SEATTLE, Oct. 29, 2014 /PRNewswire/ -- CTI BioPharma Corp.
(CTI) (NASDAQ and MTA: CTIC) today reported financial results for
the three months ended September 30,
2014.
"During the quarter, we achieved a key objective we set forth
at the beginning of 2014 by securing a partner to accelerate the
development and commercialization of PIXUVRI® by
expanding the market into countries where we do not have a
commercial presence while also retaining rights in the US. We
believe this partnership will maximize the value of PIXUVRI for CTI
and help us achieve our goal of generating net positive margin
contributions from PIXUVRI sales," said James A. Bianco, M.D., President and CEO. "This
has truly been a transformative last 12 months for CTI having
secured two major development and commercialization collaborations;
completed enrollment in the first Phase 3 clinical trial for
pacritinib, which we believe is on track to report top-line results
in the first quarter of 2015; initiated enrollment in the second
Phase 3 trial for pacritinib; and secured worldwide rights to
tosedostat, a first-in-class aminopeptidase inhibitor. We look
forward to building on this momentum as we set our sights on
readying pacritinib for potential registration late 2015."
Select Third Quarter 2014 and Recent Highlights
Corporate:
- In September 2014, entered into
an exclusive license and collaboration agreement with Servier to
develop and commercialize PIXUVRI in a transaction valued at up to
approximately €103.0 million (approximately $133.5 million) if all milestones are achieved.
Under the agreement, CTI retains full commercialization rights for
PIXUVRI in Austria, Denmark,
Finland, Germany, Israel, Norway, Sweden, Turkey,
the United Kingdom and the U.S., with Servier having
exclusive rights to commercialize PIXUVRI in all other
countries.
- In October 2014, acquired
worldwide rights to tosedostat through concurrent transactions with
Vernalis R&D Limited, the originator of tosedostat, and Chroma
Therapeutics Limited (Chroma). Tosedostat is a first-in-class
selective inhibitor of aminopeptidases, which are required by tumor
cells to provide amino acids necessary for growth and tumor cell
survival. Tosedostat is currently being evaluated in Phase 2
clinical trials for patients with MDS and AML. For more
information, please see CTI's press release dated October 27, 2014.
Research and Development:
- In August 2014, received a
$20 million development milestone
payment from Baxter International, Inc. (Baxter) following
completion of enrollment in the PERSIST-1 pivotal Phase 3 trial of
pacritinib for patients with myelofibrosis. CTI expects to report
top-line results in the first quarter of 2015.
- In August 2014, the U.S. Food and
Drug Administration (FDA) granted pacritinib Fast Track designation
for the treatment of intermediate and high risk myelofibrosis,
including but not limited to patients with disease-related
thrombocytopenia, patients experiencing treatment emergent
thrombocytopenia on other JAK2 therapy or patients who are
intolerant to or whose symptoms are sub-optimally managed on other
JAK2 therapy. The Fast Track process is designed to facilitate the
development and expedite the review of drugs to treat serious
conditions and fill an unmet medical need.
Financial Results
Total revenues for the third quarter and the nine months ended
September 30, 2014, were $39.5 million and $42.3
million, respectively, compared with no revenue for the same
periods in 2013. Total revenues for the third quarter and nine
months ended September 30, 2014,
included license and contract revenue of $37.5 million, which was primarily attributed to
the $20 million development milestone
payment received from Baxter for completion of enrollment in the
PERSIST-1 Phase 3 clinical trial of pacritinib and recognition of
$17.3 million from an upfront payment
under the PIXUVRI collaboration agreement with Servier. Net product
sales of PIXUVRI for the third quarter and first nine months of
2014 were $2.0 million and
$4.4 million, respectively, compared
to $0.4 million and $1.8 million for the same periods in 2013. CTI
currently sells PIXUVRI directly to health care providers through a
product dedicated contract sales force and through a limited number
of wholesale distributors in the E.U.
The non-GAAP operating income, which excludes non-cash
share-based compensation expense, for the third quarter of 2014 was
$11.3 million, compared to non-GAAP
operating loss of $13.6 million for
the same period in 2013. For the nine months ended September 30, 2014, the non-GAAP operating loss
was $29.8 million, compared to
$45.5 million for the same period in
2013. The GAAP operating income for the third quarter of 2014 was
$7.5 million compared to an operating
loss of $15.5 million for the same
period in 2013. For the nine month period ended September 30, 2014 the GAAP operating loss was
$46.9 million, compared to
$51.9 million for the same period in
2013. Non-cash share-based compensation expense for the third
quarter and first nine months of 2014 was $3.8
million and $17.0 million, respectively, compared
to $1.9 million and $6.3 million for the same
periods in 2013. For information on CTI's use of the aforementioned
non-GAAP measure and a reconciliation of such measure to GAAP
operating loss, see the section below entitled "Non-GAAP Financial
Measures."
