Pharmacyclics, Inc. (Nasdaq: PCYC) today reported financial results for its second fiscal quarter ended December 31, 2009.
Upon the completion of a drug supply agreement with Servier in the quarter ended December 31, 2009, the company began recognizing revenue under GAAP from its collaboration agreement with Servier, which was entered into in April 2009. Total revenue recognized under GAAP in our most recent quarter was $4.7 million, of which $2.7 million represents the pro-rata portion of revenue attributable to the period from April 2009 (i.e. the signing of the collaboration agreement) to September 30, 2009.
As of December 31, 2009, the company's cash, cash equivalents and marketable securities totaled $30.1 million compared to $16.3 million as of June 30, 2009.
Total operating expenses were $5.5 million in the second quarter of fiscal 2010, including $0.6 million of share-based compensation expense. This compares to $4.9 million in operating expenses for the second quarter of fiscal 2009, with share-based compensation expense of $0.6 million. The increase in operating expenses was primarily due to an increase in product development, manufacturing and research expenses.
Due to a change in the tax treaty between the US and France, we are anticipating to receive within this calendar year a full refund of the taxes of $0.55 million paid to the French Government in April of 2009 in association with the upfront licensing payment we received from Servier. The company therefore recorded a receivable for foreign income tax credit of $0.55 million in the second quarter of fiscal 2010. The receivable for the credit was recorded during the quarter as a result of the Protocol amending the Income Tax Treaty between the United States and France being enacted on December 23, 2009.
The GAAP net loss for the second quarter of fiscal 2010 was $218,000, or $0.00 per share, compared to a net loss of $4.8 million, or $0.19 per share, in the second quarter of fiscal 2009. For a non GAAP review of the quarter, please see the attached analysis on the last two pages of this press release.
Financial Guidance:
As of December 31, 2009, the company had $8.5 million of deferred revenue recorded on its balance sheet associated with the Servier agreements. It is currently expected that the $8.5 million in deferred revenue, for which the payments have already been received, will be recognized as revenue ratably between January 2010 and April 2011 (with a minimum of approximately $1.7 million per quarter).
Pharmacyclics projects total operating expenses, excluding share-based compensation of between $11.0 and $12.0 million for the remaining two quarters of fiscal year 2010, including general and administrative expenses of approximately $3.0 - $3.5 million. Including share-based compensation expense, Pharmacyclics projects total operating expenses of between $12.0 and $13.0 million for the remaining two quarters of fiscal year 2010, including general and administrative expenses of approximately $3.5 - $4.0 million. In the same time frame the company expects to receive from its collaboration partner Servier $1.0 million in research payments and approximately $0.8 million for the supply of products. The company anticipates ending its fiscal year at June 30, 2010 with a cash balance of above approximately $20.0 million.
Financial projections involve a high level of uncertainty due to, among other factors, the variability involved in predicting requirements of early state research programs and clinical trials, the potential for entering into partnering arrangements or strategic collaborations, the timing of U.S. Food and Drug Administration (FDA) decisions and share-based compensation expense.
Robert W. Duggan stated, "A great deal of progress has been accomplished over the past year and especially the past quarter. The team responsible for making this happen remains dedicated to moving each of our compounds through the human clinical phase in an efficient manner. As you can read elsewhere in this release, we are making a difference for the better and we look forward to expanding upon our excellent results in treating serious unmet medicinal needs."
Recent and Upcoming Milestones and Program Updates