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PALO ALTO, Calif.--(BUSINESS WIRE)--
Anacor Pharmaceuticals, Inc. (NASDAQ: ANAC) today announced its financial
results for the quarter ended June 30, 2015.
"2015 continues to be a very productive year for Anacor. We recently
announced that crisaborole, our novel non-steroidal topical
anti-inflammatory phosphodiesterase-4 (PDE-4) inhibitor in development
for the potential treatment of mild-to-moderate atopic dermatitis in
children and adults, achieved statistically significant results on all
primary and secondary endpoints in two Phase 3 pivotal studies and
demonstrated a safety profile consistent with previous studies. If
approved, we believe crisaborole could offer an important treatment
option for the many patients living with this serious skin disease, as
well as the physicians who treat them," said Paul L. Berns, Chairman and
Chief Executive Officer of Anacor. "In addition, we are pleased with the
recently announced amendment to the Sandoz Agreement. We believe the
increased investment in KERYDIN commercial activities will help increase
brand awareness among the patients suffering from onychomycosis who are
most likely to use KERYDIN, and motivate them to seek treatment from
their physicians."
Recent Highlights and Developments
On July 13, 2015, we announced preliminary top-line results from our
two Phase 3 pivotal studies of crisaborole topical ointment, 2%
(formerly known as AN2728), a novel non-steroidal topical
anti-inflammatory PDE-4 inhibitor in development for the potential
treatment of mild-to-moderate atopic dermatitis in children and
adults. In each study, crisaborole achieved statistically significant
results on all primary and secondary endpoints and demonstrated a
safety profile consistent with previous studies. In addition to the
Phase 3 pivotal studies, we are conducting an open-label long-term
safety study to evaluate the safety of intermittent use of crisaborole
for up to 12 months. We currently expect to announce the results of
the long-term safety study by the end of 2015 and submit a New Drug
Application for crisaborole to the U.S. Food and Drug Administration
in the first half of 2016.
On June 26, 2015, we entered into an amendment to our distribution and
commercialization agreement (the "Sandoz Agreement") with Sandoz Inc.
("Sandoz"), a Novartis company, pursuant to which PharmaDerm, the
branded dermatology division of Sandoz, distributes and commercializes
KERYDIN (tavaborole) topical solution, 5% in the United States.
Pursuant to the amendment, Sandoz agreed to increase its commercial
investment in KERYDIN in 2015, and we agreed to contribute a total of
$20.0 million to Sandoz (the "Anacor Contribution"), primarily focused
on consumer-directed commercialization activities. The parties'
increased investment in support of KERYDIN in 2015 includes Sandoz's
previously expanded field-sales force and a new multi-channel
integrated marketing campaign. In addition, the amendment increased
the amount of cumulative minimum gross profit sharing payments to
which we are entitled for 2016 to $65.0 million from $45.0 million and
established new cumulative minimum gross profit sharing payments to us
for 2017 of $65.0 million. The amendment also reduced the price
associated with our option to repurchase all rights in KERYDIN from
Sandoz on December 31, 2017, as determined pursuant to the Sandoz
Agreement.
Selected Financial Results for the Quarter Ended June 30, 2015
Distribution and commercialization agreement revenue for the
second quarter of 2015 was $17.8 million, representing a sequential
increase of 47.5% from the first quarter of 2015. In the quarter ended
June 30, 2015, we recognized $15.7 million of gross profit sharing
revenue, which included the final $14.9 million of the $25.0 million
launch payment made to us by Sandoz in January 2015, based upon gross
profits on sales of KERYDIN, as reported to us by Sandoz. We also
recognized $1.3 million from product sales of KERYDIN to Sandoz and $0.8
million of the $40.0 million in total upfront payments made to us by
Sandoz in 2014.
Research contracts revenue for the second quarter of 2015 was
$3.5 million, compared to $2.9 million for the comparable period in
2014. The increase over the prior year quarter was primarily driven by a
$0.4 million increase in revenue under our research contract with United
States Department of Defense, Defense Threat Reduction Agency ("DTRA")
and a $0.6 million increase in revenue for research performed under our
other agreements with not-for-profit organizations for neglected
diseases and from government grants. These increases were partially
offset by a $0.3 million decrease in revenue for research services
performed under our research agreement with the Bill and Melinda Gates
Foundation (the "Gates Foundation").
