Astex Pharmaceuticals Reports 2011 Fourth Quarter and Year-End Financial Results
Reports Annual Net Income of $5.5 Million
Dacogen Royalty Revenue Increases 15% from Prior Year
Ends Year with $128 Million in Cash & Marketable Securities
DUBLIN, Calif.--(BUSINESS WIRE)--
Astex Pharmaceuticals, Inc. (NASDAQ:ASTX), today reported financial
results for the fourth quarter and year ended December 31, 2011.
The Company reported net income for the 2011 fourth quarter of $220,000,
or $0.00 per basic and diluted share, compared with net income of $6.7
million, or $0.11 per basic and diluted share, for the same prior year
period. The Company reported net income for the year ended December 31,
2011 of $5.5 million, or $0.07 per basic and diluted share, compared
with net income of $16.3 million, or $0.27 per basic and diluted share,
for the same prior year period.
Company Highlights of 2011 include:
-
Dacogen® (decitabine) for Injection royalty revenue was $60.5
million for 2011 compared to $52.5 million for 2010, an increase of
approximately 15% from the prior year.
-
The Company ended 2011 with unrestricted cash, cash equivalents, and
current and non-current marketable securities totaling $128.1 million
compared to $120.4 million at December 31, 2010.
-
The Company completed the acquisition of Astex Therapeutics Limited in
July 2011, and the operating results of the acquisition have been
consolidated in the Company's operating results effective July 20,
2011.
-
The Company expanded its product pipeline following the Astex
acquisition to include four company-sponsored phase II programs and
four partner-sponsored clinical programs.
-
In September 2011, the Company changed its name from SuperGen, Inc. to
Astex Pharmaceuticals, Inc., trading on NASDAQ with ticker symbol
"ASTX."
"In 2011 Astex Pharmaceuticals assembled all the tools necessary for
spurring growth: rationalized operations, a prioritized portfolio that
includes a deep clinical pipeline, a strong financial footing, and a
proven discovery engine," said James S.J. Manuso, PhD, chairman and
chief executive officer of Astex Pharmaceuticals. "We are pleased the
worldwide sales of Dacogen have continued to grow steadily. In
addition, we are initially anticipating our operational results for 2012
being near cash flow neutral. "
Dr. Harren Jhoti, president of Astex Pharmaceuticals, added, "We have
much to look forward to in 2012, as we advance our discovery and
development collaborations with our partners GSK, AstraZeneca, Janssen
and Novartis. Within the first half of 2012 we expect to complete the
optimization of lead drug candidates arising from our internal discovery
efforts."
Dr. Mohammad Azab, chief medical officer of Astex Pharmaceuticals,
commented, "New clinical data for SGI-110, our new hypomethylating
agent, has been submitted for presentation at the upcoming AACR meeting,
and for AT13387, our second-generation HSP90 inhibitor, at this year's
ASCO conference. This year we will initiate an SGI-110 phase II dose
expansion clinical trial in MDS/AML and a phase II program in solid
tumors. By the end of 2012, we expect several clinical-stage programs
currently in phase II trials to produce clinical data."
2011 Fourth Quarter Financial Results
Total revenues for the 2011 fourth quarter were $21.2 million compared
with $15.3 million for the same prior year period. Total revenues for
the 2011 fourth quarter includes royalty revenue of $15.4 million
compared with $15.2 million for the same prior year period. Royalty
revenue is earned pursuant to the license agreement entered into with
MGI PHARMA (acquired by Eisai Corporation of North America in January
2008) during 2004, which granted MGI PHARMA exclusive rights to the
development, manufacture, commercialization and distribution of Dacogen.
The Company generally recognizes royalty revenue when it is received.
Total revenues for the 2011 fourth quarter also include development and
license revenue of $5.8 million compared with $127,000 for the same
prior year period. Development and license revenue represents both
milestones earned and the amortization of deferred revenue relating to
payments received pursuant to various collaborative research and license
arrangements. Development and license revenue for the 2011 fourth
quarter includes multiple milestones earned of $4.4 million related to
our GSK collaboration while there were no milestones earned for the same
prior year period.
