Pharmasset Reports Fiscal Year End 2010 Financial Results

PRINCETON, N.J., Nov. 23, 2010 /PRNewswire-FirstCall/ -- Pharmasset, Inc. (Nasdaq: VRUS), a clinical stage pharmaceutical company committed to discovering, developing, and commercializing novel drugs to treat viral infections, today reported financial results and operational highlights for the fiscal year ended September 30, 2010. At fiscal year end Pharmasset held $127.1 million in cash and cash equivalents.

Pipeline Update and 2010 highlights

RG7128

Phase 2b PROPEL and JUMP-C trials

During February 2010, dosing in the Phase 2b PROPEL study was completed. Four hundred and eight treatment-naïve, genotypes 1 or 4 hepatitis C virus (HCV)-infected patients (cirrhotic and non-cirrhotic) were enrolled. The trial is evaluating the dose and duration of treatment of RG7128 in combination with pegylated interferon and ribavirin (SOC).

In November 2010 at the AASLD meeting, Roche presented results from a 12 week interim analysis of the PROPEL study. The results presented included:

  • RG7128 1000 mg BID in combination with SOC for 12 weeks achieved a high rate of complete Early Virologic Response (cEVR; <15 IU/mL) of 83% with no on-treatment viral breakthrough
  • The safety and tolerability of RG7128 1000 mg BID with SOC were comparable to placebo/SOC with no renal or hematologic safety signals, and a discontinuation rate similar to placebo/SOC
  • No drug resistance was observed in 367 patients treated with up to 12 weeks of RG7128

In early May 2010, Roche completed enrollment of 168 treatment naive, genotypes 1 or 4 HCV-infected patients in its JUMP-C trial.

An amendment to the PROPEL and JUMP-C trial has been implemented by Roche which allows patients who were initially randomized to the placebo/SOC arm and who are non-responders to receive open label RG7128 1000mg BID in combination with SOC for 24 weeks, followed by an additional 24 weeks of SOC.

In addition, Roche is planning to initiate a Phase 2b study of RG7128 in combination with SOC in patients with HCV genotypes 2 or 3 during the first half of 2011. Roche is also planning to initiate a Phase 3 program for RG7128 during 2011 and plans to submit a marketing application for RG7128 to one or more regulatory authorities in 2013.        

PSI-7977

In January 2010, Pharmasset initiated a 28 day phase 2a dose-finding trial with PSI-7977 in combination with SOC. The trial enrolled 63 treatment-naïve, genotype 1 HCV infected patients who received either 100mg QD, 200mg QD, 400mg QD or placebo in combination with SOC for 28 days. In May 2010, we reported interim results from the trial which demonstrated that PSI-7977 was generally safe and well tolerated, as well as exhibiting potent antiviral activity (i.e. 94% RVR with 200 mg QD in combination with SOC). All patients receiving active PSI-7977 demonstrated continuous and substantial declines in HCV RNA with no viral breakthrough during the 28 days of therapy at any dose. Final results were reported in three posters at AASLD 2010 (Abstracts 815, 806, 1861).

In August 2010, we initiated a phase 2b dose-finding trial with PSI-7977 for 12 weeks in combination with SOC. The trial is expected to enroll approximately 125 treatment naïve, genotype 1 HCV-infected patients who will receive either 200mg QD, 400mg QD or placebo in combination with SOC for 12 weeks, followed by 12 weeks or 36 weeks of SOC alone. A fourth arm has completed enrollment of 25 treatment naïve, genotypes 2 or 3 HCV infected patients who will receive 400mg QD PSI-7977 in combination with SOC for 12 weeks only. We anticipate reporting preliminary safety results from this genotype 2/3 arm in the first quarter 2011 and SVR12 in the second quarter 2011.

In August 2010, Pharmasset received fast track designation from the US Food and Drug Administration (FDA) for PSI-7977 for the treatment of chronic hepatitis C (HCV) infection.

We are planning to initiate a Phase 2b study of PSI-7977 in combination with ribavirin administered with and without pegylated interferon in early December 2010. The study is expected to enroll approximately 40 treatment-naïve patients with HCV genotypes 2 or 3 and is designed to assess SVR with limited durations of pegylated interferon.

PSI-938

In April 2010, Pharmasset initiated a phase 1 single ascending dose trial with PSI-938, a purine nucleotide analog for HCV. In July 2010, we reported that single doses of PSI-938 ranging from 100mg to 800mg, and subsequently 1600mg, were generally safe and well tolerated and that a 7 day, multiple ascending dose trial had been initiated.

