BOCA RATON, Fla., July 26 /PRNewswire-FirstCall/ -- Nabi Biopharmaceuticals announced today that total revenues were $29.9 million for the second quarter of 2006, compared to total revenues of $25.9 million in the second quarter of 2005. The increase was driven by improved pricing and strong patient demand for PhosLo(R) (calcium acetate). Net loss reported for the quarter ended July 1, 2006 was $14.8 million or a loss of $0.24 per share, compared to a net loss of $20.9 million or a loss of $0.35 per share during the same period in 2005, which also included a tax benefit of $7.4 million. On a pre-tax basis, the loss in the second quarter of 2006 was $14.8 million, a 48% improvement from the $28.3 million loss in the second quarter of 2005. This improved performance was driven by increased margins from sales and a 23% reduction in operating expenses. Consistent with management expectations, cash equivalents and marketable securities were $70.2 million at the end of the second quarter of 2006. During the second quarter of 2006, cash used in operations was $11.5 million, a 48% improvement compared to the first quarter of 2006.
"We continued to make progress in achieving our important strategic objectives in the second quarter," said Thomas H. McLain, chairman, chief executive officer and president, Nabi Biopharmaceuticals. "We are delighted with the recent vote by the BPAC, recommending FDA approval of our BLA for Nabi-HB Intravenous. This is a major step toward approval of this product for its use in liver transplant patients in the U.S. In addition, we just reported results from a study that further demonstrates the superiority of PhosLo in controlling serum phosphorus levels in patients with end-stage renal disease, when compared to the leading competitive product. These announcements, coupled with new product and manufacturing alliances and the signing of a significant partnering agreement during the second quarter, provide momentum for the second half of 2006," stated Mr. McLain.
Earlier this year, Nabi Biopharmaceuticals established three strategic objectives -- optimizing value from operations, building incremental value through partnerships and alliances, and developing proof-of-concept evidence for our key pipeline programs. Listed below are a number of recent accomplishments directly aligned with these objectives.
Strategic Goal Review: Accomplishment Related Objective Strategic Significance Blood Products Advisory Optimizes value from Supports approval of Committee recommendation operations. indication for a key to Food and Drug marketed product that Administration for has been granted Orphan approval of Nabi-HB(TM) Drug Status. Intravenous [Hepatitis B Immune Globulin (Human) Intravenous] in the U.S. Initiation of Phase IIB Develops proof-of- Trial will identify proof-of-concept concept evidence for optimal formulation of clinical trial for key pipeline NicVAX and establish NicVAX(R) (Nicotine programs. proof-of-concept Conjugate Vaccine). efficacy for a vaccine approach to smoking cessation. Strategic partnership Builds value through Provides funding and with Kedrion S.p.A. for partnerships and resources for clinical development and for the alliances. development. Also commercialization of positions European Civacir(R) [Hepatitis C commercialization with Immune Globulin (Human)] established partner Europe. having significant market presence. Alliance with Fresenius Builds value through Strengthens transplant Biotech to in-license partnerships and franchise with a product ATG-Fresenius S for alliances. Develops having proven efficacy. development and proof-of-concept commercialization in the evidence for key U.S. and Canada. pipeline programs. Partnership with Sanofi Builds value through Increases manufacturing Pasteur for contract partnerships and facility utilization and manufacturing of anti- alliances and cash return on assets. rabies product. optimizes value of operations. Reported results from Optimizes value from Further demonstrates study on control of operations. superiority of PhosLo serum phosphorus at the versus leading European Renal competitive product. Association and European Dialysis Transplant Association Congress, Glasgow, Scotland. Milestone Update: Product/Product Upcoming Milestone(s) Expected Timing Candidate PhosLo European Approval H2 2006, pending inspection by EU regulators PhosLo Announce CARE-2 trial H2 2006 results PhosLo Announce EPICK study H2 2006 results PhosLo File for Chronic Kidney H2 2006 Disease (Stage 4) indication in U.S. and EU Nabi-HB Intravenous U.S. approval H2 2006 for liver transplant indication Civacir Initiate Phase II H2 2006 proof-of-concept trial NicVAX Execute Phase II Data mid-2007 proof-of-concept trial HEBIG(TM) [Hepatitis European Approval 2007 B Immune Globulin (Human)] Multi-Valent With partner, initiate 2007 StaphVAX(R) Phase III study (Staphylococcus aureus Polysaccharide Conjugate Vaccine) Multi-Valent With outside funding, 2007 Altastaph(R) initiate Phase II [Staphylococcus proof-of-concept study aureus Immune Globulin Intravenous (Human)] ATG-Fresenius S in Data from Phase III H2 2008 solid organ trial transplant patients Review of Operations: PhosLo Revenues
During the second quarter of 2006, PhosLo revenues were $9.6 million, compared with $3.2 million for the same period in 2005. During the month of May 2006, the number of PhosLo prescriptions reached an all-time record high. Sales for the second quarter reflected the benefit of price increases in the third quarter of 2005 and strong patient demand. Customer inventory levels were consistent with first quarter 2006 levels. In the second quarter of 2005, we elected to defer $5.2 million of PhosLo sales based on inventory levels at our wholesaler customers.