Total operating expenses for the 2011 fourth quarter were $21.9 million,
compared with $8.8 million for the same prior year period. The primary
reasons for the increase in total operating expenses for the 2011 fourth
quarter compared with the same prior year period are the consolidation
of research and development and general and administrative costs related
to the acquisition of Astex Therapeutics Limited effective July 20,
2011; increased research and development activities from product
development and clinical trial programs associated with SGI-110,
AT13387, and amuvatinib; amortization of intangible assets and
impairment charge; severance costs related to a reduction in force; and
an increase in stock-based compensation expense. A non-cash charge for
amortization of intangible assets including an impairment charge was
$3.0 million for the 2011 fourth quarter while there was no similar
amortization expense or impairment charge for the same prior year
period. Severance costs associated with a reduction in force were
$216,000 for the 2011 fourth quarter while there were no severance costs
for the same prior year period. Stock-based compensation expense, a
non-cash expense that is included in operating expenses, was $769,000
for the 2011 fourth quarter, compared with $183,000 for the same prior
year period.
The Company reported net income for the 2011 fourth quarter of $220,000,
or $0.00 per basic and diluted share, compared with net income of $6.7
million, or $0.11 per basic and diluted share, for the same prior year
period. The net income for the 2011 fourth quarter includes an income
tax benefit of $986,000 compared with an income tax provision of $26,000
for the same prior year period. The income tax benefit for the 2011
fourth quarter was primarily due to the recognition of a tax benefit
associated with the amortization of deferred tax liabilities resulting
from the acquisition and a foreign research and development tax credit
related to the UK subsidiary.
2011 Year-End Financial Results
Total revenues for 2011 were $66.9 million compared with $53.0 million
for the same prior year period. Total revenues for 2011 includes royalty
revenue of $60.5 million compared with $52.5 million for the same prior
year period. Total revenues for 2011 also include development and
license revenue of $6.4 million compared with $509,000 for the same
prior year period. Development and license revenue represents both
milestones earned and the amortization of deferred revenue relating to
payments received pursuant to various collaborative research and license
arrangements. Development and license revenue for 2011 includes multiple
milestones earned of $4.4 million related to our GSK collaboration while
there were no milestones earned for the same prior year period.
Excluding the gain on sale of products, total operating expenses for
2011 were $65.2 million compared with $37.8 million for the same prior
year period. The primary reasons for the increase in total operating
expenses for 2011 compared with the same prior year period are the
consolidation of research and development and general and administrative
costs related to the acquisition of Astex Therapeutics Limited effective
July 20, 2011; increased research and development activities from
product development and clinical trial programs associated with SGI-110,
AT13387, and amuvatinib; amortization of intangible assets and
impairment charge; incremental transaction costs associated with the
acquisition; severance costs related to a reduction in force; and an
increase in stock-based compensation expense. Approximately $3.5 million
of transaction costs associated with the acquisition were charged to
general and administrative expenses during 2011. A non-cash charge for
amortization of intangible assets including an impairment charge was
$4.5 million for 2011 while there was no similar amortization expense or
impairment charge for the same prior year period. Severance costs
associated with a reduction in force were $995,000 for 2011 while there
were no severance costs for the same prior year period. Stock-based
compensation expense, a non-cash expense that is included in operating
expenses, was $3.1 million for 2011 compared with $1.4 million for the
same prior year period.
The gain on sale of products for 2011 was $700,000 compared with
$750,000 for the same prior year period. The gain on sale of products
relates to the receipt of additional contractual payments resulting from
the 2007 sale of the worldwide rights for Nipent® (pentostatin for
injection) to Mayne Pharma (acquired by Hospira, Inc. in February 2007).
The Company reported net income for 2011 of $5.5 million, or $0.07 per
basic and diluted share, compared with net income of $16.3 million, or
$0.27 per basic and diluted share, for the same prior year period. Net
income for 2011 included in other expenses a net foreign currency
transaction loss of $422,000 while there was no similar loss for the
same prior year period. Net income for 2011 includes an income tax
benefit of $3.3 million compared with an income tax provision of $39,000
for the same prior year period. The income tax benefit for 2011 was
primarily due to the recognition of a tax benefit associated with the
amortization of deferred tax liabilities resulting from the acquisition
and a foreign research and development tax credit related to the UK
subsidiary.
Financial Position
As of December 31, 2011, the Company had $128.1 million in unrestricted
cash, cash equivalents, and current and non-current marketable
securities compared to $120.4 million at December 31, 2010.
