Cadence Pharmaceuticals Reports Fourth Quarter and Full Year 2013 Financial
SAN DIEGO, Feb. 28, 2014
SAN DIEGO, Feb. 28, 2014 /PRNewswire/ --Cadence Pharmaceuticals, Inc.
(NASDAQ: CADX), a biopharmaceutical company focused on acquiring,
in-licensing, developing and commercializing proprietary products principally
for use in the hospital setting, today reported financial results for the
three and twelve months ended December 31, 2013.
Recent highlights included:
oCadence entered into an agreement and plan of merger agreement with
Mallinckrodt plc and one of its wholly owned indirect subsidiaries
pursuant to which Mallinckrodt commenced a tender offer on February 19,
2014, to acquire all of the outstanding shares of Cadence common stock at
a purchase price of $14.00 per share in cash.
oNet product revenue for the fourth quarter of 2013 was $33.3 million,
representing increases of $16.2 million, or 95%, from the fourth quarter
of 2012, and $4.3 million, or 15%, from the third quarter of 2013.
oLicense revenue of $2.0 million was recognized in the fourth quarter of
2013 from a one-time commercial milestone payment pursuant to the
company's license agreement with Terumo Corporation.
oGross margin on sales of OFIRMEV was 65% for the fourth quarter of 2013,
compared to 58%, for the fourth quarter of 2012.
oCash, cash equivalents and investments were $57.4 million as of December
Cadence's net product revenue for the three months ended December 31, 2013,
was $33.3 million, an increase of 95% from the $17.1 million in net product
revenue recognized for the three months ended December 31, 2012. For the year
ended December 31, 2013, Cadence's net product revenue was $110.5 million, an
increase of 121% from the $50.1 million reported in 2012.
For the three months ended December 31, 2013, Cadence reported a net loss of
$4.1 million, or $0.05per share, compared to a net loss of $21.4 million, or
$0.25 per share, for the comparable period in 2012. For the year ended
December 31, 2013, Cadence reported a net loss of $24.3 million, or $0.28 per
share, compared to a net loss of $81.0 million, or $0.95 per share, in 2012.
Included in the company's net loss for the twelve months ended December 31,
2013, was a gain of $7.7 million recorded with respect to the waiver,
termination and sale of Cadence's Incline assets in January 2013, for which
the company received cash payments totaling $14.7 million. The company's net
loss for the three and twelve months ended December 31, 2012, included
impairment charges and a loss on the sale of equipment totaling $8.6 million
pertaining to certain assets involved with the manufacture of OFIRMEV under
the terminated development and supply agreement with Baxter Healthcare
Corporation. Additionally, the Company recognized disposal costs of $0.3
million during the fourth quarter of 2012 for the inventory held while
manufacturing was suspended at Baxter.
The company's gross margin on sales of OFIRMEV for the three months ended
December 31, 2013, was 65%, compared to 58% for the same period in 2012. For
the twelve months ended December 31, 2013, Cadence reported a gross margin of
66%, compared to 54% for 2012. These year-over-year increases were primarily
the result of lower freight costs in 2013 and the impact of price increases
implemented in 2012 and 2013. Operating expenses, including patent
amortization, decreased $3.6 million, or 12%, for the three months ended
December 31, 2013, to $26.8 million, from $30.3 million for the same period in
2012. This decrease was primarily attributable to impairment charges and a
loss on the sale of equipment totaling $8.6 million pertaining to certain
assets involved with the manufacture of OFIRMEV under the terminated
development and supply agreement with Baxter that were recognized during the
three months ended December 31, 2012. Similar charges were not recorded in
2013, however the company incurred higher legal and clinical trial expenses
during the three-months ended December 31, 2013 as compared to the same period
in 2012. For the twelve months ended December 31, 2013, Cadence reported
operating expenses of $102.1 million, a decrease of $1.5 million, or 1%, as
compared to $103.6 million for 2012. This decrease was primarily attributable
to the impairment charge and loss on equipment sale recorded during the fourth
quarter of 2012, mostly offset by higher legal expenses, clinical trial
expenses and corporate development activities in 2013 as compared to 2012.
As of December 31, 2013, Cadence held cash, cash equivalents and short-term
investments of $57.4 million, a decrease of $4.7 million from $62.1 million at
December 31, 2012. Net accounts receivable at December 31, 2013, was $9.3
million, representing approximately 30 days of sales outstanding.
