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Exhibit 99.1

 

Corporate Contact:

Sylvia Wheeler

Vice President, Corporate Communications

Affymax, Inc.

650-812-8861

 

AFFYMAX REPORTS THIRD QUARTER 2012 FINANCIAL RESULTS

 

PALO ALTO, Calif., November 8, 2012 — Affymax, Inc. (Nasdaq: AFFY) today reported financial results for the third quarter ended September 30, 2012.  The net loss for the third quarter of 2012 was $24.6 million (or ($0.68) per share) compared to a net loss of $9.8 million (or ($0.28) per share) for the third quarter of 2011.

 

Affymax recognized total revenue for the quarter ended September 30, 2012, of $13.6 million compared to $13.2 million for the quarter ended September 30, 2011. Revenue for the quarter ended September 30, 2012 primarily consisted of a $10.4 million profit equalization payment earned from its partner, Takeda Pharmaceutical Company Limited (Takeda) related to OMONTYS® (peginesatide) Injection product sales during the period.  OMONTYS net product sales, as provided by Takeda, were $15.0 million for the quarter.  In addition, Affymax earned a $2.25 million milestone payment from Takeda during the quarter as a result of the commercial progress achieved with OMONTYS during its product launch.  Revenue for the quarter ended September 30, 2011 consisted of a $10 million regulatory milestone payment from Takeda and pre-approval research and development and commercialization expenses reimbursable by Takeda.

 

Research and development expenses for the quarter ended September 30, 2012, were $11.4 million compared to $14.9 million for the quarter ended September 30, 2011.  The decrease was primarily due to reduced consultant and personnel-related costs as a result of the completion of both the filing of the OMONTYS New Drug Application with the U.S. Food and Drug Administration (FDA) in May 2011 and the preparation for an FDA advisory committee meeting which occurred in December 2011.  These decreases were partially offset by clinical trial activity for the company’s Phase 3b trial during the current quarter.

 



 

Selling, general and administrative expenses for the quarter ended September 30, 2012, were $26.2 million compared to $8.2 million for the quarter ended September 30, 2011.  The increase was primarily due to increases in commercial and medical affairs costs, including personnel-related costs associated with the establishment of its commercial and medical affairs field organizations, as the company continues to execute on the launch and commercialization of OMONTYS.

 

The company had cash and investments of $100.0 million as of September 30, 2012.

 

Updated Financial Guidance

 

Affymax is updating its financial guidance for 2012.  With respect to collaboration revenue, Affymax has earned milestone payments of $60.3 million and is not expecting additional milestone payments in 2012, consistent with its previously issued guidance.  Affymax is not providing profit equalization payment or OMONTYS net product sales guidance for 2012.

 

With respect to operating expenses, Affymax now expects to incur $130 million to $135 million in total operating expenses for 2012, excluding stock based compensation.  This reduction from the previously issued operating expense guidance of $135 million to $145 million for 2012 is primarily driven by lower than expected increases in selling, general and administrative expenses as a result of cost savings.

 

“We continue to be pleased with our commercial progress since the launch of OMONTYS in the second quarter of this year,” said John Orwin, chief executive officer of Affymax.  “A number of dialysis providers are evaluating the conversion process and experience with OMONTYS, including a key large dialysis organization and four medium dialysis organizations, while some of the smaller dialysis providers have completely converted centers to the once-monthly drug.”

 

Conference Call with Management Today

 

Management will host a teleconference and webcast to provide a general business overview, as well as to discuss third quarter 2012 financial results today, November 8, 2012, at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time).

 

Interested parties can listen to the live teleconference by dialing (866) 393-1565 from the U.S. or +1 (973) 409-9608 for international callers. Individuals may access the live audio webcast by visiting: http://www.investors.affymax.com/events.cfm.  A replay of the webcast will be available on the Company’s website for 30 days following the live event.

 



 

About Affymax, Inc.

 

Affymax, Inc. is a biopharmaceutical company based in Palo Alto, California. Affymax’s mission is to discover, develop and deliver innovative therapies that improve the lives of patients with kidney disease and other serious and often life-threatening illnesses.

 

The company’s first marketed product, OMONTYS® (peginesatide) Injection, was approved by the U.S. Food and Drug Administration (FDA) in March 2012. For additional information, please visit www.affymax.com.

 

This release contains forward-looking statements, including statements regarding financial projections and condition, the continuation and success of the Company’s collaboration with Takeda and the commercialization of OMONTYS. The Company’s actual results may differ materially from those indicated in these forward-looking statements due to risks and uncertainties, including risks relating to factors affecting the commercial potential of OMONTYS, the continued safety and efficacy of OMONTYS, industry and competitive environment, regulatory requirements by the FDA or other regulatory authorities, including post-marketing studies, trials and Risk Evaluation and Mitigation Strategy, potential for disruptions to supply,  financing requirements and ability to access capital, and other matters that are described in Affymax’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission.  Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release.  The Company undertakes no obligation to update any forward-looking statement in this press release.

 



 

AFFYMAX, INC.

