SOURCE: Auxilium Pharmaceuticals, Inc.

Auxilium Pharmaceuticals, Inc.

August 06, 2009 06:00 ET

Auxilium Pharmaceuticals, Inc. Announces Second Quarter 2009 Financial Results and Operational Highlights

Arthritis Advisory Committee for XIAFLEX™ on September 16, 2009; $30 Million Revolving Credit Line Obtained; Total Revenues of $39.2 MM, up 26.8% Versus Q2 of 2008; Increasing Guidance

MALVERN, PA--(Marketwire - August 6, 2009) - Auxilium Pharmaceuticals, Inc. (NASDAQ: AUXL), a specialty biopharmaceutical company, today announced financial results and operational highlights for the quarter ended June 30, 2009. For the second quarter of 2009, Auxilium reported net revenues of $39.2 million compared to net revenues of $30.9 million in the second quarter of 2008. The net loss for the second quarter of 2009 was $(13.4) million, or $(0.32) per share, compared to a net loss of $(11.7) million, or $(0.29) per share, reported for the second quarter of 2008.

"We believe that the second quarter of 2009 was a great success for Auxilium. We received filing acceptance of our Biologics License Application ('BLA') for XIAFLEX™ with Priority review from the U.S. Food and Drug Administration ('FDA') and a date for an FDA advisory committee. We added significant commercial and medical expertise to support the launch of XIAFLEX, and we achieved record Testim® revenues," said Armando Anido, Chief Executive Officer and President of Auxilium. "I'd like to thank our employees who gave their all and contributed to our success."

Second Quarter Operational Highlights:

XIAFLEX:

--  On April 28, the Company was notified that the FDA had accepted the
    XIAFLEX BLA filing for Dupuytren's contracture and granted Priority review
    with a Prescription Drug User Fee Act ("PDUFA") goal date of August 28,
    2009.
--  On June 18, the Company announced that an FDA Arthritis Advisory
    Committee had been tentatively set for September 16, 2009 to review XIAFLEX
    for Dupuytren's contracture.
--  Key Commercial and Medical personnel have been added in anticipation
    of a potential launch within 60 days of approval.
--  The Company's phase IIb study of XIAFLEX for Peyronie's disease
    continued to follow patients, and Auxilium expects to announce top-line
    results in the fourth quarter of 2009.
    

TESTIM:

--  According to IMS Health, Inc., a pharmaceutical research firm ("IMS"),
    a total of 150,830 prescriptions for Testim were dispensed in the second
    quarter of 2009, a growth of 15.7% over the second quarter of 2008.
--  Total prescriptions within the gel segment of the testosterone
    replacement therapy market in the U.S. grew 15.6% versus the second quarter
    of 2008, according to IMS.
--  Testim ended the month of June 2009 with a 21.9% share of total
    prescriptions for testosterone gels in the U.S., unchanged from the 21.9%
    share at the end of June 2008, according to IMS.
    

SUBSEQUENT EVENTS:

--  On July 31, the FDA's Arthritis Advisory Committee confirmed it will
    review XIAFLEX during an advisory committee hearing at the Holiday Inn in
    Gaithersburg, MD on September 16, 2009.   The FDA has not updated its PDUFA
    goal date of August 28, 2009 for completion of its review of the XIAFLEX
    BLA.
--  On August 5, the Company announced that it had secured a $30 million
    revolving credit line from Silicon Valley Bank.
--  The Company is today announcing that it has enrolled the first
    patients in a long-term clinical trial for Dupuytren's contracture patients
    who participated in XIAFLEX's Phase III clinical trials to track recurrence
    and safety data over 2-5 years after initial treatment with XIAFLEX.  The
    Company expects to continue to enroll patients into the first half of 2010.
    

Second Quarter 2009 Financial Details

For the quarter ended June 30, 2009, Auxilium reported net revenues of $39.2 million compared to net revenues of $30.9 million in the second quarter of 2008, an increase of 26.8%. Sales of Testim in the U.S. were $37.0 million, a 22.1% increase over the $30.3 million recognized in the second quarter of 2008. There was $1.3 million of ex-U.S. partner milestone revenue recognition and shipments of Testim in the second quarter of 2009, compared to $0.6 million in the second quarter of 2008. The Company also recognized $0.9 million in revenues in the second quarter from the amortization of upfront payments related to the out-licensing of XIAFLEX. The net loss for the second quarter of 2009 was $(13.4) million, or $(0.32) per share, compared to a net loss of $(11.7) million, or $(0.29) per share, reported for the second quarter of 2008. Net loss for the second quarter of 2009 includes total stock-based compensation expense of $4.9 million, compared to $2.8 million for the second quarter of 2008.

