Pfenex Inc. Reports Third Quarter 2014 Results And Provides Business Update

SAN DIEGO, Nov. 13, 2014 /PRNewswire/ -- Pfenex Inc. (NYSE MKT: PFNX), a clinical-stage biotechnology company engaged in the development of biosimilar therapeutics including high value and difficult to manufacture proteins, today reported financial results for the third quarter ended September 30, 2014 and provided a business update.

Pfenex logo.

"We are pleased to have completed the enrollment for our Phase 1b/2a trial for our lead product candidate, PF582, a biosimilar to Lucentis.  We expect to have interim data from the primary endpoint of safety and tolerability for the Phase 1b/2a trial in the first quarter of 2015 and initiate the Phase 3 trial in mid-2015,"  stated Bertrand C. Liang, President and Chief Executive Officer of Pfenex.

Business Updates

  • The Phase 1b/2a trial for PF582, our biosimilar candidate to Lucentis, completed patient enrollment and Pfenex expects interim safety and tolerability data in the first quarter of 2015.  The Phase 3 trial is expected to initiate in mid-2015 with data expected in 2017.
  • Pfenex expects to initiate a Phase 1 trial of PF530, a biosimilar candidate to Betaseron, in early 2015.
  • Pfenex expects to file IND's for both its recombinant anthrax vaccine and recombinant malaria vaccine programs by the end of 2014.
  • On November 3, 2014, Pfenex appointed Dr. Hubert Chen as its Chief Medical Officer.  Dr. Chen is a veteran in clinical development, having been involved in product development for well over a decade, most recently leading all clinical development activities at Aileron Therapeutics, as well as having extensive clinical development experience at Regulus, Amylin and Amgen.
  • Pfenex expanded its leadership team through the addition of a new board member, Robin Campbell, Ph.D.  Dr. Campbell has over 25 years of experience in pharmaceutical and biotechnology sales, marketing, product development and general management in United States and international markets.
  • Pfenex announced the initiation of a multi-product vaccine research program with PATH, a global health nonprofit organization, as part of an initiative to enhance production of vaccines.

Financial Highlights for the Third Quarter

  • Total revenue for the third quarter of 2014 was $2.8 million compared to $2.0 million in the third quarter of 2013. The increase in revenue was due to an increase in activity related to our Px563L and Px533 product candidate development under our government contracts, offset in part by a decrease in reagent product sales.
  • Cost of revenue was $1.6 million in the third quarter of 2014 compared to $1.2 million in the third quarter of 2013. The increase in cost of revenue was due primarily to the increased development costs for our proprietary novel vaccine programs which are funded by various government agencies.
  • Research and development expenses were $1.3 million for the third quarter of 2014 compared to $2.0 million in the third quarter of 2013. The decrease in research and development expenses was due in part to an increase in development activity by collaboration partner, Strides Arcolab, and resulting decrease in activity by Pfenex, of PF530, as well as manufacturing activity and purchase of comparator material for our product candidate, PF582, Phase 1b/2a trial in the comparative period. We expect research and development expense to increase as we advance our lead candidates and pipeline products.
  • Selling, general and administrative expenses were $2.4 million in the third quarter of 2014 compared to $1.6 million in the third quarter of 2013. The increase in selling, general and administrative expenses was due to an increase in activities associated with becoming and operating as a publicly-traded company. We expect selling, general and administrative expenses to increase for activities associated with operating as a public company.
  • Cash, cash equivalents and short-term investments, excluding restricted cash, was $51.5 million as of September 30, 2014, compared to $5.2 million as of December 31, 2013. As of September 30, 2014 we had $3.8 million drawn under our $3.9 million revolving credit facility and $3.9 million of restricted cash as collateral for the credit facility.

Cautionary Note Regarding Forward-Looking Statement

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, statements regarding Pfenex's expectations regarding the timing of the release of additional data for its product candidates, the timing of the initiation of additional studies for its product candidates, the timing of filing IND's for its product candidates; and future increases in expenses.  Pfenex's expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Actual results may differ materially from those indicated by these forward-looking statements as a result of the uncertainties inherent in the clinical drug development process, including, without limitation, Pfenex's ability to successfully demonstrate the efficacy and safety of its product candidates, the pre-clinical and clinical results for its product candidates, which may not support further development of product candidates, challenges related to patient enrollment in clinical trials, difficulties in achieving and demonstrating biosimilarity in formulations, Pfenex's ability to manage operating expenses, Pfenex's ability to obtain additional funding to support its business activities and establish and maintain strategic business alliances and new business initiatives, Pfenex's dependence on third parties for development, manufacture, marketing, sales and distribution of products, and unexpected expenditures, as well as those risks more fully discussed in the section entitled "Risk Factors" in Pfenex's Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 and its subsequent periodic reports, including its Form 10-Q for the quarter ended September 30, 2014 to be filed with the Securities and Exchange Commission.

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