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Progenics Pharmaceuticals Announces Business Update And Third Quarter 2019 Financial Results

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  • Lantheus Holdings, Inc. to Acquire Progenics to Form an Innovative Commercial Life Sciences Company with a Diversified Portfolio of Precision Diagnostics and Radiopharmaceutical Therapeutics
  • AZEDRA Commercial Dosing Progresses in U.S. as New Technology Add-On Payment Became Effective October 1st; Ex-U.S. Managed Access Program for Patients Has Been Initiated
  • Discussions with FDA Continue Regarding Life Cycle Management Trial to Support the Expanded Label for AZEDRA
  • Topline Data from the Phase 3 CONDOR Trial of PyLTM (18F-DCFPyL) Expected by Year End
  • Third Quarter 2019 Revenue of $5.6 Million, including $0.6 Million of AZEDRA sales
  • Progenics will not hold Q3 2019 earnings conference call due to pending transaction with Lantheus

NEW YORK, Nov. 07, 2019 (GLOBE NEWSWIRE) -- Progenics Pharmaceuticals, Inc. (NASDAQ:PGNX) is providing a business update and has today announced financial results for the third quarter 2019.

"We recently entered into a compelling transaction to combine Progenics with Lantheus.  We believe this transaction will accelerate the sales of AZEDRA, optimize our clinical pipeline, generate significant cost synergies, and avoid infrastructure build to create significant long-term shareholder value," stated Mark Baker, CEO. "By leveraging Lantheus' experienced management team, long-standing industry relationships, proven expertise in radiopharmaceutical manufacturing and commercialization, complementary portfolio of innovative products, existing infrastructure and robust resources, we believe we will realize significant value for our shareholders.  This strategic transaction offers Progenics shareholders a 35% ownership stake in the combined company with strong prospects for top line growth without requiring additional financial leverage or equity dilution. We remain focused on continuing to advance our commercial efforts for AZEDRA and supporting the continued development of our portfolio of PSMA-targeted radiopharmaceuticals, including PyL and 1095. This is a pivotal time for Progenics, and the Board and management team will continue to take the steps necessary to ensure the Company is best positioned to drive long-term value for all shareholders."

Third Quarter and Recent Key Business Highlights

Corporate Update

  • Lantheus Holdings, Inc. ("Lantheus") to Acquire Progenics to Form an Innovative Commercial Life Sciences Company with a Diversified Diagnostics and Therapeutics Portfolio 
    In October 2019, we announced the signing of a definitive agreement in which Lantheus will acquire Progenics in an all-stock transaction, offering a significant upside opportunity to the combined shareholders from a diversified, high growth portfolio with the potential for strong, growing profits. The combination of Lantheus and Progenics forms a leader in precision diagnostics and radiopharmaceutical therapeutics. The combined company will have significant product and cost synergies that will diversify and sustain growing revenues and will drive incremental profitability and cash flow.  The combined company will be led by Lantheus Chief Executive Officer, Mary Anne Heino. Ms. Heino will be supported by Chief Financial Officer, Robert J. Marshall Jr., and Chief Operations Officer, John Bolla. Following the closing, Bradley Campbell, currently a member of Progenics' Board of Directors, will be added as a member of the Board of Directors of Lantheus Holdings.

    The transaction is expected to close in the first quarter of 2020, subject to approval by Lantheus and Progenics stockholders, regulatory approvals, and customary closing conditions. Additional details can be found here.

AZEDRA (iobenguane I 131) 555 MBq/mL injection for intravenous use, Ultra-orphan Radiotherapeutic

  • AZEDRA Commercial Dosing Progresses in U.S. as New Technology Add-On Payment Became Effective October 1st; Ex-U.S. Managed Access Program for Patients Has Been Initiated 
    AZEDRA is the first and only approved therapy in the U.S. for the treatment of adult and pediatric patients 12 years and older with iobenguane scan positive, unresectable, locally advanced or metastatic pheochromocytoma or paraganglioma who require systemic anticancer therapy. Third quarter sales of AZEDRA totaled $0.6 million (first therapeutic doses for three new patients and a second therapeutic dose for one patient who previously received a first dose).  Sales of therapeutic doses of AZEDRA doubled over the preceding second quarter, and we expect them to double again in the fourth quarter. As a result, our guidance for 2019 AZEDRA sales is approximately $2.0 million.  The AZEDRA Managed Access program for appropriate commercial patients in need of the therapy outside the U.S. was initiated which will provide additional access to AZEDRA.

  • Life Cycle Management Trial to Support Expanded Label 
    We recently received comments and are currently in discussions with the U.S. Food and Drug Administration ("FDA") on our proposed life cycle management study to evaluate AZEDRA in patients with other neuroendocrine tumors (NETs). The proposed study is on clinical hold until we reach agreement with the FDA.  Assuming we can reach agreement with the FDA on an amended study, or possibly studies design, we intend to commence them next year.

