Zogenix Announces Initiatives to Reach Key Business Milestones
Cost Control Initiatives Extend Cash Runway
SAN DIEGO, June 5, 2013 (GLOBE NEWSWIRE) -- Zogenix, Inc. (Nasdaq:ZGNX), a
pharmaceutical company commercializing and developing products for the
treatment of central nervous system disorders and pain, announced today
initiatives to extend its cash runway to reach key business milestones that
may occur over the remainder of the year. These milestones include the
Company's efforts to gain U.S. Food and Drug Administration (FDA) approval for
its New Drug Application (NDA) for Zohydro ER^TM (hydrocodone bitartrate
extended release capsules) for chronic pain, to secure a development partner
for Relday^TM, a once-monthly injectable formulation of risperidone for
schizophrenia, and to out-license the Company's proprietary DosePro
needle-free delivery technology. The initiatives underway are expected to
extend the Company's cash runway beyond the potential achievement of one or
more of these milestones during the second half of 2013.
The Company's initiatives include:
*A reduction in the Company's workforce of 148 by a total of 55 full-time
equivalent employees (approximately 37%) across all functional areas of
*Maintaining the Company's core commercial capabilities and ability to
support the potential launch of Zohydro ER three to four months after
potential approval by retaining 93 full-time equivalent employees,
including 57 in sales and marketing. The expected timeline for FDA action
on the Zohydro ER NDA is unchanged and remains sometime this summer.
*Cost control initiatives to further reduce operating expenses and capital
*Increase focus on reaching SUMAVEL DosePro brand-level profitability, and
to leverage the Zogenix sale force presence in neurology. The Company is
making encouraging progress towards securing a second product to
co-promote with a goal of beginning sometime this summer.
Roger L. Hawley, chief executive officer of Zogenix, stated, "We have not
received any new updates from the FDA on the timing of their decision
regarding the Zohydro ER NDA and remain confident in the Zohydro ER program.
In addition, Zogenix has other upcoming value creating milestones that could
occur in the second half of the year. We are implementing these initiatives to
ensure we are in a position to benefit from these potential milestones while
also continuing to support our existing commercial business and partners. Our
approach includes a balance of expense reduction, a reduction in workforce,
cost controls, and progress in business development efforts.
Mr. Hawley concluded, "The reduction to our workforce was an extremely
difficult decision for our management team and our Board. I have great respect
for all of our employees and thank them for the contribution they make every
day for the patients we serve. I would like to thank all of our departing
employees for their hard work, enthusiasm and dedication to our corporate
mission. Planning for our future, we have preserved our core commercial
capabilities while reducing the size of our team in light of the unfortunate
FDA delay on Zohydro ER."
Zogenix expects to record most of the expense related to the reduction in
force with a one-time charge of approximately $1.0 million in the second
quarter 2013. To date, the Company has not raised any capital through its $25
million At The Market ("ATM") facility.
Zogenix, Inc. (Nasdaq:ZGNX), with offices in San Diego and Emeryville,
California, is a pharmaceutical company commercializing and developing
products for the treatment of central nervous system disorders and pain.
Zogenix's first commercial product, SUMAVEL® DosePro® (sumatriptan injection)
Needle-free Delivery System, was launched in January 2010 for the acute
treatment of migraine and cluster headache. Zogenix's lead investigational
product candidate, Zohydro™ ER (hydrocodone bitartrate extended release
capsules), is an oral, extended-release formulation of various strengths of
hydrocodone, without acetaminophen, intended for administration every 12 hours
for around the clock management of moderate to severe chronic pain. In May
2012, Zogenix submitted to the FDA a New Drug Application for Zohydro ER.
Zogenix's second investigational product candidate, Relday™, is a proprietary,
long-acting injectable formulation of risperidone for the treatment of
schizophrenia; an investigational new drug application was submitted to the
FDA in May 2012.
Zogenix cautions you that statements included in this press release that are
not a description of historical facts are forward-looking statements. Words
such as "believes," "anticipates," "plans," "expects," "indicates," "will,"
"intends," "potential," "suggests," "assuming" and similar expressions are
intended to identify forward-looking statements. These statements are based on
the company's current beliefs and expectations. These forward-looking
statements include statements regarding the potential extension of Zogenix's
cash runway; the projected expense related to the reduction in workforce and
the timing of the expense; other financial estimates and projections; the
likelihood of achieving and benefitting from any key business milestones; and
the business development opportunities available to Zogenix. The inclusion of
forward-looking statements should not be regarded as a representation by
Zogenix that any of its plans will be achieved. Actual results may differ from
those set forth in this release due to the risk and uncertainties inherent in
Zogenix's business, including, without limitation: Zogenix's ability to
successfully implement, in the anticipated timeframes, the planned workforce
reduction and other cost control initiatives; Zogenix's ability to attract and
retain qualified personnel; the potential for Zohydro ER to receive regulatory
approval on a timely basis or at all, including as a result of the delay in
the PDUFA target action date for the Zohydro ER NDA and recent FDA
determinations concerning abuse deterrent properties of existing opioid drugs;
the potential for adverse safety findings relating to Zohydro ER or negative
publicity concerning opioids in general to delay or prevent regulatory
approval or commercialization; the potential for delays associated with any
additional data required by the FDA to be submitted by Zogenix in support of
the Zohydro ER NDA; the ability of Zogenix and its licensors to obtain,
maintain and successfully enforce adequate patent and other intellectual
property protection of its products and product candidates and the ability to
operate its business without infringing the intellectual property rights of
others; difficulties in identifying, negotiating and carrying out strategic
transactions relating to Zohydro ER and Relday; the inherent risks of clinical
development of Relday, including potential delays in enrollment and completion
of clinical trials, and Zogenix's dependence on its existing collaboration
with DURECT Corporation and potential new partners to develop Relday; and
other risks described in the company's prior press releases and filings with
the Securities and Exchange Commission.
You are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof, and Zogenix undertakes no
obligation to revise or update this release to reflect events or circumstances
after the date hereof. All forward-looking statements are qualified in their
entirety by this cautionary statement. This caution is made under the safe
harbor provisions of Section 21E of the Private Securities Litigation Reform
Act of 1995.
SUMAVEL^®, DosePro^®, Relday^TM and Zohydro^TM ER are trademarks of Zogenix,
Zack Kubow | The Ruth Group
646.536.7020 | firstname.lastname@example.org
Caitlin Cox | The Ruth Group
646.536.7033 | email@example.com
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