BOCA RATON, Fla., Feb. 23 /PRNewswire-FirstCall/ -- Nabi
Biopharmaceuticals (Nasdaq: NABI) reported today that total revenues for the
full year ended December 31, 2005 were $108.1 million compared to
$179.8 million in 2004. A decrease in revenues was expected and was primarily
driven by the March 2005 expiration of a ten-year agreement to distribute
WinRho SDF(R) ([Rho(D) Immune Globulin (Human)] in the U.S. In addition,
sales of PhosLo(R) (calcium acetate) decreased from the prior year primarily
due to the company's decision to withdraw the tablet formulation of the
product from the market and focus its commercialization efforts on the patient
advantaged gelcap formulation. This resulted in lower total wholesaler
inventory levels of PhosLo. In reporting full year PhosLo sales of
$13.9 million, the company noted that as part of the year-end closing process
it identified an error in the calculation of rebates payable under certain
Federal programs. The correction of this error in the fourth quarter reduces
PhosLo sales by $3.9 million. This error was not material to any of the
company's previously reported quarterly results. Net loss was $128.4 million
or $2.15 per share for the twelve months ended December 31, 2005, compared to
a net loss of $50.4 million or $0.86 per share for the same period in 2004.
During 2005, the company made significant investments in a Phase III clinical
trial of StaphVAX(R) [Staphylococcus aureus Polysaccharide Conjugate Vaccine]
and its preparations for an expected 2006 launch of the product in Europe. In
December 2005, the company announced that based on the results from its
StaphVAX Phase III clinical trial, it would record write-downs related to pre-
launch inventory, a contract manufacturing right and a company-owned
manufacturing facility completed in 2005. Those write-downs totaled
$27.4 million and were recorded in the fourth quarter of 2005. Cash, cash
equivalents and marketable securities at year-end 2005 were $106.9 million.
"Significant effort in 2005 was directed toward the commercialization of
StaphVAX. With the disappointing clinical results we announced in November,
we have quickly focused on the three core elements of our operating strategy:
optimizing the value of current operations, building value through strategic
partnerships and commercial alliances, and demonstrating proof-of-concept
clinical evidence for selected pipeline products utilizing Phase II clinical
trials that will follow the design of projected Phase III studies," stated
Thomas H. McLain, chairman, chief executive officer, and president, Nabi
Biopharmaceuticals. "We look forward to the completion of the ongoing
assessment of the StaphVAX results and setting a clear direction for what next
steps, if any, will build value in our staph aureus infections program. In
2006, we will advance the clinical development of our Gram-positive infections
program with antibodies and vaccines for S. epidermidis infections. In
addition, the results of our NicVAX(TM) Phase IIb study and the regulatory
advances with our Civacir(TM) program have positioned us to begin important
Phase II 'proof-of-concept' studies for both of these programs in 2006."
"From an operational perspective, we believe that the results from the D-
COR study and the analysis of outcomes for thousands of patients in the DOPPS
database have supported the efficacy and benefits of PhosLo to treat
hyperphosphatemia. New prescription data for the fourth quarter supports that
the weight of the scientific and clinical evidence available to physicians
today demonstrates the importance of PhosLo as a first-line therapy in
dialysis patients. We expect to capitalize on this opportunity in 2006 with
an expected approval of PhosLo in Europe. We look forward to working with
commercial partners to advance its benefits to patients in Europe and
ultimately the rest of the world," noted Mr. McLain.
Mr. McLain continued, "Our business strategy enabled us to quickly react
to a major disappointment with the StaphVAX clinical trial result. Our
ability to generate cash flow from operating activities, especially the cash
flow from our biopharmaceutical business, together with our cash resources
will help fund the investment in important proof-of-concept studies for key
near-term product candidates. We are also focused on entering into alliances
and partnerships to generate additional sources of cash and cash flow to
advance these programs. I also want to acknowledge that the momentum we have
at the beginning of 2006 is a reflection of the talented and dedicated team
working together at Nabi Biopharmaceuticals. I truly appreciate the privilege
to work with this team."
