Theravance Reports First Quarter 2010 Financial Results
SOUTH SAN FRANCISCO, CA -- (Marketwire - April 21, 2010) - Theravance, Inc. (NASDAQ: THRX)
reported today its financial results for the quarter ended March 31, 2010.
Revenue for the first quarter of 2010 was $5.7 million. Net loss for the
first quarter of 2010 was $22.5 million or $0.35 per share. Cash, cash
equivalents and marketable securities totaled $225.4 million as of March
31, 2010.
"During the first quarter of 2010, we achieved a significant milestone with
the initiation of the RELOVAIR™ Phase 3 asthma program with our partner
GSK and strengthened our balance sheet with a public financing," said
Rick E Winningham, Chief Executive Officer. "I am also pleased with the
progress to date in the RELOVAIR™ Phase 3 COPD program and with
VIBATIV™ which continues to receive positive feedback from physicians in
the U.S. Furthermore, last week, we dosed the first patient with
opioid-induced constipation in a Phase 2 study with TD-1211 in our PUMA
program."
Program Highlights
Respiratory Programs
RELOVAIR™ (previously Horizon) - Asthma
In March 2010, GlaxoSmithKline (GSK) and Theravance announced that the
first asthma patient commenced treatment with RELOVAIR™ (fluticasone
furoate/vilanterol trifenatate) in an asthma exacerbation study, marking
the start of the Phase 3 clinical development program with this once-daily
therapy, for this serious and chronic disease.
The asthma program for RELOVAIR will assess the potential benefit of the
combination of the inhaled corticosteroid (ICS), fluticasone furoate (FF),
and the long-acting beta agonist (LABA), vilanterol trifenatate (642444)
versus the component products and existing treatments for asthma.
The program consists of eight studies to determine the efficacy and safety
of RELOVAIR in asthma patients who remain uncontrolled on current
treatment. These studies include an exacerbation study, a 12-month safety
study also in support of the chronic obstructive pulmonary disease (COPD)
program, a 24-week head-to-head study of RELOVAIR versus Advair/Seretide, a
24-week FF versus fluticasone propionate versus placebo study, a 12-week
vilanterol trifenatate versus salmeterol versus placebo study, a 12-week
low dose combination study and a 24-week higher dose combination study
versus components and a hypothalamic-pituitary-adrenal (HPA) axis study.
The asthma exacerbation study is a randomized, double-blind, parallel-group
study being conducted in Europe, the U.S. and other international
locations. This study will evaluate RELOVAIR 100/25 mcg against FF 100 mcg
in 2,000 patients whose asthma remains uncontrolled on current therapy. The
primary endpoint -- time to first severe asthma exacerbation -- will inform
on both safety and efficacy. The ongoing 12-month safety study will
evaluate the overall safety profile of RELOVAIR and has been designed to
support both the asthma and COPD indications.
Patients across all of the RELOVAIR programs will be dosed using a unique
single-step activation inhaler. This novel delivery device was developed
utilizing GSK's expertise in device development and valuable patient input.
GSK is in ongoing discussions with the FDA regarding U.S. requirements
following the recent U.S. Food and Drug Administration (FDA) Advisory
Committee meeting and the FDA's proposed changes to the use of
LABA-containing products in asthma.
RELOVAIR™ (previously Horizon) -- Chronic Obstructive Pulmonary Disease
(COPD)
In the Phase 3 program in COPD initiated in October 2009, enrollment is
progressing. The Phase 3 program comprises a broad range of large scale
Phase 3 studies to evaluate the investigational once-a-day LABA, vilanterol
trifenatate, in combination with the once-a-day ICS, 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 vilanterol
trifenatate and FF versus other treatments for COPD.
Gastrointestinal Motility Program
Peripheral Mu Opioid Receptor Antagonist (PUMA) -- TD-1211
Last week, we announced that the first patient with opioid-induced
constipation (OIC) was dosed in a Phase 2 clinical study with TD-1211, an
orally-administered peripherally selective mu opioid receptor antagonist
(PUMA). TD-1211 is a potent, multivalent inhibitor of the mu opioid
receptor designed to alleviate gastrointestinal side effects of opioid
analgesic therapy without affecting analgesia. This "proof of concept"
study is designed to assess the efficacy, tolerability and safety of
TD-1211 in patients with OIC.
