Sepracor Announces Third Quarter 2000 Financial Results
MARLBOROUGH, Mass., Oct 24, 2000 /PRNewswire via COMTEX/ -- Sepracor Inc. (Nasdaq: SEPR chart, msgs) today announced its consolidated financial results for the third quarter of 2000. For the three months ended September 30, 2000, Sepracor's consolidated revenues from continuing operations were $11.5 million, of which revenues from pharmaceutical product sales were approximately $9.6 million. The net loss was $45.2 million, or $0.62 per share. These consolidated results compare with consolidated revenues from continuing operations of $2.5 million, of which revenues from pharmaceutical product sales were approximately $1.8 million, and a net loss of $55.7 million, or $0.84 per share, for the three months ended September 30, 1999.
For the nine months ended September 30, 2000, Sepracor's consolidated revenues from continuing operations were $60.9 million, of which revenues from pharmaceutical product sales were $32.6 million, and the net loss was $130.6 million, or $1.80 per share. This compares with consolidated revenues from continuing operations of $10.2 million, and a net loss of $122.7 million, or $1.87 per share, for the nine months ended September 30, 1999.
As of September 30, 2000, Sepracor had approximately $680 million in consolidated cash, cash equivalents and marketable securities.
During the third quarter, Sepracor announced that it has begun Phase III studies for (S)-zopiclone for the treatment of insomnia. A second Phase III clinical study, which began in October, will run in parallel. (S)-Zopiclone is a single-isomer version of racemic zopiclone, a non-benzodiazepine, rapid-acting hypnotic marketed by Aventis Pharma AG under the brand names of IMOVANE(R) and AMOBAN(R). It is available in approximately 80 countries worldwide but has never been submitted for approval in the U.S.
Also during the quarter, the Company announced that it has successfully completed a 400-patient clinical efficacy trial for (S)-zopiclone for the treatment of transient insomnia. Patients treated with (S)-zopiclone successfully achieved all efficacy endpoints, including rapid onset of action and long duration of activity, resulting in patients falling asleep and staying asleep through the night. All endpoints were clinically relevant and statistically significant (p<0.05). Additionally, (S)-zopiclone was well tolerated in this study.
According to the National Sleep Foundation, sleep disorders affect approximately 84 million people in the United States. The U.S. market for prescription sleep products is approaching $1 billion and growing at a rate of 20 percent per year. Insomnia may be caused by a number of factors including stress, anxiety, environmental temperatures, change in the surrounding environment, sleep/wake schedule problems such as those due to jet lag, and medication side effects.
In addition, Sepracor has begun a large-scale Phase II study of (R)-didesmethylsibutramine ((R)-DDMS) for the treatment of depression. (R)-DDMS is a potent serotonin, norepinephrine and dopamine reuptake inhibitor. This unique triple mechanism of action may offer improvements in the treatment of disorders such as depression and attention deficit hyperactivity disorder (ADHD). The company believes that there is no single product with this triple mechanism of action approved for depression or ADHD. Physicians often prescribe various combinations of drugs to achieve a similar outcome, which demonstrates that this multiple effect has the potential for therapeutic synergy.
Also during the quarter, Aventis Pharma Ltd. acquired an approval from the Ministry of Health and Welfare in Japan for the anti-allergic agent, fexofenadine, which is marketed in the U.S. by Aventis as ALLEGRA(R) brand fexofenadine hydrochloride. The product will be manufactured and distributed by Aventis Pharma Ltd. upon expected National Health Insurance (NHI) drug price listing. Sepracor expects to receive royalties on product sales.
Additionally, Schering-Plough Corporation recently announced that the Committee on Proprietary Medicinal Products (CPMP) of the European Agency for the Evaluation of Medicinal Products (EMEA) has issued a positive opinion recommending approval of the nonsedating antihistamine, desloratadine 5 mg, as a once-daily treatment for seasonal allergic rhinitis (SAR). Upon final approval, desloratadine will be marketed within the European community primarily under the brand name AERIUS(TM). Upon issuance of patents that are pending in the European Patent Office, Sepracor will receive royalties on sales.
Sepracor has a total of nine compounds in human clinical trials. XOPENEX(R) (levalbuterol HCl) inhalation solution is in post-market clinical studies. XOPENEX is indicated for the treatment and prevention of bronchospasm in patients 12 years of age and older with reversible obstructive airway disease, such as asthma. The Company is preparing a New Drug Application (NDA) for norastemizole, its nonsedating antihistamine, which is scheduled for filing with the U.S. Food and Drug Administration in the first quarter of 2001. (S)-Zopiclone is in Phase III studies for the treatment of insomnia. Scheduled to advance into Phase III studies in 2001 are (S)-oxybutynin for the treatment of urge urinary incontinence, (R,R)-formoterol, a long-acting bronchodilator, and (R)-DDMS for depression. (R)-DDMS for ADHD, (S)-DDMS for sexual dysfunction, and (S)-doxazosin for benign prostatic hyperplasia are currently in Phase I. Additionally, the Company plans to file Investigational New Drug applications for new clinical candidates next year.
Sepracor also recently announced that Eli Lilly and Company has terminated its exclusive license agreement regarding (R)-fluoxetine. Based on a review of the available clinical data, (R)-fluoxetine, at the highest dose tested, demonstrated a small but statistically significant increase in QTc prolongation. The timetable for development of (R)-fluoxetine would delay NDA submission by at least two years. Given the extended development timetable and an assessment of the competitive environment, which includes Sepracor's Phase II compound for depression, (R)-DDMS, Sepracor has elected not to pursue the (R)-fluoxetine program at this time.
