Operating expenses for the full-year period ended December 31, 2012 were $51,183,000 compared to $32,550,000 for the same period in 2011. Operating expenses for the 2012 period included an increase in cost of product revenue of $18,407,000 due to higher product sales, and an increase in selling, general and administrative expenses of $1,738,000 compared to the same period in 2011. These increases were primarily due to the expansion of our business with the acquisition of Repligen Sweden AB. Research and development expenses decreased by $2,756,000 during the twelve-month period ended December 31, 2012 compared to the same period in 2011 as a result of our decision to focus on our core bioprocessing business.
Financial Guidance for 2013
The Company is providing updated and additional guidance for fiscal year 2013. This guidance is based on expectations for our existing business and does not include the impact on our revenue and expenses of potential milestone payments from Pfizer, additional out-licensing agreements for our remaining clinical assets, potential bioprocessing acquisitions or foreign currency exchange rates. Additional details will be provided on our conference call today.
Recent Events Update
- Total revenue for the full year 2013 is expected to be $63-$65 million, including the receipt of royalties from Bristol-Myers Squibb on its U.S. sales of Orencia ® which the Company will no longer receive after December 31, 2013
- Bioprocessing product revenue for the full year 2013 is expected to be $46-$48 million, reflecting product sales growth of 10%-15%
- Net income for the full year 2013 is expected to be $18-$20 million
- We expect to end 2013 with approximately $65 million in cash and investments
On January 3, 2013, we announced an exclusive worldwide licensing agreement with Pfizer Inc. to advance Repligen's spinal muscular atrophy (SMA) program, originally in-licensed from Families of Spinal Muscular Atrophy (FSMA). Under the terms of the agreement, Repligen received an upfront payment of $5.0 million, of which $4.9 million was recognized as revenue in the fourth quarter of 2012. In addition, Repligen is entitled to receive up to $65 million in potential future milestone payments as well as royalties on any future sales of SMA compounds developed under the agreement. Under the terms of the agreement, Repligen is responsible for completing the first two cohorts of an active Phase 1 trial evaluating RG3039 in healthy volunteers, which we anticipate will occur during the first quarter of 2013. We are also providing certain technology transfer services to Pfizer who will then assume full responsibility for the SMA program. The Pfizer agreement is consistent with our strategic decision announced in August 2012 to focus Repligen's internal efforts on the growth of our bioprocessing business. We are also pursuing development and commercialization partnerships for our two remaining clinical stage assets; our pancreatic imaging program centered on RG1068 and our Friedreich's ataxia program led by RG2833.