Acorda Therapeutics Reports Fourth Quarter and Full Year 2005 Financial Results.HAWTHORNE, N.Y. -- Acorda Therapeutics therapeutics Treatment and care to combat disease or alleviate pain or injury. Its tools include drugs, surgery, radiation therapy, mechanical devices, diet, and psychiatry. (Nasdaq:ACOR ACOR Association of Cancer Online Resources ACOR American Center of Oriental Research ACOR Advanced Certificate in Operational Risk ACOR Assistant Contracting Officer Representative ACOR Actual Cost of Repair ACOR Administrative Contracting Officers Representative ) today announced its financial results for the fourth quarter and full year ended December 31, 2005. "The launch of Zanaflex Capsules in April 2005 transformed Acorda into a fully-integrated biotechnology company. In 2005, we also received an SPA from the 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 our Fampridine-SR Phase 3 study in MS, which we initiated. We now have a commercial sales and marketing operation, complementing our strong pipeline and clinical and pre-clinical capabilities," stated Ron Cohen cohen or kohen (Hebrew: “priest”) Jewish priest descended from Zadok (a descendant of Aaron), priest at the First Temple of Jerusalem. The biblical priesthood was hereditary and male. , M.D., President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "These accomplishments provided the foundation for the successful completion of our initial public offering in February 2006." Financial Results For the quarter ended December 31, 2005, gross sales Gross Sales A measure of overall sales that isn't adjusted for customer discounts or returns, calculated simply by adding all sales invoices, and not including operating expenses, cost of goods sold, payment of taxes, or any other charge. of Zanaflex Capsules were $1.4 million and gross sales of Zanaflex tablets were $1.3 million providing combined gross sales of $2.7 million, compared to $0 for the same quarter in 2004. For the year ended December 31, 2005, gross sales of Zanaflex Capsules were $2.5 million and gross sales of Zanaflex tablets were $3.4 million providing combined gross sales of $5.9 million, compared to $0 for the prior year. Gross sales are recognized using a deferred revenue recognition model, meaning Zanaflex product shipments to wholesalers are recorded as deferred revenue and only recognized as revenue when end-user prescriptions of Zanaflex Capsules and tablets are reported. Zanaflex Capsule capsule In botany, a dry fruit that opens when ripe. It splits from top to bottom into separate segments known as valves, as in the iris, or forms pores at the top (e.g., poppy), or splits around the circumference, with the top falling off (e.g., pigweed and plantain). shipments to wholesalers for the quarter ended December 31, 2005 were $1.7 million and Zanaflex tablet See digitizer tablet and tablet computer. TABLET - A query language. ["Human Factor Comparison of a Procedural and a Non-procedural Query Language", C. Welty et al, ACM Trans Database Sys 6(4):626-649 (Dec 1981)]. shipments were $2.3 million providing total shipments of $4.0 million, compared to $3.9 million in Zanaflex tablet shipments for the same quarter in 2004. For the year ended December 31, 2005, Zanaflex Capsule shipments were $7.8 million and Zanaflex tablet shipments were $10.3 million providing total shipments to wholesalers of $18.1 million, compared to $6.7 million in Zanaflex tablet shipments for the prior year. Deferred product revenue as of December 31, 2005 was $16.7 million compared to $6.7 million as of December 31, 2004. For the quarter ended December 31, 2005, cost of sales increased by $2.3 million over the quarter ended December 31, 2004. This increase was primarily due to a $1.8 million reserve for excess inventory with expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created dating of 24 months at the time of purchase that, if not sold, will be written off in 2006. For the year ended December 2005, cost of sales increased by $4.2 million compared to the year ended 2004. This increase was primarily due to an increase in royalty fees, inventory costs and an increase based on the reserve for the short dated product. Net loss for the fourth quarter ended December 31, 2005 was $15.8 million or $75.59 per share, compared to a net loss of $18.5 million or $93.73 per share for the quarter ended December 31, 2004. For the year ended December 31, 2005, net loss was $60.4 million or $295.97 per share, compared to a net loss of $69.5 million or $351.76 per share for the year ended 2004. For the periods reported, our earnings per share calculations were based on the Company's pre-IPO outstanding common shares. As of December 31, 2005, the Company held cash, cash equivalents and short term investments of $13.8 million. For the quarter ended December 31, 2005, 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. increased by $1.3 million over the quarter ended December 31, 2004. This increase was primarily attributable to increased expenses related to the marketing, distribution and sales administration expenses for sales of Zanaflex Capsules. For the year ended December 31, 2005, operating expenses decreased by $5.5 million compared to the year ended December 31, 2004. This decrease was primarily due to the completion of two Phase 3 clinical trials phase 3 clinical trial Phase 3 study. See Phase study. of Fampridine-SR in spinal cord injury Spinal Cord Injury Definition Spinal cord injury is damage to the spinal cord that causes loss of sensation and motor control. Description Approximately 10,000 new spinal cord injuries (SCIs) occur each year in the United States. (SCI (Scalable Coherent Interface) An IEEE standard for a high-speed bus that uses wire or fiber-optic cable. It can transfer data up to 1GBytes/sec. (hardware) SCI - 1. Scalable Coherent Interface. 