Santhera reports 2010 interim financial results with significant reduction in net loss and strong increase in product sales
Santhera Pharmaceuticals (SIX: SANN) announced today the results for the first half year ended June 30, 2010. During the reporting period, CatenaŽ achieved net sales of CHF 1.7 million (plus 270%; first half year 2009: CHF 0.5 million).
- (1888PressRelease) September 06, 2010 - Net cash burn (CHF 13.8 million) and net loss (CHF 14.2 million) were both significantly lower in the first six months of 2010 compared to the same period in 2009 (CHF 21.6 million and CHF 23.4 million respectively) and in line with expectations.
As of June 30, 2010, Santhera had cash and cash equivalents of CHF 39.5 million. The Company expects to be profitable in the second half year 2010 considering the upfront payment of EUR 13.0 million (CHF 16.9 million) from Ipsen for the rights to fipamezole announced earlier today. Based on its current financial planning, Santhera is funded well into 2013.
Major events of 2010 to date include
* Revenues from sales of CatenaŽ in Canada and through the Named Patient Program (NPP) have already reached level of prior full year after six months in 2010
* Positive results from RHODOS study with CatenaŽ in Leber's Hereditary Optic Neuropathy (LHON) open regulatory path for potential filings in 2011 for marketing approval
* Pivotal MICONOS study with CatenaŽ/SovrimaŽ in Friedreich's Ataxia was disappointing
* Fipamezole in Dyskinesia in Parkinson's Disease partnered to Ipsen for development and commercialization outside North America and Japan
Commenting on the operational results, Klaus Schollmeier, Chief Executive Officer of Santhera, said: "The data generated with CatenaŽ in LHON are very encouraging. The instant and strong interest among LHON patients and their physicians reflects the high unmet medical need for a treatment for this devastating eye disease. We are now considering regulatory filings options together with health authorities. The second regional partnering of fipamezole outside North America and Japan is another highlight. Fipamezole is the most advanced drug candidate for levodopa-induced Dyskinesia in Parkinson's Disease. Together with Ipsen and Biovail, we are committed to bring this important product to the market as expeditiously as possible."
Commenting on the financial results, Barbara Heller, Chief Financial Officer of Santhera, said: "The financial results for the first half of 2010 are well within our expectations. In the first six months, we saw an impressive growth in product sales and significantly reduced the operating expenses primarily in research and development. The revenues from CatenaŽ sales and the upfront payment from the licensing agreement with Ipsen as announced earlier today will result in a highly profitable second half year 2010. Our current cash position as well as future product sales and milestone payments ensure that Santhera is financed well into 2013."
Solid cash position and financed well into 2013
As of June 30, 2010, Santhera had cash and cash equivalents of CHF 39.5. Net change in and cash equivalents in the first half year of 2010 was CHF 13.8 million compared to CHF 21.6 million in the same reporting period 2009. The significant reduction in cash burn reflects the Company's clear focus of activities and strict cost controls. Total equity at mid-year amounted to CHF 67.1 million compared to CHF 83.5 million as of December 31, 2009. Santhera continues to allocate funds primarily to the development programs with CatenaŽ/SovrimaŽ as well as marketing and business development activities.
The value of Santhera's intangible assets fell by CHF 3.1 million to CHF 30.7 million compared to CHF 33.8 million at year-end 2009, primarily due to currency exchange-related valuation losses of the Euro-denominated CatenaŽ/SovrimaŽ asset.
Santhera's share capital was increased by the exercise of 6,023 employee stock options. As of June 30, 2010, the share capital of Santhera Pharmaceuticals Holding AG consisted of 3,660,242 registered shares with a nominal value of CHF 1 each. Santhera remains fully equity financed.
Significantly increased sales, focused spending and reduced operating expenses
In the first six months of 2010, CatenaŽ generated net sales of CHF 1.7 million compared to CHF 0.5 million in the corresponding period in 2009. The bulk of the revenues (CHF 1.6 million) originate from product sales in Canada while the remainder comes from NPP sales in Europe and elsewhere. Gross profit amounted to CHF 1.5 million (first half of 2009: CHF 0.4 million).
