Theravance Reports Fourth Quarter and Full Year 2009 Financial Results
SOUTH SAN FRANCISCO, CA -- (Marketwire - February 11, 2010) - Theravance, Inc. (NASDAQ: THRX)
reported today its financial results for the fourth quarter and full year
ended December 31, 2009. Revenue for the full year was $24.4 million which
included $0.8 million in royalties related to sales of VIBATIV™
(telavancin) which was launched during the fourth quarter. Net loss for
the fourth quarter and full year of 2009 was $22.2 million and $85.3
million, respectively, compared with $15.9 million and $93.6 million for
the same periods of 2008. Net loss per share was $0.35 and $1.35 for the
fourth quarter and full year of 2009, respectively, compared with a net
loss per share of $0.26 and $1.53 for the same periods of 2008.
"It was a very exciting fourth quarter for Theravance with the initiation
of the large Phase 3 RELOVAIR™ program with GSK in COPD and the
commercial launch of VIBATIV for complicated skin and skin structure
infections in the United States with our partner, Astellas, as well as
approval in Canada," said Rick E Winningham, Chief Executive Officer.
"Enrollment in the Phase 3 RELOVAIR program in COPD is progressing well. I
am particularly pleased that VIBATIV is receiving positive reception from
physicians in the U.S. and that Astellas generated net sales of $4.3
million following the November launch. 2009 was a productive year for
Theravance and we look forward to the progress of the RELOVAIR program and
further development of our pipeline in 2010."
Program Highlights
Respiratory Programs
RELOVAIR™ (previously Horizon)
In October 2009, GlaxoSmithKline (GSK) and Theravance announced that the
first patient has commenced treatment in the Phase 3 program to develop a
next-generation combination treatment for patients with chronic obstructive
pulmonary disease (COPD). The Phase 3 program comprises a broad range of
large scale Phase 3 studies to evaluate the investigational once-a-day
long-acting beta agonist (LABA), 642444 ('444), in combination with the
once-a-day inhaled corticosteroid (ICS), fluticasone furoate (FF), for the
treatment of COPD. The overall program, which will study more than 6,000
patients, includes two 12-month exacerbation studies, two 6-month efficacy
and safety studies, a detailed lung function profile study, and studies to
assess the potential for superiority of the fixed combination of '444 and
FF versus other treatments for COPD.
Enrollment is progressing well for the two 12-month exacerbation studies
and two 6-month efficacy and safety studies in the Phase 3 RELOVAIR program
in COPD.
Bacterial Infections Program
VIBATIV™ (telavancin)
In November 2009, Theravance and Astellas Pharma US, Inc. announced the
commercial launch in the United States of VIBATIV™ (telavancin) for the
treatment of adult patients with complicated skin and skin structure
infections (cSSSI) caused by susceptible Gram-positive bacteria, including
Staphylococcus aureus, both
methicillin-resistant (MRSA) and methicillin-susceptible (MSSA) strains.
VIBATIV, also approved by Health Canada for the treatment of adult patients
with cSSSI, is targeted to launch in Canada in 2010 with our partner,
Astellas.
Since the commercial launch in November and through December 31, 2009
VIBATIV had net sales of $4.3 million, a substantial portion of which was
related to the initial wholesaler stocking.
Telavancin
In November 2009, the European Medicines Agency (EMEA) completed the
validation phase for the Marketing Authorization Application (MAA) for
telavancin for the treatment of NP, including ventilator-associated
pneumonia, and complicated skin and soft tissue infections (cSSTI) in
adults. Astellas Pharma Europe B.V., a European affiliate of Astellas
Pharma Inc. (Astellas), submitted the MAA in October 2009 under the
Centralized Procedure and applied for marketing authorization for
telavancin in the Member States of the European Union (EU), plus Iceland,
Liechtenstein and Norway.
