Transcept Pharmaceuticals Reports Fourth Quarter And Full Year 2012 Financial Results

Transcept Pharmaceuticals Reports Fourth Quarter And Full Year 2012 Financial
                                   Results

Conference call scheduled for 4:30 PM Eastern time today

PR Newswire

POINT RICHMOND, Calif., Feb. 27, 2013

POINT RICHMOND, Calif., Feb. 27, 2013 /PRNewswire/ --Transcept
Pharmaceuticals, Inc. (Nasdaq: TSPT), a specialty pharmaceutical company
focused on the development and commercialization of proprietary products that
address important therapeutic needs in the field of neuroscience, today
announced financial results for the three and twelve months ended December31,
2012.

Transcept reported cash, cash equivalents and marketable securities of $85.3
million at December31, 2012.

"We continue to work closely with Purdue Pharma as they execute the Intermezzo
commercialization plan," stated Glenn A. Oclassen, President and CEO of
Transcept. "The Intermezzo selling effort is newly supported by an enlarged
Purduesalesteam of approximately 615 professionals. Their sales activities
are complemented by the recent launch of a national television advertising
campaign, and we believe that these broadened commercial and educational
efforts have the potential to increase consumer awareness of Intermezzo and
drive future prescription growth."

Three months ended December31, 2012 financial results
In December 2012, Transcept contributed $10.0 million toPurdue's Intermezzo
direct-to-consumer advertising campaign. In accordance with the appropriate
accounting treatment, Transcept plans to recognize this contribution as an
offset against revenue over an estimated seven month period beginning December
1, 2012 and ending on June 30, 2013, as the advertising costs are incurred.
This treatment resulted in a $1.4 million offset to revenue during the fourth
quarter 2012.

For the quarter ended December31, 2012, Transcept recorded $0.1 million of
royalty revenue on Intermezzo net sales generated by Purdue and the above
mentioned $1.4 million offset related to the direct-to-consumer advertising
campaign, resulting in negative net revenue of $1.3 million. Net revenue for
the quarter ended December 31, 2011 was $12.8 million. The decrease of $14.1
million between periods was primarily attributable to the fourth quarter 2011
$10.0 million patent-related milestone payment from Purdue for the listing
ofTranscept's first formulation patent in the FDA's Orange Book, $2.4 million
of other 2011 revenue received from Purdue, including the reimbursement of
certain manufacturing-related costs, and the $1.4 million revenue offset
recorded during the fourth quarter 2012 related to the direct-to-consumer
advertising campaign.

Research and development expense for the quarter ended December31, 2012 was
approximately $2.9 million, compared to approximately $3.4 million for the
same period in 2011. The decrease of approximately $0.5 million was primarily
attributable to 2011 stock compensation expense related to the vesting of
performance based stock options upon the FDA approval of Intermezzo, and was
partially offset by an increase in 2012 of clinical trial expense related
toTranscept's Phase 2 study of TO-2061. Research and development expense
included non-cash stock compensation expense of approximately $0.2 million for
the quarter ended December31, 2012 and approximately $0.8 million for the
quarter ended December31, 2011.

General and administrative expense for the quarter ended December31, 2012 was
approximately $2.3 million, compared to approximately $4.1 million for the
same period in 2011. The decrease of approximately $1.8 million was primarily
attributable to 2011 stock compensation expense related to the vesting of
performance based stock options upon the FDA approval of Intermezzo. General
and administrative expense included non-cash stock compensation expense of
approximately $0.5 million for the quarter ended December31, 2012, compared
to approximately $1.6 million for the quarter ended December31, 2011.

Net loss for the quarter ended December31, 2012 was approximately $6.6
million, or $0.35 per share (basic and diluted), compared to net income of
approximately $5.3 million, or $0.39 per share (basic) and $0.37 per share
(diluted), for the quarter ended December31, 2011. The weighted average
shares used to calculate basic and diluted net loss per share were 18,628,004
for the quarter ended December31, 2012. The weighted average shares used to
calculate basic and diluted net income per share were 13,663,799 and
14,396,542, respectively, for the quarter ended December31, 2011. At
December31, 2012, there were 18,676,396 common shares outstanding and
3,047,631 common shares underlying outstanding options and warrants.

