Conference call scheduled for 5:00 PM Eastern time today POINT
RICHMOND, Calif., Nov. 12 /PRNewswire-FirstCall/ -- Transcept
Pharmaceuticals, Inc. (NASDAQ:TSPT), a specialty pharmaceutical
company focused on the development and commercialization of
proprietary products that address important therapeutic needs in
neuroscience, today announced financial results for the three and
nine months ended September 30, 2009. Transcept previously
announced that on October 28, 2009, the FDA issued a Complete
Response Letter regarding the New Drug Application (NDA) for
Intermezzo® (zolpidem tartrate sublingual tablet), the lead
Transcept product candidate. The NDA seeks approval to market
Intermezzo® for use as-needed for the treatment of insomnia when a
middle of the night awakening is followed by difficulty returning
to sleep. Transcept and Purdue Pharmaceutical Products, L.P. have
entered into a collaboration agreement for the development and
commercialization of Intermezzo® in the United States. Glenn A.
Oclassen, President and Chief Executive Officer commented, "Our
focus is now on moving Intermezzo® forward through the remainder of
the regulatory review process. With $93 million of cash, cash
equivalents and marketable securities at September 30, 2009, we
believe we have substantial resources on hand to cover a range of
potential additional expenses that may be required to address the
issues raised by the recent FDA Complete Response Letter. We expect
to have more clarity on the FDA's remaining requirements for the
Intermezzo® NDA after our planned meeting to discuss the Complete
Response Letter. We are working with the FDA to schedule this
meeting in early 2010." "Purdue Pharma, our U.S. commercialization
partner for Intermezzo®, has been actively engaged in our
collaboration since we received the Complete Response Letter. We
are working closely with the Purdue clinical, regulatory and
packaging teams to address the concerns raised by FDA." "With
regard to other key Intermezzo® milestones, we announced last week
that the United States Patent and Trademark Office issued a Notice
of Allowance for one of our patent applications with claims that
cover the use of our low-dose sublingual Intermezzo® formulation.
Transcept is actively pursuing additional patents to protect
Intermezzo® in the United States and key non-U.S. markets, and, as
part of the NDA submission, has requested that the FDA grant three
years of Hatch-Waxman marketing exclusivity to Intermezzo®." Third
Quarter 2009 Financial Results Transcept recorded $2.08 million of
revenue for the three month period ended September 30, 2009,
related to recognition of a portion of the $25 million
non-refundable license fee received from Purdue in connection with
the signing of our collaboration agreement. Transcept plans to
amortize the $25 million license fee over a 24 month period. There
was no revenue for the three month period ended September 30, 2008.
Research and development expense for the quarter ended September
30, 2009 was approximately $2.14 million, compared to approximately
$2.45 million for the same period in 2008. This decrease is
primarily attributable to lower Intermezzo® development costs, the
majority of which were incurred prior to the submission of the NDA
in September 2008. The decrease was partially offset by severance
expense incurred in connection with the reduction in force
announced in August 2009. Research and development expense included
non-cash stock compensation expense in accordance with Financial
Accounting Standards Board ("FASB") Accounting Standards
Codification ("ASC") Topic 718 Compensation - Stock Compensation
("ASC Topic 718") (formerly Statement of Financial Accounting
Standards No. 123R (SFAS No. 123R)) of approximately $234,000 for
the quarter ended September 30, 2009 and approximately $62,000 for
the quarter ended September 30, 2008. General and administrative
expense for the quarter ended September 30, 2009 was approximately
$3.84 million, compared to approximately $2.14 million for the same
period in 2008. The $1.70 million increase consists primarily of
higher professional fees to operate as a public company and to
negotiate our collaboration with Purdue, increased personnel costs
primarily in marketing and administration functions, an increase in
operating expenses associated with additional office space and
severance expense for the reduction in force noted above. General
and administrative expense included non-cash stock compensation
expense in accordance with ASC Topic 718 of approximately $299,000
for the quarter ended September 30, 2009, as compared to
approximately $106,000 for the quarter ended September 30, 2008.
