TAMPA, Fla.--(BUSINESS WIRE)--Accentia Biopharmaceuticals, Inc. (NASDAQ: ABPI; “Accentia”;
“Company”), has
released the results of its operations for the fiscal year ended
September 30, 2006, as reflected in the Company's annual report filed
with the SEC on December 29, 2006. Accentia has two operating segments
consisting of specialty pharmaceuticals (Accentia Pharmaceuticals) and
product development and market services (Analytica International). The
Company also has an approximately 78% interest in Biovest International,
Inc. ("Biovest") (OTCBB:BVTI), which is consolidated for reporting
purposes with Accentia's product development and market services
business. As previously announced, Accentia’s
percentage ownership of Biovest is expected to decline as Biovest
continues to pursue its self-funding activities.
Financial Review:
On a fully consolidated basis, including Biovest, net sales for fiscal
2006 were $25.1 million, compared with $25.2 million in the prior fiscal
year. Consolidated research and development costs were $14.6 million for
the year, an increase of $3.7 million, or 33%, over the same
twelve-month period in 2005. These research costs reflect the ongoing
Phase 3 clinical trials for SinuNase™ and
BiovaxID™.
Accentia's net loss for the year ended September 30, 2006, on a fully
consolidated basis, including Biovest, was $43.4 million, a $1.3 million
decrease, or 3%, from the $44.7 reported for the same twelve-month
period in 2005. Of this loss, $6.4 million, or approximately 15%, was
the result of non-cash charges such as depreciation, amortization of
product rights, stock-based compensation, asset impairments, derivative
gain, and amortization of debt discount.
The fully consolidated loss per share for the year ended September 30,
2006 was $1.56, of which $0.23 per share was the result of non-cash
charges, $0.23 per share was interest expense, and $0.49 per share
reflected losses incurred by Biovest. For the comparable 2005 year, the
fully consolidated loss per share for the year was $9.69, of which $2.60
per share was the result of non-cash charges, $0.37 per share was
interest expense, and $2.23 per share reflected losses incurred by
Biovest. Per share figures are based on 27,890,825 weighted average
shares outstanding for 2006, and 5,147,222 weighted average shares
outstanding for 2005.
On a fully consolidated basis, Accentia's capital resources at the end
of the 2006 fiscal year were approximately $28.7 million, consisting of
cash, restricted cash and availability under lines of credit.
Additionally, at September 30, 2006 Accentia carried an inter-Company
demand note from Biovest in the amount of $4.7 million, which Accentia
anticipates will be repaid by Biovest as it completes additional
financings. As of September 30, 2006, Accentia also owned Biovest common
shares valued in excess of $55 million based on Biovest’s
market price at the close of the fiscal year. As previously announced,
Accentia’s percentage ownership of Biovest is
expected to decline as Biovest continues to pursue its self-funding
activities.
Summary of 2006 Milestones
During fiscal 2006, the Company completed significant milestones,
including:
The commercial launch of MD Turbo™, the
first and only device that transforms more than 90% of dispensed
metered-dose inhalers (MDIs) into a breath-activated, dose-counting
inhaler
Fast Track designation from the FDA for SinuNase, a potential
blockbuster prescription intranasal amphotericin B formulation for
chronic sinusitis
The commencement of a Phase 3 clinical trial for SinuNase
An exclusive worldwide option on all prescription antifungals,
pursuant to the Mayo patents, for chronic sinusitis until December 2007
A worldwide exclusive license to all non-prescription (OTC)
formulations, pursuant to the Mayo patents, for chronic sinusitis
Significant adoption of the non-invasive fungal etiology of chronic
sinusitis and of the treatment by means of intranasal antifungals by
specialists in the U.S.
Commencement of partnership discussions for SinuNase with
Pharmaceutical companies that have existing respiratory franchises,
which includes primary care providers
Through Accentia’s majority-owned subsidiary,
Biovest International, significant advances have been made in the
development of BiovaxID, a personalized biologic therapeutic vaccine for
follicular non-Hodgkin's lymphoma, in particular:
Fast Track status was granted for BiovaxID
Orphan Drug status was granted in the EU
Modification of the secondary endpoints in the current Phase 3
clinical trial to include molecular disease status, potentially
accelerating the difference in remission between BiovaxID and control
in the clinical study
An independent clinical study demonstrated a highly significant
clinical benefit from the use of a BiovaxID formulation in relapsed
non-Hodgkins lymphoma patients
Clinical trial sites were expanded into Eastern Europe and Russia
The commercial launch of AutovaxID™, a
breakthrough automated cell culture device that enables automated
production of personalized cell-based treatments and proteins such as
monoclonal antibodies
Moreover, Accentia pioneered, with the assistance of U.S. Bank, the use
of Federal New Market Tax Credits (NMTC), a $3.5 billion annual program
sponsored by the U.S. Treasury Department, to fund biotechnology,
garnering a total of $20 million in NMTCs for Biovest and its
subsidiaries during 2006. The proceeds of the funds, in part, will be
used to support BiovaxID development in Worcester, MA, and to scale up
Biovest’s new 24,000 sq ft. AutovaxID
manufacturing facility in St. Louis, MO, for the commercial launch of
AutovaxID.
