Oscient Pharmaceuticals Reports First Quarter 2008 Financial Results

Business Wire,  May 7, 2008  

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-- Conference call with senior management scheduled for 8:30 AM today --

WALTHAM, Mass. -- Oscient Pharmaceuticals Corporation (Nasdaq: OSCI) today reported financial results for the first quarter ended March 31, 2008. Oscient issued preliminary revenue results for the first quarter on April 16, 2008. Highlights from the quarter include:

* Recorded total revenues of $18.4 million in the first quarter of 2008;

* ANTARA([R]) (fenofibrate) capsules prescriptions increased 31% in the first quarter of 2008 compared to the first quarter of 2007;

* Estimated wholesaler and retail inventory levels of ANTARA decreased by approximately three weeks in the first quarter from year-end levels;

* Secured preferred formulary status for ANTARA for the 40 million patients covered by CVS Caremark's Caremark Prescription Guide;

* Based on these first quarter 2008 results, the Company reiterates its projections for 2008 revenues of approximately $100 million.

Total revenues for the first quarter of 2008 were $18.4 million, which included $12.6 million in revenue from the cardiovascular drug ANTARA and $5.8 million in revenue from the antibiotic FACTIVE([R]) (gemifloxacin mesylate) tablets. This compares to $23.2 million in total revenues recorded in the first quarter of 2007, with $12.3 million from ANTARA and $10.9 million from FACTIVE.

For the first quarter ended March 31, 2008, the Company reported a net loss of ($21,417,000), or ($1.53) per basic and diluted share. This compares to a net loss of ($11,962,000), or ($0.88) per basic and diluted share, for the first quarter of 2007. During the quarter ended March 31, 2008, the Company's cash position decreased by approximately $10.4 million to approximately $42.1 million in total cash, cash equivalents and restricted cash.

Selling, marketing, general and administrative expenses were $23.6 million in the first quarter of 2008, compared to $21.0 million in the first quarter of 2007. Research and development expenses for the first quarter of 2008 totaled approximately $1.3 million, compared to $1.5 million in the first quarter of 2007. First quarter 2008 results included approximately $6.9 million in non-cash charges, compared to $2.3 million in the first quarter of 2007. Non-cash charges in the first quarter of 2008 included $3.9 million recorded as interest expense, $2.4 million primarily related to the amortization of intangibles and $0.6 million of stock-based compensation.

"We are pleased with the prescription growth for ANTARA in the first quarter and our enhancements in managed care reimbursement," stated Steven M. Rauscher, President and Chief Executive Officer. "Since we recognize revenues as wholesalers receive shipments of ANTARA and FACTIVE, the timing of shipments and wholesaler buying patterns can cause quarterly revenues to fluctuate and make them difficult to predict. However, with the continued strong prescription growth for ANTARA we are reaffirming our previously announced 2008 revenue and cash use guidance."

Financial Guidance

The Company reiterates that it expects $96-103 million in revenue for fiscal year 2008 from ANTARA and FACTIVE, with approximately three-quarters of those revenues derived from sales of ANTARA. The Company also reiterates its expected net cash utilization of approximately $28-30 million in 2008. This guidance does not include any cash impact of the acquisition and marketing of a third product, which remains one of the Company's top business development goals.

"Strategically, we have emphasized the ANTARA brand in our selection of physician customers, as well as in the compensation incentives provided to our territory managers in the field. ANTARA is a higher margin product for Oscient and it participates in a more rapidly growing market segment. These factors are reflected in the revenue mix guidance we have provided for 2008," added Mr. Rauscher.

Market Performance Highlights

* ANTARA prescription performance: During the first quarter of 2008, based on Wolters Kluwer Health monthly prescription data, approximately 158,500 total prescriptions for ANTARA were filled, representing a 31% increase compared to the first quarter of 2007.

* FACTIVE prescription performance: Based on Wolters Kluwer Health monthly prescription data, during the first quarter of 2008, more than 77,900 prescriptions for FACTIVE were dispensed, representing a 21% decrease from the first quarter of 2007, which is related to the Company's increased promotional focus on ANTARA.

Managed Markets Progress

During the first quarter, Oscient and CVS Caremark, a leading pharmacy services provider, agreed to preferred Caremark formulary status (tier two) in the Caremark Prescription Guide for ANTARA, making ANTARA available at a lower co-payment cost to more than 40 million patients in the CVS Caremark network. Our managed market team remains committed to ensuring that patients at risk for cardiovascular disease have access to the clinical benefits of ANTARA and continues to work diligently with pharmacy benefit managers and managed care organizations to garner preferred formulary status for the product.