PRINCETON, N.J., Dec. 31 /Pharmasset, Inc.
(Nasdaq: VRUS), a clinical stage pharmaceutical company committed to
discovering, developing and commercializing novel drugs to treat viral
infections, reported audited financial results for the fiscal year ended
September 30, 2007. Pharmasset reported a net loss attributable to common
stockholders of $6.8 million, or $0.46 per share, as compared to a net loss
attributable to common stockholders of $12.4 million, or $1.19 per share
for the same period in 2006.
Revenues were $22.0 million during the fiscal year 2007, primarily
consisting of development milestones and the amortization of payments
received from Roche from the hepatitis C virus (HCV) collaboration
agreement that were previously recorded as deferred revenue. Revenues for
the same period in 2006 were $5.4 million. This $16.6 million increase from
the year ago period was primarily due to the receipt of milestone payments
from Roche totaling $20.0 million during fiscal year 2007. Investment
income was $2.5 million during fiscal year 2007 compared to $1.7 million
during fiscal year 2006. This $0.8 million increase was due to higher
average invested cash balances during 2007.
Total costs and expenses for the fiscal year ended September 30, 2007
were $29.5 million as compared to $18.4 million for the same period in
2006. The increased operating expenses for fiscal year 2007 were primarily
the result of an increase in Phase 3 registration clinical trial expenses
for clevudine for the treatment of chronic hepatitis B virus (HBV)
infection, as well as drug discovery, non-cash stock compensation and
depreciation expenses.
At September 30, 2007, Pharmasset held $68.7 million in cash and cash
equivalents and approximately $1.3 million of short-term investments. In
September 2007, Pharmasset entered into a $30 million working capital loan
agreement, of which $10 million was funded in October 2007.
“Pharmasset achieved significant clinical development and financial
progress in 2007,” stated Schaefer Price, Pharmasset’s President & CEO. “We
remain focused on building our hepatitis and HIV franchises with novel drug
candidates that could significantly improve therapeutic standards of care.
We hope to maintain the momentum in 2008 by completing HBV patient
enrollment of the clevudine Phase 3 clinical trials for registration in the
Americas and Europe. In addition, since the first two cohorts were fully
enrolled earlier this month, we plan to report preliminary safety and
efficacy data following 4 weeks of combination therapy with R7128 and
Pegasys(R) plus Copegus(R) in the first calendar quarter of 2008.”
Fiscal Year 2007 Highlights
— Initiated HBV patient dosing of clevudine Phase 3 clinical trials for
registration in the Americas and Europe.
— Reported clevudine’s approval for the treatment of HBV in South Korea.
Clevudine is marketed by Bukwang Pharmaceuticals in South Korea under
the brand name Levovir.
— Completed Phase 1 single and multiple ascending dose studies of R7128
in both healthy volunteers and patients chronically infected with HCV.
R7128 was generally safe and well tolerated and demonstrated potent,
dose-dependent antiviral activity in these studies.
— Discovered a new series of proprietary uridine phosphoramidates that
have demonstrated potent anti-HCV activity. We are evaluating these
molecules for potential advancement toward future development.
— Confirmed Racivir’s antiviral activity in treatment-experienced HIV
patients who were failing their HIV treatment regimen and had HIV with
the M184V resistance mutation.
— Continued building our antiviral clinical development team by adding
experienced senior leadership, including Dr. Michelle Berrey, Chief
Medical Officer and Dr. Michael Rogers, Chief Development Officer.
— Completed an initial public offering (IPO) of 5,050,000 shares of
common stock at a price of $9.00 per share and began trading on the
NASDAQ Global Market under the symbol “VRUS.” Net cash proceeds from
the IPO were $40.7 million.
— Earned $20.0 million in milestone payments from Roche as part of a
collaboration for the development of R7128 for the treatment of chronic
HCV infection.
— Closed a $30 million working capital loan agreement.
