Transcept Pharmaceuticals Reports Fourth Quarter And Full Year 2013 Financial Results

Transcept Pharmaceuticals Reports Fourth Quarter And Full Year 2013 Financial
                                   Results

PR Newswire

POINT RICHMOND, Calif., March 13, 2014

POINT RICHMOND, Calif., March 13, 2014 /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 twelve months ended December31,
2013.

Transcept reported cash, cash equivalents and marketable securities of $70.0
million at December31, 2013.

"We are continuing to explore a range of alternatives to enhance stockholder
value, including a sale of the Company, a business combination and/or
partnership opportunities, a distribution of all or a significant amount of
cash to stockholders, and a liquidation of the Company," said Glenn A.
Oclassen, Transcept Chairman and CEO. "We have made progress in these
initiatives and have identified, and continue to actively evaluate multiple
opportunities together with our strategic and financial advisor, Leerink
Swann, LLC. Our strategic process is both active and ongoing and includes a
range of interactions with transaction counterparties. Thus we believe it is
in our stockholders' best interest to allow sufficient opportunity to pursue
and consummate one or more of these transactions, and to consider additional
alternatives that may materialize in the near future, before making a decision
regarding a liquidation of the Company. We look forward to further updating
our stockholders as these initiatives progress."

Three months ended December31, 2013 financial results

For the quarter ended December31, 2013 and December31, 2012, Transcept
recorded $0.3 million and $0.1 million, respectively of royalty revenue on
Intermezzo net sales generated by Purdue. Royalty revenue was offset by $0.1
million and $1.4 million related to the $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. This
resulted in net revenue of $0.2 million for the quarter ended December31,
2013 compared to negative net revenue of $1.3 million for the quarter ended
December 31, 2012.

Research and development expense for the quarter ended December31, 2013 was
approximately $1.8 million, compared to approximately $2.9 million for the
same period in 2012. The decrease of approximately $1.1 million was primarily
attributable to the wind down of Transcept's TO-2061 development program,
partially offset by approximately $0.9 million of expense associated with the
Company's TO-2070 project, its lead development candidate, and $0.3 million of
severance, related benefit and stock option modification expense related to
the November reduction in force. Research and development expense included
non-cash stock compensation expense of approximately $0.2 million for each of
the quarters ended December31, 2013 and December31, 2012.

General and administrative expense for the quarter ended December31, 2013 was
approximately $3.9 million, compared to approximately $2.3 million for the
same period in 2012. The increase of approximately $1.6 million reflects an
increase in professional services associated with patent defense and a special
shareholder meeting and $0.5 million of severance, related benefit and stock
option modification expense related to the November reduction in force.
General and administrative expense included non-cash stock compensation
expense of approximately $0.8 million for the quarter ended December31, 2013,
compared to approximately $0.5 million for the quarter ended December31,
2012.

Net loss for the quarter ended December31, 2013 was approximately $5.5
million, or $0.29 per share (basic and diluted), compared to approximately
$6.6 million, or $0.35 per share (basic and diluted), for the quarter ended
December31, 2012. The weighted average shares used to calculate basic and
diluted net loss per share were 18,842,388 for the quarter ended December31,
2013. The weighted average shares used to calculate basic and diluted net loss
per share were 18,628,004 for the quarter ended December31, 2012. At
December31, 2013, there were 18,842,388 common shares outstanding and
4,236,923 common shares underlying outstanding options and warrants.

Full year 2013 financial results

Gross royalty revenue on Intermezzo net sales generated by Purdue for the year
ended December31, 2013 was $1.7 million, compared to $0.8 million for the
year ended December31, 2012. Intermezzo was commercially launched in April
2012, and royalties earned through December31, 2012 included nine months of
revenue, whereas royalties earned through December 31, 2013 include a full
year of revenue. Royalty revenue was offset by $6.8 million and $1.4 million
for the years ended December 31, 2013 and 2012, respectively, related to the
$10.0 million contribution by Transcept in December 2012 to the Intermezzo DTC
advertising campaign. This resulted in negative net revenue of $5.1 million
for the year ended December 31, 2013 versus net revenue of $9.6 million for
the year ended December 31, 2012. Revenue during the year ended December 31,
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.