Operational Highlights
In 2012 the Company will learn the outcomes of our Dacogen
partner Eisai's supplemental New Drug Application (sNDA) and Marketing
Authorization Application (MAA) submissions to the U.S. Food and Drug
Administration (FDA) and European Medicines Agency (EMA), respectively,
seeking approval for Dacogen in the elderly acute myeloid
leukemia (AML) indication. Eisai was advised that the PDUFA date for the
sNDA is March 6, 2012. It is expected that the EMA will determine the
outcome of the MAA, filed by Janssen-Cilag International NV, within the
second half of 2012.
The FDA's Oncologic Drugs Advisory Committee (ODAC) voted 10 to 3 with
one person abstaining that data in the sNDA for Dacogen did not
support a favorable benefit-risk profile for the treatment of AML in
adults 65 years of age or older who are not considered candidates for
induction therapy. The FDA has the option of seeking the advice of its
advisory committees when it is reviewing a new drug application,
although it is not obliged to follow the committee's recommendation.
Astex's pipeline products continue to advance favorably in the clinic.
Four products in or entering phase II trials are expected to produce
data from clinical proof of concept trials in the next 12 months
including AT13387, SGI-110, and amuvatinib. In addition, new phase II
clinical proof of concept trials are expected to be initiated in the
second half of 2012 for AT13387 and SGI-110 in solid tumors.
Among our partnered programs, AstraZeneca commenced a phase I study of
AZD3839, a clinical candidate selected in October 2010 and derived from
the collaborative program on beta-secretase - a key enzyme implicated in
the progression of Alzheimer's disease. Janssen Pharmaceutica NV
selected a development candidate from the collaborative drug discovery
program aimed at identifying novel, small molecule inhibitors of
Fibroblast Growth Factor Receptor (FGFR), for the treatment of cancer.
2012 Financial Guidance
The initial financial guidance for 2012 is as follows:
-
Royalty revenue for Dacogen is expected to increase up to 10%
from the prior year to a range from $64 million to $67 million.
-
Development and license revenue is estimated at $1.4 million and
represents the recognition of deferred revenue relating to prior
payments received pursuant to a research and license agreement with
GSK.
-
The last remaining payment of $700,000 related to the sale of Nipent
to Hospira to be classified as gain on sale of products is expected to
be received during 2012.
-
Research and development expenses are expected to increase from the
prior year to a range from $62 million to $67 million.
-
Amortization of intangible assets, a non-cash charge, is estimated at
$7.6 million.
-
General and administrative expenses are expected to decrease from the
prior year to a range from $14 million to $15 million.
-
An estimated income tax benefit associated primarily with the
amortization of deferred tax liabilities resulting from the
acquisition and a foreign research and development tax credit related
to the UK subsidiary is anticipated to be in a range from $4 million
to $5 million for the year.
-
A net loss is forecasted in a range from $13 million to $15 million
for the year.
-
In addition to the amortization of intangible assets included in total
operating expenses are other recurring non-cash operating charges such
as stock-based compensation expense and depreciation estimated at $3.5
million for the year.
-
Average annual shares outstanding are expected to be approximately 93
million common shares.
Conference Call Information
Astex Pharmaceuticals will host a conference call to discuss the 2011
fourth quarter and year-end financial results today at 1:30 p.m. PT /
4:30 p.m. ET. A live webcast of the conference call is accessible via
the investor relations section of the Company's website at http://www.astx.com.
A webcast replay of the conference call will be available for 30 days.
About Astex Pharmaceuticals
Astex Pharmaceuticals is dedicated to the discovery and development of
novel small molecule therapeutics with a focus on oncology. The Company
is developing a proprietary pipeline of novel therapies and is creating
de-risked products for partnership with leading pharmaceutical
companies. Astex Pharmaceuticals developed Dacogen and receives
significant royalties on global sales.
For more information about Astex Pharmaceuticals, Inc., please visit http://www.astx.com.
