Achillion Pharmaceuticals reports net loss of $6.7M for three months ended December 31, 2009

Mar 12 2010

Achillion Pharmaceuticals, Inc. (Nasdaq:ACHN), a leader in the discovery and development of small molecule drugs to combat the most challenging infectious diseases, today reported financial results for the three and twelve months ended December 31, 2009.

For the three months ended December 31, 2009, the Company reported a net loss of $6.7 million, compared to a net loss of $8.7 million in the three months ended December 31, 2008. For the full year ended December 31, 2009, the Company's net loss was $25.9 million, compared to a net loss of $28.2 million for the year ended December 31, 2008. Cash and cash equivalents and marketable securities at December 31, 2009 were $9.7 million. The Company bolstered its cash position in January and February 2010 with $24.6 million in gross proceeds from an underwritten registered direct financing.

"Achillion made considerable progress this past year in advancing our pipeline of HCV assets, improving our strategic position in the HCV market," said Michael Kishbauch, President and CEO of Achillion. "We achieved clinical proof-of-concept with ACH-1625, demonstrating the compound's short-term safety, tolerability and an impressive viral load reduction which was sustained seven days after completion of dosing. Further, ACH-1095, a potential first-in-class NS4A antagonist, is now advancing toward an IND. Additionally, we nominated ACH-2684, a high-potency protease inhibitor from our third proprietary HCV program, as a clinical candidate. We believe Achillion is well positioned to participate in the large and important HCV market. We believe multiple compounds with distinct profiles provide Achillion with a significant advantage, as HCV is a disease in which combination therapies are anticipated to become the standard of care."

Fourth quarter results

The Company reported a net loss of $6.7 million for the three months ended December 31, 2009, compared to a net loss of $8.7 million for the three months ended December 31, 2008. Revenue for the three months ended December 31, 2009 totaled $61,000, as compared to negative revenue of $1.3 million in the three months ended December 31, 2008. In March 2009, the Company revised its estimate of the remaining performance obligations under its collaboration with Gilead Sciences to develop compounds for use in treating hepatitis C. Accordingly, Achillion adjusted its revenue to reflect the Company's revised estimate of its proportionate performance through December 31, 2008, resulting in negative revenue in the fourth quarter of 2008 and reflecting a non-cash reduction in amounts previously recognized as revenue under the collaboration. 

Research and development expenses were $4.9 million in the fourth quarter of 2009, compared to $5.6 million for the same period of 2008. Research and development expenses were primarily related to costs incurred from late stage preclinical assessment and early clinical trials of the Company's HCV compounds. 

For the three months ended December 31, 2009, general and administrative expenses totaled $1.9 million, compared to $1.6 million in the same period in 2008, primarily due to the addition of business development personnel.

Full-year results                                                                       

For the year ended December 31, 2009, the Company reported a net loss of $25.9 million, compared to a net loss of $28.2 million in 2008. Total revenues were negative $294,000 for the year ended December 31, 2009, compared to negative $234,000 for the year ended December 31, 2008. Revenues were negative due to a change in estimate of the Company's remaining performance obligations under its collaboration agreement with Gilead Sciences. 

For the year ended December 31, 2009, research and development expenses totaled $18.4 million, compared to $21.0 million in 2008. The decrease in research and development expense was primarily a result of substantial completion of clinical trials in the Company's HIV development program, offset by increased research and clinical development costs in the Company's HCV programs. 

General and administrative expenses were $6.6 million for the year ended December 31, 2009, substantially unchanged from the year ended December 31, 2008.  

2010 Financial Guidance

The Company expects that net cash used in operating activities in 2010 will be between $23 and $25 million based on current operating plans, anticipated timelines and the estimated cost of clinical trials and product development programs. The net loss per share is anticipated to range from $0.65 to $0.70 per share.