Furiex Reports Second Quarter 2012 Financial Results

Furiex Pharmaceuticals, Inc. (NASDAQ: FURX) today reported its financial and operating results for the quarter ended June 30, 2012. Furiex was spun off from Pharmaceutical Product Development, Inc. (PPD) as a separate public company effective June 14, 2010. Furiex continues the compound partnering business started by PPD in 1998.

Furiex recorded second quarter milestone revenue of $10.0 million. On May 23, 2012, Takeda Global Research & Development Centre (Europe) Ltd. received confirmation on the acceptance of the submission of a Marketing Authorization Application from the European Medicines Agency for alogliptin, a selective dipeptidyl peptidase IV inhibitor for the treatment of type 2 diabetes.

Furiex recorded second quarter royalty revenue of $3.1 million, compared to $0.9 million for the same period in the prior year. Royalty revenue included royalties related to Nesina ® and Liovel ® sales in Japan, and Priligy ® sales in various countries outside of the United States.

Research and development expenses were $30.8 million for the quarter ended June 30, 2012, compared to $13.2 million for the same period in the prior year. The increase of $17.5 million in research and development expenses was a result of the increase in Phase III clinical trial costs associated with the continued development of MuDelta, a $1.0 million development milestone payment to Ranbaxy Laboratories, Ltd. in connection with the completion of the Phase II clinical study for PPD-10558, and a $5.0 million regulatory milestone payment due to Janssen Pharmaceutica, N.V. related to the dosing of the fifth patient in the on-going Phase III clinical trials for MuDelta, partially offset by decreases in spending for the discontinued PPD-10558 program and completion of the Phase II clinical trial work related to MuDelta and JNJ-Q2.

Second quarter selling, general and administrative expenses were $2.8 million for 2012, compared to $2.5 million for the second quarter of 2011. The increase in selling, general and administrative expenses of $0.3 million was primarily due to increases in consulting and legal expenses.

Net loss was $20.8 million for the second quarter of 2012, compared to $14.9 million for the second quarter of 2011. The increase in net loss of $5.9 million during the second quarter of 2012, as compared to the second quarter of 2011, relates primarily to the changes in revenue and expenses previously described.

Net loss per share for the second quarter of 2012 was $2.09, compared to $1.51 for the second quarter of 2011.

"The Furiex team is committed to progressing the development of MuDelta for diarrhea predominant irritable bowel syndrome with skill and speed," said June Almenoff, M.D., Ph.D., president and chief medical officer of Furiex.

Fred Eshelman, Pharm.D., chairman of Furiex, added, "We remain excited about the potential of our development pipeline, as well as our marketed product portfolio, which continues to demonstrate increasing value for our shareholders."

Furiex will conduct a live conference call and webcast Friday, August 3, 2012, at 9:00 a.m. ET to discuss its second quarter 2012 results and financial outlook for 2012 as well as provide an overview of its business and pipeline. A Q&A session will follow. All interested parties can access the webcast through the Presentations & Events link in the Investors section of the Furiex website at www.furiex.com. The webcast will be archived shortly after the call for on-demand replay. The conference call will be broadcast live over the Internet and will also be available using the following direct dial numbers:
Participant dial-in:   +1.877.677.9122 (U.S./Canada)
+1.708.290.1401 (International)
 
Conference ID: 97824033

About Furiex

Furiex Pharmaceuticals is a drug development collaboration company that uses innovative clinical development design to accelerate and increase value of drug development programs by advancing them through the drug discovery and development process in a cost-efficient manner. Our drug development programs are designed and driven by a core team with extensive drug development experience. The company collaborates with pharmaceutical and biotechnology companies and has a strong, diversified product portfolio and pipeline with multiple therapeutic candidates, including one Phase III-ready asset, two compounds in Phase III development, one of which is with a partner, and two products on the market. The company's mission is to develop innovative medicines faster and at a lower cost, thereby improving profitability and accelerating time to market while providing life-improving therapies for patients. For more information, visit www.furiex.com.

Except for historical information, all of the statements, expectations and assumptions contained in this news release are forward-looking statements that involve a number of risks and uncertainties. Although Furiex attempts to be accurate in making these forward-looking statements, it is possible that future circumstances might differ from the assumptions on which such statements are based. In addition, other important factors which could cause actual results to differ materially include the following: continuing losses and our potential need for additional financing; the risk of finding collaborators for our late-stage product candidates; progress of product candidates in clinical trials and regulatory approvals as it relates to receiving future milestone payments; inability of our existing collaborators to effectively market approved products for which we receive royalty and sales milestone payments; the risks and expense of continuing the research and development activities of our existing candidates; changes in the safety and efficacy profile of our existing candidates as they progress through research and development; potential U.S. Food and Drug Administration changes to its regulatory guidance; new collaborative agreements that we might enter into in the future; the costs of defending or prosecuting any patent opposition or litigation necessary to protect our proprietary technologies; and the other risk factors set forth from time to time in the SEC filings for Furiex, copies of which can be found on our website.
FURIEX PHARMACEUTICALS, INC. AND SUBSIDIARIES                    
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)  
(In thousands, except per share data)
 
 
Three Months Ended Six Months Ended
June 30, June 30,
2011   2012   2011   2012  
Revenue:
Milestones $ $ 10,000 $ $ 10,000
Royalties   872     3,075     1,233     5,720  
Total revenue   872     13,075     1,233     15,720  
Research and development expenses 13,222 30,753 26,099 40,121
Selling, general and administrative expenses 2,503 2,790 4,324 5,523
Depreciation and amortization   23     21     45     42  
Total operating expenses   15,748     33,564     30,468     45,686  
Operating loss (14,876 ) (20,489 ) (29,235 ) (29,966 )
Interest expense 274 549
Other income, net                
Loss before provision for income taxes (14,876 ) (20,763 ) (29,235 ) (30,515 )
Provision for income taxes   6     6     12     12  
Net loss $ (14,882 ) $ (20,769 ) $ (29,247 ) $ (30,527 )
 
Net loss per basic and diluted share $ (1.51 ) $ (2.09 ) $ (2.96 ) $ (3.07 )
 
Weighted-average shares used to compute net loss per basic and diluted share: 9,881 9,957 9,881 9,953
 
FURIEX PHARMACEUTICALS, INC. AND SUBSIDIARIES            
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
 
Assets
 
December 31, June 30,
2011 2012
 
Current assets:
Cash and cash equivalents $ 33,628 $ 26,521
Short-term investments 10,000
Accounts receivable, net 1,985 3,075
Prepaid expenses   214   108
Total current assets 45,827 29,704
 
Property and equipment, net 181 149
Goodwill   49,116   49,116
Total assets $ 95,124 $ 78,969
 
Liabilities and Shareholders’ Equity
 
Current liabilities:
Accounts payable $ 147 $ 415
Accrued expenses 10,422 20,946
Current portion of long-term debt   1,351   2,973
Total current liabilities 11,920 24,334
Long-term debt, net 8,649 7,027
Other long-term liabilities   232   274
Total liabilities   20,801   31,635
 

Common stock, $0.001 par value, 40,000,000 shares authorized; 9,949,422 and 10,015,297

shares issued and outstanding
10 10

Preferred stock, $0.001 par value, 10,000,000 shares authorized; No shares issued or

outstanding
Paid-in capital 158,438 161,976
Accumulated deficit   (84,125)   (114,652)
Total shareholders’ equity   74,323   47,334
Total liabilities and shareholders’ equity $ 95,124 $ 78,969

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