POZEN Provides Patent Litigation and Financial Guidance Update

POZEN Inc. , a pharmaceutical company committed to transforming medicine that transforms lives, today announced a conference call to discuss updates and financial guidance.As previously disclosed, on August 5, 2011, the United States District Court for the Eastern District of Texas issued a favorable verdict in the litigation between POZEN and several generic pharmaceutical companies which had filed Abbreviated New Drug Applications (ANDAs) seeking approval from the U.S. Food and Drug Administration (FDA) to market generic copies of Treximet(R) (sumatriptan / naproxen sodium). Treximet is marketed by POZEN's exclusive U.S. licensee, GlaxoSmithKline (GSK). The District Court ruled U.S. Patent Nos. 6,060,499 (the '499 patent) and 6,586,458 (the '458 patent) to be valid, enforceable and infringed by Par Pharmaceutical, Inc. (Par), Alphapharm Pty Ltd. (Alphapharm), and Dr. Reddy's Laboratories, Inc. (DRL). A third patent, U.S. Patent No. 7,332,183 (the '183 patent) covering the Treximet formulation was held to be valid, enforceable and infringed by Par and DRL. The '183 patent was not asserted against Alphapharm. Each of the defendants have appealed the decision to the U.S. Court of Appeals for the Federal Circuit.As a result of the successful patent defense, we expect the royalty from Treximet sales will continue at 18% of net sales, at least through the August 2017 patent expiry, assuming the Court of Appeals upholds the decision. If the pediatric extension is granted, the exclusivity period could extend to February 2018.Therefore, we are now estimating 2011 revenue to be in the range of $18-19 million. We are estimating 2011 operating expenses to be in the range of $45.5 million to $47.5 million and an expected full year net loss of $27-$29 million. At the end of the year, we project our cash and short-term investment balance to be in the range of $39-$41 million and our accounts receivable to be approximately $4.6 million.In 2012, we expect that our R&D costs will be substantially lower due to the completion of our PA32540 Phase 3 studies and our current plan targets a cash and short-term investment balance of greater than $30 million.