SOPHIA ANTIPOLIS, France, July 28 /PRNewswire-FirstCall/ -- NicOx S.A. today reported its financial results for the six months ended June 30, 2008.
Michele Garufi, Chairman and CEO of NicOx, commented: "We remain focused on finalizing our planned NDA submission for naproxcinod with the US FDA in mid 2009. We are on track to achieve this important milestone with our two ongoing phase 3 studies nearing completion. Our confidence in our lead product has led us to sign an agreement with Archimica for the supply of naproxcinod drug substance for our future commercial needs. Additionally, we are proud of the relationships we have built with our pharmaceutical partners, with Pfizer extending our ophthalmology research collaboration and Merck initiating the first clinical trial in hypertensive volunteers in the first half of this year. We believe NicOx is in a strong position to face the future and we look forward to confirming the efficacy and blood pressure profile of naproxcinod during the second half of 2008."
Revenues for the first half of 2008 were EUR2.2 million, compared to EUR11.2 million during the same period in 2007. These revenues were due to payments received from NicOx' partnered programs with Merck & Co., Inc. in the antihypertensive field and Pfizer Inc in ophthalmology.
For the first six months of 2008, operating expenses were EUR40.6 million, compared to EUR23.7 million for the same period in 2007. The majority of these expenses relate to the phase 3 and the overall clinical development of naproxcinod, NicOx' lead drug candidate, which is a unique, first in class, Cyclooxygenase-Inhibiting Nitric Oxide Donator (CINOD) in development for the treatment of the signs and symptoms of osteoarthritis.
The Company recorded a net loss of EUR33.1 million for the first six months of 2008, compared to a net loss of EUR6.6 million for the same period in 2007. On June 30, 2008, NicOx had cash, cash equivalents and current and non-current financial instruments of EUR141.6 million, compared to EUR195.2 million on June 30, 2007.
Review of the first six months of 2008:
Naproxcinod phase 3 studies near completion ahead of projected New Drug Application (NDA) filing in mid 2009
NicOx' plan for the regulatory filing of naproxcinod consists of three pivotal phase 3 trials (the 301, 302 and 303 studies). Each of these studies has been designed to compare the efficacy of naproxcinod to placebo on three standard co-primary endpoints after 13 weeks.
Positive efficacy and blood pressure results from the 301 study, which was conducted in patients with osteoarthritis of the knee, were presented at the American College of Rheumatology (ACR) in November 2007. An additional analysis of the Office Blood Pressure Measurements (OBPMs) from the 301 study was presented in June 2008 at the European League Against Rheumatism (EULAR) and showed a statistically significant difference (p<0.05, for 3 out of 4 comparisons) between naproxcinod and naproxen in terms of the mean change from baseline in systolic and diastolic blood pressure at week 13.
Patient enrollment in the 302 study was successfully completed in December 2007 and 26-week efficacy and safety results are expected in the third quarter of 2008.
NicOx announced in May 2008 the completion of enrollment in the third pivotal phase 3 naproxcinod trial (the 303 study) in 810 patients with osteoarthritis of the hip. The objective of this study is to assess naproxcinod's efficacy in relieving the signs and symptoms of osteoarthritis of the hip and provide additional safety data, including further information on naproxcinod's blood pressure profile, as assessed by OBPM, in comparison to naproxen. Results from this study are expected in the fourth quarter of 2008.
Following the completion of the phase 3 program, NicOx plans to perform a predefined statistical analysis on the pooled OBPM data from the phase 3 studies, which should be complete in the fourth quarter of 2008.
NicOx signed an agreement with Archimica in March 2008 for the commercial manufacture and supply of naproxcinod drug substance. The goal of this agreement is to provide NicOx with the manufacturing scalability required to support a successful commercial launch of naproxcinod following the projected filing of an NDA with the FDA in mid-2009.
In July 2008, NicOx completed the enrollment of two large US clinical studies, which will assess the blood pressure profile of naproxcinod in comparison to ibuprofen and naproxen, using the Ambulatory Blood Pressure Monitoring (ABPM) technique. The two studies have recruited a total of 417 osteoarthritis patients with controlled hypertension and results are projected in the fourth quarter of 2008.
Merck & Co., Inc. initiates first clinical study in hypertensive volunteers
In May, NicOx announced the initiation of the first in a series of planned clinical trials in hypertensive volunteers by Merck & Co., Inc. as part of the companies' 2006 collaborative agreement to develop new nitric oxide-donating antihypertensive agents. Two of the three drug candidates selected for development from the companies' joint research program have completed initial dose ranging studies in healthy volunteers with encouraging results. The most advanced candidate is being evaluated in a single ascending dose trial in mild to moderate hypertensive volunteers. A number of clinical trials in hypertensive volunteers will be conducted by Merck prior to the selection of the compound or compounds that will ultimately be advanced into phase 2 testing. Merck will oversee the development of these compounds moving forward.
