LOUISVILLE, Colo., Aug. 5 /PRNewswire-FirstCall/ -- Replidyne, Inc. (Nasdaq: RDYN) today announced its financial results for the second quarter and six months ended June 30, 2008.
Replidyne reported a net loss of $18.7 million for the quarter ended June 30, 2008, or a net loss per basic and diluted common share of $0.69 per share, compared to net income of $45.5 million, or $1.71 per basic common share or $1.65 per common share on a fully diluted basis, for the second quarter ended June 30, 2007. Replidyne reported a net loss of $27.7 million for the six months ended June 30, 2008, or a net loss per basic and diluted common share of $1.02 per share, compared to net income of $36.9 million, or $1.39 per basic common share or $1.34 per common share on a fully diluted basis, for the six months ended June 30, 2007. Net income for the second quarter and six months ended June 30, 2007 was due to revenue recognized upon termination of the Company's former commercialization and collaboration agreement for faropenem medoxomil (faropenem) with Forest Laboratories that ended in May 2007 resulting in the one-time recognition of previously deferred revenue. Cash, cash equivalents and short-term investments at June 30, 2008 totaled $64.7 million.
"This second quarter we have taken several direct actions to structure our operations to conserve our cash position," said Kenneth J. Collins, Replidyne's President and CEO. "These actions have included the difficult decisions to return the faropenem license to the licensor, conclude our development efforts on the faropenem program and restructure our workforce. We believe these actions were important steps in our effort to conclude our ongoing strategic alternatives process."
During the second quarter of 2008, Replidyne announced that it had decided to terminate its license agreement with Asubio Pharma Co., Ltd. (Asubio Pharma) for faropenem. In conjunction with this decision, Replidyne also announced that it had terminated its supply agreement with Asubio Pharma and Nippon Soda Co., Ltd. (Nippon Soda) for production of faropenem. As a result, the Company recorded research and development expense of $4.2 million in the quarter, comprising a license termination fee of $3.6 million to Asubio Pharma and reimbursement of engineering costs of $0.6 million to Nippon Soda in accordance with the terms of the agreements. Replidyne also paid Nippon Soda $0.9 million for delay compensation under the supply agreement, which had been recorded in 2007.
In April 2008, Replidyne announced it had discontinued enrollment in a placebo-controlled phase III clinical trial testing faropenem in patients with acute exacerbation of chronic bronchitis (AECB) and restructured its operations. In June 2008, Replidyne further restructured its operations. As a result of these actions the Company has reduced its headcount by 23 employees and incurred approximately $2.5 million of related expense, comprising $2.1 million of employee severance expenses and $0.4 million of expenses related to closure of its facility in Milford, Connecticut.
Research and development expenses in the second quarter of 2008 were $14.4 million compared to $8.4 million in the corresponding quarter of 2007. Faropenem related expense in the quarter totaled $10.5 including $4.2 million for the termination of the faropenem license with Asubio Pharma and related reimbursement of engineering costs to Nippon Soda and costs for patient monitoring and data base analysis required for the Phase III study testing faropenem in patients with AECB that was discontinued in April 2008. Replidyne will incur further expense related to this clinical trial to complete required patient monitoring and data base analysis until the final clinical report is filed with the U.S. Food and Drug Administration, which is expected during the third quarter of 2008. Also related to faropenem, Replidyne recorded $2.7 million of research and development expense related to future decontamination of the MEDA Manufacturing GmbH (MEDA Manufacturing) facility in Germany that had previously manufactured 300 mg tablets of faropenem based on MEDA Manufacturing's communicated intention to decontaminate the facility. Replidyne believes that following receipt of documented decontamination expenses from MEDA Manufacturing these expenses are to be reimbursed by Forest Laboratories under the terms of its former collaboration agreement. Additionally, research and development expense included increased costs for preclinical activities associated with Replidyne's discovery research programs, primarily the C. difficile and DNA replication inhibition programs, offset by decreased expense related to the REP8839 program that was suspended in December 2007.
Sales, general and administrative expenses for the second quarter of 2008 were $4.7 million compared to $3.3 million in the second quarter of 2007. Replidyne recorded $1.7 million in the second quarter of 2008 as the estimate of the outcome, within a range of possible outcomes, from its pending arbitration with MEDA Manufacturing. This increase was partially offset by decreases in expenses following restructuring actions implemented in the fourth quarter of 2007 to reduce commercial and general and administrative headcount.