Forward-Looking Statements
This press release contains "forward-looking" statements within the
meaning of Section 21A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, and is
subject to the safe harbor created thereby. Actual results could differ
materially from those projected in the forward-looking statements as a
result of a number of risks and uncertainties. These forward-looking
statements include, but are not limited to, statements regarding the
continued growth of worldwide sales of Dacogen, expectations
regarding the completion of drug candidate optimization and advancement
of drug candidates in the clinic; expectations regarding our clinical
trials including the production of clinical data from these trials;
expectations regarding the anticipated generation of shareholder value
as a result of the acquisition of Astex Therapeutics Limited and the
ability of the combined company to expand and develop the Company's
pipeline of products in the years ahead; the Company's ability to
develop the current and future pipeline into commercially viable drugs;
the expectations regarding our clinical trials including the timing of
clinical proof of concept data from these trials; the progress of our
collaborations with strategic partners and other programs added through
the acquisition; the sufficiency of our operating cash to fund our
development initiatives this year and thereafter; expectations about
increases in royalty revenue; expectations regarding research and
development expenses and general and administrative expenses;
expectations regarding development and license revenue, and gains from
sales of products from the previous sale of our commercial business;
estimates of 2012 net losses and anticipated tax benefits; statements
about expected losses or profitability; estimates about the amortization
of intangible assets, estimates of non-cash stock-based compensation and
other recurring non-cash items; and expectations regarding Eisai's and
Janssen's plans for Dacogen including with respect to submissions
to the FDA and EMA. Important factors that could cause actual results to
differ materially from the expectations reflected in the forward-looking
statements include, but are not limited to: the ability of Eisai and
Janssen to generate global sales of Dacogen; the outcomes of the
on-going clinical trials; risks and uncertainties related to the
achievement of developmental milestones with respect to the compounds in
development; the research and development of amuvatinib, AT13387,
SGI-110, and other programs added by the acquisition; the decision by
certain strategic partners whether or not to license and then develop
and commercialize the products that are the subject of our collaboration
with them and whether any of those products will be commercially
successful; the outcome of Eisai's and Janssen's examination of Dacogen
clinical trial data and the submission of US and European regulatory
filings; and the risks and uncertainties associated with the post-merger
company. In general, our future success is dependent upon numerous
factors, including our ability to generate pre-clinical development
candidates for selection into clinical testing, obtaining regulatory
approval of product development programs, conducting and completing
clinical trials, obtaining regulatory approval of our products and
product candidates, our ability to successfully partner with leading
pharmaceutical companies, and creating opportunities for future
commercialization of compounds. Our future revenue and operating and net
loss or income could be worse than anticipated if demand for our
products is less than expected, if our partnerships and collaborations
with other parties are not successful, or if the introductions of new
products are delayed, for any reason, including regulatory delay.
References made to the discussion of risk factors are detailed in the
Company's filings with the Securities and Exchange Commission including
reports on its most recently filed Form 10-K and Form 10-Q. These
forward-looking statements are made only as of the date hereof, and we
disclaim any obligation to update or revise the information contained in
any such forward-looking statements, whether as a result of new
information, future events or otherwise.
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|
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ASTEX PHARMACEUTICALS, INC.
|
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(In thousands, except per share amounts)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
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|
|
Year ended
|
|
|
|
December 31,
|
|
|
|
December 31,
|
|
|
|
|
2011
|
|
|
|
2010
|
|
|
|
|
|
2011
|
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Royalty revenue
|
|
$
|
15,371
|
|
|
$
|
15,157
|
|
|
|
|
$
|
60,519
|
|
|
$
|
52,463
|
|
|
Development and license revenue
|
|
|
5,833
|
|
|
|
127
|
|
|
|
|
|
6,395
|
|
|
|
509
|
|
|
Total revenues
|
|
|
21,204
|
|
|
|
15,284
|
|
|
|
|
|
66,914
|
|
|
|
52,972
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
14,365
|
|
|
|
6,528
|
|
|
|
|
|
43,895
|
|
|
|
28,394
|
|
|
General and administrative
|
|
|
4,595
|
|
|
|
2,320
|
|
|
|
|
|
16,842
|
|
|
|
9,442
|
|
|
Amortization of intangibles and impairment charge
|
|
|
2,980
|
|
|
|
-
|
|
|
|
|
|
4,465
|
|
|
|
-
|
|
|
Gain on sale of products
|
|
|
-
|
|
|
|
(50
|
)
|
|
|
|
|
(700
|
)
|
|
|
(750
|
)
|
|
Total operating expenses
|
|
|
21,940
|
|
|
|
8,798
|
|
|
|
|
|
64,502
|
|
|
|
37,086
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations
|
|
|
(736
|
)
|
|
|
6,486
|
|
|
|
|
|
2,412
|
|
|
|
15,886
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
72
|
|
|
|
42
|
|
|
|
|
|
226
|
|
|
|
182
|
|
|
Other income (expense)
|
|
|
(102
|
)
|
|
|
244
|
|
|
|
|
|
(384
|
)
|
|
|
244
|
|
|
Income (loss) before income taxes
|
|
|
(766
|
)
|
|
|
6,772
|
|
|
|
|
|
2,254
|
|
|
|
16,312
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit (provision)
|
|
|
986
|
|
|
|
(26
|
)
|
|
|
|
|
3,288
|
|
|
|
(39
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
220
|
|
|
$
|
6,746
|
|
|
|
|
$
|
5,542
|
|
|
$
|
16,273
|
|
|
Net income per common share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.00
|
|
|
$
|
0.11
|
|
|
|
|
$
|
0.07
|
|
|
$
|
0.27
|
|
|
Diluted
|
|
$
|
0.00
|
|
|
$
|
0.11
|
|
|
|
|
$
|
0.07
|
|
|
$
|
0.27
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
92,930
|
|
|
|
60,334
|
|
|
|
|
|
75,072
|
|
|
|
60,287
|
|
|
Diluted
|
|
|
93,382
|
|
|
|
60,771
|
|
|
|
|
|
75,751
|
|
|
|
60,635
|
|
|
|
|
ASTEX PHARMACEUTICALS, INC.
