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8-K - FORM 8-K - HUMAN GENOME SCIENCES INC | c97177e8vk.htm |
Exhibit 99.1
HUMAN GENOME SCIENCES, INC. 14200 Shady Grove Road, Rockville, Maryland 20850 |
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HGS |
FOR IMMEDIATE RELEASE
Media Contact:
Jerry Parrott
Vice President, Corporate Communications
301-315-2777
Investor Contact:
Peter Vozzo
Senior Director, Investor Relations
301-251-6003
Jerry Parrott
Vice President, Corporate Communications
301-315-2777
Investor Contact:
Peter Vozzo
Senior Director, Investor Relations
301-251-6003
HUMAN GENOME SCIENCES ANNOUNCES FOURTH-QUARTER AND FULL-YEAR 2009
FINANCIAL RESULTS AND KEY DEVELOPMENTS
FINANCIAL RESULTS AND KEY DEVELOPMENTS
- Positive results for BENLYSTA pivotal Phase 3 trials announced in July and November 2009;
marketing applications in United States and Europe expected second quarter 2010 -
- Marketing applications for ZALBIN submitted in U.S. and Europe in fourth quarter 2009; BLA in
U.S. accepted as filed by FDA with PDUFA date of October 4, 2010 -
- 2009 revenue exceeded $275 million; included $180 million from deliveries of raxibacumab to U.S.
Strategic National Stockpile -
Strategic National Stockpile -
- HGS ended 2009 with $1.2 billion in cash and investments, including net proceeds from successful
public offerings of HGSI common stock completed in August and December 2009 -
ROCKVILLE, Maryland March 2, 2010 Human Genome Sciences, Inc. (Nasdaq: HGSI) today announced
financial results for the quarter and full year ended December 31, 2009, and provided highlights of
recent key developments.
2009 was an outstanding year of progress for HGS on all fronts, said H. Thomas Watkins, President
and Chief Executive Officer. We and GlaxoSmithKline reported positive results from both Phase 3
trials of BENLYSTA in systemic lupus, and we plan to submit marketing applications in the U.S. and
Europe in the second quarter of 2010. We reported positive results from our second Phase 3 trial
of ZALBIN in chronic hepatitis C, and we and Novartis submitted marketing applications in the U.S.
and Europe in the fourth quarter of last year. We also generated our first product sales in 2009
and recognized $180 million in revenues from deliveries of raxibacumab. In the GSK clinical
pipeline, darapladib for cardiovascular disease and Syncria® for type 2 diabetes are both moving
through Phase 3 trials. We greatly strengthened our cash position with two
successful public offerings of common stock and ended 2009 with $1.2 billion in cash and
investments. Both BENLYSTA and ZALBIN have the potential to receive approval in the U.S. late in
2010, and we are well positioned to work with our partners to launch them successfully.
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FINANCIAL RESULTS
HGS reported increased revenues of $275.7 million for the year ended December 31, 2009, compared
with revenues of $48.4 million for 2008. Revenues for 2009 included $180.2 million recognized from
sales and deliveries to the U.S. Strategic National Stockpile under the raxibacumab contract with
the U.S. Government, $54.2 million recognized from the ZALBIN agreement with Novartis, $24.4
million recognized from manufacturing and development services other than raxibacumab, and $4.7
million recognized from the BENLYSTA agreement with GSK.
The Company reported net income for 2009 of $5.7 million ($0.04 per share), compared with a net
loss of $268.9 million ($1.99 per share) for 2008. The improvement in net income for 2009 was due
primarily to increased revenues, lower research and development and general and administrative
expenses, and a gain on extinguishment of debt.
Cash increased by $818.7 million during 2009 primarily as a result of the successful public
offerings of HGSI common stock completed in August and December 2009. As of December 31, 2009,
cash and investments totaled $1.2 billion, of which $1.1 billion was unrestricted and available for
operations. This compares with cash and investments totaling $372.9 million as of December 31,
2008, of which $303.6 million was unrestricted and available for operations.
Net cash flow for 2009 totaled $29.7 million, compared with net cash burn of $244.8 million for
2008; this does not include the effect of the public offerings of HGSI common stock and the
repurchase of $106.2 million principal amount of outstanding long-term debt. The improvement
primarily reflected increased revenues and lower research and development and general and
administrative expenses. (For information on the calculation of this non-GAAP financial measure,
visit www.hgsi.com/images/Q4results/netcashburn.pdf.)
