- Company Continues Progress Toward Commercialization of StaphVAX(R) -
BOCA RATON, Fla., July 19 /PRNewswire-FirstCall/ -- Nabi
Biopharmaceuticals (Nasdaq: NABI) today announced that it continued to build
momentum toward commercialization of its lead product in development,
StaphVAX(R) [Staphylococcus aureus Polysaccharide Conjugate Vaccine], by
increasing its investment in research and development in the second quarter to
$19 million. In addition, the company continued to invest in the marketing,
pricing and reimbursement activities to support the expected launch of
StaphVAX in Europe in 2006. Funding for this increased level of investment
was generated by the cash margin earned from sales of $26 million, including
biopharmaceutical sales of $15 million, and from the use of cash from the
balance sheet. Operating cash flow used during the second quarter totaled
$22 million. This increased level of investment was supported by the
completion of a $112 million convertible debt issue during the second quarter,
which significantly strengthened the company's financial position. Cash and
marketable securities at the end of the second quarter totaled $157 million.
The company has continued to make progress with European regulators toward
the approval of its Marketing Authorization Application (MAA) for the use of
StaphVAX to prevent S. aureus infections in end-stage renal disease (ESRD)
patients on hemodialysis. During the second quarter, the company initiated
its first European clinical study of StaphVAX in collaboration with the Health
Protection Agency in the UK. The trial is a safety and immunogenicity study
in orthopedic surgery patients that will build awareness of the vaccine in
Europe, as well as contribute to defining its applicability beyond dialysis
patients.
During the second quarter, significant progress was achieved in support of
the company's goal to file a Biologics License Application (BLA) for StaphVAX
in the U.S. this year. Earlier this month, the company announced positive
results from a StaphVAX safety and immunogenicity study in cardiovascular
surgery patients. The results of this study support that StaphVAX may have
applicability in broader patient populations at risk for S. aureus infections.
This study demonstrated that 93% of patients safely developed protective
levels of antibodies to S. aureus. Most patients achieved protective levels
within 7 to 10 days. Today, the company also announced that during the second
quarter, it completed enrollment in an immunogenicity study in orthopedic
surgery patients in the U.S. The company also initiated and completed
enrollment in bridging and consistency lot studies to compare vaccine
manufactured at Cambrex Bio Science Baltimore, Inc. with the vaccine being
evaluated in the ongoing Phase III clinical trial. Results from all of these
trials are expected during the third quarter of 2005. This significant
progress allows Nabi Biopharmaceuticals to confirm today that it continues to
be on track to file its BLA in the U.S. by the end of the year.
Management also noted that total prescriptions for PhosLo(R) (calcium
acetate) increased by almost 2% year-over-year in the second quarter and
patient utilization measured in bottles increased by 2.5% in the first half of
2005. These results, combined with external market research completed in the
second quarter, support that PhosLo's benefits in terms of efficacy and cost
are being more broadly accepted, even as the market adjusts to a new product
entrant. Also, based on inventory data at the end of the second quarter, the
company projects that the conversion to PhosLo gelcaps is progressing rapidly
and will be completed during the third quarter. After considering all of
these factors, patient utilization of PhosLo exceeded total shipments to
wholesalers on a year-to-date basis, and as a result, PhosLo inventories at
wholesalers were reduced slightly from year-end levels.
While these are encouraging results, the company's internal analysis at
the end of the second quarter indicated that overall inventories of PhosLo at
wholesalers remained at approximately eight to nine months on hand. Current
projections support patient utilization will increase in the second half of
the year and the company could achieve its sales target for 2005 by shipping
units equal to expected patient utilization. However, these projections no
longer support an increase in patient utilization that would drive a
significant reduction in wholesaler inventory levels. Based on this analysis,
management has elected to defer revenue recognition on second quarter
shipments of PhosLo equal to approximately two months of patient utilization.
This product has been shipped and has been billed to customers on normal
payment terms. However revenue will be deferred until the company actively
manages a reduction in trade inventories of approximately two months. The
value of the deferred PhosLo revenue in the second quarter totaled
$5.2 million. As a result of this election to defer revenue recognition,
reported sales of PhosLo totaled $3.2 million in the second quarter, as
compared to $7.8 million in the second quarter of 2004.
