Avanir reports results for second quarter of fiscal 2002.(Brief Article)

2002 JUN 19 - (NewsRx.com & NewsRx.net) -- Avanir Pharmaceuticals reported financial results for the second fiscal quarter ended March 31, 2002, and provided a progress report on its drug development strategy, which is focused on large market therapeutic areas with significant partnering and licensing potential.

Areas of major progress include:

Completion of patient enrollment in a phase II/III clinical trial that examines the efficacy and safety of Neurodex in the treatment of emotional lability in patients with Lou Gehrig's disease; research on potential new topical formulations of docosanol for the treatment of genital herpes, funded by $1.2 million in total federal and state government grant awards; toxicology testing on Avanir 's lead compound for the treatment of allergy and asthma, which will be submitted to the FDA as part of an investigational new drug application and allow for Phase I testing of this compound to begin before the end of calendar year 2002; expansion of the company's research in anti-inflammation, including identifying and validating several potential small molecule leads directed at macrophage migration inhibitory factor (MIF); entry into a research collaboration with Schering Plough's subsidiary, DNAX Research, Inc., which makes the third research collaboration for antibody generation services at Xenerex.

Revenue for the second quarter of fiscal 2002, was $738,000, compared with revenue of $1.3 million for the same period last year. Revenue in both periods consisted primarily of royalties on sales of Abreva from GlaxoSmithKline. Royalties in the prior year included payments from initial Abreva sales to fill the product distribution pipeline by stocking the shelves in wholesale and retail outlets during product launch. Retail sales of Abreva for the second quarter of fiscal 2002 increased by 60% from the same period a year ago. Retail sales are not the basis for calculating Abreva royalties, as our royalties are based on wholesale sales, but we believe retail sales represent a good indicator of Abreva product performance. The company reached completion of its milestone payments from GlaxoSmithKline during the first quarter of fiscal 2002.

Total operating expenses amounted to $4.6 million for the second quarter of 2002, compared with $4.3 million for the same period of fiscal 2001. Research and development (R&D) expenses increased 28% to $3.2 million for the second quarter of fiscal 2002, compared with $2.5 million for the same period a year ago. The growth in R&D expenses reflected the company's expanded product development pipeline and advances in clinical and preclinical development, including accelerated patient enrollments in the Phase II/III clinical trial for Neurodex (formerly AVP-923) for the treatment of emotional lability. Also during fiscal 2002, Avanir initiated toxicology work on its novel lead compound for treating allergy and asthma.

Total R&D spending by major program for the second quarter of fiscal 2002 included Neurodex clinical development (29%), allergy and asthma research (23%), Xenerex' antibody generation research (12%) and other preclinical research related to anti-inflammation and cholesterol reduction (19%). The balance of R&D spending was primarily for routine costs associated with operation and maintenance of laboratory facilities. In the second quarter of fiscal 2001, R&D expenses were related primarily to the early stages of enrollment in the Neurodex phase II/III clinical trial and in the development of the antibody generation technology.

"We plan to continue increasing our spending on established R&D programs in the product development pipeline. We intend to expand our clinical development programs for Neurodex through the next several quarters. This expansion will include both a phase II clinical trial for the treatment of neuropathic pain and a phase III clinical trial of emotional lability in patients with multiple sclerosis. We also intend to continue toxicology work and ...