Delaware | 001-34962 | 20-5300780 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
5858 Horton Street, #455, Emeryville, CA | 94608 | |
(Address of Principal Executive Offices) | (Zip Code) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition. |
Item 9.01 | Financial Statements and Exhibits. |
Exhibit No. | Description | |
99.1 | Press Release, dated November 7, 2016 |
ZOGENIX, INC. | ||||||
Date: November 7, 2016 | By: | /s/ Ann D. Rhoads | ||||
Name: | Ann D. Rhoads | |||||
Title: | Executive Vice President, Chief Financial Officer, Treasurer and Secretary |
Exhibit No. | Description | |
99.1 | Press Release, dated November 7, 2016 |
• | Continued enrollment in the two Phase 3 safety and efficacy clinical trials of ZX008 (low-dose fenfluramine) (Studies 1501 and 1502) in North America, Europe and Australia, with top-line results anticipated in Q2 2017. |
• | Company remains on-track for potential regulatory submissions by year-end 2017. |
• | Initiated Cohort 1 (pharmacokinetic assessment) in Study 1504, a trial evaluating the pharmacokinetics, efficacy and safety of ZX008 in patients who have responded poorly to a stiripentol regimen. Cohort 2 (efficacy and safety assessment) is expected to begin by the end of this year. |
• | Effectiveness and safety results of ZX008 from the ongoing open-label prospective study of patients with Dravet syndrome published in the European Journal of Neurology. The study demonstrated a robust median reduction in seizures of 75% (range, 28-100%) during the treatment period with no cardiovascular abnormalities. Schoonjans, A. S., Paelinck, B. P., Marchau, F., Gunning, B., Gammaitoni, A., Galer, B. S., Lagae, L. and Ceulemans, B. (2016). Eur J Neurol. doi:10.1111/ene.13195 |
• | Presented further data at the 12th European Congress on Epileptology related to understanding the burden Dravet syndrome causes for the patient and their family, and also on identifying clinically relevant outcome measures to assess the quality of life impact on Dravet syndrome patients and their caregivers. |
• | Multiple abstracts accepted for presentation at the upcoming American Epilepsy Society Annual Meeting (December 2-6, 2016) highlighting new clinical and pre-clinical findings, including an interim analysis of an on-going investigator initiated open-label Phase 2 trial in Lennox Gastaut syndrome. |
• | Completed the nine-months ended September 30, 2016, with $109.9 million in cash and cash equivalents. Zogenix expects its cash runway to extend through 2017. |
• | Total revenue for the third quarter of 2016 was $6.6 million, consisting almost entirely of contract manufacturing revenue. This compared with total revenue of $9.1 million in the same quarter last year, which included $8.9 million of contract manufacturing revenue. The decrease in contract manufacturing revenue in the third quarter of 2016 was due primarily to a decrease in deliveries to Endo International Plc under the supply agreement between the two companies. |
• | Third quarter 2016 research and development expenses totaled $10.1 million, up from $7.9 million in the third quarter a year ago, as the Company progressed its two Phase 3 clinical trials for ZX008, continuing enrollment in Study 1501 and Study 1502. |
• | Third quarter 2016 selling, general and administrative expenses totaled $6.5 million, compared with $5.7 million in the third quarter a year ago. |
• | Net loss from continuing operations for the third quarter of 2016 was $16.6 million, compared with $13.0 million in the third quarter a year ago. |
• | Net loss from discontinued operations was $0.4 million for the third quarter of 2016, compared with net loss of $1.6 million in the third quarter a year ago. |
• | Total net loss for the third quarter of 2016 was $17.0 million, or $0.69 per share, compared with net loss of $14.6 million, or $0.65 per share, for the third quarter a year ago. |
• | Total revenue for the nine-months ended September 30, 2016 was $17.9 million, consisting almost entirely of contract manufacturing revenue. This compared with total revenue of $21.1 million in the same period last year, which included $19.0 million of contract manufacturing revenue and $2.1 million of service and other product revenue. |
• | Research and development expenses for the nine months ended September 30, 2016 totaled $28.4 million, up from $19.3 million in the year ago period, as the Company enrolled patients into two Phase 3 clinical trials for ZX008. |
• | Selling, general and administrative expense for the nine months ended September 30, 2016 totaled $19.5 million, flat as compared to the same period a year ago. |
