Fourth-quarter and full year fiscal 2009 results announced by AVANIR Pharmaceuticals

AVANIR Pharmaceuticals, Inc.Nov 24 2009

AVANIR Pharmaceuticals, Inc. (NASDAQ:AVNR) today reported unaudited financial results for the three and twelve months ended September 30, 2009.

For the fourth quarter of fiscal 2009, AVANIR reported a net loss from continuing operations of $7.0 million, or $0.09 per share, compared with a net loss from continuing operations of $5.2 million, or $0.07 per share, for the same period in fiscal 2008. Net revenues from continuing operations for the fourth quarter of fiscal 2009 were $1.0 million, compared with $1.2 million for the same period in fiscal 2008. Total operating expenses from continuing operations were $7.7 million in the fourth quarter of fiscal 2009, compared with $6.7 million in the comparable fiscal 2008 period. Cash used in continuing operations during the fourth quarter of fiscal 2009 was $4.7 million, compared to $4.3 million of cash used in continuing operations in the fourth quarter of fiscal 2008.

For fiscal 2009, AVANIR reported a net loss from continuing operations of $22.0 million, or $0.28 per share, compared with a net loss of $15.9 million, or $0.27 per share, for fiscal 2008. The increase in net loss is primarily attributed to increased spending in fiscal 2009 on the confirmatory Phase III STAR clinical trial, as well as additional pre-clinical and clinical studies to enhance our complete response to the approvable letter received in 2006 for Zenvia in pseudobulbar affect (PBA). In addition, share-based compensation expense increased by $1.2 million in fiscal 2009 as compared to the prior year, of which $935,000 of expense was recorded in the fourth fiscal quarter resulting from a decrease in estimated forfeiture rates. Net revenues from continuing operations for fiscal 2009 were $4.2 million, compared with $7.0 million for fiscal 2008. Total operating expenses from continuing operations were $26.0 million in fiscal 2009, compared with $24.7 million in fiscal 2008. Cash used in continuing operations during fiscal 2009 was $20.3 million, compared to $16.5 million in fiscal 2008.

"The past year has been one of great success and accomplishment for AVANIR. I am very pleased with the progress we made by advancing our promising investigational drug Zenvia™ through Phase III development in pseudobulbar affect as well as achieving or exceeding our financial and corporate objectives," said Keith Katkin, AVANIR's President and CEO. "With the full data set in hand from the STAR double blind study as well as the open-label extension, we believe the new lower dose Zenvia formulations should address the concerns raised by the FDA in their approvable letter. We plan to submit our complete response to the FDA approvable letter early in the second calendar quarter of 2010 and expect an approval decision approximately six months later. We also expect that we have sufficient cash on hand to fund operations to mid fiscal year 2011 and believe we are well positioned for success in 2010.”

FISCAL 2009 HIGHLIGHTS AND SUBSEQUENT EVENTS:

CLINICAL PROGRAMS AND PIPELINE

Zenvia in PBA

• Completed the enrollment of PBA patients into the confirmatory Phase III STAR trial in March 2009, exceeding the Company’s targets for the number of patients enrolled and the timeline to complete enrollment.
• Fully enrolled the 12-week open-label safety extension study in July with 89.7% of the eligible patients electing to enroll in the open-label study.
• Announced in August that Zenvia met its primary efficacy endpoint in the treatment of PBA in the top-line results of the confirmatory Phase III STAR trial. Both Zenvia 30/10 mg and 20/10 mg provided a statistically significant reduction in PBA episode rates when compared to placebo and both doses were generally safe and well tolerated.
• Presented MS cohort subset data from the Phase III STAR trial at the 3^rd World Congress on Controversies in Neurology. The Zenvia 30/10 mg dose demonstrated statistically significant relief of MS-related pain in the subset of MS patients with moderate-to-severe pain.
• Presented detailed results from the Phase III STAR trial at the 134^th Annual Meeting of the American Neurological Association. The data demonstrated that Zenvia met the primary efficacy endpoint in ALS and MS patients with PBA, was statistically significant across multiple secondary endpoints and was generally safe and well tolerated.
• Announced results of the 12-week open-label extension phase of the confirmatory Phase III STAR trial where all patients received the Zenvia 30/10 mg dose.
• Completed all remaining pre-clinical studies requested by the FDA in the approvable letter.
• Announced that the Company engaged in constructive written communication with the FDA and based on the feedback will proceed with filing the full response with existing Zenvia data as planned early in the second calendar quarter of 2010.

COMPANY OPERATIONS

• Announced in June that the Company was added to the broad-market Russell 3000 Index as well as the Russell 2000 Index and the related growth and value indexes.
• Raised gross proceeds of approximately $10.8 million in August via the sale of approximately 4.6 million shares of common stock.
• Reduced cash burn from operations for fiscal 2009 to $20.3 million from the initial estimated range of $22 to $24 million.
• Received a “Notice of Allowance” from the United States Patent and Trademark Office in October announcing that it intends to grant the Company a new patent extending commercial exclusivity for Zenvia in the United States well into 2025.

BALANCE SHEET HIGHLIGHTS

As of September 30, 2009, AVANIR had cash, cash equivalents and investments in securities totaling $32.0 million, including cash and cash equivalents of $31.5 million and restricted investments in securities of approximately $468,000.