The company continues to focus on opportunities beyond the U.S. to drive
additional growth for PhosLo. The company also announced today that it has
reached an agreement for the distribution of PhosLo in Canada. Sales of
product under this agreement are expected to begin during the fourth quarter
of 2005. This distributor relationship combined with the expected approval of
PhosLo in Europe during 2005 will create new market opportunities for growth
in patient use and revenues. Finally, effective as of the beginning of July,
the company announced it has taken a 40% increase in the price of PhosLo in
the United States.
"We continued to achieve successes on numerous fronts in the second
quarter and maintained a strong financial position essential for fulfilling
our strategic goals," stated Thomas H. McLain, chairman, president and chief
executive officer. "Our focus in 2005 remains centered on our commitment to
file our BLA for StaphVAX in the U.S. on time and to work toward the product's
approval in Europe. Just as importantly, we are focused on running our base
business to maximize predictable cash returns from operations, even in the
face of new competition for PhosLo. Based on important initiatives and
developments, such as providing new, scientifically based clinical data,
expanding into new markets, gaining support from key opinion leaders and
pursuing important cost and reimbursement differences proactively, we are
confident in the importance of PhosLo for physicians and patients and we are
confident we can continue to drive increases in sales. We believe our
commitment to increase patient use, while driving a reduction in wholesaler
inventories, will allow us to optimize operating cash flow in 2005 and 2006."
In further clinical developments within its Gram-positive infections
franchise, during the second quarter Nabi Biopharmaceuticals initiated a Phase
I study of a Gram-positive vaccine being developed to prevent Staphylococcus
epidermidis infections in at-risk patients. Also, based on encouraging
clinical results announced earlier this year, the U.S. Food and Drug
Administration (FDA) awarded Altastaph(TM) [Staphylococcus aureus Immune
Globulin Intravenous (Human)] with Fast Track designation for its use in the
treatment of patients with persistent S. aureus infections.
In other areas of clinical and regulatory development, enrollment
continued in the CARE 2 study comparing long-term control of phosphate,
calcium and lipid levels in patients treated with PhosLo plus Lipitor(R) to
patients treated with Renagel(R) plus Lipitor. Preliminary results from this
study are expected during the fourth quarter. The PhosLo EPICK study
initiated during the second quarter is designed to demonstrate the product's
safety and efficacy in controlling elevated phosphorus levels in Stage 4 (pre-
dialysis) Chronic Kidney Disease (CKD) patients. During the quarter, the
company received additional feedback from the FDA on its BLA filing for Nabi-
HB(R) Intravenous [Hepatitis B Immune Globulin (Human)]. The company will
schedule a meeting with the FDA as soon as possible to address comments
relating to the clinical data as cited in its submission. The company also
made significant progress toward marketing approval in Europe for Nabi-HB(R)
Intravenous under the tradename HEBIG(TM). Finally, Nabi Biopharmaceuticals'
Civacir [Hepatitis C Immune Globulin (Human)], its product in development for
prevention of recurrent hepatitis C liver disease in liver transplant
recipients, gained Orphan Medicinal Product designation in Europe.
Review of Operations
Sales of Nabi-HB(R) [Hepatitis B Immune Globulin (Human)] increased to
$10.9 million in the second quarter of 2005 as compared to sales of
$9.9 million in the comparable quarter in 2004. Second quarter sales of Nabi-
HB reflect end-user demand for the product, as the effect of lower liver
transplant activity in the first five months of 2005 has been largely offset
by increased market share for Nabi-HB.
Sales of the company's other biopharmaceutical products were $0.4 million
in the second quarter of 2005, compared to $1.3 million in the second quarter
of 2004. Results in the 2005 period reflect lower sales of Aloprim(TM)
[Allopurinol sodium for injection], due to the introduction of a competitive
product in the second half of 2004, and lower contract manufacturing revenue.
In the second quarter of 2005, Nabi Biopharmaceuticals' manufacturing facility
was almost fully absorbed in the manufacture of Nabi Biopharmaceuticals' own
products.
