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Pharma/biotech deliver mixed 2Q results

By Wai Lang Chu , 08-Aug-2005

The raft of pharmaceutical companies reporting results for the second quarter of 2005 provided mixed indications as to the state of the industry. The claim that pipeline product fruition is beginning to return among the pharmaceutical and biotechnology industries still remains to be seen as DrugResearcher.com presents a financial round up.

Cancer therapy developers, Onyx pharmaceuticals , reported a net loss of $18.1 million (€14.6 million) for the second quarter compared with a net loss of $13.1 million for the same period in 2004.

The second quarter 2005 results reflect the ongoing investment in sorafenib (formerly known as BAY 43-9006), an anticancer compound that Onyx is co developing with Bayer Pharmaceuticals..

 

BAY 43-9006, a novel RAF kinase and VEGFR inhibitor, is under investigation for the prevention of tumour growth, exerted an antiangiogenic effect by targeting the receptor tyrosine kinases VEGFR-2 and PDGFR and their associated signalling cascade.

 

Last month, Bayer and Onyx announced that the companies have completed the submission of a New Drug Application (NDA) with the US Food and Drug Administration (FDA) for sorafenib for patients with advanced renal cell carcinoma (RCC), or kidney cancer.

 

"We have laid the groundwork for the next phase of our corporate growth by beginning pivotal trials of sorafenib in two additional tumour types, and expanding the number of earlier stage clinical studies," said Hollings Renton, Onyx's president and chief executive officer.

 

"As a result of this clinical and commercial investment, we expect our net loss for the year to be approximately $100 million," he added.

 

The investment Onyx has contributed to the research and development of sorafenib has clearly opened up a sizeable chunk in Onyx's finances.

 

Total operating expenses were $19.9 million in the second quarter of 2005, as compared to $13.8 million during the same period in the prior year. The $6.1 million increase was attributed to higher clinical development and marketing expenses associated with sorafenib.

 

Research and development costs were $12.1 million in the second quarter of 2005 compared to $9.8 million in the second quarter of 2004. The increase was also attributed to expenses associated with the sorafenib pivotal Phase III kidney cancer trial.

 

Meanwhile Isis Pharmaceuticals reported its financial results for the second quarter 2005 having recently extended its relationship with Lilly. In addition Isis has established a new collaboration in May with Pfizer to identify second-generation antisense drugs for the treatment of ophthalmic disease.

 

Total revenue for the three and six months ended June 30, 2005 was $10.6 million and $18.0 million, respectively, compared to $9.8 million and $22.1 million for the same periods in 2004.

 

Additionally operating expenses for the three and six months ended June 30, 2005 were $22.9 million and $47.4 million, respectively, compared to $34.6 million and $66.0 million for the same periods in 2004. These results represent a substantial decrease of more than 28 per cent in the company's expenses for the first half of 2005.

 

The Company's operating expenses included $7.7 million in charges for restructuring activities, associated with employee termination costs, building consolidation costs and the closure of Isis' Singapore laboratory.

 

"As a result of cost containment measures we implemented earlier this year, our cash burn decreased by more than 30 per cent to $23.2 million, compared to $33.5 million for the second quarter last year," said B. Lynne Parshall, Isis' executive vice president and chief financial officer.

 

"The encouraging positive results reported at the American Diabetes Association (ADA) meeting in June on two of our second-generation drugs - ISIS 301012 for the treatment of high cholesterol, and ISIS 113715 for the treatment of type 2 diabetes - demonstrate that second-generation antisense is working," Parshall added.

 

Meanwhile, biotechnology company, La Jolla Pharmaceuticals reported a net loss for the second quarter of 2005 of $6.3 million compared to a net loss of $8.4 million for the second quarter of 2004.

 

The termination of 60 employees in connection with the March 2005 restructuring was given as to the decrease in operating expenses, down to $6.4 million for the three months ended June 30, 2005 compared to $8.5 million for the same period in 2004.

 

La Jolla also attributed the drop to a decrease in expenses related to the purchase of raw materials for the production of Riquent, the company's drug candidate for lupus kidney disease, partially offset by both the cost of termination benefits, mainly severance, of approximately $1.5 million.

 

Research and development expenses decreased to $5.2 million for the three months ended June 30, 2005 from $6.8 million for the same period in 2004 primarily due to the cost savings related to the March 2005 restructuring.

 

La Jolla said that contributing to the decrease was the reduction in the purchase of raw materials offset by an increase in clinical trial related expenses.

 

Finally, Amylin Pharmaceuticals reports its second quarter financial results as the company records first product sales following the launch of two first-in-class diabetes medicines in the second quarter.

 

The biopharmaceutical company reported total revenue of $46.8 million for the second quarter, which included the Company's first net product sales of $8.7 million. Net loss was $26.6 million.

 

Net product sales of $8.7 million include sales of $7.5 million for Amylin's first-in-class products, Byetta (exenatide) - an injectable therapy for type 2 diabetes, and $1.2 million for the Symlin (pramlintide acetate) injection, a first-in-class diabetes therapy that is used with mealtime insulin.

 

Amylin's Research and development expenses decreased to $26.7 million for the quarter ended June 30, 2005, compared to $29.9 million for the same period in 2004. For the six months ended June 30, 2004, research and development expenses decreased to $54.1 million compared to $57.4 million for the same period in 2004.

 

The reduction in research and development expenses in the current periods primarily reflects reduced development expenses for Byetta, partially offset by increased expenditures for the Company's Phase 2 programs in obesity, diabetes and cardiovascular disease and early stage research activities, as compared to the same periods in 2004.

 

Amylin's latest financial performance currently reflects the research-intensive period the company is currently going through. Along with the launch of its diabetes products, Amylin are also involved in a phase 2 obesity study of pramlintide (AC137)

 

A new Phase 2 dose-ranging study of pramlintide for obesity has now been fully enrolled.

 

Net loss was $26.6 million for the three months ended June 30, 2005, compared to a net loss of $39.4 million, for the same period in 2004. For the six months ended June 30, 2005, net loss was $70.2 million, compared to a net loss of $76.7 million, for the same period in 2004.

 

Operating activities used approximately $81.0 million of cash in the first half of 2005, compared to $88.1 million for the same period in 2004. At June 30, 2005, the Company held cash, cash equivalents and short-term investments of approximately $401 million.

 

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