CombinatoRx, Incorporated (NASDAQ: CRXX) today reported
financial results for the fourth quarter and year-ended December
31, 2009 and provided pipeline and business goals for 2010.
“With the successful approval of Exalgo and the Neuromed merger
and integration complete, we are uniquely positioned to become a
thriving biopharmaceutical business,” commented Mark H.N. Corrigan,
MD, President and CEO of CombinatoRx. “We will leverage our
expertise and pipeline to develop innovative products for the
treatment of pain and inflammation and have focused our portfolio
and R&D efforts in these core therapeutic areas.”
2009 and Recent Accomplishments:
- The U.S. Food and Drug
Administration (FDA) approved Exalgo™ (hydromorphone HCl)
extended-release tablets, for the management of moderate to severe
pain in opioid tolerant patients requiring continuous,
around-the-clock opioid analgesia for an extended period of time.
The approval of Exalgo triggered a $40.0 million milestone payment
to CombinatoRx from Mallinckrodt Inc., a Covidien company, who
acquired the U.S. marketing rights to Exalgo. Going forward,
CombinatoRx is eligible to receive tiered royalties on net sales of
Exalgo by Covidien.
- CombinatoRx and Neuromed
Pharmaceuticals Inc. merged, bringing together the product assets
and financial resources of both organizations, including Exalgo™
revenue, the combined portfolio of product candidates and both
company’s unique drug discovery capabilities. Mark Corrigan, MD,
former EVP of Research & Development at Sepracor and a member
of the CombinatoRx board of directors, was appointed President and
Chief Executive Officer of CombinatoRx.
- PrednisporinTM (FOV1101), a
CombinatoRx-derived combination drug candidate, was recognized as a
key asset by Sanofi-Aventis in its acquisition of our collaborator,
Fovea Pharmaceuticals, based on positive clinical results with
Prednisporin in subjects with persistent allergic conjunctivitis.
CombinatoRx also enhanced its economic interest in Prednisporin and
the other product candidates licensed to Fovea for ophthalmic
development. CombinatoRx will be eligible to receive development
and regulatory-based milestone payments for Prednisporin of up to
approximately $40.0 million and increased tiered royalty payments
of up to 12% of net sales.
- Phase 2 clinical data was
presented on SynaviveTM (CRx-102) in knee osteoarthritis (OA) at
the American College of Rheumatology (ACR) 2009 Annual Meeting and
the Annual European Congress of Rheumatology meeting (EULAR) in
which efficacy was observed early in treatment and sustained in all
WOMAC measurement subscales including pain, stiffness and physical
function. These efficacy levels were maintained throughout the
12-month knee OA extension trial and, importantly, no
treatment-related increases in glucocorticoid associated adverse
events were observed in the Synavive-treated subjects.
- A strategic alliance was
established with the Novartis Institutes for Biomedical Research,
Inc. focused on the discovery of novel anti-cancer combinations
utilizing the CombinatoRx proprietary combination high throughput
screening (cHTS) platform and Chalice analyzer software. This
non-exclusive collaboration is exploring combination effects in
cell lines representing a broad spectrum of cancers to provide a
robust and systematic understanding of combination therapy
opportunities. CombinatoRx received an upfront payment, research
funding support for two years and is eligible to receive clinical,
regulatory and commercial milestones. In addition, CombinatoRx
retains the right to conduct oncology research on its own behalf as
well as partner with others in the field of oncology, and retains
certain intellectual property which may arise from the
collaboration.
2010 Pipeline and Business Goals:
- Focus the CombinatoRx portfolio
and development efforts in the core therapeutic areas of pain and
inflammation:
- Exalgo, which is licensed to
Covidien, for the management of moderate to severe pain in opioid
tolerant patients requiring continuous, around-the-clock opioid
analgesia for an extended period of time.
- Synavive (CRx-102) for the
treatment of immuno-inflammatory diseases.
- Prednisporin (FOV1101) which is
licensed to Fovea, a subsidiary of Sanofi Aventis, for the
treatment of inflammatory ocular diseases such as allergic
conjunctivitis.
- N-Type and T-Type calcium
channel blockers for the treatment of chronic pain.
- Advance development of an
existing product candidate:
- Synavive (CRx-102) for the
treatment of osteoarthritis
- Advance an N-type lead program
from our Ion channel modulation platform into development.
- Continue to apply our
state-of-the-art drug discovery technologies to discover new pain
and inflammation product candidates for our internal portfolio:
- Selective Ion channel modulation
platform
- cHTS drug discovery
technology
- Continue to seek additional
revenue-generating research and technology collaborations for our
drug discovery platform.
- Maintain financial strength with
sufficient resources to fund operations into 2014.
Fourth Quarter and Year-End 2009 Financial Results
(Unaudited):
As of December 31, 2009, CombinatoRx had cash, cash equivalents,
restricted cash and short-term investments of $25.9 million
compared to $43.7 million on December 31, 2008.