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
(In thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
39,788
|
|
|
$
|
25,554
|
|
Marketable securities
|
|
|
86,444
|
|
|
|
89,699
|
|
Accounts receivable
|
|
|
5,189
|
|
|
|
615
|
|
Income tax receivable
|
|
|
2,963
|
|
|
|
40
|
|
Prepaid expenses and other current assets
|
|
|
2,186
|
|
|
|
715
|
|
Total current assets
|
|
|
136,570
|
|
|
|
116,623
|
|
|
|
|
|
|
|
|
Marketable securities, non-current
|
|
|
1,819
|
|
|
|
5,124
|
|
Property, plant and equipment, net
|
|
|
7,013
|
|
|
|
3,932
|
|
Goodwill
|
|
|
45,980
|
|
|
|
731
|
|
Other intangible assets, net
|
|
|
84,611
|
|
|
|
-
|
|
Restricted cash
|
|
|
-
|
|
|
|
2,134
|
|
Other assets
|
|
|
554
|
|
|
|
554
|
|
Total assets
|
|
$
|
276,547
|
|
|
$
|
129,098
|
|
|
|
|
|
|
|
|
LIABILITIES & STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
7,529
|
|
|
$
|
1,198
|
|
Accrued compensation
|
|
|
5,324
|
|
|
|
3,556
|
|
Other accrued liabilities
|
|
|
613
|
|
|
|
794
|
|
Deferred acquisition consideration
|
|
|
17,353
|
|
|
|
-
|
|
Deferred tax liability
|
|
|
3,342
|
|
|
|
-
|
|
Deferred revenue
|
|
|
509
|
|
|
|
509
|
|
Total current liabilities
|
|
|
34,670
|
|
|
|
6,057
|
|
|
|
|
|
|
|
|
Warrant liability
|
|
|
187
|
|
|
|
-
|
|
Deferred acquisition consideration, non-current
|
|
|
11,624
|
|
|
|
-
|
|
Deferred tax liability, non-current
|
|
|
9,144
|
|
|
|
-
|
|
Deferred revenue, non-current
|
|
|
921
|
|
|
|
1,429
|
|
Total liabilities
|
|
|
56,546
|
|
|
|
7,486
|
|
|
|
|
|
|
|
|
Total stockholders' equity
|
|
|
220,001
|
|
|
|
121,612
|
|
Total liabilities and stockholders' equity
|
|
$
|
276,547
|
|
|
$
|
129,098
|
Astex Pharmaceuticals, Inc.
Timothy L. Enns, 925-560-2810
Senior
Vice President
Corporate Communications & Marketing
tim.enns@astx.com
Susanna
Chau, 925-560-2845
Manager
Investor Relations
susanna.chau@astx.com
or
The
Trout Group
Alan Roemer, 646-378-2945
Managing Director
aroemer@troutgroup.com
or
College
Hill
Melanie Toyne-Sewell, +44 20 7866 7866 (Europe)
Rebecca
Skye Dietrich, 857-241-0795 (US)
astex@collegehill.com
Source: Astex Pharmaceuticals, Inc.
News Provided by Acquire Media
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