Highlights:
----------
- Cephalon, Inc. announced in August 2007 it had signed an
agreement to acquire Amrix(r) (cyclobenzaprine HCl), a product
developed by Eurand, from ECR Pharmaceuticals ("ECR") with
expected product launch in November 2007
- Signed four new co-development contracts with different
pharmaceutical companies, taking the year-to-date total to six new
collaborations
- Received $1.5 million milestone payment from GlaxoSmithKline's
("GSK") following the successful completion of a pivotal
bioequivalence study of EUR-1048
- On track to complete bioavailability study of lead product
candidate, Zentase (EUR-1008), in November 2007, with anticipated
NDA submission before the end of 2007
- Commenced $5.5 million expansion project of Dayton, OH research
and development facility
- Increased year-to-date revenues by 5 percent at constant currency
to EUR63.7 million ($90.5 million) and by 1 percent at constant
currency for the third quarter to EUR20.0 million ($28.4 million)
AMSTERDAM, Nov. 9, 2007 (PRIME NEWSWIRE) -- Eurand N.V. (Nasdaq:EURX), a specialty pharmaceutical company that develops enhanced pharmaceutical and biopharmaceutical products based on its proprietary drug formulation technologies, today announced key achievements and financial results for the three months ended September 30, 2007.
The Company disclosed recent business and clinical developments related to its preparations for the commercial launch of its lead proprietary product candidate, Zentase (EUR-1008), currently being developed for the treatment of exocrine pancreatic insufficiency (EPI), as well as an update on the Company's most advanced product candidates, both partnered and proprietary.
Gearoid Faherty, Chief Executive Officer of Eurand, commented, "The third quarter was a very successful time for Eurand and we achieved a number of significant milestones. Two important highlights included the acquisition by Cephalon of Amrix(r) (cyclobenzaprine HCl), a product we co-developed, from ECR Pharmaceuticals and the successful completion of a pivotal clinical study of EUR-1048, our undisclosed co-development product with GSK. Cephalon expects to launch Amrix this month. In addition, the Company expects GSK to file a New Drug Application (NDA) for EUR-1048 in the near future. On the business development front, we continue to make progress expanding the geographical and therapeutic reach of our established base business. We signed four co-development deals in the last quarter, taking our deal total year-to-date in 2007 to six. These deals are with some of the world's leading pharmaceutical and biotechnology companies and we continue to look to for new collaborations."
PRODUCT DEVELOPMENT PIPELINE UPDATES:
ZENTASE (EUR-1008)
* Eurand expects to complete its gastrointestinal (GI) bioavailability study of Zentase before the end of November 2007. The Company expects to finalize its NDA submission before the end of the year, at which time it will request priority review from the Food and Drug Administration (FDA). Eurand initiated its rolling NDA submission in June 2007 and was granted fast-track designation by the FDA.
EUR-1002 - Amrix(r) (cyclobenzaprine HCl)
* On August 23, 2007, Cephalon announced it had signed an agreement to acquire Amrix from ECR and that it expects to launch the product in November 2007. Amrix is a once a day formulation of cyclobenzaprine which was developed by Eurand for ECR using its proprietary Diffucaps(r) technology. Eurand, as the licensor and exclusive manufacturer of the product, is working with Cephalon to support the commercialization of the product in the U.S. Eurand is entitled to receive royalty payments from Cephalon on Amrix sales. ECR received NDA approval for the product in February 2007.
EUR-1048 - Co-Development Product with GSK
* Eurand is co-developing a fast-dissolve formulation of an undisclosed GSK compound using the Company's Microcap taste masking and AdvaTab(r) orally disintegrating tablet technologies. Eurand announced in September 2007 that it received a $1.5 million milestone payment from GSK following the successful completion of a pivotal bioequivalence study of the compound. Pursuant to its agreement with GSK, the Company could potentially receive milestone payments totaling up to $42 million (including those that have already been received by the Company). Eurand expects GSK to file a NDA in the near future, with anticipated product launch in late 2008. Under the agreement, Eurand is entitled to manufacture the product for GSK and receive royalty revenues.
