Non-GAAP Operating Loss Improves by 50% to $42.2 Million in First
Half of 2009 Compared to First Half of 2008 New Drug Application
for Exenatide Once Weekly Submitted and Accepted for Review by FDA
SAN DIEGO, July 21 /PRNewswire-FirstCall/ -- Amylin
Pharmaceuticals, Inc. (NASDAQ:AMLN) today reported financial
results for the quarter ended June 30, 2009. The Company reported
total revenue of $209.4 million for the quarter ended June 30,
2009, which includes net product sales of $197.5 million. Net loss,
excluding a charge of $11.4 million associated with the Company's
sales force reduction in the second quarter, was $51.0 million, or
$0.36 per share. Non-GAAP operating loss was $22.4 million for the
quarter ended June 30, 2009, compared to $40.3 million for the same
period in 2008. GAAP net loss was $62.4 million, or $0.44 per
share, for the quarter ended June 30, 2009, compared to $66.6
million, or $0.49 per share, for the same period in 2008. At June
30, 2009 the Company held cash, cash equivalents and short-term
investments of $644.4 million. "We set a goal of becoming operating
cash flow positive by the end of 2010, and we have taken
considerable steps toward achieving that goal," said Mark G.
Foletta, senior vice president of finance and chief financial
officer, Amylin Pharmaceuticals. "In the last few quarters, we
implemented a strategic restructuring and workforce reduction in
order to bring operating expenses more in line with revenue,
revised our cost allocation agreement with Lilly to create a more
efficient global cost structure for the exenatide franchise and
restructured our sales force to more efficiently leverage Lilly's
expertise and resources for the primary care market. Within the
first half of this year, savings from those activities have
resulted in a 50% improvement in non-GAAP operating loss, a measure
of operating cash flow, over the same period last year." Quarter
Ended June 30, 2009 Net product sales of $197.5 million for the
quarter ended June 30, 2009 include $175.1 million for BYETTA
(exenatide) injection and $22.4 million for SYMLIN (pramlintide
acetate) injection. This compares to net product sales of $200.3
million, consisting of $177.5 million for BYETTA and $22.8 million
for SYMLIN for the same period in 2008. Revenues under
collaborative agreements were $11.9 million for the quarter ended
June 30, 2009, compared to $21.7 million for the same period in
2008. The decrease reflects lower cost-sharing payments from our
collaboration partner Eli Lilly and Company (Lilly) due to
decreased spending associated with the BYETTA and exenatide once
weekly development programs. Selling, general and administrative
expenses decreased to $92.1 million for the quarter ended June 30,
2009 from $111.1 million for the same period in 2008. The decrease
primarily reflects efficiencies driven by the Company's reduced
cost structure, partially offset by costs associated with the
Company's recent proxy contest in connection with its 2009 annual
meeting of stockholders held in May 2009. Research and development
expenses decreased to $63.6 million for the quarter ended June 30,
2009 from $75.4 million for the same period in 2008. The decrease
primarily reflects lower development expenses for exenatide once
weekly and BYETTA, and reduced expenses for the Company's obesity
programs, driven by the Company's reduced cost structure. Non-GAAP
research and development expenses net of Lilly cost-sharing
payments decreased to $52.8 million for the quarter ended June 30,
2009, compared to $54.8 million for the same period in 2008.
