Myogen, Inc. (Nasdaq:MYOG), a biopharmaceutical company focused on
the discovery, development and commercialization of small molecule
therapeutics for the treatment of cardiovascular disorders, today
reported 2006 second quarter results. As of June 30, 2006, the
Company had cash, cash equivalents and investments of $188.1
million. Loss from continuing operations for the quarter ended June
30, 2006, was $18.5 million, or $0.44 per share, compared to a loss
from continuing operations of $21.7 million, or $0.61 per share
during the same period last year. Loss from continuing operations
for the six months ended June 30, 2006, was $36.1 million, or $0.85
per share, compared to a loss from continuing operations of $40.3
million, or $1.13 per share during the same period last year. "In
the second quarter, we continued to successfully execute our
strategic plan with good progress across all aspects of the
company," said J. William Freytag, President and Chief Executive
Officer of Myogen. "The clinical trial results for ambrisentan
enhance our optimism about the quality of the ambrisentan New Drug
Application, which we expect to submit to the FDA in the fourth
quarter, thus moving us closer toward our ultimate goal of
registering and commercializing ambrisentan. With the launch of
Flolan commercial operations and with our PAH-focused sales force
now fully engaged, we have taken an important step forward in our
growth as a commercial company. We also continued the development
of darusentan with the initiation of the first pivotal Phase 3
clinical trial in resistant hypertension. Lastly, the extension of
our research and development collaboration with Novartis furthers
our goal of identifying disease modifying drugs for chronic heart
failure." Second Quarter Highlights -- Announcement of Positive
Results for Second Ambrisentan Pivotal Phase 3 Clinical Trial
(ARIES-1) -- Announcement of Positive Results for Integrated
Analysis of ARIES-1 and ARIES-2 Trials -- Presentation of ARIES-2
Results at Annual Meeting of American Thoracic Society --
Initiation of Darusentan Phase 3 Clinical Program in Resistant
Hypertension -- Extension of Drug Discovery Collaboration with
Novartis for Additional Two Years Product Portfolio Update
Ambrisentan: Ambrisentan is a non-sulfonamide, propanoic-acid
class, type-A selective endothelin receptor antagonist that is
being evaluated as a once daily oral therapy for patients with
pulmonary arterial hypertension (PAH). Ambrisentan has been
evaluated in two placebo-controlled Phase 3 trials (ARIES-1 &
-2), two Phase 2 trials (AMB-201 and AMB-222), and seven Phase 1
trials. Both Phase 3 trials met the primary efficacy endpoint of
improved exercise capacity for all three ambrisentan doses
evaluated (2.5, 5 and 10 mg once daily). More than 720 subjects
have received ambrisentan in clinical trials, including
approximately 480 PAH patients. As of July 2006, nearly 400
patients continue to be treated with ambrisentan, with exposures
that currently extend up to 3.8 years. Ambrisentan has been granted
orphan drug designation for the treatment of PAH in both the United
States and European Union and has also been granted Fast Track
designation by the U.S. Food and Drug Administration (FDA). Myogen
expects to submit the ambrisentan New Drug Application to the FDA
in the fourth quarter of 2006. Long-term data: After the initial
12-week assessment period, all patients in the ARIES trials had the
option to continue ambrisentan therapy in a long-term study. To
date, more than 400 patients have been enrolled in this and other
long-term studies. The incidence of confirmed serum
aminotransferase test results greater than three times the upper
limit of the normal range (3xULN) is approximately 1%. In February
2006, the Company announced positive top line results of AMB-222,
an open-label trial in which ambrisentan was administered to 36
patients with PAH who had previously discontinued bosentan,
sitaxsentan or both due to serum aminotransferase abnormalities.
Patients in AMB-222 have continued to receive ambrisentan therapy
for periods up to 1.2 years (mean exposure of 11 months) and no
further confirmed occurrence of serum aminotransferase
concentrations greater than 3xULN has been observed. Global PAH
Collaboration with GlaxoSmithKline In March 2006, GlaxoSmithKline
and Myogen entered into a two-part collaboration involving each
party's PAH therapy. Myogen licensed commercialization rights for
ambrisentan to GlaxoSmithKline in all territories outside of the
United States where Myogen retains exclusive rights.
