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8-K - FORM 8-K - HUMAN GENOME SCIENCES INC | c07236e8vk.htm |
EXHIBIT 99
Media Contact:
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Investor Contacts: | |
Jerry Parrott
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Claudine Prowse, Ph.D. | |
Vice President, Corporate Communications
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Executive Director, Investor Relations | |
301-315-2777
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301-315-1785 | |
Peter Vozzo | ||
Senior Director, Investor Relations 301-251-6003 |
HUMAN GENOME SCIENCES ANNOUNCES THIRD QUARTER 2010
FINANCIAL RESULTS AND KEY DEVELOPMENTS
FINANCIAL RESULTS AND KEY DEVELOPMENTS
- BENLYSTA® granted priority review by FDA, with PDUFA target date of December 9, 2010 -
ROCKVILLE, Maryland October 27, 2010 Human Genome Sciences, Inc. (Nasdaq: HGSI) today
announced financial results for the quarter ended September 30, 2010, and provided highlights of
recent key developments.
BENLYSTA has continued to make excellent progress in the third quarter and we look forward to the
upcoming FDA advisory committee meeting, said H. Thomas Watkins, President and Chief Executive
Officer. We have completed the hiring of our BENLYSTA sales force and sales management team for
the United States. Their training is now underway, and we are currently building an organization
to work alongside GlaxoSmithKline in Europe. Regulatory applications have been submitted in
Europe, Australia, Canada and Switzerland, and we anticipate regulatory submissions in a number of
additional countries in the coming months. We continue to believe that BENLYSTA could become the
first new approved drug for lupus in more than 50 years.
FINANCIAL RESULTS
HGS reported revenues for the quarter ended September 30, 2010 of $50.8 million, compared with
revenues of $18.8 million for the same period in 2009. Revenues primarily included $36.1 million
recognized from payments previously received under the ZALBIN agreement with Novartis, $7.3
million recognized from sales and deliveries of raxibacumab to the U.S. Strategic National
Stockpile, and $5.1 million from manufacturing and development services other than raxibacumab.
The Company reported a reduced net loss for the third quarter of 2010 of $40.9 million ($0.22 per
share), compared with a net loss of $49.0 million ($0.32 per share) for the third quarter of 2009.
For the first nine months of 2010, HGS reported revenues of $136.1 million, compared with revenues
of $222.8 million for the same period of the previous year. Revenues primarily included $82.8
million recognized from the ZALBIN agreement with Novartis, $34.0 million recognized from the sale
and delivery of raxibacumab to the U.S. Strategic National Stockpile, and $13.7 million from
manufacturing and development services other than raxibacumab. The reduction in revenues for the
current nine months, compared with the same period last year, primarily reflected the higher level
of raxibacumab revenue recognized in 2009, $162.7 million, partially offset by increased
recognition of revenue from the ZALBIN agreement in 2010.
The Company reported a net loss of $145.6 million ($0.78 per share) for the nine months ended
September 30, 2010, compared with net income of $15.4 million ($0.11 per share) for the same period
of the previous year. The net loss for the current nine months, compared with the same period last
year, primarily reflected the difference described above in raxibacumab and ZALBIN revenue
recognized in 2010 versus the same period in 2009, in addition to a gain in 2009 of $38.9 million
on the extinguishment of debt.
As of September 30, 2010, cash and investments totaled $1.0 billion, of which $938.6 million was
unrestricted and available for operations. This compares with cash and investments totaling $1.2
billion as of December 31, 2009, of which $1.1 billion was unrestricted and available for
operations. HGS expects cash and investments at year-end 2010 to total approximately $900-950
million.
HGS has continued to invest in building the commercial infrastructure and expertise required to
support a world-class launch of BENLYSTA, said David P. Southwell, Executive Vice President and
Chief Financial Officer. With approximately $1 billion of cash and equivalents, HGS is
well-positioned financially to support the launch and growth of BENLYSTA and to fund our research
and development program.
