EX-99.1 2 b77984exv99w1.htm EX-99.1 PRESS RELEASE DATED NOVEMBER 9, 2009. exv99w1
Exhibit 99.1
(CLINICAL DATA LOGO)
One Gateway Center, Suite 702, Newton, MA 02458 USA
NEWS
FOR IMMEDIATE RELEASE
Clinical Data, Inc. Reports Second Quarter Fiscal 2010 Results
— Recent Financing Provides Additional Capital to Advance Late-stage Drug
Development Programs to Key Milestones —
NEWTON, Mass., November 9, 2009 — Clinical Data, Inc. (NASDAQ: CLDA) today announced the Company’s operational and financial results for its second fiscal quarter ended September 30, 2009.
Second Quarter and Recent Highlights
  Completed a public offering which generated approximately $47.4 million in gross proceeds
  Hosted an investor day in New York City which focused on vilazodone and featured leading experts in the treatment of depression, antidepressants and related sexual dysfunction; Company on track to submit its new drug application (NDA) for vilazodone in the first quarter of calendar 2010
  Expanded the Board of Directors to include pharmaceutical industry leader, Scott Tarriff
  Generated proceeds from the sale of certain non-core assets from the Avalon Pharmaceuticals acquisition for $1.5 million, with an estimated annual cost-savings of $4.0 to $5.0 million
  Established a collaboration and licensing agreement for A2A agonist ATL313, with the potential to receive up to $252.0 million in milestones, as well as royalties related to the commercialization of multiple myeloma and other B-cell cancer treatments
  Reported a 51% increase in FAMILION genetic testing gross revenue, as well as improved gross margins which rose from 36% to 47%,when compared to the same period a year ago

 


 

“The majority of our resources remain focused on driving our late-stage products toward key development milestones, several of which we anticipate over the next few quarters,” said Drew Fromkin, Clinical Data’s President and Chief Executive Officer. “We plan to submit our NDA for vilazodone for the treatment of depression in the first quarter of calendar 2010, and will initiate our Phase III program for Stedivaze for cardiac stress testing, shortly. During the quarter, we again demonstrated our ability to secure capital by selling non-core assets and executing transactions that will reduce overall expenses. More recently, we successfully obtained capital through the public markets, improving our stock’s liquidity and significantly expanding our shareholder base. We believe that our ability to attract high-quality investors in this recent financing is further evidence of the value we are building for shareholders.”
Financial Results for the Three Months Ended September 30, 2009
Gross revenue for the three months ended September 30, 2009 increased to $3.7 million, or 47%, from $2.5 million for the same period a year ago. This was primarily driven by an increase in gross sales from PGxHealth’s FAMILION tests of $1.2 million, or 51%, compared to the same period a year ago. The increase in gross revenue was partially offset by a rise in contractual allowances of $542,000, which represents an increase from 5% to 18% of gross genetic testing revenues when compared to the second quarter of fiscal year 2009. This increase in contractual allowances is due to additional coverage policies, as well as the revenue mix from third-party payors. Management also noted that weakened economic conditions had negatively impacted revenue as well as higher than normal contractual allowances for the period. The Company anticipates that future revenue will continue to be driven by expanding genetic test offerings, driving greater test adoption and increasing insurance coverage from third-party payors.
For the three month period ended September 30, 2009, gross profit margins increased to 47% from 36% for the same period last year. The year-over-year improvement in gross margins was due to an increase in revenues coupled with the realization of significant investments the Company has made in infrastructure improvements. Gross margins are anticipated to improve as revenues and test volumes and reimbursement increases over time.

 


 

