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Furiex Reports Third Quarter 2013 Financial Results



  Furiex Reports Third Quarter 2013 Financial Results

Third Quarter 2013 Highlights:

  * Milestone revenue of $10.0 million for third quarter 2013.
  * Royalty revenue of $5.6 million, an increase of $2.6 million (86%) from
    second quarter 2013.
  * Cash and cash equivalents balance of $34.7 million as of September 30,
    2013.
  * Secured an additional $17.0 million in capital by restructuring our
    existing credit facility to provide $2.0 million in additional funding and
    entered into a new loan agreement with our chairman for $15.0 million.
  * Takeda Pharmaceutical Company Limited (Takeda) received European Marketing
    Authorization for VIPIDIA™ (alogliptin) and fixed-dose combinations
    VIPDOMET™ (alogliptin and metformin) and INCRESYNC™ (alogliptin and
    pioglitazone).

Recent Events:

  * In October 2013, the Menarini Group (Menarini) confirmed the launch of
    Priligy^® in the United Kingdom. The Company is entitled to receive a $5.0
    million milestone payment related to this launch.

Business Wire

MORRISVILLE, N.C. -- November 5, 2013

Furiex Pharmaceuticals, Inc. (NASDAQ: FURX) today reported its financial and
operating results for the quarter ended September 30, 2013.

Total revenues were $15.6 million for the quarters ended September 30, 2013
and 2012. Milestone revenue for the third quarter of 2013 related to a $10.0
million milestone from Takeda upon receipt of European marketing authorization
for alogliptin and related products in September 2013. Milestone revenue for
the third quarter of 2012 related to a $10.0 million milestone from Menarini
upon the closing of the new license agreement related to Priligy in July 2012.

Furiex recorded third quarter royalty revenue of $5.6 million in both 2013 and
2012. Royalty revenue included royalties related to alogliptin and related
product sales in Japan and the United States, and Priligy sales in various
countries outside of the U.S.

Research and development expenses were $19.9 million for the quarter ended
September 30, 2013, compared to $14.8 million for the same period in the prior
year. The level of research and development expense during the current quarter
relate primarily to the clinical trial and manufacturing costs associated with
the continued development of eluxadoline.

Third quarter selling, general and administrative expenses were $3.2 million
for both 2013 and 2012. Selling, general and administrative expenses relate to
Company overhead costs, employee compensation and related benefit expenses,
professional fees, public company costs and non-cash share based compensation
expense, including the mark-to-market adjustment for non-vested consultant
options.

Interest expense of $1.1 million for the quarter ended September 30, 2013
related entirely to our loan agreement with MidCap Financial LLC and Silicon
Valley Bank.

Net loss was $8.7 million for the third quarter of 2013, compared to a net
loss of $3.3 million for the third quarter of 2012. The changes in net loss
during the third quarter of 2013, as compared to the same period in the prior
year, relates primarily to the changes in revenues and expenses previously
discussed.

Net loss per basic and diluted share for the third quarter of 2013 was $0.85,
compared to net loss per basic and diluted share of $0.33 for the third
quarter of 2012.

“We are pleased that our Phase III program for eluxadoline remains on track
with top line results of the efficacy endpoints for these studies still
expected in the first quarter of 2014,” said June Almenoff, M.D., Ph.D.,
president and chief medical officer of Furiex. “We have also recently
completed the key Phase I and preclinical studies needed to support the NDA
submission.”

Fred Eshelman, Pharm.D., chairman of Furiex, added, “We continue to make
steady progress on several fronts, including the recent marketing approval of
the alogliptin family of products in the EU and the associated $10.0 million
milestone, a restructure of our existing debt, $15.0 million in new debt
financing and new launches for Priligy. We believe we are well-positioned as
we progress towards the topline data readout for eluxadoline Phase III
studies.”

Furiex will conduct a live conference call and webcast Wednesday, November 6,
2013, at 9:00 a.m. ET to discuss its third quarter 2013 results and financial
outlook for 2013 as well as provide an overview of its business and pipeline.
A Q&A session will follow. All interested parties can access the webcast
through the Presentations & Events link in the Investors section of the Furiex
website at www.furiex.com. The webcast will be archived shortly after the call
for on-demand replay. The conference call will be broadcast live over the
Internet and will also be available using the following direct dial numbers:

Participant dial-in:   +1.877.677.9122 (U.S./Canada)
                       +1.708.290.1401 (International)
                        
Conference ID:         74974988

About Furiex

Furiex Pharmaceuticals is a drug development collaboration company that uses
innovative clinical development design to accelerate and increase value of
drug development programs by advancing them through the drug discovery and
development process in a cost-efficient manner. Our drug development programs
are designed and driven by a core team with extensive drug development
experience. The Company collaborates with pharmaceutical and biotechnology
companies and has a diversified product portfolio and pipeline with multiple
therapeutic candidates, including one Phase III-ready asset, two compounds in
Phase III development, one of which is with a partner, and four products on
the market. The Company's mission is to develop innovative medicines faster
and at a lower cost, thereby improving profitability and accelerating time to
market while providing life-improving therapies for patients. For more
information, visit www.furiex.com.

