Affymax® Reports Third Quarter 2011 Financial Results

PALO ALTO, Calif.--(BUSINESS WIRE)-- Affymax, Inc. (Nasdaq:AFFY) today reported financial results for the third quarter ended September 30, 2011. The net loss for the third quarter of 2011 was $9.8 million compared to a net loss of $12.0 million for the third quarter of 2010.

Affymax recognized revenue for the quarter ended September 30, 2011 of $13.2 million compared to $16.8 million for the quarter ended September 30, 2010. During the quarter ended September 30, 2011, we received a $10 million milestone payment from Takeda upon FDA acceptance of our new drug application for review. The decrease in revenue in 2011 was due to decreased reimbursement from Takeda resulting from reduced development expenses.

Research and development expenses for the quarter ended September 30, 2011, were $14.9 million compared to $21.1 million for the quarter ended September 30, 2010. The decrease was due to lower costs for API manufacturing, contractors and consultants in the third quarter of 2011, largely as a result of the submission of our NDA to the FDA for review in the second quarter of 2011.

General and administrative expenses for the quarter ended September 30, 2011 were $8.2 million compared to $7.8 million for the quarter ended September 30, 2010. The increase was primarily due to higher commercial expenses related to expansion of our commercial capabilities.

The company had cash and investments of $116.4 million as of September 30, 2011, which includes the $10 million milestone payment from Takeda upon FDA acceptance of the NDA for peginesatide.

Updated Financial Guidance

Affymax is updating its financial guidance for 2011. With respect to income, Affymax expects total 2011 payments from Takeda to be in the range of $25 million to $30 million, which is at or above the high end of the previously issued range of $20 million to $25 million.

With respect to total operating expenses Affymax expects to incur $95 million to $100 million in operating expenses during 2011, excluding stock-based compensation. This is lower than the previously issued guidance of $105 million to $110 million in operating expenses during 2011, excluding stock-based compensation. This reduction is due largely to the impact of expense reduction efforts as well due to delay in the commencement of Phase 3b studies to evaluate the process and outcomes of converting dialysis centers from a three times per week ESA to once-monthly peginesatide.

As a result, the company expects to end 2011 with approximately $95 million to $100 million in cash, cash equivalents and investments. Affymax continues to expect cash resources, ongoing Takeda reimbursement and milestone payments from Takeda to fund operations through 2012. Under the terms of its 2006 collaboration with Takeda, Affymax is due a $50 million milestone upon approval of the NDA by the FDA.

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, peginesatide, is currently under FDA review for the treatment of anemia in dialysis patients with chronic kidney disease. For additional information, please visit www.affymax.com.

This release contains forward-looking statements, including statements regarding financial projections and condition, milestones expected to be accomplished, continuation and success of the Company’s collaboration with Takeda, timing, design and progress of the Company’s peginesatide development program and the timing and potential regulatory approval and commercialization of peginesatide. 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 the approvability and completeness of the New Drug Application (NDA), risks related to regulatory requirements and approvals, in particular the FDA’s interpretation and review of the data in the NDA including issues related to the subgroup analyses in non-dialysis, data quality and integrity particularly in non-inferiority designed trials, risks related to the continued safety and efficacy of peginesatide in clinical development, the potential for once per month dosing and room temperature stability, timing of patient accrual in ongoing and planned clinical studies, regulatory requirements and approvals, research and development efforts, industry and competitive environment, intellectual property rights and disputes and potential for costs, disruptions and consequences of litigation, 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.

CONDENSED BALANCE SHEETS

(in thousands)

 
September 30, December 31,
2011 2010
(Unaudited)  
Assets
Current assets
Cash and cash equivalents $ 66,025 $ 63,499
Short-term investments 49,222 33,582
Receivable from Takeda 5,452
Deferred tax assets 438 438
Prepaid expenses and other current assets 1,753 2,023
Total current assets 122,890 99,542
Property and equipment, net 3,071 3,982
Restricted cash 1,135 1,135
Long-term investments 19,876
Deferred tax assets, net of current 6,802 6,802
Other assets 351 50
Total assets $ 134,249 $ 131,387
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable $ 2,579 $ 321
Accrued liabilities 11,359 11,594
Accrued clinical trial expenses 3,251 11,247
Payable to Takeda 5,958
Deferred revenue 18,497
Total current liabilities 17,189 47,617
Long-term income tax liability 10,378 10,249
Advance from Takeda 2,835
Other long-term liabilities 914 974
Total liabilities 31,316 58,840
Commitments and contingencies (Note 7)
 
Stockholders’ equity
Common stock: 35,645,926 and 25,451,338 shares issued and outstanding at September 30, 2011 and December 31, 2010, respectively 36 25
Additional paid-in capital 523,715 461,425
Accumulated deficit (420,860 ) (388,934 )
Accumulated other comprehensive income 42 31
Total stockholders’ equity 102,933 72,547
Total liabilities and stockholders’ equity $ 134,249 $ 131,387
 
   

AFFYMAX, INC.

CONDENSED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(Unaudited)

 

Three Months Ended
September 30,

Nine Months Ended
September 30,

2011

 

2010

2011

 

2010

Revenue:
Collaboration revenue $ 13,204 $ 16,784 $ 44,029 $ 105,771
License and royalty revenue   5   6   14   15
Total revenue   13,209   16,790   44,043   105,786
Operating expenses:
Research and development 14,863 21,118 51,606 83,120
General and administrative   8,172   7,781   24,426   25,372
Total operating expenses   23,035   28,899   76,032   108,492
Loss from operations (9,826 ) (12,109 ) (31,989 ) (2,706 )
Interest income 45 47 136 227
Interest expense (38 ) (35 ) (111 ) (104 )
Other income (expense), net   3   67   39   (1 )
Net loss before provision for income taxes (9,816 ) (12,030 ) (31,925 ) (2,584 )
Provision for income taxes       (1 )  
Net loss $ (9,816 ) $ (12,030 ) $ (31,926 ) $ (2,584 )
Net loss per share:
Basic and diluted $ (0.28 ) $ (0.49 ) $ (0.98 ) $ (0.11 )
Weighted-average number of shares used in computing basic and diluted net loss per share   35,578   24,369   32,474   24,168



CONTACT:

Affymax, Inc.
Sylvia Wheeler, 650-812-8861
Vice President, Corporate Communications

KEYWORDS:   United States  North America  California

INDUSTRY KEYWORDS:   Health  Biotechnology  Pharmaceutical  FDA

MEDIA:

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