-- Total revenues are expected to increase to between $46 million to $50
million;
-- Research and development spending is expected to be in the range of
$24 million to $26 million;
-- Selling, general and administrative expenses are expected to be in the
range of $54 million to $56 million; and
-- Total 2008 net loss should decline from 2007 by approximately $20
million, or 40%, to a range of $30 million to $35 million. Financial
guidance includes an estimated $5 million of stock based compensation
expense.
Fourth Quarter 2007 Financial Results
For the quarter ended December 31, 2007, Barrier reported total net
revenues of $9.7 million, an increase of $6.6 million over the same period
in 2006. Net U.S. product revenues in the fourth quarter of 2007 were $9.4
million, an increase of $7.2 million from the same period in 2006. The
increase in U.S. product revenues was primarily due to increased price and
volume growth for Vusion and Xolegel, which were launched in the second and
fourth quarters of 2006, respectively. International product revenues
relate primarily to our now discontinued Canadian sales operations. Net
product revenues are detailed in the table below:
Net Product Revenues Q4 2007 Q4 2006
---------- ----------
Vusion(R) $ 7,892 $ 1,669
Xolegel(R) 1,275 130
Solagé(R) 253 436
U.S. Net Product Revenues $ 9,420 $ 2,235
---------- ----------
International 51 235
Total Net Product Revenues $ 9,471 $ 2,470
---------- ----------
Gross margin on product revenues was 85% for the fourth quarter of 2007 and
2006. Cost of product revenue for the quarter included a one time $0.6
million charge related to an international manufacturing commitment. In the
fourth quarter gross margin on U.S. product revenues was 92% as compared to
87% for the fourth quarter of 2006. This increase in gross margin is the
result of both higher net prices and improved leverage on fixed expenses.
Research and development expenses for the fourth quarter of 2007 totaled
$5.8 million, down $3.7 million from the same period in 2006. Decreased
spending in 2007 resulted primarily from lower clinical and preclinical
spending on Rambazole™ and Oral Pramiconazole partially offset by
increased Hyphanox spending related to our ongoing Phase 3 study. Research
and development expenses for the fourth quarters of 2007 and 2006 include
stock based compensation expense of ($0.3) million and $0.4 million,
respectively.
Selling, general and administrative expenses totaled $14.1 million for the
fourth quarter of 2007, compared with $9.4 million in the same period in
2006. Selling expenses were $4.6 million, an increase of $1.4 million from
the fourth quarter of 2006 due to higher sales force costs and third party
co-promotion services for Vusion. Brand marketing and other commercial
expenses were $6.8 million in the fourth quarter of 2007, up $3.6 million
from 2006, reflecting increased spending for our direct to consumer
television campaign for Vusion. Corporate expenses totaled $1.9 million,
which was relatively flat as compared to the same period in 2006. Selling,
general and administrative expenses for the fourth quarter of 2007 and 2006
include stock based compensation expense of $0.8 million and $1.2 million,
respectively.
Net interest income for the fourth quarter of 2007 totaled $0.5 million, a
decrease of $0.2 million from the same period in 2006 due to lower average
balances for cash and marketable securities and interest expense on debt.
Income tax benefits of $1.1 million and $0.7 million in 2007 and 2006,
respectively, represent the net proceeds from the sale of a portion of
unused prior years' New Jersey State net operating loss carryforwards.
Net loss for the fourth quarter of 2007 was $10.1 million, or $0.29 per
share, compared to a net loss of $14.8 million, or $0.51 per share, for the
fourth quarter of 2006. The net losses for the fourth quarter of 2007 and
2006 included $0.5 million, or $0.01 per share and $1.5 million, or $0.05
per share, respectively, of stock based compensation expense. Stock based
compensation expense was down from 2006 due to an adjustment for
forfeitures.
