Titan Pharmaceuticals Announces Fourth Quarter and Year End 2013
Financial Results
Titan Management Team to Host Conference Call April 1 at 10 a.m.
PT/ 1 p.m. ET
SOUTH SAN FRANCISCO, CA--(Marketwired - Mar 31, 2014) - Titan
Pharmaceuticals, Inc. (OTCBB: TTNP) today reported financial
results for the fourth quarter and year ended December 31,
2013.
Total revenues for 2013 were approximately $10.5 million,
compared with approximately $7.1 million in 2012. Revenues in 2013
consisted of approximately $9.1 million in licensing revenues
related to the amortization of the upfront license fee received
from Titan's commercialization partner Braeburn Pharmaceuticals in
December 2012 and approximately $1.4 million in royalty revenues on
net sales of Fanapt®, which were paid by Titan to Deerfield
Management in accordance with the terms of the agreements entered
into in 2011. Titan no longer recognizes Fanapt royalty revenues
since all of such royalties are paid to third parties. The revenues
in 2012 consisted of approximately $4.8 million in royalties on
Fanapt that were passed on to Deerfield, and approximately $2.3
million associated with the licensing and stock purchase agreements
with Braeburn.
Total operating expenses for 2013 were approximately $11.4
million, compared with approximately $15.5 million for 2012, and
consisted largely of research and development (R&D) expenses of
approximately $8.3 million, compared with approximately $10.6
million for 2012. This decrease in R&D expenses was primarily
associated with a decrease in external costs related to the
completion of the Probuphine® product development program and the
preparation and review of the Probuphine new drug application (NDA)
with the U.S. Food and Drug Administration (FDA). General and
administrative (G&A) expenses for 2013 were approximately $3.1
million, compared to approximately $4.9 million in 2012. The 2013
decrease in G&A expenses was primarily related to decreases in
non-cash stock compensation costs of approximately $1.3 million,
employee-related costs of approximately $0.2 million and consulting
and professional services fees of approximately $0.3 million.
Net other income for 2013 was approximately $10.6 million,
compared to a net other expense of approximately $6.8 million in
2012. The increase in net other income during 2013 was primarily
related to approximately $9.0 million of other income generated by
the termination of Titan's royalty repurchase agreement with
Deerfield, an approximately $1.9 million gain resulting from the
settlement of Titan's indebtedness to Deerfield as a result of the
exercise of all of the Deerfield warrants, a decrease in interest
expense of approximately $3.3 million related to the Deerfield
loans and approximately $3.5 million related to non-cash gains on
changes in the fair value of warrants. This was offset in part by
approximately $0.5 million of other expense related to unamortized
transaction fees related to the initial Deerfield debt
transaction.
Net income applicable to common stockholders for 2013 was
approximately $9.7 million, or $0.12 per share, compared to a net
loss of approximately $15.2 million, or $0.23 per share, for
2012.
As of Dec. 31, 2013, Titan had cash and cash equivalents of
approximately $11.8 million compared with approximately $18.1
million at December 31, 2012. Titan believes that its working
capital at Dec. 31, 2013 is sufficient to fund planned operations
through April 2015.
"Our plans for the year changed substantially following the
decision by the FDA to decline approval of the Probuphine NDA in
April 2013, and our focus shifted from planned corporate
development and new product development activities to supporting
Braeburn in addressing the concerns expressed by the FDA," said
Titan Pharmaceuticals President Sunil Bhonsle. "The financial
results for last year are reflective of these changed plans. While
our first priority this year continues to be the support of
activities for the continued development of Probuphine and the
resubmission of the NDA, we will also evaluate opportunities for
the potential approval of Probuphine outside North America and the
potential development of additional products with the ProNeura™
long-term drug delivery platform as resources permit."
Key highlights include:
- In early March 2014, Titan and Braeburn reached an
agreement in principle with the FDA on a path forward to address
the Complete Response Letter and enable the potential
resubmission of the Probuphine NDA, which, along with other
steps, includes conducting an additional clinical study
designed to provide a non-inferiority comparison of treatment
with a dose of four Probuphine implants in stable
patients undergoing maintenance treatment with 8mg or less per
day of an FDA-approved sublingual formulation of
buprenorphine. The clinical study protocol has been submitted
to the FDA and further details of the study and implementation
plans will be provided upon the completion of the
FDA's review.
