Nov. 4, 2009 (PR Newswire) -- EAST BRUNSWICK, N.J., Nov. 4 /PRNewswire-FirstCall/ -- Savient Pharmaceuticals, Inc. (Nasdaq: SVNT) today reported financial results for the three and nine months ended September 30, 2009, ending the quarter with $67.5 million in cash and short-term investments, a reduction of $11.1 million from December 31, 2008. In October 2009, we raised $60.9 million in cash, net of $4.8 million of offering costs from an underwritten public offering of 4,945,000 shares of our common stock. The effect of combining the offering with our existing cash brings Savient to approximately $128.4 million in cash and short-term investments as of September 30, 2009, on a pro forma basis.
"Our strengthened cash position will support future important initiatives in addition to our focused efforts for the resubmission of our Biologics License Application for KRYSTEXXA(TM) to the U.S. Food and Drug Administration for the treatment of chronic gout in patients refractory to conventional treatment, which we expect will be submitted in early 2010," stated Paul Hamelin, President of Savient.
Operational Key Events:
-- During July 2009, we completed the dosing phase of our open label
extension (OLE) study for KRYSTEXXA. This study is currently in an
observation only stage.
-- In July 2009, we received a complete response letter (CRL) from the U.S.
Food and Drug Administration (FDA) stating that the FDA at that time
could not approve our Biologics License Application (BLA) for KRYSTEXXA.
The complete response letter cited deficiencies with the chemistry,
manufacturing and controls (CMC) section of the BLA and also provided a
draft of the proposed labeling and further guidance regarding a Risk
Evaluation and Mitigation Strategy (REMS).
-- Our requested Type A meeting with the FDA occurred on September 14, 2009
to discuss the CRL and next steps. The meeting with the FDA provided
clarification and alignment on a resubmission plan for us to fully
address all deficiencies and issues identified in the CRL. Since the
resubmission will include REMS materials, this is subject to a Class 2
review cycle, meaning a Prescription Drug User Fee Act date for all
components of our filing six months after the date of our resubmission.
-- In September 2009, we committed to a corporate restructuring plan where
we reduced our workforce by 25 employees. We expect that this cost
savings initiative will save $2.9 million through the year ending
December 31, 2010, net of $1.2 million of severance-related expenses.
-- In October 2009, we raised $65.7 million from an underwritten public
offering of 4,945,000 shares of our common stock that yielded $60.9
million in cash, net of $4.8 million of offering costs.
The net loss for the third quarter of 2009 was $13.9 million, or $0.23 per basic and diluted share, on total revenues of $0.3 million, compared with a net loss of $18.2 million, or $0.34 per basic and diluted share, on total revenues of $0.5 million for the third quarter of 2008. Partially offsetting our net loss for the three months ended September 30, 2009 was non-cash gain of $11.8 million due to a valuation adjustment relating to warrants that we issued in connection with our April 2009 registered direct offering. On a non-Generally Accepted Accounting Principles (GAAP) basis and excluding the $11.8 million non-cash gain due to a valuation adjustment on our warrants, our net loss for the third quarter of 2009 was $25.7 million, or $0.42 per basic and diluted share, compared with a GAAP net loss for the third quarter of 2008 of $18.2 million, or $0.34 per basic and diluted share.
The net loss for the first nine months of 2009 was $90.6 million, or $1.56 per basic and diluted share, on total revenues of $2.1 million, compared with a net loss of $60.0 million, or $1.12 per basic and diluted share, on total revenues of $2.1 million for the same period in 2008. The net loss for the nine months ended September 30, 2009 includes a non-cash charge of $24.1 million due to a valuation adjustment relating to warrants that we issued in connection with our April 2009 registered direct offering. On a non-GAAP basis, excluding the $24.1 million non-cash charge, our net loss for the first nine months of 2009 was $66.5 million, or $1.15 per basic and diluted share, compared with a GAAP net loss of $60.0 million for the nine months ended September 30, 2008, or $1.12 per basic and diluted share.
Financial Results of Operations for the Three Months Ended September 30, 2009
Total revenues for the third quarter of 2009 were $0.3 million compared with $0.5 million for the third quarter of 2008, a decrease of $0.2 million mainly due to lower gross sales of Oxandrin® as a result of decreased overall demand for the product from increased generic competition. Additionally, we adjusted our Oxandrin product return reserve in both the current and prior year quarters to reflect higher actual return experience. We expect that sales of Oxandrin will continue to decline slightly or remain flat in future periods. The decrease in Oxandrin sales was partially offset by a $0.1 million increase in sales of our authorized generic oxandrolone, due to increased market share being achieved by Watson Pharmaceuticals, Inc. (Watson), our authorized generic distributor.
Research and development expenses for the third quarter of 2009 were $17.7 million, compared with $10.9 million for the third quarter of 2008, an increase of $6.8 million, or 62%. The increase is primarily due to $4.5 million in contingency charges recorded in the third quarter of 2009 relating to amending the fee schedule and total obligation under our services agreement with our proposed secondary source supplier of pegloticase active pharmaceutical ingredient (API). We also incurred $1.0 million in higher expenses resulting from increased outside laboratory testing services supporting our OLE study for KRYSTEXXA.
Selling, general and administrative expenses for the third quarter of 2009 were $8.5 million, compared with $7.6 million for the third quarter of 2008, an increase of $0.9 million, or 13%, primarily due to severance expense related to our plan of termination that reduced our workforce by 25 employees in the third quarter of 2009.
Investment income, net for the third quarter of 2009 was $0.5 million, compared with $0.3 million for the three months ended September 30, 2008, an increase of $0.2 million, or 48%, primarily due to realized gains on the sale of short-term investments.
Other income, net for the third quarter of 2009 was $11.8 million, compared with Other expense, net of $0.1 million for the third quarter of 2008, an increase to income of $11.9 million as a result of the non-cash gain on the mark-to-market valuation adjustment to our warrant liability during the three months ended September 30, 2009.
Financial Results of Operations for the Nine Months Ended September 30, 2009
Total revenues for the first nine months of 2009 were $2.1 million, consistent with the same period of 2008.
Research and development expenses for the first nine months of 2009 were $42.1 million, compared with $37.8 million for the same period of 2008, an increase of $4.3 million, or 11%.
