POZEN announces revenue of $1.4 million for first quarter 2013

May 8 2013

POZEN Inc. (NASDAQ: POZN), a pharmaceutical company committed to transforming medicine that transforms lives, today announced results for the first quarter ended March 31, 2013.

Recent Corporate Highlights

• POZEN announced the submission of a New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA) for the marketing approval of PA32540/PA8140. Both products are coordinated-delivery tablets combining immediate-release omeprazole (40 mg), a proton pump inhibitor (PPI), layered around a pH-sensitive coating of an aspirin core. Pending regulatory approval, an indication is sought for the use of PA tablets for the secondary prevention of cardiovascular disease in patients at risk for aspirin-induced gastric ulcers.
• In early March, POZEN announced that the Opposition Division of the European Patent Office had maintained the granted European patent, EP1411900, entitled Pharmaceutical Compositions for the Coordinated Delivery of NSAIDs, which covers VIMOVO^® (naproxen / esomeprazole magnesium) delayed-release tablets and POZEN's PA product candidates. The patent claims maintained in the opposition proceedings relate to combinations of PPIs and non-steroidal anti-inflammatory drugs (NSAIDs).
• On April 5, POZEN announced that the results of a company-sponsored study entitled The Burden of Secondary Cardiovascular Disease in Commercial and Medicare Patients: A Managed Care Perspective, were presented by Ryan S. Clark, Pharm.D., MBA, Health Outcomes and Managed Markets Fellow, Global Health Economics & Outcomes Research at Xcenda, at the Academy of Managed Care Pharmacy's 25th Annual Meeting and Expo. The study demonstrated that the prevention of cardiovascular events with aspirin plus a PPI, compared to aspirin alone, is associated with a net per-patient per-year cost decrease of $103 and $145, and a potential overall cost decrease of $1.8 million and $11.0 million for a typical one million-member Commercial and Medicare Plan, respectively.
• Partnership discussions for PA continue to progress. While there can be no assurances, the Company continues to expect to close a partnership deal in 2013.
• On April 18, 2013, POZEN hosted an Analyst and Investor Event, featuring presentations by Dr. David Whellan, from Thomas Jefferson University, who discussed the use of aspirin in treatment of cardiovascular disease and clinical study results relating to PA32540; Diane Giaquinta, Pharm.D. and FAMCP, who provided an overview of the likely reimbursement landscape if PA is approved and enters the U.S. market; and POZEN's Executive Vice President and Chief Commercial Officer, Liz Cermak, who provided a review of the PA commercialization strategy. A webcast replay and presentation slides from the event can be accessed at www.pozen.com.
• Q1 2013 global net sales of VIMOVO by AstraZeneca, as defined under our agreement, were $19.7 million, up 7% from Q4 2012 and 24% vs. Q1 2012. POZEN earned a royalty of $1.4 million in Q1 2013, a 10% increase over Q1 2012. On May 3, 2013, AstraZeneca informed POZEN that it will focus its future promotional efforts for VIMOVO in specific markets where AstraZeneca feels sufficient future potential can be realized. By the end of third quarter of this year, AstraZeneca will continue to make available, but plans to cease promotion of VIMOVO in certain countries, including the U.S. and in Europe, with the exception of Spain and Portugal, due to existing contractual arrangements with third parties. For the remaining countries where VIMOVO is on the market, which accounted for 47% of sales in Q1, promotion will continue. Decisions to launch in new countries will be made by AstraZeneca on a case-by-case basis. We are unsure, at this point, of the impact on our future revenue from this change in strategy, however, we will update investors when we have greater clarity.

First Quarter Results

For the first quarter of 2013, POZEN reported revenue of $1.4 million compared to total revenue of $1.3 million for the first quarter of 2012, revenue for both quarters was royalty for sales of VIMOVO.

Operating expenses for the first quarter of 2013 totaled $7.2 million, as compared to $9.8 million for the comparable period in 2012. The decrease in operating expenses in the first quarter of 2013 was primarily a result of lower pre-commercialization costs for PA. The NDA filing fee for PA32540/PA8140, of approximately $2.0 million, was paid and expensed as research and development costs in March 2013.

The Company reported a net loss of ($5.8) million, or ($0.19) loss per share for the first quarter of 2013, compared to a net loss of ($8.4) million, or ($0.28) per share, for the first quarter of 2012.

Balance Sheet

At March 31, 2013, cash and cash equivalents totaled $80.2 million.

2013 Strategic Focus

The Company's areas of strategic focus for 2013 are: securing a commercial partnership(s) for its PA products, completing the PA regulatory submission(s) in the U.S. and potentially one or more other regions of the world, and controlling expenses. The Company is estimating a net cash burn of less than $22 million in 2013, excluding proceeds from any PA deals.