Sep. 17, 2009 (PR Newswire) -- SUNNYVALE, Calif., , Sept. 17 /PRNewswire-FirstCall/ -- Pharmacyclics, Inc. (Nasdaq: PCYC) today reported financial results for its fourth quarter and fiscal year ended June 30, 2009. During the fourth quarter of fiscal 2009 Pharmacyclics incurred a GAAP net loss of $5.4 million, or $0.20 per share, compared to a net loss of $4.6 million, or $0.18 per share for the fourth quarter of fiscal 2008.

Total non-GAAP net loss for the quarter was $4.2 million in 2009 versus $4.2 million in 2008. The adjustments in the fourth quarter 2009 included share-based compensation expense of $0.4 million; non-cash expenses for interest expense of $0.3 million; and the non recurring French withholding tax payment of $0.6 million. The adjustments in the fourth quarter 2008 included share based compensation of $0.5 million.

Pharmacyclics also reported financial results for the fiscal year ended June 30, 2009. The GAAP net loss reported for the fiscal year ended June 30, 2009 was $23.5 million, or $0.88 per share. This compares to a net loss of $24.3 million, or $0.93 per share, for fiscal year 2008.

Total non-GAAP net loss for the fiscal year was $18.1 million versus $22.0 million for fiscal 2008, approximately 18% below the prior year. The adjustments for fiscal 2009 included a $1.0 million non-recurring payment to Celera Corporation in March 2009 associated with the Servier Collaboration Agreement; share-based compensation expense of $3.3 million, of which $1.8 million related to severance agreements; non-cash interest expense for a loan to an affiliate of Robert W. Duggan of $0.5 million which was recognized for GAAP purposes at higher rates than the actual paid out rate; and the non-recurring French Withholding tax payment of $0.6 million. The adjustments in 2008 included share-based compensation of $2.3 million.

As of September 1, 2009 the company had approximately $35.0 million in cash and cash equivalents and no long term debt. Additionally, during fiscal 2010 the company has the contracted right to perform research activities and to receive $1.0 million on October 1, 2009 and $1.0 million on April 1, 2010 from Servier and expects to receive $1.3 million in payments for drug shipments in the second half of fiscal 2010.

At June 30, 2009, the company had cash, cash equivalents and marketable securities totaling $16.3 million. This compares to $16.8 million in cash, cash equivalents and marketable securities as of June 30, 2008. Subsequent to June 30, 2009, the company raised, in the recent rights offering, $28.0 million, net of approximately $0.8 million in offering costs. Pharmacyclics' Chairman and CEO, Robert W. Duggan, participated in the offering to the approximate amount of $6.1 million; he was not permitted to oversubscribe. In August of 2009 the company's long term obligation with an affiliate of Robert W. Duggan of $6.4 million was retired.

During fiscal 2009 the company received a $6.4 million loan from an affiliate of its CEO & Chairman, Robert W. Duggan. The loan's stated interest rate was on average 2.5%. Due to the below market interest rate of the loan, the rate had to be adjusted under GAAP to a fair market rate which was accounted for as a loan discount. This discount was amortized to interest expense during fiscal 2009 resulting in non-cash interest expense of approximately $0.3 million in the fourth quarter and approximately $0.5 million for the fiscal year 2009. The accrued interest expense to be paid out, based on the stated rate, for the $6.4 million loan was approximately $0.1 million.

Fiscal 2010 Guidance

With our currently planned clinical trial programs the patient/trial related expenses are expected to increase by as much as $4.0 million year over year, from currently $3.5 to approximately $7.5 million. This assumes more than 100% increase in patient enrollment in our trials. Furthermore our toxicology & pharmacology expenses are expected to increase by approximately $1.3 million year over year, from currently $1.3 million to approximately $2.6 million. Drug manufacturing expenses for fiscal 2010 are planned to increase by approximately $1.0 million year over year, from currently $2.3 million to $3.3 million. The company's G&A expenses are anticipated to decrease by about 5-7% year over year, from currently $8.5 million to approximately $8.0 million. Pharmacyclics expects total operating expenses before share-based compensation to be between $23.0 to $25.0 million for fiscal 2010. The company anticipates share-based compensation expense to be about $1.5 - $2.0 million for the upcoming fiscal year versus $3.3 million in fiscal 2009.

Due to the deferral of the Servier payments and the anticipated recognition over a two year period, Pharmacyclics projects total revenue of between approximately $7.0 - $10.0 million in fiscal 2010. This amount includes the estimated amortization of the deferred Servier license payment, the amortized projected drug shipment to Servier and the amortized receipt of research payments from Servier.

Financial projections involve a high level of uncertainty due to, among other factors, the variability involved in predicting requirements of early stage research programs and clinical trials, the potential for entering into partnering arrangements or strategic collaborations, the timing of U.S. Food and Drug Administration (FDA) decisions and share-based compensation expense.

"This last year has been very meaningful for Pharmacyclics. We put in place a new board of directors, a new management team and a very accomplished and supportive advisory board. After reorganizing the focus of the company and aligning our clinical drug programs, we signed a very important partnership for the company in our fourth quarter with Servier, the largest private French Biotech firm, and received immediately $11.0 million with an additional $4.0 million in future research payments and $2.0 million in future product purchases. Together with these payments over the next two years and our most recent rights offering of $28.8 million and the equity raised during this spring of $1.4 million, the new team at Pharmacyclics is responsible for generating more than $45.0 million in new capital." said Robert W. Duggan, Chairman of the Board and Chief Executive Officer. "We now have the funds to progress our four clinical programs in a meaningful way and continue to advance these novel product candidates."

Recent and Upcoming Milestones and Program Updates

    --  Raised approximately net $28.0 million in a July 2009 rights offering.
This financing gave all existing share holders the opportunity to
participate in the company's fund raising. After retiring its loan
obligation the rights offering provided net approximately $21.6 million
in cash.
--  Partnered PCI-24781, Pharmacyclics' oral HDAC inhibitor, with
Servier, granting exclusive licensing for all ex-U.S. markets and
providing the company with a royalty on future sales, plus $11.0 million
in up front payments, $4.0 million in research payments during the next
24 months as well as potential milestone payments of $24.5 million. PCI
-24781 is currently in a U.S. Phase I/II study in patients with
Non-Hodgkin's lymphoma and continues to have a class leading safety
profile. PCI-24781 was well tolerated in heavily pretreated patients
with relapsed/refractory Non-Hodgkin's lymphoma, with promising
clinical responses in the Phase I portion of the trial. Data will be
presented at the December 2009 ASH meeting in New Orleans. Servier,
Pharmacyclics' European partner, is in the process of arranging
their EU trial program, including an initial Phase I and several
different Phase II's.
--  PCI-34051, Pharmacyclics' HDAC 8 Inhibitor, is currently in
preclinical studies, and is planned to be developed as a unique
treatment modality for autoimmune disorders. The company is anticipating
further results and to conclude its preclinical work by calendar year
2010.
--  PCI-0120, Motexafin Gadelinium (MGd) is currently tested in two NCI
sponsored Phase II studies. Both have extended survival as their
endpoint and both completed the patient enrollment.