Net loss for the quarter ended September 30, 2009 was approximately
$3.8 million or $0.29 per share (basic and diluted), compared to a
net loss of approximately $4.3 million or $10.08 per share (basic
and diluted) for the quarter ended September 30, 2008. The weighted
average shares used to calculate basic and diluted net loss per
share were 13,174,807 and 422,777 for the quarters ended September
30, 2009 and September 30, 2008, respectively. At September 30,
2009 there were 13,336,431 common shares outstanding and 1,984,385
outstanding options, warrants and common stock subject to
repurchase. Nine months ended September 30, 2009 Financial Results
Revenue for the nine months ended September 30, 2009 was $2.08
million related to recognition of a portion of the $25 million
non-refundable license fee received from Purdue in connection with
the signing of our collaboration agreement, compared to no revenue
for the nine months ended September 30, 2008. Research and
development expense for the nine months ended September 30, 2009
was approximately $6.61 million, compared to approximately $8.84
million for the same period in 2008. The $2.23 million decrease is
primarily attributable to lower Intermezzo® development costs, the
majority of which were incurred prior to the submission of the
Intermezzo® NDA on September 30, 2008. Research and development
expense included non-cash stock compensation expense in accordance
with ASC Topic 718 of approximately $391,000 for the nine months
ended September 30, 2009 and approximately $192,000 for the nine
months ended September 30, 2008. General and administrative expense
for the nine months ended September 30, 2009 was approximately
$13.07 million, compared to approximately $5.37 million for the
same period in 2008. The $7.70 million increase consists primarily
of higher professional fees to operate as a public company and to
negotiate our collaboration with Purdue, increased personnel costs
primarily in marketing and administration, increased marketing
expense as we prepared to commercialize Intermezzo® and an increase
in operational expenses associated with additional office space.
General and administrative expense included non-cash stock
compensation expense in accordance with ASC Topic 718 of
approximately $693,000 for the nine months ended September 30,
2009, as compared to approximately $268,000 for the nine months
ended September 30, 2008. Year-to-date merger-related transaction
costs of approximately $2.22 million were expensed during the first
quarter of 2009. Net loss for the nine months ended September 30,
2009 was approximately $19.5 million or $1.65 per share, compared
to a net loss of approximately $13.8 million or $35.93 per share
for the nine months ended September 30, 2008. The weighted average
shares used to calculate net loss per share were 11,764,652 and
385,214, respectively, for the nine months ended September 30, 2009
and 2008. Cash, cash equivalents and marketable securities totaled
$93.0 million at September 30, 2009. Financial Guidance Transcept
believes it has substantial cash resources to cover a range of
potential additional expenses that may be required to address the
issues raised by the recent FDA Complete Response Letter on the
Intermezzo® NDA. General and administrative expense declined from
approximately $5.02 million in the quarter ended June 30, 2009 to
approximately $3.84 million in the quarter ended September 30,
2009. We anticipate that general and administrative expense will be
closer to the lower end of this range during the fourth quarter of
2009 and the first half of 2010. Research and development expense
was approximately $2.25 million in the quarter ended June 30, 2009
and approximately $2.14 million in the quarter ended September 30,
2009. During the fourth quarter of 2009 and the first half of 2010,
we anticipate: -- Baseline research and development expense will
remain substantially in line with these prior quarters; --
Additional research and development expense of approximately $1.05
million will be incurred in connection with manufacturing
activities undertaken in anticipation of the previously planned
launch of Intermezzo® in 2010; and -- Additional research and
development expense will be incurred as Transcept determines and
undertakes activities to support the planned resubmission of the
Intermezzo® NDA. Transcept is working with the FDA to schedule a
meeting in early 2010, and plans to provide an update to investors
as appropriate. Conference Call and Webcast Information Transcept
will host a conference call and webcast on Thursday, November 12,
2009, at 5:00 p.m. Eastern time to discuss third quarter 2009
financial results. Telephone numbers for the live conference call
are 877-874-1589 (U.S.) or 719-325-4805 (International). The
webcast can be accessed on the Investors page of the Transcept
website at http://www.transcept.com/ and will be available for
replay until close of business on November 27, 2009. A playback of
the call will be available through November 27, 2009 by dialing
888-203-1112 (U.S.) or 719-457-0820 (International), replay
passcode: 2918743. About Intermezzo® Intermezzo® (zolpidem tartrate
sublingual tablet), the lead product candidate at Transcept, has
the potential to be the first prescription sleep aid specifically
approved for use in the middle of the night at the time a patient
awakens and has difficulty returning to sleep. Intermezzo® is a
sublingual low dose formulation of zolpidem, the active agent most
commonly prescribed in the United States for the treatment of
insomnia. Intermezzo® uses approximately one-quarter to one-third
