POZEN Inc. (NASDAQ: POZN), a pharmaceutical company committed to transforming medicine that transforms lives, today announced results for the third quarter ended September 30, 2010.
“POZEN continues to gain momentum as the year progresses, beginning with last quarter's U.S. approval of VIMOVO, representing two U.S. drug approvals for POZEN in two years, and more recently with the positive agreement for approval in 23 countries across the European Union”
Recent Corporate Highlight
- VIMOVO™ (naproxen / esomeprazole magnesium) received positive agreement for approval in 23 countries across the European Union in October 2010. The Member States and AstraZeneca will now pursue pricing and reimbursement approval.
"POZEN continues to gain momentum as the year progresses, beginning with last quarter's U.S. approval of VIMOVO, representing two U.S. drug approvals for POZEN in two years, and more recently with the positive agreement for approval in 23 countries across the European Union," said John R. Plachetka, Chairman, President and Chief Executive Officer of POZEN.
Third Quarter Results
For the third quarter of 2010, POZEN reported revenue of $4.3 million, resulting from royalty on sales of Treximet® (sumatriptan / naproxen sodium) of $3.9 million, and $0.4 million from royalty on sales of VIMOVO™ (naproxen / esomeprazole magnesium). For the third quarter of 2009, the Company reported revenue of $14.3 million, resulting from a $10.0 million milestone payment for the New Drug Application (NDA) filing for VIMOVO, the amortization of upfront payments received pursuant to the collaboration agreement with AstraZeneca of $3.1 million, and royalties of $1.2 million on sales of Treximet.
Operating expenses for the third quarter of 2010 totaled $13.0 million as compared to $7.7 million for the comparable period in 2009. The higher operating expenses in the third quarter of 2010 were primarily due to increases in costs associated with the PA32540 development program, ongoing patent litigation expenses and pre-commercialization costs for PA32540.
The Company reported a net loss of $(8.6) million, or $(0.29) per share on a diluted basis, for the third quarter of 2010, compared to net income of $6.7 million, or $0.22 per share on a diluted basis, for the third quarter of 2009. The 2009 third quarter results reflect a $10.0 million milestone payment for the New Drug Application filing for VIMOVO.
Nine Month Results
For the nine months ended September 30, 2010, POZEN reported revenue of $39.5 million compared to $28.0 million for the same period in 2009. The increase in revenue was due to receipt of $10.0 million more in milestone payments from AstraZeneca in 2010 versus 2009, and the increase in the Treximet royalty rate to 18% starting in 2010.
Operating expenses for the nine months ended September 30, 2010 were $35.0 million compared to $29.5 million for the same period in 2009. The increase in operating expenses was primarily due to higher patent litigation costs.
The Company reported net income of $4.6 million, or $0.15 per share on a diluted basis for the nine month period ended September 30, 2010 compared to a net loss of $(1.1) million, or $(0.04) per share on a diluted basis for the same period in 2009.
Buoyed by the second quarter $20.0 million milestone payment and the Company's continued prudent cash management practices, the Company continues to maintain a solid balance sheet. At September 30, 2010, cash, cash equivalents and short-term investments totaled $44.6 million compared to $46.7 million at December 31, 2009. The Company had an accounts receivable balance of $4.5 million from GlaxoSmithKline and AstraZeneca at September 30, 2010.
The U.S. Food and Drug Administration (FDA) has announced an Advisory Committee meeting on November 4, 2010 to review the adequacy of endoscopically documented gastric ulcers as an outcome measure to evaluate drugs intended to prevent gastrointestinal complications of non-steroidal anti-inflammatory drugs (NSAIDs), including aspirin. As the result of this meeting could have an effect on our PA development programs, the FDA postponed our requested meeting on the PA65020 program until December and, therefore, we will not start the PA65020 Phase 3 studies this year as previously announced. Therefore, the Company is revising its previous outlook of a 2010 net loss of $3 to $5 million to a net loss of $2 to $4 million. This assumes Treximet annual net sales are in the previously estimated range of $85 to $90 million and patent litigation expenses are approximately $8.5 million for the full year.
The Company has also raised its anticipated cash balance at December 31, 2010 to be in the range of $38 to $40 million. The previous estimate was $35 to $37 million.
The Company believes it is possible it could achieve the $25 million milestone for EU pricing and reimbursement approval for VIMOVO in 2010. If this milestone is earned, the year-end earnings guidance would be revised to have 2010 net income of $21 to $23 million. If the cash were received in 2010, the Company's year-end cash guidance would be revised to $63 to $65 million.