Simultaneously, GlaxoSmithKline and Myogen entered into an
agreement whereby Myogen will be responsible for the marketing and
distribution of GSK's Flolan (epoprostenol sodium), a life-saving
medicine for many patients, used in the treatment of PAH, in the
United States. Myogen believes GlaxoSmithKline, one of the premier
pharmaceutical companies in the world, is the ideal ex-US partner
for ambrisentan. GSK has been a pioneer in the treatment of PAH
and, through its decade-long experience with Flolan, has a deep
understanding of the international regulatory and competitive PAH
market environments. Meanwhile, the Flolan distribution agreement
is expected to underwrite the development of the Company's U.S.
commercial organization and afford it the opportunity to establish
a presence in the PAH marketplace well in advance of the potential
launch of ambrisentan. The Company believes this strategic
development will accelerate relationship building with all
important customer segments, increasing the Company's understanding
of customer needs and market dynamics in general. Flolan: Myogen
has developed a commercial organization dedicated to the marketing
and distribution of Flolan in the United States, including a PAH
focused sales force, which began operations in May 2006. The
Company records Flolan sales net of the supply price paid to the
manufacturer/licensor, distribution fees paid to the specialty
pharmacies and allowances for product returns, prompt pay discounts
and government insurer rebates. Sales of Flolan in the United
States commenced in April 2006. For the three months ended June 30,
2006, the Company's Flolan net sales were $1.6 million on gross
sales of $28.9 million. Darusentan: Darusentan is a
non-sulfonamide, propanoic-acid class, type-A selective endothelin
receptor antagonist that is being evaluated as a once daily oral
therapy for patients with resistant hypertension. In August 2005,
the Company announced positive top line results of a Phase 2b
clinical trial which evaluated darusentan in patients with
resistant systolic hypertension. Additional results from the Phase
2b study were presented at ACC.06, the 55th Annual Scientific
Session of the American College of Cardiology, which was held March
11-14, 2006, in Atlanta, Georgia. Based on these results, the
Company plans to conduct international Phase 3 clinical trials,
DAR-311 and DAR-312, to further evaluate darusentan for the
treatment of patients with resistant hypertension. DAR-311 was
initiated in June 2006. The Company expects to initiate DAR-312 in
the second half of 2006. DAR-311 The primary objective of this
Phase 3 randomized, double-blind, placebo-controlled parallel group
trial is to determine if darusentan is effective in reducing
systolic blood pressure in resistant hypertension patients
currently treated with full doses of four or more antihypertensive
medications, one of which is a diuretic. Patients are eligible for
enrollment in this trial if they have a systolic blood pressure
greater than or equal to 140 mmHg and no other compelling
conditions. For patients with diabetes and chronic kidney disease,
the blood pressure inclusion criterion is a systolic blood pressure
greater than 130 mmHg. Approximately 352 patients will be
randomized to one of three doses of darusentan (50, 100, or 300 mg
qd) versus placebo in a ratio of 7:7:7:11. The treatment period for
the trial is 14 weeks. The primary endpoint of the trial is change
from baseline to week 14 in trough sitting systolic blood pressure
as compared to placebo. Upon completion of the 14-week assessment
period, patients will be eligible to enroll in a long-term safety
study. DAR-312 The primary objective of this Phase 3 randomized,
double-blind, placebo-controlled trial is to determine if
darusentan is effective in reducing systolic blood pressure in
patients with resistant hypertension. Patients are eligible for
enrollment in this trial if they have a systolic blood pressure
greater than or equal to 140 mmHg despite treatment with full doses
of three antihypertensive drugs, one of which is a diuretic, and no
other compelling conditions. For patients with diabetes and chronic
kidney disease, the blood pressure inclusion criterion is a
systolic blood pressure greater than 130 mmHg. Approximately 770
patients will be randomized to darusentan, active control
(guanfacine, an antihypertensive drug that acts as a central alpha
agonist) or placebo, in a 3:3:1 ratio. The treatment period for the
trial is 14 weeks. The primary endpoint of the trial is change from
baseline to week 14 in trough sitting systolic blood pressure
compared to placebo and then compared to the active control. Upon
completion of the 14-week assessment period, patients will be
eligible to enroll in a long-term safety study. Patients enrolled
in the two long-term safety studies will be treated and followed
for safety for at least six months with a mean exposure expected to
be in excess of one year. The Company may undertake additional
studies in this indication for commercial and regulatory support.
