Repligen Corporation (NASDAQ: RGEN) today announced preliminary financial results for fiscal year 2011 which ended March 31, 2011. Total revenue for the year is expected to be $27.3 million compared to $21.0 million in the prior fiscal year, an increase of 30%. Bioprocessing product revenue is anticipated to be $15.0 million, a 45% increase over the prior year and royalty and other revenue is anticipated to be about $12.3 million, an increase of 16% from the prior year. Research and development expenses are expected to be between $12.5-$13.0 million, compared to $14.2 million last fiscal year. Selling, general and administrative expenses are expected to be between $8.0-$8.5 million, compared to $7.1 million in fiscal year 2010. Net income for the year is expected to be between $0.0-$0.5 million and cash and investments as of March 31, 2011 are expected to be $61.5 million.
“Our strong financial position will enable us to aggressively pursue marketing approvals for RG1068 worldwide, advance our two orphan disease programs to the clinic and also selectively pursue the acquisition of additional assets to strengthen our bioprocesssing and therapeutic businesses.”
For fiscal year 2012, which started on April 1, 2011 and will end on March 31, 2012, we currently expect total revenue to be $28-$30 million. Research and development expenses are currently expected to be approximately $13.5-$14.5 million including anticipated expenses associated with regulatory filings and clinical studies to support additional indications for RG1068, advancement of our candidates for Friedreich's ataxia and spinal muscular atrophy into clinical trials and increased development activities to support expansion of our bioprocessing business. Selling, general and administrative expenses are currently expected to be approximately $10.5-$11.5 million, and include increased bioprocessing sales activities as well as pre-launch activities for RG1068, our product candidate for pancreatic imaging. The net loss for fiscal year 2012 is expected to be approximately $5 million with a cash burn of less than $4 million. This forecast does not include expenses or revenues associated with the potential acquisition of additional bioprocessing or radiology products, in-licensing or out-licensing of a therapeutic product candidate or potential revenue from partnering RG1068 outside of the U.S.
"Our strong financial position will enable us to aggressively pursue marketing approvals for RG1068 worldwide, advance our two orphan disease programs to the clinic and also selectively pursue the acquisition of additional assets to strengthen our bioprocesssing and therapeutic businesses." stated Walter C. Herlihy, President and Chief Executive Officer of Repligen Corporation.
Fiscal Year 2012 Program Goals
RG1068 for MRI Imaging of the Pancreas
In March we announced positive results from a Phase 3 study to evaluate the safety and efficacy of RG1068, synthetic human secretin, to improve magnetic resonance imaging (MRI) of the pancreas in patients with pancreatic disease using endoscopy (ERCP) as a diagnostic reference. In this study, three independent radiologists achieved a clinically and statistically significant improvement in sensitivity (all radiologists p<0.0001) with minimal loss in specificity. In addition, the RG1068-MRI images showed highly significant improvements on image quality and confidence in the diagnostic findings when compared to MRI alone. We plan to meet with the FDA later this quarter to review these results and to discuss our plans to file a NDA. Pending FDA agreement, we plan to file the NDA next quarter. FDA has granted RG1068 a "Fast Track" designation and we will seek priority review of our filing. In addition, we plan to file a New Drug Submission in Canada and a Marketing Authorization Application in Europe later this year. We also expect to build a lean commercial infrastructure to support the launch of RG1068 in the U.S. and to establish one or more partnerships for commercialization of RG1068 outside the U.S.
We believe that there may be additional uses for RG1068 and we intend to evaluate whether RG1068 has the potential to improve the detection of pancreatic cancer. Early detection of pancreatic cancer may increase the potential to treat the patient with surgery and improve patient outcomes. We will also seek to acquire products that are complementary to RG1068, which we may be able to sell to gastroenterologists and radiologists.
RG2417 for Bipolar Depression
In March we announced results from a Phase 2b study in RG2417 for bipolar depression. The study did not demonstrate, over the eight-week treatment period, a statistically significant improvement vs. placebo in treating the symptoms of depression. Although there were differences observed between the patients treated in academic and commercial sites, we do not plan, at this time, to invest additional resources in RG2417.
RG2833 for Friedreich's Ataxia
We are currently developing histone deacetylase class 1 inhibitors for the treatment of inherited neurodegenerative diseases such as Friedreich's ataxia. Friedreich's ataxia is caused by inadequate production of the protein frataxin which leads to degeneration of the nerves controlling muscle movements. Pending regulatory approval, we plan to initiate a single, ascending dose Phase 1 study of RG2833 in Friedreich's ataxia patients in Europe later this year. We have developed methods to measure changes in frataxin levels in patient cells for use in our clinical trial which may enable us to gain an early insight into the potential benefit of treating patients with RG2833. There are approximately 15,000 people worldwide diagnosed with Friedreich's ataxia.
RG3039 for Spinal Muscular Atrophy
Spinal Muscular Atrophy (SMA) 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. RG3039, our lead compound, is an inhibitor of an RNA processing enzyme which has been shown to improve survival in a preclinical model of SMA. We plan to file an IND for RG3039 this quarter and, pending FDA approval, initiate a Phase 1 study of RG3039 in healthy volunteers. This program was licensed in 2009 from Families of Spinal Muscular Atrophy. There are approximately 20,000 people in the U.S. and Europe diagnosed with SMA.
Expanding and Diversifying the Bioprocessing Business
For more than ten years, we have been a leading supplier to the biopharmaceutical industry of Protein A products used in the manufacturing of therapeutic monoclonal antibodies. We recently introduced a second product line under the tradename Opus™ which is based on a technology for the production of pre-packed, "plug and play" chromatography columns for the purification of biopharmaceuticals and vaccines. This patented technology enables reliable production of pre-packed chromatography columns in a format that is ready for use in manufacturing. Opus™ columns have the potential to improve manufacturing efficiencies by reducing time for column packing, set-up and cleaning. We plan to invest in the expansion of this product line this year based on specific customer feedback. We will also seek to acquire, license or distribute additional bioprocessing products which we can sell directly to end-users.
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