Repligen Corporation (NASDAQ: RGEN) today reported results for the third quarter of fiscal year 2011, ended December 31, 2010. Total revenue for the quarter was $7,068,000 compared to total revenue of $5,617,000 for the third quarter of fiscal year 2010 ended December 31, 2009, an increase of $1,451,000 or 26%. Bioprocessing product revenue for the third quarter was $3,126,000 compared to $2,865,000 for the third quarter of fiscal 2010, an increase of $261,000 or 9%. Royalty and research revenue, which consisted of royalty payments from Bristol-Myers Squibb on the U.S. sales of Orencia® and research grants, was $3,942,000 compared to $2,752,000 for the same quarter in the prior year. This increase was primarily due to $733,000 in grants that Repligen received under the Qualifying Therapeutic Discovery Project Program, which was created in March 2010 as part of The Patient Protection and Affordability Care Act.
“We are pleased to continue to maintain a strong financial position while advancing our therapeutic development programs”
Operating expenses for the third quarter were $6,771,000 compared to $6,987,000 for the third quarter of fiscal year 2010. Net income for the third quarter was $376,000 or $0.01 per diluted share, compared to a net loss for the third quarter of fiscal year 2010 of $349,000 or $0.01 per diluted share. Cash, cash equivalents and marketable securities as of December 31, 2010 were $60,285,000 compared to $59,146,000 as of March 31, 2010.
"We are pleased to continue to maintain a strong financial position while advancing our therapeutic development programs," stated Walter C. Herlihy, President and Chief Executive Officer of Repligen Corporation. "In the current quarter, we look forward to reporting top-line results for not only our Phase 3 clinical trial of RG1068 for pancreatic imaging but also our Phase 2b clinical trial of RG2417 for treatment of the symptoms of depression associated with bipolar disorder."
For the nine-month period ended December 31, 2010, total revenue was $21,385,000 compared to $16,099,000 for the same period in fiscal year 2010. Operating expenses for the nine-month period ended December 31, 2010 were $19,672,000 compared to $20,103,000 for the same period in fiscal year 2010. Net income for the nine-month period ended December 31, 2010 was $1,987,000 or $0.06 per diluted share compared to a net loss of $2,435,000 or $0.08 per diluted share for the same period in fiscal year 2010.
Corporate Update
RG1068 for Imaging of the Pancreas
We are currently analyzing the radiographic images from our Phase 3 study of RG1068, synthetic human secretin. The goal of the study is to evaluate the sensitivity and specificity of RG1068 in combination with MRI to improve the detection of structural abnormalities of the pancreatic ducts relative to MRI alone. Detailed visual assessment of the pancreatic ducts is important in the evaluation of pancreatic duct abnormalities, which may result in the diagnosis of diseases such as acute or chronic pancreatitis. RG1068-MRI elucidates both normal and abnormal anatomy, which may improve patient triage and pre-surgical planning and aid in avoiding unnecessary procedures such as endoscopy which is associated with serious adverse events. Data from our Phase 3 study indicates that the use of RG1068-MRI to avoid unnecessary endoscopy would potentially result in saving an average of one day of hospitalization per patient.
The analysis of the Phase 3 image data is a "re-read" which was agreed to by the Food and Drug Administration and European Medicines Agency based on the determination that the original analysis was flawed and therefore inconclusive due to deficiencies in performance by the contract research organization overseeing the analysis. We have selected a new contract research organization for the re-read. We expect to report top-line results of this study this quarter which, if positive, may support product registration. There are more than 300,000 MRIs conducted in the U.S. and Europe each year that could benefit from RG1068.
RG2417 for Bipolar Disorder
We have completed patient treatment in our Phase 2b clinical trial of RG2417, an oral formulation of uridine, in patients with bipolar depression. The primary objective of the Phase 2b study is to assess the efficacy of RG2417 on the symptoms of bipolar depression by demonstrating a greater improvement in the Montgomery-Asberg Depression Rating Scale (MADRS) score of the patients receiving RG2417 when compared to placebo over an 8-week treatment period. MADRS is a standardized, rater-administered scale, which has been used for numerous drug trials in bipolar disorder. In addition, the study will assess the safety and tolerability of RG2417 in patients with bipolar depression including lack of induction of mania as measured by the Young's Mania Rating Scale. Secondary objectives include improvements in the Clinical Global Impression scale, the patients' self-assessment of their symptoms, subset analysis of patients based on prior episodes of depression and mania, responder rates and remission rates. We expect to report top-line results of this study this quarter.
Bipolar disorder is a chronic illness associated with substantial morbidity and mortality, ranking worldwide behind unipolar depression and alcohol abuse among psychiatric illnesses for related disabilities and overall economic burden of illness. The lifetime financial burden of bipolar disorder in the U.S. is about $600,000 per patient, depending on resistance to treatment and persistence of symptoms. Although several therapies are approved for the treatment of bipolar disorder, many individuals are unable to tolerate the treatment-related side effects, and incomplete clinical response, relapse and recurrence remain common clinical problems. There are more than five million adults worldwide with bipolar disorder, which remains an area of high unmet medical need.
HDAC Inhibitors
In January, we announced that we have entered into an exclusive license agreement with the University of California, Irvine (UCI) for a patent application covering the use of histone deacetylase 3 (HDAC3) inhibitors for the treatment of disorders involving preservation or extinction of memory including Alzheimer's disease, memory impairment and post-traumatic stress disorder. The patent application is based on work conducted at UCI by Dr. Marcelo A. Wood, which demonstrates that one of Repligen's HDAC3 inhibitors improves both the acquisition and persistence of long-term memory in an animal model. Under the terms of the license agreement, UCI will receive an upfront payment, development milestones and royalties upon successful commercialization of an HDAC3 inhibitor for certain memory disorders. Upon issue, the patent will remain in force until 2031 prior to any regulatory extensions. We intend to continue to investigate the potential of our selective HDAC3 inhibitors in a variety of disease models and as a treatment for Friedreich's ataxia.
RG3039 for Spinal Muscular Atrophy
Spinal Muscular Atrophy is an inherited neurodegenerative disease in which a defect in the SMN1 ("survival motor neuron") gene results in low levels of the protein SMN and leads to progressive damage to motor neurons, loss of muscle function and, in many patients, early death. Patients lacking a functional SMN1 gene survive only because humans carry a second gene, known as SMN2 which produces low levels of SMN protein. RG3039, our lead compound, is an inhibitor of an RNA processing enzyme which targets SMN2 and has been shown to increase production of SMN protein in cells derived from patients and to improve mobility and lifespan in a preclinical model of SMA. We are currently conducting preclinical GLP toxicology studies with RG3039 to assess its suitability for human testing. SMA is diagnosed in approximately one in every 6,000 births in the U.S. and Europe where the estimated prevalence is approximately 20,000 patients.
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