On January 28, 2010, we announced that we received a letter from the FDA
indicating our response to the November 2009 Complete Response letter for
our telavancin New Drug Application for the treatment of nosocomial
pneumonia due to Gram-positive organisms was incomplete. We have not met
with the FDA yet to discuss this letter. It is unclear at this point what
the standard for approval is for this indication. We do not have an
estimated timeline for the resolution of these issues.
Financial Results
Revenue
Revenue was $3.8 million for the fourth quarter of 2009 compared with $5.9
million for the same period of 2008, a decrease of $2.1 million. Total
royalty revenue during the fourth quarter from the sales of VIBATIV was
$0.8 million. For the full year of 2009, revenue was $24.4 million,
compared with $23.1 million for the full year of 2008. All milestone
payments received to date under the company's partnership agreements are
being amortized over the relevant performance periods rather than being
recognized when received.
Research and Development
Research and development expense for the fourth quarter of 2009 increased
to $18.4 million compared with $15.2 million for the same period of 2008.
For the full year of 2009, research and development expense was $77.5
million compared with $82.0 million for the full year of 2008. The
increase for the fourth quarter of 2009 was primarily due to a $4.9 million
reimbursement of development expenses received from Astellas in the fourth
quarter of 2008. The decrease for the full year of 2009 was primarily due
to lower external costs related to the regulatory process for telavancin
and the impact of the Astellas reimbursement. Total external research and
development expense for the fourth quarter and full year of 2009, excluding
reimbursements, was $3.3 million and $17.4 million, respectively, compared
with $5.6 million and $22.8 million, respectively, for the fourth quarter
and full year of 2008. Total research and development stock-based
compensation expense for the fourth quarter and full year of 2009 was $2.6
million and $11.5 million, respectively, compared with $2.7 million and
$10.3 million, respectively, for the fourth quarter and full year of 2008.
General and Administrative
General and administrative expense for the fourth quarter of 2009 increased
to $6.4 million from $5.9 million for the same period in 2008. For the full
year of 2009, general and administrative expense was $27.1 million compared
with $28.9 million for the full year of 2008. The increase in the fourth
quarter of 2009 was primarily due to higher employee-related expenses. The
decrease for the full year of 2009 was primarily due to lower external and
facilities-related expenses. Total general and administrative stock-based
compensation expense for the fourth quarter and full year of 2009 was $2.0
million and $8.5 million, respectively, compared with $1.9 million and $7.8
million, respectively, for the fourth quarter and full year of 2008.
Restructuring Charges
The company incurred restructuring charges totaling $1.1 million for the
full year 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 announced in April 2008.
Cash and Cash Equivalents
Cash, cash equivalents and marketable securities totaled $155.4 million as
of December 31, 2009, an increase of $1.2 million during the fourth
quarter. This increase was primarily due to a $20.0 million milestone
payment received from Astellas partially offset by 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 Standard Time
today. To participate in the live call by telephone, please dial
888-710-4013 from the U.S., or 913-312-0418 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 March 13, 2010. An audio replay will also be available
through 11:59 p.m. Eastern Standard Time on February 18, 2010 by dialing
888-203-1112 from the U.S., or 719-457-0820 for international callers, and
entering confirmation code 2324359.
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: VIBATIV™ (telavancin) with Astellas Pharma Inc. and the
RELOVAIR™ program and Bifunctional Muscarinic Antagonist-Beta2 Agonist
(MABA) program with GlaxoSmithKline plc. By leveraging its proprietary
insight of multivalency toward drug discovery, 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.
VIBATIV is a trademark of Astellas Pharma Inc.
RELOVAIR is a trademark of Glaxo Group Limited.