2005 Milestones and Developments
StaphVAX and Altastaph(TM) [Staphylococcus aureus Immune Globulin
Intravenous (Human)]
* Announced results from a confirmatory Phase III study of StaphVAX that
did not meet its primary endpoint
- Withdrew the Marketing Authorization Application (MAA) for StaphVAX
filed with the European Medicines Agency (EMEA)
- Initiated an assessment and convened an external advisory panel to
investigate the causes for the Phase III clinical study results with StaphVAX
as contrasted with earlier positive results
- Placed the clinical development of StaphVAX and Altastaph on hold
until the assessment can be completed
- Recorded a write down of the value of vaccine manufacturing related
assets and pre-launch inventories of StaphVAX
* Altastaph designated an orphan medicinal product by EMEA in the EU for
treatment of S. aureus bacteremia
Gram-positive Bacterial Infections
* Completed two Phase I immune response studies for a next generation
vaccine using the company's patented S. epidermidis (PS-1) and S. aureus Type
336 antigens
* Advanced pre-clinical development of the community acquired S. aureus
program with an antigen related to the PVL toxin associated with a majority of
these infections
NicVAX(TM) (Nicotine Conjugate Vaccine)
* Completed open label dose ranging study in Europe with a new formulation
of the vaccine
* Awarded a $4.1 million grant by the U.S. National Institute on Drug
Abuse (NIDA) for partial funding of the development program for NicVAX
* Completed manufacture of a clinical lot of NicVAX in the company's
commercial scale manufacturing facility for use in a planned Phase II clinical
study
Civacir(TM) [Hepatitis C Immune Globulin (Human)]
* Received input from regulators in U.S. and EU to advance clinical
development
* Designated an orphan medicinal product in Europe
* Granted fast track status by the FDA
PhosLo
* Completed enrollment in CARE2 clinical study
* Completed enrollment in EPICK clinical study
* Filed a lawsuit against Roxane Laboratories, Inc. for infringement of
the PhosLo Gelcap patent
Intellectual Property
* Awarded a patent for GP-1 antigen for staphylococcus infections
including S.epidermidis. This antigen may inhibit colonization of the
bacteria on catheters and implanted devices.
Financing
* Completed private placement of $112.4 million in 2.875% convertible
notes due 2025. Proceeds from sale are to be used for general corporate
purposes and to fund clinical trials.
Leadership
* Leslie Hudson, Ph.D., was elected to the board of directors. Dr. Hudson
adds extensive research and commercialization experience within the
biopharmaceutical industry.
* Joseph Johnson joined the company as senior vice president, People,
Process, and Technology. Mr. Johnson is responsible for advancing the areas
of organizational and process development and information technology.
* Stephan E. Lawton joined the company as vice president, government
affairs. Mr. Lawton will lead policy development initiatives and serve as a
liaison for the company in Washington D.C.
* Thomas E. Rathjen joined the company as vice president, investor
relations. Mr. Rathjen will lead the company's communications and outreach
with the investment community.
* Mark L. Smith announced his resignation as the company's senior vice
president, finance and chief financial officer. Mr. Smith has accepted
another career opportunity. His resignation is effective on or about March 1,
2006, to facilitate the filing of the 2005 Annual Report on Form 10-K. An
active search for a new chief financial officer is underway.
Review of Operations
PhosLo
Revenues for PhosLo of $13.9 million were significantly below the previous
year level of $37.6 million primarily reflecting the decision to fully
transition to the gelcap formulation of the product. This action led to a
significant reduction in total inventories of PhosLo at wholesalers and
distributors. At year-end 2005, no tablet inventories remain in the U.S.