- In November 2013, Braeburn made a $5 million equity
investment in Titan associated with the restructuring of
certain terms of the license agreement for commercialization
of Probuphine. Under the terms of the amended license
agreement, Titan is entitled to a milestone payment of
$15 million upon FDA approval of the Probuphine NDA, potential
sales milestone payments of $165 million, regulatory milestone
payments of $35 million and tiered royalties ranging from the
mid-teens to low twenties. The sales threshold to achieve the
highest royalty tier was lowered and Braeburn agreed to assume
responsibility for all third-party expenses relating to the
Probuphine regulatory process.
- Titan amended the terms of the Deerfield warrants to
permit payment of the exercise price through the reduction
of the outstanding loan. In February and March, 2013,
Deerfield exercised all of the Deerfield warrants resulting in
a $7.5 million reduction of Titan's indebtedness. In April
2013, Titan made the last installment payment of $2.5 million
and the company's debt obligation to Deerfield was
satisfied in full. Titan also amended the agreements with
Deerfield terminating Titan's option to repurchase the Fanapt
royalty rights, resulting in the non-cash gain on the
extinguishment of royalty liability of approximately
$9 million.
"Since receiving the Complete Response Letter in April, 2013, we
have focused largely on working with Braeburn and its team of
expert clinical and regulatory advisors to secure a path forward
with the FDA for Probuphine," said Titan Pharmaceuticals Executive
Vice President and Chief Development Officer Kate Glassman-Beebe,
Ph.D. "An agreement in principle has been reached with the FDA on a
study design to support the resubmission of an NDA, and we are
working diligently with Braeburn to do all that we can to lay the
groundwork for this clinical study while we await the FDA's review
of the study protocol. We look forward to advancing this important
program to ultimately benefit the millions of people suffering from
opioid dependence."
Fourth Quarter 2013 Results Total revenues for the fourth
quarter of 2013 were approximately $0.9 million, consisting of
licensing revenues related to the amortization of the upfront
license fee received from Braeburn in December 2012. This compares
with total fourth quarter revenue of approximately $3.3 million in
2012, consisting of approximately $0.9 million in royalty revenue
on net sales of Fanapt, which were paid by Titan to Deerfield in
accordance with the terms of the agreements entered into in 2011
and approximately $2.3 million in licensing revenues, consisting of
approximately $1.7 million associated with the premium paid for
Titan's common stock by an affiliate of Braeburn pursuant to the
September 2012 stock purchase and option agreement and
approximately $0.6 million related to the recognition of the
non-refundable up-front license fee from Braeburn. The decrease in
fourth quarter 2013 revenue was due to Titan no longer recognizing
Fanapt royalty revenues, as all of such royalties are paid to third
parties.
Total operating expenses for the fourth quarter of 2012 were
approximately $1.6 million, consisting primarily of R&D
expenses of approximately $0.9 million and G&A expenses of
approximately $0.6 million. Operating expenses for the same period
in 2012 were approximately $3.7 million, consisting primarily of
R&D expenses of approximately $2.6 million related to the
preparation of the Probuphine NDA submission and FDA review, and
G&A expenses of approximately $1.1 million. The decrease in
fourth quarter 2013 operating expenses reflected the completion of
preparations for the NDA submission in 2012.
Net loss applicable to common stockholders for the fourth
quarter of 2013 was approximately $0.2 million, or $0.00 per share,
compared with approximately $0.3 million, or $0.00 per share, in
the same quarter in 2012.
About Opioid Dependence According to recent estimates, there are
approximately 2.7 million people with opioid dependence in the U.S.
