Clinical Data first-quarter gross revenue increases 52% to $6.2 million

Aug 9 2010

Clinical Data, Inc. (NASDAQ: CLDA) today announced operational and financial results for the first quarter ended June 30, 2010, noting key accomplishments including the acceptance of the Company's new drug application (NDA) for vilazodone by the U.S. Food and Drug Administration (FDA) and the successful completion of a public offering .

“Our performance this past quarter is in line with our expectations for managing the quarterly cash burn while continuing to advance our product pipeline”

"This is an exciting time for Clinical Data as we accelerate our commercial preparations in anticipation of the potential approval of vilazodone, our novel antidepressant," said Drew Fromkin, Clinical Data's President and Chief Executive Officer. "The additional funds we raised from our public offering will help drive aggressive commercial strategies for vilazodone and extends our current operating resources beyond the PDUFA date. In addition, enrollment continues in our Phase III trial for Stedivaze and plans to begin our second Phase III study are well underway. Our other compounds are advancing through preclinical development while we continue to evaluate opportunities to maximize the value of our assets."

First Quarter Fiscal 2011 Highlights

• Obtained FDA acceptance of  the NDA for vilazodone for the treatment of major depressive disorder with January 22, 2011 assigned as the decision date under the Prescription Drug User Fee Act (PDUFA)
• Raised approximately $30 million in net proceeds through a public offering of common stock
• Presented positive results from the Phase III and long-term safety studies of vilazodone, as well as other supportive data describing its novel mechanism of action
• Reported positive topline results of Phase I studies of Stedivaze, a potential best-in-class coronary vasodilator in Phase III clinical trials, demonstrating a good safety profile and tolerability in patients with asthma and chronic obstructive pulmonary disorder (COPD)
• Out-licensed adenosine 2A receptor agonist ATL313 to Santen Pharmaceuticals, Co., Ltd. for the development of glaucoma treatments and received a $2 million upfront payment with the potential for additional development, regulatory and commercial milestones and royalties
• Presented data confirming the value of proprietary FCGR3A gene variant in predicting rituximab response in non-Hodgkin's lymphoma at the American Society of Clinical Oncology (ASCO) annual meeting
• Launched two new FAMILION^® tests and one enhanced test for detecting inherited cardiac conditions, as well as presented FAMILION supportive data at major heart society meetings
• Increased net revenue 48% to $5.5 million, including the $2 million milestone payment from Santen, up from $3.7 million for the same period last year

"Our performance this past quarter is in line with our expectations for managing the quarterly cash burn while continuing to advance our product pipeline," added Mr. Fromkin. "These achievements are attributable to our diligence in prioritizing pipeline programs, strict allocation of company resources, and leveraging the value of our assets through partnering opportunities and expanded genetic test offerings."

Financial Results for the Three Months Ended June 30, 2010

Gross revenue for the three months ended June 30, 2010 increased 52% to $6.2 million from $4.1 million compared to the same period a year ago. This was, in part, driven by the one-time $2.0 million milestone payment from Santen. PGxHealth's FAMILION test revenue increased $276,000, or 7%, from the same period in the prior year. The increase in gross revenue was partially offset by an increase in contractual allowances of $348,000, which grew from 10% to 18% of gross genetic testing revenues when compared to the same period a year ago. The increase in contractual allowances was due to a greater number of in-network contracts and resulting in-network covered lives. In-network coverage leads to more predictable coverage for patients and generally results in lower out-of-pocket costs for patients.

Gross margins increased to 65% up from 55% for the same period last year. The year-over-year improvement in gross margins was due to the gross profit realized from the one-time milestone payment from Santen of $1.5 million. Excluding the gross profit from the one-time payment from Santen, the gross profit margins increased to 59% for the three months ended June 30, 2010, up from 55% for the comparable period last year as a result of the realization of benefits from infrastructure enhancements, growing test adoption, and disciplined management of the genetic testing business.

During the quarter, the Company announced the expansion of its FAMILION family of genetic tests for inherited cardiac disorders, launching two new tests and enhancing a third. With the addition of a test for Conduction Disease associated with Dilated Cardiomyopathy (CD-DCM) and a test for Short QT Syndrome (SQTS), Clinical Data's PGxHealth division continues to lead the industry with the most comprehensive menu of genetic tests to diagnose or confirm familial heart diseases. The Company anticipates that future revenue from genetic tests will continue to be driven by expanded offerings, greater adoption and increasing coverage from third-party payors.

Research and development expenses for the three months ended June 30, 2010 were $10.9 million, down $0.6 million when compared to the same period last year. This decrease is primarily attributable to the completion of the vilazodone clinical trials in June 2009 but was partially offset by the commercialization efforts for vilazodone in anticipation of FDA approval in early 2011, as well as the ongoing clinical trial for Stedivaze.

Sales and marketing expenses decreased $0.5 million, or 26%, to $1.5 million for the three months ended June 30, 2010, down from $2.1 million for the three months ended June 30, 2009. The decrease was largely the result of a reduction in sales force year-over-year.

General and administrative expenses remained essentially flat at $5.2 million for the three months ended June 30, 2010 compared to the same period in 2009.

Cash and cash equivalents at June 30, 2010 were $63.5 million. This includes net proceeds of $29.9 million from a public offering of 2.2 million shares of common stock at a price of $14.30 per share that was completed on June 14, 2010.