Dyax reports Q1 2013 financial results; LFRP portfolio continues to be a growth driver

Apr 26 2013

Dyax Corp. (NASDAQ: DYAX) today announced financial results for the first quarter ended March 31, 2013. The Company will host a webcast and conference call at 5:00 p.m. (ET) today to review financial results and updates regarding its key value drivers - the KALBITOR^® (ecallantide) business, the broader angioedema portfolio and the Licensing and Funded Research Program (LFRP).

“Our Licensing and Funded Research portfolio continues to be an important growth driver for Dyax. With a number of candidates in late stage development, we expect to see multiple clinical and regulatory milestones this year.”

Highlights of the first quarter 2013 include:

• KALBITOR^® net sales were $8.6 million, an increase over first quarter 2012 sales of $8.0 million and a decline from fourth quarter 2012 sales of $11.8 million;
• Investigational New Drug (IND) filing for DX-2930 remains on track for mid-2013; and the
• LFRP product portfolio includes 13 revenue generating clinical candidates. A recent announcement from Eli Lilly stated that it has initiated a rolling Biologic License Application (BLA) for ramucirumab as monotherapy treatment in second-line gastric cancer.

"The first quarter was challenging for our KALBITOR business, with several factors affecting our sales," stated Gustav Christensen, President and Chief Executive Officer of Dyax. "These included a decrease in the number of new patients added, a decrease in the number of treatments among existing hereditary angioedema (HAE) patients and less KALBITOR purchased by our distributors for the channel. In response, we are refocusing our sales efforts and KALBITOR service and support programs to identify and better address the needs of the HAE patients who are best served by having a healthcare professional treat and monitor their HAE attacks."

Mr. Christensen added: "Our Licensing and Funded Research portfolio continues to be an important growth driver for Dyax. With a number of candidates in late stage development, we expect to see multiple clinical and regulatory milestones this year."

2013 First Quarter Financial Results

Total revenues for the first quarter ended March 31, 2013 were $12.0 million, as compared to $11.5 million for the comparable quarter in 2012. Included in the 2013 revenues were $8.6 million of KALBITOR net sales, as compared to $8.0 million for 2012.

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 first quarter of 2013 were $708,000, as compared to $538,000 for the comparable quarter in 2012. Costs incurred in manufacturing KALBITOR prior to its approval for sale in the United States were expensed as research and development costs when incurred and, accordingly, are not included in cost of product sales during the 2012 quarter. For the 2013 quarter, KALBITOR sales were comprised of a combination of product manufactured both prior to and following FDA approval. Therefore, cost of product sales during the 2013 quarter do not reflect the full KALBITOR manufacturing cost.

Research and development expenses for the first quarter of 2013 were $8.7 million, as compared to $7.9 million for the comparable quarter in 2012.

Research and development expenses primarily relate to the following initiatives: 1) KALBITOR medical support and post-marketing requirements; 2) development of a single-injection formulation of KALBITOR; 3) development costs associated with DX-2930, a fully human monoclonal antibody inhibitor of plasma kallikrein; and 4) pass-through license fees paid by Dyax licensees under the LFRP.

Selling, general and administrative expenses for the first quarter of 2013 increased to $11.1 million, as compared to $10.4 million for the comparable quarter in 2012. The higher selling, general and administrative costs in 2013 were due to $1.1 million of stock compensation expense from the modification of certain stock options.

For the quarter ended March 31, 2013, Dyax reported a net loss of $11.2 million or $0.11 per share, as compared to a net loss of $11.3 million or $0.11 per share for the comparable quarter in 2012.

As of March 31, 2013, Dyax had cash, cash equivalents, and investments totaling $22.1 million, exclusive of restricted cash.

Corporate Initiatives

Dyax has implemented a focused commercial strategy to drive its KALBITOR business. Going forward the Company's priorities will be to:

• Focus on New Patient Growth: To address new patient growth, Dyax has focused on the HAE population that is best served by KALBITOR, coupled with high-touch patient services. This includes patients who benefit from receiving treatment by a healthcare professional. The Company is optimizing its service model to best address this HAE patient group.
• Focus on High-Value, Branded Service Programs: Ensure that Dyax's first-class service and support programs are concentrated on HAE patient recruitment and KALBITOR sales. The Dyax commercial team will continue to focus on patient identification, and patient treatment and retreatment.
• Monitor the Distribution Channel: The Company will work with its distributors to assess patient demand and monitor the amount of KALBITOR supply held by distributors to better match supply with expected demand.

Financial Guidance

Dyax's revised financial guidance for 2013:

• Top-line total revenue to be in the range of $53-58 million, including
  • KALBITOR net sales in the range of $40-44 million.

Based upon its revised guidance, Dyax will not reach cash flow breakeven during the latter part of 2013. The Company expects to manage operations with a controlled level of operating cash burn that would approximate $5 million for the second half of 2013.

A replay of the conference call will be available through May 1, 2013 and may be accessed by dialing 855-859-2056. International callers should dial 404-537-3406. The replay passcode for all callers is 30306762. The webcast will be archived on the Dyax website for an indefinite period of time.