Altus Pharmaceuticals Reports Second Quarter 2007 Results
Altus Pharmaceuticals Inc. (NASDAQ: ALTU), a biopharmaceutical company focused on the development and commercialization of oral and injectable protein therapeutics for patients with gastrointestinal and metabolic disorders, today reported financial results for the quarter ended June 30, 2007.
For the second quarter of 2007, the Company reported a net loss attributable to common stockholders of $30.5 million, or $1.06 per share, compared to a net loss attributable to common stockholders of $15.0 million, or $0.68 per share, in the second quarter of 2006. Total revenues were $1.5 million in the second quarter of 2007 compared to $4.4 million in the second quarter of 2006. Second quarter revenue decreased over the comparable quarter in 2006 primarily due to the termination of the Company’s agreement with Dr. Falk Pharma in 2007.
Research and development expenses totaled $17.9 million in the second quarter of 2007 compared to $17.3 million in the second quarter of 2006. Second quarter 2007 R&D spending reflects continued clinical and manufacturing costs associated with ALTU-135, investments in ALTU-238 clinical manufacturing capacity, outsourced third-party and internal costs related to the ALTU-237 IND submission and development spending on Altus’ early stage pre-clinical projects. General, sales and administrative expenses were $4.1 million in the second quarter of 2007 compared to $3.3 million in the second quarter of 2006. This increase is primarily due to increases in personnel, legal, consulting and professional service fees.
The total expenses for the second quarter were $33.6 million compared to $20.6 million in the second quarter of 2006. The increase in 2007 total expenses was primarily attributable to a charge of $11.5 million associated with the termination of the Dr. Falk Pharma agreement and reacquisition of European marketing rights to ALTU-135.
2007 Financial Guidance
Cash, cash equivalents and short-term marketable securities balances at June 30, 2007 totaled $178 million. Based on current operating plans and the expected timing of product development programs, Altus believes that net cash used in operating activities will be between $45 million and $55 million in 2007. Previously, Altus had provided guidance that net cash used in operating activities would be between $55 million and $65 million in 2007. Altus believes its current cash position will fund operations through the first half of 2009.
Second Quarter 2007 Accomplishments include:
* Started Phase III ALTU-135 clinical trials
* Submitted IND to study ALTU-237 for the treatment of hyperoxalurias and the potential prevention of kidney stone formation
* Reacquired European development and commercialization rights to ALTU-135
“During the second quarter, Altus delivered on two corporate milestones, including the initiation of our ALTU-135 Phase III clinical trials and our submission of an IND for ALTU-237,” stated Sheldon Berkle, President and Chief Executive Officer of Altus Pharmaceuticals. “Each individual milestone alone is a significant accomplishment for any biotech company, which only further demonstrates why we are very proud of the Altus team for achieving both objectives during the quarter.”
On May 9, 2007, the Company announced the start of its Phase III clinical trials to evaluate the efficacy and safety of ALTU-135, an oral enzyme replacement therapy for cystic fibrosis patients with pancreatic insufficiency. Altus’ consistent and pure enzyme combination, ALTU-135, is designed to improve fat, protein and carbohydrate absorption in pancreatic insufficient individuals. The DIGEST trials (Determining the efficacy and safety of an Innovative GastrointESTinal enzyme complex) consist of a Phase III efficacy trial and a Phase III safety trial.
Altus plans to recruit approximately 300 patients from more than 50 sites worldwide for the two trials, making this Phase III program the largest ever conducted to evaluate the efficacy and safety of pancreatic enzyme replacement therapy in cystic fibrosis patients. ALTU-135 has been tested in more than 160 cystic fibrosis patients including a 129 patient Phase II trial. The DIGEST trials are seeking patient participation. For information please visit www.altus.com/digesttrials.cfm. The DIGEST efficacy trial, which is testing a one capsule per meal dosing regimen, is studying the fat absorption in cystic fibrosis patients with exocrine pancreatic insufficiency through the measurement of the coefficient of fat absorption (CFA). In parallel, Altus is conducting a long-term safety study that will evaluate ALTU-135 over one year of open-label treatment.
Commenting on the DIGEST trials, Berkle said, “The DIGEST trials continue to enroll clinical sites and patients. As we previously stated, we expect to report top-line efficacy data from this trial in the second quarter of 2008.”
