Theravance Reports First Quarter 2009 Financial Results
SOUTH SAN FRANCISCO, CA -- (Marketwire - April 22, 2009) - Theravance, Inc. (NASDAQ: THRX)
reported today its financial results for the quarter ended March 31, 2009.
Net loss for the first quarter of 2009 was $19.2 million compared with
$29.8 million for the same period of 2008, a decrease of $10.6 million. Net
loss per share was $0.31 for the first quarter of 2009 compared with a net
loss per share of $0.49 for the same period of 2008.
"I'm very pleased with the continued progress of our key programs," said
Rick E Winningham, Chief Executive Officer. "In February, GSK and
Theravance released positive results from three Phase 2b studies in asthma
with fluticasone furoate. Also, we recently announced that the FDA accepted
the filing of our New Drug Application for telavancin for the treatment of
nosocomial pneumonia and issued a PDUFA goal date of November 26, 2009. In
addition, we also submitted our response to the Complete Response letter
for telavancin in complicated skin and skin structure infections in
mid-March 2009. We believe that 2009 will be an important year for the
company and we look forward to reporting on further developments in our key
programs."
Key Program Highlights
Respiratory Programs
Horizon
In February, GlaxoSmithKline, plc (GSK) and Theravance reported positive
results from three, separate Phase 2b studies of GSK's inhaled
corticosteroid fluticasone furoate (FF) in patients with mild, moderate and
severe asthma. These studies were designed to assess efficacy and safety
across a range of eight doses from 25 mcg to 800 mcg in over 1,800
patients, aged 12 years and older. The primary endpoint to assess efficacy
was mean change from baseline in trough forced expiratory volume (FEV1)
measured 24 hours after the last dose at the end of the eight-week
treatment period. Once-daily FF produced statistically significant
improvements in patients' lung function (trough FEV1) compared to placebo
(p < 0.05) in each of the three populations and at all doses, with the
exception of the very lowest dose tested. The three dose-ranging studies
fully characterized FF's dose-response curve, with only the lowest dose (25
mcg) showing no statistically significant difference from placebo on the
primary efficacy endpoint (trough FEV1) and only the highest dose (800 mcg)
being associated with a statistically significant reduction in urinary
cortisol levels (a known side effect of inhaled corticosteroids). FF was
well tolerated throughout the course of the eight-week treatment period
across the three studies. Adverse events occurred at a similar or lower
frequency than fluticasone propionate (FP) in each study, with the most
common adverse event being headache. A low frequency of serious adverse
events occurred on all treatments, including placebo, FP and FF, and for FF
were not dose dependant.
Inhaled Bifunctional Muscarinic Antagonist-Beta2 Agonist (MABA) Program
Based on the data released in the third quarter of 2008, GSK and Theravance
plan to progress GSK961081 ('081), the lead MABA compound, into a larger
Phase 2b study for the treatment of COPD in 2009.
Bacterial Infections
Telavancin
On February 26, 2009, we announced that we received a Complete Response
letter from the U.S. Food and Drug Administration (FDA) outlining
requirements for approval of telavancin for the treatment of complicated
skin and skin structure infections (cSSSI). We submitted our response to
the Complete Response letter in mid-March 2009.
Early this month, the FDA accepted the filing of our New Drug Application
(NDA) for telavancin for the treatment of nosocomial pneumonia (also known
as hospital-acquired pneumonia, or HAP) caused by Gram-positive bacteria
such as methicillin-resistant Staphylococcus aureus (MRSA). The FDA has
established a standard 10-month review for this NDA, with a Prescription
Drug User Fee Act (PDUFA) goal date of November 26, 2009. In conjunction
with the filing of our NDA, we will receive a milestone payment of
$10.0 million from our partner, Astellas Pharma Inc. (Astellas).
Financial Results
Revenue
Revenue was $9.5 million for the first quarter of 2009 compared with $5.6
million for the same period of 2008. The increase was primarily due to
recognition of the remaining deferred revenue on the long-acting muscarinic
antagonist program as a result of the program being returned to us from
GSK. All other milestone payments received to date under our agreements
with GSK and Astellas are being amortized over the relevant performance
periods rather than being recognized when received.
Research and Development
Research and development expense for the first quarter of 2009 decreased to
$19.6 million compared with $26.8 million for the same period of 2008.
Total external research and development expense for the first quarter of
2009 was $2.7 million compared with $7.4 million for the same period in
2008. The lower expense in the first quarter of 2009 was primarily due to
decreased external costs associated with telavancin and lower employee
related costs due to the reduction in force announced in April 2008.
Total research and development stock-based compensation expense for the
first quarter of 2009 was $3.0 million compared with $2.7 million in the
same period in 2008.
