BOONTON, N.J., March 8, 2012 /PRNewswire/ -- Unigene Laboratories, Inc. (OTCBB: UGNE), today announced financial results for the fourth quarter and full-year ended December 31, 2011. The Company highlighted key corporate accomplishments in 2011 and outlined its anticipated milestones for 2012.
Fourth Quarter and Full-Year 2011 Financial Summary
Unigene announced positive net income of $4.4 million or $0.05 per share for the three months ended December 31, 2011 compared to a net loss of $3.9 million or ($0.04) per share for the same period in 2010. This favorable change was mainly due to the termination of the Companys oral PTH analog license agreement with GSK, whereby previously deferred milestone payments (in the aggregate amount of $7.7 million) were recognized as revenue. The Company reported a net loss of $17.9 million for the full-year ended December 31, 2011 or ($0.19) per share compared to a net loss of $27.9 million or ($0.30) per share for 2010.
Revenue for the three months ended December 31, 2011 was $12.5 million, compared to $2.9 million for the three months ended December 31, 2010. Revenue for the full-year ended December 31, 2011 was $20.5 million compared to $11.3 million for 2010.
Cash and cash equivalents at December 31, 2011 totaled $4.7 million compared to $12.2 million at the same time point in 2010. Cash and cash equivalents at September 30, 2011 totaled $5.2 million. Based on the Companys current projections, cash flow is expected to be sufficient to fund its business operations through the end of 2012.
Ashleigh Palmer, Unigenes President and CEO stated, We accomplished a great deal in 2011, including the validation of our proprietary leading oral peptide drug delivery platform by way of the positive Phase 3 oral calcitonin results seen in Tarsas ORACAL trial and the positive Phase 2 trial results demonstrating definitive proof-of-concept for our oral PTH analog. On the other hand, we did not see favorable results from Novartis Phase 3 program in which our manufacturing technology was used to produce calcitonin drug substance for a competitors formulation. Also, most disappointingly, we did not benefit from milestone payments associated with GSK advancing to the next stage of clinical development for our oral PTH analog, the full rights to which now revert back to Unigene. Nevertheless, I am extremely pleased with our many operational and scientific successes throughout last year, leading to cash runway extension and our avoidance of having to take on additional debt, as well as our ability to reduce the impact of negative events outside of our control. Such events would almost certainly have been fatal 18 months ago. Palmer continued, Although Unigenes balance sheet represents an enormous priority challenge that threatens the Companys viability going forward, my management team and I believe that, if we execute solidly on our stated corporate goals and milestones in 2012, we will have many of the key elements in place to begin effectively addressing the significant debt we have inherited.
2011 Highlights
- Reported positive Phase 3 ORACAL trial results for Unigenes oral calcitonin product, licensed to Tarsa Therapeutics, uniquely validating Unigenes oral peptide drug delivery technology;
- Announced positive top-line Phase 2 proof-of-concept results for Unigenes experimental oral parathyroid hormone (PTH) analog, further validating the Companys oral delivery technology;
- Built a robust portfolio of seven feasibility studies evaluating Unigenes industry-leading Peptelligence platform for oral drug delivery of proprietary peptides across a broad spectrum of high potential valuation therapeutic areas;
- Signed Manufacturing and Clinical Supply Agreement enabling Cara Therapeutics to commence Phase 1 clinical testing of a proprietary Unigene oral formulation of Caras investigational peptide drug, CR845, for neuropathic pain;
- Divested or monetized a number of non-strategic assets and interests to extend cash runway, including Unigenes equity position in a Chinese manufacturing operation to a joint venture partner;
- Accelerated preclinical development of Unigenes lead metabolic peptide, UGP281, targeting patients with morbid obesity; and
- Formed joint development vehicle (JDV) with Nordic Bioscience to advance up to three of Unigenes proprietary peptide analogs through Phase 2 proof-of-concept for multiple blockbuster indications, including Type 2 diabetes and osteoarthritis.