  • Expansion of Iodine Manufacturing Capacity Continues to Support Expected Increase in Demand for AZEDRA and 1095
    We are continuing our plans to expand manufacturing capacity for our iodine-based products and to provide redundancy. We are increasing the capacity of our Somerset, New Jersey manufacturing site by adding a second shift to increase to two batches a week from the current one batch a week schedule. We are also planning to build out the two additional existing manufacturing suites at the site to make them suitable for iodine manufacturing.  Currently at Somerset, we are capable of producing one batch per week (two to three therapeutic doses).  The second shift will double our capacity commencing in the second quarter of 2020.  We expect additional iodine manufacturing capability to become available from contract manufacturing partners starting in the second quarter of 2020.

PSMA-Targeted Prostate Cancer Pipeline

  • Topline Data from Phase 3 Trial of PyL (18F-DCFPyL) Expected by Year End
    The Phase 3 CONDOR trial is a multi-center, open label trial that enrolled 208 male patients with biochemical recurrence of prostate cancer at 14 sites in the U.S. and Canada. Topline PyL data is expected by the end of the year. Based on prior discussions with the FDA, Progenics believes that positive data from the CONDOR study and the previously reported OSPREY study could serve as the basis for a New Drug Application for PyL. We currently estimate that the NDA for PyL will be submitted to the FDA in July 2020.

  • Patient Dosing in Phase 2 Trial of 1095 Ongoing 
    The Company continues to dose patients in the ongoing 120-patient open-label Phase 2 trial of 1095 in combination with enzalutamide in chemotherapy-naïve patients with metastatic castration-resistant prostate cancer (mCRPC) who are PSMA avid by PyL imaging. 1095 is a small molecule radiotherapeutic designed to selectively bind to the extracellular domain of prostate specific membrane antigen (PSMA), a protein that is highly expressed on prostate cancer cells. Currently patients are being dosed at Canadian sites using 1095 produced by our contract manufacturing organization, CPDC.  CPDC has not been allowed to ship drug to the U.S. under an import alert.  Following lifting of the import ban by the FDA, Progenics will submit a request to utilize the CPDC drug at U.S. sites.  We expect that review of our request will be completed by the end of 2019, and initiation of dosing at U.S. clinical sites is expected to begin in the first quarter of 2020.

RELISTOR, Treatment for Opioid-Induced Constipation (partnered with Bausch Health Companies Inc.)

  • Third Quarter 2019 World-Wide RELISTOR Net Sales of $32.7 Million
    The third quarter 2019 world-wide net sales of RELISTOR, as reported by its partner Bausch Health Companies, Inc., translated to $4.9 million in royalty revenue for Progenics for the quarter compared to $5.2 million for the third quarter of 2018. 2019 year to date U.S. sales of RELISTOR are $82.8 million compared to $76.2 million for the same period in 2018.

Third Quarter 2019 Financial Results

Third quarter revenue totaled $5.6 million, up from $5.3 million in the third quarter of 2018.

Third quarter research and development expenses increased by $3.3 million compared to the corresponding prior year period, primarily resulting from higher costs associated with the 1095 clinical trial, the transition of the Somerset manufacturing site, and initiatives to increase production capacity and provide redundancy for iodine-based products, AZEDRA and 1095. Third quarter selling, general and administrative expenses increased by $4.4 million compared to the corresponding prior year period, primarily due to increases in legal and advisory fees associated with the acquisition agreement with Lantheus and the contested election at our 2019 annual meeting of shareholders and the ongoing consent solicitation campaign. Progenics also recorded non-cash adjustments of $0.5 million in the third quarter of 2019, related to changes in the fair value estimate of the contingent consideration liability. For the three months ended September 30, 2019, Progenics recognized interest expense of $1.0 million related to the RELISTOR royalty-backed loan.

Net loss for the third quarter was $18.8 million, or $0.22 per diluted share, compared to net loss of $24.4 million, or $0.30 per diluted share, in the corresponding 2018 period.

Progenics ended the third quarter with cash and cash equivalents of $64.5 million, a decrease of $73.2 million compared to cash and cash equivalents as of December 31, 2018, reflecting primarily cash used for operating expenses and for the acquisition of the Somerset manufacturing site for AZEDRA, as well as for the capital expenditures to increase production capacity to satisfy increasing expected demand and provide redundancy for iodine-based products.

– Financial Tables Follow –




PROGENICS PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
     
  For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
    2019       2018     2019     2018  
Revenues:   (unaudited)  
AZEDRA product sales $ 570     $ -   $ 840   $ -  
Royalty income   4,912       5,169     12,666     11,757  
License and other revenue   131       148     6,354     627  
Total revenues   5,613       5,317     19,860     12,384  
                         
Operating expenses:                        
Cost of goods sold   1,317       -     1,810     -  
Research and development   11,439       8,090     36,911     25,547  
Selling, general and administrative   11,473       7,075     35,267     21,341  
Intangible impairment charge   -       23,200     -     23,200  
Change in contingent consideration liability   (500 )     (8,000 )   1,316     (5,900 )
Total operating expenses   23,729       30,365     75,304     64,188  
         
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