VICTORIA, BC, Feb. 7 /PRNewswire-FirstCall/ - Aspreva Pharmaceuticals Corporation , announced financial results for the fourth quarter and full-year ended December 31, 2006. Fourth quarter revenues were $52.5 million with net income and earnings per fully diluted share of $26.0 million and $0.73, respectively. Full year revenues were $214.8 million with net income and earnings per fully diluted share of $124.2 million and $3.49, respectively. Unless otherwise specified, all amounts are in U.S. dollars and are reported under U.S. GAAP.
2006 Corporate Highlights - Achieved total revenues for 2006 of $214.8 million, consistent with guidance. - Delivered strong, consistent net income and earnings per share; our seventh consecutive quarter of profitability. - Continued to strengthen our balance sheet, ending the year with $259.9 million in cash and marketable securities. - Strengthened our talent pool to support our current and potential clinical programs. Consequently, our global employee base grew to 133 from 106, year over year. - Completed our global clinical trial evaluating the use of CellCept(R) for the treatment of myasthenia gravis (MG). Based on the results of this trial, Aspreva does not intend to continue any further development of CellCept for the treatment of MG. - Continued progress in Aspreva's two phase III clinical programs evaluating the use of CellCept for the autoimmune indications lupus nephritis and pemphigus vulgaris, including successful completion of patient enrollment in our lupus nephritis trial. - Received orphan drug designation from the U.S. Food and Drug Administration (FDA) for CellCept in the treatment of pemphigus vulgaris.
"In 2006 we continued to establish Aspreva as a global pharmaceutical company with the depth of management, diversity of regulatory, clinical and commercial skills necessary to support our current and future pipeline. We successfully delivered the key clinical milestones in our three initial indications for CellCept, albeit with one disappointment with respect to the results and discontinuation of CellCept's development in MG. In addition, we achieved significant financial performance which was evidenced by our strong year-end cash position of $260 million," said Richard M. Glickman, Chairman and Chief Executive Officer of Aspreva Pharmaceuticals.
Mr. Glickman concluded, "In 2007, we remain focused on the successful execution of our clinical programs and business development. We are confident that our disciplined approach to reviewing future opportunities and deploying our capital is prudent as we strive to accomplish our objective of creating long term shareholder value. We believe that with our commitment, financial resources and ability to execute, Aspreva is well positioned to deliver on this objective."
Fourth Quarter 2006 Results
Total revenue for the fourth quarter 2006 was $52.5 million compared to $45.0 million in the fourth quarter 2005 and represents an increase of $4.5 million over the third quarter 2006. Fourth quarter 2006 net income was $26.0 million, or $0.73 per fully diluted share versus net income of $24.3 million, or $0.68 per fully diluted share, in the fourth quarter 2005.
Research and Development (R&D) expenses in the fourth quarter of 2006 were $13.6 million, compared to $11.0 million in the fourth quarter 2005 and represent an increase of $1.2 million over the third quarter 2006. This increase reflects peak activity in our clinical programs as they expanded and matured.
Marketing, general and administrative (MG&A) expenses in the fourth quarter of 2006 were $12.0 million, compared to $10.2 million in the fourth quarter 2005 and represent an increase of $2.0 million over the third quarter 2006. This increase reflects investment in our global infrastructure and pre-commercialization activities.
Full Year 2006 Results
Revenue
Revenue for the full year ended December 31, 2006 was $214.8 million versus $76.5 million for the full year ended December 31, 2005.
Aspreva currently derives revenue solely from royalty payments under the existing collaboration agreement with Roche for the development of CellCept in autoimmune indications. Under the terms of this agreement, Aspreva became entitled to royalty revenues effective April 1, 2005.
Research and Development (R&D) Expenses
R&D expenses for the full year ended December 31, 2006 were $48.0 million, versus $30.2 million for the full year ended December 31, 2005. This increase of $17.8 million year on year reflects increased expenditures on the three global clinical trial programs and the additional employees added to our global clinical team. Also included is the cost of business development efforts, including additional personnel.
Marketing, General and Administrative (MG&A) Expenses
MG&A expenses for the full-year 2006 were $38.8 million compared to $29.2 million in 2005. The increase of $9.6 million year on year included an increase in personnel to support the continued build out of the global business, and preparation for the potential commercialization of CellCept in lupus nephritis and pemphigus vulgaris.
Net Income
Net income for the full year 2006 was $124.2 million or $3.49 per fully diluted share, versus net income of $19.7 million or $0.62 per fully diluted share, for the year ended December 31, 2005. The net income for 2006 includes the effect of accounting for stock based compensation charges of $7.7 million for the full year 2006. Stock-based compensation in 2005 was $6.6 million.
Cash and Marketable Securities
Cash and marketable securities at December 31, 2006 were $259.9 million compared to $112.0 million at December 31, 2005.
2007 Revenue Guidance
Aspreva anticipates royalty revenues for the full year 2007 to be in excess of $245 million. Revenue guidance is based solely on the current collaboration with Roche for the development of CellCept in autoimmune indications.