Collaborative profit sharing, which represents Lilly's share of the
gross margin for BYETTA, was $76.2 million for the quarter ended
June 30, 2009, compared to $79.0 million for the same period in
2008. Non-GAAP operating loss was $22.4 million for the quarter
ended June 30, 2009 compared to $40.3 million for the same period
in 2008. The Company's results for the quarter ended June 30, 2009
include a charge of $11.4 million associated with the Company's
sales force restructuring during the second quarter. This charge
consists primarily of employee separation costs. Net loss excluding
this charge was $51.0 million, or $0.36 per share. GAAP net loss
was $62.4 million, or $0.44 per share, for the quarter ended June
30, 2009, compared to $66.6 million, or $0.49 per share, for the
same period in 2008. "In the first half of 2009 we made significant
progress regarding the development and potential launch of
exenatide once weekly. The FDA accepted the NDA submission for
review, and we announced results from three major clinical trials
that support the safety and efficacy of the once-weekly therapy,"
said Daniel M. Bradbury, president and chief executive officer at
Amylin Pharmaceuticals. "Additionally, we created a specialty sales
organization to better address the needs of the complex diabetes
market. We believe all of these activities will help grow BYETTA
today, and will position exenatide once weekly for a successful
launch." Second Quarter Highlights Highlights of Amylin's second
quarter and recent activities include: Corporate -- Improved
non-GAAP operating loss by 50% in the first half of 2009 compared
to the first half of 2008 -- Merged Amylin's existing primary care
and specialty sales forces into a single organization that will
bring a specialty approach to endocrinologists and diabetes-focused
primary care physicians, ultimately improving the quality and
frequency of our interactions with core prescribers -- Revised the
cost allocation agreement with Lilly regarding development and
commercialization expenses for the exenatide franchise. The changes
were part of an overall plan to optimize administration across the
Amylin/Lilly alliance BYETTA -- Presented compelling efficacy and
safety data on BYETTA at the Annual Scientific Sessions of the
American Diabetes Association (ADA) meeting, including: -- Interim
results from retrospective study that showed the risk of acute
pancreatitis among patients initiating therapy with BYETTA was not
increased compared to patients initiating other antidiabetic
therapies -- A meta-analysis of clinical data that showed there was
no increased risk of cardiovascular events associated with the use
of exenatide Exenatide Once Weekly -- Submitted a New Drug
Application (NDA) for exenatide once weekly. The application was
accepted for review by FDA in early July -- Announced results from
DURATION-3, a head-to-head comparative effectiveness study, that
demonstrated exenatide once weekly provided superior glucose
control over Lantus (insulin glargine) injection. Treatment with
exenatide once weekly also led to statistically significant
improvements in body weight, with reduced incidence of confirmed
hypoglycemia -- Signed joint supply agreement with Lilly to develop
a pen device for exenatide once weekly that will enable patients to
mix and administer the medicine from a pre-filled pen device,
instead of the syringe and vial currently used in clinical trials
-- Initiated a phase 1/2 clinical study to examine a new exenatide
once weekly suspension formulation that eliminates the need to
reconstitute the product prior to use -- Presented data at the ADA
annual meeting that showed exenatide once weekly provided: --
Sustained improvements in glycemic control, with weight loss, over
two years -- Superior glucose control with weight loss compared to
Januvia (sitagliptin) or Actos (pioglitazone) in head-to-head
DURATION-2 study Symlin -- Presented data that showed the use of
mealtime SYMLIN improved glucose control, treatment satisfaction
and quality of life for patients with type 2 diabetes Six Months
Ended June 30, 2009 Total revenues for the six months ended June
30, 2009 were $403.0 million. This includes net product sales of
$376.8 million, including $332.8 million for BYETTA and $44.0
million for SYMLIN. This compares to net product sales of $379.1
million, consisting of $336.0 million for BYETTA and $43.1 million
for SYMLIN for the same period in 2008. Revenues under
collaborative agreements decreased to $26.2 million for the six
months ended June 30, 2009, compared to $40.2 million for the same
period in 2008. The decrease reflects lower cost-sharing payments
from Lilly due to decreased spending associated with the BYETTA and
exenatide once weekly development programs. Selling, general and
administrative expenses decreased to $179.6 million for the six
months ended June 30, 2009 from $209.3 million for the same period
in 2008. The decrease primarily reflects efficiencies driven by the
Company's reduced cost structure, partially offset by costs
associated with the Company's recent proxy contest in connection
with its 2009 annual meeting of stockholders held in May 2009.
