Nabi Biopharmaceuticals reports first-quarter net income of $5.5 million from continuing operations

Nabi Biopharmaceuticals (Nasdaq:NABI) today announced its first quarter financial results for the three month period ended March 27, 2010. The Company reported net income from continuing operations of $5.5 million, or $0.11 per share, compared to a net loss of $7.0 million, or $0.14 per share, for the period ended March 28, 2009.

First quarter revenue was $13.7 million reflecting revenue recognized from payments received from GlaxoSmithKline Biologicals (GSK) associated with the PentaStaph sale and the closing of the NicVAX option and license agreement. This total includes recognized revenue of $4.6 million related to the $21.5 million upfront payment received at the close of the PentaStaph sale in 2009, $8 million for achieving a PentaStaph performance milestone and $0.9 million for services provided to GSK under the PentaStaph agreement. The company also recognized revenue of $0.2 million related to the $40 million NicVAX upfront payment received in the first quarter of 2010. Revenue from the PentaStaph and NicVAX upfront payments are being recognized ratably over 14 months and 190 months, respectively.

General and Administrative expenses were $1.8 million for the quarter ended March 27, 2010 compared to $3.1 million in the prior year period. This decrease reflects our efforts to decrease our expenses, lower legal and facilities costs as well as an allocation of a portion of these costs to Cost of Services in the 2010 period. Research and Development expenses were $5.9 million in the first quarter of 2010 compared to $3.8 million in 2009, reflecting costs of the two NicVAX Phase III trials initiated in November 2009 and March 2010 respectively, as well as manufacturing-related activities for NicVAX. We expect that Research and Development expenses will increase during the balance of 2010.

Net cash provided by operating activities was $48.6 million for the first quarter of 2010 compared to $6.5 million of net cash used in the first quarter of 2009. Cash, cash equivalents and marketable securities totaled $158.1 million at March 27, 2010 compared to $119.0 million at the end of 2009. This increase is primarily due to payments received from GSK related to the NicVAX and PentaStaph agreements, offset in part by the company's operating expenses and amounts paid to repurchase stock.

During the first quarter of 2010, the Company repurchased 1.8 shares of common stock for a total of $9.2 million. The Company expanded its share repurchase program in late March and, subsequent to the quarter end repurchased 3.6 million additional shares for a total of $20.7 million through April 30, 2010. As of that date, the share repurchase program had a remaining balance available of $40.2 million. Also subsequent to the quarter end, the Company repurchased the remaining $6.1 million, par value, balance of its 2.875% Convertible Senior Notes. 

First Quarter Accomplishments

• Received shareholder vote approving the NicVAX agreement, closed the NicVAX agreement and received the $40 million upfront nonrefundable payment.
• Achieved a second PentaStaph milestone and received an $8 million payment. Nabi has an opportunity to receive an additional $13 million upon the achievement of the remaining two milestones.
• Initiated the second of two Phase III clinical trials for NicVAX, the results of which are anticipated in early 2012
• Expanded the share repurchase program to $61 million, an increase of $50 million

Significant Recent and Upcoming Events

• Prevailed in a European Patent Office opposition proceeding that resulted in the revocation of a potential competitor's patent rights to a nicotine conjugate vaccine technology in Europe
• Redeemed the remaining outstanding balance of our 2.875% Senior Convertible Notes
• First NicVAX Phase III trial on target for completing patient accrual in the fourth quarter of this year.

"The first quarter marked the overwhelming affirmative shareholder vote for and successful closing of our NicVAX option and license agreement with GlaxoSmithKline Biologicals," said Dr. Raafat Fahim, President and Chief Executive Officer of Nabi Biopharmaceuticals. "We are now fully engaged in the pivotal Phase III clinical trials for NicVAX and participant recruitment is progressing well. Our partnership with GSK continues to strengthen as we work toward the successful commercial development of NicVAX."