ISTA Pharmaceuticals Reports Third Quarter 2009 Financial Results
"In September, we received FDA approval to begin marketing Bepreve, a new treatment for ocular itching associated with allergic conjunctivitis. We immediately launched Bepreve, by making the decision to add over 60 new sales territories and shipping samples of Bepreve to key customers within days of the product's approval. I am pleased to report we have been receiving strong positive feedback from physicians using Bepreve in their practices," stated Vicente Anido, Jr., Ph.D., President and Chief Executive Officer of ISTA. "Our sales force is excited, and we are very proud of what we have accomplished so far, but we have just begun. The ocular allergy market is the largest market we have entered to date, and Xibrom and Istalol continue to show strong growth. We believe ISTA will finish 2009 in a strong position to allow us to continue building upon our commercial success next year.
"With respect to our product candidates under development, we reported positive preliminary Phase 3 results from our Xibrom 0.09% QD confirmatory clinical study and are working diligently to file a supplemental New Drug Application (sNDA) in 2009. Our rich late-stage pipeline includes a new low-dose formulation of bromfenac for dry eye, which is expected to enter Phase 3 studies during the first half of 2010, and bepotastine nasal spray, both of which represent even larger market opportunities than ocular allergy. We are confident in our core products and in our ability to grow our business even further over the coming years as we launch new products."
Third Quarter and Year to Date Operating Details
Net revenue for the three and nine months ended September 30, 2009 was $32.0 and $76.4 million, respectively, or an increase of 47% and 39%, respectively, over the same periods of 2008. Included in net revenue for the three and nine months in 2009 is $1.2 million associated with the launch of Bepreve and $2.9 million of previously deferred revenue associated with the termination of a supply agreement.
Gross margin for the three and nine months ended September 30, 2009 was 77%, or $24.7 million, and 76%, or $57.7 million, respectively, as compared to 73%, or $15.9 million, and 73%, or $40.2 million, respectively, for the same period in 2008. Product gross margin, excluding deferred revenue, was 75% for both the three and nine month periods ended September 30, 2009. The increase in product gross margin for the three and nine months ended September 30, 2009, as compared to the three and nine months ended September 30, 2008, was primarily the result of continued growth in prescription levels and market share, particularly for Xibrom.
Research and development expenses for the three and nine months ended September 30, 2009 were $6.3 million and $19.6 million, respectively, as compared to $7.8 million and $25.1 million, respectively, during the same periods in 2008. The decrease in research and development expenses for 2009 was primarily the result of a decrease in clinical development costs and the Company's focus on shorter term development projects.
Selling, general, and administrative expenses for the three and nine months ended September 30, 2009 were $13.2 million and $38.9 million, respectively, as compared to $13.2 million and $40.2 million, respectively, for the same periods in 2008. The decrease is primarily indicative of an overall improvement in expense management.
Operating income for the three months ended September 30, 2009 was $5.2 million, compared with an operating loss of $5.1 million in the same period of 2008. For the nine months ended September 30, 2009, the operating loss was $0.8 million, as compared with an operating loss of $25.0 million for the same period in 2008.
Net loss for the three and nine months ended September 30, 2009 including the non-cash warrant valuation charges, was $0.9 million, or $0.03 per share, and $57.2 million, or $1.72 per share, respectively, as compared with a net loss of $9.6 million, or $0.29 per share, and $32.8 million, or $0.99 per share, for the same periods in 2008. Net loss for the three months ended September 30, 2009 included $1.0 million, or $0.03 per share, in one-time non-cash charges. In addition, the non-cash warrant valuation charges for the three and nine months ended September 30, 2009, of $3.4 million, or $0.10 per share, and $50.7 million, or $1.53 per share, respectively, reflect the change in the valuation of the warrants primarily driven by an increase in our stock price plus an increase in related volatility.
At September 30, 2009, ISTA increased its cash to $55.0 million, as compared to $46.9 million at June 30, 2009.
