Anadys Pharmaceuticals Reports Third Quarter 2008 Financial Results and Highlights
"We continue to make rapid progress in both of our hepatitis C developmentprograms," said Steve Worland Ph.D., President and CEO of Anadys. "Wecompleted our first clinical study of ANA598 in healthy volunteers and havenow completed the healthy volunteer portion of our ongoing ANA773 study. Forboth programs, we are very encouraged by the data and look forward toinitiating patient dosing this quarter."
As of September 30, 2008, the Company's cash, cash equivalents andsecurities available-for-sale totaled $34.4 million.
During the third quarter of 2008 the Company had no revenue, compared to$21.5 million for the same quarter of 2007. The revenue in the third quarterof 2007 was primarily derived from the recognition of previously deferredrevenue associated with an upfront payment and a milestone payment under aprior collaboration.
Research and development expenses were $7.6 million for the third quarterof 2008 and 2007. During the third quarter of 2008, cost savings derived fromAnadys' completed strategic restructuring and associated termination of priordevelopment programs were offset by a significant increase in ANA598development costs.
General and administrative expenses were $2.1 million for the thirdquarter of 2008, compared to $2.4 million for the third quarter of 2007. The$0.3 million decrease primarily resulted from cost savings derived fromAnadys' completed strategic restructuring.
Operating expenses were $9.7 million for the third quarter of 2008,compared to $10.0 million for the third quarter of 2007. Included as acomponent of Anadys' operating expenses were non-cash, share-based expenses of$0.7 million and $1.4 million for the third quarter of 2008 and 2007,respectively.
The net loss was $9.3 million for the third quarter of 2008, compared tonet income of $12.3 million for the third quarter of 2007. Basic and dilutednet loss per common share was $0.32 in the third quarter of 2008, compared tonet income per common share of $0.43 in the third quarter of 2007. Non-cashshare-based expense resulted in a $0.03 increase in basic and diluted net lossper share for the third quarter of 2008 compared to a $0.05 decrease in basicand diluted net income per share for the third quarter 2007.
During the nine months ended September 30, 2008 the Company had norevenue, compared to $23.9 million for the same period in 2007. The revenuerecognized in the first nine months of 2007 was primarily derived from theamortization of an upfront payment and a milestone payment under a priorcollaboration and the recognition of the previously deferred revenue upontermination of the collaboration. Operating expenses during the nine monthsended September 30, 2008 were $25.2 million compared to $28.1 million for thenine months ended September 30, 2007. The decrease in operating expenses wasa result of cost savings derived from Anadys' completed restructuringpartially offset by increases in development costs for ANA598 and ANA773. Forthe nine months ended September 30, 2008, Anadys reported a net loss of $23.9million, compared to $1.4 million for the same period last year. Basic anddiluted net loss per common share was $0.83 for the nine months endedSeptember 30, 2008, compared to $0.05 for the same period in 2007.
Recent Development Program Highlights
-- Phase Ib Clinical Trial of ANA598. Anadys has completed preparationsrequired to initiate a Phase Ib clinical trial of ANA598, an investigationaloral non-nucleoside polymerase inhibitor for the treatment of hepatitis Cvirus (HCV) infection, and expects to initiate patient dosing shortly. ANA598will be administered to naive genotype 1a and 1b patients at 200 mg bid(twice-a-day), 400 mg bid or 800 mg bid over a period of three days. Anadysexpects to have viral load data from this study in the first quarter of 2009.Based on the data from the first three cohorts, Anadys may elect to exploreonce daily dosing and/or other dose levels of ANA598.
-- Conclusion of Healthy Volunteer Study in Phase I Clinical Trial ofANA598. In September, Anadys announced preliminary results of the Phase Iclinical trial of ANA598 in healthy volunteers and finalization of theprotocol for a Phase Ib trial of ANA598 in HCV infected patients. ANA598 waswell tolerated at all doses tested, and all doses achieved plasma drugconcentrations predicted to display substantial antiviral activity based onpreclinical data. Safety and PK data from all dose levels in the Phase Iclinical trial of ANA598 will be presented in a late-breaker poster session onNovember 3 at the 59th Annual Meeting of the American Association for theStudy of Liver Diseases (AASLD), to be held in San Francisco, California.Further preclinical data on ANA598 will be presented at AASLD in twoadditional poster presentations on November 4.
-- Initiation of Long-Term Chronic Toxicology Studies of ANA598. InSeptember, Anadys initiated long-term chronic toxicology studies of ANA598.If ANA598 is successful in early stage clinical trials, it is anticipated thatthe acceleration of these and other non-clinical activities into 2008 willenable a more rapid and continuous development path into Phase II studiesduring 2009.
-- Phase I Clinical Trial of ANA773 in HCV. In July, Anadys announcedthat it was resuming clinical investigation of the TLR7 mechanism in HCV bytaking ANA773 into a clinical trial under a two-part protocol designed to testANA773 in both healthy volunteers and patients with HCV. In October, Anadyscompleted dosing in healthy volunteers. Subjects received a single dosefollowed by four doses taken every other day, at levels from 200 mg to 1600 mg(with six subjects receiving active and two receiving placebo in each dosecohort). No serious adverse events were reported. Biomarker inductionindicative of immune activation was seen in a majority of subjects beginningat 800 mg. Some side effects commonly seen with interferon treatment,including fever and chills, were observed at higher doses, with the frequencyand intensity of interferon-like side effects increasing with dose. Onesubject at the 1200 mg dose and two subjects at the 1600 mg dose discontinuedfrom the trial before completion of dosing. Anadys expects to initiate Part Bof the study in HCV patients within the next few weeks. Patients in the firstcohort will receive 800 mg of ANA773 every other day for 28 days. Doses forsubsequent cohorts will be selected based on viral load and tolerability datafrom the 800 mg cohort.
