- Gains in Product Revenues and Margins Led by PhosLo -
- Significant Progress Made in Advancing Key Strategic Objectives -
BOCA RATON, Fla., April 26 /PRNewswire-FirstCall/ -- Nabi
Biopharmaceuticals (Nasdaq: NABI) today announced gains in total revenues
and the gross margin earned on sales in the first quarter of 2006 primarily
reflecting strong results for PhosLo(R) (calcium acetate). Revenues totaled
$27.5 million compared to $26.1 million during the first quarter 2005, a
quarter which included $6.2 million of revenues from a product no longer
sold by the company. The gain in PhosLo revenues was driven by a continued
increase in new prescriptions and increased pricing. Higher sales of
antibody products also contributed to the increase in revenues. The net
loss reported for the first quarter of 2006 was $18.1 million or $0.30 per
share, compared to a net loss of $15.8 million or a loss of $0.27 per share
during the same period in 2005. During 2005, the company recorded a tax
benefit of $6.7 million reducing the reported net loss in the period. When
comparing the loss before income taxes, results in the first quarter of
2006 improved by $4.4 million or approximately 20 percent from the pre-tax
loss reported in 2005. Cash equivalents and marketable securities were
$81.6 million at the end of the first quarter, consistent with management's
expectations. Lower biopharmaceutical revenues in the fourth quarter of
2005 led to lower cash collections from customer receivables in the first
quarter of 2006. The cash benefit from higher biopharmaceutical revenues
this quarter will be realized in the second quarter of 2006.
"We began a significant period of transition in the first quarter of
2006 and we have made remarkable progress," said Thomas H. McLain,
chairman, chief executive officer and president of Nabi Biopharmaceuticals.
"From an operations standpoint, we are focused on maximizing opportunities
to generate cash while controlling spending. The level of improvement in
the operating performance from the business we manage today is clear when
the WinRho(R) sales and tax benefit recorded in the first quarter of 2005
are excluded from year-to-year comparisons. During the first quarter of
2006, we narrowed the focus of our research and development investment to
key pipeline programs. This resulted in a 28 percent reduction in our
overall spending on R&D in the first quarter. Selling, general and
administrative expenses remained high in the first quarter, primarily
reflecting costs of compliance efforts and incentive programs, including
the effect of new option expensing requirements and retention programs. We
are committed to reducing overall SG&A spending levels during the remainder
of 2006.
"As detailed below, we also made significant progress in advancing our
defined strategic goals -- optimizing the value from operations, building
incremental value through partnerships and alliances and developing
proof-of- concept evidence for three key program areas in our R&D pipeline:
nicotine addiction, hepatitis C re-infection and Gram-positive bacterial
infections. I am proud of our achievements and look forward to building on
the positive momentum we have established in the coming quarters," stated
Mr. McLain.
Upcoming Milestones; Product and Pipeline Programs:
Product Approvals in EU
- PhosLo approved in ESRD patients (H1 2006)
- HEBIG (2006/2007)
Initiate NicVAX(R) (Nicotine Conjugate Vaccine) proof-of-concept Phase
II study (Q2 2006)
Initiate Civacir(R) [Hepatitis C Immune Globulin (Human)]
proof-of-concept Phase II study (H2 2006)
Continue Phase III trial for ATG-Fresenius S (expect BLA filing in
early 2009)
Announce CARE-2 trial results for PhosLo (H2 2006)
Announce EPICK study results for PhosLo (H2 2006)
File for PhosLo CKD indication in US and EU (H2 2006)
Multi-valent StaphVAX
- Initiate immunogenicity study with multivalent (4) vaccine (H2 2006)
- With partner, initiate a Phase III study in a broader array of
patients at risk for Gram-positive infections (2007)
Multi-valent Altastaph
- Initiate donor stimulation study to support the manufacture of a
clinical lot of the next-generation antibody product, based on S.
aureus Types 5, 8, 336 and S. epidermidis PS-1 antigens (H1 2006)
- Initiate proof of concept Phase II study (2007)
Recent Accomplishments Support Strategic Goals:
During the first quarter, the company defined three key strategic goals
for the 2006 through 2008 period. They are:
- Optimizing the value from operations - leveraging the company's
commercial, manufacturing and development expertise and infrastructure
to build incremental cash returns
- Building value through partnerships and alliances - securing commercial
distribution for the company's products outside the U.S., accessing new
product opportunities for the U.S. market and building partnerships for
pipeline program development
- Establishing proof-of-concept clinical evidence for the company's
NicVAX, Civacir and Gram-positive infections programs - conducting Phase
II clinical studies that have been designed and sized to demonstrate
efficacy with statistical significance.
