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Pharmasset Reports Fiscal Second Quarter 2009 Financial Results

PRINCETON, N.J., May 11 /PRNewswire-FirstCall/ -- Pharmasset, Inc. (Nasdaq: VRUS), a clinical stage pharmaceutical company committed to discovering, developing, and commercializing novel drugs to treat viral infections, reported financial results and operational highlights for the fiscal quarter ended March 31, 2009.

Financial Results

Revenues were $1.9 million during the quarter ended March 31, 2009 compared to $0.5 million for the quarter ended March 31, 2008 and reflect the receipt of $1.4 million of research and development payments and the amortization of up-front and subsequent collaborative and license payments received from Roche.

Net cash used in operating activities was $15.5 million for the quarter ended March 31, 2009 as compared to $9.4 million for the quarter ended March 31, 2008. Pharmasset held $79.3 million in cash and cash equivalents at the end of the fiscal second quarter.

Total operating expenses for the quarter ended March 31, 2009 were $16.6 million as compared to $12.8 million for the same period in 2008. The increase in operating expenses for the quarter ended March 31, 2009 was primarily the result of an increase in phase 3 registration study expenses for clevudine for the treatment of chronic hepatitis B infection, as well as increased preclinical development expenses for our second generation hepatitis C virus (HCV) product candidate, PSI-7851, and the purine series of compounds.

Pharmasset reported a net loss of $15.5 million, or $0.59 per share for the quarter ended March 31, 2009, as compared to a net loss of $12.1 million, or $0.57 per share for the quarter ended March 31, 2008.

Recent Highlights:

  • On April 25, 2009, Pharmasset, Roche, and InterMune reported results from the INFORM-1 trial as an oral late breaker at the European Association for the Study of the Liver (EASL) in Copenhagen, Denmark. This is the first study to investigate the activity of a combination of two oral antiviral molecules to treat HCV in the absence of interferon. The study is investigating the combination of Pharmasset's R7128, a nucleoside inhibitor, with InterMune's R7227, a protease inhibitor;
  • On April 24, 2009, Pharmasset announced that its development partner, Roche, had initiated dosing of patients in the phase 2b trial of R7128 in combination with the standard of care in genotype 1 and 4 HCV infected patients. The start of the trial triggered a $10.0 million milestone payment to Pharmasset that is expected to be received in the quarter ending June 30, 2009;
  • On April 20, 2009, Pharmasset announced that it had voluntarily halted its phase 3 registration studies of clevudine for the treatment of chronic hepatitis B infection;
  • On March 31, 2009, Pharmasset announced the dosing of the first healthy volunteer in the phase 1 trial with PSI-7851, a second generation nucleotide inhibitor of HCV.

"Our HCV pipeline continues to make solid progress," stated Schaefer Price, President and Chief Executive Officer. "In April, we announced exciting data from the INFORM-1 trial at EASL and the initiation of the phase 2b trial with R7128. We are now able to increase our focus on further strengthening our portfolio of HCV nucleos(t)ides with the decision to halt registration studies with clevudine. We look forward to providing the first antiviral data on PSI-7851 in the second half of 2009."

Calendar Year 2009 Anticipated Milestones:

  • Announce selection of candidate(s) from our purine series of nucleos(t)ide analog for HCV in second half of 2009;
  • Provide update on safety from first 100 patients in the Phase 2b with Roche in second half of 2009;
  • Report phase 1 antiviral data with PSI-7851 in second half of 2009;
  • Report further data from INFORM-1 trial in fourth quarter of 2009.

About Pharmasset

Pharmasset is a clinical-stage pharmaceutical company committed to discovering, developing, and commercializing novel drugs to treat viral infections. Pharmasset's primary focus is on the development of oral therapeutics for the treatment of hepatitis C virus (HCV) and, secondarily, on the development of Racivir(R) for the treatment of human immunodeficiency virus (HIV). Our research and development efforts focus on nucleos(t)ide analogs, a class of compounds which act to inhibit the enzymes required for viral replication. We currently have three clinical-stage product candidates: R7128, a nucleoside analog for chronic HCV infections, has initiated a Phase 2b clinical trial in combination with Pegasys plus Copegus through a strategic collaboration with Roche; PSI-7851, an unpartnered, next generation HCV nucleotide analog, which recently began Phase 1 clinical studies and Racivir, for the treatment of HIV that has completed a Phase 2 clinical trial.

Pegasys(R) and Copegus(R) are registered trademarks of Roche.

    Richard E. T. Smith, Ph.D.
    VP, Investor Relations and Corporate Communications
    Office: +1 (609) 613-4181

Forward-Looking Statements

Pharmasset "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding our business that are not historical facts are "forward-looking statements" that involve risks and uncertainties, including without limitation, the risk that adverse events could cause the cessation or delay of any of the ongoing or planned clinical trials and/or our development of our product candidates, the risk that the results of previously conducted studies involving our product candidates will not be repeated or observed in ongoing or future studies involving our product candidates, the risk that our collaboration with Roche will not continue or will not be successful and the risk that any one or more of our product candidates will not be successfully developed and commercialized. For a discussion of these risks and uncertainties, any of which could cause our actual results to differ from those contained in the forward-looking statements, see the section of our Annual Report on Form 10-K for the fiscal year ended September 30, 2008 and our Quarterly Report on Form 10-Q for the period ended March 31, 2009 filed with the Securities and Exchange Commission entitled "Risk Factors" and discussions of potential risks and uncertainties in our subsequent filings with the Securities and Exchange Commission.

