Zalicus Inc. (Nasdaq Capital Market: ZLCS), a biopharmaceutical company that discovers and develops novel treatments for patients suffering from pain, today reported financial results for the fourth quarter and year ended December 31, 2013.
“With the successful translation of Z944 in a human clinical pain model, Zalicus has initiated a Phase 1 clinical study to evaluate the pharmacokinetics and safety of multiple modified-release formulations of Z944,” commented Mark H.N. Corrigan, MD, President and CEO of Zalicus. “Following the recent sale of the Exalgo royalty stream, prepayment of our debt obligations and the strong performance of our cHTS services business, Zalicus has the financial resources to advance a modified release formulation of Z944 toward Phase 2 clinical development in an appropriate pain indication by late 2014.”
Fourth Quarter 2013 and Recent Accomplishments:
- Z944. Initiated and successfully
completed a Phase 1b clinical study of Z944, a novel, oral, T-type
calcium channel modulator. The Phase 1b study was an experimental
clinical model utilizing Laser-Evoked-Potentials (LEP) to provide both
subjective and objective assessments of the activity of Z944 in
induced neuropathic and inflammatory pain states. In the study, an
immediate release formulation of Z944 demonstrated statistically
significant and meaningful reductions at each of the three doses
tested compared to placebo of overall peak-to-peak (PtP) amplitude of
LEPs in models of both inflammatory (p≤0.0002) and neuropathic
(p<0.05) pain, as well as consistent trends in reduction of subjective
pain scores compared to placebo using a visual analog scale in both
pain models. Zalicus is planning to advance a modified-release
formulation of Z944 toward Phase 2 clinical development in an
appropriate pain indication by late 2014. Dr. Margaret Lee, Vice
President, Research and Translational Medicine, is presenting the data
from the Phase 1b clinical trial of Z944 at the Foundation for
Peripheral Neuropathy 2014 International Symposium in Chicago on March
13, 2014.
Exalgo Royalty Monetization and Prepayment of Debt. Monetized the Exalgo royalty by selling all rights to future royalties on sales of Exalgo to Mallinckrodt Inc. (“Mallinckrodt”) for $7.2 million in cash. Exalgo was approved for sale in the U.S. in March 2010 and launched by Mallinckrodt in April 2010. To date, Zalicus has received $16.0 million in royalties related to sales of Exalgo, including approximately $2.0 million for net sales during the fourth quarter of 2013. Zalicus applied the proceeds of the Exalgo royalty sale and the Exalgo royalties to prepay the remaining $8.6 million outstanding under its term loan with Oxford Finance LLC, eliminating all future principal and interest payments to Oxford.
- cHTS Services. Continued to expand and diversify its cHTS services business with multiple new customers, providing $8.1 million in revenue for the year ended December 31, 2013.
Fourth Quarter and Year-End Financial Results:
As of December 31, 2013, Zalicus had cash, cash equivalents and restricted cash of $19.8 million compared to $36.4 million as of December 31, 2012.
For the year ended December 31, 2013, revenue was $14.7 million compared to $12.6 million for the year ended December 31, 2012. Zalicus recognized $6.7 million in royalty revenue from Mallinckrodt based on Exalgo® net sales for the year ended December 31, 2013 and Zalicus has recognized a total of $16.0 million in royalty revenue from Exalgo through December 31, 2013 since its commercial launch in April 2010. Zalicus sold all rights to future royalties on sales of Exalgo to Mallinckrodt in January 2014.
For the year ended December 31, 2013, research and development expense was $34.0 million compared to $41.4 million for the year ended December 31, 2012. Research and Development expense in the year ended December 31, 2013 included approximately $19.0 million devoted to Z160 and approximately $2.0 million in development expenses related to Z944. We expect research and development expense to decrease significantly for the year ending December 31, 2014 due to terminated development activities related to our discontinued product candidate Z160.
For the year ended December 31, 2013, net loss was $38.6 million, or ($1.68) per share, compared to a net loss of $44.3 million, or ($2.27) per share, in the year ended December 31, 2012. The net loss per share amounts have been adjusted for the 1-for-6 reverse stock split effected on October 3, 2013. Stock-based compensation expense was $2.0 million and $1.8 million in the years ended December 31, 2013, and 2012, respectively. Depreciation and Exalgo amortization expense combined was $10.0 million and $5.4 million in the years ended December 31, 2013, and 2012, respectively.
General and administrative expenses were $7.5 million in the year ended December 31, 2013 compared to $9.0 million in the year ended December 31, 2012. We expect our general and administrative expense for the year ending December 31, 2014 to be slightly lower than the year ended December 31, 2013.
About Zalicus
Zalicus Inc. (Nasdaq Capital Market: ZLCS) is
a biopharmaceutical company that discovers and develops novel treatments
for patients suffering from pain. Zalicus has a portfolio of proprietary
clinical-stage product candidates targeting pain and has entered into
multiple revenue-generating collaborations with large pharmaceutical
companies relating to other products, product candidates and drug
discovery technologies. Zalicus applies its expertise in the discovery
and development of selective ion channel modulators and its combination
high throughput screening capabilities to discover innovative
therapeutics for itself and its collaborators in the areas of pain and
oncology. To learn more about Zalicus, please visit www.zalicus.com.