Drug Discovery Research: Myogen is continuing to move forward with
its drug discovery program, which is the subject of a broad
collaboration with Novartis. The program is focused on the
discovery, development and commercialization of new therapeutics
for the treatment of heart muscle disease. In July 2006, the
Company announced that Novartis had extended the collaboration for
an additional two years. Financial Highlights for Second Quarter
2006 Flolan net sales for the quarter ended June 30, 2006, were
$1.6 million. Sublicense revenues for the quarter were $737,000.
The sublicense revenue from GSK is derived from the non-refundable
upfront payment of $20 million made by GSK in March 2006 and the
milestone achieved in April 2006, which are being recognized
ratably over the expected service period. The Company expects that
sublicense revenue related to the GSK sublicense in subsequent
quarters will be similar to the second quarter, based on milestones
achieved to date. Research and development contracts revenue from
the Company's research agreement with Novartis was $1.8 million for
the second quarter of 2006 compared to $1.6 million during the same
period in 2005. Research and development expenses, including
stock-based compensation expenses, decreased 31% to $14.5 million
from $21.0 million for the quarters ended June 30, 2006 and 2005,
respectively. The decrease in expenses from 2005 was primarily due
to the discontinuation of the development of enoximone, which was
partially offset by growth in expenses related to darusentan and
increased stock-based compensation expense. The Company expects
research and development expenses to increase in the second half
relative to the rate of spending in the second quarter, due to the
initiation of the darusentan Phase 3 clinical program. Selling,
general and administrative expenses, including stock-based
compensation expenses, increased 249% to $10.2 million for the
second quarter of 2006 from $2.9 million during the same period in
2005. The increase was primarily due to increased stock-based
compensation expense, increased marketing costs associated with
ambrisentan pre-launch activities, staffing and related recruiting
costs and an increase in professional service costs. 2006 Financial
Guidance Financial projections entail a high level of uncertainty
due, among many factors, to the variability involved in predicting
clinical trial initiation timelines, enrollment rates and results,
product revenue and the potential for Myogen to enter into
additional licensing or strategic collaborations. For the year
ending December 31, 2006, the Company anticipates: -- Total Flolan
net revenue of $3.75 million to $4.5 million; -- Total research and
development contract revenue of $7.0 million to $7.2 million; --
Total operating expenses, excluding stock-based compensation
expenses, of $100 million to $115 million; and, -- Basic net loss
per share between $2.25 and $2.65. In addition, based on current
spending projections, the Company believes its cash, cash
equivalents and investments are sufficient to fund operations
through at least the end of 2007. Conference Call J. William
Freytag, President and CEO, and other members of Myogen's senior
management will provide a company update and discuss results via
webcast and conference call on Monday, August 7, 2006, at 4:30 p.m.
Eastern time. To access the live webcast, please log on to the
company's website at www.myogen.com and go to the Investor
Relations section. Alternatively, callers may participate in the
conference call by dialing 800-218-0713 (domestic) or 303-262-2140
(international). Webcast and telephone replays of the conference
call will be available approximately two hours after the completion
of the call through Friday, August 18, 2006. Callers can access the
replay by dialing 800-405-2236 (domestic) or 303-590-3000
(international). The passcode is 11065905. About Myogen Myogen has
two product candidates in late-stage clinical development:
ambrisentan for the treatment of patients with pulmonary arterial
hypertension (PAH) and darusentan for the treatment of patients
with resistant hypertension. Myogen and GlaxoSmithKline have
entered into a global PAH collaboration in which Myogen has
marketing and distribution rights to GlaxoSmithKline's Flolan(R)
(epoprostenol sodium) for Injection in the United States and
GlaxoSmithKline has licensed ambrisentan from Myogen for all
territories outside of the United States, where Myogen retains
exclusive rights. Myogen also conducts a target and drug discovery
research program focused on the development of disease-modifying
drugs for the treatment of chronic heart failure and related
cardiovascular disorders. Please visit Myogen's website at
www.myogen.com. Safe Harbor Statement This press release contains
forward-looking statements that involve significant risks and
uncertainties, including the statements relating to the design and
implementation of the darusentan Phase 3 development program, the
submission of a New Drug Application for ambrisentan, Flolan
revenue projections and projections regarding the sufficiency of
the Company's current cash, cash equivalents and investments.
