SUNNYVALE, Calif., Feb 11 /PRNewswire-FirstCall/ -- Pharmacyclics, Inc. (Nasdaq: PCYC) today reported financial results for its second fiscal quarter ended December 31, 2009.
Upon the completion of a drug supply agreement with Servier in the quarter ended December 31, 2009, the company began recognizing revenue under GAAP from its collaboration agreement with Servier, which was entered into in April 2009. Total revenue recognized under GAAP in our most recent quarter was $4.7 million, of which $2.7 million represents the pro-rata portion of revenue attributable to the period from April 2009 (i.e. the signing of the collaboration agreement) to September 30, 2009.
As of December 31, 2009, the company's cash, cash equivalents and marketable securities totaled $30.1 million compared to $16.3 million as of June 30, 2009.
Total operating expenses were $5.5 million in the second quarter of fiscal 2010, including $0.6 million of share-based compensation expense. This compares to $4.9 million in operating expenses for the second quarter of fiscal 2009, with share-based compensation expense of $0.6 million. The increase in operating expenses was primarily due to an increase in product development, manufacturing and research expenses.
Due to a change in the tax treaty between the US and France, we are anticipating to receive within this calendar year a full refund of the taxes of $0.55 million paid to the French Government in April of 2009 in association with the upfront licensing payment we received from Servier. The company therefore recorded a receivable for foreign income tax credit of $0.55 million in the second quarter of fiscal 2010. The receivable for the credit was recorded during the quarter as a result of the Protocol amending the Income Tax Treaty between the United States and France being enacted on December 23, 2009.
The GAAP net loss for the second quarter of fiscal 2010 was $218,000, or $0.00 per share, compared to a net loss of $4.8 million, or $0.19 per share, in the second quarter of fiscal 2009. For a non GAAP review of the quarter, please see the attached analysis on the last two pages of this press release.
As of December 31, 2009, the company had $8.5 million of deferred revenue recorded on its balance sheet associated with the Servier agreements. It is currently expected that the $8.5 million in deferred revenue, for which the payments have already been received, will be recognized as revenue ratably between January 2010 and April 2011 (with a minimum of approximately $1.7 million per quarter).
Pharmacyclics projects total operating expenses, excluding share-based compensation of between $11.0 and $12.0 million for the remaining two quarters of fiscal year 2010, including general and administrative expenses of approximately $3.0 - $3.5 million. Including share-based compensation expense, Pharmacyclics projects total operating expenses of between $12.0 and $13.0 million for the remaining two quarters of fiscal year 2010, including general and administrative expenses of approximately $3.5 - $4.0 million. In the same time frame the company expects to receive from its collaboration partner Servier $1.0 million in research payments and approximately $0.8 million for the supply of products. The company anticipates ending its fiscal year at June 30, 2010 with a cash balance of above approximately $20.0 million.
Financial projections involve a high level of uncertainty due to, among other factors, the variability involved in predicting requirements of early state research programs and clinical trials, the potential for entering into partnering arrangements or strategic collaborations, the timing of U.S. Food and Drug Administration (FDA) decisions and share-based compensation expense.
Robert W. Duggan stated, "A great deal of progress has been accomplished over the past year and especially the past quarter. The team responsible for making this happen remains dedicated to moving each of our compounds through the human clinical phase in an efficient manner. As you can read elsewhere in this release, we are making a difference for the better and we look forward to expanding upon our excellent results in treating serious unmet medicinal needs."
Recent and Upcoming Milestones and Program Updates
Conference Call and Webcast Details
The company will hold a conference call today at 4:30 p.m. EST to discuss its second fiscal quarter 2010 financial results and achievements. To participate in the conference call, please dial (866) 727-3220 (for international callers (706) 643-1591) and use the conference ID: 55218310.
To see a short slide presentation to be discussed during the call and to replay the audio broadcast, please go to the Investor Relations Section of our website, under Events & Webcasts: http://ir.pharmacyclics.com/events.cfm and click on "Second Quarter 2010 Conference Call Slides".
The archived version of the webcast will be available on the company's website for one month.
