PathoGenesis Corp. Reports Third Quarter 1998 Results; TOBI Sales Increase 9 Percent From Second Quarter
04:32 p.m Oct 26, 1998 Eastern
SEATTLE, Oct. 26 /PRNewswire/ -- PathoGenesis Corp. (Nasdaq: PGNS) today reported results for the third quarter of 1998.
For the quarter ended Sept. 30, 1998, PathoGenesis reported a net loss of $3.0 million, or 18 cents per basic and diluted share, after in-licensing an aerosolized drug candidate for $4.0 million. Otherwise, the company would have reported net income of about $1.0 million, or 6 cents per basic share. This compares with a net loss of $8.5 million, or 53 cents per share, in the third quarter of 1997. Basic shares outstanding were 16.3 million for the third quarter of 1998, versus 16.1 million for the year-earlier period.
Net revenues for the third quarter of 1998 were $14.9 million, compared with $76,000 in revenues from grants and royalties in the same period a year ago. Sales of TOBI(R) (tobramycin solution for inhalation) were $14.8 million in the current quarter, an increase of 9 percent from $13.6 million in the second quarter of 1998.
"We're very pleased with these results," said Wilbur H. Gantz, chairman and chief executive officer. "We are seeing increased acceptance of TOBI by pulmonologists and people with cystic fibrosis."
In the third quarter of 1998, selling, general and administrative expenses were $4.6 million, compared with $3.0 million for general and administrative expenses in the same period a year ago. Third quarter research and development costs were $7.8 million, up 13 percent from $6.9 million in the same period a year ago, due to three ongoing Phase II clinical trials. In addition, the company recorded a $4.0 million initial payment obligation to Bristol-Myers Squibb for an exclusive worldwide license for a drug candidate, PA-1806. PathoGenesis intends to formulate PA-1806 for aerosol delivery, with the goal of developing a portfolio of complementary inhaled antibiotics to treat serious lung infections. The company already is in preclinical testing of another drug candidate, PA-1420 (polymyxin E1).
For the first nine months of 1998, PathoGenesis reported a net loss of $1.0 million, or 6 cents per basic and diluted share, primarily due to the in-licensing of a drug candidate in the third quarter. Otherwise, PathoGenesis would have reported net income of $3.0 million, or 18 cents per basic share. This compares with a net loss of $21.2 million or $1.37 per basic and diluted share in the first nine months of 1997. Revenues were $43.2 million for the first three quarters of 1998, versus $324,000 in revenues from grants and royalties for the same period a year ago. Research and development costs were $21.5 million, up 14 percent from $19.0 million in the year-earlier period. Selling, general and administrative expenses were $14.6 million for the current period, compared with $6.4 million in general and administrative expenses for the 1997 period.
Also during the third quarter, PathoGenesis announced it had filed for regulatory approval of TOBI with the Medicines Control Agency in the United Kingdom. The company hopes to receive approval of TOBI in the third quarter of next year, Gantz said. The U.K. is the lead country for seeking approval of TOBI in the European Union. An application was filed in Canada in March 1998, and regulatory filings in other countries are pending. Because cystic fibrosis is a Caucasian genetic disease, most of the 70,000 patients worldwide live in the U.S., Europe and Canada.
In addition, PathoGenesis has completed the in-patient testing requirements of two Phase II clinical trials, rifalazil for tuberculosis and TOBI for bronchiectasis, which is a form of severe chronic bronchitis. The data are currently being compiled and analyzed, and the company expects to report results before year-end, Gantz said. PathoGenesis also is conducting a third Phase II clinical trial of TOBI in 15 tuberculosis patients, and expects to report results early next year.
At Sept. 30, 1998, PathoGenesis had cash and marketable securities of $58.1 million, compared with $79.0 million at Dec. 31, 1997.
Seattle-based PathoGenesis Corp. is a pharmaceutical company that develops and markets drugs to treat chronic infectious diseases -- lung infections, in particular -- where there is a significant need for improved therapy. The company markets an inhaled antibiotic in the U.S. and is developing drug candidates to treat serious chronic lung infections, including those common in cystic fibrosis, bronchiectasis and tuberculosis patients. PathoGenesis' stock is traded on the Nasdaq National Market System under the symbol PGNS. The company's Web site is located at www.pathogenesis.com.
Note: This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to known and unknown risks, uncertainties or other factors that may cause the company's actual results to be materially different from historical results or any results expressed or implied by such forward-looking statements. Factors that might cause such a difference include, but are not limited to, uncertainties related to the fact that PathoGenesis began commercial operations only recently, its dependence on TOBI, third party reimbursement and product pricing, government regulation, drug development and clinical trials, competition and alternative therapies, and other factors described in PathoGenesis' filings with the Securities and Exchange Commission.
PathoGenesis Corp.
Consolidated Statements of Operations
(Dollars in thousands, except per share data)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1998 1997 1998 1997
Revenue:
Sales $14,833 $ --- $ 42,922 $ ---
Grants and royalties 68 76 294 324
14,901 76 43,216 324
Operating expenses:
Cost of sales 2,164 --- 6,946 ---
Research and development 7,841 6,943 21,534 18,960
Selling, general and
administrative 4,647 3,020 14,599 6,375
License fee 4,000 --- 4,000 ---
Total operating expenses 18,652 9,963 47,079 25,335
Operating loss (3,751) (9,887) (3,863) (25,011)
Other income (expense):
Investment income, net 1,004 1,403 3,214 3,898
Interest expense (233) --- (281) ---
Other expense (22) (50) (106) (103)
Net other income 749 1,353 2,827 3,795
Net loss $ (3,002) $(8,534) $(1,036)$(21,216)
Net loss per share
-- basic and diluted (a) $(0.18) $(0.53) $(0.06) $(1.37)
Weighted average common
shares outstanding
-- basic and diluted (a) 16,263,785 16,119,363 16,253,225 15,526,611
Balance Sheet Highlights
(in thousands) Sept. 31, 1998 Dec. 31, 1997
Cash, cash equivalents
and investment securities $58,125 $79,041
Total current assets 77,768 87,190
Total assets 109,543 97,596
Total current liabilities 15,297 8,107
Long-term liability 4,624 0
Total stockholders' equity 89,622 89,489
(a) Net loss per diluted share is the same as net loss per basic share,
since shares issuable for stock options and warrants would be
anti-dilutive. SOURCE PathoGenesis Corp.
Copyright 1998, PR Newswire
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