LYNBROOK, N.Y., Nov. 10, 2014 /PRNewswire/ -- BioSpecifics Technologies Corp. (NASDAQ: BSTC), a biopharmaceutical company developing first in class collagenase-based products marketed as XIAFLEX® (collagenase clostridium histolyticum or CCH) in the U.S. and XIAPEX® in the EU, today announced its financial results for the third quarter ended September 30, 2014 and provided a corporate update.
“The third quarter was marked by considerable progress across our commercial and clinical programs and we continue to focus on expanding the potential of XIAFLEX. We were very excited to announce last month the FDA-approved label expansion in Dupuytren’s contracture and that patients with up to two cords can now be treated in a single office visit. Since it is estimated that 35-40% of annual surgical procedures involve two cords, this approval combined with the increased flexibility in scheduling the finger extension procedure, will provide greater convenience for physicians and patients,” stated Thomas L. Wegman, President of BioSpecifics. “We are also expanding into new indications with our development pipeline. We initiated a Phase 2 clinical trial for CCH for the treatment of human lipomas this past quarter and expect to complete enrollment by the end of the first quarter of 2015. We also reported compelling preclinical data on the use of CCH in uterine fibroid tissue and remain excited about this widespread indication.”
“Auxilium continues to progress with their clinical studies as well and we are pleased to announce today that it will be exercising the opt-in right to license the canine lipoma indication. We are proud of the research we continue to produce demonstrating the vast potential for CCH and feel Auxilium’s decision to opt-in for canine lipoma is reflective of our team’s productivity and resourcefulness in pushing forward in new indications. Among Auxilium’s other CCH programs, we expect data from the Phase 2b trial in frozen shoulder syndrome in the first quarter of 2015, and for a Phase 2b trial in cellulite to begin in the second quarter of 2015.”
Third Quarter 2014 Financial Results
BioSpecifics reported net income of $1.4 million for the third quarter ended September 30, 2014, or $0.21 per basic share and $0.20 per share on a fully diluted basis, compared to net income of $1.2 million, or $0.19 per basic share and $0.17 per share on a fully diluted basis for the same period in 2013.
Total revenue for the third quarter ended September 30, 2014 was $4.0 million, compared to $3.1 million for the same period in 2013. This represents an increase of approximately 28% from the same period in 2013 and was mainly related to a regulatory milestone for the successful submission in July 2014 of an application to the Japanese Pharmaceutical and Medical Device Agency (PMDA) for the potential approval of XIAFLEX for the treatment of Dupuytren’s contracture in Japan by Asahi Kasei Pharma Corporation (Asahi Kasei) and increased net sales of XIAFLEX for the treatment of Dupuytren’s contracture and Peyronie’s disease during the 2014 period, as reported to BioSpecifics by Auxilium.
Royalty and mark-up on cost of goods sold for the third quarter ended September 30, 2014 were $3.5 million, compared to royalty, mark-up on cost of goods sold and earn-out revenues(which have since terminated) of $3.1 million for the same period in 2013. Royalty and mark-up on cost of goods sold revenues recognized under BioSpecifics’ agreement with Auxilium Pharmaceuticals, Inc. (Auxilium) for the third quarter ended September 30, 2014 were $3.5 million, compared to $2.1 million for the same period in 2013. This represents an increase of approximately 67%. This increase in royalties and mark-up on cost of goods sold was due to increased net sales of XIAFLEX for the treatment of Dupuytren’s contracture and Peyronie’s disease during the 2014 period, as reported by Auxilium for the second quarter of 2014 and recognized by BioSpecifics with a one quarter lag.
