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Zogenix Provides Corporate Update and Reports First Quarter 2017 Financial Results

Completed Enrollment of Study 1, First Phase 3 Clinical Trial of ZX008 in Dravet Syndrome; 

Top-Line Results Expected in Third Quarter 2017

IND Accepted by FDA for Phase 3 Clinical Trial of ZX008 in Lennox Gastaut Syndrome

Company will host a conference call today at 4:30 p.m. EDT/1:30 p.m. PDT

EMERYVILLE, Calif., May 04, 2017 (GLOBE NEWSWIRE) -- Zogenix, Inc. (NASDAQ:ZGNX), a pharmaceutical company developing therapies for the treatment of orphan and central nervous system (CNS) disorders, today provided a corporate update and announced financial results for the first quarter ended March 31, 2017.

“Zogenix has a clear development pathway to regulatory submissions for ZX008 in the U.S. and Europe in Dravet syndrome,” said Stephen J. Farr, Ph.D., President and CEO of Zogenix.  “With enrollment now complete in Study 1, our first Phase 3 trial, we look forward to the availability of top-line data in the third quarter of this year.  We believe ZX008 has the potential to transform the lives of children and their families with Dravet syndrome.  Beyond this indication, following the acceptance of our Investigational New Drug Application (IND) by the U.S. Food and Drug Administration (FDA), we are pleased to be in a position to initiate our Phase 3 clinical trial for ZX008 in Lennox Gastaut Syndrome (LGS) after we have the top-line data from Study 1.”

Corporate Update

  • Completed enrollment of Study 1 in the Phase 3 program of ZX008 in Dravet syndrome; top-line safety and efficacy results expected in the third quarter of 2017
  • Continued enrollment in Phase 3 Study 1504 for ZX008 in patients with Dravet syndrome on background therapy, including stiripentol
  • Issued three additional U.S. patents related to ZX008 method of use in Dravet syndrome
  • IND accepted by FDA to commence Phase 3 clinical trial of ZX008 in LGS; Phase 3 trial expected to begin in the second half of 2017, following the availability of top-line data from Study 1 in Dravet syndrome
  • Completed first quarter ended March 31, 2017, with $80.1 million in cash and cash equivalents

First Quarter 2017 Financial Results Compared to First Quarter 2016

  • Total revenue for the first quarter ended March 31, 2017, was $2.7 million, consisting entirely of contract manufacturing revenue. This compared with total revenue of $9.2 million in the first quarter ended March 31, 2016, also consisting entirely of contract manufacturing revenue.  The decrease in contract manufacturing revenue in the first quarter of 2017 was due to a decrease in the number of Sumavel DosePro units delivered to Endo International.
  • Research and development expenses for the first quarter ended March 31, 2017 totaled $13.3 million, up from $8.0 million in the first quarter ended March 31, 2016, as the Company progressed enrollment and expanded the scope of its Phase 3 clinical trials for ZX008 in Dravet syndrome.
  • Selling, general and administrative expenses for the first quarter ended March 31, 2017 totaled $6.6 million, compared with $6.1 million in the first quarter ended March 31, 2016.
  • Net loss from continuing operations for the first quarter ended March 31, 2017 was $21.1 million, compared with $10.2 million in the first quarter ended March 31, 2016.
  • Net loss from discontinued operations for the first quarter ended March 31, 2017 was $0.2 million, compared with $0.2 million in the first quarter ended March 31, 2016.
  • Total net loss for the first quarter ended March 31, 2017 was $21.3 million, or $0.86 per share, compared with a net loss of $10.4 million, or $0.42 per share, in the first quarter ended March 31, 2016.
  • At March 31, 2017, the Company had cash and cash equivalents of $80.1 million.  The Company believes that it has sufficient funds to support operations into the first half of 2018.
   
Conference Call Details
 
Thursday, May 4th @ 4:30 PM Eastern Time/1:30 PM Pacific Time
Toll Free:    888-287-5516
International:   719-325-2436
Conference ID:     2588025
Webcast:   http://public.viavid.com/index.php?id=123895
     
Replays, available through May 18, 2017:
Domestic:    844-512-2921
International:   412-317-6671
Replay PIN:   2588025
     

About Zogenix

Zogenix, Inc. (Nasdaq:ZGNX) is a pharmaceutical company committed to developing and commercializing CNS therapies that address specific clinical needs for people living with orphan and other CNS disorders who need innovative treatment alternatives to improve their daily functioning.
For more information, visit www.zogenix.com.

