Myogen (NASDAQ:MYOG)
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Myogen, Inc. (Nasdaq:MYOG), a biopharmaceutical company
focused on the discovery, development and commercialization of small
molecule therapeutics for the treatment of cardiovascular disorders,
today reported 2006 second quarter results. As of June 30, 2006, the
Company had cash, cash equivalents and investments of $188.1 million.
Loss from continuing operations for the quarter ended June 30, 2006,
was $18.5 million, or $0.44 per share, compared to a loss from
continuing operations of $21.7 million, or $0.61 per share during the
same period last year. Loss from continuing operations for the six
months ended June 30, 2006, was $36.1 million, or $0.85 per share,
compared to a loss from continuing operations of $40.3 million, or
$1.13 per share during the same period last year.
"In the second quarter, we continued to successfully execute our
strategic plan with good progress across all aspects of the company,"
said J. William Freytag, President and Chief Executive Officer of
Myogen. "The clinical trial results for ambrisentan enhance our
optimism about the quality of the ambrisentan New Drug Application,
which we expect to submit to the FDA in the fourth quarter, thus
moving us closer toward our ultimate goal of registering and
commercializing ambrisentan. With the launch of Flolan commercial
operations and with our PAH-focused sales force now fully engaged, we
have taken an important step forward in our growth as a commercial
company. We also continued the development of darusentan with the
initiation of the first pivotal Phase 3 clinical trial in resistant
hypertension. Lastly, the extension of our research and development
collaboration with Novartis furthers our goal of identifying disease
modifying drugs for chronic heart failure."
Second Quarter Highlights
-- Announcement of Positive Results for Second Ambrisentan
Pivotal Phase 3 Clinical Trial (ARIES-1)
-- Announcement of Positive Results for Integrated Analysis of
ARIES-1 and ARIES-2 Trials
-- Presentation of ARIES-2 Results at Annual Meeting of American
Thoracic Society
-- Initiation of Darusentan Phase 3 Clinical Program in Resistant
Hypertension
-- Extension of Drug Discovery Collaboration with Novartis for
Additional Two Years
Product Portfolio Update
Ambrisentan: Ambrisentan is a non-sulfonamide, propanoic-acid
class, type-A selective endothelin receptor antagonist that is being
evaluated as a once daily oral therapy for patients with pulmonary
arterial hypertension (PAH). Ambrisentan has been evaluated in two
placebo-controlled Phase 3 trials (ARIES-1 & -2), two Phase 2 trials
(AMB-201 and AMB-222), and seven Phase 1 trials. Both Phase 3 trials
met the primary efficacy endpoint of improved exercise capacity for
all three ambrisentan doses evaluated (2.5, 5 and 10 mg once daily).
More than 720 subjects have received ambrisentan in clinical trials,
including approximately 480 PAH patients. As of July 2006, nearly 400
patients continue to be treated with ambrisentan, with exposures that
currently extend up to 3.8 years. Ambrisentan has been granted orphan
drug designation for the treatment of PAH in both the United States
and European Union and has also been granted Fast Track designation by
the U.S. Food and Drug Administration (FDA). Myogen expects to submit
the ambrisentan New Drug Application to the FDA in the fourth quarter
of 2006.
Long-term data: After the initial 12-week assessment period, all
patients in the ARIES trials had the option to continue ambrisentan
therapy in a long-term study. To date, more than 400 patients have
been enrolled in this and other long-term studies. The incidence of
confirmed serum aminotransferase test results greater than three times
the upper limit of the normal range (3xULN) is approximately 1%.
In February 2006, the Company announced positive top line results
of AMB-222, an open-label trial in which ambrisentan was administered
to 36 patients with PAH who had previously discontinued bosentan,
sitaxsentan or both due to serum aminotransferase abnormalities.
Patients in AMB-222 have continued to receive ambrisentan therapy for
periods up to 1.2 years (mean exposure of 11 months) and no further
confirmed occurrence of serum aminotransferase concentrations greater
than 3xULN has been observed.
