GlobeNewswire Inc | Nov 9, 2020 04:01PM EST

November 09, 2020

-- FINTEPLA (fenfluramine) oral solution launched in the U.S. in late July for Dravet syndrome with high enrollment of physicians and patients into the FINTEPLA Risk Evaluation and Mitigation Strategy (REMS) program -- More than 300 patients prescribed FINTEPLA and enrolled in the FINTEPLA REMS program in the third quarter; over half of the patients were new to FINTEPLA -- Received a positive opinion from the Committee for Medicinal Products for Human Use for FINTEPLA in Dravet syndrome; European approval of the Marketing Authorization Application anticipated by the end of 2020 -- Announced highly positive top-line results from third Phase 3 trial of FINTEPLA in Dravet syndrome (Study 3) to support a planned submission of a Japan New Drug Application in the third quarter of 2021 -- Ended the third quarter with $525 million in cash, cash equivalents, and marketable securities

EMERYVILLE, Calif. , Nov. 09, 2020 (GLOBE NEWSWIRE) -- Zogenix (Nasdaq: ZGNX), a global biopharmaceutical company developing and commercializing rare disease therapies, today announced financial results for the three and nine months ended September 30, 2020 and provided a corporate update. The Company will host a conference call today, Monday, November 9, at 4:30 PM Eastern Time/1:30 PM Pacific Time.

This continues to be a very positive and rewarding year for Zogenix as our deeply experienced international teams successfully advance key clinical, regulatory, and commercial programs, said Stephen J. Farr, Ph.D., President and CEO of Zogenix. The strong physician and patient adoption of FINTEPLA in this early stage of our U.S. launch and the recent positive opinion from the Committee for Medicinal Products for Human Use (CHMP) speak to FINTEPLAs effectiveness, safety, and potential to provide meaningful and lasting seizure control for more Dravet syndrome patients. This increases our excitement for our next set of major FINTEPLA milestones anticipated approval for Dravet syndrome in Europe later this year, regulatory submission for Dravet syndrome in Japan next year, and regulatory submissions for Lennox-Gastaut syndrome (LGS) in the U.S. and Europe, also next year.

Equally important, said Dr. Farr, following a productive meeting with the U.S. Food and Drug Administration (FDA), we believe we have a clearly defined development and regulatory path for MT1621, our late-stage investigational therapy for the treatment of the often-fatal mitochondrial disease thymidine kinase 2 deficiency (TK2d), for which no approved therapies currently exist. Our goal is to have all required data in hand by the end of 2021 to enable a planned New Drug Application (NDA) submission in 2022.

Corporate Update

-- FINTEPLA for the treatment of seizures associated with Dravet syndrome: Received FDA approval on June 25, 2020 and initiated U.S. commercial launch on July 27, 2020 More than 360 prescribers had successfully completed Risk Evaluation and Mitigation Strategy (REMS) certification process by the end of September During the third quarter, more than 300 patients were prescribed FINTEPLA and enrolled in the FINTEPLA REMS program to become eligible to receive therapy, with approximately 90% completing echocardiograms. More than half of these patients were new to FINTEPLA. Received positive CHMP opinion in October 2020 for FINTEPLA in Dravet syndrome; anticipate European Medicines Agency approval by the end of 2020, and have ramped up preparations for a potential commercial launch in Europe in the first quarter of 2021 Announced positive top-line results from third multinational (including Japan) Phase 3 study in Dravet syndrome; results corroborate highly statistically significant reductions in convulsive seizure frequency seen in two earlier Phase 3 studies of FINTEPLA in Dravet. Anticipate submission of a Japan NDA to Japans Pharmaceutical and Medical Devices Agency in the third quarter of 2021 -- FINTEPLA for the treatment of seizures associated with LGS: Anticipate submitting supplemental NDA in the second quarter of 2021 following a successful Type C meeting in September clarifying regulatory path Anticipate submitting MAA with EMA in the third quarter of 2021 -- MT1621 for the treatment of TK2d: Recently held positive FDA meetings to discuss development path and data required to support planned NDA submission Company expects availability of all required data by end of 2021, and anticipates the submission of an NDA in first half of 2022