Approximately 20 percent of this population is addicted to illicit
opioids, such as heroin, and the other 80 percent to prescription
opioids, such as oxycodone, hydrocodone, methadone, hydromorphone
and codeine. Before the year 2000, medication-assisted therapies
for opioid dependence had been sanctioned to a limited number of
facilities in the U.S. The Drug Addiction Treatment Act of 2000
(DATA 2000) allowed medical office-based treatment of opioid
dependence and greatly expanded patient access to
medication-assisted treatments. As a result, an estimated 1.2
million people in the U.S. sought treatment for opioid dependence
in 2011.
About Probuphine® Probuphine is an investigational subdermal
implant designed to deliver continuous, around-the-clock blood
levels of buprenorphine for six months following a single
treatment, and to simplify patient compliance and retention.
Buprenorphine, an approved agent for the treatment of opioid
dependence, is currently available in the form of daily dosed
sublingual tablets and film formulations, with reported 2012 sales
of approximately $1.5 billion in the United States.
Probuphine was developed using ProNeura™, Titan's continuous
drug delivery system that consists of a small, solid implant made
from a mixture of ethylene-vinyl acetate (EVA) and a drug
substance. The resulting construct is a solid matrix that is placed
subdermally, normally in the upper arm in a simple office
procedure, and removed in a similar manner at the end of the
treatment period. The drug substance is released slowly and
continuously through the process of dissolution resulting at a
steady rate of release.
The efficacy and safety of Probuphine has been studied in
several clinical trials, including a 163-patient,
placebo-controlled study over a 24-week period (published in the
Journal of the American Medical Association (JAMA)), and a
follow on study of 287 patients (published in the journal
Addiction).
ProNeura™ Technology Probuphine is the first product to utilize
Titan's proprietary, long-term drug delivery technology, ProNeura,
which has the potential to be used in developing products for the
treatment of other chronic conditions. In July 2012, Titan
announced that it had successfully completed preclinical
investigation into the feasibility of a long-term,
around-the-clock, non-fluctuating dopamine agonist treatment for
Parkinson's disease, where maintaining stable, around-the-clock
blood levels of dopamine agonists may benefit the patient and
improve medical outcomes. Titan has been issued patents covering
certain dopamine agonist implants in Europe, Japan, Australia,
Canada, South Korea, Mexico, New Zealand, South Africa, and Hong
Kong, while prosecution of patent applications continues in the
U.S., Israel, India and China.
Conference Call Titan management will host a live conference
call at 10 a.m. PT / 1 p.m. ET on Tuesday, April 1, 2014 to discuss
the company's financial results for the fourth quarter and year
ended December 31, 2013. The call will be hosted by Sunil Bhonsle,
President; Katherine Glassman-Beebe, Ph.D., Executive Vice
President and Chief Development Officer; Brian Crowley, Vice
President of Finance, and Marc Rubin, M.D., Executive Chairman.
The live webcast of the call may be accessed by visiting the
Titan website at www.titanpharm.com. The call can also be accessed
by dialing (888) 221-3887, Participant Code 3001910 five minutes
prior to the start time. A replay of the call will be available on
the company website approximately two hours after completion of the
call and will be archived for two weeks.
About Titan Pharmaceuticals Titan Pharmaceuticals Inc. (OTCBB:
TTNP), based in South San Francisco, CA, is a specialty
pharmaceutical company developing proprietary therapeutics
primarily for the treatment of serious medical disorders. The
company's lead product candidate is Probuphine®, a novel and
long-acting formulation of buprenorphine for the long-term
maintenance treatment of opioid dependence. Probuphine employs
Titan's proprietary drug delivery system ProNeura™, which is
capable of delivering sustained, consistent levels of medication
for six months or longer. Titan has granted North American
commercial rights for Probuphine to Braeburn Pharmaceuticals. If
approved, Probuphine would be the first and only commercialized
treatment of opioid dependence to provide continuous,
around-the-clock blood levels of buprenorphine for six months. The
ProNeura technology has the potential to be used in developing
products for treating other chronic conditions, such as Parkinson's
disease, where maintaining consistent blood levels of a dopamine
agonist may benefit the patient and improve medical outcomes. For
more information about Titan, please visit www.titanpharm.com.
