XenoPort Reports Third Quarter Financial Results

  XenoPort Reports Third Quarter Financial Results

Business Wire

SANTA CLARA, Calif. -- October 24, 2012

XenoPort, Inc. (Nasdaq: XNPT) announced today financial results for the third
quarter and nine months ended September 30, 2012. Revenues for the third
quarter were $0.4 million, compared to $0.4 million for the same period in
2011. Net loss for the third quarter was $16.8 million, compared to a net loss
of $18.8 million for the same period in 2011. At September 30, 2012, XenoPort
had cash, cash equivalents and short-term investments of $112.9 million.

XenoPort Business Updates

Since the start of the third quarter, XenoPort’s business updates include:

  *Astellas Pharma Inc. launched Regnite® (gabapentin enacarbil)
    Extended-Release Tablets. Regnite is approved in Japan for the treatment
    of moderate-to-severe primary restless legs syndrome (RLS). It is
    estimated that there are approximately 2.1 million people in Japan with
    RLS.
  *XenoPort reported favorable preliminary results from a Phase 1 clinical
    trial in healthy adults designed to assess the pharmacokinetics (PK),
    safety and tolerability of single doses of four different oral
    formulations of XP23829, a novel fumaric acid ester compound that is a
    prodrug of monomethyl fumarate (MMF). XP23829 is being developed for the
    potential treatment of relapsing-remitting multiple sclerosis (RRMS)
    and/or psoriasis.
  *XenoPort was awarded a $0.3 million grant from The Michael J. Fox
    Foundation (MJFF) for Parkinson’s Research to support preclinical studies
    to explore XP23829 for its potential ability to protect against
    neurodegeneration in experimental preclinical models of Parkinson’s
    disease.
  *XenoPort completed an underwritten public offering generating net cash
    proceeds of approximately $43.1 million, after deducting the underwriting
    discounts and commissions and offering expenses payable by XenoPort.

Ronald W. Barrett, Ph.D., chief executive officer of XenoPort, stated, “Our
efforts in the third quarter yielded progress on several fronts. We are
encouraged by the results from our first human study of XP23829, and we are
excited to be working with MJFF to explore how XP23829 may be useful as a
potential treatment for Parkinson’s disease. We are close to completing
enrollment of patients in our Phase 3 arbaclofen placarbil (AP) clinical trial
for multiple sclerosis patients with spasticity and now expect preliminary
top-line results early in the second quarter of 2013.”

XenoPort Third Quarter and Nine-Month Financial Results

Revenues for the third quarter were $0.4 million, compared to $0.4 million for
the same period in 2011. Revenues for both periods reflected the amortization
of revenue recognized from an up-front license payment related to the
company’s agreement with Astellas Pharma Inc. Revenues for the nine months
ended September 30, 2012 were $21.1 million, compared to $38.1 million for the
same period in 2011. The decrease in revenues was primarily due to the
recognition of a $30.0 million contingent payment from GlaxoSmithKline (GSK)
in connection with the first shipment of Horizant^® (gabapentin enacarbil)
Extended-Release Tablets to a wholesaler in 2011, compared to the recognition
of a $10.0 million contingent payment from GSK in connection with the first
commercial sale of Horizant for the management of postherpetic neuralgia in
adults in 2012. Pursuant to the terms of the company’s collaboration agreement
with GSK, XenoPort’s share of losses from the Horizant joint profit and loss
(P&L) statement will be forgiven up to a maximum of $10.0 million. XenoPort’s
share of joint P&L losses totaled approximately $9.6 million as of September
30, 2012. Net sales of Horizant for the third quarter and nine months ended
September 30, 2012, as recorded by GSK, were $1.6 million and $4.4 million,
respectively.

