Published: August 02, 2005
Barrier Therapeutics Announces Second Quarter 2005 Financial Results
Barrier Therapeutics, Inc. (NASDAQ: BTRX), a
pharmaceutical company developing and commercializing products in the field
of dermatology, today announced its financial results for the second
quarter ended June 30, 2005. Net loss for the quarter was $10.8 million
which represents a loss of $ .45 per share.
"The second quarter of 2005 has been a challenging one for Barrier,"
commented Geert Cauwenbergh, Ph.D., Chairman and Chief Executive Officer.
"Following our receipt of a not approvable letter for Zimycan(TM) in May,
we continue constructive discussions with the FDA towards our goal of
obtaining U.S. approval for Zimycan as soon as possible. We were obviously
disappointed that the results of our Phase 3 non-inferiority trial for
Hyphanox(TM) in vaginal candidiasis failed to meet the primary endpoint of
therapeutic cure. However, we are reviewing the data from the trial and
are assessing alternative development paths for a subset of the patient
population. We continue to execute on all other aspects of our strategy
with particular emphasis on the launch of our sales organizations in the
U.S. and Canada, the NDA filing for Sebazole and the next stage of clinical
trials for Hyphanox in onychomycosis, Liarozole, Rambazole(TM) and
Azoline."
Second Quarter Financial Results
Total revenue for the quarter was $472,000 as compared to $179,000 for the
same period in 2004. Included in this total is $95,000 of net product
revenue from the U.S. and Canadian sales of Solage®, which was acquired
in February 2005. Product revenues declined compared to the previous
quarter as distributors reduced their inventory of Galderma labeled
inventory in anticipation of the first shipments of Barrier labeled
product, which are expected in the third quarter. Additional revenue
represents income from a research grant from the Belgian government and
revenue related to contract payments. Revenue in the second quarter of
last year consisted only of revenue from the Company's research grant.
Total cost of goods sold for the quarter was $103,000. This amount
includes cost of finished goods and distribution expenses totaling $15,000,
as well as amortization expense related to the product rights for Solage®
of $88,000.
Research and development expenses for the three months ended June 30, 2005
totaled $7.3 million, as compared to $6.6 million for the same period in
2004. Aggregate spending related to the Company's four late stage product
candidates, Zimycan, Sebazole(TM), Hyphanox and Liarozole, totaled $2.8
million this quarter, as compared to approximately $3.1 million for the
same period in 2004. Increases related to the manufacturing of clinical
supplies for Liarozole as well as costs related to the completion of the
Phase 3 study with Hyphanox in vaginal candidiasis were more than offset by
a decline in costs related to Zimycan and Sebazole. During the quarter,
development expenses of $1.8 million were incurred for our earlier stage
clinical product candidates, which include Rambazole, Azoline, Hivenyl(TM),
and Atopik, as compared to $757,000 in the same period of 2004.
Manufacturing and preclinical testing costs for Rambazole accounted for
most of the increase. Internal research and development expenses,
primarily personnel and related costs, were $2.4 million during the
quarter, as compared to $2.1 million in the corresponding period in 2004.
Sales and marketing expenses for the quarter were $2.3 million, consisting
primarily of personnel costs, including the initial sales force expenses,
as well as marketing and market research expenses related to Solage® and
the now delayed launch of Zimycan. Total sales and marketing expenses of
$897,000 were incurred during the second quarter of 2004.
General and administrative expenses increased from $1.8 million in the
second quarter of 2004 to $2.4 million in the quarter ended June 30, 2005.
Professional fees and other public company related expenses account for
most of the increase. As a result of higher average cash balances and
higher interest rates, net interest income for the second quarter of 2005
increased to $745,000 from $312,000 in the second quarter of 2004.
Net loss for the second quarter of 2005 was $10.8 million, as compared to a
net loss of $8.8 million for the second quarter of 2004. The net loss
attributable to common stockholders was $10.8 million, or $0.45 loss per
share, for the second quarter of 2005, as compared to $9.9 million, or
$0.66 loss per share, for second quarter of 2004, which includes preferred
stock accretion of $1.2 million in 2004. On a pro forma basis for the
second quarter of 2004, giving effect to the conversion of Barrier's
outstanding shares of redeemable convertible preferred stock into common
stock as if each had occurred when the preferred stock was issued, pro
forma net loss attributable to common stockholders was $0.50 loss per
share.