Financial Results
Revenue
Revenue was $5.7 million for the first quarter of 2010 compared with $9.5
million for the same period in 2009 and consisted almost entirely of the
amortization of deferred revenues from our collaborations with GSK and
Astellas. Results for the first quarter 2009 included one-time non-cash
revenue of $4.2 million due to the recognition of the remaining deferred
revenue on the long-acting muscarinic antagonist program which was returned
to us by GSK. 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 first quarter of 2010 increased to
$20.4 million compared with $19.6 million for the same period in 2009.
Results for the first quarter 2009 included a one-time reimbursement from
Astellas that reduced expenses by $2.6 million. Total external research and
development expense excluding reimbursements from Astellas was $4.1 million
during the first quarter 2010 compared with $5.3 million for the same
period in 2009. Total research and development stock-based compensation
expense for the first quarter of 2010 was $2.5 million compared with $3.0
million for the same period in 2009.
General and Administrative
General and administrative expense for the first quarter of 2010 decreased
to $6.5 million from $7.1 million for the same period in 2009. The decrease
in the first quarter of 2010 was primarily due to lower employee-related
expenses. Total general and administrative stock-based compensation
expense for the first quarter of 2010 was $2.0 million compared with
$2.1 million for the same period in 2009.
Cash and Cash Equivalents
Cash, cash equivalents and marketable securities totaled $225.4 million as
of March 31, 2010, an increase of $70.0 million during the first quarter.
This increase was primarily due to net proceeds of $93.5 million received
from our public offering of common stock in March 2010, 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 Daylight Time
today. To participate in the live call by telephone, please dial (877)
837-3908 from the U.S., or (973) 890-8166 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 21, 2010. An audio replay will also be available
through 11:59 p.m. Eastern Daylight Time on April 28, 2010 by dialing (800)
642-1687 from the U.S., or (706) 645-9291 for international callers, and
entering confirmation code 62685500.
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. Mark is intended for U.S.
and subject to FDA approval.
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, including Boxed Warning 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 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,
2010 and in Theravance's prospectus supplement filed with the SEC on March
19, 2010 pursuant to Rule 424(b)(5). 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,
--------------------
2010 2009
--------- ---------
(unaudited)
--------- ---------
Revenue $ 5,714 $ 9,544
Operating expenses:
Research and development (1) 20,351 19,557
General and administrative (1) 6,476 7,052
Restructuring charges -- 1,283
--------- ---------
Total operating expenses 26,827 27,892
--------- ---------
Loss from operations (21,113) (18,348)
Interest and other income 94 647
Interest expense (1,517) (1,516)
--------- ---------
Net loss $ (22,536) $ (19,217)
========= =========
Basic and diluted net loss per share $ (0.35) $ (0.31)
========= =========
Shares used in computing basic and diluted net loss
per share 64,921 62,288
========= =========
(1) Amounts include stock-based compensation expense for the three months
and twelve months ended March 31 as follows (in thousands):
Three Months Ended
March 31,
--------------------
2010 2009
--------- ---------
(unaudited)
--------- ---------
Research and development $ 2,527 $ 3,007
General and administrative 1,970 2,106
--------- ---------
Total stock-based compensation expense $ 4,497 $ 5,113
========= =========
THERAVANCE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, December 31,
2010 2009
----------- -----------
(unaudited) (2)
----------- -----------
Assets
Cash, cash equivalents and marketable
securities $ 225,448 $ 155,390
Other current assets 6,701 6,652
Property and equipment, net 11,881 12,927
Other assets 5,900 6,424
----------- -----------
Total assets $ 249,930 $ 181,393
=========== ===========
Liabilities and stockholders' net capital
deficiency
Current liabilities, net of current portion of
deferred revenue (1) $ 12,775 $ 15,224
Deferred revenue (1) 176,448 181,148
Convertible subordinated notes 172,500 172,500
Other long-term liabilities 1,236 1,515
Stockholders' net capital deficiency (113,029) (188,994)
----------- -----------
Total liabilities and stockholders' net
capital deficiency $ 249,930 $ 181,393
=========== ===========
(1) Deferred revenue includes the current portion of $22.8 million and
$23.7 million as of March 31, 2010 and December 31, 2009,
respectively.
(2) The condensed consolidated balance sheet amounts at December 31, 2009
are derived from audited financial statements.