PF-03187207 meets secondary endpoints in phase 2 study conducted by Pfizer Inc; Japanese phase 2 trial fully enrolled
In May, NicOx announced the results of a U.S. phase 2 study conducted by Pfizer, which compared the safety and efficacy of various doses of the nitric oxide-donating prostaglandin analog PF-03187207 to Xalatan(R) (latanoprost) 0.005% in patients with primary open-angle glaucoma and ocular hypertension. The highest dose of PF-03187207 showed consistently more intraocular pressure (IOP) lowering than Xalatan(R) 0.005%, at all study visits and at all individual time points. Abnormally raised IOP is one of the principal symptoms of glaucoma. On the primary endpoint at 28 days, PF-03187207 showed a 12% improvement over Xalatan(R) 0.005%, which did not reach statistical significance. PF-03187207 did show significance over Xalatan(R) 0.005% on a number of secondary endpoints (p<0.05).
Following the phase 2 results, Pfizer took the decision not to launch a global phase 3 development program for PF-03187207. Pfizer is currently conducting a phase 2 study for PF-03187207 in Japan, which has completed patient enrollment and NicOx will communicate the top-line results subsequent to Pfizer's review of the data and determination of the potential future development path for PF-03187207 in Asia.
Pfizer has extended its March 2006 ophthalmology agreement with NicOx
In January, NicOx announced it had signed an extension of its March 2006 collaboration agreement, which grants Pfizer Inc the exclusive right to apply its proprietary nitric oxide-donating technology to drug discovery research across the entire field of ophthalmology. The agreement provides for total potential milestone payments in excess of EUR300 million in the ophthalmology field and industry standard royalties on sales, of which EUR102 million would arise from the successful full development and launch of the first program compound. Pfizer's option to obtain an exclusive worldwide license to develop and commercialize compounds covered by this agreement in the field of ophthalmology currently runs until May 2009.
Review of the consolidated financial results for the six months ended June 30, 2008 and 2007:
Revenues
For the six months ended June 30, 2008, NicOx' revenues reached EUR2.2 million, compared to EUR11.2 million for the six months ended June 30, 2007. This significant decrease is mainly explained by the fact that the company received EUR5.0 million from Merck and EUR1.0 million from Pfizer in 2007, which was entirely recognized as revenues in the first semester of 2007.
During the first semester of 2008, NicOx only recognized the following sums, initially recorded as prepaid income, in revenues:
The initial March 2006 payments from Pfizer and Merck, listed above, were deferred over the estimated duration of NicOx' involvement in the research and development programs provided for under the terms of the corresponding agreements. The terms surrounding the duration of NicOx' involvement in these programs are revised periodically, if necessary. The remaining balance from the initial payment received from Merck was entirely recognized as revenues in the first semester of 2008. The payments received from Pfizer for the funding of the research activities are deferred over a period of 12 months from the date of invoice.
Operating expenses
Operating expenses reached EUR40.6 million for the six months ended June 30, 2008, compared to EUR23.7 million for the six months ended June 30, 2007 (adjusted to reflect the reclassification of the research tax credit subsidies into other income as indicated below). Operating expenses for the first semester of 2008 were 86% attributable to research and development expenses and 14 % attributable to selling and administrative expenses, compared to 74% and 26% respectively during the first semester of 2007.
Research and development expenses amounted to EUR34.8 million in the six months ended June 30, 2008, compared to EUR17.6 million in the six months ended June 30, 2007 (including EUR0.5 million allocated to cost of sales in the first semester of 2008 and EUR1.1 million in the first semester of 2007). This very significant increase of research and development expenses is primarily due to the costs associated with the phase 3 development of naproxcinod, such as expenses related to contract research organizations and suppliers involved in naproxcinod's clinical development and manufacturing activities. At this time, the cost of sales principally corresponds to the expenses incurred by NicOx in performing research activities under the contracts signed with Pfizer and Merck. The Company anticipates that research and development expenses will remain at a high level during the second semester of 2008, due to the end of phase 3 clinical studies on naproxcinod and the increase of the activities linked to the production of this compound. On June 30, 2008, the Company employed 94 people in research and development, compared to 77 people on June 30, 2007.
Administrative and selling expenses reached EUR5.8 million in the six months ended June 30, 2008, compared to EUR6.1 million in the six months ended June 30, 2007. General and administrative expenses were EUR3.6 million during the first semester of 2008, compared to EUR4.2 million for the corresponding period of 2007 and were primarily the result of personnel expenses in administrative and financial functions, as well as the remuneration of corporate officers, including stock option, bonus share and warrant attributions. These expenses also included structural costs such as leases, property service charges and maintenance costs (excluding structural costs related to research and development activities), legal and accounting fees and other external administrative costs. Selling expenses totaled EUR2.2 million for the first semester of 2008, compared to EUR1.9 million for the first semester of 2007, and correspond to the market analysis activities for naproxcinod, as well as the business development and communication activities of the Company. The Company anticipates an increase in its selling expenses during the second semester of 2008, due to activities linked to the commercial launch preparation for naproxcinod. On June 30, 2008, the Company employed 35 people in its selling, general, and administrative departments, compared to 32 people on June 30, 2007.
