WILMINGTON, MA--(Marketwire - May 12, 2009) - DUSA Pharmaceuticals, Inc.® (NASDAQ: DUSA), a dermatology company that is developing and marketing Levulan® Photodynamic Therapy (PDT) and other products targeting patients with common skin conditions, reported today its corporate highlights and financial results for the first quarter ended March 31, 2009.
Highlights for the first quarter include:
-- Domestic PDT revenues for the first quarter of 2009 improved by $1.1 million or 21% as compared to the first quarter of 2008.
-- Domestic Kerastick® revenues for the quarter increased by $0.9 million or 19% year over year.
-- There were 81 BLU-U® units sold during the first quarter of 2009, representing a 45% increase over the first quarter of 2008.
Management Comments:
“While total revenues were down $0.8 million versus the prior year quarter, due primarily to the loss of Nicomide® revenues, our domestic PDT business continues to show strong growth,” stated Robert Doman, President and CEO. “Domestic PDT revenues for the quarter improved to $6.3 million, representing a 21% increase year over year.”
“We are pleased with the success we have experienced in our BLU-U® sales volumes over the last two consecutive quarters. We believe that the 45% year over year volume increase realized in the first quarter is indicative of the continued acceptance of our therapy by the medical dermatology community,” continued Doman.
“International Kerastick® revenues were down $0.2 million versus the prior year quarter, due primarily to initial launch quantities sold in Korea during the first quarter of 2008. However, we are encouraged by the 13% sequential quarter over quarter volume growth in the international markets.
“In the coming months, we expect continued growth of our core PDT business driven in part by the BLU-U® units placed over the last few quarters. We will also be working to expand the therapeutic uses of our PDT products through both the expansion of our BLU-U® claims and the advancement of our solid organ transplant recipients (SOTRs) clinical trial,” concluded Doman.
First Quarter 2009 Financial Results:
Total product revenues were $7.1 million in the first quarter of 2009, down 10% from $7.9 million in the first quarter of 2008. PDT revenues totaled $6.7 million, up $0.9 million or 15% from $5.8 million for the comparable 2008 period. The increase in PDT revenues was attributable to a 13% increase in Kerastick® revenues and a 35% increase in BLU-U® revenues. The Kerastick® revenue increase was driven by an 8% increase in our domestic Kerastick® volume and a 14% increase in our average selling price. Overall Kerastick® sales volumes were relatively flat year over year, there were 51,947 units sold in the first quarter of 2009 and 52,110 units sold in the first quarter of 2008. Domestic Kerastick® sales volumes increased by 3,366 units or 8% and were fully offset by a 3,529 unit decrease in our international sales volumes caused mainly by initial stocking orders placed in Korea during the first quarter of 2008. The BLU-U® revenue increase was driven by a 45% increase in sales volume. There were 81 units sold during the quarter, representing a 25 unit increase over the prior year quarterly total of 56 units. Non-PDT revenues totaled $0.4 million versus $2.1 million for the comparable 2008 period. Non-PDT revenues were adversely impacted by the absence of Nicomide® sales during the first quarter of 2009. In response to discussions with the Food and Drug Administration (FDA) regarding our marketing of certain products considered by the FDA to be marketed unapproved drugs, the Company stopped shipping Nicomide® into the wholesale channel in June of 2008.
DUSA’s net loss on a GAAP basis for the first quarter of 2009 was ($1.6) million or ($0.07) per common share, compared to a net loss of ($1.3) million or ($0.05) per common share in the first quarter of 2008. The increase in our net loss was primarily the result of the year over year shortfall in our Non-PDT revenues which was partially offset by incremental PDT revenues, lower operating costs due to the absence of spending on our Phase IIb acne clinical trial which concluded in 2008, and a Prescription Drug User Fee Act (PDUFA) charge accrued in the prior year period.
DUSA’s non-GAAP net loss for the first quarter of 2009 was ($1.3) million or ($0.05) per common share, compared to a net loss of ($0.6) million or ($0.03) per common share in the first quarter of 2008. Please refer to the “Use of Non-GAAP Financial Measures” section and the accompanying financial table included at the end of this release for a reconciliation of GAAP results to non-GAAP results for the three month periods ending March 31, 2008 and 2009, respectively.
As of March 31, 2009, total cash, cash equivalents, and U.S. government securities were $17.9 million, compared to $18.9 million at December 31, 2008, a reduction of $1.0 million during the quarter.