Our Business Strategy Update for 2007
Since our inception, our goal has been to acquire, develop, and
commercialize innovative late-stage biopharmaceutical and medical device
products that offer the potential for superior efficacy and safety, and
that addresses significant unmet medical needs. Both SinuNase and
BiovaxID are good examples of our product strategy.
We evaluate on a continuing basis, and as appropriate, adjust our
business strategy in light of market conditions and other relevant
factors such as available financing, opportunities for strategic
relationships, and changes impacting our current and future products and
product candidates. Our business strategy and objectives as of 2007 can
be summarized as follows:
Conducting Phase 3 clinical trials for SinuNase and BiovaxID:
We intend to conduct our Phase 3 clinical trials for SinuNase and,
through our majority-owned subsidiary, Biovest International Inc,
BiovaxID, and aggressively pursue regulatory approvals for both
products in the U.S. and EU.
Leveraging our broad range of internal capabilities to support our
ongoing development and commercialization efforts:
We believe that our broad range of in-house capabilities provides a
development and commercialization platform on which to bring new
biopharmaceuticals and medical device products to market. In
particular, we have demonstrated competencies in product selection,
licensing, contracting for manufacturing, regulatory approvals in the
U.S. and EU, pricing, reimbursement, contracting with Medicaid,
Medicare part D, and managed care organizations.
After the launch of MD Turbo, the Company reorganized its commercial
sales force to focus on respiratory products. The MD Turbo is used to
improve drug delivery of pressurized metered dose inhalers, which are
the cornerstone of management for asthma patients, and about 60% of
asthma patients have chronic sinusitis. Accordingly, the Company
changed its specialty pharmaceuticals division name to Accentia
Pharmaceuticals, disposed of non-respiratory products, adjusted the
size of its sales force to approximately 45 field representatives, and
focused its efforts on the promotion of its respiratory products with
an emphasis on the ENT and Allergist specialists who treat severe
cases of chronic sinusitis. During the cough cold, and flu season, the
Company focuses on promotion of its RespiTann product line, whereas
the emphasis is on MD Turbo at all other times of the year. The
Company is also promoting the CRSFungal Profile™
laboratory diagnostic to the ENT and Allergist specialists.. CRSFungal
Profile is the only laboratory test available for the diagnosis of
chronic sinusitis and it provides identification of a fungal etiology.
Pursuing strategic relationships on a selective basis for product
development or distribution:
We may from time to time consider entering into strategic
relationships with third-parties in order to facilitate the
development of new products and to market and distribute our approved
and pipeline products. Such strategic relationships could be in the
form of product sale, licensing, distribution arrangements, spin-offs,
co-promotions, or joint ventures. For example, the Company is seeking
a partner for promotion of MD Turbo and, upon approval, of AllerNase
to primary care providers, including pediatricians. At the present
time, we intend to promote SinuNase to ENTs and Allergists in the U.S.
using our own respiratory sales force and to seek co-promotion
partners to address the patient population under the care of primary
care physicians. We intend to seek one or more commercial partners for
international markets. Accordingly, the Company, after consultation
with potential partners, elected to terminate its co-development
agreement with Pharmaceutical Product Development, Inc., reducing the
cumulative royalty on all SinuNase formulations by almost 25%. During
2006, we revised our commercialization agreement with Biovest on
BiovaxID by converting it to a passive royalty of 19.5% on net sales
worldwide, thus enhancing Biovest’s ability
to attract financing and strategic partners.
Identifying and acquiring additional late-stage clinical products,
especially ones that are based on already approved drugs for new
indications and/or new formulations pursuant to issued patents:
We intend to focus on the development and commercialization of already
approved products in new formulations or for new indications pursuant
to issued patents in order to create more clinically and economically
valuable products. These kinds of opportunities often can access the
less costly and less time-consuming 505(b)(2) regulatory pathway,
which allows sponsors to reference prior publications and approvals of
the active pharmaceutical ingredient albeit in different formulations.