Eurand has more than 10 other product candidates in various earlier stages of development, both on a proprietary basis and for co-development partners.
Eurand signed six co-development agreements to date in 2007 and is in discussions on a number of other potential agreements with multinational pharmaceutical companies for the development of products using Eurand's drug formulation technologies.
RECENT CORPORATE DEVELOPMENTS:
On September 27, 2007, Eurand announced the expansion of its research and development facilities in Dayton, OH. The purpose of the extension is to cope with the increased number of collaborative and internal projects entering development. The $5.5 million construction project includes the renovation of approximately 13,000-square-feet of the existing building and a 13,000-square-foot addition. The project is expected to be completed in 2009.
On September 13, 2007, Eurand announced the appointment of Angelo C. Malahias and Rolf A. Classon to the Eurand Board of Directors. Mr. Malahias and Mr. Classon joined the Board as independent, non-executive directors.
YEAR-TO-DATE AND THIRD QUARTER 2007 FINANCIAL RESULTS:
Total revenues were Eur63.7 ($90.5 million) for the nine months ended September 30, 2007, representing an increase of approximately 5 percent at constant currency rates compared to the same period in 2006. Product sales were Eur53.4 million ($75.9 million), representing an increase of 4 percent at constant currency compared to the same period in 2006. Royalties were Eur2.9 million ($4.1 million), representing an increase of 5 percent at constant currency compared to the same period in 2006. Development fees were Eur7.4 million ($10.5 million), representing an increase of 9 percent at constant currency compared to the same period in 2006. The increase in development fees was primarily due to milestones earned during the nine-month period.
Research and development expenses were Eur12.0 million ($17.1 million) for the nine months ended September 30, 2007, representing an increase of 1 percent at constant currency rates compared to the same period in 2006. Selling, general and administrative (SG&A) expenses were Eur14.7 million ($20.9 million), representing an increase of 44 percent at constant currency compared to the same period in 2006. This increase was primarily due to increased head count and other costs associated with the build-out of the sales and marketing infrastructure for Zentase, the costs of public company compliance, and legal costs related to the ongoing litigation between Eurand and UCB.
Operating profit was Eur0.8 million ($1.2 million) for the nine months ended September 30, 2007 compared to Eur4.0 million ($5.7 million) for the same period in 2006. The lower operating profit was primarily due to increased SG&A spending.
Financial expenses were Eur1.5 million ($2.1 million) for the nine months ended September 30, 2007, compared to Eur5.8 million ($8.2 million) for the same period of 2006. The reduction in financial costs was mainly due to the repayment of debt with proceeds from the Company's May 2007 IPO.
Net loss was Eur1.6 million (Eur0.04 per share on a pro forma basis) for the nine months ended September 30, 2007, compared to Eur3.0 million (Eur0.09 per share on a pro forma basis) for the same period in 2006.
For the three months ended September 30, 2007, total revenues were Eur20.0 million ($28.4 million), representing an increase of approximately 1 percent at constant currency rates compared to the same period in 2006. For the same period, the Company reported net loss of Eur1.1 million (Eur0.03 per share) compared to Eur1.7 million (Eur0.05 per share) for the same period in 2006.
The Company's financial position improved as proceeds from the IPO were used to reduce gross debt from Eur63.1million to Eur1.6 million (from $89.8 million to $2.2 million) and increase cash from Eur5.8 million to Eur19.4million (from $8.3 million to $27.6 million).
Attached to this earnings press release are three tables:
1. Selected consolidated statements of operations for the nine months ended September 30, 2007 compared to the same period in 2006
2. Selected consolidated statements of operations for the past seven quarters
3. Selected balance sheet data
This press release contains translations of euros into U.S. dollars at a convenience rate of 1.4219 U.S. dollars per euro, the noon buying rate at the Federal Reserve Bank of New York on September 30, 2007.
Percentage variances quoted in "Constant Currency" represent the increase or decrease recomputed as if Euro/Dollar exchange rates had been the same in the nine months ended September 30, 2007 as they were in the same period 2006. As a guide, average exchange rates were Eur1=1.342/$ in year to date September 30, 2007, and Eur1=1.244/$ in the year to date September 30, 2006.
