WARRINGTON, Pa., May 7, 2015 /PRNewswire/ -- Discovery
Laboratories, Inc. (Nasdaq: DSCO), a specialty biotechnology
company focused on developing aerosolized KL4 surfactant therapies
for respiratory diseases, today announced financial results for the
first quarter ended March 31,
2015.
Key Financial and Business Updates
The Company reported a net loss of $12.2
million ($0.14 per basic
share) on 85.6 million weighted-average common shares outstanding
for the quarter ended March 31, 2015,
compared to a net loss of $11.5
million ($0.14 per basic
share) on 84.7 million weighted average common shares outstanding
for the comparable period in 2014. For the quarter ended
March 31, 2015, the Company reported
an operating loss of $11.2 million
compared to $10.8 million for
comparable period in 2014.
Net cash outflows for the quarter ended March 31, 2015 were $9.1
million. As of March 31,
2015, the Company had cash and cash equivalents of
$35.6 million.
In April 2015, the Company
announced that it had completed enrollment in its
AEROSURF® phase 2a clinical trial in premature infants
29-34 week gestational age with respiratory distress syndrome
(RDS). The Company is finalizing its analysis of the trial data and
remains on track to release results and hold an investor conference
call in mid-May, consistent with previous guidance.
Also in April 2015, the Company
implemented a restructuring plan to voluntarily cease the
commercialization of SURFAXIN® (lucinactant)
Intratracheal Suspension and focus its resources on the development
of its aerosolized KL4 surfactant for respiratory diseases,
beginning with AEROSURF for RDS in premature infants.
The Company expects to record a one-time restructuring charge
of approximately $2.5 - $3.0 million
in the second quarter of 2015.
Select Additional Financial Results for the First Quarter ended
March 31, 2015
During the first quarter of 2015, the Company recognized
$0.2 million in grant revenue under
previously announced awards, including $0.1 million of a
$1.0 million award under a Small
Business Innovation Research (SBIR) Grant from the National
Institutes of Health (NIH) for up to $3.0
million to support the development of the Company's
aerosolized KL4 surfactant as a medical countermeasure to mitigate
acute and chronic/late-phase radiation-induced lung injury; and
$0.1 million under a $1.9 million Fast Track SBIR Grant from the NIH
to support the ongoing AEROSURF phase 2a clinical trial.
Operating expenses for the first quarter ended March 31, 2015 were $11.4
million. Approximately $4.0
million of this amount were expenditures to support
manufacturing, quality, medical affairs and commercialization
activities to support SURFAXIN. Research and development costs
included: (1) activities to conduct the Company's AEROSURF phase 2a
clinical trial and manufacture of capillary aerosol generator (CAG)
devices and related components to prepare for the planned AEROSURF
phase 2b clinical program; (2) investments associated with the
Company's collaboration with Battelle Memorial Institute to prepare
the CAG for a potential AEROSURF phase 3 clinical program and, if
successful, commercialization; and (3) investments in clinical,
medical, and aerosolization device expertise to support the
AEROSURF clinical program and pipeline development.
Other income and expense of $1.0
million for the quarter ended March
31, 2015 includes $1.2 million
of interest expense related to long-term debt including
$0.6 million cash interest expense
and $0.6 million non-cash
amortization of the debt discount.
As of March 31, 2015, the Company
had $30 million of long-term debt
with principal payable in three equal annual installments beginning
in February 2017, subject to a
potential one-year deferral of all amounts due in each of 2017 and
2018 if certain financial milestones are achieved.
As of March 31, 2015, the Company
reported a common stock warrant liability of $1.3 million related to five-year warrants issued
in February 2011. These warrants are not subject to cash
settlement, but they have been classified as derivative liabilities
in accordance with generally accepted accounting principles because
they contain anti-dilution provisions that adjust the exercise
price of the warrants in certain circumstances.
The Company had 85.7 million and 85.6 million shares of common
stock outstanding as of March 31,
2015 and December 31, 2014,
respectively.
Readers are referred to, and encouraged to read in its entirety,
the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 2015 to be filed with the
Securities and Exchange Commission on or before May 11, 2015,
which will include discussion about the Company's business plans
and operations, financial condition and results of operations.
About AEROSURF®
AEROSURF is a novel,
investigational drug/device product that combines the Company's
proprietary KL4 surfactant and its aerosolization
technologies. AEROSURF is being developed to potentially
reduce or eliminate the need for intubation and mechanical
ventilation in the treatment of premature infants with respiratory
distress syndrome (RDS). With AEROSURF, neonatologists may
potentially administer aerosolized KL4 surfactant to premature
infants supported by nasal continuous positive airway pressure
(nCPAP), without subjecting them to invasive intubation and
mechanical ventilation (each of which can result in serious
respiratory conditions and other complications), which are
currently required to administer surfactant therapy to premature
infants. By enabling delivery of aerosolized KL4 surfactant
using less invasive procedures, AEROSURF, if approved, has
the potential to address a serious unmet medical need, provide
transformative clinical and pharmacoeconomic benefits, and enable
the treatment of a significantly greater number of premature
infants with RDS who could benefit from surfactant therapy but are
currently not treated.
About Discovery Labs
Discovery Laboratories, Inc. is a
specialty biotechnology company focused on developing aerosolized
KL4 surfactant therapies for respiratory diseases.
