Altus Pharmaceuticals Inc. (ALTU)

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Altus Pharmaceuticals Reports First Quarter 2009 Financial Results
On Monday May 11, 2009, 8:47 am EDT

WALTHAM, Mass.--(BUSINESS WIRE)--Altus Pharmaceuticals Inc. (NASDAQ: ALTU - News) today reported financial results for the quarter ended March 31, 2009.

First Quarter 2009 Results

For the first quarter of 2009, the Company reported a net loss attributable to common stockholders of $20.7 million, or $0.66 per share, compared to a net loss attributable to common stockholders of $24.6 million, or $0.80 per share, in the first quarter of 2008. Altus did not earn revenue for the first quarter of 2009 compared to reporting $2.6 million in the first quarter of 2008. The Company’s contract revenue in 2008 consisted of amounts earned under former collaborative research and development agreements relating to Trizytek and ALTU-238.

Research and development expense totaled $14.0 million in the first quarter of 2009 compared to $21.6 million in the first quarter of 2008. The decrease in R&D expense is primarily due to the completion of the Trizytek Phase 3 efficacy trial which was ongoing during the first quarter of 2008. General, sales and administrative expense totaled $3.4 million in the first quarter of 2009 compared to $5.8 million in the first quarter of 2008.

Cash, cash equivalents and marketable securities at March 31, 2009 were $25.0 million. Altus believes the current cash, cash equivalents and marketable securities position will last into September of 2009.

On January 26, 2009, Altus announced a strategic realignment to focus on the advancement of ALTU-238 and, to conserve capital resources, discontinue its Trizytek development activities. In connection with the realignment, the Company implemented a workforce reduction of approximately 70% of its workforce, primarily in functions related to the Trizytek program as well as certain general and administrative positions. As a result of these activities, the Company recognized a charge of $3.6 million in the first quarter of 2009, primarily for severance and related expenses. The Company anticipates taking a further restructuring charge of between $4.0 and $6.0 million in the second quarter of 2009.

“In early 2009 we implemented a strategic realignment of our product development priorities to focus on the advancement of ALTU-238, a once-per-week treatment for adult and pediatric patients with growth hormone deficiency,” stated Dr. Georges Gemayel, President and Chief Executive Officer of Altus Pharmaceuticals. “We believe that ALTU-238 represents a promising opportunity to make a major impact on the multi-billion dollar market for growth hormone replacement products.”

Gemayel continued, “As we continue to implement our realignment plan, we are negotiating the terms of certain obligations that are not associated with the current operating plan. One positive outcome resulting from these discussions is an agreement with Dr. Falk to settle our remaining financial obligation of €5.0 million. I am pleased to report that we will make a final settlement payment of €1.8 million in May 2009.”

ALTU-238 Program Update

ALTU-238 is being developed as a subcutaneously administered, once-per-week dosage formulation of recombinant human growth hormone (hGH) that can be administered through a fine gauge needle. Altus has successfully completed a Phase 2 trial with ALTU-238 in growth hormone deficient adult subjects and recently completed a Phase 1c trial confirming the safety, pharmacokinetic and pharmacodynamic profile of a single dose of weekly ALTU-238 compared to seven injections of daily growth hormone.

Dr. Gemayel concluded, “2009 is a crucial year for Altus. During the next several months, we will pursue additional funding to enable the ALTU-238 program to continue forward. In March we started a Phase 2 trial for ALTU-238 in growth hormone deficient pediatric subjects. We have initiated the majority of the 18 U.S. clinical sites that are participating in this clinical trial and they have begun screening patients. The target for enrollment is 36 growth hormone deficient pediatric patients.”

Conference Call Access Information

The Company will host a conference call to discuss its first quarter results at 11:00 a.m. ET on May 11. The call may be joined via telephone by dialing [phone] or [phone] (for international participants) at least 5 minutes prior to the start of the call. The conference confirmation code is: 7594867. For 72 hours following the call, an audio replay can be accessed by dialing [phone] or [phone] and using the conference confirmation code 7594867. A live audio webcast of the call will also be available on the "Investor Relations" section of the Company's website, www.altus.com. An archived audio webcast will be available on the Altus website approximately two hours after the event and will be archived for 30 days.