In October 2010, we reported positive preliminary antiviral data with PSI-938 demonstrating a median decline in HCV RNA of between 3.94 log10 to 4.64 log10 from baseline at all doses tested (100mg QD, 200mg QD, 300mg QD, 100mg BID). For the 16 subjects who received PSI-938 200mg QD or 300mg QD for 7 days, more than half (9 of 16) of the subjects on PSI-938 monotherapy achieved HCV RNA below the limit of detection (15 IU/mL) and 11 out of 16 patients achieved HCV RNA below the limit of quantification (43 IU/mL).

We are screening patients for Part 2 of a phase 1 study that includes the first combinations of a purine (PSI-938) and a pyrimidine (PSI-7977) nucleotide analog for the treatment of HCV. The cohorts within Part 2 are expected to evaluate PSI-938 QD, in the absence of interferon, as monotherapy and in combination with PSI-7977 QD. The primary objective of Part 2 of this study is to assess the safety, tolerability and pharmacokinetics of PSI-938 alone and in combination with PSI-7977 in the clinically-relevant setting of combination therapy for 14 days. The secondary objective of Part 2 of this study is to evaluate the short-term change in HCV RNA. Preliminary results are expected in the first quarter of 2011. Approximately forty patients are expected to be randomized into the study.

PSI-661

In October 2009, we nominated PSI-661, a purine nucleotide analog, for preclinical development. Our current plan is to submit an IND application, or its foreign equivalent, during the first quarter of 2011. We also plan to initiate a Phase 1 SAD study to assess the safety, tolerability, and pharmacokinetics of PSI-661 during the second quarter of 2011.

Financial Results

For the fiscal year ended September 30, 2010 Pharmasset reported revenues of $1.0 million, compared with revenues of $13.3 million for fiscal year 2009. The receipt of a $10.0 million milestone from Roche for the initiation of the phase 2b study with RG7128 led to higher reported revenues in fiscal year 2009.

Total costs and expenses for the fiscal year ended September 30, 2010 were $64.7 million compared to $65.9 million for the same period in 2009. The decrease in operating expenses for the fiscal year ended September 30, 2010 was primarily the result of discontinuing our clevudine program in April 2009. This reduction was mostly offset by increases in development costs for PSI-7977, PSI-938 and PSI-661.

Pharmasset reported a net loss of $66.1 million, or $2.13 per share for the fiscal year ended September 30, 2010, as compared to a net loss of $55.6 million, or $2.10 per share for the same period in 2009.

"Pharmasset had a very productive year, advancing all of its HCV clinical programs," stated Schaefer Price, President and Chief Executive Officer. "During the year, we advanced PSI-7977 through a Phase 2a trial and into a Phase 2b study in genotype 1, 2 or 3 patients. At the same time, we also reported very exciting data with our first purine nucleotide, PSI-938, and look forward to advancing this candidate into a 'nuc-nuc' combination trial this month. In 2011, Roche plans to start a Phase 3 program with RG7128 and we are anticipating reporting data throughout the year from our PSI-7977 Phase 2b trial and our 'nuc-nuc' combination trial."

Calendar Year 2011 Anticipated Milestones:

  • Roche expects to initiate a phase 3 program with RG7128 in 2011
  • Pharmasset expects to report 12 week safety from its ongoing phase 2b trial with PSI-7977 in genotype 2/3 patients in the first quarter 2011; SVR 12 data in the second quarter 2011
  • Pharmasset expects to report the 12 week interim analysis from its PSI-7977 Phase 2b genotype 1 arms in the second quarter 2011
  • Pharmasset expects to initiate a 24 week Phase 2b trial with PSI-7977 in the second quarter 2011
  • Pharmasset expects to initiate Part 2 of a phase 1 study with PSI-938 alone and in combination with PSI-7977 in the fourth quarter 2010; report preliminary results during the first quarter 2011
  • Pharmasset expects to initiate a phase 2 study with PSI-7977 and PSI-938 in the second quarter 2011
  • Pharmasset expects to initiate an interferon sparing trial in genotype 2/3 patients with PSI-7977 in the fourth quarter 2010
  • Pharmasset plans to file an IND for PSI-661 in the first quarter 2011 and to initiate a phase 1 trial in the second quarter 2011
  • Roche expects to initiate a phase 2 study with RG7128 in genotype 2/3 patients in the first half 2011

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 C virus (HCV). Our research and development efforts focus on nucleoside/tide analogs, a class of compounds which act as alternative substrates for the viral polymerase, thus inhibiting viral replication. We currently have four clinical-stage product candidates. RG7128, a cytosine nucleoside analog for chronic HCV infection, is in two Phase 2b clinical studies in combination with Pegasys(R) plus Copegus(R) and is also in the INFORM studies, the first series of studies designed to assess the potential of combinations of small molecules without Pegasys(R) and Copegus(R) to treat chronic HCV. These clinical studies are being conducted through a strategic collaboration with Roche. Our other clinical stage HCV candidates include PSI-7977, an unpartnered uracil nucleotide analog that has recently initiated dosing in a Phase 2b study in HCV genotype 1, 2, and 3, and PSI-938, an unpartnered guanosine nucleotide analog which recently completed a 7-day monotherapy study. We also have in our pipeline an additional purine nucleotide analog, PSI-661, in advanced preclinical development.