Other Updates:
Clinical Development
-- On May 11, 2009, the Company announced the initiation of its Phase II clinical trial that will examine the safety and efficacy of broad area PDT for the treatment of actinic keratoses and the reduction of new non-melanoma skin cancer (NMSC) in high risk chronically immunosuppressed SOTRs. The 36 patient multi-center pilot study will examine SOTRs with a history of multiple annual squamous cell carcinomas to determine the efficacy of multiple courses of Levulan® plus BLU-U® treatments over a one year timeframe. The Company is seeking orphan drug designation (ODD) with respect to the prevention of cancer occurrence in these patients. An ODD application has been filed with the FDA and the Company is awaiting the agency’s decision.
Nicomide®
-- On April 27, 2009, the Company announced that it had amended its existing non-exclusive license agreement with River’s Edge, granting them an exclusive license to the patent that covers Nicomide® (U.S. Patent No. 6,979,468) and associated know-how, as well as a license to use the trademark associated with the licensed products. Under the amendment to the license, DUSA is required to transfer all of its rights, title and interest in and to DUSA’s patent, know-how and trademark relating to the licensed products (but not the copyright registration on the product labeling) to River’s Edge upon DUSA’s receipt of $5.0 million.
Revenues Table, Condensed Consolidated Balance Sheets, Condensed Consolidated Statement of Operations and GAAP to Non-GAAP reconciliation follow:
Revenues for the three-month and twelve-month periods were comprised of the following:
3-months ended March 31, ------------------------- 2009 2008 (Unaudited) (Unaudited) ------------ ------------ PDT Drug & Device Product Revenues Kerastick(R) Product Revenues: United States $ 5,685,000 $ 4,774,000 Canada 135,000 159,000 Korea 170,000 365,000 Rest of World 87,000 56,000 ------------ ------------ Subtotal Kerastick(R) Product Revenues 6,077,000 5,354,000 BLU-U(R) Product Revenues: United States 642,000 476,000 Canada - - ------------ ------------ Subtotal BLU-U(R) Product Revenues 642,000 476,000 ------------ ------------ Total PDT Drug & Device Product Revenues 6,719,000 5,830,000 ------------ ------------ Total Non-PDT Drug Product Revenues 419,000 2,100,000 ------------ ------------ TOTAL PRODUCT REVENUES $ 7,138,000 $ 7,930,000 ============ ============ DUSA Pharmaceuticals, Inc. Condensed Consolidated Balance Sheets March 31, December 31, 2009 2008 (Unaudited) --------------- --------------- ASSETS CURRENT ASSETS Cash and cash equivalents $ 3,670,824 $ 3,880,673 Marketable securities 14,240,337 15,002,830 Accrued interest receivable 97,217 155,728 Accounts receivable, net 2,124,394 2,367,803 Inventory 2,536,328 2,812,825 Prepaid and other current assets 1,285,129 1,718,073 --------------- --------------- TOTAL CURRENT ASSETS 23,954,229 25,937,932 Restricted cash 173,976 173,844 Property, plant and equipment, net 1,835,397 1,937,978 Deferred charges and other assets 149,856 160,700 --------------- --------------- TOTAL ASSETS $ 26,113,458 $ 28,210,454 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES Accounts payable $ 386,471 $ 305,734 Accrued compensation 554,262 1,515,912 Other accrued expenses 3,604,287 3,226,571 Deferred revenue 944,775 611,602 --------------- --------------- TOTAL CURRENT LIABILITIES 5,489,795 5,659,819 Deferred revenues 3,586,780 4,157,305 Warrant liability 571,370 436,458 Other liabilities 230,661 244,673 --------------- --------------- TOTAL LIABILITIES 9,878,606 10,498,255 SHAREHOLDERS’ EQUITY Capital stock Authorized: 100,000,000 shares; 40,000,000 shares designated as common stock, no par, and 60,000,000 shares issuable in series or classes; and 40,000 junior Series A preferred shares. 24,089,452 common shares issued and outstanding at March 31, 2009 and December 31, 2008, no par, common 151,663,943 151,663,943 Additional paid-in capital 7,714,027 7,514,900 Accumulated deficit (143,457,856) (141,850,925) Accumulated other comprehensive loss 314,738 384,281 --------------- --------------- TOTAL SHAREHOLDERS’ EQUITY 16,234,852 17,712,199 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 26,113,458 $ 28,210,454 =============== =============== DUSA Pharmaceuticals, Inc. Consolidated Statement of Operations 3-months ended March 31, -------------------------- 2009 2008 (Unaudited) (Unaudited) ------------ ------------ Product revenues $ 7,138,269 $ 7,929,500 Cost of product revenues and royalties 1,938,226 1,700,317 ------------ ------------ Gross margin 5,200,043 6,229,183 Operating costs: Research and development 1,185,095 2,186,209 Marketing and sales 3,410,104 3,057,201 General and administrative 2,141,450 2,367,824 Net gain on settlement of litigation - (235,600) ------------ ------------ Total operating costs 6,736,649 7,375,634 ------------ ------------ Loss from operations (1,536,606) (1,146,451) ------------ ------------ Other income: Other Income, net 64,587 206,852 Loss on change in fair value of warrants (134,912) (344,542) ------------ ------------ Net loss $ (1,606,931) $ (1,284,141) ============ ============ Basic and diluted net loss per common share $ (0.07) $ (0.05) ============ ============ Weighted average number of common shares 24,089,452 24,078,418 ============ ============
