Exhibit 99.1
Corporate Contacts:
Sylvia Wheeler
Executive Director, Corporate Communications
Affymax, Inc.
650-812-8861 | Daryl Messinger
WeissComm Partners
415-946-1062 |
AFFYMAX® REPORTS THIRD QUARTER 2008 FINANCIAL RESULTS
PALO ALTO, Calif., November 6, 2008 – Affymax, Inc. (Nasdaq: AFFY) today reported financial results for the third quarter ended September 30, 2008. The net loss for the third quarter of 2008 was $26.2 million compared to a net loss of $12.7 million for the third quarter of 2007.
Affymax recognized revenue for the quarter ended September 30, 2008 of $21.6 million compared to $10.5 million for the quarter ended September 30, 2007. The increase in revenue was the result of increased collaboration revenue from its partnership with Takeda Pharmaceutical Company Limited, under their 2006 collaboration for development of Affymax’s compound, Hematide™.
Research and development expenses for the quarter ended September 30, 2008 were $39.8 million compared to $18.6 million for the quarter ended September 30, 2007. The increase was primarily due to additional expenses related to Phase 3 clinical trials of Hematide in renal indications as well as increased manufacturing and personnel costs.
General and administrative expenses for the quarter ended September 30, 2008 were $8.3 million compared to $5.8 million for the quarter ended September 30, 2007. The increase was primarily due to increased personnel costs as well as legal, audit and consulting fees.
The company’s cash, investments and receivables from Takeda totaled $163.3 million as of September 30, 2008. Included in long-term investments are $19.7 million in auction rate securities,
a decrease from the second quarter of 2008 due to the sale and redemption of $1.6 million in auction rate securities holdings.
“We are pleased to have completed enrollment in PEARL 1 and PEARL 2 and look forward to completing enrollment in the remaining two Phase 3 trials, EMERALD 1 and EMERALD 2 by the end of 2008,” said Arlene M. Morris, president and chief executive officer of Affymax, Inc.
Revised 2008 Financial Guidance
The company expects 2008 operating expenses, net of Takeda reimbursements, to be approximately $85 million with a moderate increase expected in 2009 upon full enrollment of the Phase 3 clinical trials. This decrease of $5 million from the original 2008 guidance range is primarily due to lower than expected personnel costs. In addition, the company revised its guidance on expected 2008 year end cash, investments and receivable from Takeda. Due primarily to slower than expected invoicing by third parties for Phase 3 clinical trial related activities and lower than expected personnel costs, Affymax expects to have cash, investments and receivable from Takeda of approximately $135 million at December 31, 2008, an increase of $10 million above the range outlined in the company’s original 2008 guidance.
About Affymax, Inc.
Affymax, Inc. is a biopharmaceutical company developing novel drugs to improve the treatment of serious and often life-threatening conditions. Affymax’s product candidate, Hematide™, is currently in Phase 3 clinical trials for the treatment of anemia associated with chronic renal failure. For additional information, please visit www.affymax.com.
This release contains forward-looking statements, including statements regarding financial condition, the success of the Company’s collaboration with Takeda, timing, design and results of the Company’s clinical trials and drug development program and the timing and likelihood of the commercialization of Hematide. The Company’s actual results may differ materially from those indicated in these forward-looking statements due to risks and uncertainties, including risks relating to the continued safety and efficacy of Hematide in clinical development, the timing of patient accrual in ongoing and planned clinical studies, regulatory requirements and approvals, research and development efforts, industry and competitive environment, intellectual property rights and disputes and other matters that are described in Affymax’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The Company undertakes no obligation to update any forward-looking statement in this press release.
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AFFYMAX, INC.
