CHESTERBROOK, Pa., Oct. 30, 2014 /PRNewswire/ -- Auxilium Pharmaceuticals, Inc. (NASDAQ: AUXL), a fully integrated specialty biopharmaceutical company, today announced financial results for the third quarter ending September 30, 2014. The Company highlighted important corporate, commercial, regulatory and clinical development updates from the quarter.
“We are very pleased with the continued momentum and strong performance of the core growth products in our portfolio this quarter, especially the XIAFLEX franchise, which more than doubled in revenues over the same period in 2013. Additionally, STENDRA traction continues as the product is now the first and only erectile dysfunction treatment approved to be taken approximately 15 minutes before sexual activity,” said Adrian Adams, Chief Executive Officer and President of Auxilium. “Given our recent announcement of the proposed acquisition of Auxilium by Endo International plc, we believe there is now an even greater opportunity to fully realize our current and future products’ potential and drive significant shareholder value.”
Auxilium has a total of twelve approved products, including seven promoted across men’s healthcare and orthopedics STENDRA®, XIAFLEX® for Peyronie’s disease (PD), XIAFLEX for Dupuytren’s contracture (DC), TESTOPEL®, edex®, the Testim® franchise and Osbon® ErecAid®. The Company’s ongoing R&D programs include cellulite, with positive results of its Phase 2a trial announced ahead of schedule in August 2014, and Frozen Shoulder Syndrome (FSS), with a Phase 2b trial ongoing and on track for anticipated data review in the first quarter of 2015.
Third Quarter 2014 Financial Results:
- Total revenues for the three-month period ended September 30, 2014 were $109.6 million, compared to $108.1 million for the third quarter of 2013. Compared to 2013, year-to-date net revenues increased two percent overall and 77 percent excluding the Testim franchise. Core product revenues for the third quarter included:
- XIAFLEX U.S. net revenues (for PD and DC combined) of $34.6 million, representing a 118 percent increase from the third quarter of 2013 we believe the initial launch momentum for XIAFLEX for PD is strong with 1,450 physicians REMS certified, 5,150 patients submitted to the Auxilium Advantage program for payer reimbursement for treatment and an estimated 9,000 product vials shipped to physicians through the end of September. XIAFLEX for DC also continued to grow steadily, with approximately 5,863 vials sold in the third quarter, a 16 percent increase over the same period in 2013. Additionally, XIAFLEX for DC has approximately a 32 percent share of all DC procedures as of July 2014.
- STENDRA U.S. net revenues of $9.3 million initial product launch momentum is positive with STENDRA gaining an 8.0 percent share of all new PDE5 prescriptions and a 4.2 percent share of total PDE5 prescriptions amongst Auxilium’s target physician population, those doctors responsible for approximately 45 percent of all PDE5 prescriptions. In the third quarter, Auxilium also increased the number of physicians prescribing STENDRA by 45 percent over the second quarter of 2014 to 16,430 and the productivity per target prescriber, with 12.3 prescriptions written to date per physician
- TESTOPEL U.S. net revenues of $20.2 million with 75 percent of top plans’ price books now reset, TESTOPEL purchasing continues to normalize.
- Testim franchise U.S. net revenues of $26.2 million $15.3 million for the branded Testim product and $10.9 million for the Authorized Generic to Testim.
- See Table 1 attached for further details on revenues
- Gross margin on net revenues was approximately 77 percent (non-GAAP basis) for the third quarter 2014 compared to 74 percent for the same period in 2013 the increase is primarily due to manufacturing initiatives undertaken as well as a shift in product sales from products with a lower margin, including the Testim brand, to higher margin products, including XIAFLEX and STENDRA. R&D spending was $9.5 million (non-GAAP) compared to $11.1 million for the third quarter of 2013 this decrease resulted principally from lower spending on the XIAFLEX MULTICORD Phase 3 clinical trial for DC, offset partially by increased spending on the XIAFLEX Phase 2 trials for cellulite and FSS.
- Selling, general and administrative costs were $55.4 million (non-GAAP) compared to $55.1 million for the third quarter of 2013.
- Net income for the third quarter 2014 (non-GAAP) was $13.6 million, or $0.27 per basic and fully diluted share, compared to net income of $8.8 million or $0.18 per share (basic and fully diluted) for the third quarter of 2013 this was primarily due to a decrease in operating expenses. As of September 30, 2014, Auxilium had $77.9 million in cash, cash equivalents and short-term investments, compared to $44.7 million at June 30, 2014, and outstanding debt of $302.4 million ($350.0 million at par value) in 2018 convertible senior notes and $295.3 million ($305.1 million par value) in a secured term loan.
