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NeurogesX Reports Third Quarter 2009 Results

SAN MATEO, Calif., Nov. 6 /PRNewswire-FirstCall/ --

3Q09 Corporate Highlights:

  • Completed transfer of Qutenza(TM) E.U. Marketing Authorization to Astellas Pharma Europe Ltd.
  • Made significant progress in commercial readiness activities
  • Expanded management team to include VP Sales; Senior Director, Marketing; and Director, Commercial Operations
  • Appointed Bradford S. Goodwin to board as director and Audit Committee chairman

Upcoming 2009 Milestones:

  • FDA PDUFA date November 16, 2009 for Qutenza NDA to manage pain associated with PHN

NeurogesX, Inc. (Nasdaq: NGSX), a biopharmaceutical company focused on developing and commercializing novel pain management therapies, today reported results for the third quarter ended September 30, 2009.

During the third quarter of 2009, NeurogesX prioritized three key initiatives: 1) supporting the ongoing U.S. Food and Drug Administration (FDA) review of the new drug application (NDA) for Qutenza for postherpetic neuralgia (PHN), 2) preparing for potential commercial launch of Qutenza in the United States pending FDA approval and 3) supporting Astellas Pharma Europe Ltd., the commercial partner for Qutenza in Europe, the Middle East and Africa, in their efforts to prepare for a Qutenza launch in the European Union in 2010.

In the U.S., NeurogesX is currently awaiting a decision from FDA regarding its NDA for Qutenza to manage pain associated with PHN. The agency has assigned an extended Prescription Drug User Fee Act (PDUFA) date of November 16, 2009. In preparation for the possible approval and subsequent planned launch of Qutenza in the United States in the first half of 2010, the Company continued to make significant advances in a number of key product launch related initiatives, including:

  • Significant management additions to U.S. commercial team: VP Sales; Senior Director, Marketing; and Director, Commercial Operations
  • Market research updates to support launch planning and sales force sizing
  • Continued pursuit of our desired reimbursement scenarios for Qutenza

The Company expects to provide an update and additional details on U.S. commercialization plans once it learns the outcome of the FDA review of Qutenza in PHN.

In late September 2009, the Company completed the transfer of the Qutenza Marketing Authorization (MA) to Astellas, which is now the legal holder of the MA. In accordance with the licensing agreement between NeurogesX and Astellas, the MA transfer supports the E.U. launch of Qutenza for the treatment of neuropathic pain in non-diabetic adults, either alone or in combination with other medicinal products for pain. As a result of the MA transfer, Astellas is now responsible for ongoing maintenance of the MA, including certain post-marketing commitments for a safety and efficacy study of Qutenza.

In addition to Qutenza launch preparation activities, the Company appointed Bradford S. Goodwin to its Board of Directors as a director and Audit Committee chairman. Mr. Goodwin is currently President and CEO of Keren Pharmaceutical, nonexecutive chairman of Facet Biotech Corp. and a director of Rigel, Inc. He is a healthcare industry veteran that has held various senior executive positions at Novacea, Inc., Collabra Pharma, and Genentech, Inc.

Anthony DiTonno, President and CEO, commented, "The NeurogesX team continues to operate at exceptional levels as our focus remains squarely fixed on the upcoming PDUFA date for the potential U.S. approval of Qutenza in PHN. During the third quarter our commercialization readiness activities for Qutenza took center stage. Turning towards the E.U. launch, our highly collaborative and positive relationship with Astellas continues and our commercialization partner is working diligently toward a 2010 E.U. launch of Qutenza."

Third Quarter 2009 Financial Results

Collaboration revenue for the third quarter of 2009 was approximately $0.1 million, reflecting the initial amortization of upfront payments in connection with the Astellas Agreement. Commencement of revenue recognition during the three months ended September 30, 2009 was triggered by the completion of the transfer of the E.U. Qutenza MA from NeurogesX to Astellas in late September 2009.

Total operating expenses for the third quarter of 2009 were approximately $6.8 million, up 7.8% from approximately $6.3 million in the same period of 2008. The increase was primarily associated with a $1.2 million sublicense fee to the University of California, recorded as part of research and development expenses. The fee, which is due to be paid in the first quarter of 2010, was triggered in the most recent quarter upon receipt of a component of the upfront payments from Astellas. Excluding the sublicense fee, research and development expenses decreased year-over-year as a result of the Company's efforts to preserve cash resources to support its regulatory submissions processes in both the United States and the European Union and to devote resources to certain pre-commercialization activities. During the third quarter 2009 there was also an increase in general and administrative expenses versus the year ago period, primarily as a result of an increase in non-cash stock based compensation expense and continued focus on preparing for the potential U.S. launch of Qutenza in the United States.

