POZEN Reports First Quarter 2013 Results

  POZEN Reports First Quarter 2013 Results

            NDA for PA32540/PA8140 Submitted to FDA in Late March

Business Wire

CHAPEL HILL, N.C. -- May 8, 2013

POZEN Inc. (NASDAQ: POZN),  a pharmaceutical company committed to transforming
medicine that transforms lives, today announced results for the first quarter
ended March 31, 2013.

Recent Corporate Highlights

  *POZEN announced the submission of a New Drug Application (NDA) to the U.S.
    Food and Drug Administration (FDA) for the marketing approval of
    PA32540/PA8140. Both products are coordinated-delivery tablets combining
    immediate-release omeprazole (40 mg), a proton pump inhibitor (PPI),
    layered around a pH-sensitive coating of an aspirin core. Pending
    regulatory approval, an indication is sought for the use of PA tablets for
    the secondary prevention of cardiovascular disease in patients at risk for
    aspirin-induced gastric ulcers.
  *In early March, POZEN announced that the Opposition Division of the
    European Patent Office had maintained the granted European patent,
    EP1411900, entitled Pharmaceutical Compositions for the Coordinated
    Delivery of NSAIDs, which covers VIMOVO^® (naproxen / esomeprazole
    magnesium) delayed-release tablets and POZEN’s PA product candidates. The
    patent claims maintained in the opposition proceedings relate to
    combinations of PPIs and non-steroidal anti-inflammatory drugs (NSAIDs).
  *On April 5, POZEN announced that the results of a company-sponsored study
    entitled The Burden of Secondary Cardiovascular Disease in Commercial and
    Medicare Patients: A Managed Care Perspective, were presented by Ryan S.
    Clark, Pharm.D., MBA, Health Outcomes and Managed Markets Fellow, Global
    Health Economics & Outcomes Research at Xcenda, at the Academy of Managed
    Care Pharmacy’s 25th Annual Meeting and Expo. The study demonstrated that
    the prevention of cardiovascular events with aspirin plus a PPI, compared
    to aspirin alone, is associated with a net per-patient per-year cost
    decrease of $103 and $145, and a potential overall cost decrease of $1.8
    million and $11.0 million for a typical one million-member Commercial and
    Medicare Plan, respectively.
  *Partnership discussions for PA continue to progress. While there can be no
    assurances, the Company continues to expect to close a partnership deal in
    2013.
  *On April 18, 2013, POZEN hosted an Analyst and Investor Event, featuring
    presentations by Dr. David Whellan, from Thomas Jefferson University, who
    discussed the use of aspirin in treatment of cardiovascular disease and
    clinical study results relating to PA32540; Diane Giaquinta, Pharm.D. and
    FAMCP, who provided an overview of the likely reimbursement landscape if
    PA is approved and enters the U.S. market; and POZEN’s Executive Vice
    President and Chief Commercial Officer, Liz Cermak, who provided a review
    of the PA commercialization strategy. A webcast replay and presentation
    slides from the event can be accessed at www.pozen.com.
  *Q1 2013 global net sales of VIMOVO by AstraZeneca, as defined under our
    agreement, were $19.7 million, up 7% from Q4 2012 and 24% vs. Q1 2012.
    POZEN earned a royalty of $1.4 million in Q1 2013, a 10% increase over Q1
    2012. On May 3, 2013, AstraZeneca informed POZEN that it will focus its
    future promotional efforts for VIMOVO in specific markets where
    AstraZeneca feels sufficient future potential can be realized. By the end
    of third quarter of this year, AstraZeneca will continue to make
    available, but plans to cease promotion of VIMOVO in certain countries,
    including the U.S. and in Europe, with the exception of Spain and
    Portugal, due to existing contractual arrangements with third parties. For
    the remaining countries where VIMOVO is on the market, which accounted for
    47% of sales in Q1, promotion will continue. Decisions to launch in new
    countries will be made by AstraZeneca on a case-by-case basis. We are
    unsure, at this point, of the impact on our future revenue from this
    change in strategy, however, we will update investors when we have greater
    clarity.