The conference call will be archived on the Sepracor website for approximately 48 hours for those who were unable to hear it live. A replay of the call will also be accessible by telephone after 11:00 a.m. EST and will be available for approximately 48 hours afterward. To replay the call, dial 800-475-6701 in the U.S. and 320-365-3844 internationally, using the access code 544392.
This news release contains forward-looking statements that involve risks and uncertainties, including statements with respect to the safety, efficacy and potential benefits of the Company's ICE Pharmaceuticals under development and royalties that the Company may receive. Among the factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: the Company's ability to successfully develop its drugs under development; the timing of filing and approval of NDAs; the results of the Company's clinical trials with respect to its products under development; continued development of the Company's products by our collaborative partners; the scope of the Company's patent protection with respect to such product candidates; the results of the Company's efforts to obtain issuance of patents on patent applications that have been licensed to third parties; the availability of sufficient funds to continue research and development efforts; and, certain other factors that may affect future operating results and are detailed in the Company's periodic reports filed with the Securities and Exchange Commission. Condensed consolidated statements of operations and consolidated balance sheets follow.
Sepracor Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(in thousands, except per share amounts)
Three months ended Nine months ended
September 30, September 30,
2000 1999 2000 1999
Revenues:
Product sales $10,179 $2,392 $33,680 $7,619
R&D, license fees,
royalties 1,304 91 27,188 2,602
Total revenues 11,483 2,483 60,868 10,221
Cost of revenue 2,534 906 10,635 2,227
Gross margin 8,949 1,577 50,233 7,994
Operating expenses:
Research and
development 34,968 34,690 105,480 77,252
Sales and marketing 18,738 15,560 54,362 30,935
General and
administrative and
patent costs 5,324 4,536 15,281 12,811
Total operating
expenses 59,030 54,786 175,123 120,998
Loss from
operations (50,081) (53,209) (124,890) (113,004)
Other income (expense):
Interest income 11,683 5,304 30,872 16,975
Interest expense (12,467) (8,276) (35,286) (24,834)
Other income
(expenses), net (A) 70 70 (7,336) 132
Equity in investee gain
(loss) (B) 4,490 -- 3,501 (2,509)
Total other income
(expense) 3,776 (2,902) (8,249) (10,236)
Net loss before
minority interests (46,305) (56,111) (133,139) (123,240)
Minority interests in
subsidiaries 1,079 362 2,568 910
Net loss from
continuing operations $(45,226) $(55,749) $(130,571) $(122,330)
Discontinued operations:
Loss from discontinued operations
(net of minority interest
in subsidiaries) (C) -- -- -- (345)
Net loss $(45,226) $(55,749) $(130,571) $(122,675)
Basic and diluted net loss per common share
from continuing
operations $(0.62) $(0.84) $(1.80) $(1.86)
Basic and diluted net loss per common share
from discontinued
operations $ -- $ -- $ -- $(0.01)
Basic and diluted net loss
per common share $(0.62) $(0.84) $(1.80) $(1.87)
Shares used in computing basic and diluted
net loss per common
share: 73,334 66,197 72,435 65,745
(A) Includes $7,497 in expenses relating to prepaid interest and fees for
the conversion of 6-1/4% debentures for the nine months ended
September 30, 2000.
(B) Represents Sepracor's portion of HemaSure Inc. losses and a gain of
$5,000 resulting from the removal of a HemaSure loan guarantee in 2000
and Sepracor's portion of HemaSure Inc. and Versicor Inc. losses in
1999.
(C) Represents discontinued operations relating to BioSphere Medical Inc.
Sepracor Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands)
September 30, December 31,
2000 1999
ASSETS
Cash and marketable securities $679,521 $335,823
Accounts receivable, net 7,780 4,485
Inventory, net 6,477 4,455
Property, plant and equipment, net 20,282 19,003
Investment in affiliates (A) 23,906 3,141
Other assets (B) 60,037 39,728
Total assets $798,003 $406,635
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Accounts payable and accrued expenses $67,658 $62,771
Other liabilities 5,016 7,905
Debt payable 1,237 1,255
Convertible subordinated debentures (C) 852,843 489,475
Minority interests in subsidiaries 7,947 934
Total stockholders' equity (deficit) (A) (136,698) (155,705)
Total liabilities and stockholders'
equity (deficit) $798,003 $406,635
(A) Includes unrealized gain of $20,848 relating to investment in
Versicor Inc. which established a determinable fair value in the
quarter through its public offering in August 2000.
(B) Includes $21,705 and $12,720 in net unamortized deferred financing
costs relating to the convertible debenture offerings and $32,399 and
$20,922 of net unamortized intangible assets in 2000 and 1999,
respectively.
(C) Balance in 2000 consists of $92,883 of 6 1/4% and $299,960 of
7% convertible debentures due 2005, and $460,000 of 5% convertible
debentures due 2007.
IMOVANE and AMOBAN are registered trademarks of Rhone-Poulenc Rorer S.A. ALLEGRA is a registered trademark of Merrell Pharmaceuticals. AERIUS is a trademark of Schering-Plough Corporation. XOPENEX is a registered trademark of Sepracor Inc.
To receive a copy of this release or recent releases via fax, call Sepracor's automated news fax line at 1-800-758-5804 ext. 780960.
Source: Sepracor Inc.
Contact:
David P. Southwell, Executive Vice President - Chief Financial
Officer, or Jonae R. Barnes, Executive Director Investor Relations, both of
Sepracor, 508-481-6700
/Company News On-Call: prnewswire.com or fax,
800-758-5804, ext. 780960
URL: sepracor.com |