Nabi-HB Revenues
Sales of Nabi-HB were $7.2 million for the second quarter of 2006, compared to $10.9 million for the same period in 2005. During the second quarter of 2006, patient demand for Nabi-HB remained above prior year levels. However, Nabi-HB revenue decreased from prior year levels because of the negotiation of a new supply agreement with one of our significant customers. As a result, we shipped a minimal amount of Nabi-HB to that customer and estimated inventory levels at wholesalers decreased by approximately two months during the second quarter.
Other Biopharmaceutical Product Revenues
Second quarter 2006 revenues of the company's other biopharmaceuticals were $1.0 million, compared to second quarter 2005 revenues of $0.4 million.
Antibody Revenues
Sales of antibody products were $12.2 million in second quarter of 2006, compared to $11.4 million during the same period in 2005, reflecting increased specialty antibody sales, primarily anti-D and anti-rabies antibodies, which resulted in increased gross margins.
Operating Expenses
Research and development expense for the second quarter of 2006 was $10.7 million, a decrease of 42% as compared to the same period for 2005. During the second quarter of 2005, a large portion of our research and development expense was incurred for the development of StaphVAX. Research and development expense for the second quarter of 2006 primarily reflects activities related to the initiation of our NicVAX Phase II proof-of-concept clinical trial, ongoing expenses related to clinical development of ATG- Fresenius S and clinical trials to support PhosLo.
Selling, general and administrative expense decreased to $16.5 million in the second quarter 2006 from $17.2 million for the same period of 2005. Selling, general and administrative expense in 2005 reflected activities relating to the planned European launch of StaphVAX. Reduced spending in 2006 was partially offset by the costs of retention and equity based compensation programs and the costs for ongoing compliance efforts related to sales rebates.
Tax Expense
No tax benefit was recorded in the second quarter of 2006 and none is expected to be recorded for the full year as we continue to record a full valuation allowance against all of our deferred tax assets. During the second quarter of 2005, the company recorded a tax benefit of $7.4 million based on a tax planning strategy to utilize those assets at that time.
About Nabi Biopharmaceuticals
Nabi Biopharmaceuticals leverages its experience and knowledge in powering the immune system to develop and market products that fight serious medical conditions. The company has three products on the market today: PhosLo(R) (calcium acetate), Nabi-HB(R) [Hepatitis B Immune Globulin (Human)], and Aloprim(TM) (allopurinol sodium) for Injection. Nabi Biopharmaceuticals is focused on developing products that address unmet medical needs and offer commercial opportunities in our core business areas: Hepatitis and transplant, kidney disease (nephrology), Gram-positive bacterial infections and nicotine addiction. For a complete list of pipeline products, please go to: http://www.nabi.com/pipeline/index.php . The company is headquartered in Boca Raton, Florida. For additional information about Nabi Biopharmaceuticals, please visit our website: http://www.nabi.com .
