Veloxis Pharmaceuticals announces financial results for the first quarter 2012 in line with expectations, Phase III activities for LCP-Tacro™ progressing according to plan

HORSHOLM, Denmark, May 15, 2012 /PRNewswire/ --

Highlights: 

• Enrolment has been completed in the pivotal LCP-Tacro 3002 Phase III study in de novo kidney transplant patients. The LCP-Tacro 3002 study is designed to demonstrate non-inferiority versus standard therapy Prograf® and randomized 543 patients at approximately 90 clinical sites around the world.
• Veloxis have initiated the STRATO Study of LCP-Tacro™ in Kidney Transplant Recipients Experiencing Tremors. The study is designed to explore whether a conversion of patients who have symptomatic tremor from treatment with standard immediate release twice-daily tacrolimus capsules to extended release once-daily LCP-Tacro™ tablets leads to a measurable improvement in tremor.
• Veloxis reported a net loss of DKK 75.0 million for the first quarter of 2012 compared to a net loss of DKK 65.8 million for the same period in 2011. The reported net loss is in line with expectations and the financial outlook for 2012 is maintained. 
• For the first quarter of 2012, Veloxis' research and development costs amounted to DKK 62.8 million compared to DKK 52.3 million during the same period in 2011.
• On 31 March, 2012, Veloxis had cash and cash equivalents of DKK 213.8 million.

A conference call will be held tomorrow, 16 May, 2012 at 3:00 PM CET (Denmark); 2:00 PM GMT (London), 9:00 AM ET (New York), 6:00 AM PT (San Francisco).

To access the live conference call, please dial one of the following numbers: 
+45 32 72 76 25 (Denmark)
+44 (0) 1452 555 566 (UK)
+1 631 510 7498 (USA)
Access code 77202811

Following the conference call, a recording will be available on the company's website http://www.veloxis.com. 

Outlook for 2012
Veloxis maintains its 2012 outlook announced in the annual report for 2011, published in March 2012, with an operating loss of DKK 220–250 million and likewise a net loss of DKK 220–250 million. The Company's position of cash and cash equivalents as at 31 December, 2012 is expected to be in the range of DKK 40–80 million. 

Management is focused on securing additional funds beyond 2012 by either partner agreements, debt or equity, or a mix thereof.

Research & development update

LCP-Tacro™ in kidney transplant patients

Veloxis is completing two Phase III studies of LCP-Tacro™ in kidney transplant recipients, as the basis for its development programme for LCP-Tacro™ as a once-daily agent for the prophylaxis of organ rejection in kidney transplantation. The first of these studies, the 3001 Study was a non-inferiority study performed in 326 stable kidney transplant recipients, and this study was successfully completed in 2011, meeting its primary efficacy and safety endpoints when compared to Prograf® (tacrolimus, Astellas Pharma Inc.). The second study, Study 3002 is being undertaken in de novo kidney transplant recipients. This study is a randomized, double-blind, multicenter study that compares once-daily LCP-Tacro™ against twice-daily Prograf® in de novo adult kidney transplant patients. The primary endpoint of the study, a composite endpoint (biopsy proven acute rejection, graft failure, loss to follow up or death), will be evaluated after a 12-month treatment period to demonstrate the non-inferiority of LCP-Tacro™ compared to Prograf®. Secondary endpoints will include safety, tolerability and renal function assessments. The study completed enrollment in March 2012 of 543 subjects at approximately 90 transplant centers, primarily in the U.S and Europe. Patients will participate in a 12-month extension period on treatment for follow-up safety assessments.

In addition to the pivotal Phase III studies, Veloxis is planning a series of Phase IIIb studies to further evaluate potential differences in clinical profile provided by LCP-Tacro's unique PK profile. The first study initiated is the STRATO (Switching kidney TRAnsplant patients with Tremor to LCP-tacrO) study of LCP-Tacro™ in kidney transplant recipients experiencing drug-induced tremors. The STRATO study is designed to explore whether a conversion of patients who have symptomatic tremor from treatment with standard immediate release twice-daily tacrolimus capsules to extended release once-daily LCP-Tacro™ tablets leads to a measurable improvement in tremor.

LCP-Tacro™ Regulatory Strategy

Based upon the favorable results of the 3001 Study, and the totality of an extensive Phase I, II and III clinical safety, efficacy and PK program, the company plans to file an MAA with the EMA mid-2012. The U.S. submission to the FDA will be based on data from Studies 3001 and 3002, as well as on data from Phase I and II studies, and is planned for the second half of 2013.

The interim report is unaudited.

Revenue
For the first quarter of 2012 Veloxis had no revenue as in the same period of 2011.

Research and development costs
For the first quarter of 2012, Veloxis' research and development costs amounted to DKK 62.8 million compared to DKK 52.3 million during the same period in 2011. Research and development costs are mainly attributable to the phase III trial in LCP-Tacro™ (de novo patients, Study 3002).

Administrative expenses 
For the first quarter of 2012, Veloxis' administrative cost amounted to DKK 10.2 million compared to DKK 11.7 million during the same period in 2011. 

Compensation costs
For the first three months of 2012, a total of DKK 1.6 million was recognized as share-based compensation. The cost is included in R&D and G&A. The comparable cost for 2011 was DKK 3.5 million.

