AVANIR Pharmaceuticals Reports First Quarter of Fiscal Year 2005 Results.SAN DIEGO San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. -- AVANIR Pharmaceuticals (AMEX AMEX See: American Stock Exchange :AVN AVN Aviation AVN Avenue AVN Adult Video News AVN Avascular Necrosis AVN Atrioventricular Node AVN Aviation Model (weather forecast model, now Global Forecast System) AVN Air Vanuatu (ICAO code) ) today reported financial results for the first quarter of fiscal 2005, ended December 31, 2004. AVANIR reported a net loss for the first quarter of fiscal 2005 of $7.1 million, or $0.07 per share, compared to $6.3 million, or $0.09 per share, for the same period a year ago. In the first quarter of fiscal 2005, AVANIR continued the clinical development of Neurodex for the treatment of pseudobulbar affect and diabetic neuropathic pain, and AVP-13358 for the treatment of allergy and asthma, and pre-clinical development Pre-clinical development is a stage in the development of a new drug that begins before clinical trials (testing in humans) can begin, and during which important safety and pharmacology data is collected. of potential treatments for atherosclerosis, inflammation and several infectious diseases infectious diseases: see communicable diseases. . The Company's operating expenditures were partially offset by revenues earned from license agreements and government research grants. Total operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the first quarter of fiscal 2005 were $8.0 million, compared to $7.8 million in the same period a year ago. Expenditures on research and development (R&D) programs accounted for 63% and 68% of total operating expenses for the quarters ended December 31, 2004 and 2003, respectively. R&D expenses for the first quarter of fiscal 2005 amounted to $5.1 million, compared to $5.4 million for the same period a year ago. The first quarter of fiscal 2005 was highlighted by: --Beginning the submission process for our new drug application (NDA (Non Disclosure Agreement) An agreement signed between two parties that have to disclose confidential information to each other in order to do business. In general, the NDA states why the information is being divulged and stipulates that it cannot be used for any ) to the U.S. Food and Drug Administration (FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. ) for Neurodex(TM) for the treatment of pseudobulbar affect. AVANIR is submitting the NDA on a "rolling" review basis, whereby the Company will submit the NDA in modules as they are completed. The FDA has indicated that Neurodex would qualify for a priority review when the submission is complete. --Signing of an agreement with ACO ACO Aircraft Certification Office (FAA) ACO Ant Colony Optimization ACO Automobile Club de l'Ouest (Le Mans racing governing body) ACO Australian Chamber Orchestra (Sydney, Australia) HUD Hud (h  d), a pre-Qur'anic prophet of Islam. Hud unsuccessfully exhorted his South Arabian people, the Ad, to worship the One God. to manufacture and market
docosanol 10% cream as a treatment for cold sores in Sweden, Norway,
Denmark and Finland;--Publication of results of a Phase III clinical trial Noun 1. phase III clinical trial - a large clinical trial of a treatment or drug that in phase I and phase II has been shown to be efficacious with tolerable side effects; after successful conclusion of these clinical trials it will receive formal approval from the of Neurodex for the treatment of pseudobulbar affect in patients with amyotrophic lateral sclerosis amyotrophic lateral sclerosis (ALS) (ā'mīətrōf`ik, sklĭrō`sĭs) or motor neuron disease, in Neurology; --Presentation of results of a Phase II clinical study of Neurodex in patients with painful diabetic neuropathy Diabetic Neuropathy Definition Diabetic neuropathy is a nerve disorder caused by diabetes mellitus. Diabetic neuropathy may be diffuse, affecting several parts of the body, or focal, affecting a specific nerve and part of the body. at the 2004 annual meeting of the American Society of Regional Anesthesia regional anesthesia n. Anesthesia characterized by the loss of sensation in a circumscribed region of the body, produced by the application of a regional anesthetic, usually by injection. and Pain Medicine (ASRA ASRA American Society of Regional Anesthesia ASRA Arizona Sports Racing Association ASRA Alberta Shorthand Reporters Association ASRA Association for the Study of Reptilia and Amphibia ASRA ADP System Requirement Analysis ASRA American Shropshire Registry Association ); and --Publication of an article profiling our orally active experimental drug for the treatment of allergy and asthma in the Journal of Medicinal Chemistry The Journal of Medicinal Chemistry (usually abbreviated as J. Med. Chem.), is a peer-reviewed scientific journal, published since 1959 by the American Chemical Society. . A comparison of R&D spending by program is shown in the table that follows.
RESEARCH AND DEVELOPMENT PROGRAM EXPENSES
----------------------------------------------------------------------
First Fiscal Quarter Ended
----------------------------
December 31, December 31,
2004 2003
----------------------------
Amount Percent Amount Percent
(Mils.) (Mils.)