For the fourth quarter ended December 31, 2009, HGS reported revenues of $53.0 million, compared
with revenues of $12.9 million for the same period in 2008. Fourth quarter 2009 revenues included
$27.6 million recognized from the ZALBIN agreement with Novartis, $17.7 million recognized from
sales and deliveries of raxibacumab to the U.S. Strategic National Stockpile, $5.3 million
recognized from manufacturing and development services other than raxibacumab, and $1.0 million
recognized from the BENLYSTA agreement with GSK.
The Companys net loss for the quarter ended December 31, 2009 decreased to $9.7 million ($0.06 per
share), compared with a net loss of $61.9 million ($0.46 per share) for the fourth quarter of 2008.
The decrease in net loss was due primarily to higher revenues and lower research and development
and general and administrative expenses.
The HGS financial position was significantly strengthened during 2009, said Tim Barabe, Senior
Vice President and Chief Financial Officer. With the proceeds from two successful public
offerings of HGSI common stock, our cash position is more than sufficient to take us through the
filing of marketing applications and the launch of our late-stage products, while also continuing
to enable investment in our earlier-stage pipeline. Excluding $813 million in new funding, we
realized net cash flow of nearly $30 million in 2009.
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HIGHLIGHTS OF RECENT PROGRESS
BENLYSTA: On Track for Second Quarter 2010 Submission of U.S. and European Marketing Applications;
Potential U.S. Approval Fourth Quarter 2010
BENLYSTA (belimumab) met the primary efficacy endpoints in BLISS-52 and BLISS-76, the largest
late-stage clinical trials ever conducted in lupus patients. The results of these pivotal Phase 3
studies were reported in July and November 2009. HGS and GSK expect to submit marketing
applications for BENLYSTA to regulatory authorities in the United States and Europe in the second
quarter of 2010, and it has the potential to receive regulatory approval in the U.S. in the fourth
quarter of 2010. BENLYSTA is being developed by HGS and GSK under a co-development and
commercialization agreement entered into in 2006.
The Phase 3 data showed that BENLYSTA plus standard of care achieved a clinically and statistically
significant improvement in patient response rate, compared with placebo plus standard of care.
BLISS study results also showed that belimumab was generally well tolerated, with rates of overall
adverse events and discontinuations due to adverse events comparable between belimumab and placebo
treatment groups.
ZALBIN: Marketing Applications Filed in United States and Europe in Fourth Quarter 2009; Potential
U.S. Approval Fourth Quarter 2010
In the fourth quarter of 2009, HGS submitted a Biologics License Application (BLA) to FDA for
ZALBIN (albinterferon alfa-2b) in the United States, and Novartis submitted a Marketing
Authorization Application (MAA) under the brand name JOULFERON® to the EMEA in Europe. In February
2010, HGS received confirmation that the BLA submission was accepted by the FDA for filing with a
Prescription Drug User Fee Act (PDUFA) target date of October 4, 2010. Albinterferon alfa-2b is
being developed by HGS and Novartis under an exclusive worldwide co-development and
commercialization agreement entered into in 2006.
The regulatory submissions include the results of two pivotal Phase 3 clinical trials, known as
ACHIEVE 1 and ACHIEVE 2/3, showing that 900-mcg ZALBIN dosed every two weeks met its primary
endpoint of non-inferiority to Pegasys (peginterferon alfa-2a) dosed once each week. Patients also
received oral ribavirin. In both studies, ZALBIN, with half the injections, achieved sustained
virologic response comparable to that achieved by Pegasys. The rates of serious and/or severe
adverse events were also comparable in these studies. ACHIEVE 1 was conducted in patients infected
with genotype 1 virus, and ACHIEVE 2/3 was conducted in patients with genotypes 2 or 3 virus. The
two studies treated a total of 2,255 patients.
Raxibacumab: $180 Million in Revenue Recognized in 2009 from Deliveries to U.S. Strategic National
Stockpile; First Delivery under Second Order Completed November 2009; Approximately 15,000 Doses to
Be Delivered to Stockpile in 2010
In the first half of 2009, HGS achieved its first product sales and recognized $162.5 million in
revenue by delivering 20,000 doses of raxibacumab to the U.S. Strategic National Stockpile. In
July 2009, the U.S. Government exercised its option to purchase 45,000 additional doses to be
delivered over a three-year period. HGS expects to receive approximately $142 million from the
second award as deliveries are completed, including $17.7 million recognized as revenue from
delivery of approximately 5,600 doses in fourth quarter 2009. The Company expects to deliver
approximately 15,000 doses to the Stockpile in 2010.
