News Column

POZEN Reports Second Quarter 2014 Results

August 20, 2014



By a News Reporter-Staff News Editor at Biotech Week -- POZEN Inc. (NASDAQ: POZN), a pharmaceutical company committed to transforming medicine that transforms lives, announced results for the second quarter and first half ended June 30, 2014. Corporate Highlights POZEN reported net income of $3.0 million for the second quarter and, based upon current projections, expects to be profitable for the year (see also Pharmaceutical Companies).

Royalty revenue from VIMOVO® (naproxen / esomeprazole magnesium) for Q2 2014 was $5.4 million, an increase of $0.9 million over the prior quarter and $3.8 million over Q2 of 2013.

POZEN announced that the resubmission of the New Drug Application (NDA) for PA8140/PA32540 was submitted to the U.S. Food and Drug Administration (FDA), and has been accepted for review. The FDA indicated the NDA would be treated as a Class 2 resubmission with a new user fee goal date of December 30, 2014.

POZEN remains committed to controlling expenses and recorded an expense reduction of $1.2 million compared to Q2 2013. As part of the expense control, the Company has reduced its R&D staff and other costs and will continue to reduce costs not required to support the ongoing business activities.

Horizon Pharma, Inc., which acquired rights to market VIMOVO in the United States from AstraZeneca in November 2013, announced that it was verbally notified by CVS Caremark and Express Scripts, Inc. that VIMOVO would no longer be on their formularies and will be placed on their exclusion lists effective January 1, 2015. Horizon estimates that approximately 20-30% of VIMOVO prescriptions could be impacted by these decisions. While Horizon believes it has a strategy to mitigate the effect on VIMOVO sales, POZEN's royalty revenue from net sales of VIMOVO beginning in 2015 may be negatively affected. POZEN receives a 10% royalty on net sales of VIMOVO sold by Horizon in the United States, with guaranteed annual minimum royalty payments of $5 million in 2014, and $7.5 million each year thereafter, provided that the patents owned by POZEN which cover VIMOVO are in effect and no generic forms of VIMOVO are on the market.

In May 2014, as part of its intended acquisition of Treximet® (sumatriptan / naproxen sodium) from GlaxoSmithKline(GSK), Pernix Therapeutics Holdings, Inc. (Pernix) granted POZEN a warrant to purchase 500,000 shares of Pernix common stock at an exercise price of $4.28. The common stock underlying the warrants will be registered by Pernix with the Securities and Exchange Commission and will be exercisable from the closing date of the acquisition until February 28, 2018. If the acquisition is not completed, the warrants will be cancelled. Previous restrictions on POZEN's right to develop and commercialize additional certain dosage forms of sumatriptan / naproxen combinations outside of the United States and use of the approved U.S. New Drug Application will be eliminated upon closing of Pernix's transaction with GSK. Second Quarter Results For the second quarter of 2014, POZEN reported total revenue of $7.4 million, resulting from $5.4 million VIMOVO royalty and $2.0 million from the amortization of the $15 million upfront fee for the licensing of PA. POZEN is amortizing the remaining upfront fee through March 2015. For the second quarter of 2013, the Company reported total revenue of $1.7 million, all from VIMOVO royalty.

Operating expenses for the second quarter of 2014 totaled $4.4 million, as compared to $5.7 million for the comparable period in 2013. The decrease in operating expenses in the second quarter of 2014 was primarily a result of having fewer staff, reduced patent litigation costs and lower PA related costs.

The Company reported net income of $3.0 million, or $0.09 per share on a diluted basis for the second quarter of 2014, compared to net loss of $(4.0) million, or $(0.13) loss per share, for the second quarter of 2013. Six Month Results For the first half of 2014, POZEN reported total revenue of $15.0 million, resulting from $10.0 million VIMOVO royalty and $5.0 million from the amortization of the $15 million upfront fee for the licensing of PA. For the first half of 2013, the Company reported total revenue of $3.1 million, all from VIMOVO royalty.

Operating expenses for the first half of 2014 totaled $9.1 million, as compared to $12.9 million for the comparable period in 2013. The decrease in operating expenses in the first half of 2014 was primarily a result of having paid the PA PDUFA fee in the first half of 2013 and the strategic decision to reduce staffing and to not undertake new development projects unless fully funded by a partner.