Research and development expenses for the three months ended September 30, 2009 increased to $8.9 million, up from $8.6 million for the same period last year. This modest increase was attributable primarily to the concluding activities related to the vilazodone safety trial, Phase III clinical program and initial preparations for the NDA submission, which is anticipated in the first quarter of calendar year 2010. Ongoing research and development expenses are expected to increase with continued activities focused on NDA preparations and the imminent start of the Phase III program for Stedivaze, the Company’s potential best-in-class vasodilator for use in cardiac stress testing.
In August 2009, the Company sold certain non-core assets from the Avalon acquisition, which is expected to result in future cost savings in Avalon research and development activities of approximately $4.0 to $5.0 million annually.
Sales and marketing expense of $2.0 million was essentially flat when compared to the three months ended September 30, 2008. Expense in this area should continue at a similar rate for the next several quarters as the Company leverages a well-established FAMILION sales and marketing organization.
General and administrative expenses decreased to $5.3 million, down from $5.6 million in the second quarter of last fiscal year. The decrease was primarily driven by a reduction in stock-based compensation, however, this was partially offset by an increase in provisions for uncollectable accounts largely due to the current economic conditions.
Financial Results for the Six Months Ended September 30, 2009
Gross revenue for the six months ended September 30, 2009 increased to $7.8 million, or 65%, from $4.7 million for the six months ended September 30, 2008. This increase was mainly driven by the increase in gross sales of genetic tests of $2.9 million, or 67%, compared to the same period a year ago. Revenue has risen as a result of continued expansion of the commercial sales and marketing team in fiscal 2009, and increased coverage policies from third-party payors, such as Blue Cross and Blue Shield, Aetna and Humana. As of September 30, 2009, PGxHealth was an approved Medicare provider and a Medicaid provider in certain states. These increases were partially offset by in an increase in contractual allowances of $762,000 from $274,000, or

 


 

6% of gross genetic testing revenue, to $1.0 million, or 14% of gross genetic testing revenue. This increase in contractual allowances was due to increased coverage from third-party payers, as well as the mix of revenue from third-party payers.
Gross profit margins increased from 32% for the six months ended September 30, 2008 to 51% for the six months ended September 30, 2009. The improvement in gross profit from fiscal 2009 to 2010 was due to the increase in revenue, as well as the realization of infrastructure improvements and lab efficiencies in fiscal 2009. Gross profit margins are expected to continue to improve as revenue increases, since costs, including personnel, equipment and facilities, are expected to remain essentially fixed.
Research and development expenses increased to $20.4 million for the six months ended September 30, 2009, up from $16.2 million for the same period in 2008. The increase is primarily related to the concluding stages of the vilazodone safety and Phase III confirmatory trials and the preparation of the NDA for vilazodone, and to a lesser extent, costs associated with advancing Stedivaze and preclinical programs. Ongoing research and development costs are expected to continue to increase with supportive NDA activities for vilazodone and the commencement of the Stedivaze Phase III program.
Sales and marketing expenses increased to $4.1 million for the six months ended September 30, 2009, up from $3.7 million for the same period in 2008. The increase was mainly due to expenses relating to the expanded sales and marketing team from the same period a year ago. Sales and marketing expenses are expected to remain flat over the next several quarters as the Company leverages its established sales organization.
General and administrative expenses increased to $10.5 million for the six months ended September 30, 2009, up from $9.7 million for the same period in 2008. The increase was, in part, the result of a further provision for uncollectible accounts of $576,000 largely due to the current economic conditions.
Cash, cash equivalents and marketable securities were $37.2 million at September 30, 2009, which does not include the net proceeds of approximately $44.1 million (net of underwriting and transaction costs) from the Company’s public offering, which was completed November 2, 2009.

 


 

About Clinical Data, Inc.
Clinical Data develops first-in-class and best-in-category therapeutics. The Company is advancing its late-stage drug candidates for central nervous system disorders and cardiovascular diseases, to be followed by promising drug candidates in other major therapeutic areas. Clinical Data is also capable of combining its drug development and biomarker expertise to develop products with enhanced efficacy and tolerability, improving patient health and reducing costs. To learn more, please visit the Company’s website at www.clda.com.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This press release contains certain forward-looking information and statements that are intended to be covered by the safe harbor for forward looking statements provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. Words such as “expect(s)”, “feel(s)”, “believe(s)”, “will”, “may”, “anticipate(s)” and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to, statements about our ability to obtain regulatory approval for, and successfully introduce vilazodone, Stedivaze and our other drug candidates; our ability to expand our long-term business opportunities; and all other statements regarding future performance. All such information and statements are subject to certain risks and uncertainties, the effects of which are difficult to predict and generally beyond the control of the Company, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include, but are not limited to, whether vilazodone or Stedivaze will advance further in the clinical trials process and whether and when, if at all, they will receive final approval from the U.S. Food and Drug Administration and equivalent foreign regulatory agencies and for which indications; whether vilazodone and Stedivaze will be successfully marketed if approved; the extent to which genetic markers are predictive of clinical outcomes and drug efficacy and safety; the strength of our intellectual property rights; competition from pharmaceutical, biotechnology and diagnostics companies; the development of and our ability to take advantage of the market for pharmacogenetic and biomarker products and services; general economic downturns; and those risks identified and discussed by Clinical Data in its filings with the U.S. Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward looking statements that speak only as of the date hereof. Clinical Data does not undertake any obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Readers are also urged to carefully review and consider the various disclosures in Clinical Data’s SEC periodic and interim reports, including but not limited to its Annual Report on Form 10-K for the fiscal year ended March 31, 2009, and Current Reports on Form 8-K filed from time to time by the Company.
Financial Tables to Follow
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CONTACT INFORMATION:
Theresa McNeely
Vice President
Corporate Communications
Clinical Data, Inc.
617-527-9933 X3373

