Theravance Reports First Quarter 2007 Financial Results
SOUTH SAN FRANCISCO, CA -- 04/26/2007 -- Theravance, Inc. (NASDAQ: THRX)
reported today its financial results for the quarter ended March 31, 2007.
Net loss for the first quarter of 2007 was $49.5 million, compared with
$49.0 million for the same period of 2006, an increase of $0.5 million.
Net loss per share was $0.82 for the first quarter 2007 compared with a net
loss per share of $0.86 for the first quarter 2006.
"I'm extremely pleased with the recent advances in our pipeline," said Rick
E Winningham, Chief Executive Officer. "We recently completed enrollment
in two Phase 2 studies -- one with TD-5108 in patients with chronic
constipation and one with TD-1792 in patients with complicated skin and
skin structure infections -- and we look forward to reviewing the results
from these studies in a few months. Also during the first quarter, we
reached an important milestone when the FDA accepted the filing of our New
Drug Application for telavancin in complicated skin and skin structure
infections. Additionally, we recently reported positive results from our
Beyond Advair collaboration with GSK and this program will progress as
planned into larger studies by the end of the year."
Program Highlights
Bacterial Infections Programs
Telavancin
The U.S. Food and Drug Administration (FDA) accepted the filing of our New
Drug Application (NDA) for telavancin for the treatment of complicated skin
and skin structure infections (cSSSI) caused by Gram-positive bacteria,
including resistant pathogens such as methicillin-resistant Staphylococcus
aureus (MRSA). In conjunction with the filing of our NDA, we received a
milestone payment from our partner Astellas Pharma Inc.
Our Phase 3 program for the treatment of hospital-acquired pneumonia (HAP)
caused by Gram-positive bacteria, including resistant pathogens such as
MRSA, continues to progress. The final Independent Data Monitoring
Committee meeting was successfully completed during the first quarter with
no changes to the program required. We expect to complete enrollment late
in the first half of 2007.
Heterodimer
Our Phase 2 cSSSI clinical study with TD-1792, our investigational
heterodimer antibiotic for the treatment of serious Gram-positive
infections, including resistant pathogens such as MRSA, has completed
enrollment, and the program remains on track.
Respiratory Programs
Beyond Advair
We reported positive results of two studies in our Phase 2b clinical
program assessing the safety and efficacy of GSK642444 ('444) and GSK159797
('797) in the Beyond Advair collaboration with GlaxoSmithKline (GSK) to
develop and commercialize a once-daily Long-Acting Beta2 Agonist (LABA)
product candidate for the treatment of asthma and chronic obstructive
pulmonary disease (COPD). Both '444 and '797, dosed once daily, achieved
clinically significant increases in bronchodilation at least equivalent to
that of salmeterol dosed twice daily. Both compounds will continue in
development, with the lead compound, '444, progressing into larger studies
and the backup compound, '797, continuing in a dose optimization study.
Inhaled Bifunctional Muscarinic Antagonist-Beta2 Agonist (MABA) Program
Our MABA program for the treatment of COPD continues to progress with the
lead compound, GSK961081, expected to begin a Phase 2 clinical study later
this year.
Inhaled Long Acting Muscarinic Antagonist (LAMA) Program
Our lead compound in the LAMA program for COPD continues to progress in
preclinical safety studies.
Gastrointestinal (GI) Motility Dysfunction Program
Our Phase 2 study with TD-5108 in patients with chronic constipation has
completed enrollment and the program remains on track.
Financial Results
Revenue
Revenue was $5.4 million in the first quarter of 2007 compared with $4.3
million in the same period of 2006. This increase was due to higher
amortization of upfront and milestone payments received from the company's
partnerships with GSK and Astellas. All payments received to date under
these agreements are being amortized over the relevant performance periods
rather than being recognized when received.
Research and Development
Research and development spending for the first quarter of 2007 increased
slightly to $48.9 million compared with $48.7 million for the same period
of 2006. This increase was primarily driven by higher spending on our
Phase 2 clinical programs with TD-1792 and TD-5108, partially offset by
lower external development costs associated with telavancin. Total research
and development stock-based compensation expense for the three months ended
March 31, 2007 was $3.4 million compared with $3.0 million for the same
period in 2006. Total external research and development costs were $28.5
million in the first quarter of 2007 compared with $30.3 million for the
same period of 2006.
General and Administrative
General and administrative costs for the first quarter of 2007 were $8.8
million compared with $7.3 million for the same period in 2006. This
increase was primarily driven by salaries, stock based compensation, and IT
expenses. Total general and administrative stock-based compensation expense
for the first quarter of 2007 was $2.4 million compared with $2.0 million
for the same period in 2006.
Cash and Cash Equivalents
Cash, cash equivalents and marketable securities totaled $219.7 million as
of March 31, 2007, a decrease of $15.9 million during the quarter. This
decrease was primarily due to cash usage of approximately $47.9 million
during the first quarter offset by the receipt of payments of $32.0 million
from Astellas.
Conference Call and Webcast Information
As previously announced, the company has scheduled a conference call to
discuss this announcement beginning at 5:00 p.m. Eastern Time today. To
participate in the live call by telephone, please dial 800-817-4887 from
the U.S., or 913-981-4913 for international callers. Those interested in
listening to the conference call live via the internet may do so by
visiting the company's web site at www.theravance.com. To listen to the
live call, please go to the web site 15 minutes prior to its start to
register, download, and install any necessary audio software.