The Company reported net income of $5.9 million, or $0.18 per share on a diluted basis for the first half of 2014, compared to net loss of $(9.8) million, or $(0.32) loss per share, for the first half of 2013. Balance Sheet At June 30, 2014, cash and cash equivalents totaled $31.8 million. Accounts receivable totaled $5.5 million. 2014 Strategic Direction For 2014, the Company's areas of strategic focus are: obtaining FDA approval for PA8140/PA32540; transitioning all licensed know-how relating to PA in the United States and fulfilling all contractual obligations to Sanofi US; completing study PA10040-102, an additional Phase 1 pharmacodynamics study; preparing the regulatory filing document for PA product candidates in the European Union; finding partners for the PA and Treximet assets in ex-U.S. territories; and controlling expenses. We have made the strategic decision to not start new development programs that are not fully funded by a partner. As a result, we have reduced our staff to fifteen employees and plan to make future reductions. Our board of directors and management team continue to explore potential ways to return value to our stockholders, including future cash distributions when we accumulate surplus cash as a result of receiving milestones and royalties from our commercial partners. Second Quarter Results Webcast POZEN will host a webcast to present second quarter 2014 results and management's outlook on Thursday, August 7, 2014 at 11:00 a.m. (ET). The webcast can be accessed live and will be available for replay at www.pozen.com. About POZEN POZEN Inc. is a small pharmaceutical company that specializes in developing novel therapeutics for unmet medical needs and licensing those products to other pharmaceutical companies for commercialization. By utilizing a unique in-source model and focusing on integrated therapies, POZEN has successfully developed and obtained FDA approval of two self-invented products. Funded by these milestones/royalty streams, POZEN has created a portfolio of cost-effective, evidence-based integrated aspirin therapies designed to enable the full power of aspirin by reducing its GI damage.

POZEN is currently seeking strategic partners to help maximize the opportunities for its portfolio assets.

The Company's common stock is traded under the symbol "POZN" on The NASDAQ Global Market. For more detailed company information, including copies of this and other press releases, please visit www.pozen.com. About PA POZEN has created a portfolio of investigational integrated aspirin therapies - the PA product platform. The products in the PA portfolio are being developed with the goal of significantly reducing GI ulcers and other GI complications compared to taking enteric-coated or plain aspirin alone.

The first candidates are PA8140, containing 81 mg of aspirin, and PA32540, containing 325 mg of aspirin. Both products are a coordinated-delivery tablet combining immediate-release omeprazole (40 mg), a proton pump inhibitor, layered around a pH-sensitive coating of an aspirin core. This novel, patented product is intended for oral administration once a day and an indication is being sought for use for the secondary prevention of cardiovascular disease in patients at risk for aspirin-induced gastric ulcers. About VIMOVO VIMOVO® (naproxen / esomeprazole magnesium) is a fixed-dose combination of delayed-release enteric-coated naproxen, a non-steroidal anti-inflammatory drug (NSAID), and immediate-release esomeprazole, a stomach acid-reducing proton pump inhibitor (PPI), approved for the relief of signs and symptoms of osteoarthritis, rheumatoid arthritis, and ankylosing spondylitis, and to decrease the risk of developing gastric ulcers in patients at risk of developing NSAID-associated gastric ulcers. VIMOVO is not recommended for use in children younger than 18 years of age. VIMOVO is not recommended for initial treatment of acute pain because the absorption of naproxen is delayed compared to absorption from other naproxen-containing products. Controlled studies do not extend beyond 6 months. VIMOVO should be used at the lowest dose and for the shortest amount of time as directed by your health care provider.

For Full Prescribing Information see www.vimovo.com. About Treximet Treximet® (sumatriptan / naproxen sodium) was approved by the U.S. Food and Drug Administration (FDA) in April 2008 for the acute treatment of migraine attacks, with or without aura, in adults. The product is formulated with POZEN's patented technology of combining a triptan with a non-steroidal anti-inflammatory drug (NSAID) and GlaxoSmithKline's (GSK) RT Technology™. This migraine medication contains sumatriptan, a 5-HT1 receptor agonist that mediates vasoconstriction of the human basilar artery and vasculature of human dura mater, which correlates with the relief of migraine headache. It also contains naproxen, an NSAID that inhibits the synthesis of inflammatory mediators. Therefore, sumatriptan and naproxen contribute to the relief of migraine through pharmacologically different mechanisms of action. As a result of this dual mechanism of action, Treximet has been shown to provide superior sustained pain relief compared to placebo and to both of the single mechanism of action components.

Keywords for this news article include: Pharmaceutical Companies, Neurology, POZEN Inc., FDA Actions, Legal Issues, GlaxoSmithKline, Headache and Migraine, Clinical Trials and Studies, Government Agencies Offices and Entities.

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Source: Biotech Week


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