About OFIRMEV^® (Acetaminophen) Injection
OFIRMEV (acetaminophen) injection (1000 mg / 100 mL, 10 mg / mL; for
intravenous use only), Cadence Pharmaceuticals' proprietary intravenous
formulation of acetaminophen, is indicated for the management of mild to
moderate pain, the management of moderate to severe pain with adjunctive
opioid analgesics, and the reduction of fever. The FDA approval of OFIRMEV was
based on data from clinical trials in approximately 1,020 adult and 355
pediatric patients. These trials included two studies evaluating the safety
and effectiveness of OFIRMEV in the treatment of pain, and one study
evaluating OFIRMEV in the treatment of fever. The effectiveness of OFIRMEV for
the treatment of acute pain and fever has not been studied in pediatric
patients less than 2 years of age.
Important Safety Information
RISK OF MEDICATION ERRORS AND HEPATOTOXICITY
Take care when prescribing, preparing, and administering OFIRMEV injection to
avoid dosing errors which could result in accidental overdose and death.
OFIRMEV contains acetaminophen. Acetaminophen has been associated with cases
of acute liver failure, at times resulting in liver transplant and death. Most
of the cases of liver injury are associated with the use of acetaminophen at
doses that exceed the recommended maximum daily limits, and often involve more
than one acetaminophen-containing product.
OFIRMEV is contraindicated in patients with severe hepatic impairment, severe
active liver disease or with known hypersensitivity to acetaminophen or to any
of the excipients in the formulation. Acetaminophen should be used with
caution in patients with the following conditions: hepatic impairment or
active hepatic disease, alcoholism, chronic malnutrition, severe hypovolemia,
or severe renal impairment. Rarely, acetaminophen may cause serious skin
reactions such as acute generalized exanthematous pustulosis (AGEP),
Stevens-Johnson Syndrome (SJS), and toxic epidermal necrolysis (TEN), which
can be fatal. Discontinue OFIRMEV immediately if symptoms associated with
allergy or hypersensitivity occur, or at the first appearance of skin rash. Do
not use in patients with acetaminophen allergy.
The most common adverse reactions in patients treated with OFIRMEV were
nausea, vomiting, headache, and insomnia in adult patients and nausea,
vomiting, constipation, pruritus, agitation, and atelectasis in pediatric
patients. The antipyretic effects of OFIRMEV may mask fever in patients
treated with postsurgical pain. OFIRMEV is approved for use in patients ≥ 2
years of age. Do not exceed the recommended maximum daily dose of OFIRMEV.
OFIRMEV should be administered only as a 15-minute infusion.
For more information, please see the full OFIRMEV Prescribing Information,
including the complete boxed warning, which is available at www.OFIRMEV.comor
About Cadence Pharmaceuticals, Inc.
Cadence Pharmaceuticals is a biopharmaceutical company focused on acquiring,
in-licensing, developing and commercializing proprietary products principally
for use in the hospital setting. The current version of Cadence
Pharmaceuticals' corporate overview may be viewed on the Investors page of
www.cadencepharm.com under "Events & Presentations" by selecting "Corporate
Statements included in this press release that are not a description of
historical facts are forward-looking statements. Words such as "plans,"
"believes," "expects," "anticipates," and "will," and similar expressions, are
intended to identify forward-looking statements, and are based on Cadence's
current beliefs and expectations. Such statements include, without limitation,
statements regarding the pending acquisition of Cadence by Mallinckrodt plc.
You are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. Cadence's actual future
results may differ materially from Cadence's current expectations due to the
risks and uncertainties inherent in its business. These risks include, but are
not limited to: uncertainties as to the timing of the pending Mallinckrodt
acquisition; uncertainties as to the percentage of Cadence stockholders
tendering their shares in the tender offer; the possibility that competing
offers will be made; the possibility that various closing conditions for the
Mallinckrodt acquisition may not be satisfied or waived, including that a
governmental entity may prohibit, delay or refuse to grant approval for the
consummation of the transaction; the effects of disruption caused by the
Mallinckrodt acquisition making it more difficult to maintain relationships
with employees, collaborators, vendors and other business partners; the risk
that stockholder litigation in connection with the Mallinckrodt acquisition
may result in significant costs of defense, indemnification and liability;
Cadence's dependence on the successful commercialization of OFIRMEV, which is
the company's only product; Cadence's ability to achieve broad market
acceptance and generate revenues from sales of OFIRMEV; Cadence's dependence
on its contract manufacturers and its ability to ensure an adequate and
continued supply of OFIRMEV to meet market demand; Cadence's ability to
successfully enforce its marketing exclusivities and intellectual property
rights, and to defend the patents covering OFIRMEV, including in current
intellectual property litigation with the parties that have submitted new drug
applications ("NDAs") or abbreviated new drug applications ("ANDAs") for
generic versions of OFIRMEV; the potential that Cadence may be required to
continue intellectual property litigation for substantial lengths of time or
file additional lawsuits to defend its patent rights from challenges by
companies that have submitted NDAs or ANDAs for generic versions of OFIRMEV,
and the substantial costs associated with such lawsuits; the potential for the
U.S. patent and trademark office to grant the reexamination of U.S. patent no.