2. UART. ), and one Phase 2 clinical trial phase 2 clinical trial Phase 2 study. See Phase study. of Fampridine-SR in multiple sclerosis multiple sclerosis (MS), chronic, slowly progressive autoimmune disease in which the body's immune system attacks the protective myelin sheaths that surround the nerve cells of the brain and spinal cord (a process called demyelination), resulting in damaged areas (MS) during the first quarter of 2004. The Company also realized a reduction in its non-cash share based compensation cost and salary expense during 2005 due to the Company's repricing Repricing To change the price of an asset. In derivatives, it sometimes refers to the exchange of options of with different strike prices. repricing of certain of its stock options during 2004 that resulted in a charge to earnings in 2004. The Company also reduced its staff in early 2005 resulting in a lower salary expense, which was partially offset by increases in marketing, distribution and sales administration expenses related to the launch of Zanaflex Capsules, distribution expenses for Zanaflex tablets and an increase in salaries and benefits related to the Company's Zanaflex Capsules specialty sales force. Zanaflex Capsules Highlights --In April 2005, Acorda launched its first marketed product, Zanaflex Capsules. Zanaflex Capsules is a new formulation of tizanidine, one of the two leading treatments approved for the management of spasticity spasticity /spas·tic·i·ty/ (spas-tis´i-te) the state of being spastic; see spastic (2). spas·tic·i·ty n. 1. A spastic state or condition. 2. Spastic paralysis. . The Company initially launched the product with a 14-person, in-house specialist sales force. --On March 3, 2006, the Company reported the expansion of its in-house sales force from 14 to 32 sales professionals. --In March 2006, the Company initiated a primary care pilot program with Innovex, using 6 part-time representatives making exclusive calls for Zanaflex Capsules. Also on March 30, 2006, the Company gave notice of termination to Cardinal Health <includeonly></includeonly> Cardinal Health (NYSE: CAH) is a premier, global healthcare company dedicated to making healthcare safer and more productive. Overview Headquartered in Dublin, Ohio, Cardinal Health, Inc. of its syndicated sales force agreement. Fampridine-SR Highlights --In May 2005, the Company announced that it had received a Special Protocol Assessment (SPA) on the protocol design of its Phase 3 trial of Fampridine-SR. The FDA agreed that the trial, if successful, could qualify as one of the pivotal efficacy studies required for drug approval. --In June 2005, Acorda reported the initiation of the Phase 3 trial. The study is evaluating the safety and efficacy of Fampridine-SR in improving walking ability in people with MS. --On March 3, 2006, the Company reported that it had completed enrollment in its Phase 3 clinical trial of Fampridine-SR. The Company expects to report data from this trial in the third quarter of 2006. Corporate Highlights --In December 2005 we entered an agreement with Paul Royalty Fund to receive $15 million in funding in exchange for a portion of net revenues (as defined in the agreement, which is different from our net revenues determined in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) on Zanaflex Capsules, Zanaflex tablets, and other formulations. The agreement allows for additional funding based on the achievement of milestones. --On February 10, 2006 the Company announced the completion of its Initial Public Offering of its common stock, raising 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 $31.8 million after deducting the underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. discount and offering expenses. This amount included the sale of shares from the underwriters' over allotment A portion, share, or division. The proportionate distribution of shares of stock in a corporation. The partition and distribution of land. ALLOTMENT. Distribution by lot; partition. Merl. Rep. h.t. option. --On March 10, 2006, the Company announced that Lorin J. Randall, Senior Vice President and Chief Financial Officer for Eximias Pharmaceutical Corporation, joined the Acorda Board of Directors and will serve as the Chairman of Acorda's Audit Committee. Conference Call and Webcast Ron Cohen, President and Chief Executive Officer, David Lawrence David Lawrence can refer to many people:
The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. will host a conference call today at 8:30 am ET to review the Company's fourth quarter and year-end 2005 results. To access the call, please dial 866-383-8003 (domestic) or 617-597-5330 (international) five minutes prior to the start time, and provide the access code 81810986. A replay of the call will be available from 10:30 a.m. Eastern Time on March 31 until 11:59 p.m. Eastern Time on April 29, 2006. To access the replay, please dial 888-286-8010 (domestic) or 617-801-6888 (international), and provide the access code 98316449. A live audio webcast of the call can also be accessed from the Company's website, at http://www.acorda.com. Forward Looking Statements This press release includes 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. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. All statements, other than statements of historical facts, regarding management's expectations, beliefs, goals, plans or prospects should be considered forward-looking. These statements are subject to risks and uncertainties that could cause actual results to differ materially, including Acorda Therapeutics' ability to successfully market and sell Zanaflex Capsules , the risk of unfavorable results from the Phase 3 clinical trial of Fampridine SR, delays in obtaining or failure to obtain FDA approval of Fampridine SR, competition, the ability to obtain additional financing to support Acorda Therapeutics' operations, unfavorable results from its preclinical preclinical /pre·clin·i·cal/ (-klin´i-k'l) before a disease becomes clinically recognizable. pre·clin·i·cal adj. 1. programs, and failure to protect its intellectual property or to defend against the intellectual property claims of others. These and other risks are described in greater detail in Acorda Therapeutics' filings with the Securities and Exchange Commission. Acorda Therapeutics may not actually achieve the goals or plans described in its forward-looking statements, and investors should not place undue reliance on these statements. Acorda Therapeutics disclaims any intent or obligation to update any forward-looking statements as a result of developments occurring after the date of this press release. About Acorda Therapeutics Acorda Therapeutics is a biotechnology company developing therapies for SCI, MS and related nervous system disorders Nervous system disorders A satisfactory classification of diseases of the nervous system should include not only the type of reaction (congenital malformation, infection, trauma, neoplasm, vascular diseases, and degenerative, metabolic, toxic, or deficiency . The Company's marketed products include Zanaflex Capsules(TM) (tizanidine hydrochloride tizanidine hydrochloride Zanaflex Pharmacologic class: Alpha-adrenergic agonist (centrally acting) Therapeutic class: Skeletal muscle relaxant Pregnancy risk category C Action), a short-acting drug indicated for the management of spasticity. For full prescribing information, please go to www.zanaflexcapsules.com. Acorda's lead clinical-stage product is Fampridine-SR, which is in a Phase 3 clinical trial for MS. The Company's pipeline includes a number of products in development for the treatment, regeneration and repair of the spinal cord spinal cord, the part of the nervous system occupying the hollow interior (vertebral canal) of the series of vertebrae that form the spinal column, technically known as the vertebral column. and brain.Financial Statements
Acorda Therapeutics, Inc
Consolidated Statements of Operations
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended Years Ended
December 31, December 31,
2005 2004 2005 2004
--------- --------- --------- ---------
Gross sales - Zanaflex $ 2,684 $ - $ 5,923 $ -
Less: discounts and
allowances (122) (4,272) (1,114) (4,417)
--------- --------- --------- ---------
Net sales 2,562 (4,272) 4,809 (4,417)
Grant revenue 152 35 336 479
--------- --------- --------- ---------
Total net revenue 2,714 (4,237) 5,145 (3,938)
--------- --------- --------- ---------
Less: cost of sales (2,858) (523) (5,132) (885)
--------- --------- --------- ---------
Gross profit (144) (4,760) 13 (4,823)
Operating expenses:
Research and development 3,237 3,378 12,890 21,999
Sales and marketing 3,441 1,869 13,098 4,662
General and administrative 2,096 2,250 8,435 13,283
--------- --------- --------- ---------
Total operating expenses 8,774 7,497 34,423 39,944
--------- --------- --------- ---------
Operating loss (8,918) (12,257) (34,410) (44,767)
--------- --------- --------- ---------
Other income (expense):
Interest and amortization
of debt discount expense (702) (88) (1,526) (385)
Interest income 54 80 402 409
Other income - - 1 2
--------- --------- --------- ---------
(648) (8) (1,123) 26
Cumulative effect of change
in accounting principle - - 3 -
--------- --------- --------- ---------
Net loss (9,566) (12,265) (35,530) (44,741)
Beneficial conversion
feature, accretion of
issuance costs, preferred
dividends, and fair value
of warrants issued to
convertible preferred
stockholders (6,212) (6,250) (24,849) (24,746)
Net loss allocable to --------- --------- --------- ---------
common shareholders $ (15,778) $ (18,515) $ (60,379) $ (69,487)
========= ========= ========= =========
Net loss per share
allocable to common
stockholders - basic and
diluted $ (75.59) $ (93.73) $ (295.27) $ (351.76)
Weighted average common
shares outstanding used in
computing net loss per
share allocable to common
stockholders -
basic and diluted 208,734 197,541 204,485 197,541
Acorda Therapeutics, Inc
Consolidated Balance Sheet Data
(in thousands)
(Unaudited)
2005 2004
--------- ---------
Assets
Cash and cash equivalents $ 11,761 $ 11,729
Short-term investments 2,001 9,397
Finished goods inventory held by
the Company, net 5,587 192
Property and equipment, net 1,707 2,547
Intangible assets, net 5,952 3,386
Total assets $ 33,912 $ 30,982
Liabilities and stockholders' equity (deficit)
Accounts payable, accrued expenses
and other liabilities $ 14,060 $ 4,820
Deferred product revenue 16,736 6,668
Total current liabilities 35,858 15,872
Long term liabilities 23,377 9,317
Stockholders deficit (116,536) (60,571)
Total Liabilities and Stockholders deficit $ 33,912 $ 30,982
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