Exhibit 99.1
(AVANIR PHARMACEUTICALS LOGO)
NEWS RELEASE
FOR IMMEDIATE RELEASE
Contacts: At Avanir Pharmaceuticals:
Patrice Saxon, Investor Relations
858-622-5202
psaxon@avanir.com
AVANIR PHARMACEUTICALS REPORTS
FOURTH QUARTER AND FISCAL 2003 YEAR END RESULTS
San Diego, December 16, 2003 -- Avanir Pharmaceuticals (AMEX: AVN) today
reported a net loss for the fourth quarter of fiscal 2003 of $7.0 million, or
$0.11 per share, compared to a net loss of $4.4 million, or $0.08 per share for
the same period a year ago. Contributing to the current period loss were lower
revenues, the Company's expenditures related to ongoing clinical development
programs, and medical education and awareness programs associated with
pseudobulbar affect (PBA), also known as emotional lability.
Research and development (R&D) expenses for the fourth quarter of fiscal
2003 amounted to $5.6 million, compared to $4.0 million for the same period a
year ago. The Company continued working on the following clinical trials and
studies during the fourth fiscal quarter:
- A Phase III clinical trial of Neurodex(TM) for the treatment of
PBA in patients with multiple sclerosis;
- An open-label study of Neurodex in the treatment of PBA in a diverse
population of patients with neurologic disorders;
- A Phase I clinical trial of AVP-13358 for the treatment of allergy
and asthma; and
- Preclinical research on potential treatments for inflammatory
diseases, cholesterol reduction and infectious disease.
Expenditures on R&D programs accounted for 72% of total operating expenses for
the fourth quarter of fiscal 2003, compared to 70% of total operating expenses
for the same period a year ago.
Revenues for the fourth fiscal quarter ended September 30, 2003 were
$600,000, compared to $1.2 million for the same period a year ago. Revenues for
the current period included $402,000 that the Company recognized from the sale
of Abreva(R) royalty rights to Drug Royalty USA, based on actual Abreva
royalties of $1.0 million that were due Drug Royalty USA by GlaxoSmithKline. In
fiscal 2003, Avanir sold an undivided interest in its Abreva license agreement
to Drug Royalty USA for $24.1 million and recorded the amount as deferred
revenue, to be recognized ratably as revenue over approximately the 11 years
remaining under the license agreement. Avanir also earned $193,000 from
government research grants. Revenues for the same period a year ago included
primarily $879,000 in Abreva royalties earned and paid directly to Avanir by
GlaxoSmithKline and $132,000 in government research grants.
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FISCAL YEAR RESULTS
The net loss attributable to common shareholders in fiscal 2003 amounted
to $23.3 million, or $0.39 per share, compared to $10.3 million, or $0.18 per
share for the same period a year ago. Contributing to the loss were higher R&D
program costs and lower revenues from milestones in license agreements.
Operating expenses for fiscal 2003 amounted to $25.9 million, compared to
$19.5 million in fiscal 2002. The 33% increase in operating expenses was
primarily due to a 36% increase in R&D expenses. Total R&D expenses in fiscal
2003 amounted to $18.6 million, compared to $13.6 million for the same period a
year ago. A breakdown of major R&D spending for fiscal 2003 and fiscal 2002 is
as follows:
R&D PROJECT EXPENSE
---------------------------------------
FISCAL 2003 FISCAL 2002
----------------- ----------------
AMOUNT PERCENT AMOUNT PERCENT
------ ------- ------ ------
(MILS.) (MILS.)
Develop Neurodex for the treatment of PBA $ 5.1 27.4% $ 3.0 22.1%
Develop Neurodex for neuropathic pain ... 2.1 11.3% 1.3 9.5%
Develop AVP-13358 as a treatment for
allergy and asthma ...................... 4.7 25.3% 4.8 35.3%
Research on regulating the target MIF
as a potential treatment for inflammatory
diseases ................................ 2.2 11.8% 1.3 9.5%
Government-funded projects .............. 0.8 4.3% 0.2 1.5%
Other research focused primarily on
lowering cholesterol and treating
infectious diseases ..................... 3.7 19.9% 3.0 22.1%
----- ----- ----- -----
Total ............................... $18.6 100.0% $13.6 100.0%
===== ===== ===== =====
Sales and marketing costs increased by $1.0 million, reflecting the higher costs
associated with medical education and patient-physician awareness programs
associated with the treatment of PBA.
Revenues for fiscal 2003 were $2.4 million, compared to $8.9 million in
fiscal 2002. Revenues for fiscal 2003 included $1.8 million in revenues that the
Company recognized from the sale of Abreva(R) royalty rights to Drug Royalty
USA and $587,000 from government research grants. Fiscal 2002 revenues included
a final $5.0 million milestone payment from GlaxoSmithKline on reaching the
one-year anniversary of Abreva product launch and $3.4 million in Abreva
royalties.
BALANCE SHEET HIGHLIGHTS
As of September 30, 2003, Avanir had cash, short and long-term investments
in securities and restricted investments totaling $17.5 million, compared to
$13.2 million as of September 30, 2002. Net working capital was $10.6 million,
deferred revenue was $22.7 million and shareholders' equity was $1.0 million as
of September 30, 2003. On December 5, 2003, the Company raised $8.0 million in a
private placement financing, which is not reflected in the 4th quarter and
fiscal year end results.
