Q2 Domestic PDT revenues up 24% year over year; Kerastick margins
reach a record high of 85% WILMINGTON, Mass., Aug. 11
/PRNewswire-FirstCall/ -- DUSA Pharmaceuticals, Inc. (NASDAQ GM:
DUSA), a dermatology company that is developing and marketing
Levulan Photodynamic Therapy (PDT) and other products focused on
patients with common skin conditions, reported today its corporate
highlights and financial results for the second quarter ended June
30, 2009. (Logo:
http://www.newscom.com/cgi-bin/prnh/20090810/DC59366LOGO) Financial
highlights for the second quarter and first half of the year
include: -- Domestic PDT revenues totaled $6.1 million for the
second quarter of 2009, representing a $1.2 million, or 24%,
improvement as compared to the second quarter of 2008. First half
2009 domestic PDT revenues totaled $12.4 million, representing a
$2.3 million, or 22%, improvement year over year. -- Domestic
Kerastick revenues totaled $5.6 million for the second quarter of
2009, representing a $1.0 million, or 23%, improvement as compared
to the second quarter of 2008. First half 2009 domestic Kerastick
revenues totaled $11.3 million, representing a $2.0 million, or
21%, improvement year over year. -- Domestic BLU-U revenues totaled
$0.5 million for the second quarter of 2009, representing a $0.1
million, or 38%, improvement as compared to the second quarter of
2008. First half 2009 domestic BLU-U revenues totaled $1.1 million,
representing a $0.3 million, or 36%, improvement year over year. --
Kerastick gross margins for the second quarter of 2009 reached a
record high of 85%. Management Comments: "While overall revenues
were down for the quarter, due to the loss of Nicomide sales,
continued growth in our core PDT business helped to partially
offset the year over year shortfall," stated Robert Doman,
President and CEO. "In the face of a challenging economic
environment, our domestic PDT business experienced strong growth in
the second quarter. Domestic PDT growth was driven by increased
penetration and utilization of our therapy in the medical
dermatology and hospital segments of our business." "We are pleased
to announce another successful BLU-U sales quarter. Despite a
difficult capital equipment market, first half BLU-U unit sales
were up 43% as compared to the prior year," continued Doman. "For
the second half of the year, we expect to see expanded adoption of
our therapy by the marketplace. While we expect that adverse
economic conditions will negatively impact the international
markets and the non-reimbursed cosmetic/medi spa segment of our
business in the U.S., the medical dermatology segment of our
business continues to demonstrate robust growth. We also look
forward to the further advancement of our solid organ transplant
recipients (SOTRs) clinical trial which was initiated in May,"
concluded Doman. Second Quarter 2009 Financial Results: Total
product revenues were $7.0 million in the second quarter of 2009,
down 14% from $8.1 million in the second quarter of 2008. PDT
revenues totaled $6.4 million, up $1.0 million, or 18%, from $5.4
million for the comparable 2008 period. The increase in PDT
revenues was attributable to a 17% increase in Kerastick revenues
and a 38% increase in BLU-U revenues. The Kerastick revenue
increase was driven by an 11% increase in our domestic Kerastick
volume and an overall 14% increase in our average selling price.
Kerastick sales volumes increased to 49,815 in the second quarter
of 2009 from 48,478 units sold in the second quarter of 2008.