Cost of goods sold of $0.7 million was recognized in the second
quarter of 2015 for KERYDIN finished drug product released to Sandoz
during the quarter. Costs recorded in connection with the manufacture of
KERYDIN drug product prior to the time that we started to capitalize
such costs in 2014 were recorded as research and development expenses.
As a result, the aggregate cost of goods sold that we record for 2015
relating to sales of KERYDIN to Sandoz is expected to be lower than the
amount actually incurred to manufacture such drug product.
Research and development expenses for the second quarter of 2015
were $18.7 million, compared to $19.3 million for the comparable period
in 2014. The decrease from the prior year quarter was primarily due to a
decrease in costs for our KERYDIN program of $4.4 million and a decrease
in costs of $0.2 million under our Gates Foundation program, which were
partially offset by an increase of $1.8 million in costs relating to our
crisaborole program, a net increase of $1.8 million in our spending on
other research activities, including our neglected disease programs, and
a $0.4 million increase in costs for our DTRA program. In the second
quarter of 2015, direct research and development expenses under the
Gates Foundation, neglected disease and DTRA programs were offset by
research contracts revenue.
Selling, general and administrative expenses for the second
quarter of 2015 were $14.0 million, compared to $7.1 million for the
comparable period in 2014. The increase from the prior year quarter
resulted from the $5.0 million first installment of the Anacor
Contribution paid to Sandoz in June 2015 and growth of $1.9 million in
other general and administrative costs, including those associated with
market research activities related to crisaborole.
Net loss for the second quarter of 2015 was $13.2 million,
compared to a net loss of $24.5 million for the comparable period in
2014. Basic and diluted net loss per share were $0.30 for the second
quarter of 2015, compared to basic and diluted net loss per share of
$0.58 for the comparable period in 2014.
Cash, cash equivalents and investments totaled $176.9 million at
June 30, 2015, compared to $191.6 million at December 31, 2014. Balances
at June 30, 2015 and December 31, 2014 included cash and cash
equivalents of $7.5 million and $16.0 million, short-term and long-term
investments of $167.2 million and $171.9 million and restricted
investments of $2.2 million and $3.7 million, respectively.
Conference Call and Webcast
Anacor will host a conference call at 5:00 p.m. ET / 2:00 p.m. PT today,
during which management will discuss Anacor's financial results and
recent developments. The call may be accessed by dialing (877) 291-1367
(domestic) and (914) 495-8534 (international) five minutes prior to the
start of the call. The call will also be webcast live and can be
accessed on the Events and Presentations page, under Investors, on
Anacor's website at www.anacor.com
and will be available for three months following the call.
About Anacor Pharmaceuticals
Anacor is a biopharmaceutical company focused on discovering, developing
and commercializing novel small-molecule therapeutics derived from its
boron chemistry platform. Anacor's first approved drug, KERYDIN®
(tavaborole) topical solution, 5%, is an oxaborole antifungal approved
by the U.S. Food and Drug Administration in July 2014 for the topical
treatment of onychomycosis of the toenails. In July 2014, Anacor entered
into an exclusive agreement with Sandoz Inc., a Novartis company,
pursuant to which PharmaDerm, the branded dermatology division of
Sandoz, distributes and commercializes KERYDIN in the United States. In
September 2014, PharmaDerm launched KERYDIN in the United States.
Anacor's lead product development candidate is crisaborole topical
ointment, 2%, a novel non-steroidal topical anti-inflammatory PDE-4
inhibitor in development for the potential treatment of mild-to-moderate
atopic dermatitis and psoriasis. Beyond KERYDIN and crisaborole, Anacor
has discovered three investigational compounds that it has out-licensed
for further development. The first compound is licensed to Eli Lilly and
Company for the potential treatment of an animal health indication. The
second compound, AN5568, also referred to as SCYX-7158, is licensed to
Drugs for Neglected Diseases initiative for the potential treatment of
human African trypanosomiasis. The third compound is licensed to
GlaxoSmithKline LLC for development in tuberculosis. Anacor also has a
pipeline of other internally discovered topical and systemic boron-based
compounds in early stages of research and development. These include
AN3365, an investigational Gram-negative antibiotic, and certain other
wholly-owned investigational product candidates. For more information,
visit www.anacor.com.
