EX-99.1 2 d59075exv99w1.htm PRESS RELEASE exv99w1
EXHIBIT 99.1
(REPLIDYNE LOGO)
Replidyne contact:
Sabrina B. Oei
Dir. Investor & Public Relations
T: (303) 996-5535
Replidyne Announces Second Quarter 2008 Results from Operations
Louisville, CO, August 5, 2008 – Replidyne, Inc. (Nasdaq: RDYN) today announced its financial results for the second quarter and six months ended June 30, 2008.
Replidyne reported a net loss of $18.7 million for the quarter ended June 30, 2008, or a net loss per basic and diluted common share of $0.69 per share, compared to net income of $45.5 million, or $1.71 per basic common share or $1.65 per common share on a fully diluted basis, for the second quarter ended June 30, 2007. Replidyne reported a net loss of $27.7 million for the six months ended June 30, 2008, or a net loss per basic and diluted common share of $1.02 per share, compared to net income of $36.9 million, or $1.39 per basic common share or $1.34 per common share on a fully diluted basis, for the six months ended June 30, 2007. Net income for the second quarter and six months ended June 30, 2007 was due to revenue recognized upon termination of the Company’s former commercialization and collaboration agreement for faropenem medoxomil (faropenem) with Forest Laboratories that ended in May 2007 resulting in the one-time recognition of previously deferred revenue. Cash, cash equivalents and short-term investments at June 30, 2008 totaled $64.7 million.
“This second quarter we have taken several direct actions to structure our operations to conserve our cash position,” said Kenneth J. Collins, Replidyne’s President and CEO. “These actions have included the difficult decisions to return the faropenem license to the licensor, conclude our development efforts on the faropenem program and restructure our workforce. We believe these actions were important steps in our effort to conclude our ongoing strategic alternatives process.”
During the second quarter of 2008, Replidyne announced that it had decided to terminate its license agreement with Asubio Pharma Co., Ltd. (Asubio Pharma) for faropenem. In conjunction with this decision, Replidyne also announced that it had terminated its supply agreement with Asubio Pharma and Nippon Soda Co., Ltd. (Nippon Soda) for production of faropenem. As a result, the Company recorded research and development expense of $4.2 million in the quarter, comprising a license termination fee of $3.6 million to Asubio Pharma and reimbursement of engineering costs of $0.6 million to Nippon Soda in accordance with the terms of the

 

 

agreements. Replidyne also paid Nippon Soda $0.9 million for delay compensation under the supply agreement, which had been recorded in 2007.
In April 2008, Replidyne announced it had discontinued enrollment in a placebo-controlled phase III clinical trial testing faropenem in patients with acute exacerbation of chronic bronchitis (AECB) and restructured its operations. In June 2008, Replidyne further restructured its operations. As a result of these actions the Company has reduced its headcount by 23 employees and incurred approximately $2.5 million of related expense, comprising $2.1 million of employee severance expenses and $0.4 million of expenses related to closure of its facility in Milford, Connecticut.
Research and development expenses in the second quarter of 2008 were $14.4 million compared to $8.4 million in the corresponding quarter of 2007. Faropenem related expense in the quarter totaled $10.5 including $4.2 million for the termination of the faropenem license with Asubio Pharma and related reimbursement of engineering costs to Nippon Soda and costs for patient monitoring and data base analysis required for the Phase III study testing faropenem in patients with AECB that was discontinued in April 2008. Replidyne will incur further expense related to this clinical trial to complete required patient monitoring and data base analysis until the final clinical report is filed with the U.S. Food and Drug Administration, which is expected during the third quarter of 2008. Also related to faropenem, Replidyne recorded $2.7 million of research and development expense related to future decontamination of the MEDA Manufacturing GmbH (MEDA Manufacturing) facility in Germany that had previously manufactured 300 mg tablets of faropenem based on MEDA Manufacturing’s communicated intention to decontaminate the facility. Replidyne believes that following receipt of documented decontamination expenses from MEDA Manufacturing these expenses are to be reimbursed by Forest Laboratories under the terms of its former collaboration agreement. Additionally, research and development expense included increased costs for preclinical activities associated with Replidyne’s discovery research programs, primarily the C. difficile and DNA replication inhibition programs, offset by decreased expense related to the REP8839 program that was suspended in December 2007.
Sales, general and administrative expenses for the second quarter of 2008 were $4.7 million compared to $3.3 million in the second quarter of 2007. Replidyne recorded $1.7 million in the second quarter of 2008 as the estimate of the outcome, within a range of possible outcomes, from its pending arbitration with MEDA Manufacturing. This increase was partially offset by decreases in expenses following restructuring actions implemented in the fourth quarter of 2007 to reduce commercial and general and administrative headcount.
Investment income and other net for the second quarter of 2008 was $0.4 million compared to $1.5 million for the second quarter of 2007, primarily reflecting lower cash balances available for investment in the 2008 period.
Replidyne did not report any revenue in the second quarter of 2008. Revenue for the second quarter of 2007 was $55.6 million. Under a February 2006 commercialization and collaboration agreement with Forest Laboratories

