<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X Quarterly report pursuant to Section 13 or 15(d) of the Securities
- -----
Exchange Act of 1934. For the quarterly period ended March 31, 1998.
_____Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934. For the transition period from_____to_____.
Commission File Number
0-23160
ANESTA CORP.
(Exact name of registrant as specified in its charter)
Delaware 87-0424798
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
4745 Wiley Post Way
Plaza 6, Suite 650
Salt Lake City, UT 84116
(801) 595-1405
(Address, including zip code, and telephone number,
including area code, of principal executive offices)
Securities registered pursuant to Section 12(g) of the Act:
Common Stock $.001 par value
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2)has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock $.001 par value 9,580,493
Class Outstanding at May 14,1998
<PAGE>
ANESTA CORP.
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE NO.
--------
<S> <C>
Balance Sheets -
March 31, 1998 (unaudited) and December 31, 1997 2
Statements of Operations and Comprehensive Loss-
for the three months ended March 31, 1998 and
1997 (unaudited) and the period from inception (August 1, 1985)
to March 31, 1998 (unaudited) 3
Statements of Cash Flows -
for the three months ended March 31, 1998 and 1997 (unaudited)
and the period from inception (August 1, 1985) to
March 31, 1998 (unaudited) 4
Notes to Financial Statements (unaudited) 6
Management's Discussion and Analysis of
Financial Condition and Results
of Operations 9
PART II. OTHER INFORMATION 11
SIGNATURES 12
</TABLE>
1
<PAGE>
ANESTA CORP.
(A Development Stage Company)
BALANCE SHEETS
__________
<TABLE>
<CAPTION>
March 31, December 31,
ASSETS 1998 1997
--------------- ---------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 6,742,855 $ 9,760,765
Current portion of certificate of deposit 255,000 255,000
Marketable debt securities,
available-for-sale 17,618,850 17,875,711
Accounts receivable 63,427 82,863
Prepaid expenses and other current assets 425,741 428,490
----------- ------------
Total current assets 25,105,873 28,402,829
----------- ------------
Property and equipment, at cost:
Furniture and equipment 940,793 910,443
Leasehold improvements 2,331,314 2,278,941
Accumulated depreciation (943,528) (870,848)
----------- ------------
2,328,579 2,318,536
----------- ------------
Other assets:
Certificate of deposit 1,785,000 1,785,000
Other assets 236,704 205,269
----------- ------------
2,021,704 1,990,269
----------- ------------
Total assets $29,456,156 $ 32,711,634
=========== ============
<CAPTION>
March 31, December 31,
LIABILITIES AND STOCKHOLDERS' EQUITY 1998 1997
--------------- ----------------
(Unaudited)
<S> <C> <C>
Current liabilities:
Accounts payable $ 185,748 $ 433,666
Accrued liabilities
Accrued compensation 412,166 477,231
Accrued research and development costs 200,000 200,000
Other 50,739 52,746
Current portion of notes payable 250,000 250,000
------------- --------------
Total current liabilities 1,098,653 1,413,643
Unearned advance royalty revenues 350,000 350,000
Notes payable 1,750,000 1,750,000
------------- --------------
Total liabilities 3,198,653 3,513,643
------------- --------------
Stockholders' equity
Common stock, par value, $.001 per share; Authorized:
15,000,000 shares; Issued: 9,569,815
in 1998 and 9,551,465 in 1997 9,570 9,551
Additional paid-in capital 62,208,136 62,142,239
Deficit accumulated during the development stage (35,955,420) (32,962,206)
Accumulated other comprehensive income (loss) (4,783) 8,407
------------- --------------
Total stockholders' equity 26,257,503 29,197,991
------------- --------------
Total liabilities and stockholders' equity $ 29,456,156 $ 32,711,634
============= =============
</TABLE>
The accompanying notes are an integral
part of the financial statements
2
<PAGE>
ANESTA CORP.
