Achillion fourth quarter revenue is $2 million for three months ended December 31, 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, 2010.

For the three months ended December 31, 2010, the Company reported a net loss of $6.2 million, compared to a net loss of $6.7 million in the three months ended December 31, 2009. For the full year ended December 31, 2010, the Company's net loss was $25.5 million, compared to a net loss of $25.9 million for the year ended December 31, 2009. Cash and cash equivalents and marketable securities at December 31, 2010 were $55.2 million. 

"In many ways, this past year was a transformational one for Achillion as we advanced our pipeline of HCV assets, and thereby, significantly improved our strategic position in the HCV market," said Michael Kishbauch, President and CEO of Achillion. "We expect to have three HCV compounds in the clinic shortly, with the most advanced, ACH-1625, in phase 2, and two additional candidates, ACH-2684 and ACH-2928, in phase 1. With its current profile, including impressive viral load reduction and good safety and tolerability profile, we continue to believe that ACH-1625 has the ability to become a best-in-class protease inhibitor for HCV treatment. We look forward to being able to soon announce 4-week rapid viral response, or RVR, results from an on-going phase 2 clinical trial of ACH-1625.

"With our NS5A inhibitor, ACH-2928, as well as our high-potency, pan-genotypic HCV protease inhibitor, ACH-2684, also in our pipeline of clinical candidates, we believe Achillion is well positioned to participate in the large and important HCV market.   The opportunities we have for intra-company combinations of therapies 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 $6.2 million for the three months ended December 31, 2010, compared to a net loss of $6.7 million for the three months ended December 31, 2009. Revenue for the three months ended December 31, 2010 totaled $2 million, compared to $61,000 in the three months ended December 31, 2009. Revenue in the fourth quarter 2010 substantially consisted of grants under the Qualified Therapeutic Discovery Program, or QTDP, a federal program administered through the National Institutes of Health. 

Research and development expenses were $6.1 million in the fourth quarter of 2010, compared to $4.9 million for the same period of 2009. Research and development expenses in 2010 were primarily related to costs incurred from clinical testing of the Company's HCV protease inhibitor, ACH-1625, as well as late stage preclinical testing of the Company's HCV NS5A inhibitor, ACH-2928, and its pan-genotypic protease inhibitor, ACH-2684. 

For the three months ended December 31, 2010, general and administrative expenses totaled $2.2 million, compared to $1.9 million in the same period in 2009.

Full-year results                                                                       

For the year ended December 31, 2010, the Company reported a net loss of $25.5 million, compared to a net loss of $25.9 million in 2009. Total revenues were $2.4 million for the year ended December 31, 2010, consisting substantially of QTDP program grants, compared to negative $294,000 for the year ended December 31, 2009. Revenues were negative in 2009 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, 2010, research and development expenses totaled $20.5 million, compared to $18.4 million in 2009. The increase in research and development expense was primarily a result of increased clinical trial costs associated with ACH-1625, as well as IND-enabling preclinical testing costs associated with ACH-2928 and ACH-2684.   

General and administrative expenses were $7.2 million for the year ended December 31, 2010, compared to $6.6 million incurred in the year ended December 31, 2009, the increase resulting from higher business development and professional services fees.    

2011 Financial Guidance

The Company expects that research and development expenses during 2011 will be between $30 and $33 million and that net cash used in operating activities in 2011 will approximate $35 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.