Tuesday, February 28, 2012

POZEN Reports Fourth Quarter and End 2011 Results

Chapel Hill-based CED Member POZEN Inc. (NASDAQ: POZN), a pharmaceutical company committed to transforming medicine that transforms lives, today announced results for the fourth quarter and year ended December 31, 2011.

Corporate Highlights of 2011
  • POZEN monetized future royalty and milestone payments for sales of Treximet® (sumatriptan / naproxen sodium) in the United States to a financial investor for $75.0 million (net proceeds of $71.9 million). The Company retained rights to 20% of all royalty payments after the first quarter of 2018.
  • 2011 net sales of VIMOVO™ (naproxen / esomeprazole magnesium) delayed-release tablets were $33.8 million, generating an annual royalty of $2.9 million. VIMOVO has now been launched in a total of 28 countries.
  • The PA32540 Phase 3 pivotal studies have been fully enrolled. Top line data are anticipated in Q2 2012 and the New Drug Application (NDA) submission is targeted for Q3 2012.
  • A 12-month, Phase 3 study to evaluate the long-term safety of PA32540 in subjects who are at risk for developing aspirin-associated gastric ulcers has been completed. In the study, adverse events were as expected and consistent with what would be expected in this population of patients requiring cardio-aspirin therapy and with the known safety profile of the PA components.
  • Data from our Phase 1 Co-Rx study suggest that PA32540 given with clopidogrel, dosed at least 10 hours apart, resulted in significantly better inhibition of ADP-induced platelet aggregation (anti-clotting) when compared to a current standard of care (81 mg of EC aspirin, EC omeprazole 40 mg and clopidogrel dosed together). The results were presented at the AHA meeting in November and the clinical significance of these data is presently unknown.
  • The Company selected Keelin Reeds Partners LLC to assist in the strategic partner search for all PA assets, including PA32540 for both the U.S. and globally. Keelin Reeds is a global expert in helping life sciences companies value pipeline assets, develop business development strategies and execute partnership transactions.
  • The United States District Court for the Eastern District of Texas issued a favorable verdict in the litigation between POZEN and several generic pharmaceutical companies which had filed Abbreviated New Drug Applications (ANDAs) seeking approval from the U.S. Food and Drug Administration (FDA) to market generic copies of Treximet. Treximet is marketed by POZEN’s exclusive U.S. licensee, GlaxoSmithKline (GSK). Each of the defendants has appealed the decision to the U.S. Court of Appeals for the Federal Circuit.
  • POZEN entered into a license agreement with Cilag GmbH International, a division of Johnson & Johnson, for the development and commercialization of MT 400 in Brazil, Colombia, Ecuador and Peru. MT 400 is POZEN’s proprietary combination of sumatriptan and naproxen sodium, the first multiple mechanism triptan therapy for the treatment of migraine.
Fourth Quarter Results
For the fourth quarter of 2011, POZEN reported revenue of $73.0 million, comprised of VIMOVO royalty of $1.1 million and the net proceeds from the monetization of the Treximet royalty of $71.9 million. For the fourth quarter of 2010, the Company reported total revenue of $29.0 million, resulting from royalty on sales of Treximet of $4.0 million, and $25.0 million from the approval of VIMOVO in a major ex-U.S. territory.
Operating expenses for the fourth quarter of 2011 totaled $11.5 million, as compared to $11.4 million for the comparable period in 2010. The slight increase in operating expenses in the fourth quarter of 2011 was primarily due to higher pre-commercialization costs partially offset by lower patent litigation and R&D costs.
The Company reported a net income of $61.5 million, or $2.04 per share on a diluted basis, for the fourth quarter of 2011, compared to net income of $18.4 million, or $0.61 per share on a diluted basis, for the fourth quarter of 2010.
Twelve Month Results
For the twelve months ended December 31, 2011, POZEN reported revenue of $87.0 million compared to $68.5 million in 2010. The 2011 revenue is comprised of the monetization of the Treximet royalty stream, which resulted in $71.9 million in net revenue, $12.2 million of Treximet royalty and $2.9 million of VIMOVO royalty. The 2010 revenue was comprised of $45.0 million of milestone payments related to VIMOVO, $15.7 million of royalty from Treximet, $7.3 million of VIMOVO licensing fees and development revenues, and $0.5 million of royalty from VIMOVO.
Operating expenses for the twelve months ended December 31, 2011 were $44.8 million compared to $46.4 million in the same period in 2010. The decrease in operating expenses is primarily a result of $8.4 million less in patent litigation costs, partially offset by higher PA32540 development and pre-commercialization costs.
The Company reported a net income of $42.3 million, or $1.40 per share on a diluted basis for the 2011 year compared to a net income of $23.1 million, or $0.76 per share on a diluted basis, for the same period in 2010.
Balance Sheet
At December 31, 2011, cash, cash equivalents and short-term investments totaled $119.6 million, of which $5.8 million relates to the unsettled short-term investments purchase in late December for which settlement did not occur until early January. This had the effect of increasing cash / short-term investments and liabilities by $5.8 million for the 3 days between purchase and settlement. Cash and short-term investments were $64.1 million at December 31, 2010. The 2011 increase was due to the Treximet royalty monetization. The Company had an accounts receivable balance of $1.1 million from AstraZeneca at December 31, 2011.
2012 is an important year for POZEN. We are completing the pivotal Phase 3 studies for our leading product candidate PA32540. We expect to have the results of the studies in the second quarter and plan to file the NDA in the third quarter. We have made the decision to find a partner or partners for this and the other PA assets and, with the assistance of Keelin Reeds Partners LLC, are in discussions with potential partners. We are continuing to perform critical pre-commercialization activities required to ensure a timely launch by an eventual partner.
From a financial standpoint, in 2012 we expect our R&D costs will be substantially lower due to the completion of our PA32540 Phase 3 studies and we expect our SG&A to be slightly lower year on year. Our current plan targets a year-end cash and short-term investment balance of greater than $85.0 million.
Fourth Quarter Results Webcast
POZEN will host a webcast to present fourth quarter and year end 2011 results and management’s outlook on Tuesday, February 28, 2012 at 11:00 a.m. (ET). The webcast can be accessed live and will be available for replay at www.pozen.com.
POZEN Inc. is a progressive pharmaceutical company that is transforming how the healthcare industry addresses unmet medical needs. By utilizing a unique in-source model and focusing on integrated therapies, POZEN has successfully developed and obtained FDA approval of two self-invented products in two years. Funded by these milestone/royalty streams, POZEN is now creating a portfolio of cost-effective, evidence based integrated aspirin therapies designed to enable the full power of aspirin by reducing its GI damage.
POZEN is currently seeking strategic partners to help maximize the opportunity for its portfolio assets.
The Company's common stock is traded under the symbol “POZN” on The NASDAQ Global Market. For more detailed company information, including copies of this and other press releases, please visit www.pozen.com