Domestic Kerastick sales volumes increased by 4,662 units, or 11%,
and were partially offset by a 3,325 unit decrease in our
international sales volumes. The BLU-U revenue increase was driven
by a 41% increase in sales volume. There were 58 units sold during
the quarter, representing a 17 unit increase over the prior year
quarterly total of 41 units. Non-PDT revenues totaled $0.5 million
versus $2.7 million for the comparable 2008 period. Non-PDT
revenues were adversely impacted by the absence of Nicomide sales
in 2009. In response to discussions with the Food and Drug
Administration (FDA) regarding our marketing of certain products
considered by the FDA to be marketed unapproved drugs, the Company
stopped shipping Nicomide into the wholesale channel in June of
2008. DUSA's net loss on a GAAP basis for the second quarter of
2009 was ($0.9) million, or ($0.04) per common share, compared to a
net loss of ($0.1) million, or ($0.01) per common share, in the
second quarter of 2008. DUSA's non-GAAP net loss for the second
quarter of 2009, after adjustments for stock-based compensation
expense, consideration provided to the former Sirius shareholders,
and the non-cash change in fair value of warrants, was ($0.4)
million, or ($0.02) per common share, compared to a net loss of
($0.2) million, or ($0.01) per common share, in the prior year
period. The increase in our net loss was primarily the result of
the year over year shortfall in our Non-PDT revenues, which was
partially offset by incremental PDT revenues, lower operating costs
due to the absence of spending on our Phase IIb acne clinical trial
which concluded in 2008 and lower promotional expenses associated
with the non-PDT product segment. Please refer to the section
entitled "Use of Non-GAAP Financial Measures" and the accompanying
financial table included at the end of this release for a
reconciliation of GAAP to non-GAAP results for the three and six
month periods ending June 30, 2008 and 2009, respectively. First
Half 2009 Financial Results: Total product revenues for the six
month period ended June 30, 2009 were $14.1 million, down 12% from
$16.0 million in comparable prior year period. PDT revenues totaled
$13.1 million, up $1.9 million, or 17% from $11.3 million for the
comparable 2008 period. The increase in PDT revenues was
attributable to a 15% increase in Kerastick revenues and a 36%
increase in BLU-U revenues. The Kerastick revenue increase was
driven by a 9% increase in our domestic Kerastick volume and an
overall 14% increase in our average selling price. Kerastick sales
volumes increased to 101,762 in the first half of 2009 from 100,588
units sold in the first half of 2008. Domestic Kerastick sales
volumes increased by 8,028 units, or 9%, and were partially offset
by a 6,854 unit decrease in our international sales volumes. The
BLU-U revenue increase was driven by a 43% increase in sales
volume. There were 139 units sold during the first half of 2009,
representing a 42 unit increase over the prior year first half
total of 97 units. Non-PDT revenues totaled $1.0 million versus
$4.8 million for the comparable 2008 period. Non-PDT revenues were
adversely impacted by the absence of Nicomide sales in 2009. DUSA's
net loss on a GAAP basis for the six months ended June 30, 2009 was
($2.5) million or ($0.10) per common share, compared to a net loss
of ($1.4) million or ($0.06) per common share in the first half of
2008. DUSA's non-GAAP net loss, after adjustments for stock-based
compensation expense, consideration provided to the former Sirius
shareholders, and the non-cash change in fair value of warrants,
for the six months ending June 30, 2009 was ($1.7) million, or
($0.07) per common share, in 2009, compared to ($0.9) million, or
($0.04) per common share, in 2008. The increase in our net loss was
primarily the result of the year over year shortfall in our Non-PDT
