AVANIR Pharmaceuticals Reports First Quarter of Fiscal Year 2006 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) .R) today reported financial results for the first quarter of fiscal 2006, ended December 31, 2005. AVANIR reported a net loss for the first quarter of fiscal 2006 of $5.7 million, or $0.20 per share, compared to $7.1 million, or $0.30 per share, for the same period a year ago. In the first quarter of fiscal 2006, AVANIR continued the clinical development of Neurodex(TM) for the treatment of Involuntary involuntary adj. or adv. without intent, will, or choice. Participation in a crime is involuntary if forced by immediate threat to life or health of oneself or one's loved ones, and will result in dismissal or acquittal. INVOLUNTARY. Emotional Expression Disorder, or IEED IEED Involuntary Emotional Expression Disorder , (also known as Pseudobulbar Affect or Emotional Lability lability /la·bil·i·ty/ (lah-bil´i-te) 1. the quality of being labile. 2. in psychiatry, emotional instability. lability the quality of being labile. ) and Diabetic Neuropathic neuropathic /neu·ro·path·ic/ (-path´ik) pertaining to or characterized by neuropathy. neuropathic pertaining to disease of the nervous system. Pain. Subsequent to the end of the quarter, AVANIR completed the submission of its 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), seeking marketing approval of the drug candidate for the treatment of IEED. Additionally, during the quarter the Company continued its fully sponsored R&D partnerships with AstraZeneca and Novartis International Ltd. for programs in reverse cholesterol transport and inflammation, respectively. The Company's operating expenditures in the quarter were partially offset by revenues earned from milestones achieved and research support provided under these two license agreements, and government research grants. The first quarter of fiscal 2006 was highlighted by the following activities: --Appointment of two new members to the Company's Board of Directors; Craig A. Wheeler and Scott M. Whitcup, M.D.; --Completion of two stock offerings raising a total of $35.5 million; and --Earned a $5.0 million milestone from AstraZeneca that was received subsequent to the close of the quarter related to filing an investigational new drug application that allowed the initiation of Phase I safety studies. Subsequent to the close of the quarter, AVANIR: --Implemented a 1-for-4 reverse stock split; --Licensed docosanol 10% cream in Japan; --Completed the submission of reformatted and supplemental safety data for the Company's new drug application for Neurodex in the treatment of IEED; and --Received approximately $4.7 million from the exercise of the Company's outstanding Class A Warrants that were called by the Company. Revenues of $8.1 million for the first quarter of fiscal 2006 included $5.0 million relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the achievement of a milestone from AstraZeneca, $2.5 million in R&D research services, $582,000 in revenues that the Company recognized from the sale of abreva(R) royalty rights, and $85,000 from government research grants. Revenues in the first quarter of fiscal 2005 amounted to $888,000 and included $510,000 in revenues that the Company recognized from the sale of abreva royalty rights, $200,000 relating to the achievement of milestones under license agreements, and $161,000 from 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 2006 were $14.1 million, compared to $8.0 million in the same period a year ago. Expenditures on research and development (R&D) programs accounted for 66% and 63% of total operating expenses for the quarters ended December 31, 2005 and 2004, respectively. R&D expenses for the first quarter of fiscal 2006 amounted to $9.4 million, compared to $5.1 million for the same period a year ago, with the increase primarily attributable to the Company's ongoing 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 for Neurodex for neuropathic pain. Selling, general and administrative expenses increased year-over-year, rising to $4.8 million in the first quarter of fiscal 2006, from $3.0 million in the first quarter of fiscal 2005, with the increase primarily attributable to an increase in pre-launch marketing activities for Neurodex. Balance Sheet Highlights As of December 31, 2005, AVANIR had cash, cash equivalents, and investments in securities totaling $51.3 million (excluding the earned $5 million milestone from AstraZeneca which was received after the quarter end), compared to $27.5 million as of September 30, 2005. Net working capital balance was $44.4 million, deferred revenue was $18.6 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 $40.9 million as of December 31, 2005. AVANIR completed stock offerings in December 2005 and October 2005 that resulted in $19.4 million and $16.1 million 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). , respectively. Conference Call and Webcast Management will host a conference call with a simultaneous webcast on February 9, 2006 at 1:30 p.m. Pacific/4:30 p.m. Eastern to discuss first quarter of fiscal 2006 operating performance. The call/webcast will feature President and Chief Executive Officer Eric Brandt, 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 13, 2005 by dialing 800-642-1687 and entering the passcode 4490357. About AVANIR AVANIR Pharmaceuticals is focused on developing and commercializing novel therapeutic products for the treatment of chronic diseases. AVANIR's product candidates address therapeutic markets that include central nervous system and cardiovascular disorders, inflammation, and infectious diseases infectious diseases: see communicable diseases. . AVANIR previously announced positive results in the second of two required Phase III clinical trials of Neurodex(TM), an investigational new drug for the treatment of involuntary emotional expression disorder. Additionally, AVANIR has initiated a Phase III clinical trial for Neurodex as a potential treatment in patients with diabetic neuropathic pain, a second indication for Neurodex. AVANIR has active collaborations with two international pharmaceutical companies: Novartis International Pharmaceutical Ltd. for the treatment of inflammatory disease Noun 1. inflammatory disease - a disease characterized by inflammation disease - an impairment of health or a condition of abnormal functioning NEC, necrotizing enterocolitis - an acute inflammatory disease occurring in the intestines of premature infants; and AstraZeneca for the treatment of cardiovascular disease Cardiovascular disease Disease that affects the heart and blood vessels. Mentioned in: Lipoproteins Test cardiovascular disease . 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 cold sore: see herpes simplex. . Further information about AVANIR can be found at www.avanir.com. Forward Looking Statements The information contained in this press release, including any forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. contained herein, should be reviewed in conjunction with the company's most recent 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 quarterly report on Form 10-Q Form 10-Q See 10-Q. and other publicly available information regarding the Company. Copies of such information are available from the company upon request. Such publicly available information sets forth many risks and uncertainties related to the company's business and technology. Forward-looking statements often contain such words like "estimate," "anticipate," "believe," "plan" or "expect." AVANIR 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: 2005 2004
------------------------------------------ ------------ ------------
Revenues $8,144,888 $888,365
------------ ------------
Operating expenses
Research and development 9,363,402 5,054,241
Selling, general and administrative 4,768,743 2,951,003
Cost of product sales - 3,102
------------ ------------
Total operating expenses 14,132,145 8,008,346
------------ ------------
Loss from operations (5,987,257) (7,119,981)
Interest income 328,166 121,832
Interest expense (23,438) (21,621)
Other income (expense), net 10,512 (66,921)
------------ ------------
Loss before income taxes (5,672,017) (7,086,691)
Provision for income taxes (2,417) (1,898)
------------ ------------
Net loss $(5,674,434) $(7,088,589)
============ ============
Net loss per share:
Basic and diluted(1) $(0.20) $(0.30)
============ ============
Weighted average number of
common shares outstanding:
Basic and diluted(1) 28,579,357 23,962,989
============ ============
Consolidated Balance Sheet Data: December 31, September 30,
2005 2005
-------------------------------- ------------ ------------
Cash and cash equivalents $30,801,894 $8,620,143
Short-term, long-term and restricted
investments in securities 20,540,230 18,917,443
------------ ------------
Total cash and investments $51,342,124 $27,537,586
============ ============
Net working capital $44,356,945 $11,969,450
Total assets $71,743,265 $41,401,990
Deferred revenue $18,604,613 $19,158,210
Total liabilities $30,864,103 $32,267,111
Shareholders' equity $40,879,162 $9,134,879
(1) The shares outstanding and earnings per shares have been adjusted
for the one-for-four split.
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