Research and development expenses decreased to $123.6 million for
the six months ended June 30, 2009 from $152.6 million for the same
period in 2008. The decrease primarily reflects lower development
expenses for exenatide once weekly and BYETTA, and reduced expenses
for the Company's obesity programs, driven by the Company's reduced
cost structure. Research and development expenses for the six
months ended June 30, 2008 also included an $8.0 million license
payment for drug delivery technology. Non-GAAP research and
development expenses, net of cost-sharing payments decreased to
$99.5 million for the six months ended June 30, 2009, from $114.6
million for the same period in 2008. Collaborative profit sharing
was $149.2 million for the six months ended June 30, 2009, compared
to $148.9 million for the same period in 2008. Non-GAAP operating
loss was $42.2 million for the six months ended June 30, 2009. This
was a 50% improvement over the $84.3 million for the same period in
2008. Net loss excluding the restructuring charge was $98.0
million, or $0.70 per share. GAAP net loss for the six months ended
June 30, 2009 was $109.3 million, or $0.78 per share, compared to
$137.7 million, or $1.01 per share for the same period in 2008.
Conference Call Amylin will webcast its Quarterly Update Conference
Call today at 5:00 p.m. ET/2:00 p.m. PT. Daniel M. Bradbury,
Amylin's president and chief executive officer, will lead the call.
During the call, the Company plans to provide further details
underlying its quarterly financial results, and information
regarding assumptions for the remainder of 2009 operations. The
call will be webcast live through the "Investors" section of
Amylin's corporate Web site at http://www.amylin.com/. A slide
presentation accompanying the conference call will also be
available through the "Investors" section of Amylin's corporate Web
site. To access the webcast and slide presentation, please log on
to http://www.amylin.com/ approximately fifteen minutes prior to
the call to register, download and install any necessary audio
software. For those without access to the Internet, the live call
may be accessed by phone by calling (866) 783-2141 (U.S./Canada) or
(857) 350-1600 (international), Conference ID# 46259840. A replay
of the call will be available through the "Investors" section of
Amylin's corporate Web site and by phone beginning approximately
two hours after the close of the call and can be accessed at (888)
286-8010 (U.S./Canada) or (617) 801-6888 (international),
Conference ID# 67467542. Note Regarding Use of Non-GAAP Financial
Measures Amylin reports non-GAAP operating loss excluding non-cash
items and other one-time items, which is a non-GAAP financial
measure. The Company believes that investors' understanding of its
progress towards its stated goal of generating positive non-GAAP
operating results by the end of 2010 is enhanced by this
disclosure. Amylin also reports non-GAAP research and development
expenses net of cost-sharing payments, which is a non-GAAP
financial measure. The Company believes that investors'
understanding of Amylin's net investment in research and
development activities is enhanced by this disclosure. In addition,
the Company refers to these non-GAAP financial measures with its
analysis of the Company's financial performance. These non-GAAP
financial measures should be considered in addition to, and not as
a substitute for, or superior to, financial measures calculated in
accordance with GAAP. About Amylin Amylin Pharmaceuticals is a
biopharmaceutical company committed to improving lives through the
discovery, development and commercialization of innovative
medicines. Amylin has developed and gained approval for two
first-in-class medicines for diabetes, SYMLIN (pramlintide acetate)
injection and BYETTA (exenatide) injection. Amylin's research and
development activities leverage the Company's expertise in
metabolism to develop potential therapies to treat diabetes and
obesity. Amylin is headquartered in San Diego, California. Further
information on Amylin Pharmaceuticals is available at
http://www.amylin.com/. This press release contains forward-looking
statements about Amylin, which involve risks and uncertainties. Our
actual results could differ materially from those discussed herein
due to a number of risks and uncertainties, including risks that
BYETTA or SYMLIN may be affected by competition, unexpected new
data, safety and technical issues, or manufacturing and supply
issues; risks that our financial results may fluctuate
significantly from period to period and may not meet market
expectations; risks that any financial guidance we provide may not