of the dose of active drug contained in currently marketed
zolpidem-based sleep aids, in a formulation designed to promote
rapid sublingual absorption. Two Phase 3 clinical studies evaluated
376 patients receiving either Intermezzo® or placebo. In the first
study, a sleep laboratory trial using an objective polysomnographic
endpoint, Intermezzo® demonstrated a statistically significant
decrease versus placebo in the time it took patients to return to
sleep as measured by Latency to Persistent Sleep. In the second
study, an outpatient trial, Intermezzo® demonstrated a
statistically significant decrease in Latency to Sleep Onset, a
subjective patient reported endpoint. The most common adverse event
seen in these trials was headache (2.7 percent active versus 1.4
percent placebo in the outpatient study). In September 2008
Transcept submitted a New Drug Application (NDA) to the U.S. Food
and Drug Administration (FDA) seeking approval of Intermezzo® as a
prescription sleep aid for use in the middle of the night at the
time a patient awakens and has difficulty returning to sleep. In
October 2009 Transcept received a Complete Response Letter from the
FDA on the Intermezzo® NDA and is working to respond to issues
raised in the letter. Transcept and Purdue Pharmaceutical Products,
L.P. have entered into a collaboration agreement for the
development and commercialization of Intermezzo® in the United
States. For further information, please visit the company's website
at: http://www.transcept.com/. The United States Patent and
Trademark Office granted a Notice of Allowance for claims that
cover Intermezzo® under U.S. patent application no. 11/833,323. If
issued, this patent will expire in 2025. Transcept is actively
pursuing additional patents to protect Intermezzo® in the United
States and key non-U.S. markets, and, as part of the NDA
submission, has requested that the FDA grant three years of
Hatch-Waxman marketing exclusivity to Intermezzo®. About Transcept
Transcept Pharmaceuticals, Inc. is a specialty pharmaceutical
company focused on the development and commercialization of
proprietary products that address important therapeutic needs in
neuroscience. For further information, please visit the company's
website at: http://www.transcept.com/. Forward Looking Statements
This press release contains forward-looking statements that involve
substantial risks and uncertainties. All statements, other than
statements of historical facts, included in this press release
regarding our strategy, future operations, future financial
position, future revenues, projected expenses, prospects, plans and
objectives of management are forward-looking statements. Examples
of such statements include, but are not limited to, statements
relating to expectations with respect to the following: the ability
of Transcept to successfully obtain direction from the FDA that
will effectively guide Transcept in support of its plans to
resubmit the Intermezzo® NDA; the ability of Transcept to resubmit
the Intermezzo® NDA to the FDA with sufficient data and other
content to warrant FDA approval to market the drug candidate in its
intended indication; the sufficiency of Transcept cash resources to
cover a range of potential additional expenses that may be required
to address the issues raised by the FDA Complete Response Letter;
the potential approval and timing of regulatory decisions with
respect to the NDA for Intermezzo®; Intermezzo® being the first
commercially available sleep aid in the United States specifically
approved for use in the middle of the night at the time a patient
awakens and has difficulty returning to sleep; the ability of
Transcept to obtain and maintain patent protection and regulatory
exclusivity for Intermezzo®; and financial guidance with respect to
general and administrative expenses and research and development
expenses. Transcept may not actually achieve the plans, intentions
or expectations disclosed in our forward-looking statements and you
should not place undue reliance on these forward-looking
statements. Actual results or events could differ materially from
the plans, intentions and expectations disclosed in the
forward-looking statements we make. Various important factors could
cause actual results or events to differ materially from the
forward-looking statements that Transcept makes, including risks
related to the following: the willingness and ability of the FDA to
provide reliable guidance that will enable Transcept to make
decisions in support of the Intermezzo® NDA; the ability of
Transcept to design or successfully carry out additional safety
studies in support of potential resubmission of an NDA for
Intermezzo®; the sufficiency of the content in the planned
resubmission in support of the Intermezzo® NDA; a decision by
Purdue to not devote time or resources to support the approval of
Intermezzo® or to terminate the Purdue collaboration agreement,
even if the Intermezzo® NDA is approved; unforeseen expenses
related to efforts in support of FDA approval, general and
administrative expenses; other research and development expenses
and the business of Transcept generally; dependence on third
parties to manufacture Intermezzo®; obtaining, maintaining and
protecting the intellectual property incorporated into Intermezzo®;
other difficulties or delays in the commercialization of
Intermezzo®; and the ability of Transcept to obtain additional
funding, if needed, to support its business activities. These and
other risks are described in greater detail in the "Risk Factors"
section of Transcept periodic reports filed with the SEC.