First Quarter Results

For the first quarter of 2013, POZEN reported revenue of $1.4 million compared
to total revenue of $1.3 million for the first quarter of 2012, revenue for
both quarters was royalty for sales of VIMOVO.

Operating expenses for the first quarter of 2013 totaled $7.2 million, as
compared to $9.8 million for the comparable period in 2012. The decrease in
operating expenses in the first quarter of 2013 was primarily a result of
lower pre-commercialization costs for PA. The NDA filing fee for
PA32540/PA8140, of approximately $2.0 million, was paid and expensed as
research and development costs in March 2013.

The Company reported a net loss of ($5.8) million, or ($0.19) loss per share
for the first quarter of 2013, compared to a net loss of ($8.4) million, or
($0.28) per share, for the first quarter of 2012.

Balance Sheet

At March 31, 2013, cash and cash equivalents totaled $80.2 million.

2013 Strategic Focus

The Company’s areas of strategic focus for 2013 are: securing a commercial
partnership(s) for its PA products, completing the PA regulatory submission(s)
in the U.S. and potentially one or more other regions of the world, and
controlling expenses. The Company is estimating a net cash burn of less than
$22 million in 2013, excluding proceeds from any PA deals.

First Quarter Results Webcast

POZEN will host a webcast to present first quarter 2013 results and
management’s outlook on Wednesday, May 8, 2013 at 11:00 a.m. (ET). The webcast
can be accessed live and will be available for replay at www.pozen.com.

About POZEN

POZEN Inc. is a small pharmaceutical company that specializes in developing
novel therapeutics for unmet medical needs and licensing those products to
other pharmaceutical companies for commercialization. By utilizing a unique
in-source model and focusing on integrated therapies, POZEN has successfully
developed and obtained FDA approval of two self-invented products in two
years. Funded by these milestones/royalty streams, POZEN is now creating a
portfolio of cost-effective, evidence-based integrated aspirin therapies
designed to enable the full power of aspirin by reducing its GI damage.

POZEN is currently seeking strategic partners to help maximize the
opportunities for its portfolio assets.

The Company's common stock is traded under the symbol “POZN” on The NASDAQ
Global Market. For more detailed company information, including copies of this
and other press releases, please visit www.pozen.com.

About PA

POZEN is creating a portfolio of integrated aspirin therapies - the PA product
platform. The products in the PA portfolio are intended to significantly
reduce GI ulcers and other GI complications compared to taking enteric-coated
or plain aspirin alone.

The first candidates are PA32540, containing 325 mg of aspirin, and PA8140,
containing 81 mg of aspirin. Both products are a coordinated-delivery tablet
combining immediate-release omeprazole (40 mg), a proton pump inhibitor,
layered around a pH-sensitive coating of an aspirin core. This novel, patented
product is administered orally once a day and an indication will be sought for
use for the secondary prevention of cardiovascular disease in patients at risk
for aspirin-induced gastric ulcers.

About VIMOVO

VIMOVO^® (naproxen / esomeprazole magnesium) is a fixed-dose combination of
delayed-release enteric-coated naproxen, a non-steroidal anti-inflammatory
drug (NSAID), and immediate-release esomeprazole, a stomach acid-reducing
proton pump inhibitor (PPI), approved for the relief of signs and symptoms of
osteoarthritis, rheumatoid arthritis, and ankylosing spondylitis, and to
decrease the risk of developing gastric ulcers in patients at risk of
developing NSAID-associated gastric ulcers. ^ VIMOVO is not recommended for
use in children younger than 18 years of age. VIMOVO is not recommended for
initial treatment of acute pain because the absorption of naproxen is delayed
compared to absorption from other naproxen-containing products. Controlled
studies do not extend beyond 6 months. ^ VIMOVO should be used at the lowest
dose and for the shortest amount of time as directed by your health care
provider.

For Full Prescribing Information see www.vimovo.com.