Gross margin on net revenues was 76.4% for the quarter ended June 30, 2009 compared to 76.0% for the comparable period in 2008. Gross margin reflects the cost of product sold and royalty obligations due to the Company's licensor on the sales of Testim, and the amortization of deferred costs associated with the XIAFLEX out-licensing. The increase in the gross margin rate is the result of the impact of year-over-year price increases on U.S. Testim revenues and the increase in amortization of upfront and milestone payments, partially offset by higher coupon usage in 2009.

Research and development spending for the quarter ended June 30, 2009 was $13.7 million, compared to $13.4 million for 2008. Although the overall spending was comparable year over year, there was a significant reduction in clinical development costs primarily related to the completion of XIAFLEX clinical trials that were conducted in 2008, offset by increases in regulatory costs for XIAFLEX and costs at our Horsham manufacturing facility.

Selling, general and administrative expenses totaled $29.4 million for the quarter ended June 30, 2009 compared with $22.2 million for the year-ago quarter. The increase was primarily due to investments in preparing for the potential U.S. launch of XIAFLEX and increases in compensation costs associated with FAS 123R.

As of June 30, 2009, Auxilium had $80.4 million in cash and cash equivalents compared to $90.2 million on March 31, 2009.

Updated 2009 Financial Guidance

Auxilium has updated its 2009 financial guidance. As with its previously announced guidance, the Company is not including any sales of XIAFLEX in the U.S. or costs of the 75 to 100 person XIAFLEX sales force that it anticipates hiring, including certain training and marketing costs in its updated guidance because the amount of such sales and costs that may be realized in 2009, if any, are dependent upon the launch date of XIAFLEX and certain other key launch variables which are not yet determinable. The Company anticipates:

--  net revenues will be in the range of $155 million to $165 million for
    2009, an increase from the previously announced guidance of $150 million to
    $155 million, driven by higher than anticipated Testim revenues;
--  research and development investment will remain unchanged in the range
    of $45 million to $50 million, which includes $4 million to $5 million of
    stock-based compensation cost;
--  selling, general and administrative expenses will remain unchanged in
    the range of $120 million to $130 million, which does not include the costs
    of hiring and training the XIAFLEX sales force, and includes $12 million to
    $14 million of stock-based compensation cost;
--  net loss will be in the range of $50 million to $55 million compared
    to the previous guidance of $55 million to $60 million; and
--  total stock-based compensation expense will remain unchanged in the
    range of $16 million to $19 million.
    

Conference Call

Auxilium will hold a conference call today, August 6, 2009 at 10:00 a.m. EDT, to discuss second quarter 2009 financial results and operational highlights. The conference call will be simultaneously web cast on Auxilium's web site and archived for future review until September 6, 2009.

Conference call details:
Date:                                   Thursday, August 6, 2009
Time:                                   10:00 a.m. EDT
Dial-in (U.S.):                         866-730-5763
Dial-in (International):                857-350-1587
Web cast:                               http://www.auxilium.com
Passcode:                               Auxilium

To access an audio replay of the call:
Access number (U.S.):                   888-286-8010
Access number (International):          617-801-6888
Replay Passcode #:                      57985572

About Auxilium

Auxilium Pharmaceuticals, Inc. is a specialty biopharmaceutical company with a focus on developing and marketing to urologists, endocrinologists, orthopedists and select primary care physicians. Auxilium markets Testim® 1%, a topical testosterone gel, for the treatment of hypogonadism through its approximately 190-person sales and marketing team. Auxilium has five projects in clinical development. XIAFLEX™ (collagenase clostridium histolyticum), formerly referred to as AA4500, has completed phase III clinical trials for the treatment of Dupuytren's contracture, and the biologics license application is under review at the FDA for the treatment of Dupuytren's contracture. XIAFLEX is in phase IIb of development for the treatment of Peyronie's disease and is in phase II of development for treatment of Frozen Shoulder syndrome (Adhesive Capsulitis). Auxilium's transmucosal film product candidate for the treatment of overactive bladder (AA4010) and its fentanyl pain product using its transmucosal delivery system are in phase I of development. The Company is currently seeking a partner to further develop these transmucosal film product candidates. Auxilium has rights to additional pain products and products for hormone replacement and urologic disease using its transmucosal film delivery system. Auxilium also has options to all indications using XIAFLEX for non-topical formulations. For additional information, visit http://www.auxilium.com.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

In addition to historical facts or statements of current condition, this 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:

--  Auxilium's expected financial performance during 2009 and the
    financial milestones that it may achieve for 2009, including 2009 net
    revenues, research and development spending, selling, general and
    administrative expenses, net loss and stock-based compensation expense;
--  Testim revenues for the second half of 2009;
--  the timing of the U.S. Food and Drug Administration ("FDA") Arthritis
    Advisory Committee to review XIAFLEX for Dupuytren's contracture;
--  the timing of enrollment of patients in a long-term clinical trial for
    Dupuytren's contracture patients who participated in XIAFLEX's Phase III
    clinical trials;
--  the timing of the release of top-line results from the phase IIb
    clinical trial for XIAFLEX for the treatment of Peyronie's disease;
--  the approval by FDA of the filing of the Biologics License Application
    for XIAFLEX  for the treatment of Dupuytren's contracture and the timing of
    such approval;
--  the impact of commercial and medical personnel that have been added to
    support the potential launch of XIAFLEX;
--  the Company's preparedness for the launch of XIAFLEX in the U.S. and
    the timing of such launch; and
--  the interpretation of clinical data.
    