 


 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                 
    Three Months Ended     Six Months Ended  
    September 30,     September 30,  
    2009     2008     2009     2008  
(In thousands, except per share amounts)   (UNAUDITED)  
Net revenues
  $ 3,042     $ 2,400     $ 6,737     $ 4,437  
Cost of revenues
    1,609       1,544       3,278       3,017  
 
                       
 
                               
Gross profit
    1,433       856       3,459       1,420  
 
                               
Operating expenses:
                               
Research and development
    8,940       8,590       20,422       16,209  
Sales and marketing
    2,034       1,973       4,118       3,654  
General and administrative
    5,319       5,631       10,511       9,701  
Restructuring and lease exiting costs
    1,783             1,783        
Purchased in-process research and development
          52,100             52,100  
Avalon acquisition costs
                1,978        
 
                       
Total operating expenses
    18,076       68,294       38,812       81,664  
 
                       
 
                               
Loss from operations
    (16,643 )     (67,438 )     (35,353 )     (80,244 )
All other (expense) income, net
    (2,019 )     162       (3,555 )     442  
 
                       
 
                               
Loss from continuing operations
    (18,662 )     (67,276 )     (38,908 )     (79,802 )
(Loss) income from discontinued operations
          (2,734 )     4,837       (5,072 )
 
                       
Net loss
  $ (18,662 )   $ (70,010 )   $ (34,071 )   $ (84,874 )
 
                       
 
                               
(Loss) income per basic and diluted share:
                               
Continuing operations
  $ (0.79 )   $ (3.17 )   $ (1.66 )   $ (3.79 )
Discontinued operations
          (0.13 )     0.20       (0.24 )
 
                       
Net loss
  $ (0.79 )   $ (3.30 )   $ (1.46 )   $ (4.03 )
 
                       
 
                               
Weighted average shares: basic and diluted
    23,728       21,233       23,412       21,070  

 


 

CONDENSED CONSOLIDATED BALANCE SHEETS
                 
(In thousands)   September 30, 2009     March 31, 2009  
    (UNAUDITED)          
ASSETS
               
Current Assets:
               
Cash and cash equivalents
  $ 37,219     $ 55,180  
Marketable securities
          1,175  
Accounts receivable, net
    2,181       2,471  
Prepaid expenses and other current assets
    2,264       1,240  
Assets of discontinued operations
          18,541  
 
           
Total current assets
    41,664       78,607  
 
           
 
               
Property, plant and equipment, net
    2,922       2,942  
Goodwill & intangible assets, net
    43,218       34,243  
Other assets, net
    350       4,405  
 
           
TOTAL ASSETS
  $ 88,154     $ 120,197  
 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
 
               
Current Liabilities:
               
Current portion of long-term debt and capital leases
  $ 6,899     $ 7,067  
Accounts payable, accrued expenses and other liabilities
    13,438       11,693  
Liabilities of discontinued operations
          8,902  
 
           
Total current liabilities
    20,337       27,662  
 
           
Long-term debt and other liabilities
    59,945       63,123  
 
           
TOTAL LIABILITIES
    80,282       90,785  
 
           
Stockholders’ equity
    7,872       29,412  
 
           
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
  $ 88,154     $ 120,197