2012 Anticipated Milestones
- Publish detailed results of oral PTH analogs positive Phase 2 proof-of-concept trial in peer review journal and/or prestigious scientific congress;
- Effectively partner oral PTH analog, a highly transactable Phase 2 proof-of-concept asset;
- Continue to build a robust portfolio of feasibility programs with various biopharmaceutical partners evaluating Unigenes industry-leading Peptelligence platform for oral drug delivery of proprietary peptides;
- Convert at least one Peptelligence feasibility study into a definitive license agreement associated with significant milestones and royalties;
- File an IND and begin Phase 1 clinical testing of Unigenes lead metabolic peptide, UGP281, targeting patients with morbid obesity; and
- Select lead molecule and announce relevant preclinical study results for Type 2 diabetes or osteoarthritis indication under JDV with Nordic Bioscience.
Additional Financial Results & Notes
Revenue for the year ended December 31, 2011 increased $9.2 million, or 81%, to $20.5 million from $11.3 million in 2010. This favorable change was primarily due to an increase in licensing revenue of $9.0 million mainly resulting from the termination of the Companys license agreement with GSK, whereby previously deferred upfront and milestone payments in the aggregate amount of $7.7 million were recognized as revenue. In addition, in 2011, development fees increased $3.0 million, or 164%, to $4.8 million from $1.8 million in 2010. This increase was primarily due to development and testing services for GSK and Tarsa. However, total revenue was negatively impacted by the continuing decline in Fortical revenue.
Unigene had operating income of $6.4 million for the three months ended December 31, 2011, an improvement of $9.1 million from the operating loss of $2.7 million for the three months ended December 31, 2010. Operating loss for the twelve months ended December 31, 2011 decreased approximately $6.8 million, or 66%, to $3.5 million from $10.3 million for the corresponding period in 2010.
Net loss for 2011 decreased approximately $10.0 million, or 36%, to $17.9 million from $27.9 million in 2010. This was primarily due to an increase in revenue of $9.2 million mainly due to an increase in licensing revenue of $9.0 million. In addition, in 2011, interest expense increased $1.6 million and losses from our investments in Tarsa and Unigenes former China joint venture increased by $4.3 million over 2010. However, in 2010 the Company recognized a loss on the change in fair value of embedded conversion feature of $8.1 million and a debt issuance cost of $2.0 million.
Unigene expects to file its Annual Report on Form 10-K, including financial statements, for the year ended December 31, 2011, with the Securities and Exchange Commission on March 15, 2012. The Company anticipates that its independent registered public accounting firm will include an explanatory paragraph in their audit opinion that expresses substantial doubt about the Companys ability to continue as a going concern based on its current financial resources or the risk of defaulting on the note for its primary debt.
Conference Call and Webcast
Unigenes senior management team will host a conference call and webcast today, March 8, 2012 at 11:00 a.m. ET.
Interested participants and investors may access the conference call at 11 a.m. ET by dialing 866-277-1181 (U.S./Canada) or 617-597-5358 (international); participant code 82583482. An audio webcast can be accessed by logging on to the Investors and Media section under the Events tab of the Unigene web site, http://www.unigene.com.
A telephonic replay of the call will be available for two weeks beginning at 2 p.m. ET on March 8. Access numbers for this replay are 888-286-8010 (U.S./Canada) and 617-801-6888 (international); participant code 18902945. The webcast replay will remain available in the Investors section of the Unigene Laboratories web site for 30 days.
About Unigene Laboratories, Inc.
Unigene Laboratories, Inc. is a leader in the design, delivery, manufacture and development of peptide-based therapeutics. The Company is building a robust portfolio of proprietary partnerships in this expanding drug class based on its Peptelligence platform. Peptelligence encompasses extensive intellectual property covering drug delivery and manufacturing technologies, unsurpassed research and development expertise, and proprietary know-how representing a genuine distinctive competence. Core Peptelligence assets include proprietary oral and nasal peptide drug delivery technologies, and proprietary, high-yield, scalable and reproducible E. coli-based manufacturing technologies.