At June 30, 2005, the Company had $100.1 million in cash, cash equivalents
and marketable securities, as compared to $89.1 million as of December 31,
2004.
Second Quarter 2005 and Recent Operational Highlights:
-- Acquisition of the Canadian rights to distribute VANIQA®
(eflornithine hydrochloride) Cream 13.9% from Shire Pharmaceutical
Contracts Limited. VANIQA® is currently the only prescription product
approved by Health Canada for slowing the growth of unwanted facial hair in
women.
-- Official launch of the Barrier U.S. sales organization consisting of
21 sales associates being led by three Region Managers. The sales force,
consisting of 7 Barrier employees and 14 Ventiv employees, is currently
marketing Solage® to dermatologists across the United States. In
addition, 2 sales associates have been added to our Canadian organization.
-- Release of data from the Phase 3 non-inferiority trial with Hyphanox,
an oral antifungal agent. Hyphanox failed to reach the primary endpoint of
therapeutic cure in the treatment of vaginal candidiasis, commonly known as
a vaginal yeast infection. The trial was designed to demonstrate that a
single dose of Hyphanox, a novel patented formulation of the antifungal
itraconazole, is not inferior to a single dose of fluconazole. The study
did reach the secondary end point of "clinical efficacy," and based on
this, the Company has triggered the 90-day assessment period for Janssen
Pharmaceutica to exercise their pre-negotiated option for this product.
-- Announcement that the U.S. Food & Drug Administration (FDA) issued a
not approvable letter dated May 24, 2005 for the NDA for Zimycan (0.25%
miconazole nitrate, 15% zinc oxide, and 81.35% white petrolatum ointment)
for the treatment of diaper dermatitis complicated by candidiasis. The FDA
action is based on a single deficiency - insufficient information to
characterize the systemic exposure to miconazole in infants. The Company
is currently in discussions with the FDA concerning paths to address the
deficiency cited in the regulatory action.
-- Completion of the six month treatment period for over 400 patients in
the long term safety study for Sebazole in the treatment of seborrheic
dermatitis. This data will be included in the NDA filing which is expected
prior to the end of September 2005.
-- Appointment of Ms. Carol Raphael to the board of directors, effective
August 1, 2005. Ms. Raphael replaced Andrew N. Schiff, M.D., Managing
Director, Perseus-Soros Management, LLC, who served as a director of
Barrier Therapeutics since May 2002. Ms. Raphael currently serves as the
President and Chief Executive Officer of the Visiting Nurse Service of New
York, the largest nonprofit home health care organization in the U.S.
Conference Call & Webcast Information
Barrier's senior management will host a conference call tomorrow,
Wednesday, August 3, 2005 at 8:30 a.m. New York time, to review 2005 second
quarter financial results and provide a Company update. Live audio of the
conference call will be available to investors, members of the news media
and the general public by dialing 1-800-821-1449 (in the United States) or
1-973-409-9261 (internationally). A playback of the call will be available
by dialing 1-877-519-4471 (in the United States), or 1-973-341-3080
(internationally) and entering passcode 6315416. To access the call by
live webcast, please visit the Investor Relations section of our website at
http://www.barriertherapeutics.com. An archived version of the webcast
will also be available at the same location.
About Barrier Therapeutics, Inc.
Barrier Therapeutics, Inc. is a pharmaceutical company focused on the
discovery, development and commercialization of pharmaceutical products in
the field of dermatology. The Company currently markets Solage®
(mequinol 2%, tretinoin 0.01%) Topical Solution in the U.S. and Canada for
the treatment of solar lentigines, a common condition also known as "age
spots," and recently obtained the Canadian distribution rights for
Vaniqa® (eflornithine hydrochloride) Cream 13.9% for slowing the growth
of unwanted facial hair in women. Barrier has eight product candidates in
various stages of clinical development. The four most advanced product
candidates include one for the treatment of diaper dermatitis complicated
by candidiasis, which is under FDA review, and three products, which are in
or entering Phase 3 clinical trials for the treatment of seborrheic
dermatitis, onychomycosis, and congenital ichthyosis. Barrier has product
candidates in earlier stages of clinical development for the treatment of
acne, psoriasis and fungal infections. The Company is headquartered in
Princeton, New Jersey and has wholly owned subsidiaries in Geel, Belgium
and Ontario, Canada. Web site: http://www.barriertherapeutics.com.