Conference Call Information
The Company will host a conference call on Friday, November 9, 2007 at 8:00 a.m. Eastern Daylight Time, 2:00 p.m. Central Europe Summer Time covering these first half 2007 financial results.
To participate in the conference call, US Participants dial 1-888-935-4575, International Participants dial + 1-718-354-1385. A replay of the call will be available until November 16, 2007. The passcode to access the replay is 4483027#, US Participants dial 1-866-883-4489 , International Participants dial +1-718-354-1112.
Additionally, a live audio of the conference call will be simultaneously broadcast over the Internet and can be accessed by visiting http://ir.eurand.com/eventdetail.cfm
About Eurand
Eurand is a specialty pharmaceutical company that develops enhanced pharmaceutical and biopharmaceutical products based on its proprietary drug formulation technologies. Eurand has had four products approved by the FDA since 2001 and has a pipeline of product candidates in development for itself and its collaboration partners. Eurand has completed two phase III clinical trials on its lead product candidate, Zentase, for the treatment of Exocrine Pancreatic Insufficiency and filed a rolling NDA for this product which the company anticipates to complete by the end of 2007. Eurand's technology platforms include customized drug release, bioavailability enhancement, taste making and orally disintegrating tablets, and drug conjugation.
Eurand is a global company with facilities in the USA and Europe. For more information, visit Eurand's website at www.eurand.com.
This certain statements made in this release, and oral statements made with respect to information contained in this release, may constitute forward-looking statements. Such forward-looking statements include those which express, plan, anticipation, intent, contingency, goals, targets or future development and/or otherwise are not statements of historical fact. The words "potentially", "anticipates", "expects" and similar expressions will some times identify forward-looking statements. These statements include, but not limited to, the planned product launch of Zentase, those relating to our anticipated funding needs for the marketing of Zentase and other future operations and the scientific robustness of any of our products, our plans or our collaborators' plans for our NDA filing, enrollment and future plans for our clinical trials, progress of and reports of results from clinical studies, clinical development plans and product development activities. These statements are based upon management's current expectations and are subject to risks and uncertainties, known and unknown, which could cause actual results and developments to differ materially from those expressed or implied in such statements. Such risks have been described in Eurand's filings with the U.S. Securities and Exchange Commission. Forward-looking statements contained in this press release are made as of this date, and we undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Actual events could differ materially from those anticipated in the forward-looking statements.
Selected Consolidated Statement of Operations Data (unaudited)
--------------------------------------------------------------
Nine months ended September 30,
------------------------------------------------
% Change in
------------------
2007 2007 2006 current constant
$'000(a) euro'000 euro'000 currency currency
Product sales $ 75,911 53,387 53,145 +1% +4%
Royalty income $ 4,132 2,906 2,954 -2% +5%
Development fees $ 10,478 7,369 7,253 +2% +9%
-------- -------- -------- ---- ----
Total revenues $ 90,521 63,662 63,352 +1% +5%
Cost of goods sold $(50,543) (35,546) (36,322) -2% +1%
R & D expenses $(17,105) (12,030) (12,182) -1% +1%
S G & A expenses $(20,908) (14,704) (10,544) +40% +44%
Amortization of
intangibles $ (765) (538) (546) -2% -1%
Other income
and deductions -- -- 280 n/a n/a
-------- -------- -------- ---- ----
Operating profit $ 1,200 844 4,038 -79% -62%
Financial income
(expense) $ (2,094) (1,473) (5,771) -75% -68%
-------- -------- -------- ---- ----
Loss before taxes $ (894) (629) (1,733) -64% -80%
Income taxes $ (1,398) (983) (1,247) -21% -21%
-------- -------- -------- ---- ----
Net loss $ (2,292) (1,612) (2,980) -46% -55%
======== ======== ======== ==== ====
Basic and diluted net
loss per share $(0.10) euro(0.07) euro(1.32)
Weighted average
number of shares 23,178,525 23,178,525 2,257,634
Pro forma basic and
diluted net loss
per share $(0.05)(b) euro(0.04)(b) euro(0.09)(c)
Pro forma weighted
average number
of shares
43,861,349(b) 43,861,349(b) 34,745,574(c)
(a) Figures in US Dollars are translated from the euro, for
convenience, at a rate of 1Euro=$1.4219, the noon buying rate at
the Federal Reserve Bank of New York on September 30, 2007.
