http://www.businesswire.com/news/home/20091105005280/en
Q3 2009 Revenue Increased by 26% over Q3 2008
Cash & Investments Balance Increased with Recent $115 Million Equity Financing
DURHAM, N.C.--(Business Wire)--
Inspire Pharmaceuticals, Inc. (NASDAQ: ISPH) announced today financial results
for the third quarter ended September 30, 2009, reporting a net loss of $8.5
million or ($0.12) per common share.
Total revenue for the third quarter of 2009 was $25.2 million, as compared to
$20.0 million for the third quarter of 2008, reflecting an increase of 26%.
Revenue from AZASITE® (azithromycin ophthalmic solution) 1% totaled $9.0 million
in the third quarter of 2009, an increase of 92% compared to $4.7 million in the
third quarter of 2008. Inspire estimates that approximately $1.0 - $1.5 million
of third quarter 2009 AZASITE revenue was associated with hospital usage of
AZASITE as a substitute therapy during a temporary supply shortage of
erythromycin ophthalmic ointment (0.5%).
Total product co-promotion and royalty revenue for the third quarter of 2009 was
$16.1 million, comprised of co-promotion revenue from net sales of ELESTAT®
(epinastine HCl ophthalmic solution) 0.05% and royalty revenue from net sales of
RESTASIS® (cyclosporine ophthalmic emulsion) 0.05%, as compared to $15.2 million
in the third quarter of 2008. Royalty revenue from RESTASIS was $9.4 million and
co-promotion revenue from ELESTAT was $6.7 million, as compared to $7.8 million
and $7.4 million, respectively, recognized in the third quarter of 2008. In
addition, the Company has deferred $1.2 million of revenue from net sales of
ELESTAT from the first nine months of 2009. Under the co-promotion agreement for
ELESTAT, Inspire is entitled to a percentage of net sales based upon
predetermined calendar year net sales target levels. A portion of ELESTAT
co-promotion revenue has been recorded as deferred revenue until the Company has
achieved its 2009 annual minimum net sales target level. All deferred revenue is
expected to be recognized by the end of 2009 when the annual minimum net sales
target level is achieved.
Total revenue for the nine months ended September 30, 2009 was $62.5 million and
represented a 21% increase over the total revenue of $51.6 million for the same
period in 2008. Total revenue for the nine months ended September 30, 2009 was
comprised of $39.7 million of co-promotion and royalty revenue on net sales of
RESTASISand ELESTAT and $22.8 million of AZASITE revenue, as compared to $39.3
million and $11.1 million, respectively, recognized for the nine months ended
September 30, 2008.
Operating expenses for the third quarter of 2009 totaled $33.1 million, as
compared to $29.0 million for the same period in 2008. The increase in third
quarter 2009 operating expenses, as compared to 2008, was primarily due to
higher research and development expenses associated with ongoing programs,
specifically the cystic fibrosis program that included recognizing a $3.3
million milestone payable to Yamasa Corporation upon entering into a technology
license agreement to enable a two-supplier strategy for denufosol tetrasodium.
Operating expenses for the nine months ended September 30, 2009 were $98.0
million, as compared to $92.4 million for the same period in 2008. The increase
in nine-month 2009 operating expenses, as compared to 2008, was primarily due to
increased research and development expenses associated with ongoing programs, as
well as restructuring charges that occurred with the elimination of preclinical
and drug discovery activities in the first quarter of 2009. Additionally,
increases in cost of goods sold were the direct result of increased AZASITE
sales volume, while sales and marketing expenses decreased.
For the third quarter ended September 30, 2009, Inspire reported a net loss of
$8.5 million, or ($0.12) per common share, as compared to a net loss of $9.6
million, or ($0.17) per common share, for the same period in 2008. The net loss
for the nine months ended September 30, 2009 was $37.4 million, or ($0.61) per
common share, as compared to a net loss of $41.9 million, or ($0.74) per common
share for the same period in 2008. Cash, cash equivalents and investments
totaled $140.3 million at September 30, 2009, reflecting a $67.3 million
increase in cash and investments from December 31, 2008 as a result of the
Company`s recently completed public offering. Excluding the net proceeds from
the public offering, the Company utilized approximately $11.3 million of cash in
the third quarter for its operations.
Christy L. Shaffer, Ph.D., President and Chief Executive Officer of Inspire,
stated, "The first nine months of 2009 have been extremely productive. First, we
generated double-digit revenue growth this quarter as compared to the third
quarter of 2008. Second, our four ongoing clinical trials are progressing well
with three of the trials having recently completed patient enrollment and
results anticipated from all of these programs within eighteen months. Finally,
as a result of our recent financing, Inspire is now well-positioned to progress
our three late-stage clinical programs."
