For Immediate Release

Cadence Pharmaceuticals Reports First Quarter 2011 Financial Results

Raises OFIRMEV™ formulary guidance based upon continued rapid formulary adoption

 

May 5 , 2011

San Diego, CA -- Cadence Pharmaceuticals, Inc. (NASDAQ: CADX), a biopharmaceutical company focused on in-licensing, developing and commercializing proprietary products principally for use in the hospital setting, today reported financial results for the first quarter ended March 31, 2011.

During the first quarter of 2011, Cadence commercially launched OFIRMEV™ (acetaminophen) injection, the first and only intravenous formulation of acetaminophen to be approved in the U.S. As part of the launch strategy, the Company's sales team focused on obtaining formulary acceptance for OFIRMEV at leading hospitals throughout the country, a critical first step toward broad market adoption of the product. The result of this strategy is that OFIRMEV has received formulary acceptance at 675 hospitals as of April 30, 2011. While the sales team focused predominantly on formulary adoption during the quarter, the Company has begun to see sales pull-through by these hospitals and reported its first quarterly revenue of $0.4 million for the three months ended March 31, 2011.

"I continue to be very pleased by the speed at which hospitals are adding OFIRMEV to their formularies, and believe that the rapid rate of formulary adoption indicates that hospitals recognize that OFIRMEV can address important unmet medical needs for their patients," said Ted Schroeder, President and CEO of Cadence. "While we had initially estimated that we would be able to gain formulary acceptance at 800 to 1,000 hospitals by the end of this year, as a result of the strong desire by hospitals to add OFIRMEV to their formularies and great execution by our sales team, we are increasing this estimate. We now anticipate that by December 31, 2011, OFIRMEV will have received formulary approval at 1,000 to 1,200 hospitals, which we believe will represent more than 50% of the total U.S. IV analgesic market opportunity for OFIRMEV."

In other events, the FDA approved the Company's supplemental New Drug Application in March 2011, which added a second manufacturing site for OFIRMEV. The new manufacturing site is expected to complement the Company's existing supply source of OFIRMEV and provide geographic diversity to its supply chain in an effort to ensure that the Company has continuous availability of OFIRMEV to meet increasing market demand and to assist in preventing unanticipated supply disruptions. The site is expected to begin commercial production in the second half of 2011. In April the Company received a $5.3 million upfront payment related to a data license agreement with Terumo Corporation. Under the data license agreement, Terumo has the exclusive right to use certain data and information resulting from Cadence's clinical development program for OFIRMEV for the purposes of obtaining regulatory approval and commercializing the same intravenous formulation of acetaminophen in Japan.

Additionally, Cadence has notified Incline Therapeutics, Inc., or Incline, that it has decided not to exercise its option to acquire Incline during the first option period. "We're very pleased with the progress made by the team at Incline over the past ten months and have confidence in Incline's ability to submit a supplemental New Drug Application to the FDA for IONSYS™ (fentanyl iontophoretic transdermal system) in late 2012 or early 2013," said Mr. Schroeder. Cadence retains the right to acquire Incline during the second option period, which extends until the earliest to occur of (1) 30 days after the date on which Incline submits a supplemental New Drug Application for IONSYS to the FDA, (2) 30 days after the filing of an initial public offering by Incline, or (3) December 2013.

Financial Results
For the three months ended March 31, 2011, Cadence reported a net loss of $24.4 million, or $0.39 per share, compared to a net loss of $13.9 million, or $0.28 per share, for the comparable period in 2010. Net revenue, determined by reported wholesaler sell-through to end user hospitals, was $0.4 million for the three months ended March 31, 2011.

Costs and expenses for the three months ended March 31, 2011, increased $9.8 million to $23.6 million, from $13.8 million reported for the same period in 2010. The increase in 2011 was primarily related to the Company's commercial launch of OFIRMEV in January 2011. Costs incurred in during the first quarter of 2011 that were not incurred during the same period in 2010 include costs related to the Company's hospital sales specialists and medical science liaisons, as well costs associated with the launch of OFIRMEV and related marketing activities. Additionally, the Company incurred $0.6 million of amortization expense related to the Company's $15.0 million license payment made upon the approval of the OFIRMEV NDA. Partially offsetting this increase was a $1.5 million reduction in research and development expenses for the three months ended March 31, 2011 as compared to the 2010 period, which was primarily due to a reduction in manufacturing development expenses that were incurred in 2010 as the Company prepared for the commercial launch of OFIRMEV.

As of March 31, 2011, Cadence held cash, cash equivalents and short-term investments of $109.0 million, inventory of $3.4 million and accounts receivable of $0.8 million. The $5.3 million payment received in April from the Company's data license agreement is not included in the cash, cash equivalents and short-term investments or accounts receivable balances at March 31, 2011.

Guidance
As of May 5, 2011, Cadence estimates that OFIRMEV will be included on the formularies of approximately 1,000 to 1,200 hospitals by December 31, 2011. Cadence believes that this penetration would represent more than 50% of the total U.S. IV analgesic market opportunity for OFIRMEV.

 

 

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