Global PAH Collaboration with GlaxoSmithKline
In March 2006, GlaxoSmithKline and Myogen entered into a two-part
collaboration involving each party's PAH therapy. Myogen licensed
commercialization rights for ambrisentan to GlaxoSmithKline in all
territories outside of the United States where Myogen retains
exclusive rights. Simultaneously, GlaxoSmithKline and Myogen entered
into an agreement whereby Myogen will be responsible for the marketing
and distribution of GSK's Flolan (epoprostenol sodium), a life-saving
medicine for many patients, used in the treatment of PAH, in the
United States.
Myogen believes GlaxoSmithKline, one of the premier pharmaceutical
companies in the world, is the ideal ex-US partner for ambrisentan.
GSK has been a pioneer in the treatment of PAH and, through its
decade-long experience with Flolan, has a deep understanding of the
international regulatory and competitive PAH market environments.
Meanwhile, the Flolan distribution agreement is expected to underwrite
the development of the Company's U.S. commercial organization and
afford it the opportunity to establish a presence in the PAH
marketplace well in advance of the potential launch of ambrisentan.
The Company believes this strategic development will accelerate
relationship building with all important customer segments, increasing
the Company's understanding of customer needs and market dynamics in
general.
Flolan: Myogen has developed a commercial organization dedicated
to the marketing and distribution of Flolan in the United States,
including a PAH focused sales force, which began operations in May
2006. The Company records Flolan sales net of the supply price paid to
the manufacturer/licensor, distribution fees paid to the specialty
pharmacies and allowances for product returns, prompt pay discounts
and government insurer rebates. Sales of Flolan in the United States
commenced in April 2006. For the three months ended June 30, 2006, the
Company's Flolan net sales were $1.6 million on gross sales of $28.9
million.
Darusentan: Darusentan is a non-sulfonamide, propanoic-acid class,
type-A selective endothelin receptor antagonist that is being
evaluated as a once daily oral therapy for patients with resistant
hypertension. In August 2005, the Company announced positive top line
results of a Phase 2b clinical trial which evaluated darusentan in
patients with resistant systolic hypertension. Additional results from
the Phase 2b study were presented at ACC.06, the 55th Annual
Scientific Session of the American College of Cardiology, which was
held March 11-14, 2006, in Atlanta, Georgia. Based on these results,
the Company plans to conduct international Phase 3 clinical trials,
DAR-311 and DAR-312, to further evaluate darusentan for the treatment
of patients with resistant hypertension. DAR-311 was initiated in June
2006. The Company expects to initiate DAR-312 in the second half of
2006.
DAR-311
The primary objective of this Phase 3 randomized, double-blind,
placebo-controlled parallel group trial is to determine if darusentan
is effective in reducing systolic blood pressure in resistant
hypertension patients currently treated with full doses of four or
more antihypertensive medications, one of which is a diuretic.
Patients are eligible for enrollment in this trial if they have a
systolic blood pressure greater than or equal to 140 mmHg and no other
compelling conditions. For patients with diabetes and chronic kidney
disease, the blood pressure inclusion criterion is a systolic blood
pressure greater than 130 mmHg. Approximately 352 patients will be
randomized to one of three doses of darusentan (50, 100, or 300 mg qd)
versus placebo in a ratio of 7:7:7:11. The treatment period for the
trial is 14 weeks. The primary endpoint of the trial is change from
baseline to week 14 in trough sitting systolic blood pressure as
compared to placebo. Upon completion of the 14-week assessment period,
patients will be eligible to enroll in a long-term safety study.
DAR-312
The primary objective of this Phase 3 randomized, double-blind,
placebo-controlled trial is to determine if darusentan is effective in
reducing systolic blood pressure in patients with resistant
hypertension. Patients are eligible for enrollment in this trial if
they have a systolic blood pressure greater than or equal to 140 mmHg
despite treatment with full doses of three antihypertensive drugs, one
of which is a diuretic, and no other compelling conditions. For
patients with diabetes and chronic kidney disease, the blood pressure
inclusion criterion is a systolic blood pressure greater than 130
mmHg. Approximately 770 patients will be randomized to darusentan,
active control (guanfacine, an antihypertensive drug that acts as a
central alpha agonist) or placebo, in a 3:3:1 ratio. The treatment
period for the trial is 14 weeks. The primary endpoint of the trial is
change from baseline to week 14 in trough sitting systolic blood
pressure compared to placebo and then compared to the active control.