(A Development Stage Company)
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
________
<TABLE>
<CAPTION>
Three months ended Period from inception
----------------------------------
March 31, March 31, (August 1, 1985) to
1998 1997 March 31, 1998
------------- ------------- ----------------------
<S> <C> <C> <C>
Revenues:
Product sales $ 38,786 $ 24,231 $ 412,969
Royalty revenue 1,150 717 112,190
Revenues from contract research 9,978,931
------------- ------------- --------------
Total revenues 39,936 24,948 10,504,090
------------- ------------- --------------
Operating costs and expenses:
Cost of goods sold 10,897 7,023 130,668
Royalties 1,198 748 11,536
Research and development 1,916,050 1,816,452 32,650,833
Depreciation and amortization 76,717 59,559 1,173,868
Marketing, general and administrative 1,405,453 1,533,005 17,131,118
------------- ------------- --------------
Total costs and expenses 3,410,315 3,416,787 51,098,023
------------- ------------- --------------
Loss from operations (3,370,379) (3,391,839) (40,593,933)
Non operating income (expense):
Interest income 422,220 571,950 6,759,316
Interest expense (43,648) (19,266) (536,039)
Other (541) 25 (48,117)
------------- ------------- --------------
Loss before provision for income
taxes, extraordinary item and
cumulative effect of accounting
change (2,992,348) (2,839,130) (34,418,773)
Provision for income taxes (866) (810) (26,012)
------------- ------------- --------------
Loss before extraordinary item and
cumulative effect of change in
accounting (2,993,214) (2,839,940) (34,444,785)
Extraordinary item - reduction of income
taxes arising from carryforward of prior
years' operating losses 22,296
Cumulative effect of change in accounting (1,041,047)
------------- ------------- --------------
Net loss (2,993,214) (2,839,940) $ (35,463,536)
--------------
Other comprehensive loss:
Unrealized loss on marketable debt
securities, available-for-sale (13,190) (30,747)
------------- -------------
Comprehensive loss $ (3,006,404) $ (2,870,687)
------------- -------------
Basic and diluted loss per common share--
Loss before extraordinary item and cumulative
effect of change in accounting $ (0.31) $ (0.30)
------------- -------------
Net loss per common share $ (0.31) $ (0.30)
------------- -------------
Weighted average shares outstanding 9,569,815 9,462,242
------------- -------------
</TABLE>
The accompanying notes are an integral
part of the financial statements
3
<PAGE>
ANESTA CORP.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
________
<TABLE>
<CAPTION>
Three months ended Period from inception
-------------------------------------
March 31, March 31, (August 1, 1985) to
1998 1997 March 31, 1998
---------------- ---------------- -----------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (2,993,214) $ (2,839,940) $ (35,463,536)
Adjustments to reconcile net loss to net cash
used in operating activities:
Cumulative effect of accounting change 1,041,047
Depreciation and amortization 76,717 59,559 1,173,868
Debt conversion expense 101,330
Interest converted to equity 94,104
Compensatory stock options and stock 3,539
(Gain) loss on retirement of assets 586 (25) 75,209
Increase (decrease) due to changes in:
Accounts receivable 19,436 372,878 (63,427)
Prepaid expenses and other current assets 2,749 (136,609) (425,741)
Other assets (31,435) (28,683) (239,282)
Accounts payable (247,918) 512,647 185,748
Accrued liabilities (67,072) (79,369) 662,905
Unearned advance royalty revenues 350,000
------------- ------------- -------------
Net cash used in operating activities (3,240,151) (2,139,542) (32,504,236)
------------- ------------- -------------
Cash flows from investing activities:
Capital expenditures (87,396) (12,944) (3,302,775)
Proceeds from sale of assets 50 25 11,896
Costs associated with license agreements (1,109,533)
Advances to employees (1,650)
Purchase of marketable debt securities,
available-for-sale (5,976,772) (2,150,372) (58,358,556)
Proceeds from sale of marketable debt securities,
available-for-sale 6,220,443 2,038,853 40,716,519
Purchase of treasury bills (1,174,419)
Proceeds from maturity of treasury bills 1,174,419
Purchase of certificate deposit (816,000) (2,346,000)
Proceeds from maturity of certificate of deposit 306,000
------------- ------------- -------------
Net cash provided by (used in) investing activities 156,325 (940,438) (24,084,099)
------------- ------------- -------------
Cash flows from financing activities:
Principal payments on notes payable (337,500)
Proceeds from issuance of notes payable 800,000 3,337,700
Principle payments on obligations under capital leases (194,488)
Proceeds from issuance of common stock 65,916 41,626 60,473,243
Collections on sales receivable from
issuance of common stock 65,000
Proceeds from issuance of preferred stock 756,222
Deferred offering costs (277,103)
Dividends paid on preferred stock (491,884)
