2014

Cadence Pharmaceuticals Reports Third Quarter 2013 Financial Results

SAN DIEGO, Nov. 5, 2013 /PRNewswire/ -- Cadence Pharmaceuticals, Inc. (NASDAQ: CADX), a biopharmaceutical company focused on acquiring, in-licensing, developing and commercializing proprietary products principally for use in the hospital setting, today reported financial results for the three and nine months ended September 30, 2013.

Highlights for the third quarter of 2013 included:

  • Net product revenue for the third quarter of 2013 was $29.0 million, representing increases of $15.1 million, or 109%, from the third quarter of 2012, and $4.3 million, or 17%, from the second quarter of 2013.
  • Gross margin on sales of OFIRMEV was 66% for the third quarter of 2013, compared to 56%, for the third quarter of 2012.
  • The number of unique end-user customer accounts that ordered OFIRMEV during the third quarter of 2013 increased 33% as compared to the same period in 2012.
  • The average order size per end-user customer increased 22% during the third quarter of 2013 as compared to the third quarter of 2012.
  • The average number of orders per end-user customer increased approximately 8% during the third quarter of 2013, as compared to the third quarter of 2012.

"We maintained our strong performance during the third quarter, with OFIRMEV continuing to gain market share and posting year-over-year sales growth of more than 100% in each quarter of 2013," said Ted Schroeder, President and CEO of Cadence. "In addition, our disciplined approach to controlling expenses has enabled us to reduce our cash burn despite the legal expenses we continue to incur to defend the intellectual property covering OFIRMEV."  

Financial Results
Cadence's net product revenue for the three months ended September 30, 2013 was $29.0 million, an increase of 109%, from the $13.9 million in net product revenue recognized for the three months ended September 30, 2012. For the nine months ended September 30, 2013, Cadence's net product revenue was $77.2 million, an increase of 134% from the $33.0 million reported for the same period in 2012.

For the three months ended September 30, 2013, Cadence reported a net loss of $6.9 million, or $0.08 per share, compared to a net loss of $15.9 million, or $0.19 per share, for the comparable period in 2012. For the nine months ended September 30, 2013, Cadence reported a net loss of $20.2 million, or $0.24 per share, compared to $59.6 million, or $0.70 per share, for the nine months ended September 30, 2012.  Included in the company's net loss for the nine months ended September 30, 2013, was a gain of $7.7 million recorded with respect to the waiver, termination and sale of Cadence's Incline assets in January 2013, for which the company received cash payments totaling $14.7 million.

The Company's gross margin on sales of OFIRMEV for the three months ended September 30, 2013, was 66%, compared to 56% for the same period in 2012. For the nine months ended September 30, 2013, Cadence reported a gross margin of 66%, compared to 51% for the same period in 2012. These year-over-year increases were primarily the result of lower freight costs in 2013 and the impact of price increases implemented in 2012 and 2013. Operating expenses, including patent amortization, increased $2.2 million, or 10%, for the three months ended September 30, 2013, to $24.8 million, from $22.6 million for the same period in 2012. This increase was primarily attributable to higher legal expenses related to the company's intellectual property litigation and the timing of marketing programs, partially offset by lower research and development expenses. For the nine months ended September 30, 2013, Cadence reported operating expenses of $75.4 million, an increase of $2.1 million, or 3%, as compared to $73.3 million for the same period in 2012. This increase was primarily attributable to higher legal expenses and corporate development activities, partially offset by lower selling and research and development expenses.

As of September 30, 2013, Cadence held cash, cash equivalents and short-term investments of $54.3 million, a decrease of $2.5 million from $56.8 million at June 30, 2013, and $7.8 million from $62.1 million at December 31, 2012. Net accounts receivable at September 30, 2013, was $8.7 million, representing less than 30 days of sales outstanding.

Guidance
As of November 5, 2013, Cadence expects that net product revenue from sales of OFIRMEV for the twelve months ending December 31, 2013, will range between $107.0 million and $109.0 million. This change represents an increase from the company's prior guidance range of net product revenue between $103.0 million to $105.0 million.