Strategic Priority: Optimizing the value from operations by leveraging
the company's commercial, manufacturing and development expertise and
infrastructure to build incremental cash returns.
The company made significant progress toward optimizing value from
operations in the first quarter:
- Generated increase revenues from PhosLo.
- Advanced license application for PhosLo in the European Union.
- Filed for approval in an additional five countries under the
European Mutual Recognition Procedure (MRP), rather than waiting for
approval from the reference member state before expanding its filing
to other markets. While that election has delayed the initial
approval of PhosLo in the reference member state, it means that when
the approval is received it will be in six important markets for
phosphate binders in the European Union. The Reference Member State
completed its review of the application in January and recommended
its approval to five other member states selected by Nabi
Biopharmaceuticals. These states are currently in the final stages
of their review. Contingent upon a successful inspection of the
manufacturing plant in the U.S., approval in all six EU countries is
expected in the second quarter.
- Expanded opportunities for PhosLo in North America.
- Obtained reimbursement in Canada; recorded initial patient sales in
March.
PhosLo is being sold by a commercial partner in Canada. The company has
also made progress toward establishing a similar alliance for
commercializing PhosLo in Europe.
- Generated increased antibody sales, including new customer agreements
for specialty antibody products and higher production of normal source
plasma. Based on the increased margin realized in the first quarter,
the company expects to earn an increased cash return from its plasma
collection assets in 2006.
- Initiated changes in its manufacturing process for immune globulin
products to develop a new opportunity to use plasma collected in its
centers to produce end-products that Nabi Biopharmaceuticals can then
commercialize.
- These changes will significantly improve the yield of protein from a
liter of plasma.
- Going forward, this progress will allow the company to manufacture
Intravenous Immune Globulin (IVIG) and other plasma proteins from
normal source plasma. This opportunity is expected to lead to an
increase in the cash return from operations and allow the company to
utilize the full value chain.
- Later in 2006, the company expects to produce and release a lot of
IVIG at commercial scale and then plans to initiate the pivotal
clinical trial in the first quarter of 2007.
This is in response to guidelines for the approval of new IVIG products
issued by the FDA in November 2005. These changes were in response to an
expected shortfall in the U.S. market due to limits on production capacity.
Under the new guidelines, clinical trial requirements have been limited to
one pivotal study. Nabi Biopharmaceuticals expects the size of the study
will be between 40 and 60 patients. The trial design can also evaluate
pharmacokinetic data. That means one trial could meet the requirements for
licensure.
Strategic Priority: Building value through partnerships and alliances
by securing commercial distribution for the company's products outside the
U.S., accessing new product opportunities for the U.S. market and building
partnerships for pipeline program development.
- As announced this week, the company signed an agreement to manufacture a
polyclonal rabies product for Sanofi Pasteur, Inc. under which Nabi
Biopharmaceuticals will collect anti-rabies plasma and fractionate this
material in its manufacturing facility in Florida. The agreement
provides a new cash return opportunity and reinforces the company's
expertise in manufacturing polyclonal antibody products.
- On April 3rd, the company announced an alliance with Fresenius Biotech
to develop and market ATG-Fresenius S in the U.S. and Canada. ATG-
Fresenius S is a polyclonal antibody product used for the prevention and
treatment of acute rejection following organ transplantation.
- Nabi Biopharmaceuticals has assumed oversight of an ongoing Phase
III clinical study that is being conducted in lung transplant
patients in the U.S. and Europe.
- The company may also undertake additional studies to expand the
indications into other areas, such as bone marrow transplantation.
- Nabi Biopharmaceuticals expects to file its Biologics License
Application (BLA) for ATG-Fresenius S in early 2009.
This opportunity is well aligned with the company's competencies in the
development and commercialization of antibody-based therapies. It also
builds on the company's commercial presence in the organ transplant market
with Nabi- HB(R) [Hepatitis B Immune Globulin (Human)]. That presence will
be further expanded by Civacir, a product being developed to prevent
re-infection with hepatitis C in liver transplant patients.