Actual results and events could differ materially from those
projected and the Company cautions investors not to place undue
reliance on the forward-looking statements contained in this
release. Among other things, the projected commencement of any of
the Company's clinical trials, including the projected commencement
of the second darusentan Phase 3 trial in the second half of 2006,
and the projected submission of the ambrisentan NDA, may be
affected by difficulties or delays, including difficulties or
delays caused by regulatory issues, patient enrollment, patient
treatment, data collection or data analysis. In addition, the
Company's results may be affected by its effectiveness at managing
its financial resources, its ability to successfully develop and
market its current products, its ability to obtain and enforce
patent protection for its products, competition from other
biotechnology or pharmaceutical companies, difficulties or delays
in manufacturing the Company's products, and regulatory
developments involving current and future products. Delays in
clinical programs, whether caused by competition, adverse events,
patient enrollment rates, regulatory issues or other factors, could
adversely affect the Company's financial position and prospects.
Prior clinical trial program designs and results are not
necessarily predictive of future clinical trial designs or results.
For example, the positive results of the darusentan Phase 2b trial
are not necessarily predictive of the results of the Company's
planned Phase 3 trials of darusentan in patients with resistant
hypertension as a result of the fact that, among other things, the
designs of the planned Phase 3 clinical trials differ in material
respects from the design of the Phase 2b program. In addition, the
Company may elect, or be required by applicable regulatory
authorities, to modify the designs of one or more of its proposed
clinical trials or to conduct additional clinical trials of its
product candidates to evaluate efficacy and/or safety. Any such
additional clinical trials could adversely affect the Company's
financial position and prospects. Preliminary clinical trial
results may not be confirmed upon full analysis of the detailed
results of a trial and additional information relating to the
safety, efficacy or tolerability of the Company's product
candidates may be discovered upon further analysis of trial data or
analysis of new trial data or long term safety data. If the
Company's product candidates do not meet safety or efficacy
endpoints in clinical evaluations, they will not receive regulatory
approval and the Company will not be able to market them. Even if
the Company's product candidates meet safety and efficacy
endpoints, regulatory authorities may not approve them, or the
Company may face post-approval problems that require the withdrawal
of its product from the market. There can be no assurance that
Myogen's product candidates, including ambrisentan, will be proven
safe and effective for use in humans. Abnormal liver function test
results have been reported in trials of endothelin receptor
antagonists, including the Phase 2 trial of ambrisentan. Cash flow
projections involve a high degree of uncertainty, including
variances in future spending rates due to changes in corporate
priorities, the timing of and outcomes of clinical trials,
competitive developments and the impact on expenditures and
available capital from licensing and strategic collaboration
opportunities. If the Company is unable to raise additional capital
when required or on acceptable terms, it may have to significantly
delay, scale back or discontinue one or more of its drug
development or discovery research programs. Myogen may not ever
have any products that generate significant revenue. Additional
risks and uncertainties relating to the company and its business
can be found in the "Risk Factors" section of Myogen's annual
report on Form 10-K, in Myogen's periodic reports on Form 10-Q and
Form 8-K and in other documents filed by Myogen with the Securities
and Exchange Commission (SEC). It is Myogen's policy to only update
or confirm its public guidance by issuing a press release or filing
a periodic or current report with the SEC. The Company generally
plans to provide guidance as part of its annual and quarterly
earnings releases but reserves the right to provide guidance at
different intervals or to revise its practice in future periods.