For the third quarter ended September 30,
2014, CTI reported a net income of $4.6 million, or $0.03 per share, compared to a net loss of
$22.4 million, or ($0.20) per share, for the same period in 2013.
Net loss for the nine month period ended September 30, 2014, was $51.8 million, or ($0.36) per share, compared to $59.8 million, or share of ($0.55) per share for the same period in
2013.
As of September 30, 2014, CTI's
cash and cash equivalents totaled $29.9
million. For accounting purposes, due to the timing of the
license and collaboration agreement with Servier, CTI recognized
license and contract revenue from the upfront license fee in the
third quarter, while the total $17.8
million upfront payment received in October will be
reflected in CTI's year-end cash balance.
Financial Guidance for 2014
As a result of the stock issuance in the transaction described
above with Chroma resulting in an expense recognition of
approximately $21.0 million, CTI has
revised its financial guidance such that non-GAAP operating loss
for 2014 is now expected to range from approximately $66 million to $71 million rather than
$45 million to $50 million as
previously expected, which excludes non-cash share-based
compensation expense. This financial projection is primarily based
upon the following factors:
- Projected sales from PIXUVRI commercial operations;
- SG&A expenses, including sales and marketing expenses to
drive sales of PIXUVRI, as well as medical affairs expenses in
support of educational programs for the hematologist/oncologist
community in the E.U.;
- R&D expenses, including management of costs for PIXUVRI,
ongoing and planned Phase 3 clinical trials involving pacritinib
and multiple investigator-sponsored trials (ISTs) involving
tosedostat; and
- Potential third party milestone of $10.0
million projected to be received by year-end.
Actual financial results for 2014 will vary based upon many
factors, including the degree of market acceptance and
reimbursement rates for PIXUVRI in the applicable countries, the
rate of patient enrollment in ongoing clinical trials and other
factors described in CTI's filings with the Securities and Exchange
Commission (SEC).
Conference Call Information
CTI management will host a conference call to review its third
quarter 2014 financial results and provide an update on business
activities. The event will be held today at 1:30 p.m. PDT
/ 4:30 p.m. EDT / 9:30 p.m. CET.
Participants can access the call at 1-888-455-2263 (domestic) or +1
719-325-2376 (international). To access the live audio webcast or
the subsequent archived recording, visit CTI's website,
www.ctibiopharma.com. Webcast and telephone replays of the
conference call will be available approximately two hours after
completion of the call. Callers can access the replay by dialing
1-888-203-1112 (domestic) or +1 719-457-0820 (international). The
access code for the replay is #6010391. The telephone replay will
be available until Wednesday, November 5, 2014.
About CTI BioPharma Corp.
CTI BioPharma Corp. (NASDAQ and MTA: CTIC) is a
biopharmaceutical company focused on the acquisition, development
and commercialization of novel targeted therapies covering a
spectrum of blood-related cancers that offer a unique benefit to
patients and healthcare providers. CTI has a commercial presence in
Europe and a late-stage
development pipeline, including pacritinib, CTI's lead product
candidate that is currently being studied in a Phase 3 program for
the treatment of patients with myelofibrosis. CTI is headquartered
in Seattle, Washington, with
offices in London and Milan under
the name CTI Life Sciences Limited. For additional information and
to sign up for email alerts and get RSS feeds, please visit
www.ctibiopharma.com.
Non-GAAP Financial Measures
CTI has provided in this press release the historical financial
measure of loss from operations, excluding non-cash share-based
compensation expense, which is a non-GAAP measure, for the third
quarter ended September 30, 2014, and
the financial projection of loss from operations, excluding
non-cash share-based compensation expense, which is a non-GAAP
measure, for the 2014 fiscal year. Due to varying available
valuation methodologies, subjective assumptions and the different
GAAP accounting treatment of different award types that companies
can use under ASC Topic 718, CTI's management believes that
providing a non-GAAP financial measure that excludes non-cash
share-based compensation can enhance management's and investors'
comparison of CTI's operating results over different periods of
time as compared to the operating results of other companies.
