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Zogenix narrows 3Q loss, expenses fall

The Associated Press

NEWS: Zogenix Inc.'s third-quarter loss narrowed compared to last year, when the pain drug developer booked heavier charges for interest expense and other items.

DETAILS: The San Diego company said Monday that it had $170,000 in other income this year compared to $8.6 million in expenses in last year's quarter due in part to interest and a change in fair value of warrant liabilities.

Zogenix also recorded lower research and development spending this year due to lower development costs for two drugs. Its selling, general and administrative expenses also dropped. Those declines helped balance a drop in revenue.

Zogenix products include the recently approved extended-release painkiller Zohydro ER, which contains the widely abused prescription painkiller hydrocodone.

The company is working with the privately held company Altus Formulation Inc. to develop an abuse-deterrent form of Zohydro ER. Zogenix said last week that it will pay Altus a $750,000 technology access fee and possibly an additional $3.5 million in milestone payments.

Zogenix also said Monday that it plans to sell $60 million in shares of its common stock through a public offering in part to raise money for the marketing of Zohydro ER.

NUMBERS: The company lost $10.8 million, or 10 cents per share, in the three months that ended Sept. 30. That compares to a loss of $19.3 million, or 21 cents per share, in last year's quarter.

The adjusted loss in this year's quarter totaled 12 cents per share. Analysts surveyed by FactSet expected, on average, a loss of 9 cents per share.

Revenue fell 15 percent to $7.2 million due mainly to a return reserve increase. Analysts expected $9.3 million in revenue.

STOCK: Down 15 percent, or 44 cents, to $2.48 in afternoon trading. The shares closed at $2.92 on Friday and have more than doubled since closing 2012 at $1.33.