POZEN Reports Fourth Quarter and Year End 2005 Results; $20 Million Milestone Payment from GSK Contributes to Profitability; Lornoxicam Phase II Studies Initiated in Acute Pain And Migraine.CHAPEL HILL, N.C. -- POZEN Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : POZN), today announced results for the fourth quarter and year ended December 31, 2005. Fourth-Quarter Results POZEN reported net income of $16.1 million, or $0.54 per share on a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis, for the fourth quarter of 2005, compared to a net loss of $8.4 million, or $0.29 per share on a diluted basis, for the fourth quarter of 2004. Revenue for the quarters ended December 31, 2005 and December 31, 2004 totaled $22.2 and $2.4 million, respectively. Revenue for the fourth quarter of 2005 resulted from the amortization of upfront payments received pursuant to collaboration agreements for MT 300(TM) and Trexima(TM), and receipt of a $20 million milestone payment from GlaxoSmithKline (GSK GSK GlaxoSmithKline plc (pharmaceutical company) GSK Glycogen Synthase Kinase GSK Gruppentraining Sozialer Kompetenzen (Germany) GSK Greenland Shark (FAO fish species code) ) for the acceptance for review of the Trexima 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 ) by 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. ). 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 fourth quarter of 2005 totaled $6.5 million as compared to $11.1 million for the comparable period in 2004. The decrease in operating expenses resulted from a reduction in costs related to Trexima development, partially offset by an increase in costs associated with the PPI/NSAID and lornoxicam development programs. At December 31, 2005, cash, cash equivalents and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments totaled $45.8 million compared to $51.8 million at December 31, 2004. Twelve-Month Results POZEN reported net income of $2.0 million, or $0.07 per share on a diluted basis, for the twelve-month period ended December 31, 2005, compared with a net loss of $5.3 million, or $0.18 per share on a diluted basis, for the same period in 2004. For the twelve months ended December 31, 2005, POZEN reported revenue of $28.6 million compared to $23.1 million for the same period in 2004. Revenue for the period ended December 31, 2005 resulted from the amortization of payments received under collaboration agreements for MT 100(TM), MT 300, and Trexima, and the receipt of a $20.0 million milestone payment from GSK for the acceptance for review of the Trexima NDA by the FDA. Revenue for the period ended December 31, 2004 also included the amortization of payments for MT 100, MT 300, and Trexima, and the receipt of a $15.0 million milestone payment from GSK at the commencement of 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 activity for Trexima. Operating expenses for the twelve months ended December 31, 2005 were $28.0 million as compared to $29.1 million for the comparable period in 2004. The decrease in operating expenses was due primarily to a reduction in the costs associated with the Trexima development, partially offset by an increase in costs associated with the PPI/NSAID and lornoxicam development programs, an increase in personnel related expenses for our research and development activities, and an increase in costs associated with public company activities. Corporate Highlights POZEN received a $20 million milestone payment from GSK during the fourth quarter 2005 upon the acceptance for review of the Trexima NDA by the FDA. GlaxoSmithKline is scheduled to present data from the Phase III Noun 1. phase III - 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 FDA pivotal trials for Trexima at the American Academy of Neurology The American Academy of Neurology (AAN) is a professional society for neurologists and neuroscientists. As a medical specialty society it was established in 1949 by A.B. Baker of the University of Minnesota to advance the art and science of neurology, and thereby promote the best scientific meeting in 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. on April 4-5, 2006. The Superior Court for the County of Orange in the State of North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. has dismissed in its entirety The whole, in contradistinction to a moiety or part only. When land is conveyed to Husband and Wife, they do not take by moieties, but both are seised of the entirety. "with prejudice" the consolidated shareholder derivative derivative: see calculus. derivative In mathematics, a fundamental concept of differential calculus representing the instantaneous rate of change of a function. lawsuit lawsuit: see procedure; tort. previously pending against certain of POZEN's current and former directors and officers. The company initiated Phase II studies for its injectable in·ject·a·ble adj. Capable of being injected. Used of a drug. n. A drug or medicine that can be injected. lornoxicam product candidate during the fourth quarter of 2005 in acute pain and migraine migraine (mī`grān), headache characterized by recurrent attacks of severe pain, usually on one side of the head. It may be preceded by flashes or spots before the eyes or a ringing in the ears, and accompanied by double vision, nausea, . The United Kingdom's Medicines and Healthcare Products Regulatory Agency The Medicines and Healthcare products Regulatory Agency (MHRA) is the UK government agency which is responsible for ensuring that medicines and medical devices work and are acceptably safe. (MHRA MHRA Medicines and Healthcare Products Regulatory Agency MHRA Modern Humanities Research Association (United Kingdom) MHRA Minnesota Human Rights Act MHRA Malta Hotels and Restaurants Association ) issued a Marketing Authorization The right or permission to use a system resource; the process of granting access. See access control. for MT 100 for the acute treatment of migraine. Financial Guidance For the first quarter of 2006, POZEN expects total revenue to be approximately $2 million, and total operating expenses to be in the range of $6 million to $8 million (excluding non-cash option-based compensation expenses). For the 2006 year, POZEN expects total revenue to be in the range of $26 million to $30 million, which includes two anticipated $10 million milestone payments from GSK. Total operating expenses for the 2006 year are