Strategic Priority: Establishing proof-of-concept clinical evidence for
the company's NicVAX, Civacir and Gram-positive infections programs by
conducting Phase II clinical studies that have been designed and sized to
demonstrate efficacy with statistical significance.
StaphVAX / Altastaph
In March 2006, the company announced two important conclusions from an
investigation that was conducted with an outside scientific advisory panel
to assess the results of the StaphVAX(R) (Staphylococcus aureus
Polysaccharide Conjugate Vaccine) confirmatory Phase III trial.
(1) The quality or functional characteristics of the antibodies generated
by the vaccine used in the confirmatory clinical study was inferior to
the antibodies generated by vaccine lots used in previous and
subsequent studies and manufactured by Nabi Biopharmaceuticals.
(2) Medical factors associated with kidney disease in dialysis patients
impaired the immune response to the vaccine. When considered in
combination with an increase in virulence of the bacteria, these
factors also contributed to the observed lack of protection in the
study population.
Data from the investigation defined subtle yet clinically significant
changes in the structure of the polysaccharide that occurred during
manufacturing. The company is currently engaged in the process of building
a new intellectual property position as a result of these findings. During
this assessment, the company developed a new laboratory assay capable of
distinguishing these findings about antibody quality, helping to assure
that future vaccine product lots generate antibodies of optimal quality
prior to initiating additional clinical studies.
The company has focused future efforts on developing four-valent
vaccine and antibody products to prevent and treat Gram-positive bacterial
infections. Its next-generation StaphVAX and Altastaph(R) [Staphylococcus
aureus Immune Globulin Intravenous (Human)] products will include antigens
against S. aureus Types 5, 8 and 336 and S. epidermidis Type PS-1. By
targeting both the polysaccharide capsule and the cell wall of the bacteria
itself, such an approach would be expected to address the strains
responsible for essentially 100 percent of healthcare-associated S. aureus
infections today, as well as the cause of an estimated 70 percent of
healthcare-associated S. epidermidis infections.
The company will seek a partner to develop and commercialize its Gram-
positive vaccine candidates. Nabi Biopharmaceuticals plans to advance the
antibody product without a partner. The size and cost of clinical trials
for Altastaph will be much less than what is expected for the Gram-positive
vaccine development programs.
NicVAX
NicVAX is a proprietary vaccine candidate to treat nicotine addition
and prevent smoking relapse. Early in the first quarter the company
announced results from a Phase II open label dose-ranging study, which was
designed to assess tolerability and antibody response at higher doses than
used in previous trials. The results showed that a new formulation of
NicVAX with lower levels of adjuvant was well tolerated and generated
antibody levels comparable to the highest dose of a vaccine used in an
earlier Phase II clinical study. In March, the FDA granted NicVAX Fast
Track Designation, providing additional validation for the product's unique
approach to addressing nicotine addiction. The company expects to initiate
a Phase II proof-of-concept clinical study during the second quarter. The
company will seek a partner or other external funding for Phase III studies
which it expects to initiate in the second half of 2007. The company will
seek a partner to commercialize NicVAX.
Review of Operations:
PhosLo Revenues
Revenues during the first quarter of 2006 for PhosLo more than doubled,
increasing to $8.0 million compared to the previous year level of $3.8
million. Revenues in the first quarter of 2006 approximate patient
utilization for this product. The company stopped shipments of the tablet
formulation of the product in the first quarter of 2005, resulting in lower
sales levels in the period.
Nabi-HB Revenues
Sales of Nabi-HB during the first quarter of 2006 increased 7 percent
to $7.2 million compared to $6.7 million in the first quarter of 2005. This
reflected an increase in the number of liver transplants in the first
quarter of 2006.
Other Biopharmaceutical Product Revenues
Sales of other biopharmaceutical products were $0.7 million for the
first quarter of 2006 compared to $0.9 million in the comparable period of
2005. Lower contract manufacturing revenues were partially offset by
increased sales of Aloprim(TM) (allopurinol sodium) for Injection.
There were no sales of WinRho(R) SDF during the first quarter of 2006
compared to $6.2 million for 2005. An agreement giving the company rights
to distribute this product in the U.S. ended in March 2005.
Antibody Revenues
Total antibody sales were $11.7 million for the first quarter of 2006,
an increase of more than 35 percent from the $8.6 million reported in the
comparable period of 2005. This reflected increased sales of higher margin
anti-HBs and tetanus antibodies, partially offset by decreased sales of
rabies antibodies.
