NeurogesX (NGSX) Tops Q4 EPS by 7c; Announces Restructuring, Cutting 43 Jobs; Received CRL, FDA Seeking Added Data from Qutenza Trials

March 8, 2012 7:37 AM EST Send to a Friend
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Financial Fact:
Net product revenue: 583K

Today's EPS Names:
HAYN, SIEN, MAGS, More
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NeurogesX, Inc. (NASDAQ: NGSX) reported Q4 EPS of ($0.34), $0.07 better than the analyst estimate of ($0.41). Revenue for the quarter came in at $2.96 million versus the consensus estimate of $3.01 million.

The Company announced today a restructuring of its operations to minimize cash burn, align commercial operations spending with near term Qutenza revenue expectations, and preserve cash resources. The Company's goal is to complete the required initiatives to prepare for initiation of a NGX-1998 Phase 3 clinical trial by year end. Concurrently, the Company plans to focus on securing additional resources, either through partnership or raising additional capital, to provide sufficient capital to fund that trial to completion. Today's announcement of restructuring will result in a reduction of 43 FTEs, or a 57% reduction of the Company's workforce. The 32 remaining FTEs are in key functional areas necessary to achieve the Company's corporate objectives. As a result of the restructuring, the Company anticipates that 2012 operating expenses, excluding non-cash stock related expenses, will decrease by 32% from previously planned levels, or approximately $12.2 million, and intends to reduce the estimated 2012 cash burn rate to between $5.5 million to $6.5 million per quarter after the effects of the reorganization. The Company ended 2011 with $34.3 million in cash, cash equivalents and short term investments.

On March 7, 2012, the Company received a complete response letter from the United States Food and Drug Administration (FDA) in response to the Company's supplemental new drug application (sNDA) filing for Qutenza for the management of pain associated with HIV associated peripheral neuropathy (HIV-PN). The complete response letter indicated that in order to gain approval for the use of Qutenza for the proposed indication, the Company would need to submit additional clinical data from at least one adequate and well-controlled trial to support the proposed indication. The Company looks forward to working with the FDA to better understand the requirements for potential approval for this important patient population. However, the Company does not anticipate investing in further clinical studies for Qutenza at this time.

As announced on November 8, 2011, based on the top-line data from its Phase 2 clinical study of NGX-1998 in patients with postherpetic neuralgia (PHN), the Company believes that a 20% capsaicin formulation of NGX-1998 may provide similar efficacy and safety as Qutenza, utilizing a five-minute procedure time and without the need for a topical anesthetic pretreatment. The Company believes the clinical data obtained to date should support moving to a Phase 3 clinical development program following an End-of-Phase 2 meeting with the FDA for NGX-1998. As a result, the Company believes that it could initiate Phase 3 development near the end of 2012. Additionally, the Company announced that it recently received a notice of allowance from the Japanese Patent Office for a patent that covers NGX-1998. This follows the issuance of a patent in the United States in 2011 for a similar set of patent claims. A similar patent application is currently under review in the European Union.

For earnings history and earnings-related data on NeurogesX, Inc. (NGSX) click here.


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