Affymax® Reports Second Quarter 2010 Financial Results

PALO ALTO, Calif.--(BUSINESS WIRE)-- Affymax, Inc. (Nasdaq:AFFY) today reported financial results for the second quarter ended June 30, 2010. Net income for the second quarter of 2010 was $17.3 million compared to a net loss of $22.1 million for the second quarter of 2009. The company received milestone payments of $30.0 million from Takeda Pharmaceutical Company Limited for database lock of the Hematide™/peginesatide Phase 3 clinical trials. Due to the recognition of revenue from these milestone payments, Affymax was profitable in the quarter ended June 30, 2010. The company continues to expect to incur substantial losses for the foreseeable future.

Affymax recognized revenue for the quarter ended June 30, 2010 of $54.3 million compared to $26.9 million for the quarter ended June 30, 2009. The increase in revenue was the result of its collaboration with Takeda, including the milestone payments.

Research and development expenses for the quarter ended June 30, 2010 were $28.9 million compared to $40.8 million for the quarter ended June 30, 2009. The decrease was primarily due to the completion of the treatment and follow up of the company’s Phase 3 clinical trials at the start of 2010.

General and administrative expenses for the quarter ended June 30, 2010 were $8.2 million compared to $8.7 million for the quarter ended June 30, 2009. The decrease was primarily due to lower legal fees.

The company’s cash, investments and receivables from Takeda totaled $167.2 million as of June 30, 2010, including $30.0 million in milestone payments.

About Affymax, Inc.

Affymax, Inc. is a biopharmaceutical company committed to developing novel drugs to improve the treatment of serious and often life-threatening conditions. Affymax’s product candidate, Hematide™/peginesatide, recently completed Phase 3 clinical trials for the treatment of anemia associated with chronic renal failure. For additional information, please visit www.affymax.com.

This release contains forward-looking statements, including statements regarding financial condition, the continuation and success of the Company’s collaboration with Takeda, timing, design and results of the Company’s clinical trials and drug development program and registration strategy and the timing and likelihood of the commercialization of Hematide. The Company’s actual results may differ materially from those indicated in these forward-looking statements due to risks and uncertainties, including risks relating to timing of and regulatory requirements for approvals, including the FDA’s interpretation of the data from the Phase 3 studies, in particular with respect to the secondary analyses in the non-dialysis patients, the continued safety and efficacy of Hematide in clinical development, the timing of patient accrual in ongoing and planned clinical studies, regulatory requirements and approvals, research and development efforts, the factors affecting the commercial potential of Hematide, industry and competitive environment, intellectual property rights and disputes, financing requirements and ability to access capital, and other matters that are described in Affymax’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The Company undertakes no obligation to update any forward-looking statement in this press release.

AFFYMAX, INC.

UNAUDITED CONDENSED BALANCE SHEETS

(in thousands)

 
  June 30,   December 31,
  2010     2009  
Assets
Current assets
Cash and cash equivalents $ 64,178 $ 125,296
Short-term investments 77,651 35,292
Receivable from Takeda 10,275 18,561
Income taxes receivable 125 1,443
Deferred tax assets 1,443 1,443
Prepaid expenses and other current assets   8,465     8,704  
Total current assets 162,137 190,739
Property and equipment, net 4,682 5,469
Restricted cash 1,135 1,135
Long-term investments 15,132 7,978
Deferred tax assets, net of current 5,797 5,797
Other assets   253     392  
Total assets $ 189,136   $ 211,510  
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable $ 2,467 $ 464
Accrued liabilities 11,528 12,594
Accrued clinical trial expenses 30,690 39,499
Deferred revenue 44,054 71,972
UBS loan   5,378     9,192  
Total current liabilities 94,117 133,721
Long-term income tax liability 9,425 9,425
Other long-term liabilities   1,454     1,459  
Total liabilities   104,996     144,605  
 
Stockholders’ equity
Common stock 24 24
Additional paid-in capital 449,483 441,795
Accumulated deficit

(365,413

)

(374,859

)

Accumulated other comprehensive income (loss)   46    

(55

)

Total stockholders’ equity   84,140     66,905  
Total liabilities and stockholders’ equity $ 189,136   $ 211,510  

AFFYMAX, INC.

UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

 
  Three Months Ended
June 30,
  Six Months Ended
June 30,
  2010       2009     2010       2009  
Collaboration revenue $ 54,341 $ 26,918 $ 88,987 $ 52,767
License and royalty revenue   5     5     9     9  
Total revenue   54,346     26,923     88,996     52,776  
Operating expenses:
Research and development 28,909 40,778 62,002 81,225
General and administrative   8,172     8,689     17,591     16,106  
Total operating expenses   37,081     49,467     79,593     97,331  
Income (loss) from operations 17,265

(22,544

)

9,403

(44,555

)

Interest income 83 261 180 662
Interest expense

(35

)

(1

)

(69

)

(1

)

Other income (expense), net  

(1

)

  161    

(68

)

   
Net income (loss) before benefit for income taxes 17,312

(22,123

)

9,446

(43,894

)

Benefit for income taxes      

(31

)

     

(62

)

Net income (loss) $ 17,312  

$

(22,092

)

$ 9,446  

$

(43,832

)

Net income (loss) per share:
Basic $ 0.71  

$

(1.17

)

$ 0.39  

$

(2.48

)

Weighted-average number of shares used in
computing basic net income (loss) per
share

  24,219     18,894     24,076     17,698  
Diluted $ 0.70  

$

(1.17

)

$ 0.38  

$

(2.48

)

Weighted-average number of shares used in
computing diluted net income (loss) per
share

  24,736     18,894     24,676     17,698  



CONTACT:

Affymax, Inc.
Sylvia Wheeler, 650-812-8861
Vice President, Corporate Communications
or
WCG
Carolyn Wang, 415-946-1065

KEYWORDS:   United States  North America  California

INDUSTRY KEYWORDS:   Health  Biotechnology  Clinical Trials  Pharmaceutical  General Health

MEDIA:

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