Forward-Looking Statements
This press release contains
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 concerning Zalicus, its product
candidates, including Z944, their potential, and its plans for clinical
development for Z944, the Zalicus selective ion channel modulation
technology, and related preclinical product candidates, Zalicus’s
combination drug discovery technology, cHTS, and its financial
condition, results of operations, and other business plans. These
forward-looking statements about future expectations, plans, objectives
and prospects of Zalicus and its product candidates may be identified by
words like "believe," "expect," "may," "will," "should," "seek," “plan,”
“project” or “could” and similar expressions and involve significant
risks, uncertainties and assumptions, including risks related to the
formulation and clinical development of its product candidate Z944, the
unproven nature of the Zalicus ion channel drug discovery technology,
Zalicus’s ability to obtain additional financing or funding for its
research and development, and those other risks that can be found in the
"Risk Factors" section of Zalicus' annual report on Form 10-K on file
with the Securities and Exchange Commission and the other reports that
Zalicus periodically files with the Securities and Exchange Commission.
Actual results may differ materially from those Zalicus contemplated by
these forward-looking statements. These forward-looking statements
reflect management’s current views and Zalicus does not undertake to
update any of these forward-looking statements to reflect a change in
its views or events or circumstances that occur after the date of this
release except as required by law.
(c) 2014 Zalicus Inc. All rights reserved.
Zalicus Inc. Consolidated Statements of Operations and Comprehensive Loss (in thousands, except share and per share amounts) | ||||||||||||
| Year Ended December 31, | ||||||||||||
| 2013 | 2012 | 2011 | ||||||||||
| Revenue: | ||||||||||||
| Royalties | $ | 6,661 | $ | 5,220 | $ | 2,521 | ||||||
| cHTS services and other collaborations | 8,070 | 7,330 | 5,663 | |||||||||
| Total revenue | 14,731 | 12,550 | 8,184 | |||||||||
| Operating expenses: | ||||||||||||
| Research and development | 33,964 | 41,423 | 35,294 | |||||||||
| General and administrative | 7,523 | 8,977 | 10,400 | |||||||||
| Amortization of intangible | 8,722 | 3,892 | 5,141 | |||||||||
| Impairment charge | 1,732 | — | — | |||||||||
| Restructuring | — | 1,094 | — | |||||||||
| Total operating expenses | 51,941 | 55,386 | 50,835 | |||||||||
| Loss from operations | (37,210 | ) | (42,836 | ) | (42,651 | ) | ||||||
| Interest income | 46 | 150 | 136 | |||||||||
| Interest expense | (1,467 | ) | (2,173 | ) | (976 | ) | ||||||
| Other income | 14 | 91 | 20 | |||||||||
| Net loss before benefit for income taxes | (38,617 | ) | (44,768 | ) | (43,471 | ) | ||||||
| Benefit for income taxes | — | 441 | 1,428 | |||||||||
| Net loss | $ | (38,617 | ) | $ | (44,327 | ) | $ | (42,043 | ) | |||
| Net loss per share—basic and diluted | $ | (1.68 | ) | $ | (2.27 | ) | $ | (2.59 | ) | |||
| Weighted average number of common shares used in net loss per share calculation —basic and diluted | 22,932,675 | 19,552,828 | 16,224,532 | |||||||||
| Net loss | $ | (38,617 | ) | $ | (44,327 | ) | $ | (42,043 | ) | |||
| Other comprehensive loss: | ||||||||||||
| Unrealized (loss) gain on investments | (10 | ) | 18 | 12 | ||||||||
| Comprehensive loss | $ | (38,627 | ) | $ | (44,309 | ) | $ | (42,031 | ) | |||
Zalicus Inc. Consolidated Balance Sheets (in thousands, except per share data) | ||||||||
| December 31, | ||||||||
| 2013 | 2012 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 17,958 | $ | 4,531 | ||||
| Restricted cash | 50 | 50 | ||||||
| Short-term investments | — | 30,059 | ||||||
| Accounts receivable | 2,511 | 3,045 | ||||||
| Prepaid expenses and other current assets | 223 | 684 | ||||||
| Total current assets | 20,742 | 38,369 | ||||||
| Property and equipment, net | 2,363 | 3,535 | ||||||
| Intangible asset, net | 7,200 | 17,654 | ||||||
| Restricted cash and other assets | 1,801 | 1,817 | ||||||
| Total assets | $ | 32,106 | $ | 61,375 | ||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 2,237 | $ | 3,261 | ||||
| Accrued expenses and other current liabilities | 3,339 | 4,841 | ||||||
| Deferred revenue | 2,392 | 4,918 | ||||||
| Current portion of term loan payable | 6,640 | 6,327 | ||||||
| Current portion of lease incentive obligation | 284 | 284 | ||||||
| Total current liabilities | 14,892 | 19,631 | ||||||
| Term loan payable, net of current portion | 2,132 | 8,772 | ||||||
| Deferred revenue, net of current portion | — | 600 | ||||||
| Deferred rent, net of current portion | 309 | 457 | ||||||
| Lease incentive obligation, net of current portion | 591 | 875 | ||||||
| Other long-term liabilities | — | 14 | ||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, $0.001 par value; 5,000 shares authorized; no shares issued and outstanding | — | — | ||||||
| Common stock, $0.001 par value; 200,000 shares authorized; 26,090 and 21,170 shares issued and outstanding at December 31, 2013 and 2012, respectively | 26 | 21 | ||||||
| Additional paid-in capital | 393,796 | 372,018 | ||||||
| Accumulated other comprehensive income | — | 10 | ||||||
| Accumulated deficit | (379,640 | ) | (341,023 | ) | ||||
| Stockholders’ equity | 14,182 | 31,026 | ||||||
| Total liabilities and stockholders’ equity | $ | 32,106 | $ | 61,375 | ||||
Contacts:
Justin Renz, 617-301-7575
CFO
JRenz@zalicus.com
or
Gina
Nugent, 617-460-3579
gnugent@zalicus.com