The press release may contain "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Such statements
include, but are not limited to, any statements relating to our
product development programs and any other statements that are not
historical facts. Such statements involve risks and uncertainties
that could negatively affect our business, operating results,
financial condition and stock price. Factors that could cause
actual results to differ materially from management's current
expectations include those risks and uncertainties relating to the
regulatory approval process, the development, testing, production
and marketing of our drug candidates, patent and intellectual
property matters and strategic agreements and relationships. We
expressly disclaim any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statements
contained herein to reflect any change in our expectations or any
changes in events, conditions or circumstances on which any such
statement is based, except as required by law.
|
|
TITAN PHARMACEUTICALS, INC. |
|
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME (LOSS) |
|
(in thousands, except per share amount) |
|
(unaudited) |
|
|
|
|
|
Three Months Ended December 31, |
|
|
Year Ended December 31, |
|
|
|
2013 |
|
|
2012 |
|
|
2013 |
|
|
2012 |
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
License revenue |
|
$ |
911 |
|
|
$ |
2,325 |
|
|
$ |
9,057 |
|
|
$ |
2,325 |
|
|
Royalty revenue |
|
|
- |
|
|
|
934 |
|
|
|
1,424 |
|
|
|
4,750 |
|
|
Grant revenue |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
42 |
|
|
|
Total
revenue |
|
|
911 |
|
|
|
3,259 |
|
|
|
10,481 |
|
|
|
7,117 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
929 |
|
|
|
2,573 |
|
|
|
8,309 |
|
|
|
10,610 |
|
|
General and administrative |
|
|
624 |
|
|
|
1,128 |
|
|
|
3,063 |
|
|
|
4,877 |
|
|
|
Total
operating expense |
|
|
1,553 |
|
|
|
3,701 |
|
|
|
11,372 |
|
|
|
15,487 |
|
Loss from operations |
|
|
(642 |
) |
|
|
(442 |
) |
|
|
(891 |
) |
|
|
(8,370 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income (expense), net |
|
|
433 |
|
|
|
162 |
|
|
|
10,602 |
|
|
|
(6,810 |
) |
Net income (loss) and comprehensive |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
income (loss) |
|
$ |
(209 |
) |
|
$ |
(280 |
) |
|
$ |
9,711 |
|
|
$ |
(15,180 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) per share |
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
|
$ |
0.12 |
|
|
$ |
(0.23 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income (loss) per share |
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
|
$ |
0.10 |
|
|
$ |
(0.23 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used in computing basic net
income (loss) per share |
|
|
84,990 |
|
|
|
74,732 |
|
|
|
82,099 |
|
|
|
66,509 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used in computing diluted net
income (loss) per share |
|
|
85,051 |
|
|
|
74,732 |
|
|
|
82,659 |
|
|
|
66,509 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED BALANCE SHEETS |
|
(in thousands) |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
December 31, |
|
|
|
2013 |
|
2012 |
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
Cash |
|
$ |
11,798 |
|
$ |
18,102 |
|
|
Receivables |
|
|
4,818 |
|
|
4,646 |
|
|
Prepaid expenses and other current assets |
|
|
204 |
|
|
687 |
|
|
|
Total
current assets |
|
|
16,820 |
|
|
23,435 |
|
|
Furniture and equipment, net |
|
|
1,603 |
|
|
1,392 |
|
|
|
$ |
18,423 |
|
$ |
24,827 |
|
Liabilities and Stockholders' Equity (Deficit) |
|
|
|
|
|
|
|
|
Current liabilities |
|
$ |
10,846 |
|
$ |
21,393 |
|
|
Warrant liabilities |
|
|
1,817 |
|
|
8,240 |
|
|
Royalty liability |
|
|
- |
|
|
8,962 |
|
|
Long-term debt |
|
|
- |
|
|
9,360 |
|
|
Stockholders' equity (deficit) |
|
|
5,760 |
|
|
(23,128 |
) |
|
|
$ |
18,423 |
|
$ |
24,827 |
|
|
|
|
|
|
|
|
|
CONTACT: Titan Pharmaceuticals, Inc. Sunil Bhonsle 650-244-4990
President Media Susan Thomas 619-540-9195
stcommunications@aol.com
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