Except for historical information, all of the statements, expectations and
assumptions contained in this news release are forward-looking statements that
involve a number of risks and uncertainties. Although Furiex attempts to be
accurate in making these forward-looking statements, it is possible that
future circumstances might differ from the assumptions on which such
statements are based. In addition, other important factors which could cause
actual results to differ materially include the following: continuing losses
and our potential need for additional financing; the risks and expense of
continuing the research and development activities of our existing compounds;
the risk of finding a collaborator for our late-stage compounds; progress of
compounds in clinical trials and regulatory approvals as it relates to
receiving future milestone payments; inability of our existing collaborators
to effectively market approved products for which we receive royalty and
sales-based milestone payments; changes in the safety and efficacy profile of
our existing compounds as they progress through research and development;
potential changes to regulatory guidance by regulatory agencies such as the
U.S. Food and Drug Administration and the European Medicines Agency; new
collaborative agreements that we might enter into in the future; the costs of
defending any patent opposition or litigation necessary to protect our
proprietary technologies; and the other risk factors set forth from time to
time in the SEC filings for Furiex, copies of which can be found on our
website.

FURIEX
PHARMACEUTICALS,                                                  
INC. AND
SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF         
OPERATIONS
(Unaudited)
(In thousands,
except per share
data)
                                                                      
                       Three Months Ended          Nine Months Ended
                       September 30,               September 30,
                       2012           2013         2012            2013
Revenue:
Milestones             $ 10,000       $ 10,000     $ 20,000        $ 40,000
Royalties                5,577          5,550        11,297          17,865   
Total revenue            15,577         15,550       31,297          57,865   
Research and
development              14,798         19,895       54,919          67,309
expenses
Selling, general
and administrative       3,209          3,197        8,732           10,306
expenses
Depreciation and         22             8            64              50       
amortization
Total operating          18,029         23,100       63,715          77,665   
expenses
Operating loss           (2,452 )       (7,550 )     (32,418 )       (19,800 )
Interest expense         837            1,107        1,386           3,319
Other income, net        —              —            —               93       
Loss before
provision for            (3,289 )       (8,657 )     (33,804 )       (23,026 )
income taxes
Provision for            (3     )       26           9               147      
income taxes
Net loss               $ (3,286 )     $ (8,683 )   $ (33,813 )     $ (23,173 )
                                                                      
Net loss per basic     $ (0.33  )     $ (0.85  )   $ (3.39   )     $ (2.29   )
and diluted share
                                                                      
Weighted-average
shares used to
compute net loss         10,015         10,174       9,974           10,110
per basic and
diluted share

FURIEX PHARMACEUTICALS, INC. AND SUBSIDIARIES                   
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share data)
                                                                     
                                                  December 31,   September 30,
                                                  2012           2013
Assets
Current assets:
Cash and cash equivalents                         $ 25,718       $  34,668
Accounts receivable, net                            11,745          15,598
Prepaid expenses                                    320             568       
Total current assets                                37,783          50,834
Property and equipment, net                         118             94
Investments                                         7,500           —
Deferred financing costs                            238             1,640
Goodwill                                            49,116          49,116    
Total assets                                      $ 94,755       $  101,684   
                                                                     
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable                                  $ 6,604        $  15,558
Accrued expenses                                    10,230          6,033
Current portion of long-term debt                   5,405           5,880     
Total current liabilities                           22,239          27,471
Long-term debt, net                                 34,595          36,120
Long-term debt, related party, net                  —               15,000
Other long-term liabilities                         324             528       
Total liabilities                                   57,158          79,119    
                                                                     
Common stock, $0.001 par value, 40,000,000
shares authorized; 10,015,297 and
                                                    10              10
10,371,155 shares issued and outstanding,
respectively
Preferred stock, $0.001 par value, 10,000,000
shares authorized; no shares issued or              —               —

outstanding
Paid-in capital                                     164,577         172,718
Accumulated deficit                                 (126,990 )      (150,163 )
Total shareholders’ equity                          37,597          22,565    
Total liabilities and shareholders’ equity        $ 94,755       $  101,684   

Contact:

Furiex Pharmaceuticals, Inc.
Media/Analysts/Investors:
Sailash Patel, 919-456-7814
sailash.patel@furiex.com
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