First Quarter 2011 Highlights:
- Qutenza® (capsaicin) 8% patch purchased by 321 institutions, up from 239 in Q4 2010
- Revenue of $3.2 million including $0.6 million U.S. Qutenza product revenue
- Operational focus enables lower planned expense growth in 2011
- Qutenza sales initiated in Poland and Czech Republic by Astellas
- NGX-1998 Phase 2 clinical trial continues in postherpetic neuralgia (PHN) patients surpassing 65% enrollment
NeurogesX, Inc. (Nasdaq: NGSX), a biopharmaceutical company focused on developing and commercializing novel pain management therapies, today reported results for its first quarter ended March 31, 2011.
Anthony DiTonno, President and CEO, commented, "We are now one full year into the U.S. launch of Qutenza. We made progress in our goal of creating awareness of Qutenza among our target physician groups and in establishing a base of Qutenza treatment sites from which to build. As we move into our second year post launch, we are focusing our sales organization on growing the number of sites of care that can optimally utilize Qutenza and building patient awareness and increased physician usage."
Qutenza Launch Metrics
NeurogesX is executing the U.S. launch strategy for Qutenza by establishing a national network of Qutenza referral sites (QPROs) and continuing to expand marketing activities to reach patients treated in the primary care setting. Key Qutenza launch metrics as of March 31, 2011 were as follows:
- Qutenza on formulary or available without restriction in 137 institutions as of March 31, 2011, up from 102 at year end 2010
- 321 institutions purchased Qutenza through first quarter 2011, an increase of 34% from 239 in the fourth quarter 2010
- Percentage of repeat institutional customers grew to 60% of all institutional customers ordering in the first quarter 2011, up from 46% in fourth quarter 2010
- The cumulative number of private physician customers that have ordered Qutenza rose to 221 through March 31, 2011, up from 159 at December 31, 2010
- Training activity continues with 1,535 physicians and institutions trained by March 31, 2011, up from 1,127 at December 31, 2010
First Quarter 2011 Results
Total revenue for the first quarter ended March 31, 2011 was $3.2 million, which consisted of $2.6 million in collaboration revenue, primarily from the amortization of upfront license fees received under the Astellas Agreement, and $0.6 million of Qutenza product sales.
During the three months ended March 31, 2011, the Company recorded sales of Qutenza to its specialty distribution and specialty pharmacy customers totaling $0.6 million. Under the Company's revenue recognition policy, the Company recognized revenue during the three months ended March 31, 2011 totaling $0.6 million.
Due to the limited history of product returns and cash collections, NeurogesX recognizes revenue at the later of the time the product is shipped by its customers to healthcare professionals and the date of cash collection. As of March 31, 2011, the Company had $0.6 million of deferred product revenue. Deferred revenue is reported net of associated cost of goods sold on the Company's balance sheet. Of the deferred revenue total, $0.4 million was sold through to end users (i.e., physicians, clinics and hospitals) and the deferral resulted from cash payments not yet being due under the payment terms, while $0.2 million represented deferral of sales into the Company's distribution channel, recognition of which will be based ultimately upon sales of those units to end users.
Cost of goods sold for the first quarter 2011 totaled $0.1 million. Cost of goods sold includes product costs, fixed monthly charges related to the Company's third party logistics provider for warehousing, shipping activities, and royalty obligations due to intellectual property licensors.
Research and development expenses for the first quarter 2011 were $4.0 million, compared to $2.1 million in the year ago period. The year-over-year change included increases of $0.9 million associated with the NGX-1998 Phase 2 study and $0.3 million of non-clinical research and development for NGX-1998. In the most recent period the Company recorded a $0.3 million increase in costs related to the planned supplemental NDA for Qutenza in the HIV-AN patient population.