expected to be in the range of $32 million to $36 million (excluding non-cash option-based compensation expenses) and will vary depending upon the timing and pace of our development programs, particularly the PPI/NSAID Phase III programs. Non-cash option-based compensation expenses for 2006 are expected to be in the range of $6.8 million to $7.2 million. Fourth-Quarter/Year End Results Webcast POZEN will hold a webcast to present fourth quarter and year end results and management's outlook on Wednesday, March 1, 2006 at 11:00 a.m. Eastern time. The webcast can be accessed live and will be available for replay at www.pozen.com. About POZEN POZEN is a pharmaceutical company committed to developing therapeutic advancements for diseases with unmet un·met adj. Not satisfied or fulfilled: unmet demands. medical needs where it can improve efficacy, safety, and/or patient convenience. Since its inception, POZEN has focused its efforts primarily on the development of pharmaceutical products for the treatment of acute and chronic pain, migraine, and other pain-related conditions. POZEN has a development and commercialization alliance with GlaxoSmithKline. The company's common stock is traded on The Nasdaq Stock Market Nasdaq stock market The first electronic stock market listing over 5000 companies. The Nasdaq stock market comprises two separate markets, namely the Nasdaq National Market, which trades large, active securities and the Nasdaq Smallcap Market that trades emerging growth companies. under the symbol "POZN". For detailed company information, including copies of this and other press releases, see POZEN's website: www.pozen.com. Statements included in this press release that are not historical in nature are "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 "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " provisions 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. You should be aware that our actual results could differ materially from those contained in the forward-looking statements, which are based on management's current expectations and are subject to a number of risks and uncertainties, including, but not limited to, our failure to successfully commercialize our product candidates; costs and delays in the development and/or FDA approval of our product candidates, including as a result of the need to conduct additional studies, or the failure to obtain such approval of our product candidates, including as a result of changes in regulatory standards or the regulatory environment during the development period of any of our product candidates; uncertainties in clinical trial results or the timing of such trials, resulting in, among other things, an extension in the period over which we recognize deferred revenue or our failure to achieve milestones that would have provided us with revenue; our inability to maintain or enter into, and the risks resulting from our dependence upon, collaboration or contractual arrangements necessary for the development, manufacture, commercialization, marketing, sales and distribution of any products; competitive factors; our inability to protect our patents or proprietary rights and obtain necessary rights to third party patents and intellectual property to operate our business; our inability to operate our business without infringing the patents and proprietary rights of others; general economic conditions; the failure of any products to gain market acceptance; our inability to obtain any additional required financing; technological changes; government regulation; changes in industry practice; and one-time events, including those discussed herein and in our Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the period ended September 30, 2005 under "Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of Operations." We do not intend to update any of these factors or to publicly announce the results of any revisions to these forward-looking statements. Financial Tables to Follow...
POZEN Inc.
Statement of Operations
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
----------------------- -----------------------
2005 2004 2005 2004
----------------------- -----------------------
Revenue $22,236,999 $ 2,417,409 $28,647,374 $23,087,908
Operating expenses:
General and
administrative 1,986,594 2,589,357 9,185,251 8,660,832
Research and
development 4,537,329 8,495,466 18,769,223 20,398,748
----------- ----------- ----------- -----------
Total operating
expenses 6,523,923 11,084,823 27,954,474 29,059,580
Interest and other
income 419,203 247,858 1,265,710 711,200
----------- ----------- ----------- -----------
Net income (loss)
attributable to
common stockholders $16,132,279 $(8,419,556)$ 1,958,610 $(5,260,472)
=========== =========== =========== ===========
Basic net income
(loss) per common
share $ 0.56 $ (0.29)$ 0.07 $ (0.18)
=========== =========== =========== ===========
Shares used in
computing basic net
income (loss) per
common share 28,999,471 28,852,743 28,939,302 28,748,540
=========== =========== =========== ===========
Diluted net income
(loss) per common
share $ 0.54 (0.29)$ 0.07 (0.18)
=========== =========== =========== ===========
Shares used in
computing diluted net
income (loss) per
common share 30,042,801 28,852,743 29,623,207 28,748,540
=========== =========== =========== ===========
POZEN Inc.
Balance Sheet
(Unaudited)
December 31, December 31,
2005 2004
------------- ------------
ASSETS
Current assets:
Cash and cash equivalents $ 27,467,789 $ 51,764,129
Short-term investments 18,370,701 -
Prepaid expenses and other current assets 613,682 1,064,032
------------- ------------
Total current assets 46,452,172 52,828,161
Equipment, net of accumulated depreciation 234,839 467,688
------------- ------------
Total assets $ 46,687,011 $ 53,295,849
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,443,676 $ 2,330,349
Accrued compensation 2,591,633 1,182,848
Accrued expenses 1,201,023 1,626,829
Deferred revenue 6,552,000 8,680,092
------------- ------------
Total current liabilities 11,788,332 13,820,118
Long-term liabilities:
Deferred revenue 1,000,000 7,764,978
------------- ------------
Total liabilities 12,788,332 21,585,096
Total stockholders' equity 33,898,679 31,710,753
------------- ------------
Total liabilities and stockholders'
equity $ 46,687,011 $ 53,295,849
============= ============
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