Zogenix, Inc. (NASDAQ:ZGNX) provided a corporate update and announced financial results for the third quarter ended September 30, 2016.

CORPORATE UPDATE

  • Continued enrollment in the two Phase 3 safety and efficacy clinical trials of ZX008 (low-dose fenfluramine) (Studies 1501 and 1502) in North America, Europe and Australia, with top-line results anticipated in Q2 2017.
  • Company remains on-track for potential regulatory submissions by year-end 2017.
  • Initiated Cohort 1 (pharmacokinetic assessment) in Study 1504, a trial evaluating the pharmacokinetics, efficacy and safety of ZX008 in patients who have responded poorly to a stiripentol regimen. Cohort 2 (efficacy and safety assessment) is expected to begin by the end of this year.
  • Effectiveness and safety results of ZX008 from the ongoing open-label prospective study of patients with Dravet syndrome published in the European Journal of Neurology.  The study demonstrated a robust median reduction in seizures of 75% (range, 28–100%) during the treatment period with no cardiovascular abnormalities. Schoonjans, A. S., Paelinck, B. P., Marchau, F., Gunning, B., Gammaitoni, A., Galer, B. S., Lagae, L. and Ceulemans, B. (2016). Eur J Neurol. doi:10.1111/ene.13195
  • Presented further data at the 12th European Congress on Epileptology related to understanding the burden Dravet syndrome causes for the patient and their family, and also on identifying clinically relevant outcome measures to assess the quality of life impact on Dravet syndrome patients and their caregivers.
  • Multiple abstracts accepted for presentation at the upcoming American Epilepsy Society Annual Meeting (December 2-6, 2016) highlighting new clinical and pre-clinical findings, including an interim analysis of an on-going investigator initiated open-label Phase 2 trial in Lennox Gastaut syndrome.
  • Completed the nine-months ended September 30, 2016, with $109.9 million in cash and cash equivalents. Zogenix expects its cash runway to extend through 2017.

“During the third quarter, we continued to accelerate the clinical development of our lead product, ZX008 for Dravet syndrome,” said Stephen J. Farr, Ph.D., President and CEO. “We are continuing to enroll patients in both Phase 3 trials and intend to report top-line data in the second quarter of 2017.  We look forward to having a significant presence, including the presentation of multiple posters and hosting a Scientific Exhibit Room, at the upcoming American Epilepsy Society Meeting in December.”

Third Quarter 2016 Financial Results Compared to Third Quarter 2015 Financial Results

As a result of the sale of the Zohydro ER business in April 2015, all Zohydro ER revenue and expenses have been excluded from continuing operations for all periods herein and reported as discontinued operations.

  • Total revenue for the third quarter of 2016 was $6.6 million, consisting almost entirely of contract manufacturing revenue. This compared with total revenue of $9.1 million in the same quarter last year, which included $8.9 million of contract manufacturing revenue. The decrease in contract manufacturing revenue in the third quarter of 2016 was due primarily to a decrease in deliveries to Endo International Plc under the supply agreement between the two companies.
  • Third quarter 2016 research and development expenses totaled $10.1 million, up from $7.9 million in the third quarter a year ago, as the Company progressed its two Phase 3 clinical trials for ZX008, continuing enrollment in Study 1501 and Study 1502.
  • Third quarter 2016 selling, general and administrative expenses totaled $6.5 million, compared with$5.7 million in the third quarter a year ago.
  • Net loss from continuing operations for the third quarter of 2016 was $16.6 million, compared with$13.0 million in the third quarter a year ago.
  • Net loss from discontinued operations was $0.4 million for the third quarter of 2016, compared with net loss of $1.6 million in the third quarter a year ago.
  • Total net loss for the third quarter of 2016 was $17.0 million, or $0.69 per share, compared with net loss of $14.6 million, or $0.65 per share, for the third quarter a year ago.

Nine-Months Ended September 30, 2016 Financial Results Compared to Nine-Months Ended September 30, 2015 Financial Results

  • Total revenue for the nine-months ended September 30, 2016 was $17.9 million, consisting almost entirely of contract manufacturing revenue. This compared with total revenue of $21.1 million in the same period last year, which included $19.0 million of contract manufacturing revenue and $2.1 millionof service and other product revenue.
  • Research and development expenses for the nine months ended September 30, 2016 totaled $28.4 million, up from $19.3 million in the year ago period, as the Company enrolled patients into two Phase 3 clinical trials for ZX008.
  • Selling, general and administrative expense for the nine months ended September 30, 2016 totaled$19.5 million, flat as compared to the same period a year ago.
  • Net loss from continuing operations was $45.1 million for the nine months ended September 30, 2016, compared with $29.8 million in the same period a year ago.
  • Net loss from discontinued operations was $1.1 million for the nine months ended September 30, 2016, compared to net income of $64.8 million in the same period a year ago, which included the net gain on the sale of the Zohydro ER business.
  • Total net loss for the nine months ended September 30, 2016 was $46.2 million, or $1.87 per basic share and fully diluted, compared with net income of $35.0 million, or $1.72 per share, for the same period a year ago, which included the net gain on the sale of the Zohydro ER business.
  • Cash and cash equivalents at September 30, 2016 totaled $109.9 million, as compared to $155.3 million at December 31, 2015.

2016 Financial Guidance

Zogenix is updating its financial guidance for the full year 2016.

  • Research and development expenses are now expected to be $42-44 million compared to prior guidance of $54-$59 million, reflecting slower site initiation and ramp-up of ZX008 clinical studies than expected;
  • Selling, general and administrative expenses are unchanged and expected to be $25-27 million; and
  • Contract manufacturing revenue from the supply of Sumavel DosePro to Endo is expected at a low single-digit markup over cost of contract manufacturing. (Original Source)

Shares of Zogenix closed today at $8.55, up $0.25 or 3.01%. ZGNX has a 1-year high of $16.56 and a 1-year low of $7.33. The stock’s 50-day moving average is $10.01 and its 200-day moving average is $9.42.

On the ratings front, Zogenix has been the subject of a number of recent research reports. In a report issued on October 25, Oppenheimer analyst Rohit Vanjani assigned a Buy rating on ZGNX, with a price target of $16, which implies an upside of 92% from current levels. Separately, on October 4, Leerink’s Paul Matteis reiterated a Buy rating on the stock and has a price target of $17.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Rohit Vanjani and Paul Matteis have a yearly average return of 5.5% and a loss of 4.6% respectively. Vanjani has a success rate of 48% and is ranked #459 out of 4162 analysts, while Matteis has a success rate of 38% and is ranked #3581.

Zogenix, Inc. is a pharmaceutical company, which is engaged in commercializing and developing products for the treatment of central nervous system disorders and pain with novel drug delivery platforms. The company’s product portfolio includes: Sumavel DosePro, Zohydro and Relday. The Sumavel DosePro product offers fast-acting, easy-to-use subcutaneous administration of sumatriptan for the acute treatment of migraine and cluster headache. The Zohydro product is a 12-hour extended-release formulation of hydrocodone without acetominophen for the treatment of moderate to severe chronic pain requiring around-the-clock opioid therapy. The Relday product is a proprietary, long-acting injectable formulation of risperidone using durect’s SABER controlled-release formulation technology in combination with its DosePro needle-free, subcutaneous drug delivery system.