During January and February 2013, Transcept issued an additional 1,025,500
options to purchase common shares. As of February 27, 2013, there were
18,696,396 common shares outstanding and 4,052,339 common shares underlying
outstanding options and warrants.

Full year 2012 financial results
In December 2012, Transcept contributed $10.0 million to Purdue's Intermezzo
direct-to-consumer advertising campaign. In accordance with the appropriate
accounting treatment, Transcept plans to recognize this contribution as an
offset against revenue over an estimated seven month period beginning December
1, 2012 and ending on June 30, 2013, as the advertising costs are incurred.
This treatment resulted in a $1.4 million offset to revenue in 2012.

Net revenue for the year ended December31, 2012 was $9.6 million compared to
$19.7 million for the year ended December31, 2011. The decrease of $10.1
million was primarily attributable to the recognition in 2011 of the remaining
$7.3 million of license fee revenue related to a non-refundable license fee
received from Purdue, the reimbursement of certain manufacturing-related costs
from Purdue, and the $1.4 million revenue offset recorded in 2012 related to
the direct-to-consumer advertising campaign.

Research and development expense for the year ended December31, 2012 was
approximately $11.2 million, compared to approximately $11.3 million for the
same period in 2011. The decrease of $0.1 million was primarily attributable
to a $2.1 million decrease in salary and other general expenses related to the
July 2011 reduction in workforce, and a $0.7 million reduction in the
Intermezzo development program expense. These were partially offset by a $2.7
million increase in expense associated with the TO-2061 clinical development
program, which completed in December 2012. Research and development expense
included non-cash stock compensation expense of approximately $0.8 million for
the year ended December31, 2012 and approximately $1.3 million for the year
ended December31, 2011.

General and administrative expense for the year ended December31, 2012 was
approximately $10.3 million, compared to approximately $12.2 million for the
same period in 2011. The decrease of $1.9 million was primarily attributable
to 2011 salary and related expenses that included stock compensation expense
related to FDA approval of Intermezzo, and severance and benefit continuation
expense incurred during the 2011 reduction in workforce. General and
administrative expense included non-cash stock compensation expense of
approximately $2.1 million for the year ended December31, 2012, compared to
approximately $3.1 million for the year ended December 31, 2011.

Net loss for the year ended December31, 2012 was approximately $12.0 million,
or $0.70 per share (basic and diluted), compared to a net loss of
approximately $3.9 million, or $0.29 per share (basic and diluted), for the
year ended December31, 2011. The weighted average shares used to calculate
net loss per share were 17,052,157 and 13,534,248 for the years ended
December31, 2012 and 2011, respectively.

Other information
On December 21, 2012, Transcept announced that a Phase 2 clinical trial of
TO-2061, an investigational product for adjunctive therapy in patients with
obsessive compulsive disorder, did not meet its primary endpoint. Based on
this result, Transcept has discontinued the clinical development of TO-2061
and expects to incur final wind down costs for the program in the first half
of 2013.

Conference call and webcast information
Transcept will host a conference call and webcast on Wednesday, February 27,
2013 at 4:30 p.m. ET to discuss fourth quarter and full year 2012 financial
results. Telephone numbers for the live conference call are 877-638-4558
(U.S.) or 914-495-8537 (International). The webcast can be accessed on the
Investors page of the Transcept website at www.transcept.com and will be
available for replay until close of business on March 31, 2013.

