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01.03.2018 22:05:00

Versartis Reports Fourth Quarter and Full Year 2017 Financial Results and Provides Corporate Update

MENLO PARK, Calif., March 01, 2018 (GLOBE NEWSWIRE) -- Versartis, Inc. (NASDAQ:VSAR), an endocrine-focused biopharmaceutical company, today announced financial results for the fourth quarter and full year ended December 31, 2017, and provided a corporate update."Since October, we have restructured our company to significantly reduce our costs and preserve cash while working diligently to evaluate opportunities to leverage our expertise and resources and create value for shareholders," said Jay Shepard, President and CEO of Versartis, Inc. "While we cannot make any assurances that a strategic transaction will be recommended by the Board, we are encouraged by the interest and opportunities we have seen and we are now at an advanced stage in our review process.  Our goal remains to maximize value for all Versartis shareholders.  We sincerely appreciate the patience shareholders have shown as we evaluate paths forward and we hope to provide a further update in the coming weeks."Corporate UpdateBased on a full review of the data from the Phase 3 VELOCITY trial, feedback from the FDA during the development of somavaratan, and an objective assessment by external regulatory experts, the company believes it could not successfully file for approval based on the existing dataset.All current clinical trials of somavaratan have been concluded and the U.S. Investigational New Drug Application (IND) and equivalent filings in other countries have been withdrawn.  Additionally, in January 2018, Teijin Limited (Teijin) terminated its license agreement for somavaratan in Japan following its evaluation of the VELOCITY trial results.The investment and delay in time-to-market that further development would require significantly impact the business case for somavaratan, given the potential that one or more long-acting growth hormone products may already be commercialized for pediatric growth hormone deficiency during that time. The company is focused on evaluating strategic opportunities to leverage its expertise and resources to create value for shareholders. Cowen is assisting the company in reviewing possible transactions, including strategic combinations and opportunities to diversify the Versartis pipeline.Fourth Quarter and Full Year 2017 Financial ResultsFor the fourth quarter ended December 31, 2017, Versartis reported a net income of approximately $31.1 million, or $0.87 per share, basic and diluted, compared to a net loss for the fourth quarter ended December 31, 2016 of $22.1 million, or $0.64 per share, basic and diluted.Contract revenue for the quarter and year ended December 31, 2017 was $40.0 million, reflecting the termination of the company's exclusive license agreement with Teijin, including our related obligations to Teijin.Total operating expenses for the quarter ended December 31, 2017 were $8.9 million compared to $22.5 million for the quarter ended December 31, 2016. Research and development (R&D) expenses for the quarter ended December 31, 2017 were $1.3 million, compared to $16.7 million for the quarter ended December 31, 2016. The decrease in R&D expenses was primarily due to the termination of clinical and manufacturing related contracts that supported the company's Phase 3 clinical trials for somavaratan.  These cost savings were partially offset by severance expenses associated with our reduction in workforce, as a result of the failure of the Phase 3 VELOCITY trial to meet its primary endpoint. General and administrative (G&A) expenses were $7.6 million for the quarter ended December 31, 2017, compared to $5.8 million for the quarter ended December 31, 2016. The increase in G&A expenses was primarily due to severance expenses in connection with our reduction in workforce.  Total operating expenses for the year ended December 31, 2017 were $124.5 million compared to $96.3 million for the year ended December 31, 2016. R&D expenses for the year ended December 31, 2017 were $94.6 million, compared to $72.0 million for the year ended December 31, 2016. The increase in R&D expenses was primarily due to clinical and manufacturing related costs to support the global VELOCITY pediatric trial and the Phase 2/3 trial of somavaratan in pediatric patients in Japan.  G&A expenses were $29.9 million for the year ended December 31, 2017, compared to $24.3 million for the year ended December 31, 2016. The increase in G&A expenses was primarily due to additional payroll and fees related to consulting and professional services to support our overall growth prior to the failure of the Phase 3 VELOCITY trial to meet its primary endpoint.Total operating expenses for the quarter ended December 31, 2017 include non-cash stock-based compensation expense of $2.2 million compared to $2.9 million of non-cash stock-based compensation expense for the quarter ...Full story available on Benzinga.com
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