Upon completion of the 14-week assessment period, patients will be
eligible to enroll in a long-term safety study.
Patients enrolled in the two long-term safety studies will be
treated and followed for safety for at least six months with a mean
exposure expected to be in excess of one year. The Company may
undertake additional studies in this indication for commercial and
regulatory support.
Drug Discovery Research: Myogen is continuing to move forward with
its drug discovery program, which is the subject of a broad
collaboration with Novartis. The program is focused on the discovery,
development and commercialization of new therapeutics for the
treatment of heart muscle disease. In July 2006, the Company announced
that Novartis had extended the collaboration for an additional two
years.
Financial Highlights for Second Quarter 2006
Flolan net sales for the quarter ended June 30, 2006, were $1.6
million. Sublicense revenues for the quarter were $737,000. The
sublicense revenue from GSK is derived from the non-refundable upfront
payment of $20 million made by GSK in March 2006 and the milestone
achieved in April 2006, which are being recognized ratably over the
expected service period. The Company expects that sublicense revenue
related to the GSK sublicense in subsequent quarters will be similar
to the second quarter, based on milestones achieved to date.
Research and development contracts revenue from the Company's
research agreement with Novartis was $1.8 million for the second
quarter of 2006 compared to $1.6 million during the same period in
2005.
Research and development expenses, including stock-based
compensation expenses, decreased 31% to $14.5 million from $21.0
million for the quarters ended June 30, 2006 and 2005, respectively.
The decrease in expenses from 2005 was primarily due to the
discontinuation of the development of enoximone, which was partially
offset by growth in expenses related to darusentan and increased
stock-based compensation expense. The Company expects research and
development expenses to increase in the second half relative to the
rate of spending in the second quarter, due to the initiation of the
darusentan Phase 3 clinical program.
Selling, general and administrative expenses, including
stock-based compensation expenses, increased 249% to $10.2 million for
the second quarter of 2006 from $2.9 million during the same period in
2005. The increase was primarily due to increased stock-based
compensation expense, increased marketing costs associated with
ambrisentan pre-launch activities, staffing and related recruiting
costs and an increase in professional service costs.
2006 Financial Guidance
Financial projections entail a high level of uncertainty due,
among many factors, to the variability involved in predicting clinical
trial initiation timelines, enrollment rates and results, product
revenue and the potential for Myogen to enter into additional
licensing or strategic collaborations.
For the year ending December 31, 2006, the Company anticipates:
-- Total Flolan net revenue of $3.75 million to $4.5 million;
-- Total research and development contract revenue of $7.0
million to $7.2 million;
-- Total operating expenses, excluding stock-based compensation
expenses, of $100 million to $115 million; and,
-- Basic net loss per share between $2.25 and $2.65.
In addition, based on current spending projections, the Company
believes its cash, cash equivalents and investments are sufficient to
fund operations through at least the end of 2007.
Conference Call
J. William Freytag, President and CEO, and other members of
Myogen's senior management will provide a company update and discuss
results via webcast and conference call on Monday, August 7, 2006, at
4:30 p.m. Eastern time. To access the live webcast, please log on to
the company's website at www.myogen.com and go to the Investor
Relations section. Alternatively, callers may participate in the
conference call by dialing 800-218-0713 (domestic) or 303-262-2140
(international). Webcast and telephone replays of the conference call
will be available approximately two hours after the completion of the
call through Friday, August 18, 2006. Callers can access the replay by
dialing 800-405-2236 (domestic) or 303-590-3000 (international). The
passcode is 11065905.