SinuNase, as a unique formulation of the approved intravenous generic
antifungal, amphotericin B, is a good example of this strategy. By
focusing on these kinds of product opportunities, Accentia believes
that it can expand its product offerings with less risk, less expense,
and less time than required for new chemical entities (NCEs), which
must use the 505(b)(1)1 regulatory pathway. Accordingly, we intend to
pursue the acquisition of these kinds of additional products that
could increase the value of our development pipeline and complement
our existing products and product candidates. This may consist of
product or technology acquisitions, in-licensing, or company
acquisitions. Although our primary emphasis in acquiring new products
will be in the respiratory and oncology therapeutic areas, including
supportive care, we will consider products in other therapeutic areas
that meet our stringent criteria.
Financing
We intend to use any forthcoming upfront and milestone payments
related to potential commercial partnerships for SinuNase and BiovaxID
in the U.S. and internationally to retire, in part or in whole,
convertible debt and thereby reduce dilution and interest expense.
About Accentia Biopharmaceuticals, Inc.
Accentia Biopharmaceuticals, Inc. is a biopharmaceutical company focused
on the development of late-stage "disruptive" clinical products.
Accentia has a portfolio of currently marketed respiratory products and
a pipeline of products in clinical development. The company's lead
respiratory product candidate is SinuNase(TM), which is under clinical
development to treat chronic sinusitis (rhinosinusitis). SinuNase is a
novel application and formulation of a known anti-fungal exclusively
licensed from the Mayo Foundation for Medical Education and Research.
The product has been Fast Tracked by the FDA and the Company has
commenced a Phase 3 clinical trial. The Company's other lead product is
BiovaxID(TM), a patient-specific anti-cancer vaccine for the treatment
of follicular non-Hodgkin's lymphoma. BiovaxID, which is being developed
by Accentia's subsidiary Biovest International, Inc., (OTCBB:BVTI) is
currently in a Fast-Tracked Phase 3 clinical trial. Additionally, the
Company has a family of respiratory specialty pharmaceutical products,
including MD Turbo(TM), an FDA approved, commercially available product
that transforms over 90% of dispensed metered-dose inhalers into a
breath-activated, dose-counting inhaler. For further information, please
visit www.accentia.net.
About Biovest International, Inc.
Biovest International, Inc. (OTCBB: BVTI.OB) is a pioneer in the
development of advanced individualized immunotherapies for
life-threatening cancers of the blood system. Biovest is a majority
owned subsidiary of Accentia Biopharmaceuticals, Inc. with its remaining
shares publicly traded. Biovest has a foundation in the manufacture of
biologics for research and for clinical trials. In addition, Biovest
develops, manufactures, and markets patented cell culture systems,
including the AutovaxID, which is being developed as an automated
vaccine-manufacturing instrument. Biovest's therapy for follicular
non-Hodgkin's lymphoma, BiovaxID, is currently in a Phase 3 pivotal
clinical trial at over 20 major centers in the U.S. being conducted
under a Cooperative Research and Development Agreement (CRADA) with the
National Cancer Institute. For further information, please visit
Biovest's website: http://www.biovest.com.
Forward-Looking Statements
Statements in this release that are not strictly historical in nature
constitute "forward-looking statements." Such statements include, but
are not limited to, statements about SinuNase, BiovaxID, Autovaxid and
any other statements relating to products, product candidates, product
development programs the FDA or clinical trial process including the
commencement, process or completion of clinical trials or the regulatory
process. Such statements may include, without limitation, statements
with respect to the Company's plans, objectives, expectations and
intentions and other statements identified by words such as "may,"
"could," "would," "should," "believes," "expects," "anticipates,"
"estimates," "intends," "plans" or similar expressions. Such
forward-looking statements involve known and unknown risks,
uncertainties, and other factors that may cause the actual results of
Accentia to be materially different from historical results or from any
results expressed or implied by such forward-looking statements. These
factors include, but are not limited to, risks and uncertainties related
to the progress, timing, cost, and results of clinical trials and
product development programs; difficulties or delays in obtaining
regulatory approval for product candidates; competition from other
pharmaceutical or biotechnology companies; and the additional risks
discussed in filings with the Securities and Exchange Commission. All
forward-looking statements are qualified in their entirety by this
cautionary statement, and Accentia undertakes no obligation to revise or
update this news release to reflect events or circumstances after the
date hereof.
