Company Website:
http://www.affymax.com
PALO ALTO, Calif. -- (Business Wire)
Affymax, Inc. (Nasdaq: AFFY) today reported financial results for the
fourth quarter and year ended December 31, 2012. The net loss for the
fourth quarter of 2012 was $68.3 million (or ($1.85) per share) compared
to a net loss of $29.4 million (or ($0.82) per share) for the fourth
quarter of 2011.
On February 23, 2013, Affymax and its partner, Takeda Pharmaceutical
Company Limited (Takeda) announced a nationwide voluntary recall of
OMONTYS as a result of postmarketing reports regarding safety concerns,
including anaphylaxis, which can be life-threatening or fatal. We and
Takeda are actively investigating the cause of these reactions but there
can be no assurance that a solution will be found. As of the result of
the recall, we re-evaluated a number of estimates made as of period-end
and recorded financial statement adjustments to reflect changes in those
estimates as to the recoverability of inventory and deposits made to our
contract manufacturing organizations, or CMOs, potential losses on firm
purchase commitments and changes in the short-term and long-term
classification of certain liabilities. In the aggregate, we recorded
$45.0 million in impairment due to inventory and firm purchase
commitments in the quarter ended December 31, 2012, with no comparable
charge in the prior year.
Earlier this month, the Company began reorganizing its operations in
order to significantly reduce operating costs and negotiating with
Takeda to collaboratively focus on the OMONTYS safety and other related
FDA issues associated with the recall of the product. In addition to the
significant reduction in force of approximately 230 employees (75% of
the Company’s workforce), including the commercial and medical affairs
field forces as well as other officers and employees throughout the
organization, the Company is continuing to transition many of the
ongoing activities to Takeda and negotiating with Takeda on costs
allocated between the parties under the collaboration arrangement. In
connection with this restructuring, the Board and management continue to
review the Company’s current financial position, including but not
limited to: (i) the Company’s existing cash balance, which as of
February 28, 2013 was approximately $67 million, (ii) all currently
outstanding liabilities as well as commitments to third parties, which
include potential contract manufacturing organization (CMO) commitments
of up to an estimated approximately $33 million, (iii) outstanding debt
obligations of up to approximately $11 million under its existing credit
facility, (iv) estimated costs and expenses of the reduction in force of
$8 to $10 million, and (v) estimates of expenses pursuant to and in
continuation of its arrangement with Takeda under the collaboration
agreement and conduct the ongoing investigation and support the recall
of OMONTYS and (vi) projected costs for maintaining ongoing operations
as a significantly smaller public company. As a result, the Company is
continuing the restructuring efforts which is expected to include
further efforts to transition responsibilities for the investigation and
recall of OMONTYS to Takeda, discussions with the FDA including a
potential withdrawal of the OMONTYS New Drug Application (NDA),
additional reductions in force and renegotiation of some or all of its
existing agreements with third parties, including Takeda, in order to
support a significantly smaller organization. If the Company is unable
to rapidly and successfully progress these efforts, its ability to
continue operations will be significantly in doubt and the Company may
have to cease operations.
In addition to the evaluation of strategic alternatives for the
organization, including the sale of the company or its assets, or a
corporate merger, the company is considering all possible alternatives,
including further restructuring activities, wind-down of operations or
even bankruptcy proceedings.
About Affymax, Inc.
Affymax, Inc. is a biopharmaceutical company based in Palo Alto,
California. Affymax's mission is to discover, develop and deliver
innovative therapies that improve the lives of patients with kidney
disease and other serious and often life-threatening illnesses.
The company's first marketed product, OMONTYS® (peginesatide)
Injection, was approved by the U.S. Food and Drug Administration (FDA)
in March 2012. For additional information, please visit www.affymax.com.
This release contains forward-looking statements, including
statements regarding the Company’s ability to continue operations,
financial projections and condition, the continuation and negotiation of
the Company’s collaboration with Takeda, evaluation of strategic
alternatives and the commercialization of OMONTYS. The Company’s actual
results may differ materially from those indicated in these
forward-looking statements due to risks and uncertainties, including
risks relating to the recall and adverse events, the Company’s ability
to conduct the ongoing product investigation and identify the causes of
safety concerns, ability to renegotiate third party agreements,
including those with Takeda, ability to satisfy regulatory requirements
to re-introduce OMONTYS to the market and other factors affecting the
commercial potential of OMONTYS, the continued safety and efficacy of
OMONTYS, industry and competitive environment, regulatory requirements
by the FDA or other regulatory authorities, including withdrawal,
existing and future litigation, ability to reduce costs of operations in
a timely manner, financing requirements and ability to continue as a
going concern and access capital, and other matters that are described
in Affymax’s Annual Report on Form 10-K filed with the Securities and
Exchange Commission.Investors are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the
date of this release.The Company undertakes no obligation to
update any forward-looking statement in this press release.