Myogen undertakes no duty or obligation to update any
forward-looking statements contained in this release as a result of
new information, future events or changes in the Company's
expectations. -0- *T MYOGEN, INC. CONSOLIDATED BALANCE SHEETS
(Unaudited) (In thousands, except share data) June 30, December 31,
2006 2005 ------------ ------------ ASSETS Current assets: Cash and
cash equivalents $157,941 $138,380 Short-term investments 30,112
38,575 Accounts receivable, net 10,766 -- Prepaid expenses, accrued
interest receivable and other current assets 4,522 2,752 Assets of
discontinued operations -- 1,289 ------------ ------------ Total
current assets 203,341 180,996 Long-term investments -- 5,362
Property and equipment, net 2,950 2,622 Other assets 42 27
------------ ------------ Total assets $206,333 $189,007
============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities: Accounts payable $25,660 $10,345 Accrued
liabilities 2,819 2,797 Current portion of deferred revenue 4,801
1,187 Current portion of other liabilities 161 142 Current portion
of notes payable, net of discount -- 172 Liabilities of
discontinued operations -- 264 ------------ ------------ Total
current liabilities 33,441 14,907 Deferred revenue, net of current
portion 23,293 1,656 Other long term liabilities, net of current
portion 211 220 Stockholders' equity: Common stock, $0.001 par
value; 100,000,000 shares authorized and 42,552,834 and 41,962,587
shares issued and outstanding as of June 30, 2006, and December 31,
2005, respectively 43 42 Additional paid-in capital 422,938 412,862
Deferred stock-based compensation -- (1,406) Other comprehensive
loss (88) (88) Accumulated deficit (273,505) (239,186) ------------
------------ Total stockholders' equity 149,388 172,224
------------ ------------ Total liabilities and stockholders'
$206,333 $189,007 equity ============ ============ *T -0- *T
MYOGEN, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In
thousands, except share and per share data) For the Three For the
Six Months Ended Months Ended June 30, June 30, 2006 2005 2006 2005
---------- ---------- ---------- ---------- Revenues: Research and
development contracts $1,797 $1,580 $3,593 $3,286 Product sales,
net 1,570 -- 1,570 -- Sublicense revenues 737 -- 2,709 --
---------- ---------- ---------- ---------- 4,104 1,580 7,872 3,286
---------- ---------- ---------- ---------- Costs and expenses:
Research and development (including stock-based compensation
expense of $1,700, $266, $2,930 and $530, respectively) 14,521
20,957 30,748 38,627 Selling, general and administrative (including
stock-based compensation expense of $3,907, $252, $5,819 and $504,
respectively) 10,245 2,935 17,457 6,166 ---------- ----------
---------- ---------- 24,766 23,892 48,205 44,793 ----------
---------- ---------- ---------- Loss from operations (20,662)
(22,312) (40,333) (41,507) Interest income, net 2,156 611 4,079
1,174 ---------- ---------- ---------- ---------- Loss from
continuing operations before cumulative effect of a change in
accounting principle (18,506) (21,701) (36,254) (40,333) Cumulative
effect of a change in accounting principle -- -- 172 -- ----------
---------- ---------- ---------- Loss from continuing operations
(18,506) (21,701) (36,082) (40,333) Gain on the sale of
discontinued operations -- -- 1,763 -- Discontinued operations, net
of income taxes -- 182 -- 512 ---------- ---------- ----------
---------- Net loss $(18,506) $(21,519) $(34,319) $(39,821)
========== ========== ========== ========== Basic and diluted net
loss per common share attributable to common stockholders:
Continuing operations before cumulative effect of a change in
accounting principle (0.44) (0.61) (0.85) (1.13) Cumulative effect
of a change in accounting principle 0.00 0.00 0.00 0.00
Discontinued operations, net of income taxes 0.00 0.01 0.04 0.02
---------- ---------- ---------- ---------- $(0.44) $(0.60) $(0.81)
$(1.11) ========== ========== ========== ========== Weighted
average common shares outstanding 42,484,853 35,767,018 42,327,432
35,762,163 ========== ========== ========== ========== *T
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