Calendar Year 2008 Anticipated Milestones
— Release preliminary safety and efficacy data from a Phase 1, Part 3
multiple ascending dose study of R7128 following 4 weeks of combination
therapy with Pegasys plus Copegus in the first calendar quarter of
2008.
— Report final safety and efficacy data from a Phase 1, Part 3 multiple
ascending dose study of R7128 following 4 weeks of combination therapy
with Pegasys plus Copegus in the second calendar quarter of 2008.
— Complete patient enrollment for clevudine Phase 3 registration clinical
trials in the second calendar half of 2008.
— Initiate a Phase 2b combination study of R7128 with Pegasys plus
Copegus in the second calendar half of 2008, assuming the successful
completion of the on-going R7128 Phase 1 study and the timely
completion of all required Phase 2b study preparation activities.
About Pharmasset
Pharmasset is a clinical stage pharmaceutical company committed to
discovering, developing and commercializing novel drugs to treat viral
infections. Pharmasset’s primary focus is on the development of oral
therapeutics for the treatment of hepatitis B virus (HBV), hepatitis C
virus (HCV) and human immunodeficiency virus (HIV).
Pharmasset is currently developing three product candidates. Clevudine,
for the treatment of chronic HBV infection, is enrolling Phase 3 clinical
trials for registration in North, Central and South America and Europe.
Clevudine is already approved for HBV in South Korea and marketed by
Bukwang Pharmaceuticals in South Korea under the brand name Levovir. R7128,
an orally administered treatment for chronic HCV infection, is in a 4-week
Phase 1 clinical trial in combination with Pegasys(R) and Copegus(R)
through a strategic collaboration with Roche. Racivir, which is being
developed for the treatment of HIV in combination with other approved HIV
drugs, has completed a Phase 2 clinical trial.
Contact
Alan Roemer, Vice President
Investor Relations & Corporate Communications
alan.roemer@pharmasset.com
Office: (609) 613-4125
Forward-Looking Statements
Pharmasset “Safe Harbor” Statement under the Private Securities
Litigation Reform Act of 1995: Statements in this press release regarding
our business that are not historical facts are “forward-looking statements”
that involve risks and uncertainties, including without limitation the risk
that adverse events could cause the cessation of the Phase 3 registration
studies and/or our development of clevudine, the risk that adverse events
could cause the cessation of the Phase 1 combination study and/or our
development of R7128, including the risk that we will fail to release
preliminary or final safety and efficacy data from a Phase 1, Part 3
multiple ascending dose study and the risk that we will fail to initiate a
Phase 2b combination study of R7128 with Pegasys plus Copegus in the second
calendar half of 2008, the risk that our collaboration with Roche will not
continue or will not be successful and the risk that any one or more of our
product candidates will not be successfully developed and commercialized.
For a discussion of these risks and uncertainties, any of which could cause
our actual results to differ from those contained in the forward-looking
statements, see the section of our Annual Report on Form 10-K for the
fiscal year ended September 30, 2007 filed with the Securities and Exchange
Commission entitled “Risk Factors” and discussions of potential risks and
uncertainties in our subsequent filings with the Securities and Exchange
Commission.
PHARMASSET, INC.
