Disorder (IEED)
Zenvia in DPN Pain
BALANCE SHEET HIGHLIGHTS
As of June 30, 2007, we had cash and investments in securities totaling $10.9 million, including cash and cash equivalents of $7.5 million, short and long-term investments in securities of $2.2 million and restricted investments in securities of $1.2 million. After the end of the quarter, the Company raised additional proceeds of approximately $31 million from the sale of FazaClo, net of $11 million in debt pay-down related to the 2006 Alamo acquisition.
The Company is targeting an average annual net cash burn rate of approximately $20 million over the next two fiscal years, inclusive of the projected costs for our planned confirmatory Phase III trial of Zenvia in IEED, but excluding any costs associated with a second Phase III Zenvia trial in DPN pain.
MID-TERM LETTER TO STOCKHOLDERS
AVANIR announced that a mid-term Letter to Stockholders is available on the "Investors" section of the Company website at www.avanir.com. An electronic or hard copy of the Letter to Stockholders is also available upon request by contacting Brandi Floberg at Lippert/Heilshorn & Associates at (310) 691-7100.
Conference Call and Webcast
Management will host a conference call with a simultaneous webcast today beginning at 8:00 a.m. Pacific time/11:00 a.m. Eastern time to discuss business developments in the third quarter of fiscal 2007. The call/webcast will feature Keith Katkin, President and Chief Executive Officer; Martin Sturgeon, Vice President and Interim Chief Financial Officer; and Randall Kaye, M.D., Senior Vice President and Chief Medical Officer. Investors are invited to listen to the live webcast by visiting AVANIR's corporate website at www.avanir.com. To listen to the live call, please go to AVANIR's website prior to the start of the call to register, download and install the necessary audio software.
A webcast will be available on AVANIR's website for 30 days, and a telephone replay will be available through August 12, 2007, by dialing (800) 642-1687 (domestic) or (706) 645-9291 (international) and entering the conference ID number 7373288.
AVANIR Pharmaceuticals is focused on developing, acquiring and commercializing novel therapeutic products for the treatment of chronic diseases. AVANIR's products and product candidates address therapeutic markets that include the central nervous system (CNS), inflammation and infectious diseases. AVANIR's lead product candidate Zenvia is being developed for the treatment of pseudobulbar affect (PBA), also known as involuntary emotional expression disorder, and is the subject of an approvable letter from the FDA for that indication. Additionally, AVANIR announced meeting all primary endpoints in a recently completed Phase III clinical trial with Zenvia in patients with diabetic peripheral neuropathic (DPN) pain. AVANIR has also licensed a compound to Novartis International Pharmaceutical Ltd. for the treatment of inflammatory disease. AVANIR's infectious disease drug candidate, AVP-21D9, is a human monoclonal antibody in pre-clinical development for the treatment of anthrax with funding to date from an NIH/NIAID grant. The Company's first commercialized product, Abreva®, is marketed in North America by GlaxoSmithKline Consumer Healthcare and is the leading over-the-counter product for the treatment of cold sores. Further information about AVANIR can be found at www.avanir.com.
Zenvia is a combination of two well-characterized compounds, the therapeutically active ingredient dextromethorphan, and the enzyme inhibitor quinidine, which serves to increase the bioavailability of dextromethorphan. This first-in-class drug candidate is believed to help regulate excitatory neurotransmission in two ways, through pre-synaptic inhibition of glutamate release via sigma-1 receptor agonist activity, and through postsynaptic glutamate response modulation via uncompetitive, low-affinity NMDA antagonist activity. Zenvia is currently in development for the treatment of pseudobulbar affect (PBA), also known as involuntary emotional expression disorder, and diabetic peripheral neuropathic (DPN) pain.
In October 2006, the Company received an approvable letter for the treatment of Zenvia in PBA. To address safety concerns raised in the FDA's approvable letter for Zenvia in the treatment of PBA, the Company intends to initiate a confirmatory Phase III study with a new lower quinidine dose formulation of Zenvia. In April 2007 AVANIR completed the first of two planned Phase III studies in DPN pain where all primary endpoints were successfully met. The Company is considering the future development plan for Zenvia in this indication.
Forward Looking Statements
Statements in this press release that are not historical facts, including statements that are preceded by, followed by, or that include such words as "estimate," "intend," "anticipate," "believe," "plan," "goal," "expect," or similar statements, are forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from the future results expressed or implied by such statements. There can be no assurance that the proceeds received by the Company from the sale of the Company's FazaClo operations, together with the Company's other available funds, will be sufficient to fund the Company's operations as currently anticipated, or that the Company will be able to commence and complete planned clinical trials within the projected time periods. Risks and uncertainties affecting the Company's financial condition and operations also include the risks set forth in AVANIR's most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, and from time-to-time in other publicly available information regarding the Company. Copies of this information are available from AVANIR upon request. AVANIR disclaims any intent to update these forward-looking statements.
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|Aug 08, 2007|