PathoGenesis Corp. Reports Second Quarter 1998 Results; TOBI Prescription Sales Increased More Than 20 Percent From First Quarter
04:25 p.m Jul 28, 1998 Eastern
SEATTLE, July 28 /PRNewswire/ -- PathoGenesis Corp. (Nasdaq:PGNS) today reported sales and earnings for the second quarter of 1998. Prescription sales of TOBI(R) (tobramycin solution for inhalation) increased more than 20 percent from the first quarter's estimated prescription sales.
For the quarter ended June 30, 1998, PathoGenesis reported net income of $982,000, or six cents per basic and diluted share, compared with a net loss of $6.5 million, or 40 cents per basic and diluted share, for the second quarter of 1997. Basic shares outstanding were 16.3 million for the second quarter of 1998 versus 16.1 million for the second quarter of 1997.
Net revenues for the second quarter of 1998 were $13.7 million, compared with $162,000 in revenues from grants and royalties in the year-earlier period. TOBI sales were about $13.6 million for the second quarter of 1998. Management believes that distributors' inventories of TOBI increased by about $1.0 million during the quarter, to an average of about $5.5 million, in proportion to the increase in overall sales. Therefore, sales of TOBI to fill patient prescriptions were about $12.0 million to $12.5 million, an increase of 20 percent to 25 percent from the estimated $10.0 million of TOBI sales in the first quarter that went to fill patient prescriptions. TOBI was introduced in January 1998.
"We continue to be delighted with the strong market acceptance of TOBI," said Wilbur H. Gantz, chairman and chief executive officer. "Our 24-person sales force has made great strides in marketing TOBI to the cystic fibrosis centers and to adult pulmonologists who practice outside the centers. As a result, the equivalent of 5,000 to 5,500 patients are on TOBI full time, 28 days on drug, 28 days off drug. Doctors have put their sickest patients on TOBI first, and are already broadening the use of TOBI to their other CF patients with these life-limiting pseudomonal lung infections."
In the second quarter of 1998, research and development costs were $6.9 million, up 12 percent from $6.2 million in the second quarter last year, due to three ongoing Phase II clinical trials. Selling, general and administrative expenses were $4.6 million in the second quarter of 1998, versus $2.0 million in general and administrative expenses for the same period a year ago.
For the first half of 1998, PathoGenesis had net income of $2.0 million, or 12 cents per basic share and 11 cents per diluted share, compared with a net loss of $12.7 million or 83 cents per basic and diluted share for the first six months of 1997. Revenues were $28.3 million for the first half of 1998, versus $248,000 for the year-earlier period. Research and development costs were $13.7 million for the six months, up 14 percent from $12.0 million in the comparable period of 1997. Selling, general and administrative costs were $10.0 million for the current period, versus $3.4 million in general and administrative expenses for the year-earlier period. The increase was primarily due to sales and marketing costs associated with launching and selling TOBI.
In mid-July, PathoGenesis announced completion of enrollment in two ongoing clinical trials. A total of 76 people have been enrolled in the Phase II clinical trial of TOBI in bronchiectasis patients, while 60 patients were enrolled in the Phase II study of rifalazil (PA-1648) in tuberculosis patients. A third Phase II clinical trial, of TOBI for tuberculosis, is enrolling 25 patients in the eight-day open-label study. Results are expected to be reported in the fourth quarter.
At June 30, 1998, PathoGenesis had cash and marketable securities of $67.2 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 Six Months Ended
June 30, June 30, June 30, June 30,
1998 1997 1998 1997
Revenue:
Sales $13,562 $ --- $ 28,088 $ ---
Grants and royalties 88 162 226 248
13,650 162 28,314 248
Operating expenses:
Cost of sales 2,113 --- 4,782 ---
Research and
development 6,932 6,195 13,692 12,017
Selling, general and
administrative 4,604 2,014 9,953 3,355
Total operating
expenses 13,649 8,209 28,427 15,372
Operating income (loss) 1 (8,047) (113) (15,124)
Other income (expense):
Investment income, net 1,031 1,613 2,162 2,495
Other expense (50) (23) (83) (53)
Net other income 981 1,590 2,079 2,442
Net income (loss) $982 $(6,457) $1,966 $(12,682)
Income (loss) per share
-- basic $0.06 $(0.40) $0.12 $(0.83)
Income (loss) per share
-- diluted $0.06 $(0.40) $0.11 $(0.83)
Weighted average common
shares outstanding
-- basic 16,252,516 16,078,995 16,247,857 15,236,151
Weighted average common
shares outstanding
-- diluted 17,096,216 16,078,995* 17,117,247 15,236,151*
Balance Sheet Highlights
(in thousands) June 30, 1998 Dec. 31, 1997
Cash, cash equivalents and investment securities$67,216 $79,041
Total current assets 83,852 87,190
Total assets 110,513 97,596
Total current liabilities 13,722 8,107
Long-term liability 4,770 0
Total stockholders' equity 92,021 89,489
*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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