Healthcare Industry News:  otitis media 

Biopharmaceuticals FDA

 News Release - May 15, 2006

Advancis Pharmaceutical Receives FDA Approval Letter for New Strengths of Keflex

Company's First Product Approval Accompanied by Further Progress on PULSYS Clinical Study

GERMANTOWN, Md., May 15 (HSMN NewsFeed) -- Advancis Pharmaceutical Corporation (Nasdaq: AVNC ), a pharmaceutical company focused on developing and commercializing novel anti-infective products, today announced that the U.S. Food and Drug Administration (FDA) has issued an Approval Letter in response to Advancis' supplemental New Drug Application (NDA) for two new strengths of the Company's antibiotic Keflex® (cephalexin capsules, USP). Advancis received approval to market 333mg and 750mg capsules.

"Receiving our first supplemental NDA approval is a very significant milestone for Advancis and we believe our new Keflex products will make a meaningful financial contribution to the Company in 2006 and 2007," said Edward M. Rudnic, Ph.D., president, and CEO of Advancis. "We are pleased to have the opportunity to bring physicians greater flexibility in their prescribing of a drug that many consider a standard of care for skin infections."

The new Keflex (cephalexin) 750mg strength provides healthcare professionals a more convenient way to deliver a total daily dose of 1500mg per day, through the ability to use 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 written for cephalexin 500mg three times daily -- totaling 1500mg per day.

As previously announced, in April, the FDA initiated a pre-approval inspection of the Company's contract manufacturing facility operated by CEPH International Corporation, a wholly-owned subsidiary of Patheon Inc. Advancis has been informed by the FDA that the pre-approval inspection has been successfully completed.

Advancis expects to begin marketing the new Keflex strengths nationwide with a targeted sales force of approximately 75 sales representatives beginning in July of 2006. The Company has entered into an agreement-to- proceed with a contract sales organization that will employ the dedicated Keflex sales team.

"Over the coming months we will be working with payers, distributors, and retailers to build awareness, inventory and access to this important new addition to the Keflex line," said Darren Buchwald, vice president, commercial development, sales and marketing of Advancis. "The addition of a sales force to market Keflex directly to health care providers adds a critical element to the commercial capabilities already in place to support Keflex. We look forward to introducing the new Keflex strengths this summer."

Advancis acquired the rights to manufacture, market, and sell Keflex in the United States in July of 2004. Cephalexin is the third most prescribed outpatient antibiotic in the United States, with more than 25 million prescriptions written annually. Keflex 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. Advancis' net Keflex sales in 2005 were $4.8 million.

Amoxicillin PULSYS Phase III Trial Enrollment Update

The Company also announced that it was on schedule to complete its ongoing pivotal Phase III trial of Amoxicillin PULSYS for adolescents and adults with pharyngitis/tonsillitis by the end of this cold/flu season. Advancis enrolled a total of 574 patients as of the close of business May 12, 2006, and expects to enroll a total of at least 600 patients into the trial by the end of May. The Company plans to announce top-line trial results in the third quarter of 2006.

Financial Guidance

Advancis' financial guidance is revised as follows, to include the just- approved new Keflex products that are expected to begin contributing to the Company's product sales in the third quarter of 2006. Total revenue for 2006 is expected to be approximately $16 million to $17 million, up from approximately $5 million. This forecast assumes revenue recognition under generally accepted accounting principles (GAAP).

Net loss for the year is expected to increase by approximately $2 million from prior guidance, at between $32 million and $37 million, or approximately $1.05 to $1.25 per diluted common share. Projected cash, cash equivalents and marketable securities balance at December 31, 2006; however, is expected to remain unchanged at approximately $5 million, due to the effect of working capital changes.

Non-cash charges for 2006, consisting primarily of stock-based compensation expenses and depreciation and amortization, are expected to be approximately $7 million. These forecasts include an estimated $3 million non-cash impact from expensing of stock options under SFAS 123R.

Advancis continues to expect that its current funds, together with expected sales of all Keflex products, will be sufficient to support its currently planned operations through 2006. Assuming favorable market acceptance of the new Keflex products and our current expected level of research and development spending, the Company anticipates that it could generate positive operating cash flow over the year of 2007, thus providing sufficient funds to support its currently planned operations throughout the full year of 2007. Given suitable market conditions and favorable financing terms; however, the Company may consider raising additional capital during 2006 or 2007.

Conference Call

The Company has scheduled a conference call for today, Monday, May 15, 2006 at 10:30 AM ET. During the call, Dr. Edward Rudnic, president and CEO, and other members of Advancis management will discuss the new Keflex products and the Company's commercialization plans. Investors can call 1-800-813-8504 (domestic) and 1-706-643-7752 (international) prior to the 10:30 AM start time and ask for the Advancis Pharmaceutical conference call hosted by Dr. Rudnic. A replay of the call will be available on May 15, 2006 beginning at 12:30 PM ET and will be accessible until Monday, May 22, 2006 at 5:00 PM ET. The replay call-in number is 1-800-642-1687 for domestic callers and 1-706-645-9291 for international callers. The access number is 9320463.

The conference call will also be broadcast simultaneously on the Company's website, Investors should click on the Investor Relations tab and are advised to go to the website at least 15 minutes early to register, download, and install any necessary audio software. The call will also be archived on the Advancis website.

About Keflex:

Keflex® (cephalexin capsules, 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, and powder for oral suspension. Keflex is contraindicated in patients with known allergy to the cephalosporin group of antibiotics. More information on Keflex and prescribing information are available at


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 a portfolio of anti-infective drugs based on its novel biological finding that bacteria exposed to antibiotics in frontloaded staccato bursts, or "pulses," are killed more efficiently and effectively than those under standard treatment regimens. Based on this finding, Advancis has developed a proprietary, once-a-day pulsatile delivery technology called PULSYS. 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

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, and financial results. 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, (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 develop, receive regulatory approval, and commercialize any new 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.

Source: Advancis Pharmaceutical

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