Recent updates include (July 1, 2009 through November 5, 2009):
Ophthalmic Research & Development
* Announced patient enrollment has been completed in the PROLACRIA (diquafosol
tetrasodium ophthalmic solution) 2% Phase 3 dry eye clinical trial (Trial
03-113); top-line results are expected in the first quarter of 2010;
* Continued progress in the Phase 2 AZASITE for blepharitis program and
announced patient enrollment has been completed in the four-week trial (Trial
044-102) and 250 of a targeted 300 patients have been enrolled in the two-week
trial (Trial 044-101); complete enrollment in the two-week trial is expected in
the first quarter of 2010; and
* Announced top-line results from two Phase 1, proof-of-concept glaucoma
trials.
Pulmonary Research & Development
* Announced patient enrollment has been completed in the denufosol tetrasodium
Phase 3 cystic fibrosis clinical trial, TIGER-2 (Trial 08-110); top-line results
are expected in the first quarter of 2011;
* Entered into a technology license agreement with Yamasa Corporation to
facilitate the transfer of the current denufosol manufacturing technology,
including intellectual property, to an additional manufacturer and enable a
two-supplier strategy for denufosol;
* Presented data from the cystic fibrosis program in a poster presentation at
the 23rd Annual North American Cystic Fibrosis Conference; and
* Received the North Carolina Health & Life Sciences Award in the category of
"Breakthrough Research" for the denufosol cystic fibrosis program.
Sales and Marketing
* Increased third quarter 2009AZASITE prescription volume by approximately 50%
as compared to the third quarter of 2008; and
* Increased production of AZASITEin response to a temporary supply shortage of
erythromycin ophthalmic ointment (0.5%), which is a macrolide antibiotic
routinely used in neonates for prophylaxis of ophthalmia neonatorum, a form of
bacterial conjunctivitis that may be contracted by newborns during delivery.
Corporate
* Completed a public offering in August 2009 of 25.6 million shares of common
stock at $4.50 per share, resulting in net proceeds of $109 million, after
deducting underwriting discounts and estimated offering expenses, and 82.3
million common stock shares outstanding as of September 30, 2009;
* In July 2009, Inspire announced that Christy L. Shaffer, Ph.D., President and
CEO, informed the Board of Directors that she plans to step down once a
successor is in place; based on Dr. Shaffer`s plan, Inspire's Board initiated an
external CEO search;
* Dr. Shaffer received the Breath of Life Award, which is the most important
recognition awarded to an individual or a company by the Cystic Fibrosis
Foundation (CFF) for extraordinary commitment and contributions to support the
work of the CFF; and
* Thomas R. Staab, II, Chief Financial Officer (CFO) and Treasurer, was named
CFO of the Year in the Small Public Company category in Triangle Business
Journal`s 2009 CFO of the Year Award program.
Financial Outlook for 2009
Based upon current AZASITE, ELESTAT andRESTASIS trends, Inspire expects to
record 2009 aggregate revenue in the range of $80-$90 million. Total 2009
operating expenses are expected to be in the range of $120-$135 million. Cost of
sales, which includes the amortization of the AZASITE approval milestone and
royalty obligations to InSite Vision Incorporated, is expected to be in the
range of $8-$13 million. Total estimated selling and marketing, general and
administrative, and research and development expenses are estimated to be in the
range of $45-$50 million, $14-$18 million and $50-$60 million, respectively.
Included within this operating expense guidance are projected stock-based
compensation costs of approximately $5 million. Operating cash utilization in
2009, excluding the net proceeds from the public offering, is expected to be in
the range of $50-$65 million, which incorporates $18 million of principal
repayment on the Company`s outstanding debt.
Inspire will host a conference call and live webcast to discuss its third
quarter 2009 financial results on Thursday, November 5, 2009 at 10:00 a.m. ET.
To access the conference call, U.S. participants may call (877) 648-7970 and
international participants may call (706) 902-0415. The conference ID number is
34680016. A live webcast and replay of the call will be available on Inspire's
website at www.inspirepharm.com. A telephone replay of the conference call will
be available until November 19, 2009. To access this replay, U.S. participants
may call (800) 642-1687 and international participants may call (706) 645-9291.
The conference ID number is 34680016.
About Inspire
Inspire is a biopharmaceutical company focused on researching, developing and
commercializing prescription pharmaceutical products for ophthalmic and
pulmonary diseases. Inspire`s goal is to build and commercialize a sustainable
portfolio of innovative new products based on its technical and scientific
expertise. The most advanced compounds in Inspire`s clinical pipeline are
PROLACRIA™ (diquafosol tetrasodium ophthalmic solution) 2% for dry eye and
denufosol tetrasodium for cystic fibrosis, which are both in Phase 3 development
and AZASITE® (azithromycin ophthalmic solution) 1% for blepharitis, which is in
Phase 2 development. Inspire receives revenues related to the promotion of
AZASITE for bacterial conjunctivitis, the co-promotion of ELESTAT® (epinastine
HCl ophthalmic solution) 0.05% for allergic conjunctivitis and royalties based
on net sales of RESTASIS® (cyclosporine ophthalmic emulsion) 0.05% for dry eye.