About VIBATIV
VIBATIV was discovered by Theravance in a research program dedicated to
finding new antibiotics for serious infections due to Staphylococcus aureus
and other Gram-positive bacteria, including MRSA. VIBATIV is a
bactericidal, once-daily, injectable lipoglycopeptide antibiotic with a
dual mechanism of action whereby VIBATIV both inhibits bacterial cell wall
synthesis and disrupts bacterial cell membrane function. VIBATIV is
indicated for the treatment of adult patients with cSSSI caused by
susceptible isolates of the following Gram-positive microorganisms:
Staphylococcus aureus (including methicillin-susceptible and -resistant
isolates), Streptococcus pyogenes, Streptococcus agalactiae, Streptococcus
anginosus group (includes S. anginosus, S. intermedius and S. constellatus)
and Enterococcus faecalis (vancomycin-susceptible isolates only).
VIBATIV Important Safety Information
Fetal Risk
Women of childbearing potential should have a serum pregnancy test prior to
administration of VIBATIV. Avoid use of VIBATIV during pregnancy unless the
potential benefit to the patient outweighs the potential risk to the fetus.
Adverse developmental outcomes observed in three animal species at
clinically relevant doses raise concerns about potential adverse
developmental outcomes in humans. If not already pregnant, women of
childbearing potential should use effective contraception during VIBATIV
treatment.
Nephrotoxicity
New onset or worsening renal impairment occurred in patients who received
VIBATIV. Renal adverse events were more likely to occur in patients with
baseline comorbidities known to predispose patients to kidney dysfunction
and in patients who received concomitant medications known to affect kidney
function. Monitor renal function in all patients receiving VIBATIV prior to
initiation of treatment, during treatment, and at the end of therapy. If
renal function decreases, the benefit of continuing VIBATIV versus
discontinuing and initiating therapy with an alternative agent should be
assessed. Clinical cure rates in telavancin-treated patients were lower in
patients with baseline CrCl less than or equal to 50 mL/min compared to
those with CrCl > 50 mL/min. Consider these data when selecting
antibacterial therapy for use in patients with baseline moderate/severe
renal impairment.
Geriatric Use
Telavancin is substantially excreted by the kidney, and the risk of adverse
reactions may be greater in patients with impaired renal function. Because
elderly patients are more likely to have decreased renal function, care
should be taken in dose selection in this age group.
Infusion Related Reactions
VIBATIV is a lipoglycopeptide antibacterial agent and should be
administered over a period of 60 minutes to reduce the risk of
infusion-related reactions. Rapid intravenous infusions of the glycopeptide
class of antimicrobial agents can cause "Red-man Syndrome"-like reactions
including: flushing of the upper body, urticaria, pruritus, or rash.
Clostridium difficile-Associated Diarrhea
Clostridium difficile-associated diarrhea (CDAD) has been reported with
nearly all antibacterial agents and may range in severity from mild
diarrhea to fatal colitis. CDAD must be considered in all patients who
present with diarrhea following antibiotic use.
Development of Drug Resistant Bacteria
Prescribing VIBATIV in the absence of a proven or strongly suspected
bacterial infection is unlikely to provide benefit to the patient and
increases the risk of the development of drug-resistant bacteria. As with
other antibacterial drugs, use of VIBATIV may result in overgrowth of
nonsusceptible organisms, including fungi.
QTc Prolongation
Caution is warranted when prescribing VIBATIV to patients taking drugs
known to prolong the QT interval. In a study involving healthy volunteers,
VIBATIV prolonged the QTc interval. Use of VIBATIV should be avoided in
patients with congenital long QT syndrome, known prolongation of the QTc
interval, uncompensated heart failure, or severe left ventricular
hypertrophy.
Coagulation Test Interference
VIBATIV does not interfere with coagulation, but does interfere with
certain tests used to monitor coagulation such as prothrombin time,
international normalized ratio, activated partial thromboplastin time,
activated clotting time, and coagulation based factor Xa tests. Blood
samples for these coagulation tests should be collected as close as
possible prior to a patient's next dose of VIBATIV.
Adverse Reactions
The most common adverse reactions (greater than or equal to 10% of patients
treated with VIBATIV) observed in the Phase III cSSSI clinical trials were
taste disturbance, nausea, vomiting, and foamy urine.
