Transcept Pharmaceuticals second-quarter net loss decreases to $2.06 million

Aug 10 2010

Transcept Pharmaceuticals, Inc. (Nasdaq: TSPT), a specialty pharmaceutical company focused on the development and commercialization of proprietary products that address important therapeutic needs in the field of neuroscience, today announced financial results for the three and six months ended June 30, 2010.

"Our Intermezzo® highway driving study is underway and enrollment is proceeding on schedule. We expect to announce top-line results in the fourth quarter of 2010, and we continue to plan to resubmit the Intermezzo® NDA in the first quarter of 2011," stated Glenn A. Oclassen, Transcept President and Chief Executive Officer.

Mr. Oclassen added, "We have recently accelerated the development of TO-2061, our second internally developed pipeline program.  TO-2061 employs ultra low doses of ondansetron as adjunctive therapy in patients with obsessive compulsive disorder (OCD) who have not adequately responded to treatment with SSRIs. This project has been stimulated by the results of the two open-label pilot trials that have already been completed, and we plan to begin a double-blind placebo-controlled study in 2011."

Transcept reported cash, cash equivalents and marketable securities of $78.9 million at June 30, 2010, which we believe will be sufficient to address the activities relating to the resubmission of the Intermezzo® NDA, and to complete our planned placebo-controlled study of ondansetron.

Three months ended June 30, 2010 financial results

Transcept recorded $3.13 million of revenue for the three-month period ended June 30, 2010, related to recognition of a portion of the $25 million non-refundable license fee received from Purdue Pharmaceutical Products L.P. (Purdue) in connection with the collaboration agreement for commercialization of Intermezzo® in the United States. Transcept is recognizing the $25 million license fee over a 24-month period that commenced in August 2009. There was no revenue for the three-month period ended June 30, 2009.

Research and development expense for the quarter ended June 30, 2010 was approximately $2.41 million, compared to approximately $2.25 million for the same period in 2009. The increase is primarily attributable to expense associated with the Intermezzo® highway driving study currently underway, partially offset by payroll related savings due to the reduction in force implemented in the third and fourth quarters of 2009. Research and development expense included non-cash stock compensation expense of approximately $107,000 for the quarter ended June 30, 2010 and approximately $108,000 for the quarter ended June 30, 2009.

General and administrative expense for the quarter ended June 30, 2010 was approximately $2.77 million, compared to approximately $5.02 million for the same period in 2009.  The decrease consists primarily of reductions in legal, professional and consulting fees, as more of these functions were transitioned in-house as compared to the quarter ended June 30, 2009 following the completion of the reverse merger with Novacea on January 30, 2009. Marketing related expense also decreased as Purdue assumed, in the latter half of 2009, its marketing responsibilities for Intermezzo® in accordance with our collaboration agreement.  General and administrative expense included non-cash stock compensation expense of approximately $370,000 for the quarter ended June 30, 2010, compared to approximately $225,000 for the quarter ended June 30, 2009.

Net loss for the quarter ended June 30, 2010 was approximately $2.06 million, or $0.15 per share (basic and diluted), compared to a net loss of approximately $7.11 million, or $0.54 per share (basic and diluted), for the quarter ended June 30, 2009. The weighted average shares used to calculate basic and diluted net loss per share were 13,402,395 and 13,070,211 for the quarters ended June 30, 2010 and June 30, 2009, respectively. At June 30, 2010, there were 13,414,700 common shares outstanding and 2,546,516 common shares underlying outstanding options and warrants and outstanding common shares subject to repurchase.

Six months ended June 30, 2010 financial results

Revenue for the six months ended June 30, 2010 was $6.25 million related to recognition of a portion of the $25 million non-refundable license fee received from Purdue in connection with the signing of our collaboration agreement, compared to no revenue for the six months ended June 30, 2009.  

Research and development expense for the six months ended June 30, 2010 was approximately $4.77 million, compared to approximately $4.47 million for the same period in 2009.  The $0.30 million increase is primarily attributable to expenses associated with Intermezzo® packaging design changes, the manufacture of materials for the Intermezzo® highway driving study as well as clinical trial costs incurred to date on the study, partially offset by payroll related savings due to the reduction in force implemented in the third and fourth quarters of 2009.  Research and development expense included non-cash stock compensation expense of approximately $205,000 for the six months ended June 30, 2010 and approximately $157,000 for the six months ended June 30, 2009.  

General and administrative expense for the six months ended June 30, 2010 was approximately $5.37 million, compared to approximately $9.23 million for the same period in 2009.  The $3.86 million reduction is primarily due to reduced legal and other professional fees as we transitioned more of these functions in-house following our January 30, 2009 merger with Novacea, reduced marketing related expense as Purdue assumed, during the third quarter of 2009, its marketing responsibilities for Intermezzo® in accordance with our  collaboration agreement and a decrease in operational expenses associated with additional office space that was sublet during the second quarter of 2009.  General and administrative expense included non-cash stock compensation expense of approximately $710,000 for the six months ended June 30, 2010, compared to approximately $394,000 for the six months ended June 30, 2009.

Year-to-date merger-related transaction costs of approximately $2.22 million were expensed during the first quarter of 2009.  

Net loss for the six months ended June 30, 2010 was approximately $3.90 million, or $0.29 per share (basic and diluted), compared to a net loss of approximately $15.65 million, or $1.42 per share (basic and diluted), for the six months ended June 30, 2009.  The weighted average shares used to calculate net loss per share were 13,397,047 and 11,047,881, respectively, for the six months ended June 30, 2010 and 2009.  

Cash, cash equivalents and marketable securities totaled $78.9 million at June 30, 2010.  

Transcept Pharmaceuticals, Inc. is a specialty pharmaceutical company focused on the development and commercialization of proprietary products that address important therapeutic needs in the field of neuroscience. The most advanced Transcept product candidate is Intermezzo® (zolpidem tartrate sublingual tablet), for which a New Drug Application (NDA) was submitted to the U.S. Food and Drug Administration (FDA) in September 2008 seeking approval as a prescription sleep aid for use in the middle of the night at the time a patient awakens and has difficulty returning to sleep.

SOURCE Transcept Pharmaceuticals, Inc.