Operating expenses in the first half of 2010 were reduced by 37% to CHF 15.7 million (first half of 2009: CHF 24.9 million). This substantial decrease resulted primarily from cost reductions in Research and Development (R&D) in connection with the restructuring of the early drug discovery activities announced in July 2009 and the phase out of two large clinical studies. Total R&D amounted to CHF 7.9 million, representing 51% (first half of 2009: CHF 16.9 million and 68%) of total operating expenses. Marketing and Sales (M&S) slightly increased to CHF 2.2 million or 14% of total operating expenses (first half of 2009: CHF 2.0 million or 8%) in line with expanded activities for CatenaŽ in Canada and in Europe. General and administrative expenses (G&A) decreased to CHF 5.6 million, representing 35% of total operating expenses (first half of 2009: CHF 6.0 million or 24%). G&A includes expenses for corporate finance, business development activities as well as infrastructure and all management expenses which are not reallocated in general. Other operating income/expenses amounted to CHF 0.5 million (first half of 2009: CHF -0.03 million) mainly from a research grant. For the first half of 2010, Santhera reports a net loss of CHF 14.2 million, which is significantly lower than the net loss of CHF 23.4 million reported for the first half of 2009.
Focus continues on core activities, cash runway secured well beyond 2013
After the close of books for the 2010 Interim Report, Santhera signed a license agreement with Ipsen for the development and commercialization of fipamezole outside the US, Canada and Japan for an upfront payment of EUR 13.0 million. For the second half of 2010, Santhera anticipates to be profitable. Net cash burn for the full year is expected to be well below the 2009 level. According to its current financial planning, Santhera is funded well into 2013.
Preparation for regulatory filings of CatenaŽ in LHON will continue over the next months and expects to file for marketing approvals in the first half of 2011. In parallel to the regulatory work, Santhera will present the positive results from the RHODOS study at upcoming scientific and medical conferences. Enrollment of the first group of 40 patients into the pivotal DELOS study in Duchenne Muscular Dystrophy is expected to be completed in a few weeks' time. The proof-of-concept Phase IIa MELTIMI study in MELAS syndrome is expected to be completed with top-line data available before the end of the year.
Update on Products and Pipeline
Product sales - CatenaŽ
Product sales of CatenaŽ in Canada and under the NPP continued to grow with revenues for the first half of 2010 equal to the annual sales in 2009. In Canada, the drug has been prescribed to 153 Friedreich's Ataxia patients (of an expected population of approximately 300 individuals); 99 of them have secured reimbursement from their insurance carriers. Sales on named-patient basis continued to meet considerable interest in Europe and elsewhere.
CatenaŽ in Leber's Hereditary Optic Neuropathy (LHON) - RHODOS Phase II/III study
The RHODOS data reported in June 2010 showed that in LHON vision could be preserved or even improved in patients receiving CatenaŽ compared to those receiving placebo. For example, a higher proportion of patients receiving CatenaŽ who were almost completely blind recovered sufficiently to read at least 5 letters on a standard eye chart versus placebo. The data also indicated that the drug has the potential to protect patients at highest risk for vision loss from further deterioration in their visual acuity. The positive visual acuity outcomes were supported by improvements in color contrast sensitivity with CatenaŽ treatment compared to placebo. In the absence of any available treatment for this rare and devastating disease, Santhera is discussing strategies to make CatenaŽ available to LHON patients as soon as possible. Filings for marketing approval are anticipated for the first half of 2011.
CatenaŽ/SovrimaŽ in Duchenne Muscular Dystrophy - DELOS Phase III study
Six centers in Europe and one in the United States are open for recruitment of patients into this 12-month placebo-controlled study. DELOS employs a group-sequential design and currently only patients not comedicated with glucocorticoid are being enrolled. It is anticipated that recruitment of this first group of patients will be completed within the next few weeks. A first interim analysis will be conducted when patients in this group have been treated for six months and is expected in the first half of 2011. An interim analysis of DELOS was encouraged by both the European Medicines Agency (EMA) and the US Food and Drug Administration (FDA). Both regulatory authorities indicated that a single pivotal study providing robust efficacy data could suffice for approval. Recently, Santhera was granted patent protection in Europe until 2026.
