SAN DIEGO, Nov. 14 /PRNewswire-FirstCall/ -- Favrille, Inc. , a biopharmaceutical company developing patient-specific, active immunotherapies for the treatment of cancer, today reported its financial results for the third quarter of 2006. For the three and nine months ended September 30, 2006, the Company reported net losses of $9.6 million, or $0.33 per share, and $30.3 million, or $1.13 per share, respectively, compared to a net loss of $8.5 million, or $0.43 per share, and $26.3 million, or $1.51 per share, for the same periods in 2005.
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Third Quarter 2006 Financial Review
Research and development expense was approximately $7.5 million and $23.4 million for the three and nine months ended September 30, 2006, respectively, compared to approximately $7.4 million and $22.1 million for the same periods in 2005. The increase is primarily due to additional expenses for personnel and non-cash expenses, such as deferred rent and stock-based compensation, offset by a decrease in clinical trial costs and raw materials and supplies due to the completion of patient enrollment in the Company’s pivotal Phase 3 clinical trial in January 2006. Effective January 1, 2006, Favrille implemented SFAS 123(R). Total stock-based compensation included in research and development was approximately $460,000 and $1.4 million for the three and nine months ended September 30, 2006, compared to approximately $350,000 and $1.1 million for the same periods in 2005.
Marketing, general and administrative expense was approximately $2.6 million and $8.2 million for the three and nine months ended September 30, 2006, respectively, compared to approximately $1.5 million and $4.9 million for the same periods in 2005. The increase is primarily due to additional personnel and outside services related to strategic marketing programs and an increase in administrative personnel in preparation for the commercialization of FavId(R). Total stock-based compensation included in marketing, general and administrative expense was approximately $580,000 and $1.5 million for the three and nine months ended September 30, 2006, compared to approximately $360,000 and $1.1 million for the same periods in 2005.
As of September 30, 2006, Favrille had cash, cash equivalents and short-term investments of $51.4 million, compared to $34.5 million at December 31, 2005. The increase is primarily due to the $45.4 million in proceeds, before expenses, from the Company’s private placement of common stock and warrants in March 2006, partially offset by net cash used to fund ongoing operations.
“We expect total operating expenses for the full year 2006 to be approximately $45 million, including an estimated $4 million in stock-based compensation,” said Tamara A. Seymour, Chief Financial Officer of Favrille. “We anticipate our cash, cash equivalents and short-term investments to be approximately $40 million at the end of 2006.”
Conference Call and Webcast Information
Favrille will not host a conference call today to discuss its third quarter 2006 financial results following management’s comprehensive presentation yesterday, November 13, 2006. The webcast of yesterday’s discussion, including an overview of Favrille’s interim analysis of a secondary endpoint from its pivotal Phase 3 clinical trial of FavId following Rituxan(R) in follicular B-cell non-Hodgkin’s lymphoma (NHL), is available on the Investor Relations section of the Company’s web site at www.favrille.com. A telephone replay of the call is also available until approximately 10:00 a.m. Eastern time on Wednesday, November 15, 2006. The telephone replay can be accessed by dialing (888) 286-8010 or (617) 801-6888, passcode 83438658.
About Favrille, Inc.
Favrille, Inc. is a biopharmaceutical company focused on the development and commercialization of targeted immunotherapies for the treatment of cancer and other diseases of the immune system. The Company’s lead product candidate, FavId, is based upon unique genetic information extracted from a patient’s tumor. FavId is currently under investigation in a pivotal Phase 3 clinical trial for patients with follicular B-cell NHL and Phase 2 clinical trials in other B-cell NHL indications. The Company is developing additional applications based on its immunotherapy expertise and proprietary cost-effective manufacturing technology, including a second product candidate, FAV-201, for the treatment of cutaneous T-cell lymphoma.
Statements in this press release that are not strictly historical in nature constitute “forward-looking statements.” Such statements include, but are not limited to, references to Favrille’s product candidates, proprietary technologies and research programs. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Favrille’s actual results to be materially different from historical results or from any results expressed or implied by such forward-looking statements. These factors include, but are not limited to, risks and uncertainties related to progress and timing of clinical trials for FavId, including difficulties or delays in development, testing, manufacturing and marketing FavId or Favrille’s other product candidates; Favrille’s ability to obtain marketing approval for FavId or Favrille’s other product candidates and the timing of any such approvals, including Favrille’s ability to complete a commercial- scale manufacturing facility without utilizing proceeds from equity offerings; Favrille’s ability to manufacture sufficient quantities of FavId for use in clinical trials and, if FavId receives marketing approval, for commercialization; risks associated with achieving projected operating metrics and financial performance or the anticipated number of patients using FavId; potential delays in patient enrollment; whether patients treated with FavId will have sufficiently durable response; Favrille’s ability to obtain additional financing to support its operations; and additional risks discussed in Favrille’s filings with the Securities and Exchange Commission. In addition, conclusions regarding the safety and efficacy of Favrille’s product candidates cannot be made until the results of future clinical trials of longer duration in more patients are known. All forward-looking statements are qualified in their entirety by this cautionary statement. Favrille is providing this information as of the date of this release and, except as required by law, does not undertake any obligation to update any forward-looking statements contained in this release as a result of new information, future events or otherwise.