------------- ------------- -------------
Net cash provided by financing activities 65,916 841,626 63,331,190
------------- ------------- -------------
Net increase (decrease) in cash and cash equivalents (3,017,910) (2,238,354) 6,742,855
Cash and cash equivalents at beginning of period 9,760,765 22,807,608
------------- ------------- -------------
Cash and cash equivalents at end of period $ 6,742,855 $ 20,569,254 $ 6,742,855
============= ============= =============
</TABLE>
- Continued -
The accompanying notes are an integral
part of the financial statements
4
<PAGE>
ANESTA CORP.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS, Continued
(Unaudited)
________
<TABLE>
<CAPTION>
Three months ended Period from inception
------------------------------
March 31, March 31, (August 1, 1985) to
1998 1997 March 31, 1998
------------- ------------- ----------------------
<S> <C> <C> <C>
Supplemental schedule of noncash activities:
The Company issued stock and stock options for:
Purchase of additional license agreement $ 5,400
Notes receivable 71,000
The Company purchased leasehold improvements
using accounts payable 251,507
The Company entered into various capital lease
arrangements 204,610
The Company received stock as payment of a
note receivable 4,226
</TABLE>
The accompanying notes are an integral
part of the financial statements
5
<PAGE>
ANESTA CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
__________
1. Significant Accounting Policies:
-------------------------------
In the opinion of management, the accompanying financial statements contain
all adjustments (consisting only of normal recurring items) necessary to
present fairly the financial position of Anesta Corp. (a development stage
company) (the Company) as of March 31, 1998, and the results of its
operations for the three months ended March 31, 1998 and 1997 and for the
period from inception (August 1, 1985) to March 31, 1998, and its cash
flows for the three months ended March 31, 1998 and 1997 and for the period
from inception (August 1, 1985) to March 31, 1998. The results of
operations for the periods presented are not necessarily indicative of the
results to be expected for the full year period.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these
financial statements be read in conjunction with the Company's Annual
Report on Form 10-K for the period ended December 31, 1997.
Net Loss Per Share
------------------
Basic and diluted earnings per share are computed in accordance with
Statement of Financial Accounting Standards (SFAS) No. 128, Earnings per
Share (EPS). Basic EPS excludes dilution and is computed by dividing income
available to common stockholders by the weighted-average number of common
shares outstanding for the period. Diluted EPS reflects the potential
dilution from securities or contracts to issue common stock. Common
equivalent shares are excluded from the computation of diluted EPS when
their effect is antidilutive. As of March 31, 1998, options to purchase
1,317,294 shares of common stock at prices between $1.00 and $19.25 per
share were outstanding. As of March 31, 1997, options to purchase 1,012,739
shares of common stock were outstanding at prices between $0.80 and $19.25.
None of these options were included in the computation of diluted loss per
share because the effect would have been antidilutive.
2. Cash and Cash Equivalents and Marketable Debt Securities:
--------------------------------------------------------
At March 31, 1998, the Company maintained a majority of its cash and cash
equivalents and marketable debt securities in two banks in San Francisco,
California.
3. Income Taxes:
------------
The provision for income taxes for the three months ended March 31, 1998
and 1997 is related solely to state income taxes.
6
<PAGE>
ANESTA CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS, Continued
(Unaudited)
__________
4. Revolving/Term Promissory Note Agreements:
-----------------------------------------
On January 11, 1995, the Company entered into a revolving/term promissory
note in the amount of $1.5 million and on May 15, 1995, the term of the
revolving promissory note ended and the Company entered into a 10 year term
note in the amount of $1.5 million. Additionally, on March 20, 1997 the
Company entered into an 8 year term note for an additional $800,000, for a
total of $2.3 million. The agreements provide for a constant interest rate
of "160 basis points" above the financial institution's certificate of
deposit rate (6.00% at March 31, 1998). As of March 31, 1998 two payments
totaling $300,000 had been made leaving a balance of $2,000,000. Annual
payments in the amount of $250,000 will be made on approximately July 15
for the next 8 years beginning on July 15, 1998. Borrowings under the
agreement are collateralized by a certificate of deposit in the amount of
$2,040,000, which is maintained in a bank in Salt Lake City, Utah.
