Auxilium Pharmaceuticals reports increased net revenues of $42.1 million in third quarter 2009

Oct 28 2009

Auxilium Pharmaceuticals, Inc. (NASDAQ: AUXL), a specialty biopharmaceutical company, today announced financial results and operational highlights for the quarter ended September 30, 2009. For the third quarter of 2009, Auxilium reported net revenues of $42.1 million compared to net revenues of $32.6 million in the third quarter of 2008. The net loss for the third quarter of 2009 was $(14.9) million, or $(0.35) per share, compared to a net loss of $(10.1) million, or $(0.24) per share, reported for the third quarter of 2008.

"I'm extremely proud of our accomplishments in the third quarter. We received a unanimous vote for approval of XIAFLEX™ for Dupuytren's contracture from the U.S. Food and Drug Administration's Arthritis Advisory Committee and announced publication of XIAFLEX's pivotal Dupuytren's contracture trial in the prestigious New England Journal of Medicine. Additionally, we achieved record Testim® revenues, completed an equity offering of $115.7 million and received what we believe is a positive response to our Citizen's Petition," said Armando Anido, Chief Executive Officer and President of Auxilium. "The Auxilium team has provided excellent results this quarter, and I'd like to congratulate all of our employees, each of whom contributed to our success."

Third Quarter Operational Highlights:

XIAFLEX:

-- On September 16th, the U.S. Food and Drug Administration's (FDA) Arthritis Advisory Committee voted 12-0 to unanimously recommend approval of XIAFLEX (collagenase clostridium histolyticum) for Dupuytren's contracture. -- In its September 3rd edition, The New England Journal of Medicine published data from the pivotal CORD I phase III clinical trial of XIAFLEX, which is the largest, prospective, double blind, placebo controlled clinical trial ever conducted in the field of Dupuytren's contracture. -- Key commercial and medical personnel have been added in anticipation of a potential launch approximately 60 days after approval.

TESTIM:

-- An FDA response to the Company's Citizen's Petition was received in August 2009. The FDA agreed with some of the statements made in the Citizen's Petition regarding the testing required for generic versions of Testim and disagreed with other statements. Although not commenting upon any filing in particular, the FDA did state that "the practical effect of this determination is that any application for a testosterone gel product that has different penetration enhancers than the reference listed drug cannot be submitted as an abbreviated new drug application (ANDA) and, instead, will have to be submitted as a NDA under section 505(b) of the Act." -- According to IMS Health, Inc., a pharmaceutical research firm (IMS), a total of 161,000 prescriptions for Testim were dispensed in the third quarter of 2009, a growth of 17.3% over the third quarter of 2008. -- Total prescriptions within the gel segment of the testosterone replacement therapy market in the U.S. grew 16.8% versus the third quarter of 2008, according to IMS. -- Testim ended the month of September 2009 with a 22.3% share of total prescriptions for testosterone gels in the U.S., up slightly from the 22.2% share at the end of September 2008, according to IMS.

COMPANY HIGHLIGHTS:

-- The Company was recognized as a top fifteen finalist in Deloitte's 2009 Fast 50 program for the greater Philadelphia area. -- Auxilium was named the Silver Winner in the Large Company (101-1,000 employees) category in the 2009 Best Places to Work in Philadelphia competition by The Philadelphia Business Journal.

OTHER EVENTS:

-- On September 30th, the Company completed the sale of 3.45 million shares of its common stock at a price of $34.50 per share, resulting in proceeds to the Company, net of offering expenses and underwriting discounts and commissions, of approximately $115.7 million. -- On August 5th, the Company announced that it had secured a $30 million revolving credit line from Silicon Valley Bank.

Third Quarter 2009 Financial Details

For the quarter ended September 30, 2009, Auxilium reported net revenues of $42.1 million compared to net revenues of $32.6 million in the third quarter of 2008, an increase of 29.3%. Sales of Testim in the U.S. were $40.2 million, a 25.1% increase over the $32.1 million recognized in the third quarter of 2008. There was $1.1 million of ex-U.S. partner milestone revenue recognition and shipments of Testim in the third quarter of 2009, compared to $0.5 million in the third quarter of 2008. The Company also recognized $0.9 million in revenues in the third quarter of 2009 from the amortization of upfront payments related to the out-licensing of XIAFLEX. The net loss for the third quarter of 2009 was $(14.9) million, or $(0.35) per share, compared to a net loss of $(10.1) million, or $(0.24) per share, reported for the third quarter of 2008. Net loss for the third quarter of 2009 includes total stock-based compensation expense of $4.1 million, compared to $3.2 million for the third quarter of 2008.

Gross margin on net revenues was 77.4% for the quarter ended September 30, 2009 compared to 76.0% for the comparable period in 2008. Gross margin reflects the cost of product sold and royalty obligations due to the Company's licensor on the sales of Testim, and the amortization of deferred costs associated with the XIAFLEX out-licensing. The increase in the gross margin rate is the result of the impact of year-over-year price increases on U.S. Testim revenues and the increase in amortization of upfront and milestone payments, partially offset by higher coupon usage in 2009.

Research and development spending for the quarter ended September 30, 2009 was $12.8 million, compared to $13.3 million for 2008. This reduction in overall spending was the result of a reduction in clinical development costs primarily related to the completion of XIAFLEX clinical trials that were conducted in 2008, partially offset by increases in regulatory costs for XIAFLEX and costs at our Horsham manufacturing facility.

Selling, general and administrative expenses totaled $34.7 million for the quarter ended September 30, 2009 compared with $21.9 million for the year-ago quarter. The increase was primarily due to investments in preparing for the potential U.S. launch of XIAFLEX and increases in stock-based compensation costs.

As of September 30, 2009, Auxilium had $192.3 million in cash and cash equivalents compared to $80.4 million on June 30, 2009.

SOURCE: Marion/ Grant County CVB