revenues and the absence of damages payments from River's Edge,
which were partially offset by incremental PDT revenues, lower
operating costs due to the absence of spending on our Phase IIb
acne clinical trial which concluded in 2008, a Prescription Drug
User Fee Act (PDUFA) charge accrued in the prior year period, and
lower promotional expenses associated with the non-PDT product
segment. As of June 30, 2009, total cash, cash equivalents, and
marketable securities were $16.4 million, compared to $18.9 million
at December 31, 2008. Other Updates: -- Clinical Development. -- On
May 11, 2009, the Company announced the initiation of its Phase II
clinical trial that will examine the safety and efficacy of broad
area PDT for the treatment of actinic keratoses and the reduction
of new non-melanoma skin cancer (NMSC) in high risk chronically
immunosuppressed solid organ transplant recipients ("SOTRs"). In
May 2008, we filed an Orphan Drug Designation Application with the
FDA with respect to the prevention of cancer occurrence in these
patients. We recently received correspondence that the application
was not granted on the basis that the agency believes that the
prevalence of the target population with the disease state is
greater than 200,000, which is the maximum number of patients
allowed under the Orphan Drug legislation. The Company has
requested a meeting with the FDA to provide further clarification
on the application and the related target population. -- BLU-U
Claims Expansion. -- In May of 2009, the Company filed a 510(k)
application with the FDA to expand the allowed claims on BLU-U to
include severe acne. The filing was based on the results of our
Phase IIb clinical trial. We received a response to our application
from the FDA in June 2009. The agency has requested additional
information in order to complete its review of our application,
including supplementary clinical data in support of our claims. The
Company has requested a meeting with the FDA to clarify its
position and is currently evaluating its next steps as it relates
to the application. -- Nicomide . -- On April 27, 2009, the Company
announced that it had amended its existing non-exclusive license
agreement with River's Edge, granting them an exclusive license to
the patent that covers Nicomide (U.S. Patent No. 6,979,468) and
associated know-how, as well as a license to use the trademark
associated with the licensed products. DUSA received the first
$200,000 installment payment under the License Amendment during the
three-month period ended June 30, 2009. DUSA has not received
payments which were due on June 1, July 1, and August 1, 2009
respectively. We are evaluating our options to collect the amounts
due from River's Edge under the License Agreement. Revenues Table,
Condensed Consolidated Balance Sheets, Condensed Consolidated
Statement of Operations and GAAP to Non-GAAP reconciliation follow:
Revenues for the three month and six month periods were comprised
of the following: Three-months ended Six-months ended June 30, June
30, ------------------------ ------------------------ 2009 2008
2009 2008 (Unaudited) (Unaudited) (Unaudited) (Unaudited)
------------------------ ------------------------ PDT Drug &
Device Product Revenues Kerastick(R) Product Revenues: United
States $5,621,000 $4,572,000 $11,306,000 $9,346,000 Canada 108,000
218,000 243,000 377,000 Korea 126,000 159,000 296,000 524,000 Other
84,000 133,000 171,000 190,000 ------ ------- ------- -------
Subtotal Kerastick(R) Product Revenues 5,939,000 5,082,000
12,016,000 10,437,000 BLU-U(R) Product Revenues: United States
479,000 347,000 1,121,000 822,000 ------- ------- --------- -------
Subtotal BLU-U(R) Product Revenues 479,000 347,000 1,121,000
822,000 Total PDT Drug & Device Product Revenues 6,418,000
5,429,000 13,137,000 11,259,000 Total Non-PDT Product Revenues
548,000 2,683,000 967,000 4,783,000 ------- --------- -------