5. Collaborative Relationships:
---------------------------
Effective October 12, 1995, the Company entered into an amendment to a
prior agreement between Abbott International (A.I.) and the Company to
provide the Company the right to terminate or cause to become nonexclusive
A.I.'s license rights to OT-fentanyl products in one or more countries in
the world except the U.S. The amendment also eliminated $100,000 of the
$450,000 unearned advance royalty obligation, which amount was recognized
as royalty revenue during the year ended December 31, 1995. In January
1998, the Company exercised its right to terminate A.I.'s license rights to
OT-fentanyl products in all countries in the world except the U.S.
On January 28, 1998, the Company announced the signing of an exclusive
agreement with Grupo Ferrer (Ferrer) for the marketing, sales and
distribution of Anesta's OT-fentanyl product line, including Actiq(TM), in
Spain and Portugal. Under terms of the agreement, Ferrer will have
exclusive rights in Spain and Portugal to market and distribute Actiq and
certain other product applications of OT-fentanyl which will be
manufactured for Ferrer by Anesta. Grupo Ferrer is a leading private
Spanish pharmaceutical company.
7
<PAGE>
ANESTA CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS, Continued
(Unaudited)
_________
6. Stockholders' Equity:
---------------------
The table below presents the activity in stockholders' equity from
January 1, 1998 to March 31, 1998:
<TABLE>
<CAPTION>
Deficit
Accumulated Accumulated
Common Stock During the Other
-----------------------------------
Paid-in Development Comprehensive
Shares Amount Capital Stage Income (Loss) Total
---------- ---------- ----------- ------------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1998 9,551,465 $ 9,551 $62,142,239 $ (32,962,206) $ 8,407 $ 29,197,991
Exercise of stock options in
Jan. 1998 for cash and stock
(at $0.80 to $13.50 per share) 8,916 9 (19,580) (19,571)
Exercise of stock options in
Feb. 1998 for cash
(at $1.00 to $16.50 per share) 5,577 6 54,751 54,757
Exercise of stock options in
Mar. 1998 for cash
(at $5.00 to $14.125 per share) 3,857 4 30,726 30,730
Comprehensive loss (2,993,214) (13,190) (3,006,404)
---------- ---------- ------------ ------------- -------------- --------------
Balance at March 31, 1998 9,569,815 $ 9,570 $62,208,136 $ (35,955,420) $ (4,783) $ 26,257,503
---------- ---------- ------------ ------------- -------------- --------------
</TABLE>
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following Management's Discussion and Analysis of Financial Condition and
Results of Operations contains forward-looking statements which involve risks
and uncertainties. The Company's actual results could differ materially from
those anticipated in these forward-looking statements as a result of certain
factors discussed in this section. Additional risks and uncertainties are
described in the Company's most recently filed Annual Report on Form 10-K for
the fiscal year ended December 31, 1997.
RESULTS OF OPERATIONS
Revenues.
Total revenues increased by $15,000 or 60.1% for the three months ended March
31, 1998 as compared to the corresponding period in 1997. The increase is a
result of growth in the number of new orders and reorders of the Company's first
oral transmucosal product, Fentanyl Oralet(R).
Under the Company's agreements with Abbott Laboratories (Abbott), Abbott
manufactures Anesta's OT-fentanyl product line (Fentanyl Oralet and Actiq) and
sells these products to the Company at a price which reflects Abbott's cost of
manufacturing. The Company then sells the products to Abbott at a price related
to Abbott's selling price which results in a gross profit to the Company ranging
from approximately 40-70%. In addition, the Company is entitled to receive a
royalty on OT-fentanyl product sales by Abbott.
Operating Expenses.
Research and development expenses increased by $99,600 or 5.5% for the three
months ended March 31, 1998 as compared to the corresponding period in 1997.
The increase is due to higher expenditures in 1998 related to clinical research
programs and preparation for filing the amendment for the Actiq New Drug
Application (NDA). The Company expects that its research and development
expenses will increase in the future as a result of increased expenses related
to the hiring of additional personnel, preclinical studies, clinical trials,
product development and manufacturing process development activities.
Depreciation expense increased by $17,200 or 28.9% for the three months ended
March 31, 1998 as compared to the corresponding period in 1997. The increase in
1998 is due to the Company's remodeling of additional facilities near the end of
1997.