• | Net loss from continuing operations was $45.1 million for the nine months ended September 30, 2016, compared with $29.8 million in the same period a year ago. |
• | Net loss from discontinued operations was $1.1 million for the nine months ended September 30, 2016, compared to net income of $64.8 million in the same period a year ago, which included the net gain on the sale of the Zohydro ER business. |
• | Total net loss for the nine months ended September 30, 2016 was $46.2 million, or $1.87 per basic share and fully diluted, compared with net income of $35.0 million, or $1.72 per share, for the same period a year ago, which included the net gain on the sale of the Zohydro ER business. |
• | Cash and cash equivalents at September 30, 2016 totaled $109.9 million, as compared to $155.3 million at December 31, 2015. |
• | Research and development expenses are now expected to be $42-44 million compared to prior guidance of $54-$59 million, reflecting slower site initiation and ramp-up of ZX008 clinical studies than expected; |
• | Selling, general and administrative expenses are unchanged and expected to be $25-27 million; and |
• | Contract manufacturing revenue from the supply of Sumavel DosePro to Endo is expected at a low single-digit markup over cost of contract manufacturing. |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenues: | |||||||||||||||
Contract manufacturing revenue | $ | 6,345 | $ | 8,860 | $ | 17,537 | $ | 19,044 | |||||||
Service and other product revenue | 225 | 260 | 327 | 2,057 | |||||||||||
Total revenue | 6,570 | 9,120 | 17,864 | 21,101 | |||||||||||
Operating expense: | |||||||||||||||
Cost of contract manufacturing | 6,391 | 7,780 | 16,256 | 17,506 | |||||||||||
Royalty expense | 78 | 106 | 224 | 249 | |||||||||||
Research and development | 10,076 | 7,919 | 28,447 | 19,310 | |||||||||||
Selling, general & administrative | 6,538 | 5,696 | 19,506 | 19,547 | |||||||||||
Change in fair value of contingent consideration | 200 | (300 | ) | 2,800 | (1,900 | ) | |||||||||
Total operating expense | 23,283 | 21,201 | 67,233 | 54,712 | |||||||||||
Loss from operations | (16,713 | ) | (12,081 | ) | (49,369 | ) | (33,611 | ) | |||||||
Other income (expense): | |||||||||||||||
Interest expense, net | (567 | ) | (718 | ) | (1,788 | ) | (2,259 | ) | |||||||
Change in fair value of warrant liabilities | (356 | ) | (296 | ) | 5,148 | (861 | ) | ||||||||
Loss on short-term investments | — | (5,485 | ) | — | (5,485 | ) | |||||||||
Other (income) expense | 25 | 103 | 2 | (55 | ) | ||||||||||
Total other income (expense) | (898 | ) | (6,396 | ) | 3,362 | (8,660 | ) | ||||||||
Net loss from continuing operations before income taxes | (17,611 | ) | (18,477 | ) | (46,007 | ) | (42,271 | ) | |||||||
Income tax benefit | 993 | 5,496 | 922 | 12,428 | |||||||||||
Net loss from continuing operations | (16,618 | ) | (12,981 | ) | (45,085 | ) | (29,843 | ) | |||||||
Net income (loss) from discontinued operations, net of applicable tax | (379 | ) | (1,635 | ) | (1,130 | ) | 64,829 | ||||||||
Net income (loss) | $ | (16,997 | ) | $ | (14,616 | ) | $ | (46,215 | ) | $ | 34,986 | ||||
Net income (loss) per share, basic and diluted | $ | (0.69 | ) | $ | (0.65 | ) | $ | (1.87 | ) | $ | 1.72 | ||||
Weighted average shares outstanding, basic and diluted | 24,791 | 22,613 | 24,780 | 20,332 |
September 30, | December 31, | ||||||
2016 | 2015 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 109,866 | $ | 155,349 | |||
Restricted cash | — | 10,002 | |||||
Trade accounts receivable, net | 6,524 | 1,396 | |||||
Inventory | 9,412 | 12,030 | |||||
Prepaid expenses and other current assets | 9,467 | 5,518 | |||||
Current assets of discontinued operations | 6 | 208 | |||||
Total current assets | 135,275 | 184,503 | |||||
Property and equipment, net | 8,358 | 9,254 | |||||
Intangible assets | 102,500 | 102,500 | |||||
Goodwill | 6,234 | 6,234 | |||||
Other assets | 3,470 | 3,331 | |||||
Total assets | $ | 255,837 | $ | 305,822 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 3,107 | $ | 5,290 | |||
Accrued expenses | 7,573 | 8,328 | |||||
Common stock warrant liabilities | 1,048 | 6,196 | |||||
Long-term debt, current portion | — | 6,321 | |||||
Deferred revenue | 1,194 | 945 | |||||
Current liabilities of discontinued operations | 1,203 | 2,906 | |||||
Total current liabilities | 14,125 | 29,986 | |||||
Long-term debt, less current portion | 21,845 | 15,899 | |||||
Deferred revenue, less current portion | 4,986 | 6,139 | |||||
Contingent purchase consideration | 53,800 | 51,000 | |||||
Deferred income taxes | 17,425 | 18,450 | |||||
Other long-term liabilities | 1,739 | 1,588 | |||||
Stockholders’ equity | 141,917 | 182,760 | |||||
Total liabilities and stockholders’ equity | $ | 255,837 | $ | 305,822 |