CHESHIRE, Conn., Feb. 14 /PRNewswire-FirstCall/ -- In connection with a change in its fiscal year end from July 31 to December 31, Alexion Pharmaceuticals, Inc. today announced financial results for its five month transition period ended December 31, 2005.
For the five-month transition period ended December 31, 2005, Alexion reported revenues of $0.7 million compared to $0.2 million for the same period last year. The Company had increased activity related to government funded research grants compared with the same period last year.
Total operating expenses for the five-month transition period ended December 31, 2005, were $61.0 million compared with $38.1 million in the same period last year. The Company’s research and development expenses for the five month transition period ended December 31, 2005 were $48.2 million compared to $31.9 million for the same period last year. The increase in research and development expenses resulted primarily from higher clinical development costs related to the current clinical trials of the Company’s lead drug candidates, Soliris(TM) (eculizumab) and pexelizumab; the expensing of employee stock option grants; higher payroll and benefits costs to support our research and development activities; and higher manufacturing expenses. The Company’s general and administrative expenses were $12.8 million for the five month transition period ended December 31, 2005 compared to $6.2 million for the same period last year. The increase resulted principally from expensing of employee stock options, increased headcount dedicated to commercial development activities and higher professional fees principally for patent and compliance activities.
The Company posted investment income for the five month transition period ended December 31, 2005 of $3.1 million compared with $1.8 million for the same period last year, reflecting higher market interest rates and a higher principal balance. The higher principal balance is a result of the August 2005 issuance of 2.5 million shares of common stock in a public offering at $26.75 per share, resulting in net proceeds of $64.5 million, as well as an increase in convertible debt due to the sale of $150 million principal amount of 1.375% convertible senior notes (“1.375% Notes”) in January 2005, which was partially offset by the redemption of the Company’s $120 million principal amount of 5.75% convertible subordinated notes (“5.75% Notes”) in March 2005. Interest expense was $1.2 million for the five-month transition period ended December 31, 2005 compared with $3.2 million for the same period last year. The decrease in interest expense is attributable to the lower interest rate for the 1.375% Notes compared to the 5.75% Notes.
The Company incurred a net loss for the five month transition period ended December 31, 2005 of $58.0 million, or $1.90 per common share, versus a net loss of $35.4 million, or $1.28 per common share, for the same period last year.
Effective August 1, 2005, the Company adopted Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment (“SFAS 123R”), which requires recognition of the fair value of stock-based compensation in net earnings. The effect of SFAS 123R on our operating expenses and net loss was $4.1 million in the five month transition period ended December 31, 2005, and the effect on loss per common share was $0.13. The adoption of SFAS 123R had no impact on the Company’s operating cash flow.
As of December 31, 2005, Alexion had approximately $212.5 million in cash, cash equivalents and marketable securities as compared to $195.4 million at July 31, 2005. This increase in cash, cash equivalents and marketable securities as compared to July 31, 2005, was due primarily to the issuance of 2.5 million shares of common stock in a public offering in August 2005 at $26.75 per share, resulting in net proceeds of $64.5 million.
Clinical Update - Soliris(TM) (eculizumab)
On January 26, 2006, the Company announced positive results from its TRIUMPH Phase III pivotal trial with its lead drug candidate Soliris(TM) (eculizumab) in the orphan blood disorder Paroxysmal Nocturnal Hemoglobinuria (“PNH”). The trial met the co-primary endpoints of transfusion rate and hemoglobin stabilization with statistical significance. All secondary endpoints were also achieved with statistical significance. The companion SHEPHERD open-label Phase III trial is progressing according to plan. SHEPHERD is aimed at providing safety and additional efficacy data for Soliris(TM) (eculizumab) in PNH.
“This is an exciting period for Alexion as we focus our efforts on progressing to the global commercialization of our first product, Soliris(TM) for PNH,” said Leonard Bell, M.D., Chief Executive Officer of Alexion. “The strong results from our TRIUMPH trial are a milestone for Alexion and for patients suffering from this debilitating disease. We look forward to discussions on the regulatory front, with our target being the submission of marketing applications for Soliris(TM) during the second half of this year.”