UNAUDITED CONDENSED BALANCE SHEETS
(in thousands)
| | September 30, | | December 31, | |
| | 2008 | | 2007 | |
Assets | | | | | |
Current assets | | | | | |
Cash and cash equivalents | | $ | 38,257 | | $ | 108,215 | |
Restricted cash | | 11 | | 11 | |
Short-term investments | | 72,447 | | 60,122 | |
Receivable from Takeda | | 32,878 | | 15,331 | |
Income taxes receivable | | 2,541 | | — | |
Deferred tax assets | | 1,813 | | 1,810 | |
Prepaid expenses and other current assets | | 6,158 | | 9,323 | |
Total current assets | | 154,105 | | 194,812 | |
Property and equipment, net | | 6,616 | | 4,470 | |
Restricted cash | | 1,135 | | 1,135 | |
Long-term investments | | 19,674 | | 15,655 | |
Deferred tax assets, net of current | | 6,039 | | 8,272 | |
Other assets | | 1,327 | | 1,448 | |
Total assets | | $ | 188,896 | | $ | 225,792 | |
| | | | | |
Liabilities and Stockholders’ Equity | | | | | |
Current liabilities | | | | | |
Accounts payable | | $ | 3,618 | | $ | 9,348 | |
Accrued liabilities | | 8,655 | | 3,517 | |
Accrued clinical trial expenses | | 21,617 | | 2,473 | |
Income taxes payable | | — | | 739 | |
Deferred revenue | | 49,842 | | 39,488 | |
Capitalized lease obligations, current | | 27 | | 133 | |
Total current liabilities | | 83,759 | | 55,698 | |
Deferred revenue, net of current | | 62,391 | | 75,911 | |
Long-term income tax liability | | 9,758 | | 9,434 | |
Capitalized lease obligations, net of current | | — | | 8 | |
Other long-term liabilities | | 849 | | 556 | |
Total liabilities | | 156,757 | | 141,607 | |
| | | | | |
Stockholders’ equity | | | | | |
Common stock | | 15 | | 15 | |
Additional paid-in capital | | 304,837 | | 296,035 | |
Deferred stock-based compensation | | (9 | ) | (28 | ) |
Accumulated deficit | | (272,525 | ) | (211,818 | ) |
Accumulated other comprehensive loss | | (179 | ) | (19 | ) |
Total stockholders’ equity | | 32,139 | | 84,185 | |
Total liabilities and stockholders’ equity | | $ | 188,896 | | $ | 225,792 | |
AFFYMAX, INC.
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
| | Three Months Ended
September 30, | | Nine Months Ended
September 30, | |
| | 2008 | | 2007 | | 2008 | | 2007 | |
Collaboration revenue | | $ | 21,645 | | $ | 10,487 | | $ | 56,803 | | $ | 27,459 | |
License and royalty revenue | | 3 | | 7 | | 690 | | 28 | |
Total revenue | | 21,648 | | 10,494 | | 57,493 | | 27,487 | |
Operating expenses: | | | | | | | | | |
Research and development | | 39,780 | | 18,610 | | 96,093 | | 45,198 | |
General and administrative | | 8,308 | | 5,766 | | 23,639 | | 17,293 | |
Total operating expenses | | 48,088 | | 24,376 | | 119,732 | | 62,491 | |
Loss from operations | | (26,440 | ) | (13,882 | ) | (62,239 | ) | (35,004 | ) |
Interest income | | 821 | | 2,882 | | 3,913 | | 8,814 | |
Interest expense | | (156 | ) | (2 | ) | (357 | ) | (11 | ) |
Other income (expense), net | | (436 | ) | (9 | ) | (2,024 | ) | 26 | |
Loss before provision for income taxes | | (26,211 | ) | (11,011 | ) | (60,707 | ) | (26,175 | ) |
Provision for income taxes | | — | | 1,695 | | — | | 2,950 | |
Net loss | | $ | (26,211 | ) | $ | (12,706 | ) | $ | (60,707 | ) | $ | (29,125 | ) |
Net loss per share: | | | | | | | | | |
Basic and diluted | | $ | (1.72 | ) | $ | (0.85 | ) | $ | (4.00 | ) | $ | (1.96 | ) |
Weighted-average number of shares used in computing basic and diluted net loss per share | | 15,235 | | 14,920 | | 15,193 | | 14,887 | |