Sales of antibody products were $11.4 million in the quarter, reflecting
increased production of non-specific plasma and lower sales of specialty
plasmas as the company retained anti-HBs plasma for future production of Nabi-
HB consistent with the company's strategy for this segment of its operations.
Research and development expenses totaled $18.6 million in the quarter
compared to $16.9 million in the second quarter of 2004. These expenses were
driven primarily by the costs associated with advancing the StaphVAX clinical
program and the preparation for filing the StaphVAX BLA, which is expected by
the end of 2005. Research and development expenses also included costs related
to the ongoing development of StaphVAX manufacturing capacity at the company's
manufacturing facility and clinical programs supporting PhosLo.
Selling, general and administrative expenses increased to $17.2 million
due to increased activities in preparation for the future commercialization of
its products under development and in Europe.
Other operating expenses were $2.3 million for the quarter, comparable to
2004 same quarter totals. These expenses primarily reflect amortization of
the intangible assets associated with the acquisition of PhosLo.
As a result of the above factors, the company reported a net loss of
$20.9 million, or $0.35 per share for the second quarter compared to a net
loss of $17.6 million or $0.30 per share in the comparable quarter of 2004.
Additional Outlook for 2005
As indicated above, wholesaler inventories of PhosLo remain at eight to
nine month levels. While usage of PhosLo is increasing despite the launch of
a new competitive product, the company believes it is important to proactively
drive a reduction in trade inventories by shipping below reported patient
demand during 2005. As a result of this reassessment, we are lowering our
revenue guidance for the full year by approximately $6 million. Projections
for cash flow from operations are being reduced by approximately $5 million.
For 2005, biopharmaceutical revenues are now expected to be in the range of
$82 to $85 million. Expectations for total revenue are expected to be in the
range of $126 to $131 million, and factors in lower antibody revenue as more
production is dedicated to the manufacture of the company's own products.
Research and development expenses are expected to increase by up to 20% driven
by costs to complete the confirmatory Phase III trial for StaphVAX, the
bridging and consistency lot studies, and the immunogenicity studies in other
at-risk populations such as orthopedic and cardiovascular surgery patients as
well as accelerate the development of Altastaph and next-generation Gram-
positive products. Consistent with previous guidance, selling, general and
administration expenses are also expected to increase approximately 10% above
2004 levels as the company continues its initial commercialization activities
in Europe.
Management's discussion of second quarter 2005 results and expectations
for the remainder of 2005 can be accessed through the audio link
http://audioevent.mshow.com/245334 or at Nabi Biopharmaceuticals website at
http://www.nabi.com . The audio webcast will begin today at 4:30 p.m. Eastern
Time and a replay of the audio webcast will remain available through July 27,
2005 at 5:00 p.m. Eastern Time. If you have any questions concerning the
audio webcast, please contact Nabi Biopharmaceuticals Investor Relations
Department at 561-989-5815.
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. We are poised to capture large, commercial opportunities in our
four core business areas: Gram-positive bacterial infections, hepatitis,
kidney disease (nephrology), and nicotine addiction. We have 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)]
and a number of products in various stages of clinical and preclinical
development. The company filed its Marketing Authorization Application in
Europe for its product candidate, StaphVAX(R) [Staphylococcus aureus
Polysaccharide Conjugate Vaccine], in December 2004. The application was
accepted for review in January 2005. StaphVAX is currently in a confirmatory
Phase III clinical trial in the United States. StaphVAX is designed to
prevent the most dangerous and prevalent strains of S. aureus bacterial
infections. S. aureus bacteria are a major cause of hospital-acquired
infections and are becoming increasingly resistant to antibiotics. The
company's other products in development include Altastaph(TM) [Staphylococcus
aureus Immune Globulin Intravenous (Human)], an antibody for prevention and
treatment of S. aureus infections, NicVAX(TM) [Nicotine Conjugate Vaccine], a
vaccine to treat nicotine addiction, and Civacir(TM) [Hepatitis C Immune
Globulin (Human)], an antibody for preventing hepatitis C virus re-infection
in liver transplant patients. For additional information on Nabi
Biopharmaceuticals, please visit our web site: http://www.nabi.com .