Conference Call
Aspreva will host a conference call to discuss results for the fourth quarter 2006 and full year ending December 31, 2006 on Wednesday, February 7, 2007 at 5:00 p.m. ET (2:00 p.m. PT).
Dial-in information: North America (toll free): 1-800-299-7635 International: 1-617-786-2901 Enter passcode: 99116938
The call will be available for replay until Wednesday, February 15th, by calling 1-888-286-8010 (North America) or 1-617-801-6888 (International) and entering the pass code 50655109.
A live webcast will also be available to all interested parties on Aspreva's website: www.aspreva.com. Please click on the "Webcasts and Events" link under the Investors section of Aspreva's website. A replay of the webcast will be available until the Company's first quarter 2007 conference call.
About The CellCept Agreement
In July 2003, Aspreva acquired exclusive worldwide rights (excluding Japan) through 2017 to CellCept from Roche for the treatment of autoimmune diseases. CellCept is approved for marketing in the United States, European Union, Canada and other countries for the prevention of organ transplant rejection. Under the agreement, Aspreva is responsible for clinical development of CellCept for autoimmune diseases and will be responsible for sales and marketing upon receipt of regulatory approvals.
Aspreva currently has two phase III clinical programs underway with CellCept, including lupus nephritis (the induction phase of this trial expected to be completed in 2007) and pemphigus vulgaris (expected completion in 2008).
About Aspreva Pharmaceuticals
Aspreva is an emerging pharmaceutical company focused on identifying, developing and, upon regulatory approval, commercializing new indications for approved drugs and late stage drug candidates for patients living with less common diseases. Aspreva is listed on the NASDAQ Global Select Market under the trading symbol "ASPV" and on the Toronto Stock Exchange under the trading symbol "ASV".
Summary of Royalty Revenue Earned IN 2005 AND 2006 UNDER AGREEMENT WITH ROCHE Quarter ended Year ended ------------------------------------- ------------------ (in thousands of U.S. dollars) December September June March (unaudited) 31, 2006 30, 2006 30, 2006 31, 2006 2006 2005 ------------------------------------- ------------------ Initial quarterly payment less collar $ 50,000 $ 47,100 $ 48,700 $ 46,500 $192,300 $ 70,500 Reconcili- ation amount 2,500 800 3,000 16,200 22,500 6,000 ------------------------------------- ------------------ Total royalty revenue $ 52,500 $ 47,900 $ 51,700 $ 62,700 $214,800 $ 76,500 ------------------------------------- ------------------ ------------------------------------- ------------------ ASPREVA PHARMACEUTICALS CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands of U.S. dollars) (unaudited) December 31, December 31, 2006 2005 ----------- ------------ ASSETS Cash and marketable securities $ 259,895 $ 112,039 Accounts receivable 57,426 48,246 Other current assets 3,565 7,152 Property and equipment, net 4,736 2,687 Other long term assets 1,435 2,889 ----------- ------------ $ 327,057 $ 173,013 ----------- ------------ ----------- ------------ LIABILITIES AND SHAREHOLDERS' EQUITY Unearned royalty advance $ 6,559 $ 6,079 Other current liabilities 37,548 17,989 Long term liabilities 1,312 899 Shareholders' equity 281,638 148,046 ----------- ------------ $ 327,057 $ 173,013 ----------- ------------ ----------- ------------ ASPREVA PHARMACEUTICALS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands of U.S. dollars, except per share amounts) (unaudited) Three Months Ended Year Ended December 31, December 31, 2006 2005 2006 2005 -------------------------- -------------------------- Royalty revenue $ 52,468 $ 45,030 $ 214,784 $ 76,480 Expenses Research and development 13,562 10,990 47,951 30,205 Marketing, general and administrative 11,960 10,197 38,793 29,233 ----------- ------------ ----------- ------------ 25,522 21,187 86,744 59,438 ----------- ------------ ----------- ------------ Other income 3,135 938 10,784 3,131 ----------- ------------ ----------- ------------ Income before income taxes 30,081 24,781 138,824 20,173 Income tax expense 4,034 506 14,668 506 ----------- ------------ ----------- ------------ Net income $ 26,047 $ 24,275 $ 124,156 $ 19,667 ----------- ------------ ----------- ------------ ----------- ------------ ----------- ------------ Earnings per common share Basic $ 0.74 $ 0.71 $ 3.57 $ 0.65 Diluted 0.73 0.68 3.49 0.62 Weighted average number of shares outstanding: Basic 35,071,983 34,149,904 34,756,800 30,444,176 Diluted 35,661,853 35,576,870 35,606,933 31,892,705 Included in net income for the period are the following charges for stock-based compensation: $ 1,694 $ 1,505 $ 7,738 $ 6,617 ASPREVA PHARMACEUTICALS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands of U.S. dollars) (unaudited) Three Months Ended Year Ended December 31, December 31, 2006 2005 2006 2005 ------------------------ ------------------------- Net Cash Flows from (used in) Operating Activities Net income for the period $ 26,047 $ 24,275 $ 124,156 $ 19,667 Add non-cash items: Depreciation and amorti- zation 237 123 701 497 Deferred taxes 1,144 - 3,173 - Stock-based compensation 1,694 1,505 7,738 6,617 Net change in non-cash working capital items related to operations 3,248 (18,366) 9,867 (32,666) ----------- ------------ ----------- ------------ 32,370 7,537 145,635 (5,885) ----------- ------------ ----------- ------------ Net Cash Flows used in Investing Activities Net purchases of marketable securities (11,558) (252) (112,074) (64,358) Purchase of property and equipment (1,233) (45) (2,878) (895) ----------- ------------ ----------- ------------ (12,791) (297) (114,952) (65,253) ----------- ------------ ----------- ------------ Net Cash Flows from (used in) Financing Activities Issuance of shares, net of issue costs and tax 1,047 (1,862) 4,216 82,875 Payments on capital lease obligations (113) (170) (441) (484) ----------- ------------ ----------- ------------ 934 (2,032) 3,775 82,391 ----------- ------------ ----------- ------------ Effect of exchange rate changes on cash - (4) - (1) ----------- ------------ ----------- ------------ Net increase in cash 20,513 5,204 34,458 11,252 Cash, beginning of the period 28,704 9,555 14,759 3,507 ----------- ------------ ----------- ------------ Cash, end of the period $ 49,217 $ 14,759 $ 49,217 $ 14,759 ----------- ------------ ----------- ------------ ----------- ------------ ----------- ------------
The financial results in this news release are unaudited, and are not a complete disclosure of our quarterly or annual financial results.