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HGS submitted a BLA to FDA for raxibacumab for the treatment of inhalation anthrax in May 2009,
received a Complete Response Letter in November 2009, and is working closely with the FDA to obtain
approval. HGS will receive $20 million from the U.S. Government upon FDA licensure of raxibacumab.
Raxibacumab is being developed under a contract entered into in 2006 with the Biomedical Advanced
Research and Development Authority (BARDA) of the Office of the Assistant Secretary for
Preparedness and Response (ASPR), U.S. Department of Health and Human Services (HHS).
GSK Pipeline: Phase 3 Trials Ongoing for Darapladib in Cardiovascular Disease and Syncria® in Type
2 Diabetes
In December 2009, GSK announced the initiation of its second pivotal Phase 3 trial to evaluate
whether darapladib can reduce the risk of adverse cardiovascular events such as a heart attack or
stroke. During the year, GSK completed enrollment of its first Phase 3 trial of darapladib ahead
of schedule. With more than 27,000 patients enrolled in the two trials, the Phase 3 clinical
program for darapladib is among the largest ever conducted to evaluate the safety and efficacy of
any cardiovascular medication. Darapladib was discovered by GSK based on HGS technology. HGS will
receive 10% royalties on worldwide sales if darapladib is commercialized, and has a 20%
co-promotion option in North America and Europe.
HGS received a $9.0 million milestone payment during the first quarter of 2009, following GSKs
initiation of a Phase 3 program to evaluate the efficacy, safety and tolerability of Syncria
(albiglutide) in the long-term treatment of type 2 diabetes mellitus. Six Phase 3 trials of
Syncria are currently ongoing. Syncria was created by HGS using its proprietary albumin-fusion
technology, and the product was licensed to GSK in 2004. HGS is entitled to fees and milestone
payments that could amount to as much as $183 million including $33 million received to date in
addition to single-digit royalties on worldwide sales if Syncria is commercialized.
Oncology Program: Therapeutic Opportunities across Broad Range of Cancers
Three randomized Phase 2 chemotherapy combination trials are currently underway to evaluate the
potential of mapatumumab (HGS-ETR1) in the treatment of advanced multiple myeloma, non-small cell
lung cancer, and hepatocellular cancer. Results are expected in first quarter 2010 for non-small
cell lung cancer and mid-2010 for multiple myeloma. Mapatumumab, a human monoclonal antibody to
TRAIL receptor 1, is the most advanced of any product in development that targets the TRAIL
apoptosis pathway.
In November 2009, HGS and Aegera Therapeutics announced the initiation of a Phase 1 trial of the
Companys lead IAP inhibitor, HGS1029, as monotherapy in patients with advanced lymphoid tumors.
HGS1029 as monotherapy is also being studied in an ongoing Phase 1 study initiated in 2008 in
patients with advanced solid tumors. HGS plans to continue the study of HGS1029 both alone and in
combination with other anti-cancer agents, including mapatumumab.
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Net Proceeds of Two Public Offerings Total $812.9 Million
In the second half of 2009, HGS received $812.9 million in net proceeds from two public offerings
of HGSI common stock. In August 2009, HGS completed the public offering of 26,697,250 newly issued
shares of common stock at $14.00 per share, receiving net proceeds of $356.5 million. In December
2009, HGS completed the public offering of 17,825,000 newly issued shares of common stock at $26.75
per share, receiving net proceeds of $456.4 million.
ABOUT HUMAN GENOME SCIENCES
The mission of HGS is to apply great science and great medicine to bring innovative drugs to
patients with unmet medical needs. The HGS clinical development pipeline includes novel drugs to
treat lupus, hepatitis C, inhalation anthrax and cancer.
The Companys primary focus is rapid progress toward the commercialization of its two lead drugs,
BENLYSTA (belimumab) for systemic lupus and ZALBIN (albinterferon alfa-2b) for hepatitis C.
Phase 3 development has been completed successfully for both BENLYSTA and ZALBIN. The submission
of marketing applications for BENLYSTA is planned in the U.S., Europe and other regions in the
second quarter of 2010. A BLA has been submitted for ZALBIN to the FDA in the United States, and
an MAA has been submitted under the brand name JOULFERON® to the EMEA in Europe.