--------- TOTAL PRODUCT REVENUES $6,966,000 $8,112,000 $14,104,000
$16,042,000 ========== ========== =========== =========== DUSA
Pharmaceuticals, Inc. Condensed Consolidated Balance Sheets June
30, December 31, 2009 2008 (Unaudited) ----------- -----------
ASSETS CURRENT ASSETS Cash and cash equivalents $3,894,037
$3,880,673 Marketable securities 12,488,406 15,002,830 Accrued
interest receivable 144,523 155,728 Accounts receivable, net
1,550,149 2,367,803 Inventory 2,550,463 2,812,825 Prepaid and other
current assets 1,341,263 1,718,073 --------- --------- TOTAL
CURRENT ASSETS 21,968,841 25,937,932 Restricted cash 174,080
173,844 Property, plant and equipment, net 1,773,485 1,937,978
Deferred charges and other assets 68,099 160,700 ------ -------
TOTAL ASSETS $23,984,505 $28,210,454 =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts
payable $466,984 $305,734 Accrued compensation 497,848 1,515,912
Other accrued expenses 2,423,767 3,226,571 Deferred revenue 717,897
611,602 ------- ------- TOTAL CURRENT LIABILITIES 4,106,496
5,659,819 Deferred revenues 3,633,727 4,157,305 Warrant liability
498,188 436,458 Other liabilities 144,069 244,673 ------- -------
TOTAL LIABILITIES 8,382,480 10,498,255 SHAREHOLDERS' EQUITY Capital
stock 151,683,399 151,663,943 Authorized: 100,000,000 shares;
40,000,000 shares designated as common stock, no par, and
60,000,000 shares issuable in series or classes; and 40,000 junior
Series A preferred shares. Issued and outstanding: 24,108,908 and
24,089,452 shares of common stock, no par, at June 30, 2009 and
December 31, 2008, respectively Additional paid-in capital
7,915,624 7,514,900 Accumulated deficit (144,310,565) (141,850,925)
Accumulated other comprehensive loss 313,567 384,281 TOTAL
SHAREHOLDERS' EQUITY 15,602,025 17,712,199 ---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $23,984,505 $28,210,454
=========== =========== DUSA Pharmaceuticals, Inc. Consolidated
Statement of Operations Three-months ended Six-months ended June
30, June 30, -------------------------- ------------------------
2009 2008 2009 2008 (Unaudited) (Unaudited) (Unaudited) (Unaudited)
--------------------------- ------------------------ Product
revenues $6,965,541 $8,112,239 $14,103,810 $16,041,739 Cost of
product revenues and royalties 1,440,864 1,787,694 3,379,090
3,488,011 --------- --------- --------- --------- Gross margin
5,524,677 6,324,545 10,724,720 12,553,728 Operating costs: Research
and development 1,076,709 1,375,302 2,261,804 3,561,511 Marketing
and sales 3,037,311 3,496,233 6,447,415 6,553,434 General and
administrative 2,340,947 2,325,137 4,482,397 4,692,961 Settlements,
net 75,000 (47,825) 75,000 (283,425) ------ ------- ------ --------
Total operating costs 6,529,967 7,148,847 13,266,616 14,524,481
--------- --------- ---------- ---------- Loss from operations
(1,005,290) (824,302) (2,541,896) (1,970,753) ----------- ---------
----------- ----------- Other income: Gain/(loss) on change in fair
value of warrants 73,183 468,411 (61,730) 123,869 Other income, net
79,398 217,100 143,986 423,952 ------ ------- ------- -------- Net
loss $(852,709) $(138,791) $(2,459,640) $(1,422,932) ==========
========== ============ ============ Basic and diluted net loss per
common share $(0.04) $(0.01) $(0.10) $(0.06) ======= =======
======= ======= Weighted average number of common shares 24,100,874
24,078,610 24,095,149 24,078,514 =========== ========== ==========
========== Use of Non-GAAP Financial Measures In addition to
reporting financial results in accordance with GAAP, DUSA has
provided in the table below non-GAAP financial measures adjusted to
exclude stock-based compensation expense, consideration provided to
the former Sirius shareholders, and the non-cash change in fair
value of warrants. The Company believes that this presentation is
useful to help investors better understand DUSA's financial
performance, competitive position and prospects for the future.