Net loss for the third quarter of 2009 was approximately $6.8 million, compared to a net loss of approximately $6.3 million for the third quarter of 2008. Net loss per share was $0.38 per share and $0.36 per share for the three months ended September 30, 2009 and 2008, respectively, based on weighted average shares outstanding of 17.6 million and 17.5 million, respectively.

Cash equivalents and short-term investments were approximately $57.0 million at September 30, 2009, compared to $13.4 million at June 30, 2009. The increase reflects the receipt of a $48.8 million upfront payment from Astellas received in July 2009.

Stephen Ghiglieri, CFO, commented, "The third quarter of 2009 represents the first time we have reported quarterly revenue, which marks a milestone for NeurogesX. Our balance sheet is also strongly positioned with $57 million in cash, cash equivalents and short term investments. Consistent with our spending guidance for 2009, we are continuing our conservative focus in advance of our upcoming PDUFA date. As a result of that focus, we have been investing in commercialization activities that require long lead times, such as setting up the distribution channel, that are necessary to implement now to be ready for our targeted first half 2010 launch. Major investments, such as sales force deployment, are still being deferred pending FDA approval of Qutenza. We are also exploring strategies to further strengthen our balance sheet ahead of a potential U.S. Qutenza launch."

Development Update

NeurogesX is advancing its planning for NGX-1998 and expects to re-initiate clinical development activities in 2010.

Conference Call Details

The Company will hold its quarterly conference call today at 9:00 a.m. ET (6:00 a.m. PT) to discuss third quarter 2009 results.

To participate, please dial 1-877-407-0789 (USA) or 1-201-689-8562 (International). To access the live web cast please visit the Investor Relations section on the corporate web site at

A replay of the conference call will be available beginning November 6, 2009 at 7:30 p.m. ET (4:30 p.m. PT) and ending on November 16, 2009 by dialing 1-877-660-6853 (USA) or 1-201-612-7415 (International), Account Number: 3055, Conference ID Number: 336156. A replay of the webcast will also be available on the corporate website for one month, through December 6, 2009.

About NeurogesX, Inc.

NeurogesX (Nasdaq: NGSX) is a biopharmaceutical company focused on developing and commercializing novel pain management therapies. Its initial focus is on chronic peripheral neuropathic pain, including postherpetic neuralgia (PHN), painful HIV-distal sensory polyneuropathy (HIV-DSP) and painful diabetic neuropathy (PDN). NeurogesX' late stage product portfolio is led by its product candidate Qutenza(TM), a dermal patch designed to manage pain associated with peripheral neuropathic pain conditions. Qutenza is currently approved in the European Union for the treatment of neuropathic pain in non-diabetic adults, either alone or in combination with other medicinal products for pain. Qutenza will be marketed in the European Union, Switzerland, Norway, Iceland, Liechtenstein and certain countries in Eastern Europe, the Middle East and Africa, by Astellas Pharma Europe, Ltd. In the United States, NeurogesX submitted a new drug application (NDA) for PHN to the U.S. Food and Drug Administration (FDA) which was accepted for filing by the FDA in December 2008 and has been given an extended Prescription Drug User Fee Act (PDUFA) date of November 16, 2009.

NeurogesX' second most advanced product candidate, NGX-1998, is a topically applied, liquid formulation containing a high concentration of capsaicin designed to treat pain associated with neuropathic pain conditions. NGX-1998 has completed three Phase 1 studies and NeurogesX is currently planning the design and timing of this program.

NeurogesX' early stage product pipeline includes pre-clinical compounds, which are prodrugs of acetaminophen and various opioids. The company has evaluated these compounds in vitro and in vivo and is currently seeking development partners for these programs.

Safe Harbor Statement

This press release contains forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995 (the "Act"). NeurogesX disclaims any intent or obligation to update these forward-looking statements, and claims the protection of the Safe Harbor for forward-looking statements contained in the Act. Examples of such statements include, but are not limited to the timing and outcome of regulatory decisions and label approval being sought or that may be obtained with respect to the NDA for Qutenza with the FDA, including the PDUFA date for the NDA; plans and timing for commercialization of Qutenza; and development activities for NGX-1998 and other product candidates, including regulatory submissions and any outcomes of such submissions. Such statements are based on management's current expectations, but actual results may differ materially due to various risks and uncertainties, including, but not limited to: positive results in clinical trials may not be sufficient to obtain FDA approval; the FDA may request additional clinical trials or other information prior to granting approval for Qutenza; any regulatory approvals which are received may be limited to certain indications; inability or delay in establishing sales infrastructure to support potential commercialization; NeurogesX' product candidates may have unexpected adverse side effects or inadequate therapeutic efficacy or tolerability; physician or patient reluctance to use Qutenza or NGX-1998, if approved; other difficulties or delays in, clinical development of, and obtaining regulatory approval for NeurogesX' product candidates; and our ability to raise additional capital as needed. For further information regarding these and other risks related to NeurogesX' business, investors should consult NeurogesX' filings with the Securities and Exchange Commission.

