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Zalicus Reports Financial Results for the First Quarter 2013

  Zalicus Reports Financial Results for the First Quarter 2013  Business Wire  CAMBRIDGE, Mass. -- May 2, 2013  Zalicus Inc. (Nasdaq Capital Market: ZLCS), a biopharmaceutical company that discovers and develops novel treatments for patients suffering from pain, today reported financial results for the first quarter ended March 31, 2013.  “This has been a productive quarter for Zalicus as evidenced by the extension of our Novartis collaboration and the bolstering of our ion channel intellectual property estate to broaden and extend exclusivity for our ion channel programs Z160 and Z944,” commented Mark H.N. Corrigan, MD, President and CEO of Zalicus. “Our primary focus is on advancing the development of our ion channel programs, including Z160, our first-in-class, oral N-type calcium channel blocker for the treatment of chronic neuropathic pain that is currently actively enrolling two Phase 2 clinical trials, and Z944, a novel oral T-type calcium channel blocker that is continuing to progress in the clinic.”  First Quarter 2013 and Recent Accomplishments:    *Collaborations. Extended our alliance with Novartis through October 2014,     based on the success of the cHTS discovery collaboration up to this point.     This is Novartis’ third extension, generating up to $3.0 million in funded     research payments to Zalicus, and further validating the value of the cHTS     discovery technology to the advancement of novel treatments for cancer.   *Z160. Granted a patent by the U.S. Patent and Trademark office (USPTO)     covering novel formulations of Z160 and extending its patent protection     and exclusivity into 2032. United States patent number 8,409,560, entitled     “Solid Dispersion Formulations and Methods of Use Thereof,” provides broad     coverage for a range of novel Z160 pharmaceutical compositions and methods     of using these compositions in the treatment of pain. Z160 is a     first-in-class, oral, state dependent, selective N-type calcium channel     (Cav 2.2) blocker currently in two Phase 2a clinical trials for the     potential treatment of chronic neuropathic pain, including lumbosacral     radiculopathy which began in the third quarter of 2012 and postherpetic     neuralgia which began in the fourth quarter of 2012. Top line data from     both studies are expected to be available late in the second half of 2013.   *Z944. Granted United States patent number 8,377,968 entitled     “N-Piperidinyl Acetamide Derivatives as Calcium Channel Blockers”     providing broad coverage for Z944 including compositions of matter and     certain therapeutic methods of use through April 2029. Z944 is a novel,     oral, T-type calcium channel blocker which has demonstrated efficacy in a     number of preclinical inflammatory pain models and other disease models.     Z944 completed Phase 1 single and multiple ascending dose clinical studies     in late 2012 and Zalicus plans to continue further clinical development     with Z944 during 2013.   *Scientific Presentations. Presented preclinical data demonstrating the     advantages of applying Zalicus’s state-dependent ion channel screening     approach to identify novel calcium channel blockers for the treatment of     pain at the RSC/SCI Symposium on Ion Channels as Therapeutic Targets     Conference. These data demonstrated the utility of inactivation state     screening to identify novel, potent, selective and state-dependent calcium     channel blockers with efficacy in animal models of inflammatory and     neuropathic pain.  First Quarter Financial Results (Unaudited):  As of March 31, 2013, Zalicus had cash, cash equivalents, restricted cash and short-term investments of $26.1 million compared to $36.4 million on December 31, 2012.  For the three months ended March 31, 2013, revenue was $3.7 million compared to $2.3 million for the quarter ended March 31, 2012. Zalicus recognized $1.4 million in royalty revenue from Mallinckrodt based on Exalgo® sales for the quarter ended March 31, 2013 and a total of $10.8 million in Exalgo royalty revenue from its commercial launch in April 2010 through March31, 2013.  For the quarter ended March 31, 2013, net loss was $8.0 million, or ($0.06) per share, compared to a net loss of $13.5 million, or ($0.13) per share, in the quarter ended March 31, 2012. The net loss amounts include $2.2 million and $1.0 million in non-cash Exalgo intangible amortization expense in the quarters ended March 31, 2013 and March 31, 2012, respectively.  Research and development expenses were $7.1 million in the quarter ended March 31, 2013 compared to $10.6 million in the quarter ended March 31, 2012. The $3.5 million decrease from the 2012 period to the 2013 period was primarily due to decreased clinical development expenses related to our discontinued product candidate Synavive.  General and administrative expenses were $2.0 million in the quarter ended March 31, 2013 compared to $2.7 million in the quarter ended March 31, 2012.  About Zalicus  Zalicus Inc. (Nasdaq Global Market: ZLCS) is a biopharmaceutical company that discovers and develops novel treatments for patients suffering from pain. Zalicus has a portfolio of proprietary clinical-stage product candidates targeting pain such as Z160 and Z944 and has entered into multiple revenue-generating collaborations with large pharmaceutical companies relating to other products, product candidates and drug discovery technologies. Zalicus applies its expertise in the discovery and development of selective ion channel modulators and its combination high throughput screening capabilities to discover innovative therapeutics for itself and its collaborators in the areas of pain, inflammation, oncology and infectious disease. To learn more about Zalicus, please visit www.zalicus.com.  