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| Metabasis Therapeutics Announces Third Quarter 2008 Results and Recent Company Accomplishments and Announces Restructuring of Operations |
Recent Events:
SAN DIEGO--(BUSINESS WIRE)--Nov. 12, 2008--Metabasis Therapeutics, Inc. (Nasdaq: MBRX), announced today its financial results for the third quarter ended September 30, 2008 and commented on third quarter results and recent company events and accomplishments. Financial Results: Revenue was $1.4 million for the third quarter of 2008, down from $2.7 million for the third quarter of 2007. The $1.3 million decrease in the third quarter of 2008 was a result of lower license fee and sponsored research revenue due to the completion of the research portion of the Company's collaboration with Idenix, and lower recognized license fee revenue as a result of the extension of the Merck AMPK collaboration agreement and corresponding period over which the revenue was recognized. These decreases were partially offset by license fee and sponsored research revenue recognized in connection with the Roche collaboration established in August 2008. Revenue was $3.0 million for the nine months ended September 30, 2008, compared with $7.7 million for the nine months ended September 30, 2007. The $4.7 million decrease was mainly due to the completion of the Idenix collaboration described above and the termination of the Company's former collaboration arrangement with Schering Corporation, partially offset by license fee and sponsored research revenue related to the Roche collaboration. Research and development expenses were $8.5 million for the third quarter of 2008, compared with $10.9 million for the third quarter of 2007. Research and development expenses were $27.9 million for the nine months ended September 30, 2008, compared with $31.4 million for the nine months ended September 30, 2007. The decreases for the quarter and the nine-month period compared with the prior year periods were mainly due to a decrease in clinical and development expenses for the MB07803, MB07811 and MB07133 programs, partially offset by increases in personnel related costs, depreciation and occupancy costs. General and administrative expenses were relatively unchanged at $2.7 million for the third quarter of 2008, compared with $2.8 million for the third quarter of 2007. General and administrative expenses were $7.7 million for the nine months ended September 30, 2008, compared with $9.3 million for the nine months ended September 30, 2007. The $1.6 million decrease for the nine-month period compared with the prior year period was mainly due to a decrease in depreciation, occupancy costs and non-cash stock-based compensation. Net loss for the third quarter of 2008 was $9.8 million or $0.28 per share compared to a net loss of $10.5 million or $0.34 per share in the third quarter of 2007. Net loss for the nine months ended September 30, 2008 was $32.5 million or $0.97 per share compared to a net loss of $30.9 million or $1.01 per share for the prior year period. As of September 30, 2008, Metabasis had $32.8 million in cash, cash equivalents and securities available-for-sale compared to $42.4 million as of December 31, 2007. The decrease is primarily attributable to the use of cash to fund ongoing operations, net of proceeds from the warrant exchange and concurrent private placement completed in April 2008, the venture debt transaction completed in March 2008 and up-front fees received from the newly established collaboration with Roche. Recent Company Highlights
"We made progress on our clinical and preclinical programs for metabolic disorders this quarter," commented Dr. Paul Laikind, president and chief executive officer. "We were delighted to have Dr. Garber present the results from our Phase 2a clinical trial for MB07803, showing it to be safe and well tolerated in this trial while providing an impressive reduction in fasting plasma glucose levels, including in patients with more established disease. Moreover, we believe that greater glucose lowering may be achieved at higher doses, and we are now evaluating the safety of higher exposure levels in patients. With regard to our novel product candidate for hyperlipidemia, MB07811, significant dose-dependent reductions in both ApoB and the atherosclerotic risk factor Lp(a) were seen in the Phase 1b clinical trial, along with the significant, dose-related reductions in LDL-C and TGs we reported earlier. A lipid lowering profile that includes significant reductions in LDL-C, TGs and Lp(a) could provide physicians with an important new approach for controlling disease in patients at risk for cardiovascular events, should MB07811 be approved. We are preparing to initiate a 12-week Phase 2a clinical trial for MB07811 and expect to enroll the first patients early next year. "We are also continuing our efforts on the partnering front, an important element of our strategy to further develop our product candidates and bolster our balance sheet, which is especially important in these difficult capital market conditions. In August, we were pleased to announce an agreement under which we are collaborating with Roche in an effort to discover a new treatment for HCV by applying our HepDirect(R) liver-targeting technology to certain Roche compounds. Importantly, we are in discussions with companies regarding strategic collaborations for certain of our other assets and hope to have additional progress in this area to report by the end of this year. "Our excitement about our continued progress with our pipeline and business development is tempered by today's announcement of our restructuring and reduction in force. This action is a very difficult and disappointing necessity given the challenging financial environment under which we are operating. As a result, we have adjusted our strategic objectives including outsourcing certain components of our projects to third parties. It is important to note that we remain committed to continued development of MB07803 and MB07811 and will continue our efforts to discover and recommend for development important new therapies either independently or with current and future partners. In fact, notwithstanding the reduction in force, we expect to reach value-driving milestones on both core clinical programs, and expect to recommend several new compounds for clinical development over the next 18 months. Our goal is to combine the cost savings from the restructuring, current cash, and proceeds from potential milestones from our current partnerships with one or more additional partnerships to support operations through next year without reliance on the equity markets. In the event that we fail to receive any of the expected milestone payments and/or are unsuccessful with our current business development efforts, our current resources would allow us to operate until around the middle of 2009." Conference Call: The Metabasis management team will host a conference call and live webcast to discuss third quarter 2008 