“With the TRIUMPH results in hand, our efforts and resources are now concentrated on the successful completion of SHEPHERD, the timely and successful execution of our Soliris(TM) regulatory application and activities in preparation for a successful product launch,” said David W. Keiser, President and Chief Operating Officer of Alexion. “We have retained all rights to Soliris(TM) and are developing a global organization highlighted by our newly formed, wholly-owned subsidiary in France, which is a keystone to our international commercialization strategy. We continue to put into place all the components necessary for successful commercial launches.”
Clinical Update - pexelizumab
In November 2005, the Company reported that preliminary results from the Phase III PRIMO-CABG2 study of pexelizumab for coronary artery bypass graft (CABG) surgery did not achieve its primary endpoint and is unlikely to be sufficient for filing for licensing approval in the CABG indication. In January 2006, the Company determined to finalize its ongoing Phase III trial of pexelizumab in acute myocardial infarction (AMI) patients on or about March 1, 2006, with approximately 5,100 patients rather than the originally projected approximately 8,500 patients. The number of patients to be enrolled in the AMI trial may not be sufficient for the Special Protocol Assessment previously agreed with the Food and Drug Administration for AMI.
Financial Guidance
For Alexion’s 2006 calendar year, guidance with respect to the projected net loss is in the range $95-$110 million. This projected net loss excludes the expense of employee stock options and other stock based compensation expense. Under SFAS 123R, the Company is required to recognize such costs in the Company’s statement of operations. Research and development costs in 2006 are expected to be $65 to $70 million, including $15-$20 million in costs related to pexelizumab which will be primarily related to completion of clinical trials. General and administrative costs are projected to increase due to the ramp-up of pre-launch commercialization activities. The financial results and the amount of loss may vary depending upon many factors, including the timing and results of regulatory filings for Soliris(TM) (eculizumab) and APEX-AMI clinical results for pexelizumab.
Conference Call/Web cast Information
Alexion will host a conference call/webcast to discuss matters mentioned in this release. The call is scheduled for today, February 14th at 8:30 a.m., Eastern Time. To participate in this call, dial 719-457-2727, confirmation code 7167764, shortly before 8:30 a.m., Eastern Time. A replay of the call will be available for a limited period following the call, beginning at 11:30 a.m. today. The replay number is 719-457-0820, confirmation code 7167764. The web cast can be accessed at: www.alexionpharm.com.
About Alexion
Alexion Pharmaceuticals is a biotechnology company working to develop and deliver life-changing drug therapies for patients with serious and life- threatening medical conditions. Alexion is engaged in the discovery and development of therapeutic products aimed at treating patients with a wide array of severe disease states, including hematologic diseases, cancer, and autoimmune disorders. Alexion’s two lead product candidates, eculizumab and pexelizumab, are currently undergoing evaluation in several clinical development programs, including two Phase III trials of Soliris(TM) (eculizumab) for the treatment of paroxysmal nocturnal hemoglobinuria (PNH). Under the Special Protocol Assessment (SPA) process, the FDA has agreed to the design of protocols for the two trials of Soliris(TM) (eculizumab) in PNH patients that could, if successful, serve as the primary basis of review for approval of a licensing application for eculizumab in the PNH indication. The Company’s Phase III trial of pexelizumab in coronary artery bypass graft (CABG) surgery patients undergoing cardiopulmonary bypass (CPB) did not achieve its primary endpoint. The Company has determined to finalize its ongoing Phase III trial of pexelizumab in acute myocardial infarction (AMI) patients with fewer patients than originally planned. The pexelizumab trials are conducted in collaboration with Procter and Gamble Pharmaceuticals. Preliminary results from the PRIMO-CABG2 trial of pexelizumab indicate that the trial is unlikely to be sufficient for filing for licensing approval of pexelizumab in the CABG indication. The number of patients to be enrolled in the AMI trial may not be sufficient for the previously agreed pexelizumab SPA for AMI. Alexion is engaged in discovering and developing a pipeline of additional antibody therapeutics targeting severe unmet medical needs, through its wholly owned subsidiary, Alexion Antibody Technologies, Inc. This press release and further information about Alexion Pharmaceuticals, Inc. can be found at: http://www.alexionpharm.com.