Investment income and other net for the second quarter of 2008 was $0.4 million compared to $1.5 million for the second quarter of 2007, primarily reflecting lower cash balances available for investment in the 2008 period.
Replidyne did not report any revenue in the second quarter of 2008. Revenue for the second quarter of 2007 was $55.6 million. Under a February 2006 commercialization and collaboration agreement with Forest Laboratories that terminated on May 7, 2007, Replidyne received non-refundable upfront and milestone payments totaling $60 million that were being recognized as revenue on a straight-line basis over approximately 15 years in accordance with Replidyne's revenue recognition policy. Upon termination, the balance of unamortized upfront and milestone payments of $55.2 million was fully recognized as revenue in the second quarter of 2007. In addition, during the second quarter of 2007 the Company recognized $0.4 million in contract revenue for funded activity through May 7, 2007 under the agreement.
About Replidyne, Inc.
Replidyne is a biopharmaceutical company focused on discovering, developing, and in-licensing innovative anti-infective products. Replidyne's lead program is an investigational antibacterial agent REP3123 that targets Gram-positive Clostridium difficile (C. difficile) bacteria and C. difficile Infection (CDI). Replidyne is pursuing the development of other novel anti-infective programs based on its DNA replication inhibition technology and its in-house discovery research. The Company's operating strategy is directed to pursuing strategic alternatives that include the merger or acquisition of some or all of its assets, and could reduce or change its current focus on the development of anti-infective product candidates.
This press release contains plans, intentions, objectives, estimates
and expectations that constitute forward-looking statements about
Replidyne, Inc. that involve significant risks and uncertainties. Actual
results could differ materially from those discussed due to a number of
factors including, the outcome of the Company's strategic alternatives
process; resolution by the Company of the matters raised in the Warning
Letter received from the FDA in January 2008; the success and timing of
pre-clinical studies and clinical trials; the Company's ability to obtain
and maintain regulatory approval of product candidates and the labeling
under any approval that may be obtained; plans to develop and commercialize
product candidates; the loss of key scientific or management personnel; the
size and growth of the potential markets for the Company's product
candidates and the Company's ability to serve those markets; regulatory
developments in the U.S. and foreign countries; the rate and degree of
market acceptance of any future products; the accuracy of Company estimates
regarding expenses, future revenues and capital requirements; the Company's
ability to obtain and maintain intellectual property protection for our
product candidates; the success of competing drugs that are or become
available; and the performance of third party manufacturers. These and
additional risks and uncertainties are described more fully in the
Company's most recent Form 10-K filed with the SEC under the Securities
Exchange Act of 1934. Copies of filings made with the SEC are available
through the SEC's electronic data gathering analysis and retrieval system
(EDGAR) at http://www.sec.gov. All forward-looking statements made in the
press release are made as of the date hereof and the Company assumes no
obligation to update the forward-looking statements in the document.
CONDENSED BALANCE SHEETS
June 30, December 31,
Cash and cash equivalents $40,746 $43,969
Short-term investments 23,970 46,297
Prepaid expenses and other current assets 1,177 2,429
Total current assets 65,893 92,695
Property and equipment, net 1,105 1,905
Other assets 80 90
Total assets $67,078 $94,690
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $12,201 $12,255
Total current liabilities 12,201 12,255
Other long-term liabilities - 31
Total liabilities 12,201 12,286
Commitments and contingencies
Stockholders' equity 54,877 82,404
Total liabilities and stockholders' equity $67,078 $94,690
CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended June 30, Six Months Ended June 30,
2008 2007 2008 2007
Revenue $- $55,647 $- $58,571
Costs and expenses:
development 14,444 8,364 22,062 17,811
Sales, general and
administrative 4,666 3,280 6,619 6,815
Total costs and
expenses 19,110 11,644 28,681 24,626
from operations (19,110) 44,003 (28,681) 33,945
and other, net 380 1,487 992 2,993
Net income (loss) $(18,730) $45,490 $(27,689) $36,938
Net income (loss)
per share - basic $(0.69) $1.71 $(1.02) $1.39
Net income (loss)
per share - diluted $(0.69) $1.65 $(1.02) $1.34
outstanding - basic 27,029 26,677 27,022 26,649
outstanding - diluted 27,029 27,651 27,022 27,612
|SOURCE Replidyne, Inc.|
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