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INFINITY PHARMACEUTICALS, INC. Reports Operating Results (10-Q)

November 06, 2012 | About:
10qk

10qk

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INFINITY PHARMACEUTICALS, INC. (INFI) filed Quarterly Report for the period ended 2012-09-30.

Infinity Pharmaceuticals, Inc. has a market cap of $751.4 million; its shares were traded at around $21.99 with and P/S ratio of 8.1.

Highlight of Business Operations:

Millennium may terminate its participation rights in any oncology product with 12 months prior written notice to us, after which Millenniums participation rights would revert back to the original milestone- and royalty-based payment structure, provided that Millennium would not be entitled to receive royalty payments for net sales occurring prior to the termination date and certain specified milestone payments.

Mundipharma and Purdue have no further obligation to provide research and development funding to us. Under the alliance, Mundipharma was obligated to reimburse us for research and development expenses we incurred, up to an annual aggregate cap for each alliance program other than FAAH. During the nine months ended September 30, 2012, we received $55 million in research and development funding. We recognized revenue for reimbursed research and development services we performed for Mundipharma and Purdue. We recognized $0 and $45 million in such revenue in the three and nine months ended September 30, 2012, respectively. We recognized $22.3 million and $67.3 million in such revenue, which included $0.5 million and $3.3 million, respectively, in revenue related to reimbursed research and development services for the transition of the FAAH program, in the three and nine months ended September 30, 2011, respectively. We did not record a liability for amounts previously funded by Purdue and Mundipharma as this relationship was not considered a financing arrangement.

As a result of the 2012 termination agreements, we have no further research and development service performance obligations to Mundipharma or Purdue. We recognized $0 and $2.1 million in revenue from the upfront license fee in the three and nine months ended September 30, 2012, respectively. We recognized $1.0 million and $3.1 million in such revenue in the three and nine months ended September 30, 2011, respectively.

Our revenue during the three and nine months ended September 30, 2012 consisted of approximately $0 and $45 million, respectively, for reimbursed research and development services we performed under our strategic alliance with Mundipharma and Purdue, and $0 million and $2.1 million, respectively, from the amortization of the deferred revenue associated with the grant of rights and licenses under this alliance. Our revenue during the three and nine months ended September 30, 2011 consisted of approximately $22.3 million and $67.3 million, respectively, for reimbursed research and development services, including $0.5 million and $3.3 million, respectively, in revenue related to reimbursed research and development services for the transition of the FAAH program, and $1.0 million and $3.1 million, respectively, from the amortization of the deferred revenue associated with the grant of rights and licenses under our alliance with Mundipharma and Purdue. The decrease in reimbursed research and development services revenue for the three and nine months ended September 30, 2012 was due to the 2012 termination agreements with Mundipharma and Purdue. We do not expect to recognize any research and development service revenue in future periods from Mundipharma and Purdue.

We have not generated any revenue from the sale of drugs to date, and we do not expect to generate any such revenue for the next several years, if at all. We have instead relied on the proceeds from sales of equity securities, interest on investments, license fees, expense reimbursement under our collaborations, milestone payments, contract service payments and debt to fund our operations. Our available-for-sale debt securities primarily trade in liquid markets, and the average days to maturity of our portfolio, as of September 30, 2012, is less than six months. Because our product candidates are in various stages of clinical and preclinical development and the outcome of these efforts is uncertain, we cannot estimate the actual amounts necessary to successfully complete the development and commercialization of our product candidates or whether, or when, we may achieve profitability.

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