Natrecor Sales Exceed Consensus Estimates for Quarter
SUNNYVALE, Calif., Oct. 25 /PRNewswire/ -- Scios Inc. (Nasdaq: SCIO) today
announced financial results for the three-month and nine-month periods ended
September 30, 2001. The Company reported net revenue of $19.6 million in the
third quarter of 2001 compared to $2.8 million in the same period last year.
Net sales of flagship product Natrecor(R) (nesiritide) were $4.5 million,
exceeding consensus estimates for the quarter.
"We are off to a great start with Natrecor thanks to the tremendous
efforts of everyone at Scios, particularly our Scientific Affairs Managers and
the sales and marketing groups," said Thomas L. Feldman, Scios' vice president
of sales and marketing. "This success reflects acceptance by the heart
failure and critical care communities of the potential benefits of Natrecor,
the first new drug to become available in over a decade for acutely
decompensated congestive heart failure. We are penetrating the market
effectively and educating and supporting professionals through a number of
programs to drive adoption and usage."
Richard B. Brewer, Scios' president and chief executive officer, added
that, "Scios is continuing clinical development of Natrecor for expanded usage
beyond the hospital setting, and moving our next product candidate, SCIO-469
for the treatment of Rheumatoid Arthritis, to the next phase of clinical
development. We also expect to further expand our promising product pipeline
by moving another compound into development next year."
Third Quarter Highlights
-- Natrecor is now being used at almost 600 of the 2,000 U.S. hospitals
Scios is targeting, including some of the largest and most
influential teaching institutions such as the Brigham & Women's
Hospital, the Cleveland Clinic Foundation, Stanford University
Hospital and Shands Hospital at the University of Florida in
Gainesville. Approximately half of the 130 wholesalers with which
Scios is working nationwide have already reordered the drug.
-- Scios recently launched ADHERE (The Acute Decompensated Heart
Failure National Registry), the first national registry to collect
and analyze demographic and treatment data about patients
hospitalized due to acutely decompensated heart failure.
-- The company has enrolled 205 of the planned 250 patients in the
PROACTION study. PROACTION was designed to gain practical
experience with Natrecor in the emergency department, examining the
safety, efficacy and economic impact of Natrecor in that setting.
Scios has performed an interim analysis of the first 145 patients
enrolled in the study and the preliminary data indicate that
Natrecor can be safely administered in an outpatient emergency
department setting, with a safety profile similar to that reported
in the pivotal VMAC study. The preliminary data also suggest that
patients treated with Natrecor in an emergency department may be
less likely to be hospitalized for heart failure. Final results of
the study will be reported in the first quarter of next year.
Third Quarter and First Nine-Month Financial Results
Third quarter net revenues were $19.6 million compared to $2.8 million in
the third quarter of 2000. This increase was primarily due to $13.8 million
from the Company's one-time sale of bulk Fibroblast Growth
Factor ("FGF") to Kaken Pharmaceuticals Co., Ltd. following the approval
in Japan of Fiblast(R) spray. Additionally, the increase was due to
$4.5 million of Natrecor product revenue, which was achieved in the last six
weeks of the third quarter, following FDA approval. In the prior year the
Company had $1.6 million in product sales related to the psychiatric sales and
marketing division, which ceased operations in the first quarter of this year.
Total costs and expenses for the 2001 third quarter were $32.5 million
compared to $13.2 million for the quarter ended September 30, 2000. The
increase in costs and expenses were largely attributable to building a
marketing and sales infrastructure for Natrecor and clinical development of
SCIO-469.
The net loss for the quarter was $11.2 million, or $0.25 per diluted
share, compared to a net loss of $10.5 million, or $0.28 per diluted share,
for the same period last year. Per share amounts were based on 45.4 million
weighted average diluted shares in the 2001 third quarter, compared to
37.9 million weighted average diluted shares in last year's third quarter.