Recent Corporate Milestones:
- Announcement of the proposed acquisition of Auxilium by Endo International plc (“Endo”) for approximately $2.6 billion in cash and stock Endo has stated that it expects the proposed transaction to be immediately accretive and that it is designed to create a leading specialty healthcare company with an expanded platform for future growth. The companies entered into a definitive agreement under which Endo, subject to certain conditions, will acquire all outstanding Auxilium common shares for consideration of $33.25 per Auxilium share in all cash, a cash-and-stock mix or all stock, in accordance with the terms of the agreement. Endo has stated that it expects to generate up to $175 million of annual run rate operating expense reductions, inclusive of the $75 million reductions previously announced by Auxilium in September 2014
- FDA approval of the STENDRA supplemental New Drug Application (sNDA), making STENDRA the first and only oral erectile dysfunction treatment approved to be taken approximately 15 minutes before sexual activity.
- FDA approval of the XIAFLEX for DC supplemental Biologics Application (sBLA), expanding the use of XIAFLEX to the treatment of up to two DC joints in the same hand during a single treatment visit. It is estimated that 35-40 percent of surgical procedures to treat DC have been performed on multiple joints.
- Announcement of positive data from the randomized, double-blind Phase 2a clinical trial of collagenase clostridium histolyticum (or CCH) in patients with cellulite. The mid and high-level doses of CCH demonstrated statistically significant improvement in cellulite across all endpoints and nearly 70 percent of mid and high dose patients were satisfied or very satisfied with treatment results.
- The first data presentation of positive safety and efficacy data from the XIAFLEX MULTICORD (MULtiple Treatment Investigation of Collagenase Optimizing the Resolution of Dupuytren’s) Phase 3b clinical trial at the 69th Annual Meeting of the American Society for Surgery of the Hand (ASSH). This study evaluated CCH for the treatment of two Dupuytren’s cords concurrently in the same hand as well as expanded flexibility with timing of the finger extension procedure.
Use of Non-GAAP Financial Measures
The foregoing descriptions of our Third Quarter financial details contain non-GAAP financial measures. Non-GAAP financial measures should not be relied upon as an alternative to GAAP measures. A description of the non-GAAP calculations and reconciliation to the closest comparable GAAP measure, as well as the Company’s rationale for the utility to investors of the non-GAAP measures it has elected to report, is provided in the accompanying Table 2.
No Offer or Solicitation
This communication is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the acquisition or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
Additional Information
This communication does not constitute an offer to buy or solicitation of an offer to sell any securities. This communication relates in part to a proposed business combination transaction between Endo and Auxilium. In furtherance of such proposed transaction, Endo and Auxilium intend to file one or more registration statements, prospectuses, proxy statements or other documents with the U.S. Securities and Exchange Commission (“SEC”). This communication is not a substitute for any registration statement, prospectus, proxy statement or other document Endo and/or Auxilium file with the SEC in connection with such proposed transaction. INVESTORS AND SECURITY HOLDERS OF AUXILIUM ARE URGED TO READ THE REGISTRATION STATEMENT, PROSPECTUS, PROXY STATEMENT AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT SUCH PROPOSED TRANSACTION. The definitive proxy statement (when available) will be mailed to stockholders of Auxilium. Investors and security holders will be able to obtain free copies of these documents (when available) and other documents filed with the SEC by Endo through the web site maintained by the SEC at http://www.sec.gov.
Certain Information Regarding Participants
Endo and Auxilium and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from Auxilium stockholders with respect to the proposed transaction under the rules of the SEC. Security holders may obtain information regarding the names and interests of Endo’s directors and executive officers in Endo Health Solutions Inc.'s (“EHSI”) Annual Report on Form 10-K for the year ended December 31, 2013, which was filed with the SEC on March 3, 2014, and Endo’s proxy statement for the 2014 Annual General Meeting of Shareholders, which was filed with the SEC on April 29, 2014. Security holders may obtain information regarding the names and interests of Auxilium’s directors and executive officers in Auxilium’s Annual Report on Form 10-K for the year ended December 31, 2013, which was filed with the SEC on February 28, 2014, Auxilium’s proxy statement for the 2014 Annual Meeting of Stockholders, which was filed with the SEC on April 10, 2014, and the materials that will be filed with the SEC in connection with such proposed transaction. These documents can be obtained free of charge from the sources indicated above. Additional information regarding the interests of these participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will also be included in the proxy statement and other relevant materials to be filed with the SEC when they become available.
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