POZEN Monetizes Its Treximet Royalty Stream for $75 Million
Expects to End 2011 with >$110 Million in Cash and No Debt
CHAPEL HILL, N.C.--(BUSINESS WIRE)--Nov 28, 2011 - POZEN Inc. (NASDAQ: POZN), a pharmaceutical company committed to transforming medicine that transforms lives, announced today that it has sold most of the future royalty and milestone payments under its collaboration and license agreement with Glaxo Group Limited, part of the GlaxoSmithKline group of companies (GSK), covering Treximet® (sumatriptan/naproxen sodium) sales in the United States to a financial investor for $75 million. By virtue of the agreement, the financial investor will be entitled to receive royalties on net sales of Treximet and any other products containing sumatriptan and naproxen sodium developed and sold by GSK under the collaboration and license agreement in the United States on or after October 1, 2011. POZEN retains rights to 20% of royalties paid on net sales of Treximet and such other products in the United States, beginning in the second quarter of 2018. This agreement has no effect on any future royalties from MT400 that might originate from sales of the product outside of the United States.
“Monetizing this portion of the U.S. Treximet royalty unlocks its inherent value and significantly improves our balance sheet without dilution of existing shareholders. This enables us to negotiate with potential partners for PA32540 from a much stronger position and to continue to execute our strategic plan,” said Dr. John R. Plachetka, Chairman, President and Chief Executive Officer. “With the completion of this transaction, we now expect to end 2011 with greater than $110 million, or approximately $3.67 per share, in cash, cash equivalents and short-term investments.”
Morgan Stanley & Co. LLC acted as financial advisor to POZEN in connection with this transaction.
We will record the $75 million purchase price, less transaction costs, as revenue in the fourth quarter of 2011. Therefore, we are revising our earlier estimated full year 2011 revenue to be in the range of $86-$87 million. We are now estimating full year 2011 operating expenses to be in the range of $45-$47 million and estimating a full year after-tax net income of $39.5-$41.5 million. Based upon our current 2012 plan, which includes filing the NDA for PA32540, we also expect to have cash and short-term investments of >$85 million at the end of 2012, before recording any cash that may be realized from a partnership arrangement on PA32540 or other pipeline assets.
POZEN Inc. is a progressive pharmaceutical company that is transforming how the healthcare industry addresses unmet medical needs. By utilizing a unique in-source model and focusing on integrated therapies, POZEN has successfully developed and obtained FDA approval of two self-invented products in two years. Funded by these two milestone/royalty streams, POZEN is now creating a portfolio of cost-effective, evidence based integrated aspirin therapies designed to enable the full power of aspirin by reducing its GI damage.
The Company's common stock is traded under the symbol “POZN” on the NASDAQ Global Market. For more detailed company information, including copies of this and other press releases, please visit www.pozen.com.
Treximet was approved by the U.S. Food and Drug Administration (FDA) in April 2008 for the acute treatment of migraine attacks, with or without aura, in adults. The product is formulated with POZEN's patented technology of combining a triptan with a non-steroidal anti-inflammatory drug (NSAID) and GlaxoSmithKline's (GSK) RT Technology™. This migraine medication contains sumatriptan, a 5-HT1 receptor agonist that mediates vasoconstriction of the human basilar artery and vasculature of human dura mater, which correlates with the relief of migraine headache. It also contains naproxen, an NSAID that inhibits the synthesis of inflammatory mediators. Therefore, sumatriptan and naproxen contribute to the relief of migraine through pharmacologically different mechanisms of action. As a result of this dual mechanism of action, Treximet has been shown to provide superior sustained pain relief compared to placebo and to both of the single mechanism of action components.
For Full Prescribing Information see www.treximet.com.
Statements included in this press release that are not historical in nature are “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. You should be aware that our actual results could differ materially from those contained in the forward-looking statements, which are based on current market data and research (including third party and POZEN sponsored market studies and reports), management's current expectations and are subject to a number of risks and uncertainties, including, but not limited to, our failure to successfully commercialize our product candidates; costs and delays in the development and/or FDA approval of our product candidates, including as a result of the need to conduct additional studies, or the failure to obtain such approval of our product candidates, including as a result of changes in regulatory standards or the regulatory environment during the development period of any of our product candidates; uncertainties in clinical trial results or the timing of such trials, resulting in, among other things, an extension in the period over which we recognize deferred revenue or our failure to achieve milestones that would have provided us with revenue; our inability to maintain or enter into, and the risks resulting from our dependence upon, collaboration or contractual arrangements necessary for the development, manufacture, commercialization, marketing, sales and distribution of any products, including our dependence on AstraZeneca for the sales and marketing of VIMOVO™; competitive factors; our inability to protect our patents or proprietary rights and obtain necessary rights to third party patents and intellectual property to operate our business; our inability to operate our business without infringing the patents and proprietary rights of others; general economic conditions; the failure of any products to gain market acceptance; our inability to obtain any additional required financing; technological changes; government regulation; changes in industry practice; and one-time events, including those discussed herein and in our Quarterly Report on Form 10-Q for the period ended September 30, 2011. We do not intend to update any of these factors or to publicly announce the results of any revisions to these forward-looking statements.
Contact: POZEN Inc.
Bill Hodges, 919-913-1030
Chief Financial Officer
Stephanie Bonestell, 919-913-1030
Manager, Investor Relations & Public Relations
Posted: November 2011