POZEN reports net loss of $6.9M for year ended December 31, 2009

Mar 3 2010

POZEN Inc. (NASDAQ:POZN), today announced results for the fourth quarter and year ended December 31, 2009.

Fourth Quarter Results

POZEN reported a net loss of $(5.8) million, or $(0.19) per share on a diluted basis, for the fourth quarter of 2009, compared to net loss of $(4.1) million, or $(0.14) per share on a diluted basis, for the fourth quarter of 2008.

For the fourth quarter of 2009, POZEN reported revenue of $4.2 million resulting from the amortization of upfront payments received pursuant to the collaboration agreement with AstraZeneca of $3.1 million and royalty on sales of Treximet^® (sumatriptan and naproxen sodium) of $1.1 million. Revenue for the fourth quarter ended December 31, 2008 totaled $14.0 million, resulting from the amortization of upfront payments received pursuant to the collaboration agreements of $4.1 million, $8.8 million of revenue for development work, and $1.1 million of royalty on sales of Treximet.

Operating expenses for the fourth quarter of 2009 totaled $10.7 million as compared to $18.5 million for the comparable period in 2008. The decrease in operating expenses was primarily due to a decrease in costs associated with the development program for VIMOVO™ (enteric-coated naproxen/immediate release esomeprazole magnesium).

Due to recently enacted legislation, the Company plans to file an income tax carryback claim for alternative minimum tax expense incurred during 2007. Therefore, POZEN recorded a $0.6 million tax benefit in the fourth quarter of 2009.

At December 31, 2009, cash, cash equivalents and short-term investments totaled $46.7 million compared to $61.7 million at December 31, 2008.

Year End Results

POZEN reported a net loss of $(6.9) million, or $(0.23) per share on a diluted basis, for the year ended December 31, 2009, compared to a net loss of $(6.0) million, or $(0.20) per share on a diluted basis, for the same period in 2008.

For the year ended December 31, 2009, POZEN reported revenue of $32.2 million compared to $66.1 million for the same period in 2008. The decrease in revenue was primarily due to $23.4 million less development revenue in 2009 and $10.0 million less in milestone payments in 2009.

Operating expenses for the year ended December 31, 2009 were $40.2 million as compared to $74.2 million for the same period in 2008. The decrease in operating expenses was primarily due to a decrease in costs for the development program for VIMOVO. Non-cash stock-based compensation expense was $5.1 million in 2009 versus $6.0 million in 2008. Patent litigation expenses totaled $4.8 million in 2009 and $0.3 million in 2008.

Corporate Highlights

Corporate Strategy

POZEN continues on the path of commercialization of its pipeline assets. The Company hosted its first analyst/investor day at NASDAQ headquarters on December 8, 2009. The meeting featured presentations from independent medical experts as well as POZEN executive leadership and highlighted the PA franchise, along with the new commercialization strategy. POZEN is committed to delivering high-quality, evidence-based and affordable products to customers.

Treximet^®

Net sales of Treximet^® totaled $86.1 million for GlaxoSmithKline in 2009, generating royalty revenue of $4.3 million for POZEN. The royalty rate for Treximet increased to 18% starting January 2010. POZEN retains ex–U.S. rights to develop and market other triptan and NSAID combinations and plans to seek global commercial partners.

VIMOVO™, formerly PN 400

The NDA for VIMOVO™ was submitted on June 30, 2009 and is under review by the U.S. Food and Drug Administration (FDA). We expect a response from the FDA in second quarter 2010. Pursuant to the collaboration agreement, POZEN received a $10.0 million milestone payment from AstraZeneca in September 2009. Results from the pivotal trials for VIMOVO were presented at the American College of Rheumatology Scientific Session in Philadelphia on October 19, 2009. AstraZeneca submitted a Marketing Authorization Application (MAA) to the European Union via the Decentralized Procedure for VIMOVO in October 2009.

PA Program

POZEN is creating a safer form of aspirin franchise of product candidates – the PA product platform. The first candidate, PA32540, is a coordinated-delivery tablet combining immediate-release omeprazole, a PPI, layered around pH-sensitive aspirin. This novel, patented product is administered orally once a day and is under investigation for use for the secondary prevention of cardiovascular disease. The Company initiated the two Phase 3 pivotal trials for PA32540 in October 2009, in addition to a one year long safety study. The primary endpoint for the pivotal trials is the cumulative incidence of gastric ulcers over the six-month treatment period for PA32540 versus 325 mg of enteric-coated aspirin.

An estimated 80 million U.S. adults have some form of cardiovascular disease, and the disease remains the #1 cause of death for men and women alike. PA32540 is being developed to deliver the cardio-protective benefits of aspirin while reducing the GI toxicity. If approved, it will offer a new therapeutic option to patients with cardiovascular disease and to doctors who treat them.

The POZEN PA pipeline also includes earlier-stage work evaluating the application of aspirin combinations for pain and pain-related conditions. POZEN is advancing commercialization plans for the PA franchise within the U.S. For markets outside the U.S., the company plans to seek strong global commercial partners.

Financial Guidance

POZEN will earn a $20.0 million milestone payment upon the U.S. Food and Drug Administration (FDA) approval of VIMOVO and will start to earn royalty revenue when AstraZeneca begins commercial sales. We will look to provide financial guidance on the 2010 year when we can determine the timing of these important events.