In the Phase III cSSSI clinical trials, serious adverse events were
reported in 7% of patients treated with VIBATIV and most commonly included
renal, respiratory, or cardiac events. Serious adverse events were reported
in 5% of vancomycin-treated patients, and most commonly included cardiac,
respiratory, or infectious events.
For full prescribing information and medication guide, please visit
www.VIBATIV.com.
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 and product commercialization, statements
regarding the potential benefits and mechanisms of action of drug
candidates, statements concerning the timing of seeking regulatory approval
of our product candidates, statements concerning enabling capabilities of
Theravance's approach to drug discovery and its proprietary insights, and
statements regarding expectations for product candidates through
development and commercialization and projections of revenue, expenses 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 Quarterly
Report on Form 10-Q filed with the Securities and Exchange Commission (SEC)
on November 4, 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 Twelve Months Ended
December 31, December 31,
-------------------- --------------------
2009 2008 2009 2008
--------- --------- --------- ---------
(unaudited) (unaudited) (2)
--------- --------- --------- ---------
Revenue $ 3,822 $ 5,947 $ 24,374 $ 23,096
Operating expenses:
Research and development (1) 18,406 15,170 77,524 82,020
General and administrative (1) 6,393 5,945 27,066 28,861
Restructuring charges (162) 306 1,145 5,419
--------- --------- --------- ---------
Total operating expenses 24,637 21,421 105,735 116,300
--------- --------- --------- ---------
Loss from operations (20,815) (15,474) (81,361) (93,204)
Interest and other income 115 1,066 2,111 5,242
Interest expense (1,510) (1,517) (6,052) (5,681)
--------- --------- --------- ---------
Net loss $ (22,210) $ (15,925) $ (85,302) $ (93,643)
========= ========= ========= =========
Basic and diluted net loss per
share $ (0.35) $ (0.26) $ (1.35) $ (1.53)
========= ========= ========= =========
Shares used in computing basic
and diluted net loss per share 63,729 61,810 63,027 61,390
========= ========= ========= =========
(1) Amounts include stock-based compensation expense for the three months
and twelve months ended December 31 as follows (in thousands):
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------- --------------------
2009 2008 2009 2008
--------- --------- --------- ---------
(unaudited) (unaudited) (2)
--------- --------- --------- ---------
Research and development $ 2,566 $ 2,725 $ 11,542 $ 10,264
General and administrative 2,050 1,892 8,458 7,755
--------- --------- --------- ---------
Total stock-based compensation
expense $ 4,616 $ 4,617 $ 20,000 $ 18,019
========= ========= ========= =========
(2) The condensed consolidated statement of operations amounts for the year
ended December 31, 2008 are derived from audited financial statements.
THERAVANCE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, December 31,
2009 2008
------------ ------------
(unaudited) (2)
------------ ------------
Assets
Cash, cash equivalents and marketable
securities $ 155,390 $ 200,605
Other current assets 6,652 9,356
Property and equipment, net 12,927 16,206
Other assets 6,424 9,989
------------ ------------
Total assets $ 181,393 $ 236,156
============ ============
Liabilities and stockholders' net capital
deficiency
Current liabilities, net of current portion
of deferred revenue (1) $ 15,224 $ 20,167
Deferred revenue (1) 181,148 176,559
Convertible subordinated notes 172,500 172,500
Other long-term liabilities 1,515 1,879
Stockholders' net capital deficiency (188,994) (134,949)
------------ ------------
Total liabilities and stockholders' net
capital deficiency $ 181,393 $ 236,156
============ ============
(1) Deferred revenue includes the current portion of $23.7 million and
$23.8 million as of December 31, 2009 and December 31, 2008,
respectively. The 2009 net change in total deferred revenue is a result
of additional milestones payments received offset by amortization.
(2) The condensed consolidated balance sheet amounts at December 31, 2008
are derived from audited financial statements.