HGSI reported $18.8M in net sales and Execs pushed back break-even date to 2014 from 2013.
Sounds like HGSI may need to raise $ in the next 12 months.
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Human Genome Sciences, Inc. (Nasdaq:HGSI - News) today announced financial results for the quarter ended September 30, 2011, and provided highlights of recent key developments.
“We are seeing solid progress in the trial and adoption of BENLYSTA treatment for systemic lupus by rheumatologists in the United States,” said H. Thomas Watkins, President and Chief Executive Officer. “The number of key accounts that have begun to order BENLYSTA has increased substantially. The number of countries in which BENLYSTA is available continues to increase. We and GSK look forward to making BENLYSTA available around the world.”
FINANCIAL RESULTS
HGS reported revenues for the quarter ended September 30, 2011 of $34.0 million, compared with revenues of $50.8 million for the same period in 2010. Revenues included $18.8 million recognized from net sales of BENLYSTA and $12.0 million recognized from sales and deliveries of raxibacumab to the U.S. Strategic National Stockpile. The decrease in revenues reflected $36.1 million in upfront and milestone payments recognized from the ZALBIN™ agreement with Novartis in the quarter ended September 30, 2010.
The Company reported a net loss for the third quarter of 2011 of $88.4 million ($0.45 per share), compared with a net loss of $40.9 million ($0.22 per share) for the third quarter of 2010. The increased net loss for the current quarter, compared with the same quarter last year, is primarily due to the absence of revenue recognized in 2011 from the ZALBIN agreement with Novartis, increased selling, general and administrative expenses and increased commercial collaboration expenses related to the commercialization of BENLYSTA, partially offset by higher product revenue and lower research and development expenses.
For the first nine months of 2011, HGS reported revenues of $85.5 million, compared with revenues of $136.1 million for the same period of the previous year. Revenues included $26.6 million recognized from sales of BENLYSTA, $38.9 million recognized from sales and deliveries of raxibacumab to the U.S. Strategic National Stockpile, and $16.8 million recognized from manufacturing and development services other than raxibacumab. The decrease in revenues reflected $82.8 million recognized from the ZALBIN agreement with Novartis in the nine months ended September 30, 2010.
The Company reported a net loss of $300.1 million ($1.56 per share) for the nine months ended September 30, 2011, compared with a net loss of $145.6 million ($0.78 per share) for the same period of the previous year. The increased net loss for the current nine months, compared with the same period last year, is primarily due to lower revenue recognized in 2011 from research and development collaborative agreements, a $50.0 million upfront license fee paid in the first quarter of 2011 to FivePrime Therapeutics, Inc., and increased selling, general and administrative expenses related to the commercialization of BENLYSTA, partially offset by higher product revenue.
During the three months ended September 30, 2011, HGS issued 7,614,000 shares of common stock in several separate transactions in exchange for $116.6 million principal amount (net of an unamortized discount of $1.2 million) of the Company’s 2¼% Convertible Subordinated Notes due October 2011. The remaining $78.0 million principal amount of these notes matured on October 15, 2011 and was repaid in cash.
As of September 30, 2011, cash and investments totaled $619.7 million, of which $539.8 million was unrestricted and available for operations. This compares with cash and investments totaling $933.4 million as of December 31, 2010, of which $853.9 million was unrestricted and available for operations.
HIGHLIGHTS OF RECENT PROGRESS
BENLYSTA: U.S. Launch Continues to Progress Well; BENLYSTA Now Available in Germany, Several Other European Countries and Canada
BENLYSTA gross sales for the third quarter totaled $21.3 million before gross-to-net adjustments of $2.5 million. Net sales of BENLYSTA for the quarter totaled $18.8 million, compared with $7.8 million in the second quarter. During the third quarter, BENLYSTA average weekly gross sales for the last four weeks of September were $2.0 million, compared with $1.7 million and $1.4 million for the preceding four-week periods, respectively.
The number of accounts ordering BENLYSTA continues to increase. HGS sales data suggest that approximately 30% of key accounts have initiated treatment of at least one patient with BENLYSTA as of the end of September 2011, compared with less than 10% at the end of the second quarter and approximately 20% in August. Among the community-based accounts that are the largest infusing practices, more than 40% have begun to purchase BENLYSTA. Among key hospital accounts, which are hospitals with very large lupus cohorts, approximately 35% have begun to purchase BENLYSTA. Steadily increasing formulary acceptances are enabling increased account penetration among hospitals.
BENLYSTA received marketing authorization from the European Commission on July 13, 2011. BENLYSTA is now available in Canada and several European countries, including Germany, Austria, Denmark, Finland, Hungary, Norway and Sweden.
Earlier than expected, the Spanish Ministry of Health has announced on its website that it intends to approve the inclusion of BENLYSTA in the public fund system for reimbursement. HGS and GSK expect to launch BENLYSTA in Spain later this quarter.
2011 FINANCIAL GUIDANCE
In previous guidance, originally provided in February 2011, HGS expected cash and investments at year-end 2011 to total between $550 million and $650 million. The Company now expects cash and investments at year-end 2011 to total between $440 million and $470 million, net of $79 million principal amount and interest paid upon maturity of the 2011 convertible debt. Cash and investments were $933.4 million at year-end 2010. The Company’s guidance for 2011 SG&A and R&D expense has not changed; consistent with that guidance, SG&A expense is expected to total between $150 million and $170 million, and R&D expense is expected to total between $180 million and $220 million.