be accurate; risks that our clinical trials will not be completed
when planned, may not replicate previous results or achieve desired
end-points; risks that our preclinical studies may not be
predictive; risks that our NDAs for product candidates, such as the
exenatide once weekly NDA mentioned in this press release, or sNDAs
for label expansion requests may not be submitted timely or receive
FDA approval; risks that our expense reductions will not be as
large as we expect; risks that the restructured operations for
exenatide or our sales force will not produce the results we
expect; and other risks inherent in the drug development and
commercialization process. Commercial and government reimbursement
and pricing decisions and the pace of market acceptance may also
affect the potential for BYETTA or SYMLIN. These and additional
risks and uncertainties are described more fully in the Company's
recently filed Form 10-Q. Amylin disclaims any obligation to update
these forward-looking statements. (Financial information to follow)
AMYLIN PHARMACEUTICALS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data) (unaudited) Quarter ended
June 30, Six months ended June 30, 2009 2008 2009 2008 ---- ----
---- ---- Revenues: Net product sales $197,497 $200,335 $376,829
$379,056 Revenues under collaborative agreements 11,875 21,684
26,217 40,200 ------- ------- ------- ------- Total revenues
209,372 222,019 403,046 419,256 Costs and expenses: Cost of goods
sold 24,293 24,682 42,925 46,706 Selling, general and
administrative 92,052 111,088 179,608 209,331 Research and
development 63,601 75,401 123,620 152,607 Collaborative profit
sharing 76,199 78,950 149,216 148,851 Restructuring 11,376 - 11,376
- ------- ------- ------- ------- Total costs and expenses 267,521
290,121 506,745 557,495 Operating loss (58,149) (68,102) (103,699)
(138,239) Interest and other (expense) income, net (4,223) 1,511
(5,627) 549 ------- ----- ------- --- Net loss $(62,372) $(66,591)
$(109,326) $(137,690) ========= ========= ========== ========== Net
loss per share - basic and diluted $(0.44) $(0.49) $(0.78) $(1.01)
======= ======= ======= ======= Shares used in computing net loss
per share - basic and diluted 140,912 137,142 139,864 136,500
======= ======= ======= ======= A reconciliation of reported GAAP
operating loss to non-GAAP operating loss excluding non-cash items
and one-time items is provided in the table that follows (in
thousands, unaudited): Quarter ended Six months ended June 30, June
30, 2009 2008 2009 2008 ---- ---- ---- ---- GAAP operating loss
$(58,149) $(68,102) $(103,699) $(138,239) Stock-based compensation
12,093 14,929 23,047 28,983 Other non-cash compensation 4,241 6,670
11,327 13,316 Depreciation and amortization 9,133 7,254 17,854
13,740 Amortization of deferred revenue (1,071) (1,071) (2,143)
(2,143) Restructuring 11,376 - 11,376 - ------ ------- ------
------- Non-GAAP operating loss $(22,377) $(40,320) $(42,238)
$(84,343) ========= ========= ========= ========= A reconciliation
of reported GAAP research and development expenses to non-GAAP
research and development expenses, net of cost-sharing payments, is
provided in the table that follows (in thousands, unaudited):
Quarter ended Six months ended June 30, June 30, 2009 2008 2009
2008 ---- ---- ---- ---- Research and development expenses $63,601
$75,401 $123,620 $152,607 Cost-sharing payments (10,803) (20,612)
(24,074) (38,057) -------- -------- -------- -------- Net research
and development expenses $52,798 $54,789 $99,546 $114,550 =======
======= ======= ======== AMYLIN PHARMACEUTICALS, INC. CONDENSED
CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited) June 30,
December 31, 2009 2008 ---- ---- Assets Cash, cash equivalents and
short-term investments $644,438 $816,838 Accounts receivable, net
76,405 62,369 Inventories, net 109,803 115,823 Other current assets
64,839 41,038 Property and equipment, net 714,541 655,444 Other
assets 40,341 35,541 ---------- ---------- Total assets $1,650,367
$1,727,053 ========== ========== Liabilities and stockholders'
equity Current liabilities 279,484 313,778 Other liabilities, net
of current portion 191,002 179,227 Long-term debt 710,255 714,771
Stockholders' equity 469,626 519,277 ---------- ---------- Total
liabilities and stockholders' equity $1,650,367 $1,727,053
========== ========== DATASOURCE: Amylin Pharmaceuticals, Inc.
CONTACT: Financial, Michael York, Senior Director, Investor
Relations, +1-858-458-8602, , or Media, Alice Izzo, Executive
Director, Corporate Affairs, +1-858-642-7272, , both of Amylin
Pharmaceuticals, Inc. Web Site: http://www.amylin.com/
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