HIGHLIGHTS OF RECENT PROGRESS
BENLYSTA®: Granted Priority Review by FDA; Assigned December 9, 2010 PDUFA Target Date
In August 2010, the FDA granted a priority review designation to BENLYSTA (belimumab) as a
potential treatment for autoantibody-positive patients with clinically active systemic lupus
erythematosus (SLE). A priority review designation is granted to drugs that, if approved, offer
major advances in treatment or provide a treatment where no adequate therapy exists. The FDA has
assigned belimumab a PDUFA target date of December 9, 2010, and an FDA Advisory Committee meeting
to consider the belimumab Biologics License Application (BLA) is
scheduled to take place on November 16, 2010. No new drug for lupus has been approved by
regulatory authorities in more than 50 years.
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In July 2010, HGS and Lonza announced an agreement for future commercial supply of BENLYSTA.
Although HGS believes that its large-scale manufacturing facility has sufficient capacity to
provide worldwide supply of BENLYSTA following approval and for the first two to three years
following launch, it is likely that additional capacity will eventually be required. Lonza
production is expected to be available for supply of the U.S. market in the first half of 2012.
BENLYSTA is being developed by HGS and GSK under a co-development and commercialization agreement
entered into in 2006.
Raxibacumab: $34.0 Million in Revenue Recognized from Deliveries to the U.S. Strategic National
Stockpile in First Nine Months of 2010
In the third quarter and first nine months of 2010, HGS recognized $7.3 million and $34.0 million
in revenue, respectively, from the delivery of raxibacumab to the U.S. Strategic National
Stockpile. The delivery was made under a purchase order received from the U.S. Government in July
2009 for 45,000 doses of raxibacumab to be delivered over a three-year period. HGS expects to
receive approximately $142 million from this award as deliveries are completed, including $51.7
million recognized to date. Raxibacumab is being developed under a contract entered into in 2006
with the Biomedical Advanced Research and Development Authority (BARDA) of the Office of the
Assistant Secretary for Preparedness and Response (ASPR), U.S. Department of Health and Human
Services (HHS).
ZALBIN: Complete Response Letter Received from the FDA; HGS and Novartis Will Not Continue
Development of ZALBIN
On October 4, 2010, as expected, HGS received a complete response letter from the FDA, regarding
the Companys BLA for 900-mcg ZALBIN (albinterferon alfa-2b, known in Europe as JOULFERON®) dosed
every two weeks for the treatment of chronic hepatitis C. HGS and Novartis have decided not to
develop ZALBIN further. Based on this decision, in September 2010, HGS recognized all remaining
deferred revenue relating to payments previously received under the ZALBIN agreement with Novartis.
There will, however, be certain additional research and development costs incurred by both parties
in the near future as activities are concluded.
About Human Genome Sciences
The mission of HGS is to apply great science and great medicine to bring innovative drugs to
patients with unmet medical needs.
For more information about HGS, please visit the Companys web site at www.hgsi.com. Health
professionals and patients interested in clinical trials of HGS products may inquire via e-mail to
medinfo@hgsi.com or by calling HGS at (877) 822-8472.
HGS, Human Genome Sciences, BENLYSTA, and ZALBIN are trademarks of Human Genome Sciences, Inc.
Other trademarks referenced are the property of their respective owners.
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Safe Harbor Statement
This announcement contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. The forward-looking statements are based on Human Genome Sciences current intent, belief
and expectations. These statements are not guarantees of future performance and are subject to
certain risks and uncertainties that are difficult to predict. Actual results may differ materially
from these forward-looking statements because of Human Genome Sciences unproven business model,
its dependence on new technologies, the uncertainty and timing of clinical trials and regulatory
approvals, Human Genome Sciences ability to develop and commercialize products, its dependence on
collaborators for services and revenue, its substantial indebtedness and lease obligations, its
changing requirements and costs associated with facilities, intense competition, the uncertainty of
patent and intellectual property protection, Human Genome Sciences dependence on key management
and key suppliers, the uncertainty of regulation of products, the impact of future alliances or
transactions and other risks described in the Companys filings with the SEC. Existing and
prospective investors are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of todays date. Human Genome Sciences undertakes no obligation to
update or revise the information contained in this announcement whether as a result of new
information, future events or circumstances or otherwise.