Conference Call and Webcast on November 5, 2013, at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time)
Cadence will host a conference call on November 5, 2013, at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) and interested investors may participate in the conference call by dialing (877) 303-9145 (domestic) or (760) 536-5203 (international). To access the webcast, please visit the company's website at www.cadencepharm.com and go to the Investors page. A replay of the webcast will be available approximately two hours after the call and remain available on the company's website until the next quarterly financial results call. Cadence uses the Investors portion of its website as one means of disclosing material non-public information, and investors are encouraged to monitor Cadence's website in addition to following the company's press releases, SEC filings and public conference calls and webcasts.

About OFIRMEV® (Acetaminophen) Injection
OFIRMEV (acetaminophen) injection (1000 mg / 100 mL, 10 mg / mL; for intravenous use only), Cadence Pharmaceuticals' proprietary intravenous formulation of acetaminophen, is indicated for the management of mild to moderate pain, the management of moderate to severe pain with adjunctive opioid analgesics, and the reduction of fever. The FDA approval of OFIRMEV was based on data from clinical trials in approximately 1,020 adult and 355 pediatric patients. These trials included two studies evaluating the safety and effectiveness of OFIRMEV in the treatment of pain, and one study evaluating OFIRMEV in the treatment of fever. The effectiveness of OFIRMEV for the treatment of acute pain and fever has not been studied in pediatric patients less than 2 years of age.

Important Safety Information


RISK OF MEDICATION ERRORS AND HEPATOTOXICITY
Take care when prescribing, preparing, and administering OFIRMEV injection to avoid dosing errors which could result in accidental overdose and death.

OFIRMEV contains acetaminophen.  Acetaminophen has been associated with cases of acute liver failure, at times resulting in liver transplant and death.  Most of the cases of liver injury are associated with the use of acetaminophen at doses that exceed the recommended maximum daily limits, and often involve more than one acetaminophen-containing product.

OFIRMEV is contraindicated in patients with severe hepatic impairment, severe active liver disease or with known hypersensitivity to acetaminophen or to any of the excipients in the formulation.  Acetaminophen should be used with caution in patients with the following conditions: hepatic impairment or active hepatic disease, alcoholism, chronic malnutrition, severe hypovolemia, or severe renal impairment. Rarely, acetaminophen may cause serious skin reactions such as acute generalized exanthematous pustulosis (AGEP), Stevens-Johnson Syndrome (SJS), and toxic epidermal necrolysis (TEN), which can be fatal.  Discontinue OFIRMEV immediately if symptoms associated with allergy or hypersensitivity occur, or at the first appearance of skin rash. Do not use in patients with acetaminophen allergy.

The most common adverse reactions in patients treated with OFIRMEV were nausea, vomiting, headache, and insomnia in adult patients and nausea, vomiting, constipation, pruritus, agitation, and atelectasis in pediatric patients. The antipyretic effects of OFIRMEV may mask fever in patients treated with postsurgical pain. OFIRMEV is approved for use in patients ≥ 2 years of age. Do not exceed the recommended maximum daily dose of OFIRMEV. OFIRMEV should be administered only as a 15-minute infusion.

For more information, please see the full OFIRMEV Prescribing Information, including the complete boxed warning, which is available at www.OFIRMEV.com or www.cadencepharm.com.

About Cadence Pharmaceuticals, Inc.
Cadence Pharmaceuticals is a biopharmaceutical company focused on acquiring, in-licensing, developing and commercializing proprietary products principally for use in the hospital setting. The current version of Cadence Pharmaceuticals' corporate overview may be viewed on the Investors page of www.cadencepharm.com under "Events & Presentations" by selecting "Corporate Overview."