----------------------------
Develop Neurodex for the treatment of PBA $2.0 40% $1.8 33%
Develop Neurodex for neuropathic pain 0.1 2% 0.6 11%
Development program for allergy and asthma
(IgE regulator) 0.7 14% 1.1 20%
Preclinical atherosclerosis research
program 1.3 25% 0.2 4%
Other preclinical research, including
potential treatments for inflammation and
infectious diseases 1.0 19% 1.7 32%
--- --- --- ---
Total $5.1 100% $5.4 100%
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Revenues of $888,000 for the first quarter of fiscal 2005 included $508,000 in revenues that the Company recognized from the sale of Abreva(R) royalty rights, $200,000 relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the achievement of milestones under license agreements, and $161,000 from government research grants. Revenues in the first quarter of fiscal 2004 amounted to $1.5 million and included $770,000 from sales of the active ingredient An active ingredient, also active pharmaceutical ingredient (or API), is the substance in a drug that is pharmaceutically active. Some medications may contain more than one active ingredient. docosanol to licensees, $536,000 in revenues recognized from the sale of Abreva(R) royalty rights, and $198,000 from government research grants. Balance sheet highlights As of December 31, 2004, AVANIR had cash, cash equivalents, and investments in securities totaling $26.4 million, compared to $25.9 million as of September 30, 2004. Net working capital balance was $16.2 million, deferred revenue was $20.4 million and shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. was $10.2 million as of December 31, 2004. AVANIR completed a stock offering in December 2004, resulting in net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of $7.0 million from the sale of Class A common stock. Conference Call and Webcast Management will host a conference call with a simultaneous webcast on February 10, 2005 at 1:30 Pacific/4:30 Eastern to discuss first quarter of fiscal 2005 operating performance. The call/webcast will feature President and Chief Executive Officer Gerald J. Yakatan, Ph.D., and Vice President and Chief Financial Officer Gregory P. Hanson, CMA CMA - Concert Multithread Architecture from DEC. . The webcast will be available live via the Internet by accessing AVANIR's web site at www.avanir.com. Please go to the web site at least ten minutes early to register, download and install any necessary audio software. Replays of the webcast will be available for 90 days, and a phone replay will be available through February 17, 2005 by dialing 888-266-2081 and entering the passcode 648044. The Company AVANIR Pharmaceuticals is a drug discovery and development company focused on treatments for chronic diseases. Our product candidates address therapeutic markets that include central nervous system and cardiovascular disorders, inflammation, and infectious disease Infectious disease A pathological condition spread among biological species. Infectious diseases, although varied in their effects, are always associated with viruses, bacteria, fungi, protozoa, multicellular parasites and aberrant proteins known as prions. . The Company's first commercialized product, Abreva(R), is marketed in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. by GlaxoSmithKline Consumer Healthcare and is the leading over-the-counter product for the treatment of cold sores. Further information about AVANIR can be found at www.avanir.com. Except for the historical information presented herein, matters discussed in this press release contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Statements that are not historical facts, including statements that are preceded by, followed by, or that include such words like "estimate," "anticipate," "believe," "intend," "plan," or "expect" or similar statements are forward-looking statements. In regard to financial projections, risks and uncertainties include risks associated with milestones and royalties earned from licensees, and results of clinical trials or product development efforts, as well as risks shown in the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and from time-to-time in other publicly available information regarding the Company. Copies of such information are available from AVANIR upon request. Such publicly available information sets forth many risks and uncertainties related to AVANIR's business and technology. The company disclaims any intent or obligation to update these forward-looking statements.
AVANIR PHARMACEUTICALS
Summary Consolidated Financial Information (Unaudited)
Three Months Ended
December 31,
-------------------------
Consolidated Statement of Operations Data: 2004 2003
------------------------------------------ ------------ ------------
Revenues $888,365 $1,509,645
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Operating expenses
Research and development 5,054,241 5,366,369
General and administrative 1,852,175 1,405,210
Sales and marketing 1,098,828 858,511
Cost of product sales 3,102 210,090
------------ ------------
Total operating expenses 8,008,346 7,840,180
------------ ------------
Loss from operations (7,119,981) (6,330,535)
Interest income 121,832 55,542
Interest expense (21,621) (10,808)
Other income (expense), net (66,921) 7,647
------------ ------------
Loss before income taxes (7,086,691) (6,278,154)
Provision for income taxes (1,898) (2,058)
------------ ------------
Net loss $(7,088,589) $(6,280,212)
============ ============
Net loss per share:
Basic and diluted $(0.07) $(0.09)
============ ============
Weighted average number of
common shares outstanding:
Basic and diluted 95,851,957 67,804,604
============ ============
Consolidated Balance Sheet Data: December 31, September 30,
2004 2004
-------------------------------- ------------- -------------
Cash and cash equivalents $14,615,394 $13,494,083
Short-term, long-term and restricted
investments in securities 11,735,034 12,412,446
------------ ------------
Total cash and investments $26,350,428 $25,906,529
============ ============
Net working capital $16,246,326 $16,653,621
Total assets $37,173,977 $37,403,953
Deferred revenue $20,400,786 $21,009,115
Total liabilities $26,966,081 $27,206,694
Shareholders' equity $10,207,896 $10,197,259
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