6,992,218 (the "'218 patent"), which is related to OFIRMEV, and the potential
that any claims in the '218 patent or in U.S. patent no. 6,028,222, which also
relates to OFIRMEV and is currently undergoing reexamination, are invalidated
or narrowed in scope; the potential introduction of generic competition to
OFIRMEV in the event Cadence is unsuccessful in defending the patents covering
OFIRMEV or in current or future intellectual property litigation, and the
impact it may have on the sales and pricing of the product; Cadence's
dependence on its licensors for the maintenance and enforcement of its
intellectual property rights; the potential product liability exposure
associated with pharmaceutical products such as OFIRMEV and other products
Cadence may in-license or acquire; Cadence's ability to fully comply with
numerous federal, state and local laws and regulatory requirements that apply
to its commercial activities; public concern regarding the safety of drug
products such as OFIRMEV, and the potential implementation by regulatory
agencies of new requirements to include unfavorable information in the
labeling for OFIRMEV; the risk that Cadence may not be able to raise
sufficient capital when needed, or at all; and other risks detailed under
"Risk Factors" and elsewhere in Cadence's periodic reports and other filings
made with the Securities and Exchange Commission from time to time. All
forward-looking statements are qualified in their entirety by this cautionary
statement, which is made under the safe harbor provisions of Section 21E of
the Private Securities Litigation Reform Act of 1995, and Cadence undertakes
no obligation to revise or update this press release to reflect events or
circumstances after the date hereof.
Cadence^® and OFIRMEV^® are trademarks of Cadence Pharmaceuticals, Inc.
Contact: William R. LaRue
SVP & Chief Financial Officer
Cadence Pharmaceuticals, Inc.
CADENCE PHARMACEUTICALS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
2013 2012 2013 2012
Product revenue, net $ 33,286 $ 17,089 $ 110,529 $ 50,066
License revenue 2,027 85 2,027 118
Total revenues 35,313 17,174 112,556 50,184
Costs and expenses:
Cost of product sales 11,548 7,178 37,973 23,256
Amortization of patent 335 335 1,343 1,343
Research and development 2,045 1,073 6,743 6,519
Selling, general and 24,221 20,032 94,482 86,843
Impairment of long-lived - 7,723 - 7,723
Other 161 1,160 (441) 1,174
Total costs and 38,310 37,501 140,100 126,858
Loss from operations (2,997) (20,327) (27,544) (76,674)
Other (expense) income, (1,121) (1,094) 3,250 (4,299)
Net loss $ (4,118) $ (21,421) $ (24,294) $ (80,973)
Basic and diluted net $ (0.05) $ (0.25) $ (0.28) $ (0.95)
loss per share
Shares used to compute
diluted net loss per 86,344 85,591 85,969 85,556
CADENCE PHARMACEUTICALS, INC.
CONDENSED BALANCE SHEETS
December 31, December 31,
Cash, cash equivalents and $ 57,401 $ 62,072
Restricted cash 548 640
Accounts receivable, net 9,300 6,152
Inventory 8,646 6,498
Prepaid expenses and other 1,993 1,154
Total current assets 77,888 76,516
Property and equipment, net 2,060 1,967
Intangible assets, net 10,747 12,090
Other assets 108 7,106
Total assets $ 90,803 $ 97,679
Liabilities and Stockholders'
Accounts payable $ 7,724 $ 5,796
Accrued liabilities 18,042 12,969
Deferred revenue - 2,234
Current portion of long-term 10,777 -
debt, less discount
Total current liabilities 36,543 20,999
Other liabilities 844 51
Long-term debt, less discount 18,538 28,818
Total stockholders' equity 34,878 47,811
Total liabilities and $ 90,803 $ 97,679
SOURCE Cadence Pharmaceuticals, Inc.
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