Also during the second quarter, Altus announced that it reacquired from Dr. Falk Pharma the development and commercialization rights to ALTU-135 and ended the development and commercialization collaboration in Europe and countries of the former Soviet Union, Israel and Egypt. Under the agreement, Altus regains control of all of the assets created in the collaboration. In exchange, Altus will pay Dr. Falk Pharma €12.0 million over three years.
Berkle continued, “We believe reporting Phase III top-line efficacy data can be a significant value creating event for ALTU-135 and Altus. To maximize the value of our ALTU-135 assets, we continue to evaluate our strategic options outside of North America.”
Conference Call Access Information
The Company will host a conference call to discuss the second quarter results at 11:00 a.m. ET on August 8. The call may be joined via telephone by dialing (800) 817-4887 or (913) 981-4913 (for international participants) at least 5 minutes prior to the start of the call. The conference confirmation code is: 6945814. For 72 hours following the call, an audio replay can be accessed by dialing (719) 457-0820 or (888) 203-1112 and using the conference confirmation code 6945814.
About Altus Pharmaceuticals Inc.
Altus Pharmaceuticals is a company focused on the development and commercialization of oral and injectable protein therapeutics for patients with gastrointestinal and metabolic disorders. The Company's website is http://www.altus.com.
Safe Harbor Statement
Certain statements in this news release concerning Altus’ business are considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, those relating to our 2007 financial guidance, the anticipated net cash requirements to be used to fund on-going development programs and operations, and the plans for and the scientific robustness of our ALTU-135 clinical development program. Any or all of the forward-looking statements in this press release may turn out to be wrong. They can be affected by inaccurate assumptions Altus might make or by known or unknown risks and uncertainties, including, but not limited to uncertainties as to the future success or timing of ongoing and planned clinical trials, inherent uncertainties in the timing of patient enrollment in our clinical trials, the continued development of our manufacturing processes in parallel with our clinical programs, the performance and development plans of our third party collaborators, and the unproven safety and efficacy of products under development. Consequently, no forward-looking statement can be guaranteed, and actual results may vary materially. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in Altus’ reports to the Securities and Exchange Commission, including its Quarterly Report on Form 10-Q for the period ended June 30, 2007. However, Altus undertakes no obligation to publicly update forward-looking statements, whether because of new information, future events or otherwise.
ALTUS PHARMACEUTICALS INC. (ALTU)
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2007 2006 2007 2006
Contract revenue $ 1,508 $ 4,410 $ 2,335 $ 5,922
Costs and expenses:
Research and development 17,940 17,314 30,799 27,103
General, sales and administrative 4,135 3,330 8,716 6,437
Reacquisition of European marketing rights from Dr. Falk 11,493 - 11,493 -
Total costs and expenses 33,568 20,644 51,008 33,540
Loss from operations (32,060) (16,234) (48,673) (27,618)
Other income (expense):
Interest income 1,937 1,495 2,946 2,540
Interest expense (290) (177) (453) (368)
Foreign currency loss (23) - (23) -
Total other income (expense) —net 1,624 1,318 2,470 2,172
Net loss (30,436) (14,916) (46,203) (25,446)
Preferred stock dividends and accretion (56) (100) (113) (1,086)
Net loss attributable to common stockholders $ (30,492) $ (15,016) $ (46,316) $ (26,532)
Net loss attributable to common stockholders per share - basic and diluted
$ (1.06) $ (0.68) $ (1.77) $ (1.42)
Weighted average shares outstanding - basic and diluted 28,844 22,200 26,172 18,693
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)
June 30, December 31,
2007 2006
Cash, cash equivalents and marketable securities $ 178,066 $ 85,914
Prepaid expenses and other current assets 2,341 2,576
Property and equipment, net 6,393 6,717
Other assets, net 1,029 1,254
Total assets $ 187,829 $ 96,461
Current liabilities $ 25,083 $ 17,183
Noncurrent liabilities 23,322 3,575
Redeemable preferred stock 6,394 6,281
Total stockholders' equity 133,030 69,422
Total liabilities, redeemable preferred stock and stockholders' equity
$ 187,829 $ 96,461
Altus Pharmaceuticals
John A. Jordan, 617-299-2852
Senior Director, Corporate Communications
Source: Business Wire (August 8, 2007 - 6:57 AM EST)
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