Use of Non-GAAP Financial Measures
This press release contains non-GAAP financial measures, and includes operating and other expenses adjusted to exclude certain non-cash and non-recurring expenses. These measures are not in accordance with, or an alternative for generally accepted accounting principles, or GAAP, and may be different from non-GAAP financial measures used by other companies. Among the items included in GAAP presentations but excluded for purposes of determining non-GAAP financial measures that we present are: non-cash interest expense associated with the loan from an affiliate of Robert W. Duggan; employee related non-cash expenses; pro-rata revenue related to prior services performed under the Servier Collaboration and the withholding tax related to the Servier transaction. We believe the presentation of non-GAAP financial measures provides useful information to management and investors regarding various financial and business trends relating to our financial condition and results of operations. When GAAP financial measures are viewed in conjunction with non-GAAP financial measures, investors are provided with a more meaningful understanding of our ongoing operating performance. In addition, these non-GAAP financial measures are among those indicators we use as a basis for evaluating operational performance, allocating resources and planning and forecasting future periods. Non-GAAP financial measures are not intended to be considered in isolation or as a substitute for GAAP financial measures. To the extent this release contains historical non-GAAP financial measures, we have also provided corresponding GAAP financial measures for comparative purposes.
Pharmacyclics® is a clinical-stage biopharmaceutical company focused on developing and commercializing innovative small-molecule drugs for the treatment of immune mediated disease and cancer. The purpose of the company is to create a profitable business by generating income from products it develops, licenses and commercializes, either with one or several potential partners or alone as may best forward the economic interest of its stakeholders. The company endeavors to create novel, patentable, differentiated products that have the potential to significantly improve the standard of care in the markets it serves. Presently, Pharmacyclics has four product candidates in clinical development and two product candidates in pre-clinical development. It is Pharmacyclics' business strategy to establish collaborations with large pharmaceutical and biotechnology companies for the purpose of generating present and future income in exchange for adding to their product pipelines. Pharmacyclics strives to generate collaborations that allow it to retain valuable territorial rights and simultaneously fast forward the clinical development and commercialization of its products. The company is headquartered in Sunnyvale, California and is listed on NASDAQ under the symbol PCYC. To learn more about how Pharmacyclics advances science to improve human healthcare visit us at http://www.pharmacyclics.com.
NOTE: This announcement may contain forward-looking statements made in reliance upon the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding our expectations and beliefs regarding our future results or performance. Because these statements apply to future events, they are subject to risks and uncertainties. When used in this announcement, the words "anticipate", "believe", "estimate", "expect", "expectation", "should", "would", "project", "plan", "predict", "intend" and similar expressions are intended to identify such forward-looking statements. Our actual results could differ materially from those projected in the forward-looking statements. Additionally, you should not consider past results to be an indication of our future performance. For a discussion of the risk factors and other factors that may affect our results, please see the Risk Factors section of our filings with the Securities and Exchange Commission, including our annual report on Form 10-K and quarterly reports on Form 10-Q. We do not intend to update any of the forward-looking statements after the date of this announcement to conform these statements to actual results, to changes in management's expectations or otherwise, except as may be required by law.