Total revenue was $8.6 million in the fourth quarter of 2009
compared to $3.5 million reported in the fourth quarter of 2008.
For the year ended December 31, 2009, revenue was $17.3 million
compared to $12.3 million for 2008. Revenue increased from 2008 to
2009 due to the accelerated recognition of deferred revenue related
to the early termination of our agreement with Angiotech.
Net income for the quarter ended December 31, 2009 was $25.2
million, or $0.57 per share, as compared to a $15.2 million loss,
or ($0.43) per share, in the fourth quarter of 2008. Stock-based
compensation expense was approximately $0.8 million in the fourth
quarter of 2009 as compared to $0.9 million in the fourth quarter
of 2008. For the year ended December 31, 2009, net income from
continuing operations was $1.3 million, or $0.03 per share,
compared to a net loss of $60.6 million, or $(1.74) per share, in
the year ended December 31, 2008. Stock-based compensation expense
was approximately $3.9 million and $5.7 million in the years ended
December 31, 2009, and 2008, respectively.
Research and development expenses totaled $3.1 million in the
fourth quarter of 2009 compared to $9.8 million in the fourth
quarter of 2008. Research and development expenses were $21.2
million in the year ended December 31, 2009 compared to $55.3
million in the year ended December 31, 2008. The $34.1 million
decrease from the 2008 period to the 2009 period was primarily due
to a decrease of $16.7 million in preclinical and external clinical
expenses, a $10.8 million decrease in compensation and benefit
expenses, associated with reduced headcount attributable to the
2008 and 2009 restructurings, a $5.6 million decrease in
consulting, lab supplies, facilities, depreciation and other
overhead costs related to our 2008 and 2009 restructurings, as well
as a $1.0 million decrease in non-cash stock-based compensation
expense.
General and administrative expenses were $5.1 million in the
fourth quarter of 2009 compared to $3.0 million in the fourth
quarter of 2008. General and administrative expenses were $17.1
million in the year ended December 31, 2009 compared to $14.5
million in the year ended December 31, 2008. The increase was due
primarily to professional and consulting expenses related to our
merger with Neuromed.
Conference Call Information:
CombinatoRx senior management, including Mark H.N. Corrigan, MD,
President and Chief Executive Officer and Justin Renz, Senior Vice
President and Chief Financial Officer of CombinatoRx, will provide
an update on the Company, discuss fourth quarter and year-end 2009
financial results and discuss expectations for the future via
conference call at 8:30 a.m. EDT on Thursday, March 25, 2010. To
access the call, please dial 866-383-7998 (domestic) or
617-597-5329 (international) five minutes prior to the start time
and provide the passcode 67986161. A replay of the call will be
available beginning at 11:30 a.m. ET on March 25, 2010. To access
the replay, please dial 888-286-8010 (domestic) or 617-801-6888
(international), and provide the passcode 35427451. A live audio
webcast of the call will also be available on the “Investors”
section of the company’s website, www.combinatorx.com. An archived
audio webcast will be available on the CombinatoRx website two
hours after the event.
About CombinatoRx:
CombinatoRx, Incorporated (CRXX) develops novel drug candidates
with a focus on the treatment of pain and inflammation. The company
applies its combination drug discovery capabilities and its
selective ion-channel modulation platform to generate innovative
therapeutics. To learn more about CombinatoRx, please visit
www.combinatorx.com.
Forward-Looking Statement:
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
concerning CombinatoRx, the product Exalgo™ and its ability to
generate future royalty revenue for CombinatoRx, Fovea’s product
candidate Prednisporin™, its clinical potential and the amended
agreement with Fovea, the potential of the CombinatoRx product
candidate Synavive, the CombinatoRx collaboration with Novartis,
the CombinatoRx selective ion channel modulation platform, its
combination drug discovery technology, and CombinatoRx’s financial
condition, results of operations, projected expenses, cash
positions and business plans. These forward-looking statements
about future expectations, plans, objectives and prospects of
CombinatoRx may be identified by words like "believe," "expect,"
"may," "will," "should," "seek," or “could” and similar expressions
and involve significant risks, uncertainties and assumptions,
including risks related to the sale and marketing of Exalgo by
Covidien, risks related to the development and regulatory approval
of CombinatoRx’s product candidates, the unproven nature of the
CombinatoRx drug discovery technologies, the ability of Covidien,
Novartis and Fovea to perform their obligations under their
collaboration agreements with CombinatoRx, the ability of the
Company or its collaboration partners to initiate and successfully
complete clinical trials of its product candidates, the Company's
ability to obtain additional financing or funding for its research
and development and those other risks that can be found in the
"Risk Factors" section beginning on page 31 of CombinatoRx's Form
S-4 Registration Statement filed in connection with its merger with
Neuromed (File No. 333-161146), on file with the Securities and
Exchange Commission and the other reports that CombinatoRx
periodically files with the Securities and Exchange Commission.
