XenoPort, Inc. (Nasdaq:XNPT) announced today its financial results for the fourth quarter and year ended December 31, 2013. Revenues for the fourth quarter were $2.9 million, compared to $0.5 million for the same period in 2012. Net loss for the fourth quarter was $19.1 million compared to net income of $3.0 million that resulted from a non-cash gain from XenoPort's litigation settlement with Glaxo Group Limited (GSK) in the fourth quarter of 2012. At December 31, 2013, XenoPort had cash and cash equivalents and short-term investments of $58.7 million.
XenoPort Business Updates
Since the beginning of the fourth quarter of 2013:
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XenoPort completed a successful follow-on public offering of XenoPort common stock, raising net proceeds of approximately $67.3 million, after deducting underwriting discounts and commissions and other estimated offering expenses.
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XenoPort reported that it received feedback from the U.S. Food and Drug Administration (FDA) Division of Neurology Products regarding potential development plans for XP23829 as a potential treatment for patients with relapsing forms of multiple sclerosis (MS). Based on the feedback, XenoPort believes that it could initiate Phase 3 clinical development using XP23829 doses that produce monomethyl fumarate (MMF) exposure similar to that produced by the approved dose of TECFIDERA (dimethyl fumarate). XenoPort also believes that the FDA will require additional information on XP23829 before determining the applicability of the Section 505(b)(2) pathway for a potential New Drug Application (NDA) submission.
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XenoPort indicated that it plans to submit an Investigational New Drug (IND) application to the FDA Division of Dermatology and Dental Products for XP23829 as a potential treatment for moderate-to-severe chronic plaque psoriasis and plans to initiate a Phase 2 clinical trial of XP23829 for this indication by mid-2014.
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Net sales of HORIZANT® (gabapentin enacarbil) Extended-Release Tablets in the United States in the fourth quarter grew 34% compared to the third quarter of 2013, which was the first full quarter of XenoPort's commercialization of HORIZANT. The total number and the trajectory of growth of HORIZANT prescribed tablets achieved all-time highs. HORIZANT prescribed pill counts increased 27% nationwide for the fourth quarter ending December 31, 2013 compared to the third quarter of 2013. In territories where XenoPort is actively promoting HORIZANT, total prescribed pills for the fourth quarter ending December 31, 2013 increased by 39% compared to the third quarter of 2013. This compares to no growth in non-promoted territories.
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XenoPort reported positive top-line results of a Phase 4 clinical trial that evaluated lower doses of gabapentin enacarbil for the treatment of moderate-to-severe primary restless legs syndrome (RLS) in adults. The study was conducted by XenoPort's former commercial partner, GSK, as part of the post-marketing commitments imposed by the FDA in connection with its approval of HORIZANT for the treatment of adult patients with moderate-to-severe primary RLS. The most common adverse reactions in adult patients with moderate-to-severe primary RLS taking HORIZANT are somnolence/sedation, dizziness, headache, nausea and fatigue.
Ronald W. Barrett, Ph.D., chief executive officer of XenoPort, stated, "We are currently focused on preparing to initiate Phase 2 development of our novel fumarate product candidate, XP23829, later this year. Our Phase 1 clinical trial results indicated that XP23829 can deliver relevant plasma concentrations of MMF with a desired pharmacokinetic profile. While Phase 1 data in a small number of subjects must be viewed cautiously, we are intrigued by the pharmacodynamic effects of XP23829 on immune cells in peripheral blood of healthy subjects, particularly when XP23829 was dosed once a day. We hope to establish optimal dosing of XP23829 in our planned Phase 2 psoriasis study and use this information for dose selection for potential Phase 3 trials in psoriasis and/or relapsing forms of MS."
Dr. Barrett continued, "We also believe we have made progress in commercializing HORIZANT. In only two full quarters of promotion, we believe we have demonstrated the potential of our targeted educational efforts and we continue to receive positive feedback from physicians who prescribe HORIZANT. We will continue to closely monitor our progress in increasing the value of HORIZANT through these commercialization efforts."
XenoPort Fourth Quarter and Year-End 2013 Financial Results
Revenues for the fourth quarter and year ended December 31, 2013 were $2.9 million and $8.0 million, respectively, compared to $0.5 million and $21.6 million for the same periods in 2012. The increase in revenues in the fourth quarter ended December 31, 2013 was principally due to HORIZANT net product sales. HORIZANT net product sales totaled $6.4 million for the year ended December 31, 2013. The decrease in total revenues for the year ended December 31, 2013 compared to 2012 was primarily due to the recognition in 2012 of a $10.0 million contingent payment from GSK and a $10.0 million milestone payment from Astellas Pharma Inc.
Research and development expenses for the fourth quarter of 2013 decreased to $3.7 million from $10.6 million for the same period in 2012. The decrease in research and development expenses for the fourth quarter of 2013 was principally due to decreased net costs for arbaclofen placarbil (AP), decreased personnel costs, which were primarily due to decreased headcount and decreased non-cash stock-based compensation, and decreased net costs for XP23829 development activities. Research and development expenses for the year ended December 31, 2013 decreased to $33.3 million from $42.9 million for 2012. The decrease in research and development expenses for 2013 compared to 2012 was principally due to decreased net costs for AP and decreased personnel costs, which were primarily due to decreased headcount and decreased non-cash stock-based compensation, partially offset by increased net costs for XP23829 development activities.
Selling, general and administrative expenses were $17.6 million and $59.1 million for the fourth quarter and year ended December 31, 2013, respectively, compared to $7.4 million and $30.2 million for the same periods in 2012, respectively. The increase in selling, general and administrative expenses in both periods of 2013 compared with 2012 was principally due to costs related to the commercialization and promotion of HORIZANT, which included increased professional fees, marketing costs and personnel costs.
Net loss for the fourth quarter of 2013 was $19.1 million, compared to net income of $3.0 million for the same period in 2012. Net loss for 2013 was $85.9 million, compared to a net loss of $30.8 million for 2012. Basic and diluted net loss per share were $0.40 for the fourth quarter of 2013, compared to basic and diluted net income per share of $0.07 for the same period in 2012. For the year ended 2013, basic and diluted net loss per share were $1.81, compared to basic and diluted net loss per share of $0.78 for 2012.
Financial Guidance
XenoPort announced that it expects the net use of cash for 2014 to be in the range of $60 million to $70 million (net use of cash is the difference between the anticipated balances of cash and cash equivalents plus short-term investments at 12/31/14 and the actual balances at 12/31/13, excluding net proceeds from the January 2014 financing).
Other News
XenoPort also reported today that Clinton Relational Opportunity Master Fund, L.P. (Clinton) has provided notice of its intent to nominate three candidates to stand for election to XenoPort's Board of Directors and to submit other proposals for consideration at XenoPort's 2014 Annual Meeting of Stockholders.
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