Forward-looking statements do not reflect the potential impact of
any future in-licensing, collaborations, acquisitions, mergers,
dispositions, joint ventures, or investments Transcept may enter
into or make. Transcept does not assume any obligation to update
any forward-looking statements, except as required by law.
FINANCIAL TABLES FOLLOW Transcept Pharmaceuticals, Inc. Statements
of Operations (Unaudited) Three Months Ended Nine Months Ended
September 30, September 30, ------------------ -----------------
2009 2008 2009 2008 ---- ---- ---- ---- Revenue: License fee
revenue $2,083,334 $- $2,083,334 $- Operating expenses: Research
and development 2,135,622 2,453,237 6,607,022 8,844,666 General and
administrative 3,839,612 2,141,535 13,072,734 5,365,574 Merger
related transaction costs - - 2,223,860 - --- --- --------- ---
Total operating expenses 5,975,234 4,594,772 21,903,616 14,210,240
--------- --------- ---------- ---------- Loss from operations
(3,891,900) (4,594,772) (19,820,282) (14,210,240) Interest income
54,729 133,878 239,661 682,117 Interest expense (4,176) (176,060)
(175,100) (618,188) Other income (expense), net 36,499 377,264
299,995 306,307 ------ ------- ------- ------- Net loss
$(3,804,848) $(4,259,690) $(19,455,726) $(13,840,004) ===========
=========== ============ ============ Basic and diluted net loss
per share $(0.29) $(10.08) $(1.65) $(35.93) ====== ======= ======
======= Weighted average shares outstanding 13,174,807 422,777
11,764,652 385,214 ========== ======= ========== ======= Transcept
Pharmaceuticals, Inc. Balance Sheets September 30, December 31,
------------- ------------ 2009 2008 ---- ---- Assets (Unaudited)
Current assets: Cash and cash equivalents $10,729,594 $4,431,505
Marketable securities 82,267,092 7,250,987 Prepaid and other
current assets 1,714,064 381,836 Restricted cash 200,000 200,000
------- ------- Total current assets 94,910,750 12,264,328 Property
and equipment, net 1,318,083 1,450,216 Goodwill 2,961,664 - Other
assets 826,243 65,970 ------- ------ Total assets $100,016,740
$13,780,514 ============ =========== Liabilities, convertible
preferred stock and stockholders' equity (net capital deficiency)
Current liabilities: Accounts payable $605,529 $575,269 Accrued
liabilities 2,185,011 1,468,415 Lease liability, short- term
portion 297,853 - Deferred revenue, short- term portion 12,500,000
- Loan payable, short-term portion 43,908 3,347,010 ------
--------- Total current liabilities 15,632,301 5,390,694 Deferred
revenue, long-term portion 10,416,666 - Warrant liability - 599,845
Deposit for stock purchase 51,780 87,656 Deferred rent 100,161
77,044 Lease liability, long-term portion 639,325 - Loan payable,
long-term portion 136,370 169,636 Other liabilities 12,500 - ------
--- Total liabilities 26,989,103 6,324,875 Convertible preferred
stock: $0.001 par value; 7,593,091 shares authorized; 0 shares
issued and outstanding at September 30, 2009; Series A - 60,212,
Series B - 1,126,020, Series C - 2,838,091 and Series D - 3,325,647
shares issued and outstanding at December 31, 2008 - 71,036,951
Stockholders' equity (net capital deficiency): Common stock, $0.001
par value; 100,000,000 shares authorized; 13,336,431 and 454,676
shares issued and outstanding at September 30, 2009 and December
31, 2008, respectively 13,336 455 Additional paid-in capital
157,516,702 1,503,841 Accumulated deficit (84,567,159) (65,111,433)
Accumulated other comprehensive income 64,758 25,825 ------ ------
Total stockholders' equity (net capital deficiency) 73,027,637
(63,581,312) ---------- ----------- Total liabilities, convertible
preferred stock and stockholders' equity (net capital deficiency)
$100,016,740 $13,780,514 ============ =========== Contact:
Transcept Pharmaceuticals, Inc. Greg Mann Director, Corporate
Communications (510) 215-3567 DATASOURCE: Transcept
Pharmaceuticals, Inc. CONTACT: Greg Mann, Director, Corporate
Communications of Transcept Pharmaceuticals, Inc., +1-510-215-3567,
Web Site: http://www.transcept.com/
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