Affymax(R) Reports Third Quarter 2009 Financial Results

November 4, 2009 7:30 AM EST

PALO ALTO, Calif.--(BUSINESS WIRE)-- Affymax, Inc. (Nasdaq: AFFY) today reported financial results for the third quarter ended September 30, 2009. The net loss for the third quarter of 2009 was $18.4 million compared to a net loss of $26.2 million for the third quarter of 2008.

Affymax recognized revenue for the quarter ended September 30, 2009 of $29.2 million compared to $21.6 million for the quarter ended September 30, 2008. The increase in revenue was the result of increased collaboration revenue from its partnership with Takeda Pharmaceutical Company Limited (Takeda), under their 2006 collaboration for development of Affymax's compound, Hematide(TM).

Research and development expenses for the quarter ended September 30, 2009, were $37.2 million compared to $39.8 million for the quarter ended September 30, 2008. The decrease was primarily due to reduced purchases of comparator drugs used in the Company's clinical trials.

General and administrative expenses for the quarter ended September 30, 2009 were $10.7 million compared to $8.3 million for the quarter ended September 30, 2008 primarily due to increased legal fees. The company's cash, investments and receivables from Takeda totaled $121.2 million as of September 30, 2009.

About Affymax, Inc.

Affymax, Inc. is a biopharmaceutical company committed to developing novel drugs to improve the treatment of serious and often life-threatening conditions. Affymax's product candidate, Hematide(TM), is currently in Phase 3 clinical trials for the treatment of anemia associated with chronic renal failure. For additional information, please visit www.affymax.com.

This release contains forward-looking statements, including statements regarding financial condition, the success of the Company's collaboration with Takeda, timing, design and results of the Company's clinical trials and drug development program and the timing and likelihood of the commercialization of Hematide. The Company's actual results may differ materially from those indicated in these forward-looking statements due to risks and uncertainties, including risks relating to the continued safety and efficacy of Hematide in clinical development, the potential for once per month dosing and room temperature stability, the cardiovascular event rate in our phase 3 clinical program, the timing of patient accrual in ongoing and planned clinical studies, regulatory requirements and approvals, research and development efforts, industry and competitive environment, intellectual property rights and disputes and other matters that are described in Affymax's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The Company undertakes no obligation to update any forward-looking statement in this press release.

AFFYMAX, INC.

UNAUDITED CONDENSED BALANCE SHEETS

(in thousands)

                                                September 30,  December 31,

                                                2009           2008

Assets

Current assets

Cash and cash equivalents                       $ 67,336       $ 24,046

Short-term investments                            32,354         70,673

Receivable from Takeda                            17,360         21,688

Income tax receivable                             110            2,665

Deferred tax assets                               1,351          1,351

Prepaid expenses and other current assets         8,894          6,658

Total current assets                              127,405        127,081

Property and equipment, net                       5,963          6,952

Restricted cash                                   1,135          1,135

Long-term investments                             4,139          22,945

Deferred tax assets, net of current               5,889          5,889

Other assets                                      401            3,718

Total assets                                    $ 144,932      $ 167,720

Liabilities and Stockholders' Equity (Deficit)

Current liabilities

Accounts payable                                $ 2,464        $ 614

Accrued liabilities                               12,662         9,838

Accrued clinical trial expenses                   37,696         27,806

Income taxes payable                              --             163

Deferred revenue                                  67,446         54,930

Total current liabilities                         120,268        93,351

Deferred revenue, net of current                  16,986         54,915

Long-term income tax liability                    9,419          9,400

Other long-term liabilities                       991            1,070

Total liabilities                                 147,664        158,736

Stockholders' equity (deficit)

Common stock                                      19             15

Additional paid-in capital                        357,748        306,824

Accumulated deficit                               (360,542 )     (298,328 )

Accumulated other comprehensive gain              43             473

Total stockholders' equity (deficit)              (2,732   )     8,984

Total liabilities and stockholders' equity      $ 144,932      $ 167,720
(deficit)

AFFYMAX, INC.

UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

                             Three Months Ended        Nine Months Ended
                             September 30,             September 30,

                               2009         2008         2009         2008

Collaboration revenue        $ 29,157     $ 21,645     $ 81,924     $ 56,803

License and royalty revenue    4            3            13           690

Total revenue                  29,161       21,648       81,937       57,493

Operating expenses:

Research and development       37,237       39,780       118,462      96,093

General and administrative     10,657       8,308        26,763       23,639

Total operating expenses       47,894       48,088       145,225      119,732

Loss from operations           (18,733 )    (26,440 )    (63,288 )    (62,239 )

Interest income                164          821          826          3,913

Interest expense               --           (156    )    (1      )    (357    )

Other income (expense), net    163          (436    )    163          (2,024  )

Net loss before benefit for    (18,406 )    (26,211 )    (62,300 )    (60,707 )
income taxes

Benefit for income taxes       (24     )    --           (86     )    --

Net loss                     $ (18,382 )  $ (26,211 )  $ (62,214 )  $ (60,707 )

Net loss per share:

Basic and diluted            $ (0.97   )  $ (1.72   )  $ (3.43   )  $ (4.00   )

Weighted-average number of
shares used in computing       18,951       15,235       18,120       15,193
basic and diluted net loss
per share

    Source: Affymax, Inc.

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