BioSpecifics Technologies second-quarter total revenues decrease to $0.9 million

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Aug 7 2010

BioSpecifics Technologies Corp. (Nasdaq: BSTC; the "Company"), a biopharmaceutical company developing first in class collagenase-based products, today announced its financial results for the second quarter ended June 30, 2010. The Company's partner, Auxilium Pharmaceuticals, Inc. (Auxilium) markets XIAFLEX® (collagenase clostridium histolyticum), a novel, first-in-class, orphan-designated, biologic, for the treatment of adult Dupuytren's contracture patients with a palpable cord.

"We are very pleased with the efficacy and safety of XIAFLEX seen in clinical practice based on reports from the early stages of the launch by our partner Auxilium," commented Thomas L. Wegman, President of BioSpecifics. "In the future, we see significant growth potential for the product. Auxilium has announced a positive outcome of its end of Phase 2 meeting with the FDA for XIAFLEX for Peyronie's disease, and we look forward to the initiation of the Phase 3 pivotal trials by the end of the year. In addition, Pfizer continues its efforts to achieve registration of XIAFLEX for Dupuytren's contracture in Europe."

Financial Results

The Company reported a net loss of $0.9 million for the second quarter ended June 30, 2010, or $0.15 per basic and diluted common share, compared to a net loss of $0.1 million, or $0.01 per basic and diluted common share, for the same period in 2009. As of June 17, 2010, the Company revised its compensation policy and determined that, absent special circumstances, no new options will be granted to directors, officers, employees or consultants.

Total revenues for the second quarter ended June 30, 2010 were $0.9 million as compared to $1.2 million for the same period in 2009. The decrease in revenues was mainly attributable to the recognition of less milestone and licensing revenue during the second quarter ended June 30, 2010. For the second quarter ended June 30, 2010 the Company recognized the remaining portion, $0.15 million, of a $1.0 million milestone related to the approval by the U.S. Food and Drug Administration (FDA) of XIAFLEX for Dupuytren's contracture in February 2010. This remaining portion was recognized in connection with the Company's notification to Auxilium of its election not to commercially manufacture XIAFLEX. In addition, licensing revenues recognized are related to the cash payments received in prior years and amortized over the expected development period under the Company's agreement with Auxilium. The decrease in licensing revenues recognized during the second quarter of 2010 was primarily due to the completed recognition in the first quarter of 2010 of licensing revenues associated with the Dupuytren's contracture indication. The revenue for the second quarter ended June 30, 2010 does not include royalties or markup on cost of goods sold for XIAFLEX sales.

Research and development expenses for the second quarter ended June 30, 2010 were $0.1 million, compared to $0.1 million for the same period in 2009. Research and development expenses include employee related expenses, preclinical expenses, costs of materials, lab expense, facility costs and overhead.

General and administrative expenses for the second quarter ended June 30, 2010 totaled $1.6 million, compared to $1.1 million for the same period in 2009. The increase in general and administrative expenses was primarily due to outside legal fees, stock-based compensation, and consulting and outside services related to investor relations partially offset by lower patent expenses.

As of June 30, 2010, BioSpecifics held cash, cash equivalents and short-term investments of $9.9 million, compared to $11.3 million on March 31, 2010.

XIAFLEX for Dupuytren's Contracture Update

On August 5, 2010, Auxilium provided net revenue guidance for third quarter sales of XIAFLEX. Auxilium stated that net revenues from sales of XIAFLEX are expected to be in the range of $4.4 million to $5.4 million.

As of July 31, 2010, Auxilium reported the following leading indicators of the XIAFLEX launch:

On June 8, 2010, Auxilium announced results from its ongoing long-term extension study, which demonstrated a two year nominal recurrence rate of 19.3% for joints previously treated successfully with XIAFLEX. For Metacarpal Phalangeal joints the two year nominal rate was 13.6%, while Proximal Intra-Phalangeal joints showed a 34.1% nominal recurrence. Auxilium believes that these rates compare favorably to recurrence rates from current surgical treatments, including open fasciectomy and needle aponeurotomy.

Corporate and Pipeline Update

On July 12, 2010, Auxilium announced that it held its end of Phase 2 meeting with the FDA in late June 2010 regarding development of XIAFLEX for the treatment of Peyronie's disease and that, as a result, Auxilium was reaffirming its plan to commence pivotal Phase 3 trials by the end of 2010.

On June 4, 2010, the Company announced that its Board of Directors authorized the repurchase of up to $2 million of its outstanding common stock. This decision reflected the Company's continued commitment to increasing value for its stockholders and its confidence that it will achieve its goals.

Upcoming Milestones

Following are the Company's upcoming milestones:

There will be a presentation at the American Society for Surgery of the Hand (ASSH) 2010 Annual Meeting on October 8, 2010 entitled New Advances in the Treatment of Dupuytren's.