    NeurogesX, Inc.                     The Ruth Group
    Stephen Ghiglieri                   Sara Pellegrino (investors)
    Chief Financial Officer             (646) 536-7002
    (650) 358-3310            

                                        Jason Rando (media)
                                        (646) 536-7025
                            NEUROGESX, INC.
           Condensed Consolidated Statements of Operations
            (in thousands, except share and per share data)

                                      Three Months Ended   Nine Months Ended
                                         September 30,        September 30,
                                      ------------------   ------------------
                                       2009        2008      2009       2008
                                       ----        ----      ----       ----
    Collaboration revenue              $119        $--       $119        $--
                                      -----      -----     ------     ------
    Operating expenses:
    Research and development(1)       3,557      3,653      8,664     13,607
    General and administrative(2)     3,269      2,677      8,062      8,027
                                      -----      -----     ------     ------
    Total operating expenses          6,826      6,330     16,726     21,634
                                      -----      -----     ------     ------
    Loss from operations             (6,707)    (6,330)   (16,607)   (21,634)
    Interest income                       3        212         48      1,001
    Interest expense                    (52)      (183)      (240)      (640)
    Other income (expense), net          --        (12)        10         26
                                        ---        ---        ---        ---
    Net loss                        $(6,756)   $(6,313)  $(16,789)  $(21,247)
                                    =======    =======   ========   ========
    Basic and diluted net loss
     per share                       $(0.38)    $(0.36)    $(0.95)    $(1.21)
                                     ======     ======     ======     ======
    Shares used to compute basic
     and diluted net loss
     per share                   17,617,209 17,538,886 17,588,832 17,508,094
                                 ========== ========== ========== ==========

    Non-cash stock-based compensation
     expense included in operating

    (1) Research and development       $148       $183       $596       $597
    (2) General and administrative      576        190      1,025        570
                                       ----       ----     ------     ------
                                       $724       $373     $1,621     $1,167
                                       ====       ====     ======     ======
                           NEUROGESX, INC.
               Condensed Consolidated Balance Sheets
                           (in thousands)

                                               September 30,   December 31,
                                                   2009            2008
                                               -------------   ------------
                                                 (unaudited)        (1)
                                                 -----------        ---
     Current assets:
       Cash and cash equivalents                     $48,468        $10,435
       Short-term investments                          8,516         14,071
       Prepaid expenses and other current assets         776            412
       Restricted cash                                    40             40
                                                          --             --
     Total current assets                             57,800         24,958
     Property and equipment, net                         380            468
     Restricted cash                                     160            160
     Other assets                                         --              4
                                                         ---            ---
     Total assets                                    $58,340        $25,590
                                                     =======        =======
            Liabilities and Stockholders' Equity
     Current liabilities:
       Accounts payable                                 $524           $370
       Accrued compensation                            1,221          1,039
       Accrued license fees                            1,213             --
       Accrued research and development                  190          1,067
       Other accrued expenses                          1,208            540
       Deferred revenue                                7,242             --
       Notes payable - current portion                   740          2,833
                                                         ---          -----
     Total current liabilities                        12,338          5,849
     Non-current liabilities:
     Deferred revenue                                 41,426             --
     Notes payable - non-current portion                  --            191
     Deferred rent                                       332            276
                                                         ---            ---
     Total non-current liabilities                    41,758            467

     Commitments and contingencies

     Stockholders' equity:
       Common stock                                       18             18
       Additional paid-in capital                    211,155        209,370
       Deferred stock-based compensation                  --             (2)
       Accumulated other comprehensive income              4             32
       Accumulated deficit                          (206,933)      (190,144)
                                                   ---------      ---------
     Total stockholders' equity                        4,244         19,274
                                                       -----         ------
     Total liabilities and stockholders' equity      $58,340        $25,590
                                                     =======        =======

    (1) The balance sheet at December 31, 2008, has been derived from the
    audited consolidated financial statements at that date

SOURCE NeurogesX

SOURCE NeurogesX
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