Zalicus Inc. (NASDAQ: ZLCS) today reported financial results for the third quarter ended September 30, 2010.
"We made solid product development progress this quarter," commented Mark H.N. Corrigan, MD, President and CEO of Zalicus. "We finalized our development plans for Synavive, and also related to Synavive, we were awarded a Therapeutic Discovery Project grant to help fund Synavive development going forward. Our most promising Ion channel leads are in preclinical development with the goal of moving one or more into clinical development for pain in early 2011. And finally, the power of our combination high throughput discovery platform to generate potentially interesting oncology leads was highlighted at two oncology research meetings this Fall, further supporting the value of employing a systematic combination screening approach to identify novel product candidates."
Third Quarter 2010 and Recent Accomplishments:
- Zalicus has finalized the development strategy for Synavive™ and after consultation with the FDA is planning to initiate Phase 2b development in rheumatoid arthritis (RA) in early 2011. Prior to selecting RA, Zalicus conducted a series of interviews with key opinion leaders, practicing rheumatologists, primary care doctors and managed care personnel to fully explore the potential benefits of moving into RA as an initial indication for Synavive. Based on their feedback, RA is the most attractive choice on a number of fronts including current medical practice in which there is already a high prevalence of glucocorticoid use in RA to combat inflammation and restore function, as well as the unmet need for less expensive, easier to access options to biologic therapy. Beyond RA, Synavive has potential in other steroid-responsive diseases such as polymyalgia rheumatica (PMR), lupus (SLE) and ulcerative colitis (Crohn's) as well as a replacement to NSAIDs and COXIB's in osteoarthritis.
- Also related to Synavive, Zalicus was awarded a Therapeutic Discovery Project grant of approximately $244,000. The grant, which targets therapeutic discovery projects that show potential to result in new therapies to treat areas of unmet medical need or treat chronic or acute diseases and conditions potentially resulting in reduced health care costs, was awarded to Zalicus to help fund the further clinical development of Synavive, a clinical-stage product candidate in development for immuno-inflammatory diseases such as rheumatoid arthritis.
- Zalicus's Ion channel research efforts were presented at the WorldPharma 2010 Conference in Copenhagen in July by Terrance Snutch, Ph.D., Zalicus's Chief Scientific Officer and a recognized leader in the field of Ion channel drug discovery. In his talk, Dr. Snutch described the novel mechanism of action of one of Zalicus's Ion channel blockers for the attenuation of pain signals through the blockade of T-type calcium and sodium channels.
- Novel synergistic drug combinations for the treatment of cancer were presented at two important oncology research meetings this quarter; the Targeted Cancer Therapies World Europe 2010 meeting in September and the ASCO-NCI-EORTC Molecular Markers meeting in October. While not a core therapeutic area of focus for Zalicus, this data, which was generated with our combination high-throughput screening (cHTS™) technology, supports the rationale for employing a systematic combination screening approach to the discovery of novel cancer targets and the premise that sequencing of drug combinations can yield greater synergy and overcome resistance. Zalicus is continuing to leverage the power of its proprietary cHTS technology through research collaborations with biopharmaceutical companies such as our ongoing oncology research collaboration with Novartis. In addition, data on Zalicus's discovery of novel A2A agonist oncology programs for the treatment of multiple myeloma and other B-cell malignancies will be highlighted at the 52nd Annual Meeting of the American Society of Hematology in Orlando, FL on December 4-7, 2010.
Third Quarter 2010 Financial Results (Unaudited):
As of September 30, 2010, Zalicus had cash, cash equivalents, restricted cash and short-term investments of $48.6 million compared to $52.2 million on June 30, 2010.
Total revenue was $1.2 million in the third quarter of 2010 compared to $2.7 million reported in the third quarter of 2009. This decrease was primarily due to the completion of certain cHTS research collaborations in 2009. Zalicus recognized approximately $0.1 million in royalty revenue from Covidien based on Exalgo™ sales for the quarter ended September 30, 2010. As this is the second quarter of Exalgo sales since commercial launch in April of 2010, we expect Exalgo royalty revenue to continue to fluctuate on a quarterly basis.
Net loss for the quarter ended September 30, 2010 was $11.4 million, or ($0.13) per share, as compared to net loss of $8.3 million, or ($0.24) per share in the third quarter of 2009. Stock-based compensation expense was approximately $0.5 million in the third quarter of 2010, as compared to $0.6 million in the third quarter of 2009. The third quarter ended September 30, 2010 also included $4.7 million of amortization expense associated with the Exalgo intangible asset.
Research and development expense totaled $5.1 million in the third quarter of 2010 compared to $4.9 million in the third quarter of 2009.
General and administrative expense was $2.8 million in the third quarter of 2010 compared to $3.6 million in the third quarter of 2009. The decrease was primarily due to a decrease in legal and consulting fees related to the merger with Neuromed.