CTI's use of a non-GAAP financial measure has limitations and
should not be considered in isolation from, or as a substitute for,
financial information prepared in accordance with GAAP. One
limitation is that CTI's reported non-GAAP loss from operations
results in the exclusion of a recurring expense, since share-based
compensation will continue to be a significant recurring expense in
CTI's business. A second limitation is that CTI's methodology for
calculating non-GAAP loss from operations, which only excludes the
component of share-based compensation, may differ from the
methodology CTI's peer companies utilize to the extent they report
non-GAAP loss from operations or similarly titled measures and
accordingly may not necessarily be comparable to similarly titled
measures of other companies. Investors are urged to review the
reconciliation of these non-GAAP measures to their most directly
comparable GAAP financial measures. A reconciliation of CTI's
non-GAAP financial measures to their most directly comparable GAAP
measures has been provided in the financial statement tables
included below in this press release.
CTI has not included a reconciliation of CTI's projected
non-GAAP loss from operations to a projected GAAP loss from
operations because the calculation of the excluded share-based
compensation would require information that is presently uncertain,
such as the future level of additional equity awards that will be
granted to meet CTI's compensation philosophy and objectives after
taking into account the economic climate at the time of grant. In
addition, the calculation is largely based on the price of CTI's
stock at the time of the specific grants (as required under ASC
Topic 718), which price is variable and therefore unknowable until
the grant is made. Because of the contingent nature of such
factors, CTI believes that the specific adjustment for future
share-based compensation cannot be forecast with accuracy.
Forward-Looking Statements
This press release includes forward-looking statements within
the meaning of the Safe Harbor provisions of the Private Securities
Litigation Reform Act of 1995. Such statements are subject to
a number of risks and uncertainties, the outcome of which could
materially and/or adversely affect actual future results and the
trading price of CTI's securities. Such statements include,
but are not limited to, statements regarding CTI's expectations
with respect to the development of CTI and its product and product
candidate portfolio, expectations with respect to potential
milestone and royalty payments, benefits of collaborations and the
ability to maximize potential of product candidates, CTI's ability
to achieve its objectives and projections (including that of
completing PERSIST-1 and reporting the associated topline results
in early 2015, the projected progress of PERSIST-2, driving PIXUVRI
sales, advancing CTI's various clinical trials and evaluating and
developing product candidates in other indications in the future)
and CTI's projected non-GAAP operating loss. Risks that
contribute to the uncertain nature of the forward-looking
statements include, among others, risks associated with the
biopharmaceutical industry in general and with CTI and its product
and product candidate portfolio in particular including, among
others, risks associated with the following: that CTI cannot
predict or guarantee the pace or geography of enrollment of its
clinical trials, that CTI cannot predict or guarantee the
commencement or outcome of preclinical and clinical studies, that
CTI may not obtain reimbursement for PIXUVRI in the various
applicable countries, that the conditional marketing authorization
for PIXUVRI may be withdrawn or may be subject to additional
conditions, that CTI may not obtain favorable determinations by
other regulatory, patent and administrative governmental
authorities, risks related to the costs of developing, producing
and selling PIXUVRI, pacritinib and CTI's other product candidates,
and other risks, including, without limitation, competitive
factors, technological developments, that CTI's operating expenses
continue to exceed its net revenues, that CTI may not be able to
complete projected collaborations for its compounds, that CTI may
not be able to sustain its current cost controls or further reduce
its operating expenses, that CTI may not achieve previously
announced goals and objectives as or when projected, that CTI's
average net operating burn rate may increase, and that CTI will
continue to need to raise capital to fund its operating expenses,
but may not be able to raise sufficient amounts to fund its
continued operation as well as other risks listed or described from
time to time in CTI's most recent filings with the SEC on
Forms 10-K, 10-Q and 8-K. Except as required by law, CTI
does not intend to update any of the statements in this press
release upon further developments.
Currency Exchange Rate
Under the license and collaboration agreement with Servier,
monetary amounts are generally denoted in euros, while the
corresponding U.S. dollar amounts are based upon conversion on
September 12, 2014.
PIXUVRI is a registered trademark of CTI BioPharma
Corp.
Contacts:
Monique
Greer
+1 206-272-4343
mgreer@ctibiopharma.com
Ed Bell
+1 206-282-7100
ebell@ctibiopharma.com
In Europe:
CTI Life Sciences Limited, Milan
Branch
Laura Villa
+39 02 94751572
lvilla@cti-lifesciences.com
CTI BioPharma
Corp.