Other income
During the first semester of 2008, other income amounted to EUR2.4 million, compared to EUR2.7 million on June 30, 2007.
Other income corresponds to the operational subsidies from the research tax credits which were previously deducted from research and development expenses until December 31, 2007.
Operating result
The operating loss amounted to EUR36.0 million for the six months ended June 30, 2008, compared to EUR9.8 million for the same period of 2007. This situation results primarily from the strong increase in operating expenses during the first semester of 2008 and from the considerable decrease in revenues recognized during the period as indicated above.
Other results
Net financial income totaled EUR3.0 million for the first six months of 2008, compared to EUR3.2 million for the corresponding period of 2007.
The income tax expense incurred by NicOx during the first semester of 2008 relates principally to its Italian subsidiary and amounted to EUR0.1 million, compared to a non significant tax credit during the same period of 2007.
Net result
The net loss reached EUR33.1 million for the six months ended June 30, 2008, compared to EUR6.6 million for the six months ended June 30, 2007. As indicated above, this strong increase in net loss during the first semester of 2008 results from the significant increase of research and development expenses associated with naproxcinod and from the considerable decrease in the revenues recognized during this period.
Balance sheet items
The indebtedness incurred by NicOx is mainly short-term operating debt. On June 30, 2008, the Company's current liabilities amounts to EUR22.0 million, including EUR16.8 million in accounts payable to suppliers and external collaborators, EUR2.5 million in accrued compensation for employees, EUR2.2 million in deferred revenues due to payments received under collaboration agreements, EUR0.2 million in corporate taxes payable, EUR0.2 million for other liabilities and EUR0.1 million in current income tax payable.
During the first semester of 2008, Axcan Pharma and NicOx agreed to terminate their collaboration agreement and Axcan accordingly made a final balancing payment of EUR2.2 million under the development cost-sharing arrangements.
In the first semester of 2008, NicOx granted Archimica a loan totaling EUR6 million, payable in 9 monthly installments, as part of the financial terms of the manufacturing and supply agreement with this company. On June 30, 2008, the amount paid by NicOx under this agreement was EUR4.0 million.
On June 30, 2008, the Company's current and non-current financial instruments and cash and cash equivalents amounted to EUR141.6 million, compared to EUR195.2 million on June 30, 2007. The Company uses its liquid assets principally to cover research and development expenses, expenses relating to the development of relationships with pharmaceutical companies, with a view to encouraging new partnerships, and corporate expenses related to general and administrative and promotional activities. NicOx expects its operating expenses to continue to increase very strongly over the coming financial years, as a result of the anticipated expenses related to the clinical development and the launch preparation activities for its drug candidate naproxcinod, which is currently in phase 3 clinical development.
NicOx (Bloomberg: COX:FP, Reuters: NCOX.PA) is a product-driven biopharmaceutical company dedicated to the development and future commercialization of investigational drugs for unmet medical needs. NicOx is applying its proprietary nitric oxide-donating technology to develop an internal portfolio of New Chemical Entities (NCEs) in the therapeutic areas of inflammatory and cardio-metabolic disease.
Resources are focused on the development of naproxcinod, a proprietary NCE and the first compound in the Cyclooxygenase-Inhibiting Nitric Oxide-Donating (CINOD) class of anti-inflammatory agents, which is in phase 3 clinical studies for the treatment of the signs and symptoms of osteoarthritis, with final phase 3 results anticipated in 2008.
Beyond naproxcinod, NicOx has a pipeline containing multiple nitric oxide-donating NCEs, which are in development internally and with partners, including Pfizer Inc and Merck & Co., Inc., for the treatment of prevalent and underserved diseases, such as atherosclerosis, hypertension, glaucoma and Chronic Obstructive Pulmonary Disease (COPD).
NicOx S.A. is headquartered in France and is listed on the Euronext Paris Stock Exchange (Compartment B: Mid Caps).
This press release contains certain forward-looking statements. Although the Company believes its expectations are based on reasonable assumptions, these forward-looking statements are subject to numerous risks and uncertainties, which could cause actual results to differ materially from those anticipated in the forward-looking statements.
For a discussion of risks and uncertainties which could cause actual results, financial condition, performance or achievements of NicOx S.A. to differ from those contained in the forward-looking statements, please refer to the Risk Factors ("Facteurs de Risque") section of the Document de Reference filed with the AMF, which is available on the AMF website (http://www.amf-france.org) or on NicOx S.A.'s website (http://www.nicox.com).
CONTACT: Contacts: NicOx: Karl Hanks, Director of Investor Relations and
Corporate Communication, Tel +33(0)4-97-24-53-42, hanks@nicox.com; Media in
the United States, FD: Robert Stanislaro, Tel +1-212-850-5657,
robert.stanislaro@fd.com; Irma Gomez-Dib, Tel +1-212-850-55761,
irma.gomez-dib@fd.com; Media in Europe, Citigate Dewe Rogerson: David
Dible, Tel +44(0)207-282-2949, david.dible@citigatedr.co.uk; Sylvie
Berrebi, Tel +44(0)207-282-1050, sylvie.berrebi@citigatedr.co.uk
