SAN DIEGO, Nov. 13, 2015 /PRNewswire/ -- Pfenex Inc. (NYSE MKT: PFNX), a clinical-stage biotechnology company engaged in the development of biosimilar therapeutics, including high value and difficult to manufacture proteins, today reported financial results for the third quarter ended September 30, 2015 and provided a business update.
“Pfenex has made significant progress in advancing its portfolio of biosimilar product candidates in the third quarter,” stated Bertrand C. Liang, chief executive officer of Pfenex. “Today we are pleased to provide an update on the Phase 1 trial for PF530, our Betaseron biosimilar candidate. The study enrolled 12 subjects who received an initial dose of either PF530 or reference product to assess pharmacokinetic (PK) and pharmacodynamic (PD) parameters. After a subsequent wash out period, subjects were crossed over to receive the other product. There were no statistically significant differences in PK and PD between the groups administered PF530 versus the reference product. While the study enrolled just 12 subjects and was therefore not powered for further statistical testing, this pilot PK/PD study has provided the necessary PK/PD variability information for PF530 further development. Following our discussions with FDA, we intend to pursue an abbreviated development path for PF530 consisting of a pivotal PK/PD study in healthy subjects and an immunogenicity trial in multiple sclerosis patients, pending the agency’s review of additional bioanalytical data. Over the remainder of this year and into early next year, we will supplement our bioanalytical package and have additional discussions with FDA to refine the study design. We expect to initiate the clinical program in the second half of 2016.”
Business Updates
- Pfenex initiated a Phase 1 trial of PF530, a biosimilar candidate to Betaseron, in the first quarter of 2015 and enrolled 12 healthy subjects. Based on the analysis of the trial PK and PD parameters, no statistical differences between PF530 compared to Betaferon were observed. The clinical program is expected to initiate in the second half of 2016.
- PF708, our peptide generic to Forteo, is expected to enter a bioequivalence study by the end of 2015.
- Pfenex is continuing to assist in the manufacturing technology transfer of PF582, our biosimilar candidate to Lucentis, to the manufacturing site of Hospira, Inc., a subsidiary of Pfizer, and we expect that the pivotal clinical comparator trial for PF582 trial will initiate in 2016.
- Pfenex expects to initiate the Phase 1 trial for its recombinant anthrax vaccine by the end of 2015.
- In August, Pfenex announced it had signed a five year, cost plus fixed fee contract valued at up to $143.5 million with the Biomedical Advanced Research and Development Authority (BARDA) of the Department of Health and Human Services (HHS), for the advanced development of Px563L, a mutant recombinant protective antigen anthrax vaccine which offers the potential for a dramatic improvement in the rapid production of large amounts of high value stable recombinant anthrax vaccine for the U.S. Government.
- In September, Pfenex announced that Dennis M. Fenton, Ph.D. was appointed to the company’s board of directors, deepening Pfenex’s manufacturing and product development expertise. Dr. Fenton, an industry pioneer, has over three decades of experience in the biotechnology industry.
Financial Highlights for the Third Quarter
Total Revenue decreased by $2.3 million, or 27%, to $6.3 million in the nine month period ended September 30, 2015 compared to $8.6 million in same period in 2014. Revenue decreased by $0.7 million, or 27%, to $2.1 million in the three month period ended September 30, 2015 compared to $2.8 million in same period in 2014. The decreases in revenue for the periods presented were due to the stage of development of our Px563L product candidate under our government contracts and the decrease in activity related to our protein production service work, partially offset by an increase in license revenue. We expect revenue related to our protein production services to decline in the near-term as we shift our resources to developing our product pipeline. Given the nature of the novel vaccine development process, revenue will fluctuate depending on stage of development.
Cost of revenue decreased by approximately $3.1 million, or 52%, to $2.9 million in the nine month period ended September 30, 2015 compared to $6.0 million in same period in 2014. Cost of revenue decreased by approximately $0.9 million, or 57%, to $0.7 million in the three month period ended September 30, 2015 compared to $1.6 million in same period in 2014. The decreases in cost of revenue for the periods presented were due primarily to the stage of development of our Px563L product candidate under our government contracts. Given the nature of the novel vaccine development process, these costs will fluctuate depending on stage of development.
Research and development expenses increased by approximately $9.3 million, or 334%, to $12.1 million in the nine month period ended September 30, 2015 compared to $2.8 million in the same period in 2014. Research and development expenses increased by approximately $4.4 million, or 354%, to $5.7 million in the three month period ended September 30, 2015 compared to $1.3 million in same period in 2014. The increase in research and development expenses during the periods presented was due to the increase in development activity on our product candidates PF708 and PF530 and the hiring of additional personnel dedicated to our research and development efforts. PF530 was removed from the Joint Development License Agreement (“JDLA”) with Strides Arcolab in February 2015 and we initiated a Phase 1 trial for PF530 in March 2015. We expect research and development costs will increase going forward as we independently advance PF530 as a wholly-owned product candidate. Additionally, we expect research and development expenses to increase as we advance our other lead candidates and pipeline product candidates. For example, under our agreement with Pfizer, we will share the confirmatory clinical study costs for PF582 with our share capped at $20 million, $10 million of which will be setoff as a credit against royalties payable to us unless the collaboration agreement is terminated prior to such setoff. We will also share the costs of seeking regulatory approval of PF582 and a certain portion of other costs that are related to PF582, and that may begin after any filings for regulatory approval of PF582 would be made.
Selling, general and administrative expenses increased by $4.9 million, or 82%, to $10.9 million in the nine month period ended September 30, 2015 compared to $6.0 million in the same period in 2014. Selling, general and administrative expenses increased by $0.8 million, or 34%, to $3.3 million in the three month period ended September 30, 2015 compared to $2.5 million in the same period in 2014. The increases in selling, general and administrative expenses during the periods presented were due to an increase in activities associated with operating as a publicly-traded company. We expect general and administrative costs to increase for activities associated with operating as a publicly-traded company, including maintaining compliance with exchange listing and Securities and Exchange Commission requirements. These increases will likely include legal fees, accounting fees, directors’ and officers’ liability insurance premiums and fees associated with investor relations. These increases will also likely include the hiring of additional personnel. In addition, we intend to continue to incur increased internal and external business development costs to support our various product development efforts, which can vary from period to period.
Cash and cash equivalents as of September 30, 2015 was $115.9 million.
Cautionary Note Regarding Forward-Looking Statement
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or Pfenex’s future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern Pfenex’s expectations, strategy, plans or intentions. Forward-looking statements in this press release include, but are not limited to, statements regarding the future potential of Pfenex’s product candidates, including future plans to develop, manufacture and commercialize its product candidates and the potential to receive future payments under its development agreements; Pfenex’s expectations regarding the timing of the release of additional data and results for its product candidates and the timing of the initiation of additional studies for its product candidates; and Pfenex’s future projections related to increases in expenses and reductions in protein production revenue.
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