Pegasys(R) and Copegus(R) are registered trademarks of Roche.

   Contact

       Richard E. T. Smith, Ph.D.

       VP, Investor Relations and Corporate Communications

       Office +1 (609) 613-4181



Forward-Looking Statements

Pharmasset "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:  Statements in this press release that are not historical facts are "forward-looking statements," that involve risks, uncertainties, and other important factors, including, without limitation,  the risk of cessation or delay of any of the ongoing or planned clinical trials and/or our development of our product candidates,  the risk that the results of previously conducted studies involving our product candidates will not be repeated or observed in ongoing or future studies involving our product candidates, 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 risks, uncertainties, and other important factors, any of which could cause our actual results to differ from those contained in the forward-looking statements, see the section entitled "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended September 30, 2010 and our Quarterly Reports on Form 10-Q for the periods ended December 31, 2009, March 31, 2010 and June 30, 2010 filed with the Securities and Exchange Commission and discussions of potential risks, uncertainties, and other important factors in our subsequent filings with the Securities and Exchange Commission.

PHARMASSET, INC.

STATEMENTS OF OPERATIONS AND COMPREHENSIVE NET LOSS

(in thousands, except share and per share amounts)




















Years Ended September 30,



2010


2009


2008








Revenues


$        1,020


$      13,293


$        1,857








COSTS AND EXPENSES:







 Research and development


48,261


52,552


42,996

 General and administrative


16,458


13,365


13,289








          Total costs and expenses


64,719


65,917


56,285








Operating loss


(63,699)


(52,624)


(54,428)








Investment income


8


221


1,986

Interest expense


(2,391)


(3,190)


(2,216)








Loss before income taxes


(66,082)


(55,593)


(54,658)

Provision for income taxes


-


-


-








Net loss


$    (66,082)


$    (55,593)


$    (54,658)








COMPREHENSIVE NET LOSS:







 Net loss


$    (66,082)


$    (55,593)


$    (54,658)

 Unrealized gain (loss) on available-for-sale







   investments


-


3


(7)

Comprehensive net loss


$    (66,082)


$    (55,590)


$    (54,665)















NET LOSS PER SHARE:







 Basic and diluted


$        (2.13)


$        (2.10)


$        (2.51)








WEIGHTED AVERAGE SHARES OUTSTANDING:







 Basic and diluted


30,954,983


26,479,532


21,808,283



PHARMASSET, INC.

BALANCE SHEETS

(in thousands, except par value, share and per share amounts)






As of September 30,


2010


2009

ASSETS




CURRENT ASSETS:




 Cash and cash equivalents

$ 127,081


$  58,408

 Amounts due from collaboration partner

6


369

 Prepaid expenses and other assets

718


1,656

          Total current assets

127,805


60,433





EQUIPMENT AND LEASEHOLD IMPROVEMENTS:




 Equipment

4,060


3,613

 Leasehold improvements

1,837


1,837


5,897


5,450

 Less accumulated depreciation and amortization

(4,184)


(3,419)

          Total equipment and leasehold improvements, net

1,713


2,031

Restricted cash

100


100

Other assets

143


172

          Total

$ 129,761


$  62,736





LIABILITIES AND STOCKHOLDERS’ EQUITY




CURRENT LIABILITIES:




 Current portion of long-term debt

$     8,705


$    7,513

 Accounts payable

5,037


2,533

 Accrued expenses

5,863


7,675

 Deferred rent

25


80

 Deferred revenue

985


985

          Total current liabilities

20,615


18,786





 Deferred rent

93


-

 Deferred revenue

1,971


2,956

 Long-term debt, net of discount of $150 and $472 as of
    September 30, 2010 and 2009, respectively

2,934


12,096

          Total liabilities

25,613


33,838





Commitments and contingencies




STOCKHOLDERS' EQUITY:




 Common stock, $0.001 par value, 100,000,000 shares authorized,
    34,043,898 and 28,268,004 shares issued and outstanding at
    September 30, 2010 and 2009, respectively

34


28

 Warrants to purchase 127,248 shares of common stock
    for $12.05 per share at September 30, 2010 and 2009

1,230


1,230

 Additional paid-in capital

336,351


195,025

 Accumulated deficit

(233,467)


(167,385)

          Total stockholders’ equity

104,148


28,898

          Total

$ 129,761


$  62,736



SOURCE Pharmasset, Inc.

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