Marketing, general and administrative expenses decreased by $127,600 or 8.3% for
the three months ended March 31, 1998 as compared to the corresponding period in
1997. The decrease in marketing, general and administrative expenses is due
primarily to lower expenditures for personnel, corporate development activities,
marketing research, and Actiq pre-marketing activities for the three months
ended March 31, 1998. The Company expects that its marketing and general and
administrative expenses will increase in the future as a result of the increased
support required for marketing research, Actiq pre-launch market development and
market launch activities, and corporate development activities.
Non Operating Income (Expense).
Interest income decreased by $149,700 or 26.2% for the three months ended March
31, 1998 as compared to the corresponding period in 1997. The decrease is
primarily due to a reduction in the amount of invested funds for the three
months ended March 31, 1998 as compared to the corresponding period in 1997.
9
<PAGE>
Interest expense increased by $24,400 or 126.6% for the three months ended March
31, 1998 as compared to the corresponding period in 1997. The increase is
primarily due to increased borrowings under the term note (See Note 4 to
Financial Statements).
Net Loss.
As a result of the increase in total revenues, the increase in research and
development activities and other factors discussed above, the net loss for the
three months ended March 31, 1998 was $2,993,200 or $0.31 per share as compared
to $2,839,900 or $0.30 per share for the same period in 1997.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 1998, the Company had cash and cash equivalents totaling
$6,742,900, $2,040,000 in a certificate of deposit used as collateral for a
revolving/term loan (See Note 4 to Financial Statements), and $17,618,900 in
marketable debt securities which are available for sale. Thus cash, cash
equivalents, certificate of deposit and marketable debt securities totaled
$26,401,705 as of March 31, 1998. Cash in excess of immediate requirements is
invested according to the Company's investment policy, which provides guidelines
with regard to liquidity and return, and, wherever possible, seeks to minimize
the potential effects of concentration of credit risk.
The Company used cash in operating activities of $3,240,200 for the three months
ended March 31, 1998 compared to $2,139,500 for the corresponding period in
1997. The increase in cash used in the period is a direct result of the increase
in net loss and the decrease in accounts payable.
During the three months ended March 31, 1998, the Company made capital
expenditures of approximately $87,400 as compared to capital expenditures of
$12,900 during the corresponding period in 1997.
During the three months ended March 31, 1998, the Company realized cash proceeds
of $65,900 relating to the exercise of stock options. During the three months
ended March 31, 1997 the Company realized cash proceeds of $41,600 relating to
the exercise of stock options and $800,000 from issuance of notes payable.
The Company's future capital requirements could be substantial and will depend
on, and could increase as a result of, many factors, including progress of the
Company's research and development programs; the results and costs of
preclinical and clinical testing of the Company's products, if developed; the
time and costs involved in obtaining regulatory approvals; the costs involved in
filing patents; the time and costs involved in developing and maintaining
collaborative research relationships; the costs associated with potential
commercialization of its products; and administrative and legal costs.
The Company believes that it is prudent to monitor existing cash balances in
order to fund the activities which the Company believes are necessary to
continue its growth. Therefore, the Company periodically evaluates market
conditions and various financing alternatives for obtaining funds to augment
existing cash balances.
10
<PAGE>
Part II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION.
On May 5, 1998 the Company released the press release filed as exhibit 99.1
hereto entitled "Anesta Files Amendment for Actiq NDA".
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a) EXHIBITS.
Exhibit
Number Description
------ -----------
27.1 Financial Data Schedule
99.1 Anesta Corp. May 5, 1998 Press Release
b) REPORTS ON FORM 8-K.
None.
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: May 15, 1998 ANESTA CORP.
