Transcept Pharmaceuticals Reports Third Quarter Financial Results

      Transcept Pharmaceuticals Reports Third Quarter Financial Results

Conference call scheduled for 4:30 PM Eastern time today

PR Newswire

POINT RICHMOND, Calif., Nov. 7, 2013

POINT RICHMOND, Calif., Nov.7, 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 nine months ended September 30,
2013.

Transcept reported cash, cash equivalents and marketable securities of $75.8
million at September30, 2013.

"Our management team and Board of Directors continue to pursue key initiatives
to increase stockholder value," stated Glenn A. Oclassen, President and CEO of
Transcept. "We are working closely with Leerink Swann, our financial and
strategic advisor, to evaluate all alternatives, including, but not limited to
a possible sale, business combination, partnership, or return of capital to
stockholders."

Three months ended September30, 2013 financial results

For the quarters ended September30, 2013 and September 30, 2012, Transcept
recorded $0.4 million and $0.2 million of royalty revenue on Intermezzo net
sales generated by Purdue. The 2013 royalty revenue was partially offset by
$0.1 million related to a $10.0 million contribution by Transcept in December
2012 to an Intermezzo direct-to-consumer (DTC) advertising campaign led by
Purdue.Transcept is recognizing this contribution as an offset against
revenue as the advertising costs are incurred. Revenue during the quarter
ended September 30, 2013 also included $0.1 million from Purdue for a
non-refundable option to negotiate for the commercialization of Intermezzo in
Mexico. This resulted in net revenue of $0.4 million for the quarter ended
September30, 2013 compared to $10.4 million for the quarter ended
September30, 2012. Revenue during the quarter ended September 30, 2012 also
included a $10.0 million milestone payment from Purdue for the listing of a
Transcept method of use patent in the FDA's Orange Book and $0.2 million from
Purdue for a non-refundable option to negotiate for the commercialization of
Intermezzo in Mexico and Canada.

Research and development expense for the quarter ended September30, 2013 was
approximately $2.4 million, compared to approximately $3.1 million for the
same period in 2012. The decrease of approximately $0.7 million was primarily
attributable to the wind down of Transcept's TO-2061 development program,
partially offset by approximately $1.4 million of expense associated with the
Company's TO-2070 project, its lead development candidate. Research and
development expense included non-cash stock compensation expense of
approximately $0.1 million for the quarter ended September30, 2013 and
approximately $0.2 million for the quarter ended September30, 2012.

General and administrative expense for the quarter ended September30, 2013
was approximately $2.7 million, compared to approximately $2.5 million for the
same period in 2012. The increase of approximately $0.2 million reflects an
increase in professional expenses. General and administrative expense
included non-cash stock compensation expense of approximately $0.7 million for
the quarter ended September30, 2013, compared to approximately $0.5 million
for the quarter ended September30, 2012.

Net loss for the quarter ended September30, 2013 was approximately $4.7
million, or $0.25 per share (basic and diluted), compared to net income of
approximately $4.9 million, or $0.26 per share (basic) and $0.25 per share
(diluted), for the quarter ended September30, 2012. The increase in net loss
of $9.6 million was primarily due to the $10.0 million method of use patent
milestone payment received during the third quarter of 2012. The weighted
average shares used to calculate basic and diluted net loss per share for the
quarter ended September30, 2013 was 18,782,442. The weighted average shares
used to calculate basic and diluted net income per share for the quarter ended
September30, 2012 was 18,567,833 and 19,231,656, respectively. At
September30, 2013, there were 18,842,388 common shares outstanding and
4,515,232 common shares underlying outstanding options and warrants.

Nine months ended September 30, 2013 financial results

Royalty revenue on Intermezzo net sales generated by Purdue for the nine
months ended September 30, 2013 was $1.4 million compared to $0.7 million for
the nine months ended September 30, 2012. Intermezzo was commercially
launched in April 2012, and royalties earned through September 30, 2012
included six months of revenue, whereas royalties earned through September 30,
2013 include nine months of revenue. 2013 royalty revenue was offset by $6.7
million related to a $10.0 million contribution by Transcept in December 2012
to the Intermezzo DTC advertising campaign. Revenue during the nine months
ended September 30, 2013 also included $0.1 million from Purdue for a
non-refundable option to negotiate for the commercialization of Intermezzo in
Mexico. This resulted in negative net revenue of $5.3 million for the nine
months ended September 30, 2013 versus net revenue of $10.9 million for the
nine months ended September 30, 2012. Revenue during the nine months ended
September 30, 2012 also included a $10.0 million milestone payment from Purdue
for the listing of a Transcept method of use patent in the FDA's Orange Book
and $0.2 million from Purdue for a non-refundable option to negotiate for the
commercialization of Intermezzo in Mexico and Canada.