financial results at 5:30 a.m. Pacific Time (8:30 a.m. Eastern Time) tomorrow, November 13, 2008. Individuals interested in participating in the call may do so by dialing 866-356-3093 for domestic callers and 617-597-5381 for international callers. Please specify to the operator "Metabasis" when asked for a passcode. The conference call will be webcast live on the Metabasis website at www.mbasis.com, under the Investors section, and will be archived there for 30 days following the call. Please connect to Metabasis' website several minutes prior to the start of the call to ensure adequate time for any necessary software download. About Metabasis (www.mbasis.com): Metabasis is a biopharmaceutical company using its proprietary technologies, scientific expertise and unique capabilities for targeting the liver and liver pathways to develop novel therapies to treat metabolic and other diseases. The Company has established a broad pipeline of product candidates and advanced research programs targeting large markets with significant unmet needs. Metabasis' core area of focus is on the discovery and development of product candidates to treat metabolic diseases such as hyperlipidemia and diabetes, among others. Although not a core focus of the Company, Metabasis has also discovered and is developing product candidates indicated for the treatment of liver diseases such as hepatitis and primary liver cancer, which it now intends to license or sell. All product candidates have been developed internally using proprietary technologies. Forward-looking Statements: Statements in this press release that are not strictly historical in nature constitute "forward-looking statements." Such statements include, but are not limited to, references to Metabasis' progress on its strategic goals and pursuit of its corporate objectives; the completion and results of clinical trials for MB07803 and MB07811 and timelines and expectations for additional clinical trials of those product candidates; the potential efficacy and benefits of, and the potential market for, Metabasis' product candidates; the status of ongoing and future partnering activities including the newly established collaboration with Roche and collaborations being sought for other programs and product candidates; and the impact of the reorganization and reduction in force, including the company's ability to reach milestones and recommend compounds for clinical development notwithstanding the reduction in force. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause Metabasis' actual results to be materially different from historical results or from any results expressed or implied by such forward-looking statements. These factors include, but are not limited to, risks and uncertainties related to the progress and timing of clinical trials for Metabasis' product candidates; the fact that positive results from preclinical studies and early clinical trials does not necessarily mean later clinical trials will succeed; difficulties or delays in development, testing, obtaining regulatory approval, producing and marketing Metabasis' product candidates; serious adverse side effects or inadequate efficacy of, or serious adverse events related to, Metabasis' product candidates or proprietary technologies; the risk that Metabasis will not be able to build more value or retain rights for direct commercialization of its product candidates; Metabasis' dependence on its licensees and collaborators for the clinical development and registration of, as well as information relating to, certain of its product candidates; potential conflicts with collaborators that could delay or prevent the development or commercialization of Metabasis' product candidates; the scope and validity of intellectual property protection for Metabasis' product candidates, proprietary technologies and their uses; competition from other pharmaceutical or biotechnology companies; Metabasis' ability to obtain additional financing to support its operations; ability to generate financing through partnerships; maintaining compliance with Nasdaq Global Market continued listing requirements and other factors discussed in the "Risk Factors" section of Metabasis' Quarterly Report on Form 10-Q for the three months ended September 30, 2008 and in Metabasis' other filings with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by this cautionary statement. Metabasis is providing this information as of the date of this release and does not undertake any obligation to update any forward-looking statements contained in this release as a result of new information, future events or otherwise.
Metabasis Therapeutics, Inc.
Condensed Balance Sheets
(in thousands)
September 30, December 31,
2008 2007
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(unaudited)
Assets:
Current assets:
Cash and securities available-for-sale $32,782 $42,438
Other current assets 1,369 1,157
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Total current assets 34,151 43,595
Property and equipment, net 5,285 6,356
Other assets 297 172
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Total assets $39,733 $50,123
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Liabilities and stockholders' equity:
Current liabilities:
Accounts payable and accrued liabilities $ 2,804 $ 4,934
Other current liabilities 12,482 6,593
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Total current liabilities 15,286 11,527
Long-term liabilities 12,289 6,495
Stockholders' equity 12,158 32,101
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Total liabilities and stockholders' equity $39,733 $50,123
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Metabasis Therapeutics, Inc.
Condensed Statements of Operations
(unaudited, in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
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2008 2007 2008 2007
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Revenues:
Sponsored research $ 659 $ 937 $ 1,698 $ 2,813
License fees 743 1,417 1,333 4,550
Other revenue - 299 - 320
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Total revenues 1,402 2,653 3,031 7,683
Operating expenses:
Research and development 8,480 10,866 27,892 31,437
General and administrative 2,659 2,834 7,747 9,284
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Total operating expenses 11,139 13,700 35,639 40,721
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Loss from operations (9,737) (11,047) (32,608) (33,038)
Total interest income, net (97) 567 132 2,117
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Net loss $(9,834) $(10,480) $(32,476) $(30,921)
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Basic and diluted net loss per
share $ (0.28) $ (0.34) $ (0.97) $ (1.01)
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Shares used to compute basic
and diluted net loss per share 35,042 30,650 33,354 30,552
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CONTACT: Metabasis Therapeutics, Inc. |
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