Forward-Looking Statements  This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 concerning Zalicus, its product candidates, their potential, and its plans for clinical development, the Zalicus selective ion channel modulation technology, and related preclinical product candidates and intellectual property, Zalicus’s combination drug discovery technology, cHTS, and its financial condition, results of operations, including expected 2013 royalties on Mallinckrodt’s net sales of Exalgo, and other business plans. These forward-looking statements about future expectations, plans, objectives and prospects of Zalicus and its product candidates may be identified by words like "believe," "expect," "may," "will," "should," "seek," “plan,” “project” or “could” and similar expressions and involve significant risks, uncertainties and assumptions, including risks related to the risks related to the formulation and clinical development of its product candidates Z160 and Z944, the unproven nature of the Zalicus ion channel drug discovery technology, risks related to the sale and marketing of Exalgo by Mallinckrodt, the ability of Zalicus’s collaboration partners to initiate and successfully complete clinical trials of their partnered product candidates, Zalicus’s ability to obtain additional financing or funding for its research and development, and those other risks that can be found in the "Risk Factors" section of Zalicus' annual report on Form 10-K on file with the Securities and Exchange Commission and the other reports that Zalicus periodically files with the Securities and Exchange Commission. Actual results may differ materially from those Zalicus contemplated by these forward-looking statements. These forward-looking statements reflect management’s current views and Zalicus does not undertake to update any of these forward-looking statements to reflect a change in its views or events or circumstances that occur after the date of this release except as required by law.  (c) 2013 Zalicus Inc. All rights reserved.                                                             Zalicus Inc. Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands, except share and per share amounts) (Unaudited)                                                                                                                                                                            Three months ended                                            March 31,                                             2013              2012         Revenue: Royalties                                  $ 1,432             $ 1,118 cHTS services and other collaborations      2,242             1,202                                                                        Total revenue                               3,674             2,320                                                                        Operating expenses: Research and development                     7,079               10,582 General and administrative                   2,042               2,663 Amortization of intangible                   2,181               973 Restructuring                               —                 1,101                                                                        Total operating expenses                    11,302            15,319                                                                       Loss from operations                         (7,628      )       (12,999     ) Interest income                              23                  41 Interest expense                             (440        )       (591        ) Other (expense) income                      (2          )      7                                                                            Net loss                                   $ (8,047      )     $ (13,542     )                                                                                                                                 Net loss per share—basic and diluted       $ (0.06       )     $ (0.13       )                                                                 Weighted average number of common shares used in net loss per share           127,225,319       103,790,071  calculation – basic and diluted                                                                                                                                 Comprehensive loss                         $ (8,053      )     $ (13,520     )                                                                Zalicus Inc. Condensed Consolidated Balance Sheets (in thousands, except per share data) (Unaudited)                                                                                                                                                                                        March 31,        December 31,                                                  2013             2012                                                                    Assets Current assets: Cash and cash equivalents                        $ 3,221          $ 4,531 Restricted cash                                    50               50 Short-term investments                             21,077           30,059 Accounts receivable                                2,532            3,045 Prepaid expenses and other current assets         834            684                                                                          Total current assets                               27,714           38,369 Property and equipment, net                        3,212            3,535 Intangible asset, net                              15,473           17,654 Restricted cash and other assets                  1,804          1,817                                                                        Total assets                                     $ 48,203        $ 61,375                                                                       Liabilities and stockholders’ equity Current liabilities: Accounts payable                                 $ 1,426          $ 3,261 Accrued expenses and other current                 3,519            4,841 liabilities Deferred revenue                                   4,583            4,918 Current portion of term loan payable               6,521            6,327 Current portion of lease incentive                284            284       obligation                                                                    Total current liabilities                          16,333           19,631 Term loan payable, net of current portion          7,067            8,772 Deferred revenue, net of current portion           75               600 Deferred rent, net of current portion              420              457 Lease incentive obligation, net of current         804              875 portion Other long-term liabilities                        —                14 Stockholders’ equity: Preferred stock, $0.001 par value; 5,000 shares authorized; no shares issued and            —                — outstanding Common stock, $0.001 par value; 200,000 shares authorized; 127,265 and 127,019 shares issued                                      127              127  and outstanding at March 31, 2013 and December 31, 2012, respectively Additional paid-in capital                         372,443          371,912 Accumulated other comprehensive income             4                10 Accumulated deficit                               (349,070 )      (341,023 )                                                                    Stockholders’ equity                              23,504         31,026                                                                       Total liabilities and stockholders’ equity       $ 48,203        $ 61,375     Contact:  Zalicus Inc. Justin Renz, 617-301-7575 CFO JRenz@zalicus.com or Gina Nugent, 617-460-3579 gnugent@zalicus.com