Third Quarter 2020 Financial Results

-- The Company recorded $2.9 millionin revenue for the third quarter endedSeptember 30, 2020. This included product sales of FINTEPLA in the U.S. of $1.5 million, in addition to $1.4 million in revenue as a result of theMarch 2019collaboration with Nippon Shinyaku Co., Ltd. for FINTEPLA in Dravet syndrome and LGS inJapan. Zogenix recorded $0.6 million in revenue for the corresponding period of 2019. -- Research and development expenses for the third quarter ended September 30, 2020, totaled $34.4 million, up from $28.4 millionin the third quarter ended September 30, 2019, as the Company expanded clinical activities in LGS and MT1621, partially offset by decreased spending in Dravet syndrome. -- Selling, general and administrative expenses for the third quarter endedSeptember 30, 2020, totaled $24.6 million, compared with $15.8 millionin the third quarter ended September 30, 2019, as the Company continued investment related to the launch of FINTEPLA for the treatment of Dravet syndrome in the U.S. and prepared for potential launch in Europe. -- Net loss for the third quarter ended September 30, 2020, was $60.1 million, or a net loss of $1.08 per share, compared with a net loss of $290.5 million, or a net loss of $6.75 per share, in the third quarter endedSeptember 30, 2019. Net loss for the three months ended September 30, 2019, included $249.4 million of acquired in-process research and development consisting of existing research and development projects at the time of the Modis acquisition.

Nine Months Ended September 30, 2020 Financial Results Compared to Nine Months Ended September 30, 2019

-- The Company recorded $5.1 millionin revenue for the nine months ended September 30, 2020. This included product sales of FINTEPLA in the U.S. of $1.5 million, in addition to $3.6 million in revenue as a result of theMarch 2019collaboration with Nippon Shinyaku Co., Ltd. for FINTEPLA in Dravet syndrome and LGS inJapan. Zogenix recorded $1.7 million in revenue for the corresponding period of 2019. -- Research and development expenses for the nine months ended September 30, 2020, totaled$102.0 million, up from$79.8 millionin the nine months endedSeptember 30, 2019, as the Company expanded clinical activities in LGS and MT1621, partially offset by decreased spending in Dravet syndrome. -- Selling, general and administrative expenses for the nine months ended September 30, 2020, totaled $70.3 million, up from $42.1 millionin the nine months ended September 30, 2019, as the Company continued investment related to the launch of FINTEPLA for the treatment of Dravet syndrome in the U.S. and prepared for prospective launch in Europe. -- Net loss for the nine months endedSeptember 30, 2020, was $139.2 million, or a net loss of $2.62 per share, compared with a net loss of $363.4 million, or a net loss of $8.54 per share, in the nine months ended September 30, 2019. -- As of September 30, 2020, the Company had $525.2 million in cash, cash equivalents, and marketable securities, reflecting the issuance of a $200 million convertible bond on September 28, 2020, compared to $251.2 million at December 31, 2019.

Conference CallMonday, November 9 at 4:30 PM Easter Time / 1:30 PM Pacific Time

Toll Free: 877-407-9716International: 201-493-6779Conference ID: 13711927Webcast: http://public.viavid.com/index.php?id=141969

About Zogenix

Zogenix is a global biopharmaceutical company committed to developing and commercializing therapies with the potential to transform the lives of patients and their families living with rare diseases. The companys first rare disease therapy, FINTEPLA (fenfluramine) oral solution has been approved by the U.S. FDA and received a positive CHMP opinion in Europe for the treatment of seizures associated with Dravet syndrome, a rare, severe childhood onset epilepsy. The company has two additional late-stage development programs underway: one for FINTEPLA for the treatment of seizures associated with Lennox-Gastaut syndrome, a different rare childhood-onset epilepsy and another for MT1621, an investigational novel substrate enhancement therapy for the treatment of TK2 deficiency, a rare genetic disorder. MT1621 is being developed through Modis Therapeutics, a Zogenix company.

Forward Looking Statements

Zogenixcautions you that statements included in this press release that are not a description of historical facts are forward-looking statements. Words such as believes, anticipates, plans, expects, indicates, will, intends, potential, suggests, assuming, designed, and similar expressions are intended to identify forward-looking statements. These statements include the potential that FINTEPLA, if approved by the EC, will be an important new treatment option for Dravet syndrome patients; and the timing and results of any decision regarding the MAA for FINTEPLA for the treatment of seizures associated with Dravet syndrome. These statements are based on Zogenixs current beliefs and expectations. The inclusion of forward-looking statements should not be regarded as a representation byZogenixthat any of its plans will be achieved. Actual results may differ from those set forth in this release due to the risks and uncertainties inherent in Zogenixs business, including, without limitation: theECmay not agree with the Companys interpretation of the clinical data submitted in the MAA; the EC may not affirm the CHMP opinion and grant a centralized marketing authorization; additional data from Zogenixs ongoing studies may contradict or undermine the data submitted in the Dravet syndrome MAA for FINTEPLA or reported for LGS; unexpected adverse side effects or inadequate therapeutic efficacy of FINTEPLA that could limit approval and/or commercialization, or that could result in recalls or product liability claims; and other risks described in Zogenixs prior press releases as well as in public periodic filings with theU.S. Securities & Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, andZogenixundertakes no obligation to revise or update this press release to reflect events or circumstances after the date hereof. All forward-looking statements arequalified in their entirety by this cautionary statement. This caution is made under the safe harbor provisions of Section 21E of the Private Securities Litigation Reform Act of 1995.