Forward-Looking Statements
Statements included in this press release and Cadence's conference call that are not a description of historical facts are forward-looking statements. Words such as "plans," "believes," "expects," "anticipates," and "will," and similar expressions, are intended to identify forward-looking statements, and are based on Cadence's current beliefs and expectations. Such statements include, without limitation, statements regarding: Cadence's belief that OFIRMEV is continuing to gain market share; the company's ongoing intellectual property litigation and related expenses; and the company's guidance regarding anticipated net product revenue from sales of OFIRMEV for the twelve months ending December 31, 2013. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Cadence's actual future results may differ materially from Cadence's current expectations due to the risks and uncertainties inherent in its business. These risks include, but are not limited to: Cadence's dependence on the successful commercialization of OFIRMEV, which is the company's only product; Cadence's ability to achieve broad market acceptance and generate revenues from sales of OFIRMEV; Cadence's dependence on its contract manufacturers and its ability to ensure an adequate and continued supply of OFIRMEV to meet market demand; Cadence's ability to successfully enforce its marketing exclusivities and intellectual property rights, and to defend the patents covering OFIRMEV, including in current intellectual property litigation with the parties that have submitted new drug applications ("NDAs") or abbreviated new drug applications ("ANDAs") for generic versions of OFIRMEV; the potential that Cadence may be required to continue intellectual property litigation for substantial lengths of time or file additional lawsuits to defend its patent rights from challenges by companies that have submitted NDAs or ANDAs for generic versions of OFIRMEV, and the substantial costs associated with such lawsuits; the potential introduction of generic competition to OFIRMEV in the event Cadence is unsuccessful in current or future intellectual property litigation, and the impact it may have on the sales and pricing of the product; Cadence's dependence on its licensors for the maintenance and enforcement of its intellectual property rights; the potential product liability exposure associated with pharmaceutical products such as OFIRMEV and other products Cadence may in-license or acquire; Cadence's ability to fully comply with numerous federal, state and local laws and regulatory requirements that apply to its commercial activities; public concern regarding the safety of drug products such as OFIRMEV, and the potential implementation by regulatory agencies of new requirements to include unfavorable information in the labeling for OFIRMEV; the risk that Cadence may not be able to raise sufficient capital when needed, or at all; and other risks detailed under "Risk Factors" and elsewhere in Cadence's periodic reports and other filings made with the Securities and Exchange Commission from time to time. All forward-looking statements are qualified in their entirety by this cautionary statement, which is made under the safe harbor provisions of Section 21E of the Private Securities Litigation Reform Act of 1995, and Cadence undertakes no obligation to revise or update this press release to reflect events or circumstances after the date hereof.

Cadence® and OFIRMEV® are trademarks of Cadence Pharmaceuticals, Inc.

Contact:

William R. LaRue


SVP & Chief Financial Officer


Cadence Pharmaceuticals, Inc.


Phone: 858-436-1400

 

 

CADENCE PHARMACEUTICALS, INC.

CONDENSED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except per share amounts)




Three Months Ended


Nine Months Ended



September 30,


September 30,



2013


2012


2013


2012

Revenues:









Product revenue, net

$           28,957


$           13,898


$           77,243


$           32,977


License revenue

-


-


-


33

        Total revenues

28,957


13,898


77,243


33,010



















Costs and expenses:









Cost of product sales

9,964


6,076


26,425


16,078


Amortization of patent license

336


336


1,008


1,008


Research and development

1,655


2,235


4,698


5,446


Selling, general and administrative

22,928


20,039


70,261


66,811


Other

(107)


13


(602)


14

        Total costs and expenses

34,776


28,699


101,790


89,357










Loss from operations

(5,819)


(14,801)


(24,547)


(56,347)










Other (expense) income, net

(1,119)


(1,089)


4,371


(3,205)










Net loss

$           (6,938)


$         (15,890)


$         (20,176)


$         (59,552)










Basic and diluted net loss per share

$             (0.08)


$             (0.19)


$             (0.24)


$             (0.70)










Shares used to compute basic and








diluted net loss per share

86,044


85,560


85,841


85,544










 

CADENCE PHARMACEUTICALS, INC.

CONDENSED BALANCE SHEETS

(in thousands)



September 30,


December 31,


2013


2012


(unaudited)



Assets




Current assets:




    Cash, cash equivalents and short-term investments 

$            54,306


$            62,072

    Restricted cash 

548


640

    Accounts receivable, net 

8,711


6,152

    Inventory 

6,094


6,498

    Prepaid expenses and other current assets 

1,307


1,154

        Total current assets

70,966


76,516





Property and equipment, net

1,801


1,967

Intangible assets, net

11,082


12,090

Other assets

175


7,106

        Total assets

$            84,024


$            97,679





Liabilities and Stockholders' Equity 




Current liabilities:




    Accounts payable 

$             4,473


$             5,796

    Accrued liabilities 

15,379


12,969

    Deferred revenue 

-


2,234

    Current portion of long-term debt, less discount 

7,937


-

        Total current liabilities

27,789


20,999





Other liabilities

604


51

Long-term debt, less discount

21,251


28,818

Total stockholders' equity

34,380


47,811

        Total liabilities and stockholders' equity

$            84,024


$            97,679





 

 

SOURCE Cadence Pharmaceuticals, Inc.



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