About Myogen
Myogen has two product candidates in late-stage clinical
development: ambrisentan for the treatment of patients with pulmonary
arterial hypertension (PAH) and darusentan for the treatment of
patients with resistant hypertension. Myogen and GlaxoSmithKline have
entered into a global PAH collaboration in which Myogen has marketing
and distribution rights to GlaxoSmithKline's Flolan(R) (epoprostenol
sodium) for Injection in the United States and GlaxoSmithKline has
licensed ambrisentan from Myogen for all territories outside of the
United States, where Myogen retains exclusive rights. Myogen also
conducts a target and drug discovery research program focused on the
development of disease-modifying drugs for the treatment of chronic
heart failure and related cardiovascular disorders. Please visit
Myogen's website at www.myogen.com.
Safe Harbor Statement
This press release contains forward-looking statements that
involve significant risks and uncertainties, including the statements
relating to the design and implementation of the darusentan Phase 3
development program, the submission of a New Drug Application for
ambrisentan, Flolan revenue projections and projections regarding the
sufficiency of the Company's current cash, cash equivalents and
investments. Actual results and events could differ materially from
those projected and the Company cautions investors not to place undue
reliance on the forward-looking statements contained in this release.
Among other things, the projected commencement of any of the
Company's clinical trials, including the projected commencement of the
second darusentan Phase 3 trial in the second half of 2006, and the
projected submission of the ambrisentan NDA, may be affected by
difficulties or delays, including difficulties or delays caused by
regulatory issues, patient enrollment, patient treatment, data
collection or data analysis. In addition, the Company's results may be
affected by its effectiveness at managing its financial resources, its
ability to successfully develop and market its current products, its
ability to obtain and enforce patent protection for its products,
competition from other biotechnology or pharmaceutical companies,
difficulties or delays in manufacturing the Company's products, and
regulatory developments involving current and future products. Delays
in clinical programs, whether caused by competition, adverse events,
patient enrollment rates, regulatory issues or other factors, could
adversely affect the Company's financial position and prospects. Prior
clinical trial program designs and results are not necessarily
predictive of future clinical trial designs or results. For example,
the positive results of the darusentan Phase 2b trial are not
necessarily predictive of the results of the Company's planned Phase 3
trials of darusentan in patients with resistant hypertension as a
result of the fact that, among other things, the designs of the
planned Phase 3 clinical trials differ in material respects from the
design of the Phase 2b program. In addition, the Company may elect, or
be required by applicable regulatory authorities, to modify the
designs of one or more of its proposed clinical trials or to conduct
additional clinical trials of its product candidates to evaluate
efficacy and/or safety. Any such additional clinical trials could
adversely affect the Company's financial position and prospects.
Preliminary clinical trial results may not be confirmed upon full
analysis of the detailed results of a trial and additional information
relating to the safety, efficacy or tolerability of the Company's
product candidates may be discovered upon further analysis of trial
data or analysis of new trial data or long term safety data. If the
Company's product candidates do not meet safety or efficacy endpoints
in clinical evaluations, they will not receive regulatory approval and
the Company will not be able to market them. Even if the Company's
product candidates meet safety and efficacy endpoints, regulatory
authorities may not approve them, or the Company may face
post-approval problems that require the withdrawal of its product from
the market. There can be no assurance that Myogen's product
candidates, including ambrisentan, will be proven safe and effective
for use in humans. Abnormal liver function test results have been
reported in trials of endothelin receptor antagonists, including the
Phase 2 trial of ambrisentan.
Cash flow projections involve a high degree of uncertainty,
including variances in future spending rates due to changes in
corporate priorities, the timing of and outcomes of clinical trials,
competitive developments and the impact on expenditures and available
capital from licensing and strategic collaboration opportunities. If
the Company is unable to raise additional capital when required or on
acceptable terms, it may have to significantly delay, scale back or
discontinue one or more of its drug development or discovery research
programs. Myogen may not ever have any products that generate
significant revenue.