|
|
| |
| | |
| AFFYMAX, INC. |
| CONDENSED BALANCE SHEETS |
| (in thousands, except share data) |
|
|
| | | December 31, |
| | December 31, |
| | | 2012 | | | 2011 |
| | |
(Unaudited)
| | |
|
| Assets | | | | | | | | |
|
Current assets
| | | | | | | | |
|
Cash and cash equivalents
| | |
$
|
68,265
| | | | |
$
|
54,339
| |
|
Short-term investments
| | | |
9,717
| | | | | |
44,165
| |
|
Receivable from Takeda
| | | |
18,365
| | | | | |
6,937
| |
|
Deferred tax assets
| | | |
363
| | | | | |
351
| |
|
Prepaid expenses and other current assets
| | |
|
5,800
|
|
| | |
|
1,828
|
|
|
Total current assets
| | | |
102,510
| | | | | |
107,620
| |
|
Property and equipment, net
| | | |
2,981
| | | | | |
3,013
| |
|
Restricted cash
| | | |
1,135
| | | | | |
1,135
| |
|
Long-term investments
| | | |
2,323
| | | | | |
—
| |
|
Deferred tax assets, net of current
| | | |
6,876
| | | | | |
6,888
| |
|
Other assets
| | |
|
2,392
|
|
| | |
|
339
|
|
|
Total assets
| | |
$
|
118,217
|
|
| | |
$
|
118,995
|
|
| Liabilities and Stockholders’ Equity | | | | | | | | |
|
Current liabilities
| | | | | | | | |
|
Accounts payable
| | |
$
|
6,591
| | | | |
$
|
941
| |
|
Accrued liabilities
| | | |
52,522
| | | | | |
13,999
| |
|
Accrued clinical trial expenses
| | | |
2,844
| | | | | |
3,365
| |
|
Deposit from Takeda
| | | |
559
| | | | | |
1,998
| |
|
Advance from Takeda, current
| | | |
27,715
| | | | | |
—
| |
|
Notes payable, current
| | |
|
8,844
|
|
| | |
|
—
|
|
|
Total current liabilities
| | | |
99,075
| | | | | |
20,303
| |
|
Long-term income tax liability
| | | |
10,062
| | | | | |
10,411
| |
|
Advance from Takeda, net of current
| | | |
—
| | | | | |
6,121
| |
|
Deferred revenue, net of current
| | | |
—
| | | | | |
5,174
| |
|
Other long-term liabilities
| | |
|
799
|
|
| | |
|
989
|
|
|
Total liabilities
| | |
|
109,936
|
|
| | |
|
42,998
|
|
|
Commitments and contingencies
| | | |
—
| | | | | |
—
| |
|
Stockholders’ equity
| | | | | | | | |
|
Common stock
| | | |
37
| | | | | |
36
| |
|
Additional paid-in capital
| | | |
551,959
| | | | | |
526,244
| |
|
Accumulated deficit
| | | |
(543,713
|
)
|
| | | |
(450,301
|
)
|
|
Accumulated other comprehensive income
| | |
|
(2
|
)
|
| | |
|
18
|
|
|
Total stockholders’ equity
| | |
|
8,281
|
|
| | |
|
75,997
|
|
|
Total liabilities and stockholders’ equity
| | |
$
|
118,217
|
|
| | |
$
|
118,995
|
|
| | | | | | | | | | |
|
|
|
| | |
| |
| |
|
| | |
| AFFYMAX, INC. |
| CONDENSED STATEMENTS OF OPERATIONS |
| (in thousands, except per share data) |
| (Unaudited) |
| | | | | | | |
| | | | | | |
| | | Three Months Ended | | | Twelve Months Ended |
| | | December 31, |
|
| December 31, |
| | | 2012 | |
| 2011 | | | 2012 | | | 2011 |
|
Revenue:
| | | | | | | | | | | | | | | |
|
Collaboration revenue
| | |
$
|
14,796
| | | |
$
|
3,674
| | | |
$
|
94,358
| | | |
$
|
47,703
| |
|
License and royalty revenue
| | |
|
3
|
| | |
|
3
|
| | |
|
12
|
| | |
|
17
|
|
|
Total revenue
| | |
|
14,799
|
| | |
|
3,677
|
| | |
|
94,370
|
| | |
|
47,720
|
|
|
Operating expenses:
| | | | | | | | | | | | | | | |
Impairment of inventory and losses on firm purchase commitments
| | | |
44,957
| | | | |
—
| | | | |
44,957
| | | | |
—
| |
|
Research and development
| | | |
11,252
| | | | |
24,702
| | | | |
51,738
| | | | |
76,308
| |
|
Selling, general and administrative
| | |
|
26,778
|
| | |
|
8,392
|
| | |
|
89,714
|
| | |
|
32,818
|
|
|
Total operating expenses
| | |
|
82,987
|
| | |
|
33,094
|
| | |
|
186,409
|
| | |
|
109,126
|
|
|
Loss from operations
| | | |
(68,188
|
)
| | | |
(29,417
|
)
| | | |
(92,039
|
)
| | | |
(61,406
|
)
|
|
Interest income
| | | |
21
| | | | |
33
| | | | |
77
| | | | |
169
| |
|
Interest expense
| | | |
(126
|
)
| | | |
(33
|
)
| | | |
(1,442
|
)
| | | |
(144
|
)
|
|
Other income (expense), net
| | |
|
(5
|
)
| | |
|
(24
|
)
| | |
|
(34