                                  PHARMASSET, INC.

                           Three Months Ended           Six Months Ended
                               March 31,                   March 31,
                               ---------                   ---------
                           2009          2008          2009          2008
                           ----          ----          ----          ----

    REVENUES            $1,902,679      $464,292    $2,366,970      $928,583
                        ----------      --------    ----------      --------

      Research and
       development      13,694,247     8,990,469    27,717,177    19,540,840
      General and
       administrative    2,893,504     3,809,073     6,962,874     6,428,818
                         ---------     ---------     ---------     ---------

        Total costs
         and expenses   16,587,751    12,799,542    34,680,051    25,969,658
                        ----------    ----------    ----------    ----------

    OPERATING LOSS     (14,685,072)  (12,335,250)  (32,313,081)  (25,041,075)

     INCOME                 57,685       585,048       167,209     1,481,450
     EXPENSE              (844,822)     (386,161)   (1,601,734)     (749,337)
                          --------      --------    ----------      --------

     INCOME TAXES      (15,472,209)  (12,136,363)  (33,747,606)  (24,308,962)
     INCOME TAXES                -             -             -             -
                               ---           ---           ---           ---

    NET LOSS          $(15,472,209) $(12,136,363) $(33,747,606) $(24,308,962)
                      ============  ============  ============  ============

    NET LOSS          $(15,472,209) $(12,136,363) $(33,747,606) $(24,308,962)
     GAIN (LOSS)
     INVESTMENTS                 -       (29,572)            -       (29,572)
                               ---       -------           ---       -------
     NET LOSS         $(15,472,209) $(12,165,935) $(33,747,606) $(24,338,534)
                      ============  ============  ============  ============

      BASIC                 $(0.59)       $(0.57)       $(1.36)       $(1.14)
      DILUTED               $(0.59)       $(0.57)       $(1.36)       $(1.14)

      BASIC             26,262,090    21,379,638    24,799,895    21,321,336
      DILUTED           26,262,090    21,379,638    24,799,895    21,321,336

                                PHARMASSET, INC.
                            CONDENSED BALANCE SHEET

                                                    As of         As of
                                                   March 31,   September 30,
                                                     2009           2008
                                                     ----           ----
      Cash and cash equivalents                 $79,289,134    $63,073,103
      Short-term investments                              -        497,310
      Amounts due from collaboration partner        638,926      1,169,690
      Prepaid expenses and other assets             865,731      1,008,083
                                                    -------      ---------
        Total current assets                     80,793,791     65,748,186
                                                 ----------     ----------

      Laboratory, office furniture and
       equipment                                  3,554,153      3,362,846
      Leasehold improvements                      1,836,553      1,836,553
                                                  ---------      ---------
                                                  5,390,706      5,199,399
      Less accumulated depreciation
       and amortization                          (2,926,654)    (2,432,325)
                                                 ----------     ----------
        Total equipment and leasehold
         improvements, net                        2,464,052      2,767,074
    OTHER ASSETS                                    424,400        466,809
                                                    -------        -------
    TOTAL                                       $83,682,243    $68,982,069
                                                ===========    ===========

      Current portion of long-term debt          $5,774,058     $2,651,592
      Current portion of capital lease
       obligation                                         -         41,641
      Accounts payable                            1,339,109      2,466,052
      Accrued expenses                            7,417,493      6,182,417
      Deferred rent                                 124,463        124,463
      Deferred revenue                            1,857,136      1,857,136
                                                  ---------      ---------
        Total current liabilities                16,512,259     13,323,301

    DEFERRED RENT                                    17,732         79,793
    DEFERRED REVENUE                              2,940,382      3,868,965
    LONG-TERM DEBT, net                          16,291,594     16,522,665
                                                 ----------     ----------
        Total liabilities                        35,761,967     33,794,724
                                                 ----------     ----------


    Common Stock, $0.001 par value,
     100,000,000 shares authorized,
     28,111,991 and 23,340,498 shares
     issued and outstanding at March 31,
     2009 (unaudited) and September 30, 2008,
     respectively                                    28,112         23,340
    Warrants to purchase 127,248 and 116,183
     shares of common stock for $12.05 per
     share, as of March 31, 2009, (unaudited)
     and September 30, 2008, respectively         1,229,767      1,140,114
    Additional paid-in capital                  192,201,947    145,818,439
    Accumulated other comprehensive
     (loss) income                                        -         (2,604)
    Accumulated deficit                        (145,539,550)  (111,791,944)
                                               ------------   ------------
        Total stockholders' equity               47,920,276     35,187,345
                                                 ----------     ----------
    TOTAL                                       $83,682,243    $68,982,069
                                                ===========    ===========

SOURCE Pharmasset, Inc.
Copyright©2009 PR Newswire.
All rights reserved

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