Executive Management Changes - In connection with the merger, on November 14, 2012, the Company announced the appointment of Russell H. Plumb as its President and Chief Executive Officer, as well as a director, and Joseph M. Patti, M.S.P.H., Ph.D. as its Executive Vice President, Corporate Development & Strategy. Peter Cook, who resigned as the Chief Executive Officer of Biota Holdings Limited upon the completion of the merger, continues to serve as a director.
Mr. Plumb previously served as President, Chief Executive Officer and Chief Financial Officer of Inhibitex, Inc., a publicly-traded clinical-stage drug development company, from December 2006 through February 2012, when it was acquired. From 2000 to December 2006, Mr. Plumb was the Chief Financial Officer of Inhibitex.
Dr. Patti was a co-founder of Inhibitex, and served as its Chief Scientific Officer and Senior Vice President of Research and Development from 2007 through February 2012. Prior to that, he served as the Vice President, Research and Development and Chief Scientific Officer from 2005 to 2007 and Vice President of Preclinical Development from 1998 to 2005.
Financial Results for the Three Month Period Ended December 31, 2012
As of December 31, 2012, the Company held $74.1 million in cash and cash equivalents.
The Company reported net income in the three month period ended December 31, 2012 of $4.8 million, as compared to a net loss of $7.0 million in the second quarter of 2011. The $11.8 million change from net loss in 2011 to net income in 2012 was primarily the result of an $8.2 million increase in revenue, the recording of a $7.8 million gain related to the merger, and the receipt of a $4.4 million research and development credit, offset in part by a $7.7 million increase in total operating expenses, a $0.4 million decrease in interest income and a $0.5 million decrease in income tax benefits. Basic and diluted net income per share were $0.17 for the three month period ended December 31, 2012, as compared to a net basic and diluted loss per share of $0.31 in the same period of 2011.
Revenue increased to $10.4 million for the three months ended December 31, 2012 from $2.1 million in the same period of 2011, primarily as a result of increased service revenue in 2012 due principally to the advancement of the laninamivir octanoate program under the BARDA contract and higher royalty revenue.
Cost of revenue increased to $7.1 million in the three months ended December 31, 2012 from $2.9 million in the same three month period in 2011 due principally to the advancement of the laninamivir octanoate program under the BARDA contract.
Research and development expense decreased to $4.0 million in the second quarter of 2012 from $5.7 million in the second quarter of 2011, due largely to the completion of the vapendavir Phase 2 clinical trial during the quarter ended June 30, 2012, as well as lower preclinical costs associated with our antibacterial and hepatitis C virus programs and lower personnel-related and other indirect costs in general.
General and administrative expense increase to $7.1 million in the second quarter of 2012 as compared to $1.9 million in the second quarter of 2011 primarily due to merger-related costs of $3.3 million in 2012, an increase in salaries, benefits, stock-based compensation and recruiting costs related to the addition of executive and administrative staff in the U.S., as well as generally higher insurance, rent, and maintenance costs.
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