Operating Expenses
Research and development expense decreased almost 30 percent or $4.3
million to $10.9 million during the first quarter of 2006. Research and
development expense in the first quarter of 2005 included the costs
associated with the StaphVAX Phase III clinical trial and activities to
support establishing vaccine manufacturing in a new plant. During the first
quarter of 2006, research and development expense included the company's
EPICK and CARE-2 studies for PhosLo, work to support the upcoming NicVAX
proof-of- concept Phase II clinical trial and support for the company's
Gram-positive infections programs, including the StaphVAX assessment.
Selling, general and administrative expense increased 17 percent to
$16.8 million in the first quarter of 2006 compared to $14.4 million for
comparable period of 2005. This change primarily reflected increased
compliance efforts related to sales rebates and higher employee benefits
costs including the adoption of a new accounting standard for expensing
employee stock options.
Tax Expense
No tax benefit was recorded in the first quarter of 2006. The company
recorded a full valuation allowance against the deferred tax assets created
by the operating loss in the period. During the first quarter of 2005 the
company recorded a tax benefit of $6.7 million related to the operating
losses reported in that period. The company did not record a valuation
allowance against those losses because it had a tax planning strategy to
utilize those assets at that time.
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 and transplant, 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 Web site:
http://www.nabi.com .
Statements in this press release about the company that are not
strictly historical are forward-looking statements and include statements
about our products in development, the market for such products, clinical
trials and studies, intellectual property position, and alliances and
partnerships. You can identify these forward-looking statements because
they involve our expectations, beliefs, plans, 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; 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; successfully partner with other companies; 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 31, 2005 filed with the Securities
and Exchange Commission.
Nabi Biopharmaceuticals
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, amounts in thousands, except per share data)
For the Three Months Ended
April 1, March 26,
2006 2005
Sales $27,548 $26,076
Costs and expenses:
Costs of products sold, excluding amortization
of intangible assets 15,254 14,862
Royalty expense 356 2,199
Gross margin, excluding amortization of intangible
assets 11,938 9,015
Selling, general and administrative expense 16,809 14,402
Research and development expense 10,926 15,255
Amortization of intangible assets 2,131 2,288
Other operating expense, principally freight 180 34
Operating loss (18,108) (22,964)
Interest income 1,063 554
Interest expense (1,098) (138)
Other income, net 66 31
Loss before benefit for income taxes (18,077) (22,517)
Benefit for income taxes -- 6,695
Net loss $(18,077) $(15,822)
Basic and diluted loss per share $(0.30) $(0.27)
Basic and diluted weighted average shares
outstanding 60,329 59,530
SUPPLEMENTAL INFORMATION:
Sales by Operating Segment
Biopharmaceutical Products $15,896 $17,493
Antibody Products:
Specialty antibodies 5,878 3,738
Non-specific antibodies 5,774 4,845
Total antibodies 11,652 8,583
Total $27,548 $26,076
Nabi Biopharmaceuticals
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, amounts in thousands)
April 1, December 31,
2006 2005
Cash and cash equivalents $51,396 $101,762
Marketable securities 30,222 5,172
Restricted cash, current 816 816
Trade accounts receivable, net 25,891 22,322
Inventories, net 22,197 22,323
Prepaid expenses and other assets 3,089 2,672
Property, plant and equipment, net 92,280 94,084
Intangible assets, net 76,201 78,332
Other assets, net 852 914
Total assets $302,944 $328,397
Trade accounts payable and accrued
expenses $38,423 $43,490
Notes payable and capital lease
obligations, net 10,609 13,556
2.875% Convertible Senior Notes 109,187 109,145
Other liabilities 334 379
Stockholders' equity 144,391 161,827
Total liabilities and stockholders' equity $302,944 $328,397
Capital expenditures were $0.4 million and $2.5 million for the three
months ended April 1, 2006 and March 26, 2005, respectively.
Depreciation and amortization expenses were $4.3 million and $4.8
million for the three months ended April 1, 2006 and March 26, 2005,
respectively.
The 2005 condensed balance sheet has been derived from the audited
balance sheet for the year ended December 31, 2005. Certain items in the
2005 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
CONTACT:
Thomas E. Rathjen, Vice President, Investor
Relations, Nabi Biopharmaceuticals, +1-561-989-5800
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