|
Condensed
Consolidated Statements of Operations
|
(In thousands, except
per share amounts)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2014
|
|
|
2013
|
|
2014
|
|
|
2013
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product sales,
net
|
$
|
2,021
|
|
|
$
|
362
|
|
$
|
4,437
|
|
|
$
|
1,794
|
License and contract
revenue
|
|
37,513
|
|
|
|
—
|
|
|
37,851
|
|
|
|
—
|
Total
revenues
|
|
39,534
|
|
|
|
362
|
|
|
42,288
|
|
|
|
1,794
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product
sold
|
|
252
|
|
|
|
13
|
|
|
599
|
|
|
|
104
|
Research and
development
|
|
16,528
|
|
|
|
7,245
|
|
|
42,725
|
|
|
|
23,620
|
Selling, general and
administrative
|
|
12,563
|
|
|
|
8,529
|
|
|
43,104
|
|
|
|
29,774
|
Settlement
expense
|
|
—
|
|
|
|
60
|
|
|
—
|
|
|
|
155
|
Other operating
expense
|
|
2,719
|
|
|
|
—
|
|
|
2,719
|
|
|
|
—
|
Total operating costs
and expenses
|
|
32,062
|
|
|
|
15,847
|
|
|
89,147
|
|
|
|
53,653
|
Income (loss) from
operations
|
|
7,472
|
|
|
|
(15,485)
|
|
|
(46,859)
|
|
|
|
(51,859)
|
Other non-operating
income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(472)
|
|
|
|
(316)
|
|
|
(1,403)
|
|
|
|
(680)
|
Amortization of debt
discount and issuance costs
|
|
(185)
|
|
|
|
(162)
|
|
|
(547)
|
|
|
|
(349)
|
Foreign exchange gain
(loss)
|
|
(2,455)
|
|
|
|
547
|
|
|
(2,621)
|
|
|
|
(199)
|
Other non-operating
expense
|
|
—
|
|
|
|
(268)
|
|
|
(885)
|
|
|
|
(433)
|
Net income (loss)
before noncontrolling interest
|
|
4,360
|
|
|
|
(15,684)
|
|
|
(52,315)
|
|
|
|
(53,520)
|
Noncontrolling
interest
|
|
243
|
|
|
|
140
|
|
|
517
|
|
|
|
581
|
Net income (loss)
attributable to CTI
|
|
4,603
|
|
|
|
(15,544)
|
|
|
(51,798)
|
|
|
|
(52,939)
|
Deemed dividends on
preferred stock
|
|
—
|
|
|
|
(6,900)
|
|
|
—
|
|
|
|
(6,900)
|
Net income (loss)
attributable to CTI common shareholders
|
|
4,603
|
|
|
|
(22,444)
|
|
|
(51,798)
|
|
|
|
(59,839)
|
Net income (loss) per
common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.03
|
|
|
$
|
(0.20)
|
|
$
|
(0.36)
|
|
|
$
|
(0.55)
|
Diluted
|
$
|
0.03
|
|
|
$
|
(0.20)
|
|
$
|
(0.36)
|
|
|
$
|
(0.55)
|
Shares used in
calculation of earnings (loss) per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
145,138
|
|
|
|
110,996
|
|
|
143,920
|
|
|
|
108,489
|
Diluted
|
|
147,097
|
|
|
|
110,996
|
|
|
143,920
|
|
|
|
108,489
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet Data
(unaudited):
|
|
|
|
|
|
|
|
(amounts in
thousands)
|
|
|
|
|
|
|
|
|
September
30,
|
|
|
December
31,
|
|
|
|
|
|
|
|
|
2014
|
|
|
2013
|
Cash and cash
equivalents
|
|
|
|
|
|
|
|
$
|
29,910
|
|
|
$
|
71,639
|
Working
capital
|
|
|
|
|
|
|
|
|
27,127
|
|
|
|
60,446
|
Total
assets
|
|
|
|
|
|
|
|
|
68,594
|
|
|
|
93,723
|
Current portion of
long-term debt
|
|
|
|
|
|
|
|
|
5,865
|
|
|
|
3,155
|
Long-term debt, less
current portion
|
|
|
|
|
|
|
|
|
7,846
|
|
|
|
10,152
|
Total shareholders'
equity
|
|
|
|
|
|
|
|
|
16,047
|
|
|
|
42,758
|
Non-GAAP
Reconciliations
|
(In
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
|
2014
|
|
|
2013
|
|
2014
|
|
|
2013
|
As reported - income
(loss) from operations (GAAP)
|
|
$
|
7,472
|
|
|
$
|
(15,485)
|
|
$
|
(46,859)
|
|
|
$
|
(51,859)
|
As reported -
share-based compensation expense (GAAP)
|
|
|
3,837
|
|
|
|
1,928
|
|
|
17,022
|
|
|
|
6,324
|
As adjusted - income
(loss) from operations (Non-GAAP)
|
|
$
|
11,309
|
|
|
$
|
(13,557)
|
|
$
|
(29,837)
|
|
|
$
|
(45,535)
|
SOURCE CTI BioPharma Corp.