Management believes that these non-GAAP financial measures assist
in providing a more complete understanding of the Company's
underlying operational results and trends, and in allowing for a
more comparable presentation of results. Management uses these
measures along with their corresponding GAAP financial measures to
help manage the Company's business and to help evaluate DUSA's
performance compared to the marketplace. However, the presentation
of non-GAAP financial measures is not meant to be considered in
isolation or as superior to or as a substitute for financial
information provided in accordance with GAAP. The non-GAAP
financial measures used by the Company may be calculated
differently from, and, therefore, may not be comparable to,
similarly titled measures used by other companies. Investors are
encouraged to review the reconciliations of these non-GAAP
financial measures to the comparable GAAP results, contained in the
table below. Three-months ended Six-months ended June 30, June 30,
2009 2008 2009 2008 (Unaudited) (Unaudited) (Unaudited) (Unaudited)
----------- ----------- ----------- ----------- GAAP net loss
$(852,709) $(138,791) $(2,459,640) $(1,422,932) Stock-based
compensation (a) 225,466 357,912 424,593 689,550 Consideration to
former Sirius shareholders (b) 305,000 - 305,000 - Change in fair
value of warrants (c) (73,183) (468,411) 61,730 (123,869) --------
--------- ------- --------- Non-GAAP adjusted net loss $(395,426)
$(249,290) $(1,668,317) $(857,251) ========== ==========
============ ========== Non-GAAP basic and diluted net loss per
common share $(0.02) $(0.01) $(0.07) $(0.04) ======= =======
======= ======= Weighted average number of common shares 24,100,874
24,078,610 24,095,149 24,078,514 ------------------------ (a)
Stock-based compensation expense resulting from the application of
SFAS 123(R). (b) Payment of $100,000 and accrual of $205,000
related to the release, consent and the third amendment to the
merger agreement between DUSA and the former Sirius shareholders.
(c) Non-cash gain/loss on change in fair value of warrants.
Conference Call Details and Dial-in Information In conjunction with
this announcement, DUSA will host a conference call today: Tuesday,
August 11th -- 8:30 a.m. Eastern If calling from the U.S. or Canada
use the following toll-free number: 800.647.4314 Password -- DUSA
For international callers use 502.498.8422 Password -- DUSA A
recorded replay of the call will be available approximately 15
minutes following the call U.S. or Canada callers use 877.863.0350
International callers use 858.244.1268 The call will be accessible
on our Web site approximately four hours following the call at
http://www.dusapharma.com/. About DUSA Pharmaceuticals DUSA
Pharmaceuticals, Inc. is an integrated dermatology pharmaceutical
company focused primarily on the development and marketing of its
Levulan photodynamic therapy (PDT) technology platform, and
complementary dermatology products. Levulan PDT is currently
approved for the treatment of Grade 1 and 2 actinic keratoses of
the face and scalp. DUSA also markets other dermatology products,
including ClindaReach . DUSA is researching the use of Levulan PDT
to prevent AKs and squamous cell carcinomas in immunosuppressed
solid organ transplant recipients and is supporting research
related to oral leukoplakia in collaboration with the National
Institutes of Health (NIH). DUSA is based in Wilmington, Mass.
Please visit our Web site at http://www.dusapharma.com/. Except for
historical information, this news release contains certain
forward-looking statements that represent our current expectations
and beliefs concerning future events, and involve certain known and
unknown risk and uncertainties. These forward-looking statements
relate to expectations for expanded marketplace acceptance of
Levulan PDT, and for the negative impact on certain market
segments, as well as the international markets, intentions for the
SOTR clinical study, and management's beliefs concerning non-GAAP
financial measures. These forward-looking statements are further
qualified by important factors that could cause actual results to
differ materially from future results, performance or achievements
expressed or implied by those in the forward-looking statements
made in this release. These factors include, without limitation,
actions by health regulatory authorities, changing economic
conditions, launch of competitive products, the status of our
patent portfolio, reliance on third parties, sufficient funding,
and other risks and uncertainties identified in DUSA's Form 10-K
for the year ended December 31, 2008.
http://www.newscom.com/cgi-bin/prnh/20090810/DC59366LOGODATASOURCE:
DUSA Pharmaceuticals, Inc. CONTACT: Robert F. Doman, President
& CEO, +1-978-909-2216, or Richard Christopher, VP Finance
& CFO, +1-978-909-2211, both of DUSA Pharmaceuticals, Inc.; or
Chad Rubin, Investor Relations Contact, +1-646-378-2947, for DUSA
Pharmaceuticals, Inc. Web Site: http://www.dusapharma.com/
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