Forward Looking Statements

Zogenix cautions you that statements included in this press release that are not a description of historical facts are forward-looking statements. Words such as "believes," "anticipates," "plans," "expects," "indicates," "will," "intends," "potential," "suggests," "assuming," "designed" and similar expressions are intended to identify forward-looking statements. These statements are based on the Company's current beliefs and expectations. These forward-looking statements include statements regarding ZX008’s potential as a treatment for seizures associated with Dravet syndrome; the enrollment of patients in the on-going Phase 3 clinical trials for ZX008; the timing of top line results for the on-going Phase 3 clinical trials (including Study 1); any IND submission and commencement of a Phase 3 clinical trial in LGS; and the commercial potential of ZX008. The inclusion of forward-looking statements should not be regarded as a representation by Zogenix that any of its plans will be achieved. Actual results may differ from those set forth in this release due to the risks and uncertainties inherent in Zogenix's business, including, without limitation: the uncertainties associated with the clinical development and regulatory approval of product candidates such as ZX008, including potential delays in the commencement, enrollment and completion of clinical trials; the potential that earlier clinical trials and studies may not be predictive of future results; top-line data from Study 1 may not support our NDA for ZX008 in Dravet syndrome; negative top-line data from Study 1 may delay or prevent commencement of the Phase 3 clinical trial in LGS; Zogenix's reliance on third parties to conduct its clinical trials, enroll patients, manufacture its preclinical and clinical drug supplies and manufacture commercial supplies of its drug products, if approved; unexpected adverse side effects or inadequate therapeutic efficacy of ZX008 that could limit approval and/or commercialization, or that could result in recalls or product liability claims; Zogenix's ability to fully comply with numerous federal, state and local laws and regulatory requirements, as well as rules and regulations outside the United States, that apply to its product development activities; Fast Track designation may not result in an expedited regulatory review process; and other risks described in Zogenix's prior press releases as well as in public periodic filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and Zogenix undertakes no obligation to revise or update this press release to reflect events or circumstances after the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement. This caution is made under the safe harbor provisions of Section 21E of the Private Securities Litigation Reform Act of 1995. 

 
Zogenix, Inc.
Condensed Consolidated Statements of Operations
(In Thousands, except Per Share Amounts)
(Unaudited)
 
  Three Months Ended March 31,
  2017   2016
       
Contract manufacturing revenue $ 2,696     $ 9,206  
Costs and expenses:      
Cost of contract manufacturing 2,487     7,804  
Royalty expense     71  
Research and development 13,341     7,987  
Selling, general and administrative 6,554     6,124  
Impairment charges 813      
Change in fair value of contingent consideration 600     1,300  
  Total costs and expenses 23,795     23,286  
Loss from operations (21,099 )   (14,080 )
Other income (expense):      
Interest expense, net (577 )   (598 )
Change in fair value of common stock warrant liabilities 587     4,527  
Other expense (20 )   (7 )
  Total other (expense) income (10 )   3,922  
Loss from continuing operations before income taxes (21,109 )   (10,158 )
Income tax expense (17 )   (62 )
Net loss from continuing operations (21,126 )   (10,220 )
Net loss from discontinued operations (181 )   (169 )
Net loss $ (21,307 )   $ (10,389 )
Net loss per share, basic and diluted:      
Continuing operations $ (0.85 )   $ (0.41 )
Discontinued operations $ (0.01 )   $ (0.01 )
  Total $ (0.86 )   $ (0.42 )
       
Weighted average shares outstanding, basic and diluted 24,813     24,722  


 
Zogenix, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In Thousands)
 
  March 31,
 2017
  December 31,
 2016
Assets      
Current assets:      
Cash and cash equivalents $ 80,108     $ 91,551  
Trade accounts receivable, net 1,027     12,577  
Inventory 9,099     7,047  
Prepaid expenses and other current assets 8,584     8,739  
Total current assets 98,818     119,914  
Property and equipment, net 710     1,710  
Intangible assets 102,500     102,500  
Goodwill 6,234     6,234  
Other assets 1,076     1,147  
Total assets $ 209,338     $ 231,505  
Liabilities and stockholders’ equity      
Current liabilities:      
Accounts payable $ 2,625     $ 4,549  
Accrued expenses 7,427     6,374  
Accrued compensation 1,941     3,652  
Common stock warrant liabilities 222     809  
Working capital advance note payable, net of discount 3,385     3,267  
Current portion of long-term debt 1,333      
Deferred revenue 972     1,245  
Current liabilities of discontinued operations 439     414  
Total current liabilities 18,344     20,310  
Long term debt 17,625     18,824  
Contingent consideration 53,400     52,800  
Deferred income taxes 17,425     17,425  
Other long-term liabilities 1,422     1,390  
Stockholders’ equity:      
Common stock 25     25  
Additional paid-in capital 567,627     565,954  
Accumulated deficit (466,530 )   (445,223 )
Total stockholders’ equity 101,122     120,756  
Total liabilities and stockholders’ equity $ 209,338     $ 231,505  


CONTACT:
Investors:
Andrew McDonald
Founding Partner, LifeSci Advisors LLC
646-597-6987 | Andrew@lifesciadvisors.com

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Zogenix, Inc.