General and Administrative
General and administrative expense for the first quarter of 2009 decreased
to $7.1 million from $9.2 million for the same period in 2008. The lower
expense in the first quarter of 2009 was primarily due to lower employee
and facilities related costs due to the reduction in force initiated in
April 2008. Total general and administrative stock-based compensation
expense for the first quarter of 2009 was $2.1 million compared with
$2.2 million for the same period in 2008.
Restructuring Charges
The company incurred restructuring charges totaling $1.3 million for the
first quarter of 2009. The charges resulted primarily from a loss
recognized on the sublease of excess space in one of the company's South
San Francisco, CA buildings as well as employee severance and benefits
resulting from the reduction in force initiated in April 2008.
Cash and Cash Equivalents
Cash, cash equivalents and marketable securities totaled $178.9 million as
of March 31, 2009, a decrease of $21.7 million during the quarter. The
decrease was primarily due to cash used in operations.
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 Daylight Time
today. To participate in the live call by telephone, please dial
877-723-9519 from the U.S., or 719-325-4800 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 22, 2009. An audio replay will also be available
through 11:59 p.m. Eastern Daylight Time on May 6, 2009 by dialing
888-203-1112 from the U.S., or 719-457-0820 for international callers, and
entering confirmation code 7658405.
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. The company's key
programs include: telavancin for the treatment of serious Gram-positive
bacterial infections with Astellas Pharma Inc. and the Horizon program and
Bifunctional Muscarinic Antagonist-Beta2 Agonist (MABA) program with
GlaxoSmithKline plc. By leveraging its proprietary insight of multivalency
toward drug discovery focused primarily on validated targets, Theravance is
pursuing a next generation strategy designed to discover superior medicines
in areas of significant unmet medical need. 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
and timing of clinical 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
(including with respect to telavancin statements regarding any expectation
that the third-party manufacturer will successfully address the cGMP issues
the FDA noted in the approvable letter or that regulatory authorities will
approve telavancin on the basis of existing preclinical and clinical data
or at all), statements concerning 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 studies, the potential that results of
clinical or preclinical studies indicate product candidates are unsafe or
ineffective, our dependence on third parties in the conduct of our clinical
studies, delays or failure to achieve regulatory approvals for, or to
successfully launch, product candidates, risks of relying on third-party
manufacturers for the supply of our product candidates 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 Annual Report on Form 10-K filed
with the Securities and Exchange Commission (SEC) on February 26, 2009 and
the risks discussed in our other periodic 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,
--------------------
2009 2008
--------- ---------
(unaudited)
--------------------
Revenue (1) $ 9,544 $ 5,645
Operating expenses:
Research and development (2) 19,557 26,779
General and administrative (2) 7,052 9,166
Restructuring charges 1,283 --
--------- ---------
Total operating expenses 27,892 35,945
--------- ---------
Loss from operations (18,348) (30,300)
Interest and other income, net 647 1,672
Interest expense (1,516) (1,136)
--------- ---------
Net loss $ (19,217) $ (29,764)
========= =========
Net loss per share $ (0.31) $ (0.49)
========= =========
Shares used in computing net loss per share 62,288 61,003
========= =========
(1) Revenue includes amounts from GSK, a related party, of $6.9 million
and $2.8 million for the three months ended March 31, 2009 and 2008,
respectively.
(2) Amounts include stock-based compensation expense for the three months
ended March 31, as follows (in thousands):
Three Months
Ended March 31,
---------------
2009 2008
------- -------
(unaudited)
---------------
Research and development $ 3,007 $ 2,722
General and administrative 2,106 2,192
------- -------
Total stock-based compensation expense $ 5,113 $ 4,914
======= =======
THERAVANCE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, December 31,
2009 2008
----------- -----------
(unaudited) (2)
Assets
Cash, cash equivalents and marketable
securities $ 178,876 $ 200,605
Other current assets 11,024 9,356
Property and equipment, net 15,233 16,206
Other assets 9,659 9,989
----------- -----------
Total assets $ 214,792 $ 236,156
=========== ===========
Liabilities and stockholders' equity (net capital
deficiency)
Current liabilities, net of current portion of
deferred revenue (1) $ 16,193 $ 20,167
Deferred revenue (1) 168,015 176,559
Convertible subordinated notes 172,500 172,500
Other long-term liabilities 2,346 1,879
Stockholders' equity (net capital deficiency) (144,262) (134,949)
----------- -----------
Total liabilities and stockholders' equity (net
capital deficiency) $ 214,792 $ 236,156
=========== ===========
(1) Deferred revenue includes the current portion of $21.2 million and
$23.8 million as of March 31, 2009 and December 31, 2008,
respectively. The decrease in total deferred revenue is a result of
revenue recognized in 2009.
(2) The condensed consolidated balance sheet amounts at December 31, 2008
are derived from audited financial statements.