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HUMAN
GENOME SCIENCES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
(in thousands, except share and per share amounts) | ||||||||||||||||
Revenue: |
||||||||||||||||
Product sales |
$ | 7,295 | $ | | $ | 33,963 | $ | 136,381 | ||||||||
Manufacturing and development services |
5,677 | 8,668 | 15,177 | 45,294 | ||||||||||||
Research and development collaborative
agreements |
37,810 | 10,166 | 86,948 | 41,117 | ||||||||||||
Total revenue |
50,782 | 18,834 | 136,088 | 222,792 | ||||||||||||
Costs and expenses: |
||||||||||||||||
Cost of product sales |
8,434 | | 23,529 | 14,569 | ||||||||||||
Cost of manufacturing and development services |
3,338 | 7,331 | 7,364 | 17,239 | ||||||||||||
Research and development expenses |
42,471 | 34,794 | 151,331 | 131,379 | ||||||||||||
General and administrative expenses |
26,365 | 14,673 | 68,456 | 41,754 | ||||||||||||
Facility-related exit costs |
| | | 11,434 | ||||||||||||
Total costs and expenses (a) |
80,608 | 56,798 | 250,680 | 216,375 | ||||||||||||
Income (loss) from operations |
(29,826 | ) | (37,964 | ) | (114,592 | ) | 6,417 | |||||||||
Investment income |
3,794 | 3,137 | 13,497 | 10,354 | ||||||||||||
Interest expense |
(14,949 | ) | (14,409 | ) | (44,409 | ) | (43,958 | ) | ||||||||
Gain on extinguishment of debt |
| | | 38,873 | ||||||||||||
Gain on sale of long-term equity investment |
| | | 5,259 | ||||||||||||
Charge for impaired investments |
| | | (1,250 | ) | |||||||||||
Other income (expense) |
122 | 233 | (95 | ) | (295 | ) | ||||||||||
Income (loss) before taxes |
(40,859 | ) | (49,003 | ) | (145,599 | ) | 15,400 | |||||||||
Provision for income taxes |
| | | | ||||||||||||
Net income (loss) |
$ | (40,859 | ) | $ | (49,003 | ) | $ | (145,599 | ) | $ | 15,400 | |||||
Basic net income (loss) per share |
$ | (0.22 | ) | $ | (0.32 | ) | $ | (0.78 | ) | $ | 0.11 | |||||
Diluted net income (loss) per share |
$ | (0.22 | ) | $ | (0.32 | ) | $ | (0.78 | ) | $ | 0.11 | |||||
Weighted average shares outstanding, basic |
188,420,580 | 154,513,251 | 187,418,995 | 142,104,996 | ||||||||||||
Weighted average shares outstanding, diluted |
188,420,580 | 154,513,251 | 187,418,995 | 145,537,847 | ||||||||||||
(a) | Includes stock-based compensation expense of $6,984 ($0.04 basic and diluted share) and $3,226 ($0.02 per basic and diluted share) for the three months ended September 30, 2010 and 2009, respectively. Includes stock-based compensation expense of $17,803 ($0.09 basic and diluted share) and $9,547 ($0.07 per basic and diluted share) for the nine months ended September 2010 and 2009, respectively. |
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CONSOLIDATED BALANCE SHEET DATA:
As of | As of | |||||||
September 30, 2010 | December 31, 2009 | |||||||
(in thousands) | ||||||||
Cash, cash equivalents and investments (b) |
$ | 1,018,120 | $ | 1,191,660 | ||||
Total assets (b) |
1,370,625 | 1,530,630 | ||||||
Convertible subordinated debt (c) |
366,899 | 349,807 | ||||||
Lease financing |
250,076 | 248,628 | ||||||
Total stockholders equity |
666,757 | 755,415 |
(b) | Includes $79,480 and $88,437 in restricted investments at September 30, 2010 and December 31, 2009, respectively. | |
(c) | Convertible subordinated debt is net of unamortized debt discount of $36,942 and $54,043 as of September 30, 2010 and December 31, 2009, respectively. Convertible subordinated debt at face value is $403,840 and $403,850 as of September 30, 2010 and December 31, 2009, respectively. |
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