|
)
| | |
|
15
|
|
|
Loss before provision for income taxes
| | | |
(68,298
|
)
| | | |
(29,441
|
)
| | | |
(93,438
|
)
| | | |
(61,366
|
)
|
|
Provision (benefit) for income taxes
| | |
|
(27
|
)
| | |
|
—
|
| | |
|
(26)
|
| | |
|
1
|
|
|
Net loss
| | |
$
|
(68,271
|
)
| | |
$
|
(29,441
|
)
| | |
$
|
(93,412
|
)
| | |
$
|
(61,367
|
)
|
|
Net loss per share:
| | | | | | | | | | | | | | | |
|
Basic and diluted
| | |
$
|
(1.85
|
)
| | |
$
|
(0.82
|
)
| | |
$
|
(2.57
|
)
| | |
$
|
(1.84
|
)
|
|
Weighted-average number of shares used in computing basic and
diluted net loss per share
| | |
|
36,846
|
| | |
|
35,704
|
| | |
|
36,342
|
| | |
|
33,288
|
|
| | | | | | | | | | | | | | | | | | | |
|
|
|
| | |
|
| | | |
| |
| AFFYMAX, INC. |
| COLLABORATION REVENUE |
| (in thousands) |
| (Unaudited) |
| | | | | | | |
|
| | | | |
| | | Three Months Ended | | | Twelve Months Ended |
| | | December 31, | | | December 31, |
| | | 2012 | | | 2011 | | | 2012 | |
| 2011 |
|
OMONTYS net product sales (as provided by Takeda)
| | |
$
|
19,561
| | | |
$
|
—
| | |
$
|
34,569
| | | |
$
|
—
|
|
Total Collaboration costs & expenses (1)
| | |
|
26,355
|
| | |
|
—
| | |
|
69,275
|
| | |
|
—
|
|
OMONTYS collaboration profit (loss)
| | |
|
(6,794
|
)
| | |
|
—
| | |
|
(34,706
|
)
| | |
|
—
|
| | | | | | | | | | | | | |
|
|
Affymax share of collaboration profit (loss)
| | | |
(3,397
|
)
| | | |
—
| | | |
(17,353
|
)
| | | |
—
|
|
Net reimbursement of Affymax costs & expenses
| | |
|
16,893
|
| | |
|
—
| | |
|
43,897
|
| | |
|
—
|
|
Profit equalization revenue earned by Affymax (2)
| | | |
13,496
| | | | |
—
| | | |
26,544
| | | | |
—
|
|
Milestone payments
| | | |
—
| | | | |
—
| | | |
60,250
| | | | |
10,000
|
|
Revenue previously deferred related to API
| | | |
495
| | | | |
—
| | | |
936
| | | | |
—
|
|
Revenue recognized under CAPM (3)
| | | |
—
| | | | |
—
| | | |
—
| | | | |
26,606
|
|
Net expense reimbursement after CAPM (4)
| | |
|
805
|
| | |
|
3,674
| | |
|
6,628
|
| | |
|
11,097
|
|
Total collaboration revenue
| | |
$
|
14,796
|
| | |
$
|
3,674
| | |
$
|
94,358
|
| | |
$
|
47,703
|
| | | | | | | | | | | | | | | | | |
|
|
|
|
(1)
|
|
Total Collaboration costs and expenses include costs incurred by
Affymax and Takeda including amounts provided to us by Takeda.
|
| | | |
|
| |
(2)
| |
Profit equalization payment earned is comprised of Affymax’s share
of collaboration profit or loss as well as net reimbursement for
commercialization costs and certain post-marketing development
costs incurred subsequent to the launch of OMONTYS on March 27,
2012.
|
| | | |
|
| |
(3)
| |
Revenue recognized under CAPM (Contingency Adjusted Performance
Model) includes amounts received related to upfront payments,
development milestones, purchase of active pharmaceutical
ingredient, or API, and reimbursement of development expenses.
Under CAPM, revenue for these amounts was recognized ratably over
the expected development period, which ended in May 2011 with the
submission of the NDA for OMONTYS to the FDA.
|
| | | |
|
| |
(4)
| |
Net expense reimbursement after CAPM is comprised of two
components: (i) net reimbursement at 50% of commercialization
expenses and certain post-marketing development costs incurred
subsequent to the submission of the NDA for OMONTYS in May 2011
and prior to the launch of OMONTYS on March 27, 2012, after which
such costs are incorporated into the profit equalization payment,
(ii) the reimbursement of those development expenses that fall
under the 70/30 expense split in our collaboration agreement with
Takeda subsequent to the submission of the NDA for OMONTYS in May
2011 and (iii) certain MAA external costs eligible for 100%
reimbursement.
|
Contacts:
Affymax, Inc.
Herb Cross, 650-812-8847
Chief Financial Officer
Source: Affymax, Inc.
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