By: /s/ Thomas B. King
------------------------------
Thomas B. King, President and
Chief Executive Officer
(Authorized Signatory)
By: /s/ Roger P. Evans
------------------------------
Roger P. Evans, Controller
(Principal Accounting Officer)
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<EXCHANGE-RATE> 1
<CASH> 6,743
<SECURITIES> 17,619
<RECEIVABLES> 63
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 25,106
<PP&E> 3,272
<DEPRECIATION> 944
<TOTAL-ASSETS> 29,456
<CURRENT-LIABILITIES> 1,099
<BONDS> 1,750
0
0
<COMMON> 10
<OTHER-SE> 26,248
<TOTAL-LIABILITY-AND-EQUITY> 29,456
<SALES> 39
<TOTAL-REVENUES> 40
<CGS> 12
<TOTAL-COSTS> 3,410
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 44
<INCOME-PRETAX> (2,992)
<INCOME-TAX> 1
<INCOME-CONTINUING> (2,993)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,993)
<EPS-PRIMARY> (0.31)
<EPS-DILUTED> (0.31)
</TABLE>
<PAGE>
EXHIBIT 99.1
[LOGO]
LETTERHEAD OF ANESTA APPEARS HERE
- --------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE CONTACT: Thomas B. King or
William C. Moeller
801 595 1405
ANESTA FILES AMENDMENT FOR ACTIQ(TM) NDA
SALT LAKE CITY, UT -- May 5, 1998 -- Anesta Corp. (Nasdaq: NSTA) announced
today that it has submitted its amendment to the New Drug Application (NDA)
for Actiq (oral transmucosal fentanyl citrate). This amendment is in response
to the not approvable action letter received from the U.S. Food and Drug
Administration (FDA) on November 13, 1997. The amendment addresses all of the
issues outlined in the FDA action letter. The Actiq NDA was originally
submitted to the FDA in November 1996, requesting marketing clearance for use
in the treatment of chronic pain, particularly breakthrough pain, in opioid-
tolerant patients.
The action letter from the FDA drew attention to issues relating to clinical
results, data analysis, manufacturing information, and the Company's proposed
risk management plan. The action letter followed a unanimous vote (19 - 0)
from the FDA's Anesthetic and Life Support Drugs Advisory Committee on
September 17, 1997, advising FDA that the benefits of Actiq for use in the
intended patient population outweigh the product's risks to unintended
populations, which was the only question the FDA had asked the advisory
committee for its advice and vote.
"Since we received the action letter, we have worked diligently with the FDA
and outside experts to fully understand all of the issues surrounding the
approvability of the Actiq NDA," said Thomas B. King, Anesta president and
CEO. "We have met with the FDA on several occasions with our clinical
experts, conducted telephone meetings, and exchanged significant amounts of
data and information during the past 5 1/2 months, all in an effort to
develop a full and complete response to the issues raised in the action
letter. We believe our amendment is very comprehensive and addresses all of
the issues contained in the action letter."
Under current regulations, the FDA has up to 180 days to review the
amendment. The NDA for Actiq is the first ever to include a breakthrough pain
indication and, if approved, Actiq will be the first product specifically
cleared for this indication.
(more)
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT 99.1
[LOGO]
- --------------------------------------------------------------------------------
Breakthrough pain is a flare of severe pain, which "breaks through" the
medication that is being administered at regular intervals for persistent
pain. Breakthrough pain is a component of chronic pain that is particularly
difficult to treat due to its severity, rapid onset and frequent
unpredictability. Approximately 50 percent of all cancer pain patients, more
than 800,000 patients in the US alone, experience breakthrough pain, which is
by definition severe and frequently has a significant impact on a patient's
life.
Anesta is a leader in oral transmucosal drug delivery. The company's first
oral transmucosal product, Fentanyl Oralet(R), is cleared for marketing by
the FDA for use in surgical premedication and for sedation/analgesia prior to
diagnostic or therapeutic procedures in hospital settings. Actiq is intended
to treat breakthrough pain in home, as well as institutional settings, and
had completed an initial FDA review with the issuance of an unfavorable
regulatory action letter in November 1997. Successful review of the Actiq NDA
amendment by the FDA needs to be successfully completed before Actiq could be
cleared for marketing. Other products in clinical development using Anesta's
OT-system for drug delivery include OT-nicotine for smoking cessation and OT-
etomidate for short-acting sedation in an outpatient setting.
Further information is available on the Anesta homepage at
http://www.anesta.com.
---------------------
This news release contains forward looking statements that involve risk and
uncertainties. Future events may differ materially from those discussed
herein, due to a number of factors, including uncertainties related to
clinical research results and regulatory approvals, as well as other factors
which are more fully discussed in the Company's Annual Report on Form 10-K
for the year ended December 31, 1997.
###
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