FAVRILLE, INC. (a development stage company) BALANCE SHEETS (in thousands, except share and per share data) September 30, December 31, 2006 2005 (unaudited) Assets Current assets: Cash and cash equivalents $19,856 $12,065 Short-term investments 31,542 22,427 Receivables 806 372 Prepaid expenses and other current assets 655 563 Total current assets 52,859 35,427 Property and equipment, net 16,329 9,430 Restricted cash 3,451 1,550 Other assets 596 600 Total assets $73,235 $47,007 Liabilities and stockholders’ equity Current liabilities: Accounts payable and accrued liabilities $5,804 $3,888 Current portion of debt 4,160 2,553 Total current liabilities 9,964 6,441 Debt, less current portion 4,795 3,532 Deferred rent 4,633 1,320 Commitments and contingencies Stockholders’ equity: Preferred stock, $0.001 par value 5,000,000 shares authorized at September 30, 2006 and December 31, 2005; no shares issued and outstanding at September 30, 2006 and December 31, 2005 -- -- Common stock, $0.001 par value: Authorized shares, 75,000,000 at September 30, 2006 and December 31, 2005; Issued and outstanding shares - 29,058,260 and 20,329,046 at September 30, 2006 and December 31, 2005, respectively 29 20 Additional paid-in capital 199,466 156,882 Deferred stock-based compensation -- (5,655) Note receivable from stockholder -- (96) Accumulated other comprehensive loss (4) (54) Deficit accumulated during the development stage (145,648) (115,383) Total stockholders’ equity 53,843 35,714 Total liabilities and stockholders’ equity $73,235 $47,007 FAVRILLE, INC. (a development stage company) STATEMENTS OF OPERATIONS(in thousands, except share and per share data) Unaudited Three Months ended Nine Months ended September 30, September 30, 2006 2005 2006 2005 Operating expenses: Research and development $7,487 $7,353 $23,370 $22,090 Marketing, general and administrative 2,605 1,534 8,226 4,879 Total operating expenses 10,092 8,887 31,596 26,969 Interest income 773 524 2,004 1,229 Interest expense (266) (166) (644) (555) Other expense -- 5 (29) (7) Total other income, net 507 363 1,331 667 Net loss (9,585) (8,524) (30,265) (26,302) Accretion of Series C redeemable convertible preferred stock issuance costs -- -- -- (6) Net loss applicable to common stockholders $(9,585) $(8,524) $(30,265) $(26,308) Historical net loss per share: Basic and diluted $(0.33) $(0.43) $(1.13) $(1.51) Weighted-average shares - basic and diluted 28,805,214 19,913,038 26,679,507 17,409,227 FAVRILLE, INC.(a development stage company) STATEMENTS OF CASH FLOWS(in thousands) Unaudited Nine Months ended September 30, 2006 2005 Operating activities Net loss $(30,265) $(26,302) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 1,534 1,341 Stock-based compensation 2,898 2,159 Amortization of premium/discount on short-term investments (428) (3) Other 294 (303) Changes in operating assets and liabilities: Receivables (547) 1 Prepaid expenses and other assets (88) 229 Accounts payable and accrued liabilities 1,915 877 Deferred Rent 3,313 404 Net cash used in operating activities (21,374) (21,597) Investing activities Purchases of property and equipment (8,461) (806) Purchases of short-term investments (48,735) (23,206) Maturities of short-term investments 40,098 -- Restricted cash (1,901) 56 Net cash used in investing activities (18,999) (23,956) Financing activities Proceeds from debt 4,822 1,427 Payments on debt (2,103) (1,990) Issuance of common stock and warrants 45,449 39,550 Repurchase of restricted common stock (4) (7) Net cash provided by financing activities 48,164 38,980 Net decrease increase in cash and cash equivalents 7,791 (6,573) Cash and cash equivalents at beginning of period 12,065 25,065 Cash and cash equivalents at end of period $19,856 $18,492 Supplemental schedule of non-cash investing and financing activities: Conversion of convertible preferred stock to common stock upon initial public offering $-- $43,678
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CONTACT: Tamara A. Seymour, CFO and Vice President, Finance &Administration, +1-858-526-8035, tseymour@favrille.com, or Pete De Spain,Associate Director, Investor Relations & Corporate Communications,+1-858-526-2426, pdespain@favrille.com, both of Favrille, Inc.
Web site: http://www.favrille.com/
