Repligen Corporation (NASDAQ: RGEN) today reported financial results for its second quarter and year-to-date period ended June 30, 2012. In addition, the Company announced that it will focus its corporate strategy and resources on the growth of its core bioprocessing business, which achieved record sales during the quarter. As a result of this defined strategic focus, the Company will seek a development and commercialization partner for its pancreatic imaging product candidate, RG1068. The Company reported total revenue for the three-month period ended June 30, 2012 of $15,524,000 compared to $7,654,000 for the same period in 2011. Revenue growth for the second quarter of 2012 was driven by the Company’s expanded bioprocessing business, which generated $11,659,000 in product revenue compared to $4,358,000 for the same period in 2011, an increase of 168%. Royalty and research revenue for the three-month period ended June 30, 2012, consisting primarily of royalty payments from Bristol-Myers Squibb on its U.S. sales of Orencia ®, was $3,865,000 compared to $3,295,000 for the same period in 2011. June 30, 2012 marks the end of the second fiscal quarter for which the Company is reporting consolidated financial results since its acquisition of Novozymes Biopharma Sweden AB (now Repligen Sweden AB) in December 2011. “Our strong second quarter and year-to-date financial performance was highlighted by revenue gains in our recently expanded bioprocessing business,” said Walter C. Herlihy, Ph.D., President and CEO of Repligen. “The successful integration of Repligen Sweden, our longstanding expertise in bioprocessing product development and manufacturing, and the continued strength in the global market for biologic drugs were key factors in our decision to focus corporate strategy and resources on bioprocessing. We are committed to building Repligen into a sustainably profitable, best-in-class life sciences company focused on providing high-value consumables used to manufacture biologics.” Operating expenses for the three-month period ended June 30, 2012 were $14,206,000 compared to $7,775,000 for the same period in 2011, an increase of $6,431,000 or 83%. These operating expenses included an increase in cost of product revenue of $5,792,000 due to higher sales, and an increase in selling, general and administrative expenses of $1,129,000 compared to the same three-month period in 2011. These increases were primarily due to the addition of Repligen Sweden AB in December 2011. In addition, research and development expenses decreased by $612,000 during the three-month period ended June 30, 2012 compared to the same period in 2011. Expenses for the second quarter included $511,000 for employee salary and severance associated with our cost reduction initiatives at Repligen Sweden. Net income for the three-month period ended June 30, 2012 was $1,570,000 or $0.05 per diluted share, compared to a net loss of $56,000 or $0.00 per diluted share for the same period in 2011. Cash and investments as of June 30, 2012 were $39,232,000 compared to $36,025,000 as of December 31, 2011.
For the six-month period ended June 30, 2012, total revenue was $28,348,000 compared to total revenue of $13,560,000 for the same period in 2011. Operating expenses for the six-month period ended June 30, 2012 were $25,863,000 compared to $15,768,000 for the same period in 2011. Net income for the six-month period ended June 30, 2012 was $2,796,000 or $0.09 per diluted share compared to a net loss of $2,086,000 or $0.07 per diluted share for the same period in 2011.Based on current sales projections, the Company is raising revenue guidance for fiscal year 2012 from its previous estimate of $52 million to $55 million to its current estimate of $55 million to $57 million. Included in this total revenue estimate is bioprocessing revenue, for which the Company is increasing its previous estimate of $39 million to $41 million to its current estimate of $41 million to $43 million. The Company is also adjusting its estimate for net profit to $5 million to $7 million for fiscal year 2012; an increase based in part on anticipated reductions in research and development costs associated with its diagnostic and orphan drug assets. Corporate Update Repligen corporate events for the year-to-date included the following: Bioprocessing
- Our acquisition of Novozymes Biopharma Sweden AB in December 2011 positioned Repligen as a world-leading manufacturer of critical products for manufacturing biologic drugs, including monoclonal antibodies. During the second quarter of 2012 we continued a process to integrate Repligen Sweden AB into Repligen’s U.S. operations. We believe that the cost reduction initiatives we have implemented thus far will contribute to our goal to optimize operating efficiencies and increase bioprocessing margins.