Pharmacyclics, Inc. (a development stage enterprise) Condensed Statements of Operations (unaudited, in thousands) Three Months Six Months Ended Ended December 31, December 31, ------------ ------------ 2009 2008 2009 2008 ---- ---- ---- ---- Revenues: License, collaboration and milestone revenues (1) $4,702 $- $4,702 $- ------ --- ------ --- Total revenues 4,702 - 4,702 - ----- --- ----- --- Operating expenses: Research and development (2) 3,723 2,986 7,011 6,189 General and administrative (3) 1,765 1,874 3,298 5,313 ----- ----- ----- ----- Total operating expenses 5,488 4,860 10,309 11,502 ----- ----- ------ ------ Loss from operations (786) (4,860) (5,607) (11,502) Interest and other income (expense), net (4) 18 26 (6) 126 --- --- --- --- Loss before provision for income tax (768) (4,834) (5,613) (11,376) Benefit from Income Tax (5) 550 - 550 - --- --- --- --- Net loss $(218) $(4,834) $(5,063) $(11,376) ===== ======= ======= ======== Basic and diluted net loss per share $- $(0.19) (0.11) $(0.44) === ====== ===== ====== Shares used to compute basic and diluted net loss per share 50,076 26,034 45,535 26,025 ====== ====== ====== ====== (1) Includes $2,676 related to the pro-rata portion of services performed under the Servier Collaboration arrangement prior to this quarter. (2) Includes stock based compensation of $216 for three months ended 12/31/2009 and of $173 for three months ended 12/31/2008. Includes stock based compensation of $374 for six months ended 12/31/2009 and of $352 for six months ended 12/31/2008. (3) Includes stock based compensation of $356 for three months ended 12/31/2009 and of $461 for three months ended 12/31/2008. Includes stock based compensation of $446 for six months ended 12/31/2009 and of $2,099 for six months ended 12/31/2008. (4) Includes accrued interest expense for the six months ended 12/31/2009 to be paid out for the loan to an affiliate of Robert W. Duggan of $22 and due to its below market interest rate the non-cash GAAP adjustment of $21 to a market interest rate. (5) Includes reclaiming French Withholding Tax of $550 paid on the $11 million license payment received from Servier. Pharmacyclics, Inc. (a development stage enterprise) Condensed Balance Sheets (unaudited, in thousands) December 31, June 30, 2009 2009 ---- ---- Assets Cash, cash equivalents and marketable securities* $ 30,120 $ 16,326 Other current assets 2,270 1,215 ----- ----- Total current assets 32,390 17,541 Property and equipment, net 376 470 Other noncurrent assets 319 290 --- --- $ 33,085 $ 18,301 ====== ====== Liabilities and stockholders' equity (deficit) Notes payable to related party $ - $ 6,379 Deferred revenue - current portion 6,600 7,025 Other current liabilities 2,620 1,968 ----- ----- Total current liabilities 9,220 15,372 Deferred revenue - non-current portion 1,899 4,603 Other long term obligations 58 67 -- -- Total liabilities 11,177 20,042 Stockholder's equity (deficit) 21,908 (1,741) ------ ------ $ 33,085 $ 18,301 ====== ====== * Marketable securities $ 24,353 $ 1,792 ====== ===== Pharmacyclics, Inc. (a development stage enterprise) Three Months ended December 31, 2009 Reconciliation of selected GAAP measures to non-GAAP measures (1) (unaudited) (in thousands) Fiscal Q2 Fiscal Q2 2010 2009 ----- ------- NET LOSS per GAAP $(218) $(4,834) ----- ------- Adjustments: R&D stock-based compensation (2) 216 173 G&A stock-based compensation (2) 356 461 Income Tax Adjustment (3) (550) - ---- --- 22 634 License and collaboration revenues (4) (2,676) - ------ --- (2,676) - ------- ------- NET LOSS per non-GAAP $(2,872) $(4,200) ------- ------- (1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our financial statements prepared in accordance with GAAP. See also "Use of non-GAAP Financial Measures" in this press release. (2) All share-based compensation was excluded from the non-GAAP Analysis (3) Represents a reclaiming of paid French Withholding Tax of $550 thousand for the $11 million upfront payment from Servier. (4) Represents the pro-rata portion of services performed under the Servier Collaboration arrangement prior to this quarter. Pharmacyclics, Inc. (a development stage enterprise) Six Months ended December 31, 2009 Reconciliation of selected GAAP measures to non-GAAP measures (1) (unaudited) (in thousands) 6 Months 6 Months 2009 2008 ------- -------- NET LOSS per GAAP $(5,063) $(11,376) ------- -------- Adjustments: R&D stock-based compensation (2) 374 352 G&A stock-based compensation (2) 446 2,099 Interest Adjustment for RWD loan (3) 21 - Income Tax Adjustment (4) (550) - ---- --- 291 2,451 License and collaboration revenues (5) (2,676) - ------ --- (2,676) - ------- ------- NET LOSS per non-GAAP $(7,448) $(8,925) ------- ------- (1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our financial statements prepared in accordance with GAAP. See also "Use of non-GAAP Financial Measures" in this press release. (2) All share-based compensation was excluded from the non-GAAP Analysis. (3) Due to the below market interest rate of the RWD loan, total GAAP interest expense includes non-cash interest expense of $21. (4) Represents a reclaiming of paid French Withholding Tax of $550 thousand for the $11 million upfront payment from Servier. (5) Represents the pro-rata portion of services performed under the Servier Collaboration arrangement prior to this quarter.
SOURCE Pharmacyclics, Inc.
|SOURCE Pharmacyclics, Inc.|
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