Full Year 2007 Financial Results
Total revenues for the full year of 2007 were $24.1 million, an increase of
$17.3 million from $6.7 million for the full year of 2006, as a result of
increased product revenues partly offset by $0.3 million lower grant
revenue. Net product revenues increased $17.7 million primarily due to
Vusion and Xolegel sales. Annual net product revenues are detailed as
follows:
($ in 000s) Full Year Full Year
Net Product Revenues 2007 2006
---------- ----------
Vusion(R) $ 18,133 $ 3,765
Xolegel(R) 3,928 130
Solagé(R) 994 1,436
---------- ----------
U.S. Net Product Revenues 23,055 5,331
---------- ----------
International 464 522
---------- ----------
Total Net Product Revenues $ 23,519 $ 5,853
========== ==========
Gross margin for product revenues was 86% for the full year 2007 as
compared to 76% for 2006. This increase in gross margin is the result of
both higher net prices and improved leverage on fixed expenses.
Research and development expenses for 2007 totaled $27.9 million, a $2.0
million increase from $25.9 million in 2006. Development costs for Hyphanox
totaled $9.2 million, up $6.6 million from 2006 primarily related to the
Phase 3 study in onychomycosis. This increase was partially offset by
lower spending on both Rambazole and Oral Pramiconazole resulting from the
completion of the Phase 2b studies earlier this year. Research and
development expenses for the years ended 2007 and 2006 include stock based
compensation expense of $0.7 million and $1.4 million, respectively.
Selling, general and administrative expenses for 2007 totaled $49.6
million, an increase of $13.8 million from $35.8 million in 2006. Selling
expenses totaled $15.6 million, up $4.4 million from 2006 due to the
expansion of our sales force in the second quarter of 2006 and costs
related to third party co-promotion services for Vusion. Brand marketing
and other commercial expenses were $22.0 million in 2007, up $9.3 million
from 2006, reflecting investment in commercial launches of both Vusion and
Xolegel. Corporate expenses totaled $8.1 million, or $0.3 million higher
than the same period in 2006. Selling, general and administrative expenses
for the years ended 2007 and 2006 include stock based compensation expense
of $3.8 million and $3.9 million, respectively.
Net interest income for 2007 totaled $1.9 million, a decrease of $1.1
million from the same period in 2006, as higher average interest rates more
than offset the lower average balances for cash and marketable securities.
Income tax benefits of $1.1 million and $0.7 million in 2007 and 2006,
respectively, represent the net proceeds from the sale of a portion of
unused prior years' New Jersey State net operating loss carryforwards.
The Company reported a net loss for the full year of 2007 of $53.7 million,
or $1.74 per share, compared to a net loss of $52.7 million, or $2.06 per
share, for the full year of 2006. Included in the net loss for 2007 and
2006 was $4.6 million, or $0.15 per share and $5.3 million, or $0.21 per
share, respectively, of stock based compensation expense. Stock based
compensation expense was down from 2006 due to an adjustment for
forfeitures.
Conference Call & Webcast Information
Barrier's senior management will host a conference call on February 28,
2008 at 4:30 p.m. ET to provide a company update and discuss the financial
results for the quarter. Interested investors can listen to the call live
on the investor relations section of the company's web site located at
http://www.barriertherapeutics.com or by dialing 888-680-0894 (U.S.) or
617-213-4860 (International). Conference ID code: 87131116. An audio
replay of the call will be available for seven days by dialing 888-286-8010
(U.S.) or 617-801-6888 (International). Replay Passcode: 21386961.
About Barrier Therapeutics
Barrier Therapeutics, Inc. is a pharmaceutical company focused on the
development and commercialization of products in the field of dermatology.
Barrier Therapeutics currently markets three pharmaceutical products in the
United States: Xolegel® (ketoconazole, USP) Gel, 2%, for seborrheic
dermatitis; Vusion® (0.25% miconazole nitrate, 15% zinc oxide, 81.35%
white petrolatum) Ointment, for diaper dermatitis complicated by documented
candidiasis; and Solagé® (mequinol 2.0%, tretinoin 0.01%) Topical
Solution, for solar lentigines. Barrier Therapeutics has other product
candidates in various stages of clinical development for the treatment of a
range of dermatological conditions, including onychomycosis, psoriasis,
acne, skin allergies, and acute fungal infections. The company is
headquartered in Princeton, New Jersey and has a wholly owned subsidiary in
Geel, Belgium. More information about Barrier Therapeutics can be found
on its corporate website at: www.barriertherapeutics.com.
Xolegel, Vusion and Solagé are trademarks of Barrier Therapeutics, Inc.