A replay of the conference call will be available on the company's web site
for 30 days through May 26, 2007. An audio replay will also be available
through 11:59 p.m. Eastern Time on May 10, 2007 by dialing 888-203-1112
from the U.S., or 719-457-0820 for international callers, and entering
confirmation code 4645250.
About Theravance
Theravance is a biopharmaceutical company with a pipeline of internally
discovered product candidates. Theravance is focused on the discovery,
development and commercialization of small molecule medicines across a
number of therapeutic areas including respiratory disease, bacterial
infections and gastrointestinal motility dysfunction. Of the five programs
in development, two are in late stage -- its telavancin program focusing on
treating serious Gram-positive bacterial infections with Astellas Pharma
Inc. and the Beyond Advair collaboration with GlaxoSmithKline. By
leveraging its proprietary insight of multivalency to drug discovery
focused on validated targets, Theravance is pursuing a next generation drug
discovery strategy designed to discover superior medicines in large
markets. For more information, please visit the company's web site at
www.theravance.com.
THERAVANCE®, the Theravance logo, and MEDICINES THAT MAKE A DIFFERENCE®
are registered trademarks of Theravance, Inc.
This press release contains and the conference call will contain certain
"forward-looking" statements as that term is defined in the Private
Securities Litigation Reform Act of 1995 regarding, among other things,
statements relating to goals, plans, objectives and future events.
Theravance intends such forward-looking statements to be covered by the
safe harbor provisions for forward-looking statements contained in Section
21E of the Exchange Act and the Private Securities Litigation Reform Act of
1995. Examples of such statements include statements relating to the goals,
timing and expected results of clinical and preclinical studies, statements
regarding the potential benefits and mechanisms of action of drug
candidates, statements concerning the goals and timing of seeking
regulatory approval of our product candidates, the enabling capabilities of
Theravance's approach to drug discovery and its proprietary insights,
statements concerning expectations for product candidates through
development and commercialization and projections of revenue and other
financial items. These statements are based on the current estimates and
assumptions of the management of Theravance as of the date of this press
release and the conference call and are subject to risks, uncertainties,
changes in circumstances, assumptions and other factors that may cause the
actual results of Theravance to be materially different from those
reflected in its forward-looking statements. Important factors that could
cause actual results to differ materially from those indicated by such
forward-looking statements include, among others, risks related to delays
or difficulties in commencing or completing clinical and preclinical
studies, the potential that results of clinical or preclinical studies
indicate product candidates are unsafe, ineffective, inferior or not
superior, and delays or failure to achieve regulatory approvals, and risks
of collaborating with third parties to develop and commercialize products.
These and other risks are described in greater detail under the heading
"Risk Factors" contained in Theravance's Form 10-K filed with the
Securities and Exchange Commission (SEC) on March 1, 2007, and the risks
discussed in our other filings with the SEC. Given these uncertainties, you
should not place undue reliance on these forward-looking statements.
Theravance assumes no obligation to update its forward-looking statements.
THERAVANCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended March 31,
--------------------------
2007 2006
------------ ------------
(unaudited)
Revenue (1) $ 5,398 $ 4,296
Operating expenses:
Research and development (2) 48,858 48,708
General and administrative (2) 8,798 7,274
------------ ------------
Total operating expenses 57,656 55,982
------------ ------------
Loss from operations (52,258) (51,686)
Interest and other income, net 2,929 2,885
Interest expense (121) (151)
------------ ------------
Net loss $ (49,450) $ (48,952)
============ ============
Net loss per share (3) $ (0.82) $ (0.86)
============ ============
Shares used in computing net loss per share (3) 60,061 56,871
============ ============
(1) Revenue includes amounts from GSK, a related party, of $2.8 million for
the three months ended March 31, 2007 and $3.0 million for the three
months ended March 31, 2006.
(2) Amounts include stock-based compensation expense for the three months
ended March 31 as follows (in thousands):
Three Months Ended March 31,
---------------------------
2007 2006
------------- -------------
(unaudited)
Research and development $ 3,368 $ 3,046
General and administrative 2,420 1,967
------------- -------------
Total stock-based compensation expense $ 5,788 $ 5,013
============= =============
(3) Shares used in computing net loss per share exclude approximately 11.2
million and 10.8 million shares issuable upon exercise of outstanding
stock options and warrants, restricted shares, and shares subject to
repurchase as of March 31, 2007 and 2006, respectively, as their effect
would be antidilutive.
THERAVANCE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, December 31,
2007 2006
------------- -------------
(unaudited) (2)
Assets
Cash, cash equivalents and marketable
securities $ 184,634 $ 201,080
Other current assets 6,051 6,111
Marketable securities - non-current 35,077 34,490
Property and equipment, net 16,183 15,101
Other assets 5,714 5,642
------------- -------------
Total assets $ 247,659 $ 262,424
============= =============
Liabilities and stockholders equity
Current liabilities, net of current
portion of deferred revenue $ 41,665 $ 40,336
Deferred revenue (1) 180,259 153,656
Other long-term liabilities 5,391 5,122
Stockholders equity 20,344 63,310
------------- -------------
Total liabilities and stockholders equity $ 247,659 $ 262,424
============= =============
(1) Deferred revenue includes the current portion of $21.2 million and
$19.3 million as of March 31, 2007 and December 31, 2006, respectively.
The net increase in total deferred revenue is the result of additional
payments that were earned under the companys collaboration with
Astellas, partially offset by the amortization of deferred revenue.
(2) The condensed consolidated balance sheet amounts at December 31, 2006
are derived from audited financial statements.