Use of Non-GAAP Financial Measures
In addition to reporting financial results in accordance with GAAP, DUSA has provided in the table below non-GAAP financial measures adjusted to exclude stock-based compensation expense, and the non-cash loss on the change in fair value of warrants. The Company believes that this presentation is useful to help investors better understand DUSA’s financial performance, competitive position and prospects for the future. Management believes these non-GAAP financial measures assist in providing a more complete understanding of the Company’s underlying operational results and trends, and in allowing for a more comparable presentation of results. Management uses these measures along with their corresponding GAAP financial measures to help manage the Company’s business and to help evaluate DUSA’s performance compared to the marketplace. However, the presentation of non-GAAP financial measures is not meant to be considered in isolation or as superior to or as a substitute for financial information provided in accordance with GAAP. The non-GAAP financial measures used by the Company may be calculated differently from, and, therefore, may not be comparable to, similarly titled measures used by other companies.
Investors are encouraged to review the reconciliations of these non-GAAP financial measures to the comparable GAAP results, contained in the table below.
3-months ended March 31, -------------------------- 2009 2008 ------------ ------------ GAAP net loss $ (1,606,931) $ (1,284,141) Share-based compensation (a) 199,127 331,638 Loss on change in fair value of warrants (b) 134,912 344,542 ------------ ------------ Non-GAAP adjusted net loss $ (1,272,892) $ (607,961) ============ ============ Non-GAAP basic and diluted net loss per common share $ (0.05) $ (0.03) ============ ============ Weighted average number of common shares 24,089,452 24,078,418 ============ ============ (a) Share-based compensation expense resulting from the application of SFAS 123(R). (b) Non-cash loss on change in fair value of warrants.
Conference Call Details and Dial-in Information
In conjunction with this announcement, DUSA will host a conference call today:
Tuesday, May 12th - 8:30 a.m. Eastern If calling from the U.S. or Canada use the following toll-free number: 800.647.4314 Password - DUSA For international callers use 502.498.8422 Password - DUSA A recorded replay of the call will be available North American callers use 877.863.0350 International callers use 858.244.1268
The call will be accessible on our web site approximately four hours following the call at www.dusapharma.com.
About DUSA Pharmaceuticals
DUSA Pharmaceuticals, Inc. is an integrated dermatology pharmaceutical company focused primarily on the development and marketing of its Levulan® Photodynamic Therapy (PDT) technology platform, and complementary dermatology products. Levulan® PDT is currently approved for the treatment of Grade 1 and 2 actinic keratoses of the face and scalp. DUSA also markets other dermatology products, including ClindaReach®. DUSA is researching the use of Levulan® PDT to prevent AKs and squamous cell carcinomas in immunosuppressed solid organ transplant recipients and is supporting research related to oral leukoplakia in collaboration with National Institutes of Health (NIH). DUSA is based in Wilmington, Mass. Please visit our Web site at www.dusapharma.com.
Except for historical information, this news release contains certain forward-looking statements that represent our current expectations and beliefs concerning future events, and involve certain known and unknown risk and uncertainties. These forward-looking statements relate to beliefs relating to reasons for volume increases in BLU-U® sales volumes; anticipated growth of the PDT business; efforts to expand therapeutic uses of PDT products; intentions for the SOTR clinical study and management’s beliefs and calculations concerning non-GAAP financial measures. These forward-looking statements are further qualified by important factors that could cause actual results to differ materially from future results, performance or achievements expressed or implied by those in the forward-looking statements made in this release. These factors include, without limitation, ability to continue to penetrate the market, actions by health regulatory authorities, the uncertainties regarding clinical research process and the results thereof, reliance on third parties, sufficient funding, and other risks and uncertainties identified in DUSA’s Form 10-K for the year ended December 31, 2008.