Net revenues for the first nine months of 2001 were $36.8 million compared
to $9.1 million in the same period last year. The increase was primarily due
to the following: one-time sale of bulk FGF to Kaken for $15.9 million;
one-time gain from the sale of marketing rights to GlaxoSmithKline in the
amount of $9.4 million related to the psychiatric sales and marketing
division; and $4.5 million of Natrecor product revenue. In the prior year
period, the Company had $4.6 million in product sales related to the
psychiatric sales and marketing division.
Total costs and expenses in the nine-month period were $71.8 million
compared to $39.0 million for the same period a year ago. The increase in
costs and expenses for the nine-month period is largely attributable to
building a marketing and sales infrastructure for Natrecor and clinical
development of SCIO-469.
The Company reported a net loss of $33.7 million, or $0.81 per diluted
share, for the nine months ended September 30, 2001, compared to a net loss of
$30.3 million, or $0.80 per diluted share, for the comparable period in 2000.
Cash, cash equivalents and marketable securities (both current and
non-current) balances at September 30, 2001 were $141.6 million.
Outlook
Scios will be initiating the FUSION study (Management of CHF After
Hospitalization: Follow-Up Serial Infusions Of Natrecor) in the fourth
quarter of this year. FUSION is designed to evaluate the utility of short,
intermittent infusions of two doses of Natrecor in patients at high risk for
being readmitted to the hospital for CHF. The company is also supporting
several physician-sponsored clinical trials, the results of which will be
reported at various professional meetings next year.
The company also announced that it plans to file an Investigational New
Drug application with FDA in November for a Phase II study with SCIO-469. The
study is expected to begin enrollment of Rheumatoid Arthritis patients in
January 2002. Scios completed two Phase I trials of SCIO-469 earlier this
year showing that single and multiple oral doses were well tolerated.
Scios and Innovex have reached agreement in principle to modify their
marketing alliance to their mutual advantage. The new agreement will
facilitate an early transfer to Scios of the 168-person Natrecor sales force.
Under the modification, and at Scios' option, the transfer of the sales force
to Scios can take place in June 2003, one year earlier than originally
planned. "We are delighted at the prospect of bringing the sales force and
infrastructure in-house a year ahead of schedule," said Mr. Brewer. "We
appreciate Innovex's willingness to make that happen, as well as their efforts
in the successful Natrecor launch in August." Dennis Gillings, chairman of
Quintiles, Innovex's parent company, said "Our ability to provide Scios a
robust and flexible partnership to meet the launch requirements for Natrecor
is a prime example of Innovex's core strength in supporting product launches
for similarly situated companies."
Scios continues to estimate revenues from Natrecor sales of
$10 - $12 million in 2001, and approximately $50 to $55 million in 2002. The
net loss for 2002 is projected to be between $60 and $70 million.
The Company is projecting costs and expenses for research and development
and SG&A should be in the range of $110 to $112 million for 2001. In 2002
these expenses are anticipated to be in the range of $135 to $150 million.
Today's Conference Call Details
Scios will host its customary quarterly conference call today,
October 25, 2001, at 7:00 a.m. PT / 10:00 a.m. ET to discuss the results of
the quarter and the company's outlook. The dial-in number is 800-364-4174,
confirmation code 1933643. The call will also be broadcast live and archived
on Scios' web site at http://www.sciosinc.com until November 1, 2001.
Scios Inc.
Scios is a biopharmaceutical company developing novel treatments for
cardiovascular and inflammatory disease. The Company's disease-based
technology platform integrates expertise in protein biology with computational
and medicinal chemistry to identify novel targets and rationally design small
molecule compounds for large markets with unmet medical needs.