Safe Harbor Statement
In addition to historical facts or statements of current condition, this
press release contains forward-looking statements within the meaning of the
"Safe Harbor" provisions of The Private Securities Litigation Reform Act of
1995, including statements regarding the financial guidance for 2008, the
future growth potential for revenues, the expected decline in net losses,
Barrier's expense structure, and the anticipated progress on the clinical
pipeline. Forward-looking statements provide Barrier's current
expectations or forecasts of future events. Barrier's performance and
financial results could differ materially from those reflected in these
forward-looking statements due to the marketplace acceptance of Barrier's
products, Barrier's ability to execute its commercial and clinical
strategy, the decisions of regulatory authorities, the results of clinical
trials, and strategic decisions regarding its pipeline, general financial,
economic, regulatory and political conditions affecting the biotechnology
and pharmaceutical industries generally. For a discussion of these and
other risks and uncertainties that may effect the forward-looking
statements, please see the risk factors in the company's Quarterly Report
on Form 10-Q for the quarter ended September 30, 2007 which is on file with
the Securities and Exchange Commission. Given these risks and
uncertainties, any or all of these forward-looking statements may prove to
be incorrect. Barrier undertakes no obligation to update publicly any
forward-looking statement.
In addition, please note that success in clinical trials does not mean that
subsequent trials will confirm earlier findings. No assessment of the
efficacy or safety of any product candidate can be considered definitive
until all clinical trials needed to support a submission for marketing
approval are complete.
Barrier Therapeutics, Inc.
Consolidated Statements of Operations
(All amounts in thousands, except share and per share amounts)
Three months ended Year ended
December 31, December 31,
====================== ======================
2007 2006 2007 2006
Revenues:
Net product revenues $ 9,471 $ 2,470 $ 23,519 $ 5,853
Other revenues 241 599 563 885
---------- ---------- ---------- ----------
Total revenues 9,712 3,069 24,082 6,738
Costs and expenses:
Cost of product revenues 1,466 381 3,192 1,431
Research and development 5,755 9,446 27,900 25,895
Selling, general and
administrative 14,146 9,387 49,630 35,795
---------- ---------- ---------- ----------
Total costs and expenses 21,367 19,214 80,722 63,121
---------- ---------- ---------- ----------
Loss from operations (11,655) (16,145) (56,640) (56,383)
Interest income, net 512 718 1,898 2,954
---------- ---------- ---------- ----------
Net loss before income tax
benefit and cumulative
effect of change in
accounting principle (11,143) (15,427) (54,742) (53,429)
Income tax benefit 1,050 655 1,050 655
Cumulative effect of change
in accounting principle - - - 57
---------- ---------- ---------- ----------
Net loss $ (10,093) $ (14,772) $ (53,692) $ (52,717)
========== ========== ========== ==========
Basic and diluted net loss
per share before and after
change in accounting
principle
$ (0.29) $ (0.51) $ (1.74) $ (2.06)
Weighted average shares
outstanding -- basic and
diluted
34,819,525 29,020,433 30,862,594 25,583,259
Barrier Therapeutics, Inc.
Condensed Consolidated Balance Sheets
(In Thousands)
December 31, December 31,
2007 2006
------------- -------------
Assets
Current assets:
Cash, cash equivalents and marketable
securities $ 48,463 $ 58,884
Receivables, net 11,792 1,863
Finished goods inventories 793 1,179
Prepaid expenses and other current assets 3,381 1,842
------------- -------------
Total current assets 64,429 63,768
Property and equipment, net 659 873
Other assets 2,328 2,564
------------- -------------
Total assets $ 67,416 $ 67,205
============= =============
Liabilities and stockholders' equity
Current liabilities:
Note payable: current portion $ 8,711 $ 345
Accounts payable and accrued expenses 24,666 12,928
Deferred revenue - 430
Other current liabilities 17 9
------------- -------------
Total current liabilities 33,394 13,712
Notes payable: long-term portion 104 280
Stockholders' equity 33,918 53,213
Total liablilities and stockholders' equity $ 67,416 $ 67,205
============= =============
Certain amounts have been reclassified to conform to the current period
Contact Information: Contact: Barrier Therapeutics, Inc. Anne M. VanLent EVP & CFO (609) 945-1202 Lazar Partners Ltd. Gregory Gin, Investor Relations (212) 867-1762