In the first quarter of 2012, a total of 109,548 warrants have been cancelled.

As of 31 March, 2012, there were a total of 29,776,146 warrants outstanding at an average strike price of DKK 3.0. Members of the Board of Directors held 828,976 warrants at an average strike price of DKK 7.2. Members of the Executive Management held 9,112,445 warrants at an average strike price of DKK 2.1, while other current and former employees held 19,834,725 warrants at an average strike price of DKK 3.3.

Please refer to Veloxis' latest annual report for additional details on the Company's warrant programs.

Operating loss
Veloxis' operating loss for the first three months of 2012 was DKK 73.1 million compared to DKK 64.0 million in the corresponding period of 2011.

Financial income
During the first three months of 2012, the Company recognized net financial expenses of DKK 1.6 million compared to net financial expenses of DKK 1.9 million in the corresponding period of 2011. The loss is mainly due to unrealized currency losses following the decline in the USD / DKK currency rate during the first quarter of 2012.

Net loss 
Veloxis' net loss for the first three months of 2012 was DKK 75.0 million compared to DKK 65.8 million in the corresponding period of 2011.

Cash flow 
As per 31 March, 2012, the balance sheet reflects cash and cash equivalents of DKK 213.8 million compared to DKK 297.7 million as per 31 December, 2011. This represents a decrease of DKK 83.9 million primarily related to the Company's operating activities for the period.

Balance sheet
As per 31 March, 2012, total assets were DKK 235.2 million compared to DKK 320.9 million at the end of 2011.

Shareholders' equity equalled DKK 182.5 million as of 31 March, 2012, compared to DKK 255.9 million at the end of 2011.

As approved at the annual general meeting on 18 April 2012 the company's share capital will be decreased by nominally DKK 407,288,232 from nominally DKK 452,542,480 to nominally DKK 45,254,248 following a four week notice period.

Accounting policies
The interim report is prepared in compliance with International Accounting Standard No. 34 (IAS 34), "Interim Financial Reporting" and in accordance with the NASDAQ OMX Copenhagen's financial reporting requirements for listed companies.

There have been no changes in accounting policies used for the interim report compared to the accounting policies used in the preparation of Veloxis Pharmaceuticals annual report for 2011.

Financial review
Veloxis reports its financial statements in Danish Kroner (DKK), which is the functional currency of the Company and the group. Solely for the convenience of the reader, this Interim Report contains a conversion of certain DKK amounts into Euro (EUR) at a specified rate. These converted amounts should not be construed as representations that the DKK amounts actually represent such EUR amounts or could be converted into EUR at the rate indicated or at any other rate. Unless otherwise indicated, conversion herein of financial information into EUR has been made using the Danish Central Bank's spot rate on 31 March, 2012, which was EUR 1.00 = DKK 7.4399.

For more information, please contact:

The forward looking statements and targets contained herein are based on Veloxis Pharmaceuticals A/S' management's current view and assumptions. Such statements involve known and unknown risks and uncertainties that may cause actual results, performance or events to differ materially from those anticipated herein. Veloxis Pharmaceuticals A/S expressly disclaim any obligation or undertaking to update or revise any forward looking statements, targets or estimates contained in this interim report to reflect any change in events, conditions, assumptions, or circulations on which any such statements are based unless  required by applicable law.

About Veloxis Pharmaceuticals A/S (Veloxis)
Based in Horsholm, Denmark, with an office in New Jersey, Veloxis is a specialty pharmaceutical company. Clinical development is the core of Veloxis' efforts to develop a product portfolio which includes the Company's lead product candidate, LCP-Tacro™, for immunosuppression, specifically organ transplantation, and products to combat certain cardiovascular diseases. Veloxis adapts new technologies on a fast commercial timetable. Veloxis' unique, patented delivery technology, MeltDose®, can improve absorption and bioavailability - at low-scale up costs - not only for a broad spectrum of drugs already on the market but also for new chemical entities. Veloxis has a lipid-lowering product, Fenoglide®, currently on the U.S. market and a diversified near and medium-term pipeline with three clinical stage product candidates and a number of projects in preclinical development. Veloxis is listed on the NASDAQ OMX Copenhagen under the trading symbol OMX: VELO. For further information, please visit http://www.veloxis.com.

Executive Management's and the Board of Directors' Statement on the Interim Report

The Executive Management and the Board of Directors have considered and adopted the Interim Report of Veloxis Pharmaceuticals A/S.

The Interim Report is prepared in accordance with International Accounting Standard No. 34 (IAS 34), "Interim Financial Reporting" and additional Danish disclosure requirements for financial reporting of listed companies.

We consider the applied accounting policies to be appropriate and, in our opinion, the Interim Report gives a true and fair view of the assets and liabilities, financial position, results of the operation and cash flow of the group for the period under review. Furthermore, in our opinion the management review includes a fair review of the development and performance of the business and the financial position of the group, together with a description of the material risks and uncertainties the group faces.

Horsholm, 15 May, 2012

Executive Management

Board of Directors

Income statement and statement of comprehensive income

Balance sheet

Balance sheet

Cash flow statements

Statement of changes in equity

The share capital is not available for distribution, while other reserves are distributable for dividend purposes subject to the provision of the Danish Public Company Act.

SOURCE Veloxis Pharmaceuticals