Surfactants are produced naturally in the lung and are
essential for normal respiratory function and survival. If
surfactant deficiency or degradation occurs, the air sacs in the
lungs can collapse, resulting in severe respiratory diseases and
disorders. Discovery Labs' technology platform includes a
novel synthetic peptide-containing (KL4) surfactant, that is
structurally similar to pulmonary surfactant, and proprietary drug
delivery technologies being developed to enable efficient delivery
of aerosolized KL4 surfactant. Discovery Labs believes that
its proprietary technology platform makes it possible, for the
first time, to develop a significant pipeline of aerosolized
surfactant products to address a variety of respiratory diseases
for which there frequently are few or no approved therapies.
For more information, please visit the Company's website at
www.Discoverylabs.com.
Forward-Looking Statements
To the extent
that statements in this press release are not strictly historical,
all such statements are forward-looking, and are made pursuant to
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are
subject to certain risks and uncertainties that could cause actual
results, including projections of future cash balances and
anticipated cash outflows, to differ materially from the statements
made. Examples of such risks and uncertainties include:
risks associated with Discovery Labs' decision to cease its
commercialization activities for SURFAXIN and terminate its
manufacturing activities at its manufacturing facility in
Totowa, NJ; risks that Discovery
Labs will be unable to secure significant additional capital as
needed, and may be unable in a timely manner, if at all, to
identify potential strategic partners to support product
development and, if approved, commercialize products in markets
outside the U.S., or to access debt or equity financings, which
could result in substantial equity dilution; risks related to
Discovery Labs' AEROSURF and other development programs,
which may involve time-consuming and expensive pre-clinical studies
and clinical trials, which may be subject to potentially
significant delays or regulatory holds, or fail; risks related to
technology transfers to contract manufacturers and problems or
delays encountered by Discovery Labs, contract manufacturers or
suppliers in manufacturing drug products, drug substances, CAG
devices and other materials on a timely basis and in sufficient
amounts; risks relating to rigorous regulatory requirements,
including that: (i) the FDA or other regulatory authorities may not
agree with Discovery Labs on matters raised during regulatory
reviews, may require significant additional activities, or may not
accept or may withhold or delay consideration of applications, or
may not approve or may limit approval of Discovery Labs'
products, and (ii) changes in the national or
international political and regulatory environment may make it more
difficult to gain regulatory approvals; risks related to
maintaining continued compliance with The Nasdaq Capital
Market listing requirements; risks related to Discovery Labs'
efforts to maintain and protect the patents and licenses related to
its products,; and other risks and uncertainties described in
Discovery Labs' filings with the Securities and Exchange Commission
including the most recent reports on Forms 10-K, 10-Q and 8-K, and
any amendments thereto.
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Discovery
Laboratories, Inc.
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Condensed
Consolidated State of Operations
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(in thousands, except
per share data)
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|
|
|
|
|
|
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Three Months
Ended
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March 31,
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(unaudited)
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2015
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2014
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Revenues:
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Product
sales
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$
7
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$
28
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Grant
revenue
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184
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|
3
|
|
|
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|
191
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31
|
|
|
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Operating expenses:
(1)
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|
|
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Cost of product
sales
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929
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|
781
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Research and
development
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7,082
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5,590
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Selling, general and
administrative
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3,353
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4,423
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Total
expenses
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11,364
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10,794
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Operating
loss
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(11,173)
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(10,763)
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Change in fair value
of common stock warrant
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liability
(1)
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(31)
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378
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Other income /
(expense), net
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(975)
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(1,091)
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Net loss
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$
(12,179)
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$
(11,476)
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Net loss per common
share
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$
(0.14)
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$
(0.14)
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|
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Weighted avg. common
shares outstanding
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85,589
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|
84,728
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(1)
Material non-cash items
include the change in fair value of certain outstanding warrants
accounted for as derivative liabilities, and in operating expenses,
depreciation and stock-based compensation. For the three
months ended March 31, 2015 and 2014, the charges for depreciation
and stock-based compensation were $0.8 million ($0.4 million in
R&D and $0.4 million in S, G & A) and $0.9 million ($0.4
million in R&D and $0.5 million in S, G & A),
respectively.
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Discovery
Laboratories, Inc.
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Condensed
Consolidated Balance Sheets
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(in thousands, except
per share data)
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March 31,
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December
31,
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2015
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2014
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ASSETS
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(Unaudited)
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Current
Assets:
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Cash and cash
equivalents
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$
35,583
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$
44,711
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Inventory
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–
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27
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Prepaid expenses and
other current assets
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576
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821
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Total current
assets
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36,159
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45,559
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Property and
equipment, net
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1,665
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1,637
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Restricted
cash
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225
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225
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Other
assets
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73
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|
78
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Total
Assets
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$
38,122
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$
47,499
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LIABILITIES AND
STOCKHOLDERS' EQUITY
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Current
Liabilities:
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Accounts payable and
accrued expenses
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$
7,926
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$
6,466
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Deferred
revenue
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–
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43
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Common stock warrant
liability
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1,289
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1,258
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Equipment loans,
current portion
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42
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|
62
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Total current
liabilities
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9,257
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7,829
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Long-term debt,
$30,000 net of discount of $9,143 at March 31, 2015 and
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$9,698 at December
31, 2014
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20,857
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20,302
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Other
liabilities
|
|
196
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|
169
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Stockholders'
Equity
|
|
7,812
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|
19,199
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Total Liabilities and
Stockholders' Equity
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$
38,122
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$
47,499
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To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/discovery-labs-reports-first-quarter-2015-financial-results-300079847.html
SOURCE Discovery Laboratories, Inc.