distribution channel and wholesaler inventories of PhosLo Gelcaps were
significantly reduced. Further, in preparing year-end financial statements
the company self assessed the need for higher Medicaid rebate accruals
reflecting greater utilization of PhosLo by Medicaid eligible patients. The
result included adjustments to reported revenues for PhosLo for errors related
to prior periods, none of which were material to the quarters or years
affected. Looking forward, with this significant reduction in inventories and
the introduction of Medicare Part D prescription coverage, the company is
positioned to take full advantage of strengthening patient demand trends
reported in the fourth quarter of 2005. For the full year, patient use of
PhosLo in 2005 was consistent with 2004, despite the introduction of a
competitive product in the first quarter of 2005. In the fourth quarter, the
company incorporated important new clinical data to solidify PhosLo's position
as first-line therapy for treatment of hyperphosphatemia. As a result of
these efforts, externally supplied data show that the new prescription share
for PhosLo increased to 50%, 10% more than the nearest competitor. This is
the strongest competitive position for PhosLo in its history with Nabi
Biopharmaceuticals.
Noted Mr. McLain, "We believe that positive trends for new PhosLo
prescriptions reflect the mounting body of evidence supporting calcium based
binders and their superior control of phosphate and calcium phosphate product,
including the DOPPS study presented at the recent American Society of
Nephrology meeting."
The Dialysis Outcomes Practice Pattern Study (DOPPS) compared treatment
outcomes of 9,000 dialysis patients worldwide who were being treated for
hyperphosphatemia. The study confirmed that patients treated with calcium
based binders controlled serum phosphorus levels more effectively than those
taking Renagel(R) (sevelamer hydrochloride). Serum calcium levels were the
same in patients dosed with calcium and non-calcium based binders. PhosLo is
the only calcium based prescription phosphate binder available to patients in
the U.S.
Nabi-HB(R) [Hepatitis B Immune Globulin (Human)]
Sales of Nabi-HB were $39.2 million compared to $40.2 million in 2004.
Sales in 2005 reflect lower HBV liver transplant activity in 2005, partially
offset by increased use of Nabi-HB among patients receiving maintenance
therapy following liver transplant surgery.
WinRho SDF and Other Biopharmaceutical Products
Sales of WinRho SDF, for which the ten-year distribution agreement ended
in March 2005, were $6.2 million for 2005 compared to $47.9 million in 2004.
Sales of other biopharmaceutical products were $2.9 million in 2005
compared to $6.2 million in 2004, primarily reflecting lower sales of
Aloprim(TM) (allopurinol sodium) for Injection following introduction of a
competitive product.
Antibody Sales
Total antibody sales were $45.9 million in 2005 compared $48.0 million in
2004 reflecting lower sales of anti-D antibodies partially offset by increased
sales of tetanus and rabies antibodies.
Operating Expenses
Research and development expense in 2005 was $66.8 million compared to
$61.0 million in 2004 primarily reflecting the costs associated with
completing the StaphVAX phase III clinical trial, conducting immunogenicity
studies in cardiac surgery and orthopedic surgery patient populations, and
conducting studies and activities to support establishing vaccine
manufacturing in a new plant. Research and development activities in the year
also supported the advancement of key programs including next generation Gram-
positive infection vaccines and antibodies, NicVAX and Civacir.
Research and development expense also reflects clinical trials and filings
to broaden the product labels for PhosLo and Nabi-HB and to support launch of
these products in Europe.
Selling, general and administrative expense was $68.4 million in 2005
compared to $55.3 million in 2004 as the company prepared for the planned
launch of StaphVAX including establishing initial commercial operations in
Europe. The company announced in December 2005 that it would close its
European operations based on the withdrawal of the StaphVAX MAA. The costs
associated with the closure were approximately $1 million.
Operating expenses in 2005 also included charges for the write-down of the
company's vaccine manufacturing facility totaling $19.8 million and its
intangible manufacturing right asset totaling $2.7 million. These charges
resulted from the StaphVAX phase III clinical trial result reported during the
fourth quarter. The cash investment for these assets was incurred in prior
periods.
The reported tax benefit for 2005 was $0.9 million. This included the
impact of establishing a valuation allowance against all of the company's
deferred tax assets in the fourth quarter of 2005.