- Our commercial launch in February of pre-packed OPUS™ chromatography columns for clinical-stage manufacturing has generated significant interest from biopharmaceutical customers. The OPUS™ line is positioned to benefit from an ongoing increase in the market demand for disposable technologies in biopharmaceutical manufacturing. These single-use technologies can substantially decrease production time and increase cGMP manufacturing facility flexibility. In addition, our “Open Platform, User Specified” OPUS™ system is unique in being customizable for the specific requirements of our customers who manufacture a wide range of clinical-stage biologic drugs.
- In June, we received a Complete Response Letter (CRL) from the U.S. Food and Drug Administration (FDA) with respect to our new drug application (NDA) for RG1068 (synthetic human secretin). The RG1068 NDA was submitted for the improved detection of pancreatic duct abnormalities in patients with known or suspected pancreatitis. The CRL indicated that additional trial data will be required to support potential approval of the NDA.
- Consistent with our decision to focus corporate strategy on bioprocessing, and considering the time and resources required to conduct additional clinical studies, the Company will seek a development and commercialization partner for RG1068. Given the positive efficacy and safety data observed to date for RG1068, we continue to interact with the FDA to gain further information regarding a study protocol that a potential partner could adopt to address the agency’s requirements. In conjunction with this decision, we will cease to prosecute our European Union Marketing Authorization Application for RG1068.
- In April, we announced at the annual meeting of the American Academy of Neurology the positive topline results from a completed Phase 1 study of our novel small molecule enzyme inhibitor, RG3039, for the potential treatment of spinal muscular atrophy (SMA). We are seeking partners to fund future development of this program, which has received financial support from the Muscular Dystrophy Association (MDA).
- A Phase 1 trial of the Company’s novel HDAC inhibitor RG2833 was initiated in March and is currently ongoing. RG2833 is being studied as a potential treatment for Friedreich’s ataxia (FA). This single ascending dose crossover study in up to 20 adult FA patients is designed to evaluate the pharmacokinetic and safety profile of RG2833 as well as biomarkers indicative of a drug response. We are pursuing partners to fund future development of this program which currently receives financial support from a number of organizations including the MDA, GoFAR, and the Friedreich’s Ataxia Research Alliance.
- In June, Repligen stock was added to the Russell 2000® index in conjunction with Russell Investments’ annual index reconstitution. We believe that the inclusion of RGEN will enhance visibility of the Company among institutions that rely on equity indexes as part of their investment strategy.
|CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)|
|Three months ended June 30,||Six months ended June 30,|
|Royalty and other revenue||3,864,581||3,295,333||7,346,441||6,051,190|
|Cost of product revenue||7,345,257||1,552,809||12,617,800||2,945,898|
|Cost of royalty and other revenue||536,933||415,870||999,021||792,761|
|Research and development||2,905,658||3,517,461||5,714,121||7,301,732|
|Selling, general and administrative||3,418,233||2,289,118||6,846,769||4,727,754|
|Gain on bargain purchase||-||-||(314,244||)||-|
|Total operating expenses||14,206,081||7,775,258||25,863,467||15,768,145|
|Income (loss) from operations||1,317,739||(121,533||)||2,484,814||(2,208,035||)|
|Income (loss) before income taxes||1,778,193||(55,597||)||3,063,572||(2,086,284||)|
|Income tax provision||208,230||-||267,137||-|
|Net income (loss)||$||1,569,963||$||(55,597||)||$||2,796,435||$||(2,086,284||)|
|Earnings (loss) per share:|
|Weighted average shares outstanding:|
|Comprehensive income (loss)||$||(159,166||)||$||(55,597||)||$||2,155,131||$||(2,086,284||)|
|Balance Sheet Data:||June 30, 2012||Dec. 31, 2011|
|Cash, cash equivalents and marketable securities*||$||39,232,475||$||36,024,531|
|*does not include restricted cash|