CatenaŽ/SovrimaŽ in Friedreich's Ataxia - MICONOS Phase III study
The MICONOS results announced in May 2010 represent a major setback for this development program. Santhera is awaiting further data from two ongoing extension studies which will provide long-term follow-up data on the use of the drug in Friedreich's Ataxia patients. The Company believes that the results of the completed studies conducted to date and the experience of treating physicians and patients underscore the benefit individual patients receive from CatenaŽ/SovrimaŽ. Still under investigation are the reasons for the failure of MICONOS to demonstrate conclusively the efficacy of the drug. It is already clear that the unexpected variability in disease progression as measured by the available neurological rating scales and the limited size and duration of the trial played an important role. In Canada, Santhera and Health Canada are exploring possibilities to allow patients continued access to CatenaŽ under the existing NOC/c.
CatenaŽ in MELAS syndrome - MELTIMI Phase IIa study
Santhera is collaborating with the Columbia University of New York City in this Phase II proof-of-concept study. The trial investigates the efficacy of two doses of CatenaŽ versus placebo in reducing the levels of a disease-relevant biomarker over a treatment period of 28 days. Recruitment is almost completed and Santhera expects to report top-line results in the second half of 2010.
Fipamezole in Dyskinesia in Parkinson's Disease - Phase III development
On September 2, 2010, Santhera and Ipsen signed a license agreement under which Ipsen acquired the rights to develop and commercialize fipamezole outside North America and Japan. Santhera receives an upfront payment of EUR 13.0 million and is entitled to up to EUR 128.0 million in development and sales milestones plus royalties on Ipsen's future product sales. Santhera retains full rights in Japan.
Meanwhile, preparation for the Phase III development at Biovail, Santhera's partner in the United States and Canada, is progressing. Initiation of the first pivotal study with fipamezole is currently planned for 2011. Biovail has entered a definitive merger agreement with Valeant and a pipeline review is intended to be undertaken.
Omigapil in Congenital Muscular Dystrophy - Phase II/III development
With a grant from the patient organization Association française contre les myopathies, Santhera completed the nonclinical development required for omigapil in support of a clinical study. In collaboration with international experts, in the forthcoming months Santhera will develop a clinical trial protocol which will be discussed with the EMA and FDA during protocol assistance meetings early next year.
Half-year 2010 Financial Information
The 2010 Interim Report of Santhera Pharmaceuticals including the unaudited consolidated financial statements is available on the Company's Web site under www.santhera.com/reports
About Santhera
Santhera Pharmaceuticals (SIX: SANN) is a Swiss specialty pharmaceutical company focused on the development and commercialization of innovative pharmaceutical products for the treatment of severe neuromuscular diseases, an area of high unmet medical need which includes many orphan indications with no current therapy. Santhera's first product, CatenaŽ, to treat Friedreich's Ataxia is marketed in Canada. For further information, please visit www.santhera.com
CatenaŽ is a trademark of Santhera Pharmaceuticals.
Webcast/Teleconference
At 15:00 CET / 14:00 UKT / 09:00 EST on September 3, 2010, Santhera's management will host a teleconference/webcast. You can either join the webcast on www.santhera.com/webcast or the teleconference using the conference ID 96144870 and one of the following dial-ins:
Switzerland 056 580 00 12 (local call)
Germany 0692 222 4956 (local call)
UK 0844 338 74 (local call)
Europe +44 (0) 1452 561 488 (standard international)
USA 1877 328 4999
The webcast will be available for playback one hour after the analyst presentation ends.
For further information, contact
Klaus Schollmeier, Chief Executive Officer
Phone: +41 (0)61 906 89 52
klaus.schollmeier ( @ ) santhera dot com
Barbara Heller, Chief Financial Officer
Phone: +41 (0)61 906 89 54
barbara.heller ( @ ) santhera dot com
Thomas Staffelbach, Head Public & Investor Relations
Phone: +41 (0)61 906 89 47
thomas.staffelbach ( @ ) santhera dot com
Disclaimer/Forward-looking statements
This communication does not constitute an offer or invitation to subscribe for or purchase any securities of Santhera Pharmaceuticals Holding AG. This publication may contain certain forward-looking statements concerning the Company and its business. Such statements involve certain risks, uncertainties and other factors which could cause the actual results, financial condition, performance or achievements of the Company to be materially different from those expressed or implied by such statements. Readers should therefore not place undue reliance on these statements, particularly not in connection with any contract or investment decision. The Company disclaims any obligation to update these forward-looking statements.
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