Repligen Corporation (Nasdaq: RGEN) today reported results for the first quarter of fiscal year 2011, ended June 30, 2010. Total revenue for the first quarter was $7,010,000 compared to total revenue of $5,061,000 for the first quarter of fiscal year 2010, an increase of $1,949,000 or 39%. Bioprocessing product revenue for the first quarter was $4,269,000 compared to $2,473,000 for the first quarter of fiscal 2010, an increase of $1,796,000 or 73%. Royalty and research revenue for the first quarter, which consisted primarily of royalty payments from Bristol-Myers Squibb on the U.S. sales of Orencia®, was $2,741,000 compared to $2,588,000 for the same quarter in the prior year.
Operating expenses for the first quarter were $6,121,000 compared to $6,489,000 for the first quarter of fiscal year 2010. This decrease in operating expenses of $368,000 was primarily due to decreased spending due to the completion of our Phase 3 clinical trial of RG1068 for pancreatic imaging. This decrease was partially offset by a milestone payment to McLean Hospital upon the issuance of a U.S. patent covering the use of uridine for the treatment of patients with bipolar disorder.
Net income for the first quarter was $988,000 or $0.03 per diluted share, compared to a net loss for the first quarter of fiscal year 2010 of $1,106,000 or $0.04 per diluted share. Cash, cash equivalents and marketable securities as of June 30, 2010 were $58,638,000 compared to $59,146,000 as of March 31, 2010.
"We are pleased to have achieved strong growth in product revenue for the quarter," stated Walter C. Herlihy, President and Chief Executive Officer of Repligen Corporation. "Profits from our product sales and royalties are supporting our four therapeutics development programs while our strong financial position will allow us to continue to selectively seek acquisitions that strengthen our bioprocessing business and therapeutics pipeline."
RG1068 for Imaging of the Pancreas
We are currently analyzing the radiographic images from our Phase 3 study of RG1068, synthetic human secretin. The goal of the study is to evaluate the sensitivity and specificity of RG1068 in combination with MRI to improve the detection of structural abnormalities of the pancreatic ducts relative to MRI alone. Detailed visual assessment of the pancreatic ducts is important in the diagnosis, treatment and evaluation of diseases such as acute and chronic pancreatitis. Because RG1068-MRI elucidates both normal and abnormal anatomy, it may improve patient triage and pre-surgical planning and could aid in avoiding unnecessary and potentially risky procedures such as endoscopy.
The analysis of the Phase 3 image data is a "re-read" which was agreed to by the Food and Drug Administration and European Medicines Agency based on the determination that the original analysis was flawed and therefore inconclusive due to deficiencies in performance by the contract research organization overseeing the analysis. We expect to report top-line results from the analysis in approximately six months.
RG2417 for Bipolar Disorder
We expect to complete enrollment in our ongoing Phase 2b clinical trial of RG2417, an oral formulation of uridine, in patients with bipolar depression by the end of September. This study is designed to confirm and extend the results of a Phase 2a study in which 6 weeks of treatment with RG2417 improved the symptoms of bipolar depression when compared to placebo as measured by the Montgomery-Asberg Depression Rating Scale. The positive effect of treatment with RG2417 in the Phase 2a study was primarily observed in patients with a significant history of disease as determined by the number of episodes of mania and depression experienced during their lifetime. We expect to report top-line results of the Phase 2b study in approximately six months. There are more than five million adults worldwide with bipolar disorder, which is an area of high unmet medical need due to the ineffectiveness and significant side effects of current therapies.
RG2833 for Friedreich's Ataxia
In May, we filed an Investigational New Drug Application with the FDA for a Phase 1 study of RG2833, a selective histone deacetylase 3 (HDAC-3) inhibitor, to evaluate the pharmacokinetic and safety profile of RG2833 in up to 40 healthy volunteers. This study will also evaluate the pharmacodynamic response of various biomarkers in blood to RG2833. The FDA has requested additional toxicology data, and we plan to conduct additional studies to address their questions. RG2833 is the first compound that targets activation of the defective gene responsible for Friedreich's ataxia. If this therapeutic approach is successful, it has the potential to change the progression of the disease and significantly impact patients' lives. There are approximately 15,000 people worldwide with Friedreich's ataxia.
RG3039 for Spinal Muscular Atrophy
SMA is an inherited neurodegenerative disease in which a defect in the SMN1 ("survival motor neuron") gene results in low levels of the protein SMN and leads to progressive damage to motor neurons, loss of muscle function and, in many patients, early death. RG3039, our lead compound, targets activation of a gene that encodes SMN protein and has been shown to increase production of SMN in cells derived from patients. If this therapeutic approach is successful, it has the potential to change the progression of the disease and significantly impact patients' lives. We are planning to initiate preclinical GLP toxicology studies later this month to evaluate the suitability of RG3039 for human clinical testing. There are approximately 20,000 SMA patients in the U.S. and Europe with no treatment or cure for their disease.
For more than twenty years, we have been a leading supplier to the biopharmaceutical industry of Protein A products used in the manufacturing of therapeutic and diagnostic monoclonal antibodies.
Sales of our bioprocessing products were negatively impacted last year due to the financial environment; however, this quarter we experienced significant growth in our product revenue due to a rebound in demand from customers. We are seeking to leverage our expertise in protein manufacturing through developing and commercializing new products that improve efficiency in biopharmaceutical manufacturing.