 

 

that terminated on May 7, 2007, Replidyne received non-refundable upfront and milestone payments totaling $60 million that were being recognized as revenue on a straight-line basis over approximately 15 years in accordance with Replidyne’s revenue recognition policy. Upon termination, the balance of unamortized upfront and milestone payments of $55.2 million was fully recognized as revenue in the second quarter of 2007. In addition, during the second quarter of 2007 the Company recognized $0.4 million in contract revenue for funded activity through May 7, 2007 under the agreement.
About Replidyne, Inc.
Replidyne is a biopharmaceutical company focused on discovering, developing, and in-licensing innovative anti-infective products. Replidyne’s lead program is an investigational antibacterial agent REP3123 that targets Gram-positive Clostridium difficile (C. difficile) bacteria and C. difficile Infection (CDI). Replidyne is pursuing the development of other novel anti-infective programs based on its DNA replication inhibition technology and its in-house discovery research. The Company’s operating strategy is directed to pursuing strategic alternatives that include the merger or acquisition of some or all of its assets, and could reduce or change its current focus on the development of anti-infective product candidates.
Safe Harbor
This press release contains plans, intentions, objectives, estimates and expectations that constitute forward-looking statements about Replidyne, Inc. that involve significant risks and uncertainties. Actual results could differ materially from those discussed due to a number of factors including, the outcome of the Company’s strategic alternatives process; resolution by the Company of the matters raised in the Warning Letter received from the FDA in January 2008; the success and timing of pre-clinical studies and clinical trials; the Company’s ability to obtain and maintain regulatory approval of product candidates and the labeling under any approval that may be obtained; plans to develop and commercialize product candidates; the loss of key scientific or management personnel; the size and growth of the potential markets for the Company’s product candidates and the Company’s ability to serve those markets; regulatory developments in the U.S. and foreign countries; the rate and degree of market acceptance of any future products; the accuracy of Company estimates regarding expenses, future revenues and capital requirements; the Company’s ability to obtain and maintain intellectual property protection for our product candidates; the success of competing drugs that are or become available; and the performance of third party manufacturers. These and additional risks and uncertainties are described more fully in the Company’s most recent Form 10-K filed with the SEC under the Securities Exchange Act of 1934. Copies of filings made with the SEC are available through the SEC’s electronic data gathering analysis and retrieval system (EDGAR) at www.sec.gov. All forward-looking statements made in the press release are made as of the date hereof and the Company assumes no obligation to update the forward-looking statements in the document.

 

 

REPLIDYNE, INC.
CONDENSED BALANCE SHEETS
(In thousands)
(Unaudited)
                 
    June 30,     December 31,  
    2008     2007  
ASSETS
 
                
Current assets:
                
Cash and cash equivalents
   $ 40,746     $ 43,969  
Short-term investments
     23,970       46,297  
Prepaid expenses and other current assets
     1,177       2,429  
 
            
Total current assets
     65,893       92,695  
 
                
Property and equipment, net
     1,105       1,905  
Other assets
     80       90  
 
            
Total assets
   $ 67,078     $ 94,690  
 
            
 
                
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
                
Current liabilities:
                
Accounts payable and accrued expenses
   $ 12,201     $ 12,255  
 
            
Total current liabilities
     12,201       12,255  
 
                
Other long-term liabilities
     —       31  
 
            
Total liabilities
     12,201       12,286  
 
            
 
                
Commitments and contingencies
                
 
                
Stockholders’ equity
     54,877       82,404  
 
            
Total liabilities and stockholders’ equity
   $ 67,078     $ 94,690  
 
            

 

 

REPLIDYNE, INC.
CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
                                 
    Three Months Ended June 30,     Six Months Ended June 30,  
    2008     2007     2008     2007  
Revenue
   $ —     $ 55,647     $ —     $ 58,571  
 
                        
 
Costs and expenses:
                                
 
                                
Research and development
     14,444       8,364       22,062       17,811  
 
Sales, general and administrative
     4,666       3,280       6,619       6,815  
 
                        
 
                                
Total costs and expenses
     19,110       11,644       28,681       24,626  
 
                        
 
                                
Income (loss) from operations
     (19,110 )     44,003       (28,681 )     33,945  
 
                                
Investment income and other, net
     380       1,487       992       2,993  
 
                        
 
                                
Net income (loss)
   $ (18,730 )   $ 45,490     $ (27,689 )   $ 36,938  
 
                        
 
                                
Net income (loss) per share — basic
   $ (0.69 )   $ 1.71     $ (1.02 )   $ 1.39  
 
                        
 
                                
Net income (loss) per share — diluted
   $ (0.69 )   $ 1.65     $ (1.02 )   $ 1.34  
 
                        
 
                                
Weighted average common shares outstanding — basic
     27,029       26,677       27,022       26,649  
 
                        
 
                                
Weighted average common shares outstanding — diluted
     27,029       27,651       27,022       27,612  
 
                        

- ENDS -