GlobeNewswire Inc | Aug 5, 2020 04:01PM EDT

August 05, 2020

-- FINTEPLA (fenfluramine) in Dravet syndrome is now FDA approved and commercially launched in the U.S. -- More than 230 prescribers have already completed FINTEPLA REMS enrollment and certification -- FDA meeting scheduled in September to discuss planned sNDA for FINTEPLA in Lennox-Gastaut syndrome -- Held productive meetings with FDA to discuss MT1621 development program

EMERYVILLE, Calif., Aug. 05, 2020 (GLOBE NEWSWIRE) -- Zogenix, Inc. (Nasdaq: ZGNX), a global biopharmaceutical company developing and commercializing rare disease therapies, today announced financial results for the three and six months ended June 30, 2020, and provided a corporate update. The Company will host a conference call today, Wednesday, August 5, at 4:30 PM Eastern Time/1:30 PM Pacific Time.

In June, we were thrilled to receive U.S. Food and Drug Administration (FDA) approval for FINTEPLA for the treatment of seizures associated with Dravet syndrome, said Stephen J. Farr, Ph.D., President and CEO of Zogenix. This was a significant milestone for Zogenix and those in the Dravet community seeking effective new treatment options. Last week, we commenced the commercial launch of FINTEPLA in the United States and are very pleased with our early progress. More than 230 U.S. healthcare providers have successfully completed the FINTEPLA Risk Evaluation and Mitigation Strategy (REMS) certification required to begin prescribing of FINTEPLA.

Despite the global pandemic, we have been able to continue advancing projects that will further support our growth as a commercial-stage rare disease company, continued Dr. Farr. We recently held positive meetings with the FDA to discuss the remaining development path to support a planned New Drug Application (NDA) submission for MT1621 for the treatment of thymidine kinase 2 deficiency. In addition, a meeting with the FDA has been scheduled in September to discuss next steps for our supplemental NDA (sNDA) for FINTEPLA in Lennox-Gastaut syndrome (LGS), another difficult-to-treat childhood onset epilepsy.

Corporate Update

-- FINTEPLA for the treatment of seizures associated with Dravet syndrome:- Received FDA approval onJune 25, 2020 and executed initial commercial launch on July 27, 2020- Over 230 prescribers have successfully completed REMS certification process to date- FINTEPLA Marketing Authorization Application (MAA) is under active review by theEuropean Medicines Agency (EMA)and commercial launch preparations are ongoing in Europe- Last patient enrolled in pivotal Phase 3 study in Japan, with top-line data expected in the fourth quarter of this year; anticipate submission of a J-NDA to Japans Pharmaceutical and Medical Devices Agency in the first half of 2021- Eight U.S. patents (expiring between 2033-2039) added to the Orange Book listing for FINTEPLA

-- FINTEPLA for the treatment of seizures associated with LGS:- Primary endpoint achieved in Study 1601; patients taking FINTEPLA 0.7 mg/kg/day demonstrated a statistically significant greater reduction in monthly drop seizure frequency compared to placebo (p=0.0012). FINTEPLA was generally well-tolerated; the most common adverse events were decreased appetite, somnolence, fatigue, vomiting, diarrhea, and pyrexia. No cases of valvular heart disease or pulmonary arterial hypertension were observed.- Advancing non-clinical carcinogenicity and clinical Phase 1 pharmacokinetic (PK) studies in hepatic and renal impairment to support sNDA submission- FDA meeting scheduled in September 2020 to discuss requirements for sNDA submission

-- MT1621 for the treatment of thymidine kinase 2 (TK2) deficiency:- Recently held positive FDA meetings to discuss development path and required data 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

Second Quarter 2020 Financial Results

-- The Company recorded$1.0 millionin revenue for the second quarter endedJune 30, 2020, as a result of itsMarch 2019collaboration with Nippon Shinyaku Co., Ltd. for FINTEPLA in Dravet syndrome and LGS inJapan.Zogenixrecorded $1.1 million in revenue for the corresponding period of 2019.

-- Research and development expenses for the second quarter endedJune 30, 2020, totaled$34.4 million, up from$27.1 millionin the second quarter endedJune 30, 2019, as the Company decreased spending in Dravet syndrome and expanded clinical activities in LGS and MT1621.

-- Selling, general and administrative expenses for the second quarter endedJune 30, 2020, totaled$24.4 million, compared with$15.5 millionin the second quarter endedJune 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 second quarter endedJune 30, 2020, was$53.3 million, or a net loss of$0.96per share, reflective of two offsetting non-cash items related to the approval of FINTEPLA, involving contingent consideration and the deferred tax liability, compared with a net loss of$37.8 million, or a net loss of$0.89per share, in the second quarter endedJune 30, 2019.

Six Months EndedJune 30, 2020Financial Results Compared to Six Months EndedJune 30, 2019

-- The Company recorded$2.3 millionin revenue for the six months endedJune 30, 2020, as a result of itsMarch 2019collaboration withNippon Shinyaku Co., Ltd.for FINTEPLA in Dravet syndrome and LGS inJapan.Zogenixrecorded $1.1 million in revenue for the corresponding period of 2019.

-- Research and development expenses for the six months endedJune 30, 2020, totaled$67.6 million, up from$51.4 millionin the six months endedJune 30, 2019, as the Company decreased spending in Dravet syndrome and expanded clinical activities in LGS and MT1621.