Additional risks and uncertainties relating to the company and its
business can be found in the "Risk Factors" section of Myogen's annual
report on Form 10-K, in Myogen's periodic reports on Form 10-Q and
Form 8-K and in other documents filed by Myogen with the Securities
and Exchange Commission (SEC). It is Myogen's policy to only update or
confirm its public guidance by issuing a press release or filing a
periodic or current report with the SEC. The Company generally plans
to provide guidance as part of its annual and quarterly earnings
releases but reserves the right to provide guidance at different
intervals or to revise its practice in future periods. Myogen
undertakes no duty or obligation to update any forward-looking
statements contained in this release as a result of new information,
future events or changes in the Company's expectations.
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MYOGEN, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share data)
June 30, December 31,
2006 2005
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $157,941 $138,380
Short-term investments 30,112 38,575
Accounts receivable, net 10,766 --
Prepaid expenses, accrued interest
receivable and other current assets 4,522 2,752
Assets of discontinued operations -- 1,289
------------ ------------
Total current assets 203,341 180,996
Long-term investments -- 5,362
Property and equipment, net 2,950 2,622
Other assets 42 27
------------ ------------
Total assets $206,333 $189,007
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $25,660 $10,345
Accrued liabilities 2,819 2,797
Current portion of deferred revenue 4,801 1,187
Current portion of other liabilities 161 142
Current portion of notes payable,
net of discount -- 172
Liabilities of discontinued operations -- 264
------------ ------------
Total current liabilities 33,441 14,907
Deferred revenue, net of current portion 23,293 1,656
Other long term liabilities, net of
current portion 211 220
Stockholders' equity:
Common stock, $0.001 par value;
100,000,000 shares authorized and
42,552,834 and 41,962,587 shares issued
and outstanding as of June 30, 2006,
and December 31, 2005, respectively 43 42
Additional paid-in capital 422,938 412,862
Deferred stock-based compensation -- (1,406)
Other comprehensive loss (88) (88)
Accumulated deficit (273,505) (239,186)
------------ ------------
Total stockholders' equity 149,388 172,224
------------ ------------
Total liabilities and stockholders' $206,333 $189,007
equity ============ ============
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MYOGEN, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except share and per share data)
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
2006 2005 2006 2005
---------- ---------- ---------- ----------
Revenues:
Research and
development
contracts $1,797 $1,580 $3,593 $3,286
Product sales, net 1,570 -- 1,570 --
Sublicense revenues 737 -- 2,709 --
---------- ---------- ---------- ----------
4,104 1,580 7,872 3,286
---------- ---------- ---------- ----------
Costs and expenses:
Research and
development
(including
stock-based
compensation expense
of $1,700, $266,
$2,930 and $530,
respectively) 14,521 20,957 30,748 38,627
Selling, general and
administrative
(including
stock-based
compensation expense
of $3,907, $252,
$5,819 and $504,
respectively) 10,245 2,935 17,457 6,166
---------- ---------- ---------- ----------
24,766 23,892 48,205 44,793
---------- ---------- ---------- ----------
Loss from operations (20,662) (22,312) (40,333) (41,507)
Interest income, net 2,156 611 4,079 1,174
---------- ---------- ---------- ----------
Loss from continuing
operations before
cumulative effect of
a change in accounting
principle (18,506) (21,701) (36,254) (40,333)
Cumulative effect of a
change in accounting
principle -- -- 172 --
---------- ---------- ---------- ----------
Loss from continuing
operations (18,506) (21,701) (36,082) (40,333)
Gain on the sale of
discontinued operations -- -- 1,763 --
Discontinued operations,
net of income taxes -- 182 -- 512
---------- ---------- ---------- ----------
Net loss $(18,506) $(21,519) $(34,319) $(39,821)
========== ========== ========== ==========
Basic and diluted net
loss per common share
attributable to common
stockholders:
Continuing operations
before cumulative
effect of a change in
accounting principle (0.44) (0.61) (0.85) (1.13)
Cumulative effect of
a change in
accounting principle 0.00 0.00 0.00 0.00
Discontinued
operations, net of
income taxes 0.00 0.01 0.04 0.02
---------- ---------- ---------- ----------
$(0.44) $(0.60) $(0.81) $(1.11)
========== ========== ========== ==========
Weighted average common
shares outstanding 42,484,853 35,767,018 42,327,432 35,762,163
========== ========== ========== ==========
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