AVNC Advancis Pharmaceutical (MM)

Retail Stocking Delays Result in Lowering of 2006 Revenue Expectations; Keflex 750 Soon to be Stocked in More Than 20,000 U.S. Pharmacies GERMANTOWN, Md., Oct. 13 /PRNewswire-FirstCall/ -- Advancis Pharmaceutical Corporation (NASDAQ:AVNC), a pharmaceutical company focused on developing and commercializing novel anti-infective products, today provided an update on the launch of its recently approved 750mg strength Keflex Capsules (Cephalexin, USP) and revised its financial expectations for the remainder of 2006. Retail pharmacy stocking of Keflex 750 was lower than expected in August and September of 2006, and, as a result, the Company has reissued financial guidance for 2006. In late September, Advancis commenced specific initiatives to significantly increase the number of pharmacies stocking Keflex 750. Based on these initiatives, the Company believes more than 20,000 pharmacies will carry Keflex 750 by the end of October, including several major retail pharmacy chains that will stock Keflex 750 in a majority of their stores. "While our Keflex 750 launch has taken longer to develop than our original expectations, we are optimistic that the expanded distribution of Keflex 750 to more than 20,000 pharmacies, especially in the major chains, will enable us to meet our 2007 and long-term goals for the product," said Dr. Edward Rudnic, Advancis president and CEO. "We do not believe that this delay will have a material effect on our performance next year or impact the long-term potential of Keflex 750." FINANCIAL GUIDANCE Due to the impact from a delayed post-launch ramp of Advancis' Keflex 750mg capsules, financial guidance for 2006 has been reduced. The Company cautions that its revised expectations are based on limited prescription data to date and assume a favorable market acceptance of Keflex 750 for the remainder of 2006. Total revenue for 2006 from sales of Keflex products is now expected to be approximately $7 million to $10 million, down from prior expectations of $16 million to $17 million. The Company generally recognizes revenue from product sales at the time products are delivered to customers. The revenue guidance assumes the accounting policy for Keflex 750 sales in 2006 will also be to generally recognize revenue as products are delivered to customers. Net loss for the year is expected to be between $37 million and $40 million, or approximately $1.21 to $1.31 per diluted common share; compared to previous loss expectations of between $32 million and $37 million, or approximately $1.05 to $1.25 per diluted common share. Cash, cash equivalents, and marketable securities at the end of 2006 are now expected to be approximately $4 million to $6 million, changed from prior expectations of approximately $12 million to $13 million. As previously stated, given suitable market conditions and favorable financing terms, the Company may consider raising additional capital during 2006 or 2007. KEFLEX OVERVIEW Following U.S. Food and Drug Administration approval in May, 2006, Advancis commenced its commercialization initiatives for Keflex 750mg capsules through a targeted nationwide sales force of 75 contract sales representatives and eight Advancis district sales managers. On July 25, 2006, the Company announced that Keflex 750mg capsules had been manufactured and packaged, and that it had shipped Keflex bottles to pharmacies nationwide for initial inventory stocking. Advancis contract sales representatives began directly promoting Keflex 750mg capsules to targeted physicians as well as providing patient starter samples in late July 2006. Advancis believes the new Keflex 750mg strength provides healthcare professionals a more convenient way to deliver a total daily dose of 1500mg per day, by providing them an option to prescribe just two daily doses of the 750mg capsules. Keflex is approved for adult dosages ranging from one to four grams per day in divided doses; however, the majority of prescriptions are currently written for cephalexin 500mg three times daily -- totaling 1500mg per day. Cephalexin, the generic form of Keflex, is the third most prescribed outpatient antibiotic in the United States, with more than 25 million prescriptions written annually representing a retail market size of approximately $500 million. Cephalexin is the number-one most prescribed oral cephalosporin antibiotic and is also the number-one recommended oral antibiotic therapy for uncomplicated skin and skin structure infections. About Keflex: Keflex(R) Capsules (Cephalexin, USP) is a first-generation cephalosporin antibiotic shown to be active against strains of both gram-positive and gram-negative aerobes in vitro and in clinical infections. Keflex is indicated for treatment of the following infections: respiratory tract infections, otitis media, skin and skin structure infections, bone infections, and genitourinary tract infections. Keflex is currently available in 250mg capsules, 500mg capsules, 750mg capsules, and powder for oral suspension. Keflex is contraindicated in patients with known allergy to the cephalosporin group of antibiotics. Before therapy with cephalexin is instituted, careful inquiry should be made to determine whether the patient has had previous hypersensitivity reactions to cephalexin, cephalosporins, penicillins, or other drugs. Keflex should be administered with caution in the presence of markedly impaired renal function or a history of gastrointestinal disease, particularly colitis. More information on Keflex and prescribing information are available at http://www.keflex.com/ . About Advancis Pharmaceutical Corporation: Advancis Pharmaceutical Corporation (NASDAQ:AVNC) is a pharmaceutical company focused on the development and commercialization of pulsatile drug products that fulfill substantial unmet medical needs in the treatment of infectious disease. The Company is developing anti-infective drugs based on its novel biological finding that bacteria exposed to antibiotics in front-loaded staccato bursts, or "pulses," are killed more efficiently than those under standard treatment regimens. Based on this finding, Advancis has developed a proprietary, once-a-day pulsatile delivery technology called PULSYS(TM). By examining the resistance patterns of bacteria and applying its delivery technologies, Advancis has the potential to redefine infectious disease therapy and significantly improve drug efficacy, shorten length of therapy, and reduce drug resistance versus currently available antibacterial products. For more on Advancis, please visit http://www.advancispharm.com/ . This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on Advancis' current expectations and assumptions. These statements are not guarantees of future performance and are subject to a number of risks and uncertainties that would cause actual results to differ materially from those anticipated. The words, "believe," "expect," "intend," "anticipate," and variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. Statements in this announcement that are forward-looking include, but are not limited to, statements about the Company's future development plans, clinical trials, potential commercial success, and any financial forecasts and projections for the full year of 2006 and thereafter included under the Financial Guidance section of this announcement. The actual results realized by Advancis could differ materially from these forward-looking statements, depending in particular upon the risks and uncertainties described in the Company's filings with the Securities and Exchange Commission. These include, without limitation, risks and uncertainties relating to the Company's financial results and the ability of the Company to (1) reach profitability, (2) prove that the preliminary findings for its product candidates are valid, (3) receive required regulatory approvals, (4) successfully conduct clinical trials in a timely manner with favorable results, (5) establish its competitive position for its products, (6) develop and commercialize products that are superior to existing or newly developed competitor products, (7) develop products without any defects, (8) have sufficient capital resources to fund its operations, (9) protect its intellectual property rights and patents, (10) implement its sales and marketing strategy, (11) successfully attract and retain collaborative partners, (12) successfully commercialize and gain market acceptance for its Keflex products, and (13) retain its senior management and other personnel. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today's date. Advancis undertakes no obligation to update or revise the information in this announcement, whether as a result of new information, future events or circumstances or otherwise. DATASOURCE: Advancis Pharmaceutical Corporation CONTACT: Robert Bannon, Vice President, Investor Relations & Corporate Communications of Advancis Pharmaceutical Corp., +1-301-944-6710, Web site: http://www.advancispharm.com/ http://www.keflex.com/

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