-- Selling, general and administrative expenses for the six months endedJune 30, 2020, totaled$45.7 million, up from$26.4 millionin the six months endedJune 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 six months endedJune 30, 2020, was$79.1 million, or a net loss of$1.53per share, compared with a net loss of$73.0 million, or a net loss of$1.72per share, in the six months endedJune 30, 2019.

-- As ofJune 30, 2020, the Company had$390.2 millionin cash, cash equivalents, and marketable securities, compared to$251.2 millionatDecember 31, 2019.

Conference Call

Wednesday, August 5, at 4:30 PM Eastern Time / 1:30 PM Pacific TimeToll Free: 866-269-4260International: 323-347-3612Conference ID: 8881331Webcast: http://public.viavid.com/index.php?id=141049

About Zogenix

Zogenixis 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, C-IV has been approved by theU.S.FDA and is under review inEuropefor the treatment of seizures associated with Dravet syndrome, a rare, severe childhood onset epilepsy. In addition, the company has two late-stage development programs underway: one for FINTEPLA for the treatment of seizures associated with Lennox-Gastaut syndrome, a 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, aZogenixcompany.

Forward Looking Statements

Zogenixcautions you that statements included in this press release and the conference call 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: FINTEPLA providing a treatment option for patients with Dravet syndrome; Zogenixs plans to commercialize FINTEPLA; the timing of review by EMA with respect to the MAA for FINTEPLA for the treatment of patients with Dravet syndrome; Zogenixs plans to finalize the studies and data required to support an sNDA for FINTEPLA in LGS; and the timing of regulatory submissions and meetings or other interactions with regulatory agencies related to FINTEPLA and MT1621. 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: Zogenixs ability to successfully launch FINTEPLA in the U.S.; EMA may disagree that existing safety and efficacy data, or Zogenixs analysis of such data, is sufficient to support marketing approval in Europe; the COVID-19 pandemic may disrupt Zogenixs business operations, impairing the ability to commercialize FINTEPLA and Zogenixs ability to generate product revenue; unexpected adverse side effects or inadequate therapeutic efficacy of FINTEPLA that could limit commercialization, or that could result in recalls or product liability claims; additional data from Zogenixs ongoing studies may contradict or undermine the data reported for LGS;Zogenixmay not be successful in executing its sales and marketing strategy for the commercialization of FINTEPLA; Zogenixs dependence on third parties for the manufacture of FINTEPLA; Zogenixs ability to achieve and maintain adequate levels of coverage and reimbursement for FINTEPLA; the scope and validity of patent protection or regulatory exclusivity protection for FINTEPLA and Zogenixs ability to commercialize FINTEPLA without infringing the patent rights of others; 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 are qualified 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)

June 30, 2020 December 31, 2019Assets: Current assets: Cash and cash equivalents $ 136,871 $ 62,070 Marketable securities 253,378 189,085 Inventory, net 475 ? Prepaid expenses and other current assets 10,833 11,084 Acquisition holdback placed in escrow 25,000 25,000 Total current assets 426,557 287,239 Property and equipment, net 9,300 9,424 Operating lease right-of-use assets 8,266 7,774 Intangible asset 102,500 102,500 Goodwill 6,234 6,234 Other noncurrent assets 2,250 1,079 Total assets $ 555,107 $ 414,250 Liabilities and stockholders? equity: Current liabilities: Accounts payable $ 8,518 $ 7,979 Accrued and other current liabilities 40,176 30,117 Acquisition holdback liability 24,444 24,444 Deferred revenue, current 5,303 5,927 Current portion of operating lease liabilities 1,633 1,322 Current portion of contingent consideration 13,000 25,600 Total current liabilities 93,074 95,389 Deferred revenue, noncurrent 5,768 7,425 Operating lease liabilities, net of current 11,022 10,752 portionContingent consideration, net of current 40,100 38,200 portionDeferred tax liability ? 17,425 Total liabilities 149,964 169,191 Commitments and contingencies Stockholders? equity: Common stock 55 45 Additional paid-in capital 1,599,047 1,360,092 Accumulated deficit (1,194,581 ) (1,115,457 ) Accumulated other comprehensive income 622 379 Total stockholders? equity 405,143 245,059 Total liabilities and stockholders? equity $ 555,107 $ 414,250

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

Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019Collaboration $ 1,032 $ 1,069 $ 2,281 $ 1,069 revenueOperating expenses:Research and 34,373 27,096 67,613 51,448 developmentSelling, generaland 24,431 15,459 45,749 26,377 administrativeAcquiredin-processresearch and 1,500 ? 3,000 ? developmentexpenseChange in fairvalue of 12,200 (700 ) 4,300 2,300 contingentconsiderationTotal operating 72,504 41,855 120,662 80,125 expensesLoss from (71,472 ) (40,786 ) (118,381 ) (79,056 ) operationsOther (expense) (157 ) 40 19,864 (48 ) income, netInterest income 880 2,983 1,968 6,139 Loss before (70,749 ) (37,763 ) (96,549 ) (72,965 ) income taxesIncome tax (17,425 ) ? (17,425 ) ? benefitNet loss $ (53,324 ) $ (37,763 ) $ (79,124 ) $ (72,965 ) Net loss pershare, basic and $ (0.96 ) $ (0.89 ) $ (1.53 ) $ (1.72 ) diluted Weighted averagenumber of sharesused in thecalculation of 55,355 42,458 51,770 42,348 basic and dilutednet loss percommon share