Research and development expenses for the third quarter of 2012 were $9.4
million, compared to $11.5 million for the same period in 2011. The decrease
in research and development expenses in the three months ended September 30,
2012 compared to the same period in 2011 was principally due to decreased net
costs for XP21279 and XP23829, decreased personnel costs primarily related to
decreased headcount and decreased non-cash stock-based compensation, as well
as decreased office and facilities overhead costs. Research and development
expenses for the nine months ended September 30, 2012 were $32.3 million,
compared to $31.3 million for the same period in 2011. The increase in
research and development expenses in the nine months ended September 30, 2012
compared to the same period in 2011 was principally due to increased net costs
for AP and XP23829, partially offset by decreased net costs for XP21279 and
decreased office and facilities overhead costs.

Selling, general and administrative expenses were $7.8 million for the third
quarter of 2012, compared to $7.7 million for the same period in 2011.
Selling, general and administrative expenses were $22.8 million for the nine
months ended September 30, 2012, compared to $23.5 million for the same period
in 2011.

Net loss for the third quarter of 2012 was $16.8 million, compared to a net
loss of $18.8 million for the same period in 2011. Net loss for the nine
months ended September 30, 2012 was $33.9 million, compared to a net loss of
$16.5 million for the same period in 2011. Basic and diluted net loss per
share were both $0.41 in the third quarter of 2012 versus basic and diluted
net loss per share of $0.53 for the same period in the prior year. For the
nine-month period ended September 30, 2012, basic and diluted net loss per
share were both $0.90 versus basic and diluted net loss per share of $0.47 for
the same period in 2011.

Conference Call

XenoPort will host a conference call at 5:00 p.m. Eastern Time today to
discuss its financial results and provide an update on XenoPort’s business. To
access the conference call via the Internet, go to www.XenoPort.com. To access
the live conference call via phone, dial 1-888-275-3514. International callers
may access the live call by dialing 706-679-1417. The reference number to
enter the call is 51875216.

The replay of the conference call may be accessed after 8:00 p.m. Eastern Time
today via the Internet, at www.XenoPort.com, or via phone at 1-800-642-1687
for domestic callers, or 706-645-9291 for international callers. The reference
number to enter the replay of the call is 51875216. Dial-in access to the
replay of the call will be available for approximately one week, and the
Internet replay of the call will be available for approximately one month
following the live call.

About XenoPort

XenoPort is a biopharmaceutical company focused on developing and
commercializing a portfolio of internally discovered product candidates for
the potential treatment of neurological disorders. Horizant® (gabapentin
enacarbil) Extended-Release Tablets is approved in the United States for the
treatment of moderate-to-severe primary restless legs syndrome (RLS) in adults
and for the management of postherpetic neuralgia in adults. GlaxoSmithKline
holds commercialization rights and certain development rights for Horizant in
the United States. Regnite® (gabapentin enacarbil) Extended-Release Tablets is
approved for the treatment of RLS in Japan. Astellas Pharma Inc. holds all
development and commercialization rights for Regnite in Japan and five other
Asian countries. XenoPort holds all other world-wide rights and has
co-promotion and certain development rights to gabapentin enacarbil in the
United States. XenoPort’s pipeline of product candidates includes potential
treatments for patients with spasticity, Parkinson’s disease and
relapsing-remitting multiple sclerosis.

To learn more about XenoPort, please visit the Web site at www.XenoPort.com.