This news release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of applicable securities laws in Canada (collectively, "forward-looking statements"). The words "anticipates", "believes", "budgets", "could", "estimates", "expects", "forecasts", "intends", "may", "might", "plans", "projects", "schedule", "should", "will", "would" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements in this news release include, but are not limited to, statements about: our strategy, future operations, clinical trials, prospects and plans of management; our expectations regarding future revenues; the effects of CellCept on patients; our expectations with respect to our existing collaboration agreement with Roche for the development of CellCept in autoimmune indications; and our two phase III clinical programs underway with CellCept: lupus nephritis and pemphigus vulgaris.
With respect to the forward-looking statements contained in this news release, we have made numerous assumptions regarding, among other things: our ability to accurately forecast future revenues; our ability to predict the effects of CellCept on patients; our ability to continue our two phase III clinical programs underway with CellCept: lupus nephritis and pemphigus vulgaris; our ability to protect our intellectual property rights and to not infringe on the intellectual property rights of others; our ability to comply with applicable governmental regulations and standards; and our ability to succeed at establishing a successful commercialization program for any of our potential products. Readers are cautioned that the plans, intentions or expectations disclosed in any forward-looking statements and underlying assumptions may not be achieved and that they should not place undue reliance on any forward-looking statement. Actual results or events could differ materially from the plans, intentions, expectations, and assumptions expressed or implied in any forward-looking statements as a result of numerous risks, uncertainties and other factors, including those relating to: difficulties or delays in the progress, timing and results of clinical trials and studies; difficulties or delays in obtaining regulatory approvals; the FDA may determine that the design and planned analysis of our clinical trials do not adequately address the trial objectives in support of our regulatory submission; future sales of CellCept may be less than expected; our future operating results are uncertain and likely to fluctuate; we may not be able to develop and obtain regulatory approval for CellCept in the treatment of autoimmune indications and any future products in our targeted indications; we may not be able to establish marketing and sales capabilities and the costs of launching CellCept in the treatment of autoimmune indications and any future products for our targeting indications may be greater than anticipated; the risk that we may not sustain our profitability; our ability to attract and retain collaborations relating to the development and commercialization of new indications; competition from other pharmaceutical or biotechnology companies; our ability to raise additional financing required to fund further research and development, clinical studies, and obtain regulatory approvals, on commercially acceptable terms or at all; economic and capital market conditions; our ability to obtain and protect patents and other intellectual property rights; our ability to operate without infringing the intellectual property rights of others; our ability to comply with applicable governmental regulations and standards; currency exchange rates; and our ability to successfully attract and retain skilled and experienced personnel.
For a more thorough discussion of the risks associated with Aspreva's business, see the "Risk Factors" section in Aspreva's Quarterly Report on Form 10Q for the quarter ended September 30, 2006, filed with the U.S. Securities and Exchange Commission at www.sec.gov and with securities regulatory authorities in Canada at www.sedar.com. Although we have attempted to identify important risks, uncertainties and other factors that could cause actual results or events to differ materially from those expressed or implied in the forward-looking statements, there may be other factors that cause actual results or events to differ from those expressed or implied in the forward-looking statements. All forward-looking statements are qualified in their entirety by this cautionary statement and Aspreva undertakes no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise after the date hereof.
CONTACT: Sage Baker, VP, Investor Relations & Corporate Communications, Aspreva Pharmaceuticals, (250) 744-2488 ext. 84270, sbaker@aspreva.com
Aspreva PharmaceuticalsCONTACT: Sage Baker, VP, Investor Relations & Corporate Communications,Aspreva Pharmaceuticals, (250) 744-2488 ext. 84270, sbaker@aspreva.com
