Company Signs Term Sheet to Sell Keflex Brand That Could Result in
$15 Million and Royalties on New Product Sales; Updated Financial
Guidance Provided for 2005 and 2006
GERMANTOWN, Md., Sept. 15 /PRNewswire-FirstCall/ -- Advancis
Pharmaceutical Corporation (Nasdaq: AVNC), a pharmaceutical company focused on
developing and commercializing novel anti-infective products, today announced
that it will conduct a new Phase III trial for its Amoxicillin PULSYS product
candidate in adults and adolescents with pharyngitis/tonsillitis due to Group
A strep infections. Enrollment in the clinical trial is expected begin in the
fourth quarter of 2005. The Company believes it has the cash and resources to
fund this trial through completion and to fund its research operations into
early 2007.
Following extensive analysis of data from the Company's recently concluded
unsuccessful Amoxicillin PULSYS clinical trials, Advancis has decided to
extend the length of treatment in a new Phase III trial in adults and
adolescents from seven days to 10 days for its product candidate.
"We are very eager to continue our development work on a once-daily
Amoxicillin PULSYS product," said Edward M. Rudnic, Ph.D., chairman,
president, and CEO of Advancis. "As a result of what we learned from our prior
trials, we believe that our current once-a-day formulation dosed for 10 days
has the potential to provide the efficacy required for product approval. In
addition, we believe this therapy may yield eradication rates that are
competitive with the most efficacious treatments for strep throat. This
therapy would utilize Advancis' proprietary PULSYS technology and preserve the
product's strongest marketing appeal of once-daily dosing."
Advancis' adult and adolescent pivotal trial is expected to be designed as
a 600-patient, double-blind, double-dummy, non-inferiority trial to begin as
early as November 2005. The Company anticipates comparing its Amoxicillin
PULSYS dosage form for the treatment of pharyngitis/tonsillitis in adults and
adolescents delivered in a once-daily, 775 milligram tablet for a period of 10
days to 250 milligrams of penicillin dosed four times daily, for a total of
one gram per day, for 10 days.
Advancis' Amoxicillin PULSYS dosing of 775 milligrams for 10 days - or
just under eight grams in total for this new therapy - compares to the most
common amoxicillin therapy for pharyngitis that is dosed 500 milligrams three-
times daily for a period of 10 days - or a total of 15 grams of amoxicillin
over the full course of therapy. If successful, physicians prescribing
Amoxicillin PULSYS would be able to dose approximately one-half the amount of
amoxicillin in adult and adolescent patients with pharyngitis/tonsillitis,
while at the same time providing the convenience of once-daily dosing.
Sale of Keflex Brand
Advancis also announced that it has reached an agreement in principle to
sell the U.S. rights to the Keflex(R) brand of cephalexin to a private
company. The Company has agreed to terms for the sale of its Keflex assets and
has received a $1 million non-refundable upfront payment. Completion of the
transaction is subject to negotiation of a definitive agreement and completion
of necessary financing by the buyer. If the transaction is completed as
expected by year-end, the Company anticipates receiving at least an additional
$11 million in 2005 and a cumulative total of approximately $15 million could
be realized over the next 12 months.
"We are very pleased with the terms of this agreement," said Dr. Rudnic.
"We believe that we have built value in the Keflex franchise, which we have
stewarded over the past 14 months. In selling the rights to Keflex, we are
establishing a source of additional corporate funds that will provide us
greater financial flexibility as we proceed with the continued development of
our proprietary PULSYS technology."
Terms of the agreement include $3 million in potential milestone payments
to Advancis following the approval of certain products currently under
development, reimbursement of related development costs, and royalty income on
subsequent net sales of such products.
Financial Guidance
Assuming the sale of Keflex closes as anticipated in 2005, full year 2005
financial results are expected to show total cash balance at December 31,
2005, in the range of $35 million to $38 million.
Advancis anticipates that its current funds along with proceeds from the
sale of Keflex will be sufficient to support its new Phase III trial for
Amoxicillin PULSYS and its other planned operations through 2006 and into
early 2007. Assuming positive Phase III trial results and FDA approval of the
Company's Amoxicillin PULSYS product in 2006, Advancis may consider raising
additional capital to support the launch of Amoxicillin PULSYS and the
potential development of additional PULSYS product candidates.
Total revenue for the 2005 is expected to be between $16 million and $18
million, resulting from sales of Keflex, reimbursed R&D payments, and
recognition of license revenue during the year, and includes the recognition
of $6 million of deferred revenue related to the termination of the Company's
Amoxicillin PULSYS agreement with Par Pharmaceutical Companies, Inc. Net loss
for the year is expected to be between $30 million and $35 million, or
approximately $1.10 to $1.30 per diluted common share. Non-cash charges for
2005, consisting primarily of stock-based compensation expenses and
depreciation and amortization, are expected to be approximately $6 million.
