Repligen Corporation (NASDAQ:RGEN) today reported financial results for the quarter and nine-month fiscal year ended December 31, 2011. These results reflect significant accomplishments of the Company during the period, highlighted by the completion of our acquisition of Novozymes Biopharma Sweden AB on December 20, 2011 and the successful filing of the Company's first new drug application (NDA) for SecreFlo™ on December 21, 2011. These results include acquisition related expenses of $2,300,000 in the third quarter as well as a $427,000 gain on bargain purchase as the recorded fair value of the assets acquired from Novozymes Biopharma AB exceeded the total purchase price of the acquisition.
Total revenue for the nine-month fiscal year ended December 31, 2011 was $23,450,000 compared to total revenue for the nine-month period ended December 31, 2010 of $21,385,000, an increase of 9.7%. Bioprocessing product revenue for the nine-month fiscal year ended December 31, 2011 was $13,215,000, an 11.9% increase over the nine-month period ended December 31, 2010 and royalty and other revenue was $10,235,000 for the nine-month fiscal year ended December 31, 2011, a 6.9% increase over the nine-month period ended December 31, 2010. Research and development expenses were $9,462,000 for the nine-month fiscal year ended December 31, 2011 compared to $8,745,000 for the nine-month period ended December 31, 2010. Selling, general and administrative expenses were $9,050,000 for the nine-month fiscal year ended December 31, 2011 compared to $5,580,000 for the nine-month period ended December 31, 2010.
Operating expenses for the nine-month fiscal year ended December 31, 2011 were $24,557,000 compared to operating expenses of $19,672,000 for the nine-month period ended December 31, 2010. Net loss for the nine-month fiscal year ended December 31, 2011 was $1,613,000, or $0.05 per diluted share compared to net income of $1,987,000 for the nine-month period ended December 31, 2010 or $0.06 per diluted share. Cash, cash equivalents and marketable securities as of December 31, 2011 were $36,025,000 compared to $61,503,000 as of March 31, 2011. The decrease is primarily due to the Company's December 20, 2011 acquisition of Novozymes Biopharma Sweden AB for $22.1 million (€17 million) in an all cash transaction.
As previously reported, we have changed our financial reporting periods to make our fiscal year consistent with the calendar year. Historically, the Company's fiscal year-end has been March 31. This change has resulted in a nine-month fiscal year for the period ended December 31, 2011. This change has been made to allow for a more standard marketplace assessment of Repligen's business performance.
"This past year has been marked by very significant accomplishments for Repligen including doubling our product revenue through the acquisition of Novozymes Biopharm AB and filing of the Company's first New Drug Application for marketing approval of SecreFlo™ with the FDA," said Walter C. Herlihy, Ph.D., President and Chief Executive Officer of Repligen. "We are well positioned to continue to grow our Company and deliver on our goal to achieve sustainable profitability in this current fiscal year."
Total revenue for the quarter ended December 31, 2011 was $7,165,000 compared to total revenue of $7,068,000 for the quarter ended December 31, 2010. Operating expenses for the quarter ended December 31, 2011 were $8,703,000 compared to $6,771,000 for the quarter ended December 31, 2010. Net loss for the quarter ended December 31, 2011 was $2,162,000 or $0.07 per diluted share, compared to net income of $376,000 or $0.01 per diluted share, for the quarter ended December 31, 2010.
Corporate Update
Bioprocessing Business Integration and Diversification
On December 20, 2011, we completed the acquisition of Novozymes Biopharma Sweden AB, which positions Repligen as a world-leading supplier of critical products for manufacturing biologic drugs. We expect bioprocessing revenues for the combined Company to be approximately $39 to $41 million and total revenues to reach $52-$55 million for the fiscal year ending December 31, 2012. We are in the process of integrating Repligen Sweden AB personnel and operations with Repligen's U.S. operations and expect to realize overall operational efficiencies and economies in the second half of 2012 as a result of our combined efforts.
On February 27, 2012 we launched a new line of larger pre-packed, "plug-and-play" chromatography columns under our Opus™ brand that are suitable for the production of clinical trial material and niche commercial products such as orphan biologics. We estimate the total chromatography market for clinical stage biologics to be approximately $100 million.
SecreFlo™ for Pancreatic Imaging
On February 21, 2012, the U.S. Food and Drug Administration (FDA) granted our NDA for SecreFlo™ priority review. Under the Prescription Drug User Fee Act (PDUFA), the FDA's goal for completing a priority review and delivering a decision on marketing approval is reduced to six months, compared to ten months for a standard review. The FDA has assigned a PDUFA goal date of June 21, 2012 to the SecreFlo™ NDA. SecreFlo™ was previously granted Fast Track designation by the FDA and Orphan Drug status, which qualifies Repligen to receive seven years of U.S. marketing exclusivity for SecreFlo™, if approved. On March 5, 2012 we submitted a marketing authorization application (MAA) to the European Medicines Agency (EMA). The U.S. and EU marketing applications support the use of SecreFlo™ in combination with MRI to improve detection of pancreatic duct abnormalities in patients with pancreatitis. Contingent on FDA approval, we plan to employ a targeted sales force to market SecreFlo™ in the U.S. and to identify marketing partners and distributors for territories outside of the U.S. We estimate the market opportunity for SecreFlo™ in the U.S. to be approximately $100 million for the initial pancreatitis indication.
Orphan CNS Drugs
We are developing two central nervous system (CNS) therapies, RG3039 and RG2833, for Spinal Muscular Atrophy (SMA) and Friedreich's ataxia (FA), respectively. Both SMA and FA are serious and debilitating neurodegenerative diseases typically diagnosed in childhood and each is characterized by a defect in a single gene that results in diminished production of a key protein. RG3039 is currently in a Phase 1 study in healthy volunteers, with no serious adverse events reported to date. On March 15, 2012, we announced that we initiated a Phase 1 study of RG2833 in adult patients with FA. There are approximately 20,000 patients in the U.S. and Europe with SMA and 15,000 patients with FA worldwide, a combined market opportunity of greater than $1 billion. We are currently engaged in partnering discussions with companies that could accelerate the global development of our CNS programs as we focus on near-term commercial opportunities within our bioprocessing and diagnostic imaging businesses.
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