Research and development expense for the year ended December31, 2013 was
approximately $6.9 million, compared to approximately $11.2 million for the
same period in 2012. The decrease of $4.3 million was primarily attributable
to the wind down of Transcept's TO-2061 development program, partially offset
by approximately $2.5 million of expense associated with the Company's TO-2070
project, its lead development candidate, along with approximately $0.5 million
of severance, related benefit and stock option modification expense related to
the January and November reductions in force. Research and development expense
included non-cash stock compensation expense of approximately $0.7 million for
the year ended December31, 2013 and approximately $0.8 million for the year
ended December31, 2012.

General and administrative expense for the year ended December31, 2013 was
approximately $12.4 million, compared to approximately $10.3 million for the
same period in 2012. The increase of $2.1 million was primarily attributable
to an increase in professional fees associated with patent litigation and a
special shareholder meeting along with approximately $0.6 million of
severance, related benefit and stock option modification expense related to
the January and November reductions in force. General and administrative
expense included non-cash stock compensation expense of approximately $2.7
million for the year ended December31, 2013, compared to approximately $2.1
million for the year ended December 31, 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 year ended December31, 2013 was approximately $27.4 million,
or $1.46 per share (basic and diluted), compared to a net loss of
approximately $12.0 million, or $0.70 per share (basic and diluted), for the
year ended December31, 2012. The weighted average shares used to calculate
net loss per share were 18,771,808 and 17,052,157 for the years ended
December31, 2013 and 2012, respectively.

About Transcept

Transcept Pharmaceuticals, Inc.is a specialty pharmaceutical company focused
on the development and commercialization of proprietary products to 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, which
Transcept intends to develop through the completion of preclinical safety
studies, but not including the initiation of a Phase 1 human pharmacokinetic
study. 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
inhalation.

The Transcept management team developed Intermezzo®from concept to its
approval by theFDAin 2011.Purdueholds commercialization and development
rights for Intermezzo in the United States.For further information about
Transcept, please visitwww.transcept.com. For information about Intermezzo,
please visitwww.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 our expectations regarding the nature, timing and
effect of our pursuit of strategic alternatives. 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 ability to successfully pursue and consummate a strategic
transaction to enhance stockholder value; the impact of competitive products
and the market for Intermezzo generally; our dependence on our collaboration
with Purdue; 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 December 31,  Year ended December 31,
                     2013              2012           2013         2012
Revenue:
 Gross royalty     $   316           $  93          $ 1,697      $ 776
revenue
 Gross milestone   —                 —              —            10,000
revenue
 Gross other       —                 —              50           250
revenue
 Advertising
expense - Purdue     (140)             (1,429)        (6,821)      (1,429)
Pharma
Net revenue          176               (1,336)        (5,074)      9,597
Operating expenses:
 Research and      1,753             2,918          6,904        11,191
development
 General and       3,941             2,265          12,431       10,263
administrative
 Goodwill          —                 —              2,962        —
impairment
Total operating      5,694             5,183          22,297       21,454
expenses
Loss from operations (5,518)           (6,519)        (27,371)     (11,857)
Interest and other
income (expense),    (17)              (35)           (75)         (159)
net
Net loss             $   (5,535)       $  (6,554)     $ (27,446)   $ (12,016)
Net loss per share:
 Basic and diluted $   (0.29)        $  (0.35)      $ (1.46)     $ (0.70)
Weighted average
common shares
outstanding:
 Basic and diluted 18,842            18,628         18,772       17,052
Comprehensive loss   $   (5,544)       $  (6,552)     $ (27,431)   $ (12,038)



Transcept Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
                                          December31, 2013  December31, 2012
                                          (unaudited)
Assets
Current assets:
 Cash and cash equivalents              $     9,935        $     39,368
 Marketable securities                  60,110             45,907
 Prepaid advertising                    —                  8,571
 Other current assets                   3,582              1,120
Total current assets                      73,627             94,966
Property and equipment, net               43                 128
Goodwill                                  —                  2,962
Total assets                              $     73,670       $     98,056
Liabilities and stockholders' equity
Total current liabilities                 $     1,928        $     2,663
Stockholders' equity:
 Common stock and additional paid in    211,276            207,496
capital
 Accumulated deficit                    (139,556)          (112,110)
 Accumulated other comprehensive income 22                 7
Total stockholders' equity                71,742             95,393
Total liabilities and stockholders'       $     73,670       $     98,056
equity

SOURCE Transcept Pharmaceuticals, Inc.

Website: http://www.transcept.com
 
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