In April 2009, HGS completed the delivery of 20,000 doses of raxibacumab to the U.S. Strategic
National Stockpile for use in the event of an emergency to treat inhalation anthrax. In July 2009,
HGS secured a new purchase order for 45,000 doses, and the Company delivered the first 5,600 doses
to the Stockpile under the new order in November 2009.
HGS also has several drugs in earlier stages of development for treatment of cancer, led by the
TRAIL receptor antibody mapatumumab and a small-molecule antagonist of inhibitor-of-apoptosis
proteins. In addition, HGS has substantial financial rights to certain products in the GSK
clinical pipeline including darapladib, in Phase 3 development in patients with coronary heart
disease, and Syncria® (albiglutide), in Phase 3 development in patients with type 2 diabetes.
For more information about HGS, please visit the Companys web site at www.hgsi.com. Health
professionals and patients interested in clinical trials of HGS products may inquire via e-mail to
medinfo@hgsi.com or by calling HGS at (877) 822-8472.
HGS, Human Genome Sciences, BENLYSTA, and ZALBIN are trademarks of Human Genome Sciences, Inc.
Other trademarks referenced are the property of their respective owners.
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NON-GAAP FINANCIAL MEASURE
Net cash flow (burn) is a non-GAAP financial measure that may be considered in addition to results
prepared in accordance with accounting principles generally accepted in the United States of
America (GAAP). Generally, a non-GAAP financial measure is a numerical measure of a companys
performance, financial position or cash flows that either excludes or includes amounts that are not
normally included or excluded in the most directly comparable measure calculated and presented in
accordance with GAAP. We define net cash flow (burn) as net income or loss, plus non-cash
expenses, such as stock-based compensation, depreciation and other non-cash
charges, and minus deferred revenue and capital expenditures. This non-GAAP measure should not be
considered a substitute for, or superior to, GAAP results. The Company believes that net cash flow
(burn) is relevant and useful information for the Company and our investors as it provides a simple
method of determining net cash used by the Company. Net cash flow (burn) is also a measure used by
our management, including our chief executive officer, who is our chief operating decision maker,
in evaluating the performance of our business. Net cash flow (burn), as presented, may not be
comparable to similarly titled measures reported by other companies since not all companies
necessarily calculate net cash flow (burn) in an identical manner and, therefore, they are not
necessarily an accurate measure of comparison between companies.
SAFE HARBOR STATEMENT
This announcement contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. The forward-looking statements are based on Human Genome Sciences current intent, belief
and expectations. These statements are not guarantees of future performance and are subject to
certain risks and uncertainties that are difficult to predict. Actual results may differ materially
from these forward-looking statements because of Human Genome Sciences unproven business model,
its dependence on new technologies, the uncertainty and timing of clinical trials, Human Genome
Sciences ability to develop and commercialize products, its dependence on collaborators for
services and revenue, its substantial indebtedness and lease obligations, its changing requirements
and costs associated with facilities, intense competition, the uncertainty of patent and
intellectual property protection, Human Genome Sciences dependence on key management and key
suppliers, the uncertainty of regulation of products, the impact of future alliances or
transactions and other risks described in the Companys filings with the SEC. Existing and
prospective investors are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of todays date. Human Genome Sciences undertakes no obligation to
update or revise the information contained in this announcement whether as a result of new
information, future events or circumstances or otherwise.
(See selected financial data on following pages.)