Forward-Looking Statement
Statements in this press release about the company that are not strictly historical are forward-looking statements and include statements about our products in development, the market for such products, and regulatory approval of our product candidates. You can identify these forward-looking statements because they involve our expectations, beliefs, intentions, plans, projections, or other characterizations of future events or circumstances. These forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that may cause actual results to differ materially from those in the forward-looking statements as a result of any number of factors. These factors include, but are not limited to, risks relating to the company's ability to advance the development of products currently in the pipeline or in clinical trials; maintain the human and financial resources to commercialize current products and bring to market products in development; obtain regulatory approval for its products in the U.S., Europe or other markets; successfully develop, manufacture and market its products; successfully partner with other companies; realize future sales growth for its biopharmaceutical products; maintain sufficient intellectual property protection or positions; raise additional capital on acceptable terms; and re-pay its outstanding convertible senior notes when due. Many of these factors are more fully discussed, as are other factors, in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2005 and Quarterly Report on Form 10-Q for the Quarter ended April 1, 2006 filed with the Securities and Exchange Commission.
Nabi Biopharmaceuticals CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, amounts in thousands, except per share data) For the Three For the Six Months Months Ended Ended July 1, June 25, July 1, June 25, 2006 2005 2006 2005 Sales $29,935 $25,879 $57,483 $51,956 Costs and expenses: Costs of products sold, excluding amortization of intangible assets 15,188 15,368 30,441 30,231 Royalty expense 343 480 700 2,679 Gross Margin, excluding amortization of intangible assets 14,404 10,031 26,342 19,046 Selling, general and administrative expense 16,544 17,231 33,353 31,633 Research and development expense 10,686 18,577 21,613 33,832 Amortization of intangible assets 2,131 2,222 4,262 4,511 Other operating expense, principally freight 79 122 258 155 Operating loss (15,036) (28,121) (33,144) (51,085) Interest income 945 924 2,008 1,478 Interest expense (1,050) (891) (2,148) (1,029) Other income (expense), net 317 (215) 383 (184) Loss before benefit for income taxes (14,824) (28,303) (32,901) (50,820) Benefit for income taxes -- 7,373 -- 14,068 Net loss $(14,824) $(20,930) $(32,901) $(36,752) Basic and diluted loss per share $(0.24) $(0.35) $(0.54) $(0.62) Basic and diluted weighted average shares outstanding 60,977 59,695 60,653 59,612 SUPPLEMENTAL INFORMATION: Sales by Operating Segment Biopharmaceutical Products $17,721 $14,500 $33,617 $31,994 Antibody Products: Specialty antibodies 7,791 6,240 13,669 9,978 Non-specific antibodies 4,423 5,139 10,197 9,984 Total antibodies 12,214 11,379 23,866 19,962 Total $29,935 $25,879 $57,483 $51,956 Nabi Biopharmaceuticals CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, amounts in thousands) July 1, December 31, 2006 2005 Cash and cash equivalents $31,121 $101,762 Marketable securities 39,097 5,172 Restricted cash, current 819 816 Trade accounts receivable, net 25,570 22,322 Inventories, net 23,144 22,323 Prepaid expenses and other assets 3,622 3,611 Property, plant and equipment, net 90,564 94,084 Intangible assets, net 74,070 78,332 Other assets, net 826 914 Total assets $288,833 $329,336 Trade accounts payable and accrued expenses $37,339 $44,429 Notes payable and capital lease obligations, net 10,715 13,557 2.875% Convertible Senior Notes 109,229 109,145 Other liabilities 232 378 Stockholders' equity 131,318 161,827 Total liabilities and stockholders' equity $288,833 $329,336 Capital expenditures were $1.1 million and $4.5 million for the six months ended July 1, 2006 and June 25, 2005, respectively. Depreciation and amortization expenses were $8.6 million and $9.5 million for the six months ended July 1, 2006 and June 25, 2005, respectively. The 2005 condensed balance sheet has been derived from the audited balance sheet for the year ended December 31, 2005. Certain items in the 2005 consolidated financial statements have been reclassified to conform to the current year's presentation.
Nabi BiopharmaceuticalsCONTACT: Thomas E. Rathjen, Vice President, Investor Relations, NabiBiopharmaceuticals, +1-561-989-5800
