Dyax fourth quarter total revenues decrease to $8.5 million

Feb 22 2012

Dyax Corp. (NASDAQ: DYAX) today announced financial results for the fourth quarter and year ended December 31, 2011. Dyax will host a webcast and conference call at 5:00 p.m. (ET) today to review financial results and updates regarding its two key value drivers - the angioedema franchise and the Licensing and Funded Research Program (LFRP).

Highlights of 2011 include:

• KALBITOR^® fourth quarter 2011 net sales increased to $7 million, a 130% increase over fourth quarter 2010;
• KALBITOR net sales increased 160% to $22.9 million for the year, contributing to total revenues of $48.7 million for 2011;
• Patients with KALBITOR placed reached 731, up 114% from 2010;
• Patients treating with KALBITOR in 2011 quadrupled to 397 at year end;
• LFRP portfolio now includes 18 clinical candidates, of which four are in Phase 3 and four are in Phase 2 clinical development; and
• Cash, cash equivalents and investments at December 31, 2011 totaled $57.5 million.

"Building on our positive momentum from 2011, Dyax is committed to expanding our reach beyond hereditary angioedema (HAE) into the broader treatment of all forms of bradykinin-mediated angioedema," stated Gustav Christensen, President and Chief Executive Officer of Dyax. "This represents a major unmet medical need for tens of thousands of patients worldwide and we are developing a suite of products focused on these patients, including a new laboratory test and a next-generation therapeutic product. Furthermore, the LFRP continues to be a strategically important asset for Dyax and holds significant value through its broad pipeline of clinical candidates addressing large therapeutic markets."

2011 Fourth Quarter and Full Year Financial Results

Total revenues for the fourth quarter ended December 31, 2011 were $8.5 million, as compared to $9.3 million for the comparable quarter in 2010. Revenues for the year ended December 31, 2011 were $48.7 million, as compared to $51.4 million for the 2010 year.

Included in the 2011 revenues were $22.9 million of KALBITOR net sales, as compared to $8.8 million for 2010. The 2011 revenues also included $10.5 million associated with the expansion of our collaboration with Sigma-Tau. The agreement with Sigma-Tau was amended twice in 2011, including in the fourth quarter when rights to commercialize KALBITOR in several Asian territories reverted back to Dyax. This resulted in a $3.0 million reduction of revenue in the fourth quarter of 2011, which had previously been recognized in the second quarter of 2011.

The 2010 revenues included $13.8 million of development and license fee revenue associated with Dyax's agreement with Cubist Pharmaceuticals, and $11.3 million of revenue from the sale of rights to royalties and other payments related to the commercialization of Xyntha^® by our licensee Pfizer, Inc.

Quarterly and annual revenues are expected to continue to fluctuate due to the timing and amount of future milestone payments, the clinical activities of collaborators and licensees, and the timing and completion of contractual commitments.

Cost of product sales for KALBITOR for the fourth quarter of 2011 were $442,000, as compared to $258,000 for the comparable quarter in 2010. For the year ended December 31, 2011, cost of product sales were $1.2 million as compared to $505,000 for the comparable period in 2010. Costs associated with manufacturing KALBITOR drug substance, which were incurred prior to KALBITOR's approval in the United States, were expensed as research and development costs and accordingly, are not included in the cost of product sales during the 2011 and 2010 periods reported.

Research and development expenses for the fourth quarter of 2011 were $8.4 million, as compared to $7.8 million for the comparable quarter in 2010. For the year ended December 31, 2011, research and development expenses increased to $34.7 million, as compared to $31.5 million for the comparable period in 2010. The 2011 research and development expenses primarily relate to key Dyax research and development initiatives, which include the following:

• KALBITOR post-marketing requirements;
• Development of a 1mL higher strength formulation of KALBITOR;
• Clinical study for the use of ecallantide for the treatment of ACE inhibitor-induced angioedema;
• Research on Dyax's preclinical pipeline; and
• Pass-through license fees paid by Dyax licensees under the LFRP.

Selling, general and administrative expenses for the fourth quarter of 2011 increased to $10.6 million, as compared to $9.0 million for the comparable quarter in 2010. For the year ended December 31, 2011, selling, general and administrative costs increased to $37.7 million, as compared to $33.6 million for the comparable period in 2010. The higher selling, general and administrative costs in 2011 were primarily due to expanded infrastructure to support KALBITOR commercial efforts.

For the quarter ended December 31, 2011, Dyax reported a net loss of $13.5 million or $0.14 per share, as compared to a net loss of $8.9 million or $0.09 per share for the comparable quarter in 2010. For the year ended December 31, 2011, the net loss was $34.6 million or $0.35 per share, as compared to $24.5 million or $0.26 per share for the comparable period in 2010.

As of December 31, 2011, Dyax had cash, cash equivalents, and investments totaling $57.5 million, exclusive of restricted cash.

Corporate Initiatives

Dyax also announced that it has implemented a strategic alignment of its resources to focus on and grow the angioedema franchise and LFRP. This investment includes the expansion of the KALBITOR franchise, as well as other high value opportunities in the bradykinin-mediated angioedema space. These opportunities include:

• Label Expansion: Dyax is conducting a Phase 2, double-blind, placebo controlled, randomized study of ecallantide in angiotensin converting enzyme (ACE) inhibitor-induced angioedema, with the goal of providing the first therapeutic option for this ineffectively treated condition. Dyax expects results from this study in the second half of 2012.
• Development of Laboratory Test: Dyax is developing a laboratory test designed to determine whether a patient's angioedema is bradykinin-mediated in nature. The test will measure perturbations in the kallikrein-kinin pathway, thereby aiding physicians in properly identifying and providing appropriate treatment for patients with bradykinin-mediated angioedemas, including Type I, II and III HAE, ACE inhibitor-induced and idiopathic angioedema. Dyax anticipates an appropriate test format to be available by the end of 2012 with clinical validation starting in 2013.
• Development of a Next-Generation Therapy: Dyax is in pre-clinical development of a potent, specific fully human monoclonal antibody inhibitor of plasma kallikrein (pKal) which could be a candidate to prophylactically treat any bradykinin-mediated angioedema. This antibody provides the potential of a subcutaneous formulation, with a longer half-life suitable for less frequent dosing and a desirable safety profile. Dyax expects to file an Investigational New Drug (IND) application for the pKal antibody with the US Food and Drug Administration by mid- 2013.

In aligning its corporate initiatives around the angioedema franchise and LFRP, Dyax plans to out-license early stage preclinical programs that do not fall within either of these areas. In addition, Dyax is redirecting resources supporting these non-core areas and has implemented a workforce reduction of 27 employees.

Financial Guidance

Dyax's financial guidance for 2012 and beyond:

• 2012 top-line total revenue to be in the range of $50 - 54 million, including KALBITOR net sales in the range of $36 - 40 million; and
• Cash flow break-even in 2013.

This guidance excludes potential revenue and cash flow from new licenses or collaborations and ex-U.S. KALBITOR sales.