Forward-Looking Safe Harbor Statement
This news release contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. We generally identify such forward-looking statements
using words like "believe," "intend," "expect," "may," "should," "plan,"
"project," "contemplate," "anticipate" or similar statements. Statements that
are not historical facts are forward-looking statements based on current
assumptions that involve risks and uncertainties. These risks and
uncertainties may include the sales penetration and success of Natrecor, the
success of clinical trials of Natrecor and our pipeline products, including
SCIO-469, as well as other risks detailed from time to time in the reports
filed by Scios with the SEC, including the Company's quarterly reports and
annual report on Form 10-K. Actual results, performance or achievements of
Scios may differ significantly from those described in these forward-looking
statements. Scios disclaims any intention or obligation to update or revise
any financial projections or forward-looking statements, whether as a result
of new information, future events or otherwise.
SCIOS INC.
Consolidated Balance Sheets
(In thousands, except share data)
ASSETS September 30, December 31,
2001 2000
(Unaudited)
Current assets:
Cash and cash equivalents $69,904 $3,291
Marketable securities 1,006 35,356
Accounts receivable 6,440 5,217
Inventory 428 --
Prepaid expenses 488 722
Total current assets 78,266 44,586
Marketable securities, non-current 70,666 32,884
Property and equipment, net 8,642 8,910
Other assets 4,063 2,007
TOTAL ASSETS $161,637 $88,387
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $6,879 $4,587
Other accrued liabilities 12,116 10,749
Deferred contract revenue 128 16,193
Total current liabilities 19,123 31,529
Long-term debt 41,350 39,095
Total liabilities 60,473 70,624
Stockholders' equity:
Series A preferred stock;
$.001 par value; 20,000,000 shares
authorized; issued
and outstanding 4,991 shares -- --
Series B preferred stock;
$.001 par value; 5,000,000 shares
authorized; none issued and outstanding -- --
Common stock; $.001 par value;
150,000,000 shares authorized;
issued and outstanding
45,397,905 and 39,166,373, respectively 45 39
Treasury stock; 30,000 shares (445) --
Additional paid-in capital 545,930 428,987
Notes receivable from stockholders (446) (634)
Deferred compensation, net (106) (417)
Accumulated other comprehensive income 1,256 1,195
Accumulated deficit (445,070) (411,407)
Total stockholders' equity 101,164 17,763
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $161,637 $88,387
SCIOS INC.
Consolidated Statements of Operations
(In thousands, except share and per share data)
Three months ended Nine months ended
September 30, September 30,
2001 2000 2001 2000
(Unaudited) (Unaudited)
Revenues:
Product sales $18,330 $-- $20,428 $--
Research & development
contracts and royalties 1,284 1,192 3,865 4,568
Gain on sale
of marketing rights -- -- 9,363 --
Psychiatric product sales,
co-promotion commissions,
net of expenses -- 1,624 3,142 4,539
19,614 2,816 36,798 9,107
Costs and expenses:
Cost of sales 2,035 -- 2,035 --
Research and development 12,101 9,645 34,665 30,223
Marketing,
general and administration 18,347 3,545 35,105 9,777
Restructuring
charges (credits) -- -- -- (993)
32,483 13,190 71,805 39,007
Loss from operations (12,869) (10,374) (35,007) (29,900)
Other income and expense:
Interest income 1,929 1,221 3,483 3,809
Interest expense (653) (917) (2,256) (2,927)
Realized gains
(losses) on securities 205 (3) 594 (187)
Other income (expense), net 221 (411) (477) (1,113)
1,702 (110) 1,344 (418)
Net loss $(11,167) $(10,484) $(33,663) $(30,318)
Loss per common share:
Basic and diluted $(0.25) $(0.28) $(0.81) $(0.80)
Weighted average number
of common shares
outstanding used in per
share calculation 45,383,394 37,881,422 41,563,771 37,813,858
SOURCE Scios, Inc.
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Related links:
http://www.sciosinc.com
CONTACT:
Wendy Carhart of Scios Inc., +1-408-616 8325,
or press, Jim Weiss of WeissComm, +1-415-203-0328, for Scios,
Inc.
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