Safe Harbor Statement
In addition to historical facts or statements of current condition, this
press release contains forward-looking statements within the meaning of the
"Safe Harbor" provisions of The Private Securities Litigation Reform Act of
1995, including statements regarding the timing of regulatory action for
Zimycan, the timing of shipping Barrier labeled Solage® inventory and the
timing for making regulatory filings for Sebazole. Forward-looking
statements provide Barrier's current expectations or forecasts of future
events. Barrier's performance and financial results could differ
materially from those reflected in these forward-looking statements due to
the decisions of regulatory authorities, our ability to execute our
clinical and commercial strategy, the results of our clinical trials,
general financial, economic, regulatory and political conditions affecting
the biotechnology and pharmaceutical industries generally, and due to
Barrier's further analysis of clinical results and strategic decisions
regarding its pipeline. For a discussion of these and other risks and
uncertainties that may effect the forward-looking statements please see the
risk factors in our Quarterly Report on Form 10Q, which is on file with the
Securities and Exchange Commission. Given these risks and uncertainties,
any or all of these forward-looking statements may prove to be incorrect.
Barrier undertakes no obligation to update publicly any forward-looking
statement.
Barrier Therapeutics, Inc.
Condensed Consolidated Statements of Operations
(All amounts in thousands, except share and per share amounts)
(unaudited)
Three months ended June 30, Six months ended June 30,
2005 2004 2005 2004
Revenues:
Net product revenue $ 95 $ - $ 305 $ -
Contract revenue 151 371
Grant revenue 226 179 449 359
----------- ----------- ----------- -----------
Total Revenues 472 179 1,125 359
Costs and expenses:
Cost of goods sold 103 185
Research and
development 7,306 6,564 16,791 12,094
Sales and marketing 2,259 897 4,041 1,641
General and
administrative 2,358 1,786 4,411 3,381
----------- ----------- ----------- -----------
Total costs and
expenses 12,026 9,247 25,428 17,116
----------- ----------- ----------- -----------
Loss from operations (11,554) (9,068) (24,303) (16,757)
Interest income, net 745 312 1,337 477
----------- ----------- ----------- -----------
Net loss (10,809) (8,756) (22,966) (16,280)
Preferred stock
accretion - (1,174) - (4,592)
----------- ----------- ----------- -----------
Net loss attributable
to common stockholders $ (10,809) $ (9,930) $ (22,966) $ (20,872)
=========== =========== =========== ===========
Basic and diluted net
loss attributable to
common stockholders
per share $ (0.45) $ (0.66) $ (0.98) $ (2.69)
Weighted average
shares outstanding
- basic and diluted 23,839,701 15,043,544 23,323,399 7,763,643
Pro forma basic and
diluted net loss
attributable to
common stockholders
per share $ (0.45) $ (0.50) $ (0.98) $ (1.15)
Pro forma weighted
average shares
outstanding —
basic and diluted 23,839,701 19,954,589 23,323,399 18,199,615
Certain amounts have been reclassified to conform to the current period
presentation.
The pro forma net loss per share attributable to common stockholders gives
effect to the conversion of Barrier's outstanding shares of redeemable
convertible preferred stock into common stock as if each occurred when the
preferred stock was issued.
Barrier Therapeutics, Inc.
Balance Sheet Data
(in thousands)
June 30, December 31,
2005 2004
(unaudited)
Cash and cash equivalents $ 25,216 $ 11,908
Marketable securities $ 74,895 $ 77,174
Total assets $106,834 $ 92,784
Current liabilities $ 8,223 $ 8,771
Total liabilities and
stockholders equity $106,834 $ 92,784
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