Actual results may differ materially from those CombinatoRx
contemplated by these forward-looking statements. These forward
looking statements reflect management’s current views and
CombinatoRx does not undertake to update any of these
forward-looking statements to reflect a change in its views or
events or circumstances that occur after the date of this release
except as required by law.
(c) 2010 CombinatoRx, Incorporated. All rights reserved.
CombinatoRx, Incorporated Consolidated Statements
of Operations (in thousands, except share and per share
amounts) (Unaudited) Three months ended
December 31, Twelve months ended December 31, 2009 2008 2009 2008
As Adjusted As Adjusted Revenue Collaborations
$ 8,384 $ 3,248 $ 16,320 $ 11,462 Government contracts and grants
196 210 953 842 Total revenue
8,580 3,458 17,273 12,304
Operating expenses: Research and development 3,120 9,819 21,244
55,296 General and administration 5,056 3,039 17,081 14,469
Restructuring 123 4,637 2,736 4,637 Amortization of intangible
asset 520 - 520 - Gain on legal settlement (3,700) -
(3,700) - Total operating expenses 5,119 17,495
37,881 74,402 Loss from operations 3,461 (14,037) (20,608)
(62,098) Interest income 15 199 257 2,264 Interest expense - (123)
(28) (651) Loss on early extinguishment of debt - (195) - (195)
Gain on revalue of contingent consideration 12,068 - 12,068 - Gain
on bargain purchase 9,809 - 9,809 - Other expense (249)
(24) (281) (4) Net income (loss) before
provision for income taxes 25,104 (14,180) 1,217 (60,684)
Benefit for income taxes 67 128 67 108
Net income (loss) from continuing operations 25,171 (14,052) 1,284
(60,576) Discontinued Operations: Loss from operations of
discontinued subsidiary - (1,182) (1,536) (4,557) Gain on disposal
of discontinued operations - - 15,640 -
Gain (loss) on discontinued operations - (1,182)
14,104 (4,557) Net income (loss) $ 25,171 $ (15,234)
$ 15,388 $ (65,133) Net income (loss) per share - basic and
diluted: From continuing operations $ 0.57 $ (0.41) $ 0.03 $ (1.74)
From discontinued operations - (0.02) 0.38
(0.13) Net income (loss) per share - basic and diluted $
0.57 $ (0.43) $ 0.41 $ (1.87) Weighted average number of
common shares used in net income (loss) per share calculation:
Basic 44,198,131 35,095,516 37,338,042
34,848,701 Diluted 44,503,062 35,095,516
37,491,237 34,848,701 Note: The Statements of
Operations for the three and twelve months ended December 31, 2008
reflect the financial results of CombinatoRx Singapore as a
discontinued operation.
CombinatoRx, Incorporated
Consolidated Balance Sheets (in thousands, except per share
data) (Unaudited)
December 31, 2009
December 31, 2008 As Adjusted Assets
Current assets: Cash and cash equivalents $ 8,779 $ 3,039
Restricted cash 750 1,250 Short-term investments 14,551 36,614
Accounts receivable 2,927 438 Prepaid expenses and other current
assets 5,415 1,001 Current assets of discontinued operations
- 7,837 Total current assets 32,422 50,179 Property
and equipment, net 8,380 12,400 Property and equipment of
discontinued operations, net - 995 Intangible asset, net 45,423 -
Restricted cash and other assets 1,927 2,923 Total
assets $ 88,152 $ 66,497
Liabilities and stockholders’
equity Current liabilities: Accounts payable $ 4,269 $ 2,842
Accrued expenses 5,495 4,067 Accrued restructuring 1,274 1,902
Deferred revenue 2,750 5,384 Current portion of lease incentive
obligation 284 575 Current liabilities of discontinued operations
- 19,822 Total current liabilities 14,072 34,592
Deferred revenue, net of current portion 2,667 6,325
Deferred rent, net of current portion 775 1,680 Lease incentive
obligation, net of current portion 1,726 4,074 Accrued
restructuring, net of current portion - 968 Other long-term
liabilities 3,235 - Contingent consideration 12,764 - Liabilities
of discontinued operations - 66 Noncontrolling interest in
discontinued operations - 2,917 Stockholders’ equity:
Preferred stock, $0.001 par value: 5,000 shares authorized; no
shares issued and outstanding - - Common stock, $0.001 par value:
200,000 shares authorized; 117,829 and 35,090 shares issued and
outstanding at December 31, 2009 and December 31, 2008,
respectively 118 35 Additional paid-in capital 272,405 267,238
Accumulated other comprehensive (loss) income (2) 73 Accumulated
deficit (219,608) (251,471) Stockholders’ equity
52,913 15,875 Total liabilities and stockholders'
equity $ 88,152 $ 66,497 Note: The Balance Sheet as of
December 31, 2008 reflects the reclassification of CombinatoRx
Singapore as a discontinued operation.
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