This news release contains forward-looking statements, including statements related to financial guidance for calendar year 2006 with respect to the projected net loss, research and development costs, costs related to clinical trials for pexelizumab and general and administrative costs, characterization of clinical trial results, timing of announcement of clinical trial results, commercial potential of Alexion’s drug candidates, the progression of Alexion’s drug candidates towards commercial sales and timing for submission of, and decisions with respect to, marketing applications for Solaris. Forward-looking statements are subject to factors that may cause Alexion’s results and plans to differ from those expected, including delays in completion of ongoing clinical trials, delays in completion of analysis of clinical trial results, timing and evaluation by regulatory agencies of the results of these and other clinical trials, the results of pre-clinical or clinical studies (including termination or delay in clinical programs), the need for additional research and testing, decision of the FDA or other regulatory authorities not to approve (or to materially limit) marketing of one or both of Alexion’s two drug candidates, delays in arranging satisfactory manufacturing capability, inability to acquire funding on timely and satisfactory terms, delays in developing or adverse changes in commercial relationships, the possibility that results of earlier clinical trials are not predictive of safety and efficacy results in later clinical trials, dependence on Procter & Gamble Pharmaceuticals for development and commercialization of pexelizumab, the risk that third parties won’t agree to license any necessary intellectual property to us on reasonable terms, and a variety of other risks set forth from time to time in Alexion’s filings with the Securities and Exchange Commission, including but not limited to the risks discussed in Alexion’s Annual Report on Form 10-K for the year ended July 31, 2005 and in our other filings with the Securities and Exchange Commission. P&GP retains the development rights and the termination rights discussed in Alexion’s Form 10-K referred to above. Alexion does not intend to update any of these forward- looking statements to reflect events or circumstances after the date hereof, except when a duty arises under law.
ALEXION PHARMACEUTICALS, INC. Selected Financial Data (Amounts in thousands, except per share amounts) Consolidated Statements of Operations Data: Five Months Ended December 31, Year Ended July 31, 2005 2004 2005 2004 (Unaudited) (Unaudited) Contract research revenues $ 664 $ 245 $ 1,064 $ 4,609 Operating expenses: Research and development 48,238 31,914 91,388 59,840 General and administrative 12,763 6,160 18,951 14,459 Impairment of fixed assets - - - 760 Total operating expenses 61,001 38,074 110,339 75,059 Operating loss (60,337) (37,829) (109,275) (70,450) Other income (expense): Investment income 3,123 1,756 5,266 3,373 Interest expense (1,192) (3,153) (6,125) (7,709) Gain from extinguishment of note payable - 3,804 3,804 - Loss on early extinguishment of debt - - (3,185) - Total other income (expense) 1,931 2,407 (240) (4,336) State tax benefit 450 61 765 691 Net Loss $(57,956) $(35,361) $(108,750) $(74,095) Basic and diluted net loss per common share $ (1.90) $ (1.28) $ (3.90) $ (3.43) Shares used in computing net loss per common share 30,523 27,685 27,852 21,622 Memo: Share-based compensation included in net loss $ 4,100 $ - $ - $ - Consolidated Balance Sheet Data As of December 31, As of July 31, 2005 2004 2005 2004 (Unaudited)(Unaudited) Cash, cash equivalents, and marketable securities $212,456 $232,498 $195,404 $266,501 Total assets 262,711 281,221 248,122 319,575 Total stockholders’ equity 81,890 138,505 67,671 172,522 Contact: Alexion Pharmaceuticals, Inc. David Keiser President & COO 203-272-2596 Noonan Russo Matt Haines (Media) 212-845-4235 Rx Communications Rhonda Chiger (Investor) 917-322-2569
Alexion Pharmaceuticals, Inc.
CONTACT: David Keiser, President & COO, Alexion Pharmaceuticals, Inc.,+1-203-272-2596; Matt Haines (Media), Noonan Russo, +1-212-845-4235; RhondaChiger (Investor), Rx Communications, +1-917-322-2569
Web site: http://www.alexionpharm.com/