For more information, visit www.inspirepharm.com.
Forward-Looking Statements
The forward-looking statements in this news release relating to management's
expectations and beliefs are based on preliminary information and management
assumptions. Specifically, no assurances can be made with respect to: the extent
to which the 2009 annual minimum net sales target of ELESTAT is achieved; the
Company`s ability to recognize all deferred ELESTAT revenues by the end of 2009;
the Company`s ability to have results from all of its late-stage clinical
programs within 18 months; the Company`s ability to announce top-line results in
the first quarter of 2010 with respect to the PROLACRIA Phase 3 dry eye clinical
trial, complete enrollment in the two-week AZASITE blepharitis trial in the
first quarter of 2010, and announce top-line results in the first quarter of
2011 with respect to the denufosol tetrasodium Phase 3 cystic fibrosis study,
TIGER-2; the amount of revenues derived from AZASITE and ELESTAT as a result of
the Company`s commercial efforts; the level of royalty payments received from
Allergan with respect to net sales of RESTASIS; 2009 aggregate revenues; 2009
total operating expenses; 2009 cost of sales, including the amortization of the
AZASITE approval milestone and royalty obligations to InSite Vision
Incorporated; total 2009 selling and marketing expenses; total 2009 general and
administrative expenses; total 2009 research and development expenses; total
2009 stock-based compensation costs; operating cash utilization by the Company
in 2009, including the amount of principal repayment on the Company`s
outstanding debt; potential changes in the Company`s current operating plans;
and Inspire`s ability to build and commercialize a sustainable portfolio of
innovative new products based on its technical and scientific expertise. Such
forward-looking statements are subject to a wide range of risks and
uncertainties that could cause results to differ in material respects, including
those relating to product development, revenue, expense and earnings
expectations, the seasonality of ELESTAT, intellectual property rights,
competitive products, results and timing of clinical trials, success of
marketing efforts, the need for additional research and testing, delays in
manufacturing, funding, and the timing and content of decisions made by
regulatory authorities, including the U.S. Food and Drug Administration. Further
information regarding factors that could affect Inspire's results is included in
Inspire's filings with the SEC. Inspire undertakes no obligation to publicly
release the results of any revisions to these forward-looking statements that
may be made to reflect events or circumstances after the date hereof.
-- Financial tables follow --
INSPIRE PHARMACEUTICALS, INC.
Condensed Statements of Operations
(in thousands, except per share amounts)
(Unaudited)
Three Months Nine Months
Ended Sept 30,
Ended Sept 30,
2009 2008 2009 2008
Revenues:
Product sales, net $ 9,041 $ 4,721 $ 22,814 $ 11,076
Product co-promotion and royalty 16,127 15,231 39,736 39,313
Collaborative research and development ---- ---- ---- 1,250
Total revenue 25,168 19,952 62,550 51,639
Operating expenses:
Cost of Sales 3,032 1,624 7,277 4,274
Research and development 15,300 9,796 41,124 34,401
Selling and marketing 11,323 13,817 36,132 42,937
General and administrative 3,410 3,748 11,463 10,787
Restructuring 35 ---- 2,014 ----
Total operating expenses 33,100 28,985 98,010 92,399
Loss from operations (7,932 ) (9,033 ) (35,460 ) (40,760 )
Other income (expense):
Interest income 151 534 470 2,431
Interest expense (712 ) (1,120 ) (2,421 ) (3,565 )
Other income (expense), net (561 ) (586 ) (1,951 ) (1,134 )
Net loss $ (8,493 ) $ (9,619 ) $ (37,411 ) $ (41,894 )
Basic and diluted net loss per common share $ (0.12 ) $ (0.17 ) $ (0.61 ) $ (0.74 )
Weighted average common shares used in computing basic and diluted net loss per common share 71,168 56,621 61,564 56,592
INSPIRE PHARMACEUTICALS, INC.
Selected Balance Sheet Information
(in thousands)
September 30, December 31,
2009 2008
Cash, cash equivalents and investments $ 140,268 $ 72,966
Trade receivables 20,358 16,544
Inventories, net 1,417 689
Total assets 185,801 114,224
Working capital 90,599 52,512
Deferred revenue 1,219 --
Debt, including current portion 29,920 43,605
Total stockholders' equity 120,151 44,387
Shares of common stock outstanding 82,300 56,672
Investor Contact:
Inspire Pharmaceuticals, Inc.
Jenny Kobin, VP, Investor Relations and
Corporate Communications, 919-941-9777, Ext. 219
or
Thomas R. Staab, II, 919-941-9777, Ext. 267
Chief Financial Officer and Treasurer
or
Media Contact:
Inspire Pharmaceuticals, Inc.
Cara Amoroso, 919-941-9777, Ext. 266
Manager, Corporate Communications
Copyright Business Wire 2009
