Pozen Revises 2006 Guidance Upon Receipt of $40 M from AstraZeneca
Pozen has received the $40-million initial upfront payment from AstraZeneca through the exclusive global collaboration agreement between the two companies, which was signed in August.
Pozen is thus revising its financial guidance for third quarter and 2006. It expects total revenue to be between $3–$4 million in the third quarter, an increase of $1 million from predictions at the end of the second quarter. Revenue includes $1–$2 million for research under the AstraZeneca agreement. Total operating expenses for the third quarter of 2006 are estimated to be in the range of $7.5–$8.5 million, up from the previous estimated range of $6–$8 million. Expenses include $1.5 million of estimated noncash stock-based compensation expense.
Pozen predicts total revenue for 2006 to be in the range of $14–$16 million, a $2-million increase from end of second quarter financial guidance statements. This includes revenues of $5–$7 million for work performed under the AstraZeneca agreement, up $1 million. Total operating expenses for 2006 are anticipated to be in the range of $36–$38 million, while that range was $33–$36 million at the beginning of August. This includes $6.5 million of estimated noncash stock-based compensation expense. Pozen anticipates its cash balance will be approximately $60 million at the end of 2006.
The agreement between Pozen and AstraZeneca includes the co-development and commercialization of fixed-dose single-tablet combinations of the proton pump inhibitor esomeprazole magnesium with the nonsteroidal anti-inflammatory drug naproxen. These products will be indicated for the management of pain and inflammation associated with conditions such as osteoarthritis and rheumatoid arthritis in patients who are at risk for developing NSAID-associated gastric ulcers.
In addition, Pozen is eligible to receive up to $160 million for certain development and regulatory milestones and $175 million in potential sales performance milestones. Royalties will be paid on net sales on a tiered royalty structure that ranges from mid-single digits to mid-teens.