Forward-looking statements often address Auxilium's expected future financial position or business strategy and plans and objectives of management for future operations, and often contain the words "believe," "may," "could," "will," "estimate," "continue," "anticipate," "intend," "should," "plan," "expect," and "potentially," and similar expressions. Forward-looking statements provide Auxilium's current expectations or forecasts of future events. Auxilium's performance and financial results could differ materially from those reflected in these forward-looking statements due to:

--  the success of research and development activities;
--  further evaluation of clinical data and results of clinical trials;
--  the performance of third-party manufacturers and suppliers;
--  decisions by regulatory authorities as to whether and when to approve
    drug applications;
--  decisions by regulatory authorities as to whether and when to proceed
    to the next phase of clinical trials;
--  the timing, cost and degree of success of the U.S. launch of XIAFLEX;
--  difficulties or delays in manufacturing;
--  the outcome of pending litigation;
--  competition from currently marketed products, generic products, and
    new products;
--  general financial, economic, regulatory and political conditions
    affecting the biotechnology and pharmaceutical industries and the
    jurisdictions in which Auxilium markets or seeks to market its products;
--  claims and concerns that may arise regarding the safety or efficacy of
    its products; and
--  increase in costs or expenses.
    

A more detailed list and description of the risks and uncertainties that Auxilium faces may be found under the heading "Risk Factors" in Auxilium's Annual Report on Form 10-K for the year ended December 31, 2008, which is on file with the Securities and Exchange Commission. Given these risks and uncertainties, any or all of the forward-looking statements contained in this release may prove to be incorrect. Therefore, you should not rely on any such factors or forward-looking statements. Auxilium undertakes no obligation to update publicly any forward-looking statement.

                      AUXILIUM PHARMACEUTICALS, INC.
              Condensed Consolidated Statement of Operations
            (In thousands, except share and per share amounts)
                                (Unaudited)

                              Three Months Ended       Six Months Ended
                                   June 30,                June 30,
                            ----------------------  ----------------------
                               2009        2008        2009        2008
                            ----------  ----------  ----------  ----------
Net revenues                 $ 39,194    $ 30,901    $ 73,869    $ 58,019
                            ----------  ----------  ----------  ----------
Operating expenses:
   Cost of goods sold            9,239       7,409      17,117      13,409
   Research and
    development*                13,734      13,435      27,267      26,628
   Selling, general and
    administrative*             29,383      22,173      55,785      43,193
                            ----------  ----------  ----------  ----------
       Total operating
        expenses                52,356      43,017     100,169      83,230
                            ----------  ----------  ----------  ----------
Loss from operations           (13,162)    (12,116)    (26,300)    (25,211)
Interest income                    105         390         323       1,171
                            ----------  ----------  ----------  ----------
Loss before income taxes       (13,057)    (11,726)    (25,977)    (24,040)
Provision for income taxes         317           -         631           -
                            ----------  ----------  ----------  ----------
Net loss                    $  (13,374) $  (11,726) $  (26,608) $  (24,040)
                            ==========  ==========  ==========  ==========
Basic and diluted net loss
 per common share           $    (0.32) $    (0.29) $    (0.63) $    (0.59)
                            ==========  ==========  ==========  ==========
Weighted average common
 shares outstanding         42,008,009  41,050,599  42,399,560  40,888,477
                            ==========  ==========  ==========  ==========

*includes the following
 amounts of stock-based
 compensation expense:
   Research and development $    1,752  $      648  $    2,885  $    1,164
   Selling, general and
    administrative               3,117       2,128       6,515       3,725





                       AUXILIUM PHARMACEUTICALS, INC.
                  Selected Consolidated Balance Sheet Data
                              (In thousands)
                                (Unaudited)

                                             June 30,          December 31,
                                               2009               2008
                                            -----------        -----------
Cash and cash equivalents                   $    80,352        $   113,943
Working capital                                  63,385             87,339
Long-term investments                             3,419              3,419
Total assets                                    141,930            171,187
Other long-term liabilities                      76,292             80,423
Total stockholders' equity                       20,092             35,266

Contact Information

  • CONTACT:
    James E. Fickenscher
    Chief Financial Officer
    Auxilium Pharmaceuticals, Inc.
    +1-484-321-5900
    Email Contact
    or
    William Q. Sargent Jr.
    Vice-President, Investor Relations and Corporate Communications
    +1-484-321-5900
    Email Contact