CONDENSED BALANCE SHEETS

(in thousands, except share data)

 

 

 

September 30,
2012

 

December 31,

 

 

 

(Unaudited)

 

2011

 

Assets

 

 

 

 

 

Current assets

 

 

 

 

 

Cash and cash equivalents

 

$

89,169

 

$

54,339

 

Short-term investments

 

9,684

 

44,165

 

Receivable from Takeda

 

9,710

 

6,937

 

Inventory

 

2,040

 

 

Deferred tax assets

 

351

 

351

 

Prepaid expenses and other current assets

 

7,267

 

1,828

 

Total current assets

 

118,221

 

107,620

 

Property and equipment, net

 

3,024

 

3,013

 

Restricted cash

 

1,135

 

1,135

 

Deferred tax assets, net of current

 

6,888

 

6,888

 

Other assets

 

3,481

 

339

 

Total assets

 

$

132,749

 

$

118,995

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Current liabilities

 

 

 

 

 

Accounts payable

 

$

3,766

 

$

941

 

Accrued liabilities

 

17,749

 

13,733

 

Accrued clinical trial expenses

 

2,500

 

3,365

 

Deposit from Takeda

 

559

 

1,998

 

Notes payable, current

 

2,766

 

 

Total current liabilities

 

27,340

 

20,037

 

Long-term income tax liability

 

10,513

 

10,411

 

Advance from Takeda

 

9,310

 

6,121

 

Deferred revenue

 

12,386

 

5,174

 

Notes payable, net of current

 

7,234

 

 

Other long-term liabilities

 

810

 

1,255

 

Total liabilities

 

67,593

 

42,998

 

Commitments and contingencies

 

 

 

Stockholders’ equity

 

 

 

 

 

Common stock: $0.001 par value, 100,000,000 shares authorized, 36,663,946 and 35,733,181 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively

 

37

 

36

 

Additional paid-in capital

 

540,560

 

526,244

 

Accumulated deficit

 

(475,442

)

(450,301

)

Accumulated other comprehensive income

 

1

 

18

 

Total stockholders’ equity

 

65,156

 

75,997

 

Total liabilities and stockholders’ equity

 

$

132,749

 

$

118,995

 

 



 

AFFYMAX, INC.

CONDENSED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2012

 

2011

 

2012

 

2011

 

Revenue:

 

 

 

 

 

 

 

 

 

Collaboration revenue

 

$

13,603

 

$

13,204

 

$

79,562

 

$

44,029

 

License and royalty revenue

 

4

 

5

 

9

 

14

 

Total revenue

 

13,607

 

13,209

 

79,571

 

44,043

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development

 

11,416

 

14,863

 

40,486

 

51,606

 

Selling, general and administrative

 

26,181

 

8,172

 

62,936

 

24,426

 

Total operating expenses

 

37,597

 

23,035

 

103,422

 

76,032

 

Loss from operations

 

(23,990

)

(9,826

)

(23,851

)

(31,989

)

Interest income

 

23

 

45

 

56

 

136

 

Interest expense

 

(668

)

(38

)

(1,316

)

(111

)

Other income (expense), net

 

(3

)

3

 

(29

)

39

 

Net loss before provision for income taxes

 

(24,638

)

(9,816

)

(25,140

)

(31,925

)

Provision for income taxes

 

 

 

(1

)

(1

)

Net loss

 

$

(24,638

)

$

(9,816

)

$

(25,141

)

$

(31,926

)

Net loss per share:

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.68

)

$

(0.28

)

$

(0.70

)

$

(0.98

)

 

 

 

 

 

 

 

 

 

 

Weighted-average number of shares used in computing basic and diluted net loss per share

 

36,350

 

35,578

 

36,067

 

32,474

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive loss

 

$

(24,641

)

$

(9,844

)

$

(25,158

)

$

(31,915

)

 



 

AFFYMAX, INC.
COLLABORATION REVENUE

(in thousands)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2012

 

2011

 

2012

 

2011

 

OMONTYS net product sales (as provided by Takeda)

 

$

15,008

 

$

 

$

15,008

 

$

 

Total Collaboration costs & expenses (1)

 

23,406

 

 

42,920

 

 

OMONTYS collaboration profit (loss)

 

(8,398

)

 

(27,912

)

 

 

 

 

 

 

 

 

 

 

 

Affymax share of collaboration profit (loss)

 

(4,199

)

 

(13,956

)

 

Net reimbursement of Affymax costs & expenses

 

14,576

 

 

27,004

 

 

Profit equalization payment earned by Affymax (2)

 

10,377

 

 

13,048

 

 

Milestone payments

 

2,250

 

10,000

 

60,250

 

10,000

 

Revenue previously deferred related to API

 

441

 

 

441

 

 

Revenue recognized under CAPM (3)

 

 

 

 

26,606

 

Net expense reimbursement after CAPM (4)

 

535

 

3,204

 

5,823

 

7,423

 

Total collaboration revenue

 

$

13,603

 

$

13,204

 

$

79,562

 

$

44,029

 

 


(1)         Total Collaboration costs and expenses include costs incurred by Affymax and Takeda including amounts provided to us by Takeda.

 

(2)         Profit equalization payment earned is comprised of Affymax’s share of collaboration profit or loss as well as net reimbursement for commercialization costs and certain post-marketing development costs incurred subsequent to the launch of OMONTYS on March 27, 2012.

 

(3)         Revenue recognized under CAPM (Contingency Adjusted Performance Model) includes amounts received related to upfront payments, development milestones, purchase of active pharmaceutical ingredient, or API, and reimbursement of development expenses.  Under CAPM, revenue for these amounts was recognized ratably over the expected development period, which ended in May 2011 with the submission of the NDA for OMONTYS to the FDA.

 

(4)         Net expense reimbursement after CAPM is comprised of two components:  (i) net reimbursement of commercialization expenses and certain post-marketing development costs incurred subsequent to the submission of the NDA for OMONTYS in May 2011 and  prior to the launch of OMONTYS on March 27, 2012, after which such costs are incorporated into the profit equalization payment and (ii) the reimbursement of those development expenses that fall under the 70/30 expense split in our collaboration agreement with Takeda subsequent to the submission of the NDA for OMONTYS in May 2011.