Pharmasset reports net loss of $16.1 million for fiscal second-quarter 2010

Pharmasset, Inc. (Nasdaq: VRUS), a clinical stage pharmaceutical company committed to discovering, developing, and commercializing novel drugs to treat viral infections, today reported financial results and operational highlights for the quarter ended March 31, 2010.

Financial Results

Revenues were $0.3 million during the quarter ended March 31, 2010 compared to $1.9 million for the quarter ended March 31, 2009 and include amortization of up-front and subsequent collaborative and license payments received from Roche. Revenues during the quarter ended March 31, 2009 also include $1.4 million of non-recurring research and development payments from Roche for activities related to holding the IND application for RG7128.

Net cash used in operating activities was $27.3 million for the six months ended March 31, 2010, as compared to $30.7 million for the six months ended March 31, 2009. Net cash used in operating activities for the three months ended March 31, 2010 was $12.8 million. Pharmasset had $61.0 million in cash and cash equivalents as of March 31, 2010.

Total operating expenses for the quarter ended March 31, 2010 were $15.7 million as compared to $16.6 million for the same period in 2009. The decrease in operating expenses for the quarter ended March 31, 2010 was primarily the result of discontinuing our clevudine program in April 2009, partially offset by increases in development costs for PSI-7977, PSI-938 and PSI-661.

Pharmasset reported a net loss of $16.1 million, or $0.54 per share, for the quarter ended March 31, 2010, as compared to a net loss of $15.5 million, or $0.59 per share, for the quarter ended March 31, 2009.

Recent Operational Highlights:

• On February 17, 2010, Pharmasset announced that its partner Roche completed enrollment of the RG7128 phase 2b study (PROPEL), enrolling approximately 400 treatment naïve patients with hepatitis C virus (HCV) genotypes 1 and 4. The PROPEL study is investigating a 12 week duration of RG7128 with the standard of care (SOC), followed by an additional 12 weeks of SOC. The last patient enrolled in this study is to receive his or her last dose of RG7128 or placebo in early May.
• Roche has also initiated a second phase 2b trial investigating 24 weeks of treatment with RG7128 and SOC. This trial has completed enrollment of approximately 180 treatment naïve patients with hepatitis C virus (HCV) genotypes 1 and 4.
• The PROPEL and 24 week studies have been amended so that patients that failed treatment with placebo and SOC will receive RG7128 1000mg BID for 24 weeks followed by 24 weeks of SOC, starting in 3Q10.
• On April 8, 2010, Pharmasset announced that it had initiated a phase 1 study with PSI-938 for the treatment of HCV.
• On April 15, 2010, Pharmasset presented follow-up data from the 28 day study with RG7128 in genotype 2 and 3 non-responder patients, demonstrating a 65% SVR. Of those patients that received 48 weeks of therapy 90% achieved an SVR. Further in vitro data was presented on the combination of PSI-7977 and PSI-938 at the European Association for the Study of the Liver (EASL) meeting in Vienna, Austria
• On May 4, 2010, Pharmasset announced efficacy and preliminary safety results from its 28-day Phase 2a study of PSI-7977 dosed once daily (QD) in combination with SOC in patients with HCV genotype 1 who have not been treated previously.  On an intent-to-treat analysis, patients receiving PSI-7977 100mg QD, 200mg QD or 400mg QD in combination with SOC achieved RVR rates of 88%, 94% and 93%, respectively, compared to 21% in the placebo plus SOC arm. Preliminary safety and tolerability across all doses were comparable to placebo administered with SOC.

"Pharmasset had a very productive start to 2010." stated Schaefer Price, President and Chief Executive Officer, "as we recently reported positive Phase 2a results for our PSI-7977 program demonstrating high RVR rates in patients, consistent with RVR rates previously reported for RG7128. Safety results to date from both compounds are encouraging. During the quarter, we also advanced our first of two guanine nucleotide analogs, PSI-938, into the clinic. Based on the data from our compounds, we believe our nucleoside/tide analogs continue to differentiate themselves as a class of direct acting antivirals for the treatment of HCV and we look forward to reporting updates for our programs throughout the rest of 2010."

Calendar Year 2010 Anticipated Milestones:

• Roche expects to initiate a Phase 2b study of RG7128 in combination with SOC in patients with HCV genotypes 2 and 3 in the second half of 2010
• Pharmasset expects to present the PSI-7977 Phase 2a data at a scientific meeting later in 2010
• Pharmasset expects to initiate 12-week Phase 2b study of PSI-7977 in the fourth quarter of 2010
• Pharmasset expects to report top line Phase 1 antiviral data for PSI-938 in the third quarter of 2010
• Pharmasset expects to submit an IND or foreign regulatory equivalent for its second guanine nucleotide, PSI-661 (formerly PSI-879), in the fourth quarter of 2010

SOURCE Pharmasset, Inc.