(b) Presumes the conversion of all Series A preference shares into
32,487,940 ordinary shares and the conversion of all Series C
preference shares into 2,029,786 ordinary shares, as if these had
occurred on January 1, 2007 rather than at the IPO date.
(c) Presumes the conversion of all Series A preference shares into
32,487,940 ordinary shares, as if this had occurred on January 1,
2006. There were no Series C preference shares during the nine
months ended September 30, 2006.
Selected consolidated statements of operations
for the past seven quarters
----------------------------------------------
March 31, June 30, Sept. 30, Dec. 31,
2006 2006 2006 2006
euro'000 euro'000 euro'000 euro'000
------- ------- ------- -------
Product sales 17,927 18,889 16,329 16,626
Royalties 1,283 860 811 942
Development fees 1,968 1,886 3,399 1,929
------- ------- ------- -------
Revenue 21,178 21,635 20,539 19,497
Cost of goods sold (11,138) (12,574) (12,610) (11,236)
Research and Development
expenses attributable to
development fees (1,249) (1,303) (1,497) (1,541)
Other research and
development expenses (3,425) (2,402) (2,306) (2,564)
Selling, general and
administrative costs (3,235) (3,558) (3,751) (4,242)
Other Expenses -- -- 280 74
Amortization of
Intangibles (183) (182) (181) (181)
------- ------- ------- -------
Operating income (loss) 1,948 1,616 474 (193)
Interest expenses, net (1,876) (1,936) (1,970) (1,479)
Foreign exchanges, net 38 (59) 32 1
------- ------- ------- -------
Income(loss) before taxes 110 (379) (1,464) (1,671)
Income tax expense (365) (670) (212) (346)
------- ------- ------- -------
Net (loss) income (255) (1,049) (1,676) (2,017)
======= ======= ======= =======
March 31, June 30, Sept. 30,
2007 2007 2007
euro'000 euro'000 euro'000
------- ------- -------
Product sales 18,706 18,828 15,853
Royalties 974 842 1,090
Development fees 2,210 2,107 3,052
------- ------- -------
Revenue 21,890 21,777 19,995
Cost of goods sold (12,555) (11,992) (10,999)
Research and Development
expenses attributable to
development fees (1,231) (1,319) (1,062)
Other research and
development expenses (2,648) (2,503) (3,267)
Selling, general and
administrative costs (4,481) (4,710) (5,513)
Other Expenses -- -- --
Amortization of
Intangibles (180) (179) (179)
------- ------- -------
Operating income (loss) 795 1,074 (1,025)
Interest expenses, net (1,228) (468) 102
Foreign exchanges, net 28 86 7
------- ------- -------
Income(loss) before taxes (405) 692 (916)
Income tax expense (377) (388) (218)
------- ------- -------
Net (loss) income (782) 304 (1,134)
------- ------- -------
Selected Consolidated Balance Sheet Data (unaudited)
----------------------------------------------------
Sept. 30, 2007 Dec. 31, 2006
$'000(1) euro'000 euro'000
Cash and cash equivalents $ 27,585 euro 19,400 euro 5,810
Total assets $157,667 110,885 102,946
Total debt $ 2,291 1,611 63,144
Total liabilities $ 36,765 25,856 90,213
Series A redeemable
preference shares -- -- 26,844
Series C redeemable
preference shares -- -- 23,000
Total shareholders'
equity (deficit) $120,902 euro 85,029 euro (37,111)
(1) Figures in US Dollars are translated from the euro, for
convenience, at a rate of 1Euro=$1.4219, the noon buying rate at
the Federal Reserve Bank of New York on September 30, 2007.