STATEMENTS OF OPERATIONS AND COMPREHENSIVE NET LOSS
Years Ended Nine Months
September 30, Ended
————————- September 30,
2007 2006 2005
————————- ————-
REVENUES $22,009,458 $5,424,614 $3,719,104
————————- ————-
COSTS AND EXPENSES:
Research and development 20,318,910 10,497,703 10,468,026
General and administrative 9,210,623 7,911,545 8,095,897
————————- ————-
Total costs and expenses 29,529,533 18,409,248 18,563,923
————————- ————-
OPERATING LOSS (7,520,075) (12,984,634) (14,844,819)
INVESTMENT INCOME 2,470,563 1,658,977 1,136,035
INTEREST EXPENSE (15,136) - -
————————- ————-
LOSS BEFORE INCOME TAXES (5,064,648) (11,325,657) (13,708,784)
PROVISION FOR INCOME TAXES - - -
————————- ————-
NET LOSS (5,064,648) (11,325,657) (13,708,784)
REDEEMABLE PREFERRED STOCK
ACCRETION 1,775,684 1,110,973 2,286,799
————————- ————-
NET LOSS ATTRIBUTABLE TO
COMMON STOCKHOLDERS $(6,840,332) $(12,436,630) $(15,995,583)
========================== =============
COMPREHENSIVE NET LOSS:
NET LOSS $(5,064,648) $(11,325,657) $(13,708,784)
UNREALIZED GAIN (LOSS) ON
AVAILABLE-FOR-SALE
INVESTMENTS 2,100 (56,465) 58,454
————————- ————-
COMPREHENSIVE NET LOSS: $(5,062,548) $(11,382,122) $(13,650,330)
========================== =============
NET LOSS ATTRIBUTABLE TO
COMMON
STOCKHOLDERS PER SHARE:
BASIC $(0.46) $(1.19) $(2.42)
DILUTED $(0.46) $(1.19) $(2.42)
WEIGHTED AVERAGE SHARES
OUTSTANDING:
BASIC 14,990,472 10,462,369 6,630,463
DILUTED 14,990,472 10,462,369 6,630,463
PHARMASSET, INC.
BALANCE SHEETS
As of September 30,
—————————-
2007 2006
—————————-
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $68,745,694 $26,182,316
Short-term investments 1,252,113 1,250,013
Amounts due under collaborative
agreements 919,110 297,070
Prepaid expenses and other assets 783,311 359,082
Deferred offering costs - 1,608,826
—————————-
Total current assets 71,700,228 29,697,307
—————————-
EQUIPMENT AND LEASEHOLD IMPROVEMENTS:
Laboratory, office furniture and
equipment 2,462,647 1,877,095
Leasehold improvements 1,836,553 1,836,553
—————————-
4,299,200 3,713,648
Less accumulated depreciation and
amortization (1,437,080) (544,725)
—————————-
Total equipment and leasehold
improvements, net 2,862,120 3,168,923
OTHER ASSETS 1,282,051 131,300
—————————-
TOTAL $75,844,399 $32,997,530
============================
LIABILITIES, REDEEMABLE STOCK AND WARRANTS,
AND STOCKHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $3,281,600 $710,386
Accrued expenses 5,513,407 2,055,025
Deferred rent 124,462 124,462
Current portion of capital lease
obligation 159,440 -
Deferred revenue 1,857,136 1,803,564
—————————-
Total current liabilities 10,936,045 4,693,437
DEFERRED RENT 204,256 328,718
NON CURRENT PORTION OF CAPITAL LEASE
OBLIGATION 41,641 -
DEFERRED REVENUE 5,726,131 7,364,547
—————————-
Total liabilities 16,908,073 12,386,702
—————————-
COMMITMENTS
REDEEMABLE STOCK AND WARRANTS
Series B, C, D, and R redeemable
convertible stock - 19,376,679
Series R-1 warrants - 264,000
Redeemable common stock - 1,190,251
Total redeemable stock and
warrants —————————-
- 20,830,930
—————————-
STOCKHOLDER’S EQUITY (DEFICIT)
Series A convertible preferred stock - 2,640
Series D-1 warrants - 5,411,932
Common Stock, $0.001 par value,
21,232,991 and 10,291,386 shares
outstanding at September 30, 2007
and 2006, respectively 21,233 10,291
Warrants to purchase 66,390 shares
of common stock 526,720 -
Additional paid-in capital 115,518,201 44,480,015
Accumulated other comprehensive
income 4,405 2,305
Accumulated deficit (57,134,233) (50,127,285)
—————————-
Total stockholders’ equity
(deficit) 58,936,326 (220,102)
—————————-
TOTAL $75,844,399 $32,997,530
============================
SOURCE Pharmasset, Inc.
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