This press release contains forward-looking statements that reflect the
company's current expectations regarding future events. Any such forward-
looking statements are not guarantees of future performance and involve
significant risks and uncertainties. Actual results may differ significantly
from those in the forward-looking statements as a result of any number of
factors, including, but not limited to, risks relating to the possibility that
our confirmatory Phase III clinical trial for StaphVAX or our plans to
commercialize StaphVAX in the European Union and United States may not be
successful; the possibility that we may not realize the value of our
acquisition of PhosLo; the company's ability to raise additional capital on
acceptable terms; the company's dependence upon third parties to manufacture
its products; the company's ability to utilize the full capacity of its
manufacturing facility; the impact on sales of Nabi-HB from patient treatment
protocols and the number of liver transplants performed in HBV-positive
patients; reliance on a small number of customers; the future sales growth
prospects for the company's biopharmaceutical products; and the company's
ability to obtain regulatory approval for its products in the United States or
abroad or to successfully develop, manufacture and market its products. These
factors are more fully discussed 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 Three For the Six
Months Ended Months Ended
June 25, June 26, June 25, June 26,
2005 2004 2005 2004
Sales $25,879 $47,992 $51,956 $94,341
Costs and expenses:
Costs of products sold,
excluding amortization of
intangible assets 15,368 17,339 30,231 37,539
Royalty expense 480 6,018 2,679 9,593
Gross margin, excluding
amortization of intangible
assets 10,031 24,635 19,046 47,209
Selling, general and
administrative expense 17,231 14,481 31,633 26,837
Research and development
expense 18,577 16,903 33,832 28,331
Amortization of intangible
assets 2,222 2,167 4,511 4,320
Other operating expense,
principally freight 122 130 155 193
Operating loss (28,121) (9,046) (51,085) (12,472)
Interest income 924 347 1,478 683
Interest expense (891) (318) (1,029) (1,808)
Other (expense) income, net (216) 12 (184) 10
Loss before benefit (provision)
for income taxes (28,304) (9,005) (50,820) (13,587)
Benefit (provision) for
income taxes 7,374 (8,573) 14,068 (8,830)
Net loss $(20,930) $(17,578) $(36,752) $(22,417)
Basic and diluted loss
per share $(0.35) $(0.30) $(0.62) $(0.38)
Basic and diluted weighted
average shares outstanding 59,733 58,835 59,631 58,398
SUPPLEMENTAL INFORMATION:
Sales by Operating Segment
Biopharmaceutical
Products $14,500 $36,296 $31,994 $70,231
Antibody Products:
Specialty antibodies 6,240 6,748 9,978 13,019
Non-specific
antibodies 5,139 4,948 9,984 11,091
Total
antibodies 11,379 11,696 19,962 24,110
Total $25,879 $47,992 $51,956 $94,341
Nabi Biopharmaceuticals
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, amounts in thousands)
June 25, December 25,
2005 2004
Cash and cash equivalents $94,346 $94,759
Marketable securities 62,525 8,350
Restricted cash 677 672
Trade accounts receivable, net 29,310 32,405
Inventories, net 23,573 20,175
Prepaid expenses and other assets 20,598 6,227
Property, plant and equipment, net 115,041 115,406
Intangible assets, net 85,433 89,728
Other assets, net 712 449
Total assets $432,215 $368,171
Trade accounts payable and accrued
expenses $52,243 $54,233
Notes payable and capital lease
obligations, net 14,656 23,844
2.875% Senior Convertible Notes 109,061 --
Other liabilities 5,539 5,773
Stockholders' equity 250,716 284,321
Total liabilities and stockholders' equity $432,215 $368,171
Capital expenditures were $4.5 million and $5.6 million for the six
months ended June 25, 2005 and June 26, 2004, respectively.
Depreciation and amortization expenses were $9.5 million and $9.0 million
for the six months ended June 25, 2005 and June 26, 2004, respectively.
The 2004 condensed consolidated balance sheet has been derived from the
audited balance sheet for the year ended December 25, 2004. Certain
items in the 2004 condensed 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
Audio:http://audioevent.mshow.com/245334
CONTACT:
Constance Bienfait, Vice President, Investor
Relations, Nabi Biopharmaceuticals, +1-561-989-5800
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