Management's discussion of 2005 results and expectations for 2006 webcast
can be accessed via the Nabi Biopharmaceuticals website at
http://www.nabi.com . If you do not have Internet access, the U.S./Canada
call-in number is 866-383-8108 conference code 43071086, and the international
call-in number is 617-597-5343 conference code 43071086. An audio replay will
be available for U.S./Canada callers at 888-286-8010 conference code 95917960,
and for international callers at 617-801-6888 conference code 95917960.
An archived version of the webcast will be available at the same Internet
address through March 2, 2006. The audio replay will also be available
through March 2, 2006. The press release will be available on the company's
website at http://www.nabi.com .
2006 Milestones
* Issue a report summarizing the conclusions reached with the outside
panel of experts on the analysis of the StaphVAX clinical program. This
report is expected during the first half of 2006.
* Initiate the NicVAX Phase II proof-of-concept study, scheduled to
commence during the second quarter of 2006, to assess safety, efficacy and
optimal dose regimen. This trial is expected to generate statistical data
sufficient for a decision whether to proceed to a pivotal Phase III study.
* Begin the Civacir Phase II proof-of-concept study scheduled to commence
during the second half of 2006, to assess safety, efficacy and optimal dose
regimen. This trial is expected to generate statistical data sufficient for a
decision whether to proceed to a pivotal Phase III study.
* Advance the preparations for a Phase II proof-of-concept study for a
multi-valent vaccine or antibody product targeting S. epidermidis infections
scheduled to commence during the first half of 2007. The benefit of a multi-
valent product in reducing or treating infection in high-risk patient
populations will be evaluated. Based upon the outcome of the StaphVAX
assessment, this trial may incorporate antigens to the capsular polysaccharide
to S. aureus Types 5 and 8.
* Receive EU approval of PhosLo, anticipated during the first half of
2006.
* Complete the PhosLo CARE2 and EPICK studies in the second half of 2006.
* Based on expected EPICK data, submit license applications in the U.S.
and Europe for an indication for the use of PhosLo to control
hyperphosphatemia in chronic kidney disease patients in the second half of
2006.
* Receive EU approval of Nabi-HB(R) Intravenous [Hepatitis B Immune
Globulin (Human) Intravenous] under the trade name of HEBIG(TM).
About Nabi Biopharmaceuticals
Nabi Biopharmaceuticals leverages its experience and knowledge in powering
the immune system to develop and market products that fight serious medical
conditions. The company has three products on the market today: PhosLo(R)
(calcium acetate), Nabi-HB(R) [Hepatitis B Immune Globulin (Human)], and
Aloprim(TM) (allopurinol sodium) for Injection). Nabi Biopharmaceuticals is
focused on developing products that address unmet medical needs and offer
commercial opportunities in our core business areas: Gram-positive bacterial
infections, hepatitis, kidney disease (nephrology) and nicotine addiction.
For a complete list of pipeline products, please go to
http://www.nabi.com/pipeline/index.php . The company is headquartered in Boca
Raton, Florida. For additional information about Nabi Biopharmaceuticals,
please visit our website at http://www.nabi.com .
Forward-Looking Statement
Statements in this press release about the company that are not strictly
historical are forward-looking statements and include statements about our
marketed products, products in development, demand for our products, clinical
trials and studies, licensure applications and approvals, assessment of the
StaphVAX phase III trial results, and alliances and partnerships. You can
identify these forward-looking statements because they involve our
expectations, beliefs, projections, or other characterizations of future
events or circumstances. These forward-looking statements are not guarantees
of future performance and are subject to risks and uncertainties that may
cause actual results to differ materially from those in the forward-looking
statements as a result of any number of factors. These factors include, but
are not limited to, risks relating to the company's ability to advance the
development of products currently in the pipeline or in clinical trials;
complete the assessment of the StaphVAX Phase III clinical trials during the
first half of 2006; maintain the human and financial resources to
commercialize current products and bring to market products in development;
obtain regulatory approval for its products in the U.S., Europe or other
markets; successfully develop manufacture and market its products; realize
future sales growth for its biopharmaceutical products; prevail in patent
litigation; raise additional capital on acceptable terms; re-pay its
outstanding convertible senior notes when due. Many of these factors are more
fully discussed, as are other factors, in the company's Annual Report on Form
10-K for the fiscal year ended December 25, 2004 filed with the Securities and
Exchange Commission.