Conference Call
The Company has scheduled a conference call for today, September 15, 2005
at 10:30 AM ET. During the call, Dr. Edward Rudnic, chairman, president and
CEO, and Steve Shallcross, senior vice president and CFO will discuss the
expected clinical trial and other corporate activities. Investors can call 1-
800-813-8504 (domestic) and 1-706-643-7752 (international) prior to the 10:30
AM start time and ask for the Advancis Pharmaceutical conference call hosted
by Dr. Rudnic. A replay of the call will be available on Thursday, September
15, 2005 beginning at 12:30 PM ET and will be accessible until Thursday,
September 22, 2005 at 5:00 PM ET. The replay call-in number is 1-800-642-1687
for domestic callers and 1-706-645-9291 for international callers. The access
number is 9542089.
The conference call will also be broadcast simultaneously on the Company's
website, http://www.advancispharm.com. In addition, the Company will make
slides available for viewing on the website in conjunction with the audio
webcast. Investors should click on the Investor Relations tab and are advised
to go to the website at least 15 minutes early to register, download, and
install any necessary audio software. The call will also be archived on the
Advancis website.
About Keflex:
Keflex(R) (cephalexin capsules, USP) is a first-generation cephalosporin
antibiotic shown to be active against strains of both gram-positive and gram-
negative aerobes in vitro and in clinical infections. Keflex is indicated for
treatment of the following infections: respiratory tract infections, otitis
media, skin and skin structure infections, bone infections, and genitourinary
tract infections. More information on Keflex and prescribing information are
available at http://www.advancispharm.com/products/keflex.
About Amoxicillin:
More than 54 million prescriptions for amoxicillin were written in 2004
with total retail sales of approximately $600 million. Amoxicillin is
indicated for a broad range of infections, and is commonly prescribed as a
first-line therapy for common infections such as otitis media (middle ear
infection), pharyngitis (sore throat), and sinusitis (sinus infection).
According to data from IMS Health, a pharmaceutical research company,
approximately one-quarter of amoxicillin prescriptions are written for
pharyngitis, strep throat, and tonsillitis in adults and children.
About Advancis Pharmaceutical:
Advancis Pharmaceutical Corporation (NASDAQ: AVNC) is a pharmaceutical
company focused on the development and commercialization of pulsatile drug
products that fulfill substantial unmet medical needs in the treatment of
infectious disease. The Company is developing a broad portfolio of anti-
infective drugs based on its novel biological finding that bacteria exposed to
antibiotics in frontloaded staccato bursts, or "pulses," are killed more
efficiently and effectively than those under standard treatment regimens.
Based on this finding, Advancis has developed a proprietary, once-a-day
pulsatile delivery technology called PULSYS. By examining the resistance
patterns of bacteria and applying its delivery technologies, Advancis has the
potential to redefine infectious disease therapy and significantly improve
drug efficacy, shorten length of therapy, and reduce drug resistance versus
currently available antibacterial products. For more on Advancis, please visit
http://www.advancispharm.com.
This announcement contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. These statements are based on
Advancis' current expectations and assumptions. These statements are not
guarantees of future performance and are subject to a number of risks and
uncertainties that would cause actual results to differ materially from those
anticipated. The words, "believe," "expect," "intend," "anticipate," and
variations of such words, and similar expressions identify forward-looking
statements, but their absence does not mean that the statement is not forward-
looking. Statements in this announcement that are forward-looking include, but
are not limited to, statements about the Company's future development plans,
clinical trials, and financial results. The actual results realized by
Advancis could differ materially from these forward-looking statements,
depending in particular upon the risks and uncertainties described in the
Company's filings with the Securities and Exchange Commission. These include,
without limitation, risks and uncertainties relating to the Company's
financial results and the ability of the Company to (1) reach profitability,
(2) prove that the preliminary findings for its product candidates are valid,
(3) receive required regulatory approvals, (4) successfully conduct clinical
trials in a timely manner, (5) establish its competitive position for its
products, (6) develop and commercialize products that are superior to existing
or newly developed competitor products, (7) develop products without any
defects, (8) have sufficient capital resources to fund its operations, (9)
protect its intellectual property rights and patents, (10) implement its sales
and marketing strategy, (11) successfully attract and retain collaborative
partners, (12) implement, conduct, and successfully conclude its planned Phase
III clinical trials for Amoxicillin PULSYS, and (13) retain its senior
management and other personnel. Existing and prospective investors are
cautioned not to place undue reliance on these forward-looking statements,
which speak only as of today's date. Advancis undertakes no obligation to
update or revise the information in this announcement, whether as a result of
new information, future events or circumstances or otherwise.
SOURCE Advancis Pharmaceutical Corporation
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Related links:
http://www.advancispharm.com
CONTACT:
Steve Shallcross, Senior Vice President &
CFO, +1-301-944-6590, sshallcross@advancispharm.com, or Bob
Bannon, Sr. Director, Investor
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