Research and development expense for the nine months ended September 30, 2013
was approximately $5.2 million, compared to approximately $8.3 million for the
same period in 2012. The decrease of approximately $3.1 million was primarily
attributable to the wind down of Transcept's TO-2061 development program,
partially offset by approximately $1.6 million of expense associated with the
Company's TO-2070 project, its lead development candidate. Research and
development expense included non-cash stock compensation expense of
approximately $0.5 million for the nine months ended September 30, 2013 and
approximately $0.7 million for the nine months ended September 30, 2012.

General and administrative expense for the nine months ended September 30,
2013 was approximately $8.5 million, compared to approximately $8.0 million
for the same period in 2012. The increase of $0.5 million was primarily
attributable to an increase in professional fees. General and administrative
expense included non-cash stock compensation expense of approximately $1.8
million for the nine months ended September 30, 2013, compared to
approximately $1.5 million for the nine months ended September 30, 2012.

Transcept recorded a goodwill impairment charge of $3.0 million during the
quarter ended June 30, 2013 as a result of an impairment analysis that
concluded that the entire carrying value of goodwill was impaired.

Net loss for the nine months ended September 30, 2013 was approximately $21.9
million, or $1.17 per share (basic and diluted), compared to a net loss of
approximately $5.5 million, or $0.33 per share (basic and diluted), for the
nine months ended September 30, 2012. The weighted average shares used to
calculate net loss per share were 18,748,023 and 16,523,037 for the nine
months ended September 30, 2013 and 2012, respectively.

Conference call and webcast information

Transcept will host a conference call and webcast on Thursday, November 7,
2013 at 4:30 p.m. ET to discuss third quarter 2013 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 December 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. The Company's lead
development candidate is TO-2070, a novel, rapidly absorbed treatment for
acute migraine incorporating dihydroergotamine (DHE) as the active drug.
Preclinical data suggest that TO-2070 may offer significant migraine treatment
benefits beyond those provided by less convenient and more invasive DHE drug
delivery methods, such as injection, liquid nasal sprays or pulmonary
inhilation.

In addition to advancing TO-2070, Transcept is continuing to evaluate
opportunities to supplement its development pipeline with new programs
appropriate to its area of expertise. The Company's management team developed
Intermezzo^® from concept to its approval by the FDA in 2011. 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 revenue, 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: our pursuit of alternatives to increase
stockholder value, including working with our financial and strategic advisor
to evaluate all initiatives; 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; expectations that TO-2070 may offer
significant migraine treatment benefits beyond existing treatments; and future
opportunities to supplement Transcept's development pipeline. 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; our dependence on our collaboration with Purdue; 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 ability to develop
TO-2070; 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   Nine Months Ended
                                                 September 30,
                            September 30,
                            2013       2012      2013        2012
Revenue:
Gross royalty revenue       $ 418      $ 190     $ 1,381     $ 683
 Gross milestone       —          10,000    —           10,000
revenue
 Gross other revenue   50         250       50          250
 Advertising expense   (86)       —         (6,681)     —
- Purdue Pharma
Net revenue                   382        10,440    (5,250)     10,933
Operating expenses:
 Research and          2,410      3,057     5,151       8,273
development
 General and           2,658      2,483     8,490       7,998
administrative
Goodwill impairment   —          —         2,962       —
Total operating expenses      5,068      5,540     16,603      16,271
(Loss) income from            (4,686)    4,900     (21,853)    (5,338)
operations
Interest and other income     (17)       (45)      (58)        (124)
(expense), net
Net (loss) income           $ (4,703)  $ 4,855   $ (21,911)  $ (5,462)
Net (loss) income per
share:
Basic                       $ (0.25)   $ 0.26    $ (1.17)    $ (0.33)
Diluted                     $ (0.25)   $ 0.25    $ (1.17)    $ (0.33)
Weighted average common
shares outstanding:
Basic                       18,782       18,568    18,748      16,523
Diluted                     18,782       19,232    18,748      16,523
Other comprehensive (loss)
income:
Changes in unrealized gain
(loss) on marketable        40           7         24          (23)
securities
Comprehensive (loss) income $ (4,663)  $ 4,862   $ (21,887)  $ (5,485)



Transcept Pharmaceuticals, Inc.

Condensed Consolidated Balance Sheets

(in thousands)
                                              September30,  December31,

                                              2013           2012
                                              (unaudited)
Assets
Current assets:
Cash and cash equivalents                     $  13,642      $  39,368
Marketable securities                         62,123         45,907
Prepaid advertising                           244            8,571
Prepaid and other current assets              3,289          1,120
Total current assets                          79,298         94,966
Property and equipment, net                   51             128
Goodwill                                      —              2,962
Total assets                                  $  79,349      $  98,056
Liabilities and stockholders' equity
Total current liabilities                     $  3,060       $  2,663
Stockholders' equity:
Common stock and additional paid in capital   210,279        207,496
Accumulated deficit                           (134,021)      (112,110)
Accumulated other comprehensive (loss) income 31             7
Total stockholders' equity                    76,289         95,393
Total liabilities and stockholders' equity    $  79,349      $  98,056







SOURCE Transcept Pharmaceuticals, Inc.

Website: http://www.transcept.com
 
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