CONTACTS:

ZogenixMelinda BakerSenior Director, Corporate Communications+1 (510) 788-8732corpcomms@zogenix.com

InvestorsBrian RitchieManaging Director, LifeSci Advisors LLC+1 (212) 915-2578britchie@lifesciadvisors.com

MediaStefanie TuckVice President, Porter Novelli+1 (978) 390-1394stefanie.tuck@porternovelli.com

Zogenix, Inc.Condensed Consolidated Balance Sheets (Unaudited)(in thousands)

September 30, December 31, 2020 2019Assets: Current assets: Cash and cash equivalents $ 297,460 $ 62,070 Marketable securities 227,707 189,085 Accounts receivable, net 1,309 ? Inventory 1,010 ? Prepaid expenses and other current assets 12,905 11,084 Acquisition holdback placed in escrow 25,000 25,000 Total current assets 565,391 287,239 Property and equipment, net 9,050 9,424 Operating lease right-of-use assets 8,002 7,774 Intangible asset, net 100,529 102,500 Goodwill 6,234 6,234 Other noncurrent assets 2,840 1,079 Total assets $ 692,046 $ 414,250 Liabilities and stockholders? equity: Current liabilities: Accounts payable $ 7,223 $ 7,979 Accrued and other current liabilities 31,882 30,117 Acquisition holdback liability 24,444 24,444 Deferred revenue, current 4,900 5,927 Current portion of operating lease liabilities 1,654 1,322 Current portion of contingent consideration 22,200 25,600 Total current liabilities 92,303 95,389 Deferred revenue, noncurrent 6,331 7,425 Operating lease liabilities, net of current 10,660 10,752 portionContingent consideration, net of current 32,700 38,200 portionConvertible senior notes 127,960 ? Deferred tax liability ? 17,425 Total liabilities 269,954 169,191 Commitments and contingencies Stockholders? equity: Common stock 56 45 Additional paid-in capital 1,676,408 1,360,092 Accumulated deficit (1,254,670 ) (1,115,457 )Accumulated other comprehensive income 298 379 Total stockholders? equity 422,092 245,059 Total liabilities and stockholders? equity $ 692,046 $ 414,250

Zogenix, Inc.Condensed Consolidated Statements of Operations (Unaudited)(in thousands, except per share amounts)

Three Months Ended Nine Months Ended September September 30, 30, 2020 2019 2020 2019Revenues: Net product sales $ 1,520 $ ? $ 1,520 $ ? Collaboration revenue 1,340 630 3,621 1,699 Total revenues 2,860 630 5,141 1,699 Costs and expenses: Cost of product sales(excluding 140 ? 140 ? amortization ofintangible asset)Research and 34,425 28,372 102,038 79,820 developmentSelling, general and 24,583 15,762 70,332 42,139 administrativeAmortization of 1,971 ? 1,971 ? intangible assetAcquired in-processresearch anddevelopment and 1,500 249,437 4,500 249,437 acquisition-relatedcostsChange in fair valueof contingent 1,800 400 6,100 2,700 considerationTotal costs and 64,419 293,971 185,081 374,096 expensesLoss from operations (61,559 ) (293,341 ) (179,940 ) (372,397 )Other income, net 934 481 20,798 433 Interest income, net 536 2,382 2,504 8,521 Loss before income (60,089 ) (290,478 ) (156,638 ) (363,443 )taxesIncome tax benefit ? ? (17,425 ) ? Net loss $ (60,089 ) $ (290,478 ) $ (139,213 ) $ (363,443 ) Net loss per share, $ (1.08 ) $ (6.75 ) $ (2.62 ) $ (8.54 )basic and diluted Weighted averagenumber of shares usedin the calculation of 55,548 43,029 53,039 42,577 basic and diluted netloss per common share