Forward-Looking Statements

Statements included in this press release that are not historical in nature
are “forward-looking statements” within the meaning of the “safe harbor”
provisions of the Private Securities Litigation Reform Act of 1995. You should
be aware that our actual results could differ materially from those contained
in the forward-looking statements, which are based on current market data and
research (including third party and POZEN sponsored market studies and
reports), management’s current expectations and are subject to a number of
risks and uncertainties, including, but not limited to, our inability to
license our PA product candidates on terms and timing acceptable to us, our
inability to file a new drug application with the FDA for our PA product
candidates in the timeframe we anticipate, our failure to successfully
commercialize our product candidates; costs and delays in the development
and/or FDA approval of our product candidates, including as a result of the
need to conduct additional studies, or the failure to obtain such approval of
our product candidates, including as a result of changes in regulatory
standards or the regulatory environment during the development period of any
of our product candidates; uncertainties in clinical trial results or the
timing of such trials, resulting in, among other things, an extension in the
period over which we recognize deferred revenue or our failure to achieve
milestones that would have provided us with revenue; our inability to maintain
or enter into, and the risks resulting from our dependence upon, collaboration
or contractual arrangements necessary for the development, manufacture,
commercialization, marketing, sales and distribution of any products,
including our dependence on AstraZeneca for the sales and marketing of
VIMOVO^®; competitive factors; our inability to protect our patents or
proprietary rights and obtain necessary rights to third party patents and
intellectual property to operate our business; our inability to operate our
business without infringing the patents and proprietary rights of others;
general economic conditions; the failure of any products to gain market
acceptance; our inability to obtain any additional required financing;
technological changes; government regulation; changes in industry practice;
and one-time events, including those discussed herein and in our Annual Report
on Form 10-K for the period ended December 31, 2012. We do not intend to
update any of these factors or to publicly announce the results of any
revisions to these forward-looking statements.

POZEN Inc.
Statements of Operations
(Unaudited)
                                          
                                             Three Months Ended

                                             March 31,
                                              2013            2012
Revenue:                                                     
Royalty revenue                              $ 1,415,000        $ 1,289,000
Operating expenses:
Selling, general and administrative            3,634,043          5,647,924
Research and development                       3,583,940         4,104,445  
Total operating expenses                       7,217,983          9,752,369
Other income:
Interest and other income, net                 25,051            68,637     
Loss before income tax benefit                 (5,777,932 )       (8,394,732 )
Income tax expense                             —                 —          
Net loss attributable to common              $ (5,777,932 )     $ (8,394,732 )
stockholders
                                                                             
Basic net loss per common share              $ (0.19      )     $ (0.28      )
                                                                             
Shares used in computing basic net
loss per common                                30,336,398        29,975,175 
share
                                                                             
Diluted net loss per common share            $ (0.19      )       (0.28      )
                                                                             
Shares used in computing diluted net
loss per                                       30,336,398        29,975,175 
common share


POZEN Inc.
Balance Sheets
(Unaudited)
                                                     
                                               March 31,          December 31,
                                               2013               2012
ASSETS
Current assets:
Cash and cash equivalents                $     80,190,747       $ 68,416,308
Short-term investments                         —                  18,898,136
Accounts receivable                            1,415,000          1,352,000
Prepaid expenses and other                     330,543            858,423
current assets
Total current assets                           81,936,290         89,524,867
Equipment, net of accumulated                  65,813             71,945
depreciation
Total assets                             $     82,002,103       $ 89,596,812
                                                                  
                                                                  
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                         $     497,479          $ 1,231,761
Accrued compensation                           675,935            2,574,334
Accrued expenses                               1,482,558          1,456,055
Deferred revenue                               257,300            257,300
Total current liabilities                      2,913,272          5,519,450
                                                                  
                                                                  
Total stockholders’ equity                     79,088,831         84,077,362
Total liabilities and                    $     82,002,103       $ 89,596,812
stockholders’ equity

Contact:

POZEN Inc.
Bill Hodges, 919-913-1030
Chief Financial Officer
or
Stephanie Bonestell, 919-913-1030
Manager, Investor Relations & Public Relations
 
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