Based upon the continued growth of ISTA's business, the Company provides this updated 2009 financial outlook:
ISTA will host a conference call with a simultaneous webcast, today November 3, 2009, at 5:00 PM Eastern Time, to discuss its third quarter 2009 results. To access the live conference call, U.S. and Canadian participants may dial 800-510-9691; international participants may dial 617-614-3453. The access code for the live call is 62898415. To access the 24-hour audio replay, U.S. and Canadian participants may dial 888-286-8010; international participants may dial 617-801-6888. The access code for the replay is 52451599. The conference call will also be webcast live and archived on ISTA's website for 30 days at http://www.istavision.com.
About ISTA Pharmaceuticals
ISTA Pharmaceuticals is the fourth largest branded ophthalmic pharmaceutical business in the U.S. ISTA's four marketed products plus its product candidates include therapies for inflammation, ocular pain, glaucoma, allergy, and dry eye. The Company is developing a strong product pipeline to fuel future growth and market share, thereby continuing its growth to become the leading niche ophthalmic pharmaceutical company in the U.S. For additional information regarding ISTA, please visit ISTA Pharmaceuticals' website at http://www.istavision.com.
Bepreve(TM) (bepotastine besilate ophthalmic solution) 1.5%, Xibrom(TM) (bromfenac ophthalmic solution) 0.09%, Istalol® (timolol maleate ophthalmic solution) 0.5%, and Vitrase® (hyaluronidase injection) are trademarks of ISTA Pharmaceuticals.
Full prescribing information for Bepreve(TM) is available on ISTA Pharmaceuticals' website at http://www.istavision.com/pdf/Bepreve_insert.pdf
Full prescribing information for Xibrom is available on ISTA Pharmaceuticals' website at www.istavision.com/pdf/XibromPI_XIB553.pdf
Any statements contained in this press release that refer to future events or other non-historical matters are forward-looking statements. Without limiting the foregoing, but by way of example, statements contained in this press release relating to ISTA's 2009 expected financial results, the commercial launch of Bepreve, ISTA's expectation to begin a Phase 3 study for ISTA's low-dose formulation of bromfenac in the first half of 2010. Except as required by law, ISTA disclaims any intent or obligation to update any forward-looking statements. These forward-looking statements are based on ISTA's expectations as of the date of this press release and are subject to risks and uncertainties that could cause actual results to differ materially. Important factors that could cause actual results to differ from current expectations include, among others: timely and successful implementation of ISTA's strategic initiatives; delays and uncertainties related to ISTA's research and development programs (including the difficulty of predicting the timing or outcome of product development efforts and the FDA or other regulatory agency approval or actions); uncertainties and risks regarding market acceptance of and demand for ISTA's approved products and the impact of competitive products and pricing, including the introduction of competitive generic products; uncertainties and risks related to ISTA's ability to properly manage its growth; uncertainties and risks regarding the continued timely performance by ISTA's strategic partners of their respective obligations under existing collaborations and licensing arrangements; uncertainties and risks related to the continued availability of third party sourced products and raw materials on commercially reasonable terms, or at all; uncertainties and risks related to successful compliance with FDA and or other governmental regulations applicable to ISTA's facilities, products and/or business; uncertainties and risks related to the scope, validity, and enforceability of patents related to ISTA's products and technologies and the impact of patents and other intellectual property rights held by third parties; and such other risks and uncertainties as detailed from time to time in ISTA's public filings with the U.S. Securities and Exchange Commission, including but not limited to ISTA's Annual Report on Form 10-K for the year ended December 31, 2008 and ISTA's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2009, and June 30, 2009.
Net Revenue (in millions, except percentage data) Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended September September % September September % 30, 2009 30, 2008 Change 30, 2009 30, 2008 Change Xibrom $21.4 $16.2 32% $55.1 $41.6 32% Istalol 5.1 3.9 31% 13.0 9.5 37% Vitrase 1.4 1.5 -7% 4.0 3.7 8% Bepreve 1.2 0.0 - 1.2 0.0 - Total product 29.1 21.6 35% 73.3 54.8 34% Other 2.9 0.1 - 3.1 0.2 - Total $32.0 $21.7 47% $76.4 $55.0 39%
SOURCE ISTA Pharmaceuticals, Inc.
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