-- Phase I Clinical Trial of ANA773 in Oncology. Anadys continues toenroll patients in an ongoing Phase I clinical trial of ANA773 in oncology andhas now completed enrollment in the third cohort.
Webcast of Conference Call
Anadys will host a conference call at 5:00 p.m. EDT today to discuss itsthird quarter financial results and highlights and to provide an update on itsdevelopment programs. A live webcast of the call will be available online athttp://www.anadyspharma.com. A telephone replay will also be availableapproximately one hour after completion of the call. To access the telephonereplay, dial 888-286-8010 (domestic) or 617-801-6888 (international), passcode86226986. The webcast and telephone replay will be available through November6, 2008.
Anadys Pharmaceuticals, Inc. is a clinical-stage biopharmaceutical companydedicated to improving patient care by developing novel medicines in the areasof hepatitis C and oncology. For the treatment of chronic hepatitis C, theCompany is developing two potentially complementary agents, ANA598, a non-nucleoside polymerase inhibitor and ANA773, an oral TLR7 agonist prodrug. TheCompany is also developing ANA773 for the treatment of cancer.
Safe Harbor Statement
Statements in this press release that are not strictly historical innature constitute "forward-looking statements." Such statements include, butare not limited to, references to the expected timing and planned developmentactivities for ANA598 and ANA773, including the trial design, occurrence,timing, and pace of future clinical trials, the timing for obtaining viralload data and expectations regarding such data, as well as the anticipatedfuture clinical benefits of ANA598 and ANA773. Such forward-lookingstatements involve known and unknown risks, uncertainties and other factors,which may cause Anadys' actual results to be materially different fromhistorical results or from any results expressed or implied by such forward-looking statements. For example, the results of preclinical studies and earlyclinical trials may not be predictive of future results, and Anadys cannotprovide any assurances that ANA598 or ANA773 will not have unforeseen safetyissues, will have favorable results in future clinical trials or will receiveregulatory approval. In addition, Anadys' results may be affected bycompetition from other biotechnology and pharmaceutical companies, itseffectiveness at managing its financial resources, its ability to enter intocollaborations around its product candidates, its ability to successfullydevelop and market products, difficulties or delays in its preclinical studiesor clinical trials, difficulties or delays in manufacturing its clinicaltrials materials, the scope and validity of patent protection for itsproducts, regulatory developments involving its product candidates and itsability to obtain additional funding to support its operations. Risk factorsthat may cause actual results to differ are more fully discussed in Anadys'SEC filings, including Anadys' Form 10-K for the year ended December 31, 2007and Anadys' most recent Form 10-Q. All forward-looking statements arequalified in their entirety by this cautionary statement. Anadys is providingthis information as of this date and does not undertake any obligation toupdate any forward-looking statements contained in this document as a resultof new information, future events or otherwise.Condensed Consolidated Financial Statements Anadys Pharmaceuticals, Inc. Condensed Consolidated Statements of Operations (In thousands except per share amounts) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2008 2007 2008 2007 Revenues $-- $21,489 $-- $23,892 Operating expenses Research and development(1) 7,581 7,602 19,091 21,275 General and administrative 2,084 2,444 6,104 6,844 Total operating expenses (2) 9,665 10,046 25,195 28,119 Interest income and other, net 316 864 1,311 2,855 Net (loss) income (2) $(9,349) $12,307 $(23,884) $(1,372) Net (loss) income per share, basic and diluted (2) $(0.32) $0.43 $(0.83) $(0.05) Share used in calculating net (loss) income per share, basic and diluted 28,775 28,651 28,734 28,637 (1) Includes $- and $77 as additional research and development expense, which represents an estimate of the net payable due to Novartis of ANA975 research and development costs for the three months ended September 30, 2008 and 2007, respectively. Includes ($47) and ($514) as an offset in research and development expense, which represents an estimate of the net reimbursement by Novartis of ANA975 research and development costs for the nine months ended September 30, 2008 and 2007, respectively. (2) Includes non-cash operating expenses of $738 and $1,392 determined in accordance with Statement of Financial Accounts Standards No. 123(R), "Share-Based Payment" (SFAS No. 123(R)) or approximately $0.03 and $0.05 effect on basic and diluted net (loss) income per common share for the three months ended September 30, 2008 and 2007, respectively. Research and development expense and general and administrative expense includes $326 and $412 of non-cash operating expenses determined in accordance with SFAS No. 123(R) for the three months ended September 30, 2008. Includes non-cash operating expenses of $2,065 and $3,502 determined in accordance with SFAS No. 123(R) or approximately $0.07 and $0.12 effect on basic and diluted net loss per common share for the nine months ended September 30, 2008 and 2007, respectively. Research and development expense and general and administrative expense includes $949 and $1,116 of non-cash operating expenses determined in accordance with SFAS No. 123(R) for the nine months ended September 30, 2008. Anadys Pharmaceuticals, Inc. Condensed Consolidated Balance Sheets (In thousands) September 30, December 31, 2008 2007 (Unaudited) (Audited) Assets Cash, cash equivalents and securities available-for-sale $34,352 $56,495 Other current assets 2,442 1,004 Noncurrent assets 1,999 4,027 Total assets $38,793 $61,526 Liabilities and Stockholders' Equity Current liabilities $5,549 $5,415 Other long-term liabilities 38 432 Stockholders' equity 33,206 55,679 Total liabilities and stockholders' equity $38,793 $61,526
SOURCE Anadys Pharmaceuticals, Inc.
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