Forward-Looking Statements

This press release contains “forward-looking” statements, including, without
limitation, all statements related to the commercial opportunity for Regnite
in Japan; XenoPort’s clinical development programs for XP23829 and AP, and the
timing and results thereof; the potential suitability of XP23829 as a
treatment for RRMS and/or psoriasis; the potential of XP23829 to protect
against neurodegeneration in experimental preclinical models of Parkinson’s
disease; the potential suitability of AP as a treatment for spasticity;
XenoPort’s clinical trials, and the timing of enrollment and results; and the
therapeutic and commercial potential of XenoPort's product candidates. Any
statements contained in this press release that are not statements of
historical fact may be deemed to be forward-looking statements. Words such as
“estimated,” “expect,” “potential,” “may,” “will,” and similar expressions are
intended to identify forward-looking statements. These forward-looking
statements are based upon XenoPort's current expectations. Forward-looking
statements involve risks and uncertainties. XenoPort's actual results and the
timing of events could differ materially from those anticipated in such
forward-looking statements as a result of these risks and uncertainties, which
include, without limitation, risks related to XenoPort’s dependence on
Astellas to commercialize Regnite and GSK to commercialize Horizant; the
uncertain results and timing of clinical trials and other studies, including
the risk that success in preclinical testing and early clinical trials do not
ensure that later clinical trials will be successful, and that the results of
clinical trials by other parties may not be indicative of the results in
trials that XenoPort may conduct; XenoPort’s ability to successfully complete
enrollment and conduct clinical trials in the anticipated timeframes, or at
all; XenoPort’s dependence on its current and future collaborative partners;
the availability of resources to develop XenoPort’s product candidates; and
the uncertain therapeutic and commercial value of XenoPort’s product
candidates. These and other risk factors are discussed under the heading "Risk
Factors" in XenoPort’s Quarterly Report on Form 10-Q for the quarter ended
June 30, 2012, filed with the Securities and Exchange Commission on August 8,
2012. XenoPort expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statements contained
herein to reflect any change in the company's expectations with regard thereto
or any change in events, conditions or circumstances on which any such
statements are based.

XENOPORT and Regnite are registered trademarks of XenoPort, Inc.
Horizant is a registered trademark of GSK.

XNPT2F

XENOPORT, INC.
                                                           
BALANCE SHEETS
(Unaudited)
                                                               
                                               September 30,   December 31,
                                                 2012        2011     
                                               (In thousands)
Current assets:
Cash and cash equivalents                      $  18,702       $ 25,386
Short-term investments                            94,159         69,056
Prepaids and other current assets                 3,023          3,010
Restricted investments                           1,955        —        
Total current assets                              117,839        97,452
Property and equipment, net                       1,995          3,921
Restricted investments and other assets          —            2,663    
Total assets                                   $  119,834     $ 104,036  
Liabilities:
Current liabilities                            $  13,199       $ 13,530
Noncurrent liabilities                           13,131       15,371   
Total liabilities                                26,330       28,901   
Stockholders’ equity:
Common stock                                      43             35
Additional paid-in capital and other              548,103        495,886
Accumulated deficit                              (454,642 )    (420,786 )
Total stockholders’ equity                       93,504       75,135   
Total liabilities and stockholders’ equity     $  119,834     $ 104,036  

XENOPORT, INC.

STATEMENTS OF OPERATIONS
(Unaudited)
                                                 
                         Three Months                Nine Months Ended
                                                     September 30,
                         Ended September 30,
                          2012       2011        2012       2011    
                         (In thousands, except per share amounts)
Revenues:
Net revenue from
unconsolidated joint     $ —           $ —           $ 10,000      $ 30,000
operating activities
Collaboration             379         379         11,137      8,137   
revenue
Total revenues            379         379         21,137      38,137  
Operating expenses:
Research and               9,365         11,518        32,347        31,276
development*
Selling, general and      7,833       7,713       22,822      23,539  
administrative*
Total operating           17,198      19,231      55,169      54,815  
expenses
Loss from operations       (16,819 )     (18,852 )     (34,032 )     (16,678 )
Interest income           66          59          176         184     
Net loss                 $ (16,753 )   $ (18,793 )   $ (33,856 )   $ (16,494 )
Basic and diluted
net loss                 $ (0.41   )   $ (0.53   )   $ (0.90   )   $ (0.47   )
per share
Shares used to
compute
basic and diluted         41,016      35,444      37,480      35,372  
net loss
per share

* Includes employee non-cash stock-based compensation as follows:
Research and             $ 935         $ 1,223       $ 3,043       $ 4,009
development
Selling, general          1,881       2,278       6,096       6,961   
and administrative
Total non-cash
stock-based              $ 2,816      $ 3,501      $ 9,139      $ 10,970  
compensation expense

Contact:

XenoPort
Jackie Cossmon, 408-616-7220
ir@XenoPort.com
 
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