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ANNUAL MEETING
The 2004 Annual Meeting of Shareholders of Avanir Pharmaceuticals will be
held on March 18th, 2004 at 10:00 a.m. at the Company's Conference Center,
located at 11404 Sorrento Valley Road, San Diego, California. All shareholders
are cordially invited to attend the meeting.
CONFERENCE CALL AND WEBCAST
Management will host a conference call with a simultaneous webcast today
at 1:30 p.m. Pacific/ 4:30 p.m. Eastern to discuss fourth fiscal quarter and
fiscal year 2003 operating performance. The call/webcast will feature President
and Chief Executive Officer Gerald J. Yakatan, Ph.D., and Vice President and
Chief Financial Officer Gregory P. Hanson, CMA. The webcast will be available
live via the Internet by accessing Avanir's web site at www.avanir.com or CCBN's
www.companyboardroom.com. Please go to either web site at least ten minutes
early to register, download and install any necessary audio software. Replays of
the webcast will be available for 90 days, or a phone replay will be available
through December 23, 2003, by dialing (888) 266-2086 and entering the passcode #
351134.
THE COMPANY
Avanir Pharmaceuticals, based in San Diego, is a drug discovery and
development company focused on the development of treatments for central nervous
system disorders and inflammatory diseases. The Company's lead product
candidate, Neurodex(TM), is in Phase III clinical development for pseudobulbar
affect, also known as emotional lability. Neurodex is also in Phase II clinical
development for neuropathic pain. An internally developed small molecule,
AVP-13358, is in a Phase I clinical trial for the treatment of allergy and
asthma. Using its proprietary Xenerex(TM) technology, Avanir also develops human
monoclonal antibodies for infectious diseases and other therapeutic
applications. The Company's first commercialized product, Abreva(R), is
marketed in North America by GlaxoSmithKline and is the leading over-the-counter
product for the treatment of cold sores.
Except for the historical information presented herein, matters discussed in
this press release contain forward-looking statements that are subject to
certain risks and uncertainties that could cause actual results to differ
materially from any future results, performance or achievements expressed or
implied by such statements. Statements that are not historical facts, including
statements that are preceded by, followed by, or that include such words like
"estimate," "anticipate," "believe," "intend," "plan," or "expect" or similar
statements are forward-looking statements. In regard to financial projections,
risks and uncertainties include risks associated with milestones and royalties
earned from licensees, and results of clinical trials or product development
efforts, as well as risks shown in the Company's Annual Report on Form 10-K and
from time-to-time in other publicly available information regarding the Company.
Copies of such information are available from Avanir upon request. Such publicly
available information sets forth many risks and uncertainties related to
Avanir's business and technology. The company disclaims any intent or obligation
to update these forward-looking statements.
- Tables to follow -
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AVANIR PHARMACEUTICALS
SUMMARY FINANCIAL INFORMATION
Quarters Ended September 30, Years Ended September 30,
------------------------------- -------------------------------
Statement of operations data: 2003 2002 2003 2002
------------ ------------ ------------ ------------
Revenues $ 599,762 $ 1,165,809 $ 2,438,733 $ 8,853,742
------------ ------------ ------------ ------------
Expenses
Research and development 5,562,255 3,971,191 18,558,017 13,602,484
General and administrative 1,259,026 1,124,030 4,736,791 4,243,829
Sales and marketing 862,387 567,134 2,621,320 1,640,812
Cost of sales -- -- 3,102 4,731
------------ ------------ ------------ ------------
Total operating expenses 7,683,668 5,662,355 25,919,230 19,491,856
------------ ------------ ------------ ------------
Loss from operations (7,083,906) (4,496,546) (23,480,497) (10,638,114)
Interest income 63,349 143,929 265,874 663,588
Other income 6,882 33,917 26,801 129,514
Interest expense (10,479) (13,843) (44,927) (60,560)
------------ ------------ ------------ ------------
Loss before income taxes (7,024,154) (4,332,543) (23,232,749) (9,905,572)
Income tax benefit (provision) 33,167 (87,625) (3,599) (343,940)
------------ ------------ ------------ ------------
Net loss $ (6,990,987) $ (4,420,168) $(23,236,348) $(10,249,512)
============ ============ ============ ============
Net loss attributable to
common shareholders $ (6,990,987) $ (4,431,027) $(23,264,293) $(10,292,798)
============ ============ ============ ============
Net loss per share
Basic and diluted $ (0.11) $ (0.08) $ (0.39) $ (0.18)
============ ============ ============ ============
Weighted average number of
common shares:
Basic and diluted 64,147,835 58,284,033 59,896,135 58,206,969
============ ============ ============ ============
September 30, 2003 September 30, 2002
------------------ ------------------
Balance sheet data:
Cash and cash equivalents $12,198,408 $ 8,630,547
Short-term, long-term and restricted investments in
securities 5,258,881 4,538,460
----------- -----------
Total cash and investments in securities $17,457,289 $13,169,007
Net working capital $10,619,216 $ 5,918,083
Total assets $29,645,257 $20,332,929
Deferred revenue $22,742,641 $ 233,333
Total liabilities $28,608,026 $ 5,752,259
Convertible preferred stock $ -- $ 521,189
Shareholders' equity $ 1,037,231 $14,059,481
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