For the third quarter ended September 30, 2014, BioSpecifics recognized total licensing revenue and milestone revenue of $512,000 as compared to $55,000 for the same period in 2013. Certain licensing fees recognized are related to the cash payments received under BioSpecifics’ agreement with Auxilium in prior years and amortized over the expected development period. In the 2014 third-quarter period, licensing revenue related to the development of XIAFLEX was approximately $12,000 as compared to $26,000 in the 2013 third-quarter period. Milestone revenue recognized in the third quarter was $0.5 million as compared to $28,500 for the 2013 third-quarter period. The $0.5 million milestone revenue recognized in the 2014 third-quarter period related to the regulatory milestone for the successful submission of an application to the Japanese PMDA for the potential approval of XIAFLEX for the treatment of Dupuytren’s contracture in Japan by Asahi Kasei. The $28,500 milestone revenue recognized in the 2013 third-quarter period related to product approval for XIAFLEX for the treatment of Dupuytren’s contracture in adults with a palpable cord in Australia, granted to Actelion.
Research and development expenses for the third quarter ended September 30, 2014 were $240,000, compared to $347,000 in the same period in 2013. This decrease in research and development expenses was primarily due to the completion of the first human trial and the canine lipoma trials and preclinical costs associated with the uterine fibroid program.
General and administrative expenses for the third quarter ended September 30, 2014 were $1.7 million, compared to $1.1 million for the same period in 2013. The increase in general and administrative expenses was mainly due to increased legal fees and consulting fees, third party royalty fees and the amortization of the royalty buydown related to a third party agreement.
Income tax expenses for the third quarter ended September 30, 2014 were $0.7 million compared to $0.6 million for the same period in 2013.
As of September 30, 2014, BioSpecifics had cash and cash equivalents, and investments of $17.5 million, compared to $16.6 million on June 30, 2014.
Commercial Highlights and XIAFLEX Label Expansion:
CCH is marketed as XIAFLEX in the U.S. by Auxilium for Dupuytren’s contracture and Peyronie’s disease, and in the EU by Swedish Orphan Biovitrum AB (Sobi), as XIAPEX, for Dupuytren’s contracture. The following commercial highlights occurred in the third quarter or in October of 2014:
- The label expansion for XIAFLEX for Dupuytren’s contracture was approved on October 20, 2014. The U.S. Food and Drug Administration (FDA) approved on October 20, 2014 the supplemental Biologics License Application (sBLA) submitted by Auxilium for XIAFLEX for the treatment of up to two Dupuytren’s contracture cords in the same hand during a single treatment visit.
- Commercial growth in the U.S. continues for XIAFLEX for Dupuytren’s contracture and Peyronie’s disease, as reported by Auxilium on October 30, 2014.
- XIAFLEX U.S. net revenues for the third quarter of 2014 increased 118% over the third quarter of 2013 to $34.6 million.
- Auxilium reported the following strong U.S. launch momentum metrics for XIAFLEX for Peyronie’s disease through the end of September 2014:
- In total, 1,450 physicians have been REMS certified.
- 5,150 Peyronie’s disease patients have submitted to the Auxilium Advantage program for payer reimbursement for treatment.
- 9,000 product vials were estimated to have been shipped to physicians.
- XIAFLEX in Dupuytren’s contracture has shown continued stable commercial growth, with approximately 5,863 vials sold in the third quarter, a 16% increase over the same period in 2013. Market share of XIAFLEX across all Dupuytren’s contracture procedures is now approximately 32% as of July 2014.
Pipeline Highlights
CCH is currently in development for lipomas and uterine fibroids, managed by BioSpecifics, and for cellulite and frozen shoulder syndrome, managed by Auxilium. The following highlights occurred in the third quarter of 2014 or more recently:
- On November 5, 2014, Auxilium exercised its option to expand its rights to CCH to include the potential treatment of canine lipomas. In accordance with the exercise of their opt-in right, Auxilium will pay BioSpecifics $500,000 within ten business days of the date of exercise.
- On October 15, 2014, promising preclinical data from a collaboration with Duke Medicine were presented on the potential of CCH in uterine fibroids. The data were presented at the Mechanotransduction in the Reproductive Tract conference and demonstrate that CCH can reduce the rigidity of human uterine fibroid tissue and potentially shrink uterine fibroid tumors.
On August 21, 2014, positive, statistically significant results were reported from a randomized double-blind Phase 2a clinical trial of CCH for the treatment of cellulite.
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