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 the field of neuroscience. Intermezzo^®
(zolpidem tartrate) sublingual tablet C-IV is the first FDA approved Transcept
product. Purdue holds commercialization and development rights for Intermezzo
in the United States. For further information about Transcept, please visit
www.transcept.com. For information about Intermezzo, please visit
www.MyIntermezzo.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 the following: Purdue's plans to commercialize
Intermezzo, including our collaboration with Purdue; the effect of Purdue's
commercialization plans, including the broadened commercial and educational
efforts through the national television advertising campaign, for Intermezzo
on consumer awareness and prescription growth; and the period over which we
expect to offset against revenue the $10 million contribution related to the
direct-to-consumer advertising campaign led by Purdue. Transcept may not
actually achieve the plans, carry out the intentions or meet the expectations
or projections 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, expectations and
projections disclosed in the forward-looking statements. Various important
factors could cause actual results or events to differ materially from the
forward-looking statements that Transcept makes, including the following:
achieving acceptance of Intermezzo by physicians, patients and third party
payors; supplying sufficient quantities of Intermezzo from third party
manufacturers and suppliers to meet anticipated market demand; the impact of
competitive products and the market for Intermezzo generally; our dependence
on our collaboration with Purdue; obtaining, maintaining and protecting
regulatory exclusivity and intellectual property protection for Intermezzo;
our ability to identify and finance additional product candidates for
in-licensing or acquisition; 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.

Contact:
Transcept Pharmaceuticals, Inc.
Leone Patterson
Vice President, Chief Financial Officer
(510) 215-3500
lpatterson@transcept.com

FINANCIAL TABLES FOLLOW

Transcept Pharmaceuticals, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
                            Three months ended        Year ended December 31,
                            December 31,
                            2012           2011       2012         2011
Revenue:
                            $        $      $       $     
Gross royalty revenue       93                776            -
                                           -
Gross license fee revenue  -              417        -            7,292
Gross milestone revenue    -              10,000     10,000       10,000
Gross other revenue        -              2,402      250          2,402
Advertising expense        (1,429)        -          (1,429)      -
-PurduePharma
Net revenue                 (1,336)        12,819     9,597        19,694
Operating expenses:
 Research and development  2,918          3,351      11,191       11,273
 General and               2,265          4,140      10,263       12,185
administrative
Total operating expenses    5,183          7,491      21,454       23,458
(Loss) income from          (6,519)        5,328      (11,857)     (3,764)
operations
Interest and other income   (35)           (32)       (159)        (116)
(expense), net
Net (loss) income           $           $      $          $   
                            (6,554)        5,296    (12,016)    (3,880)
Net (loss) income per
share:
 Basic                     $         $      $        $     
                            (0.35)           0.39   (0.70)      (0.29)
 Diluted                   $         $      $        $     
                            (0.35)           0.37   (0.70)      (0.29)
Weighted average common
shares outstanding:
 Basic                     18,628         13,664     17,052       13,534
 Diluted                   18,628         14,397     17,052       13,534
Comprehensive (loss)        $           $      $          $   
income                     (6,552)        5,289    (12,038)    (3,853)



Transcept Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
                                December 31, 2012        December 31, 2011
                                (unaudited)
Assets
Current assets:
 Cash and cash equivalents  $             $          
                                 39,368                10,659
 Marketable securities      45,907                   51,703
 Prepaid advertising        8,571                    -
 Other current assets       1,120                    3,475
Total current assets            94,966                   65,837
Property and equipment, net     128                      314
Goodwill                        2,962                    2,962
Other assets                    -                        38
Total assets                    $             $          
                                 98,056                69,151
Liabilities and stockholders'
equity
Total current liabilities       $             $          
                                  2,663                 3,339
Other liabilities, long-term    -                        60
portion
Total liabilities               2,663                    3,399
Stockholders' equity:
 Common stock and           207,496                  165,817
additional paid in capital
 Accumulated deficit        (112,110)                (100,094)
 Accumulated other          7                        29
comprehensive income
Total stockholders' equity      95,393                   65,752
Total liabilities and           $             $          
stockholders' equity             98,056                69,151

SOURCE Transcept Pharmaceuticals, Inc.

Website: http://www.transcept.com
Website: http://www.MyIntermezzo.com
 
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