Nabi Biopharmaceuticals
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, amounts in thousands, except per share data)
For the For the
Three Months Ended Twelve Months Ended
December December December December
31, 25, 31, 25,
2005 2004 2005 2004
Sales $25,331 $41,648 $108,055 $179,763
Costs and expenses:
Costs of products sold,
excluding amortization of
intangible assets 22,660 21,310 67,217 76,345
Royalty expense 483 4,646 3,623 17,569
Gross margin, excluding
amortization of intangible
assets 2,188 15,692 37,215 85,849
Selling, general and
administrative expense 17,188 16,440 68,448 55,286
Research and development
expense 15,593 14,954 66,836 61,003
Amortization of intangible
assets 2,194 2,248 8,928 8,673
Write-off of intangible
asset 2,684 -- 2,684 --
Impairment of vaccine
facility 19,842 -- 19,842 --
Other operating expense,
principally freight 76 153 349 521
Operating loss (55,389) (18,103) (129,872) (39,634)
Interest income 1,351 517 4,094 1,628
Interest expense (1,082) (95) (3,097) (2,199)
Other (expense) income, net (373) 195 (482) 213
Loss before (provision)
benefit for income taxes (55,493) (17,486) (129,357) (39,992)
(Provision) benefit for
income taxes (20,086) 434 908 (10,398)
Net loss $(75,579) $(17,052) $(128,449) $(50,390)
Basic and diluted loss per
share $(1.25) $(0.29) $(2.15) $(0.86)
Basic and diluted weighted
average shares
outstanding 60,231 59,302 59,862 58,800
SUPPLEMENTAL INFORMATION:
Sales by Operating Segment
Biopharmaceutical
Products $9,928 $28,757 $62,137 $131,813
Antibody Products:
Specialty
antibodies 8,815 5,631 22,936 23,270
Non-specific
antibodies 6,588 7,260 22,982 24,680
Total antibodies 15,403 12,891 45,918 47,950
Total $25,331 $41,648 $108,055 $179,763
Nabi Biopharmaceuticals
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, amounts in thousands)
December 31, December 25,
2005 2004
Cash and cash equivalents $101,762 $94,759
Marketable securities 5,172 8,350
Restricted cash, current 816 672
Trade accounts receivable, net 22,322 32,405
Inventories, net 22,323 20,175
Prepaid expenses and other assets 2,672 6,227
Property, plant and equipment, net 94,084 115,406
Intangible assets, net 78,332 89,728
Other assets, net 914 449
Total assets $328,397 $368,171
Trade accounts payable and accrued
expenses $43,490 $54,233
Notes payable and capital lease
obligations, net 13,556 23,844
2.875% Convertible Senior Notes 109,145 --
Other liabilities 379 5,773
Stockholders' equity 161,827 284,321
Total liabilities and stockholders' equity $328,397 $368,171
Capital expenditures were $8.7 million and $22.6 million for the twelve
months ended December 31, 2005 and December 25, 2004, respectively.
Depreciation and amortization expenses were $19.0 million and
$18.2 million for the twelve months ended December 31, 2005 and December
25, 2004, respectively.
The 2004 condensed balance sheet has been derived from the audited
balance sheet for the year ended December 25, 2004. Certain items in the
2004 consolidated financial statements have been reclassified to conform
to the current year's presentation.
SOURCE Nabi Biopharmaceuticals
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Related links:
http://www.nabi.com
http://www.nabi.com/pipeline/index.php
Audio:http://www.nabi.com
CONTACT:
Thomas E. Rathjen, Vice President, Investor
Relations, Nabi Biopharmaceuticals, +1-561-989-5800
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