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HUMAN
GENOME SCIENCES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||
2009 | 2008(a) | 2009 | 2008(a) | |||||||||||||
(dollars in thousands, except share and per share amounts) | ||||||||||||||||
Revenue: |
||||||||||||||||
Product sales |
$ | 17,693 | $ | | $ | 154,074 | $ | | ||||||||
Manufacturing and development service |
5,360 | | 50,653 | | ||||||||||||
Research and development collaborative agreements |
29,904 | 12,906 | 71,022 | 48,422 | ||||||||||||
Total revenue |
52,957 | 12,906 | 275,749 | 48,422 | ||||||||||||
Costs and expenses: |
||||||||||||||||
Cost of product sales |
1,236 | | 15,805 | | ||||||||||||
Cost of manufacturing and development services |
976 | | 18,215 | | ||||||||||||
Research and development expenses |
42,330 | 48,652 | 173,709 | 243,257 | ||||||||||||
General and administrative expenses |
19,319 | 14,860 | 61,073 | 60,865 | ||||||||||||
Facility-related
exit charges (credits) (b) |
(10,675 | ) | | 759 | | |||||||||||
Total costs and expenses (c) |
53,186 | 63,512 | 269,561 | 304,122 | ||||||||||||
Income (loss) from operations |
(229 | ) | (50,606 | ) | 6,188 | (255,700 | ) | |||||||||
Investment income |
3,623 | 4,903 | 12,727 | 23,487 | ||||||||||||
Interest expense |
(14,465 | ) | (15,946 | ) | (58,424 | ) | (62,912 | ) | ||||||||
Gain on extinguishment of debt |
| | 38,873 | | ||||||||||||
Gain on sale of long-term equity investment |
| | 5,259 | 32,518 | ||||||||||||
Other income (expense) |
56 | (235 | ) | (238 | ) | (6,284 | ) | |||||||||
Income (loss) before taxes |
(11,015 | ) | (61,884 | ) | 4,385 | (268,891 | ) | |||||||||
Income tax benefit |
1,274 | | 1,274 | | ||||||||||||
Net income (loss) |
$ | (9,741 | ) | $ | (61,884 | ) | $ | 5,659 | $ | (268,891 | ) | |||||
Basic net income (loss) per share |
$ | (0.06 | ) | $ | (0.46 | ) | $ | 0.04 | $ | (1.99 | ) | |||||
Diluted net income (loss) per share |
$ | (0.06 | ) | $ | (0.46 | ) | $ | 0.04 | $ | (1.99 | ) | |||||
Weighted average shares outstanding, basic |
170,700,803 | 135,518,032 | 149,334,426 | 135,406,642 | ||||||||||||
Weighted average shares outstanding, diluted |
170,700,803 | 135,518,032 | 155,053,473 | 135,406,642 | ||||||||||||
(a) | HGS adopted new guidance related to accounting for convertible debt instruments effective January 1, 2009, which required restatement of prior periods, as applicable. Research and development expenses, interest expense, net loss and net loss per share as previously reported for the three months ended December 31, 2008 were $48,516, $9,894, $55,696 and $0.41 per basic and diluted share, respectively. Research and development expenses, interest expense, net loss and net loss per share as previously reported for the year ended December 31, 2008 were $242,710, $39,483, $244,915 and $1.81 per basic and diluted share, respectively. | |
(b) | Facility-related exit credits during the three months ended December 31, 2009 relate to the reversal of substantially all of an exit charge recorded during the three months ended June 30, 2009. HGS has decided to resume production in certain previously-vacant space in order to support upcoming manufacturing activities. | |
(c) | Includes stock-based compensation expense of $2,977 ($0.02 per basic and diluted share) and $4,645 ($0.03 per basic and diluted share) for the three months ended December 31, 2009 and 2008, respectively. Includes stock-based compensation expense of $12,524 ($0.08 per basic and diluted share) and $18,593 ($0.14 per basic and diluted share) for the year ended December 31, 2009 and 2008, respectively. |
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CONSOLIDATED BALANCE SHEET DATA:
As of | As of | |||||||
December 31, 2009 | December 31, 2008 (d) | |||||||
(dollars in thousands) | ||||||||
Cash, cash equivalents and investments (e) |
$ | 1,191,660 | $ | 372,939 | ||||
Total assets (e) |
1,530,630 | 686,832 | ||||||
Convertible subordinated debt (f) |
349,807 | 417,597 | ||||||
Lease financing |
248,628 | 246,477 | ||||||
Total stockholders equity (deficit) |
755,415 | (136,304 | ) |
(d) | As noted in footnote (a), the adoption of new accounting guidance required restatement of prior periods. Total assets, convertible subordinated debt, and total stockholders deficit as previously reported were $674,164, $510,000, and $(241,375) as of December 31, 2008. | |
(e) | Includes $88,437 and $69,360 in restricted investments at December 31, 2009 and December 31, 2008, respectively. | |
(f) | Convertible subordinated debt is net of unamortized debt discount of $54,043 and $92,403 as of December 31, 2009 and December 31, 2008, respectively. Convertible subordinated debt at face value is $403,850 and $510,000 as of December 31, 2009 and December 31, 2008, respectively. |
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