Forward-Looking Statements
This press release contains forward-looking statements, including
statements regarding the progress, timing and results of Anacor's
clinical trials, the safety and efficacy of Anacor's approved product
and product development candidates, the timing of Anacor's potential
regulatory filings and approval of Anacor's product development
candidates, the commercial success of KERYDIN and the timing and
potential commercial success of Anacor's product development candidates.
These statements constitute forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934. The words "may," "might," "will,"
"should," "estimate," "project," "plan," "anticipate," "expect,"
"intend," "outlook," "believe" and other similar expressions are
intended to identify forward-looking statements. Readers are cautioned
not to place undue reliance on these forward-looking statements, which
speak only as of the date of this release, and Anacor undertakes no
obligation to update any forward-looking statement except as required by
law. These forward-looking statements are based on estimates and
assumptions by Anacor's management that, although believed to be
reasonable, are inherently uncertain and subject to a number of risks
and uncertainties. The following represent some, but not necessarily
all, of the factors that could cause actual results to differ from
historical results or those anticipated or predicted by Anacor's
forward-looking statements: the successful commercialization of KERYDIN
pursuant to Anacor's distribution and commercialization agreement with
Sandoz Inc.; any issues, delays or failures arising during the course,
or as a result, of Anacor's studies relating to crisaborole; any delay
by Anacor in filing for regulatory approval or failure by the U.S. Food
and Drug Administration to approve crisaborole; Anacor's ability to
timely and successfully launch, either alone or with a partner,
crisaborole, if approved; the impact of general economic, industry,
market or political conditions; and the other risks and uncertainties
identified in Anacor's periodic filings, including Anacor's Annual
Report on Form 10-K for the year ended December 31, 2014 and Quarterly
Report on Form 10-Q for the quarter ended March 31, 2015.
ANACOR PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
Three Months Ended June 30,
Six Months Ended June 30,
2015
2014
2015
2014
(unaudited)
(unaudited)
Revenues:
Distribution and commercialization agreement
$
17,801
$
—
$
29,870
$
—
Research contracts
3,536
2,931
6,731
7,089
Total revenues
21,337
2,931
36,601
7,089
Operating expenses:
Cost of goods sold (1)
680
—
1,434
—
Research and development (1)
18,666
19,261
36,827
35,196
Selling, general and administrative (1)
13,987
7,095
22,132
15,423
Total operating expenses
33,333
26,356
60,393
50,619
Loss from operations
(11,996
)
(23,425
)
(23,792
)
(43,530
)
Interest income
176
59
368
123
Interest expense
(1,376
)
(1,142
)
(2,733
)
(2,273
)
Net loss
$
(13,196
)
$
(24,508
)
$
(26,157
)
$
(45,680
)
Net loss per share — basic and diluted
$
(0.30
)
$
(0.58
)
$
(0.60
)
$
(1.09
)
Weighted-average number of shares used in calculating net loss per
share — basic and diluted
43,859,504
41,921,329
43,646,950
41,830,803
___________________
(1) Includes the following stock-based compensation expenses:
Cost of goods sold
$
35
$
—
$
98
$
—
Research and development expenses
$
1,684
$
1,249
$
3,234
$
2,334
Selling, general and administrative expenses
$
2,433
$
1,942
$
4,801
$
5,593
ANACOR PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(in thousands)
June 30, 2015
December 31, 2014 (1)
(unaudited)
Cash, cash equivalents and investments (2)
$
176,885
$
191,635
Convertible senior notes, net (3)
61,664
59,969
Accumulated deficit
(243,749
)
(217,592
)
Total stockholders' equity
65,278
78,832
(1)
Derived from the audited financial statements included in the
Company's Annual Report on Form 10-K for the year ended December 31,
2014.
(2)
Balances at June 30, 2015 and December 31, 2014 included cash and
cash equivalents of $7.5 million and $16.0 million, short-term and
long-term investments of $167.2 million and $171.9 million and
restricted investments of $2.2 million and $3.7 million,
respectively.
(3)
The Company separately accounts for the debt and equity components
of the 2.00% Convertible Senior Notes due 2021. At June 30, 2015,
the net carrying amount of the liability component was $61.7
million, and the unamortized discount on the liability component was
$28.8 million. The aggregate outstanding principal amount of the
Convertible Senior Notes was $90.5 million.
