Acusphere, Inc. Reports 2005 Financial Results and Operating Highlights.WATERTOWN, Mass. -- Acusphere, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : ACUS acus (a´kus) a needle or needle-like process. acus a needle or needle-like process. ) today reported financial results for the quarter and year ended December 31, 2005 and commented on operating progress. Financial Results The Company's financial results for the quarter and year ended December 31, 2005 are summarized in the accompanying table. These results are detailed in Acusphere's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. as scheduled to be filed today with the U.S. Securities and Exchange Commission. During 2005, the Company recognized $3.4 million in collaboration revenue in connection with its agreement with Nycomed for European marketing rights to the Company's lead product candidate, AI-700. As of December 31, 2005, the Company reported $6.0 million in deferred revenues relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc this agreement. Under this agreement, as amended, Nycomed is scheduled to pay Acusphere $2.9 million in 2006, including up to $1.85 million which Nycomed agreed to pay to help fund the Company's qualification of its commercial manufacturing facility for AI-700. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. in 2005 increased to $49.6 million, compared to $32.1 million in 2004, primarily due to costs incurred for the Company's Phase 3 clinical program for AI-700 and the one-time $6.2 million write-off in June 2005 related to the acquisition of patents from Schering AG. As of December 31, 2005, the Company's total assets were $95.8 million of which cash and cash equivalents totaled $51.1 million. Operating Update The Company announced today that the 90-day patient follow-up period for one of its Phase 3 pivotal trials, the "32" trial for AI-700, is now concluded. The Company is now focused on conducting quality control checks to ensure that all of the required data have been fully gathered and filed prior to locking the data base and announcing trial results in the second quarter of 2006. The "33" trial, as previously reported, will continue to enroll patients into the second quarter of 2006, with results from this trial expected in the fourth quarter this year. Since inception of Acusphere's clinical testing of AI-700, more than 1,000 people have received AI-700, including approximately 750 patients in the Phase 3 pivotal trials. Based upon market research, Acusphere believes that the potential market for AI-700 again expanded in 2005, with an estimated 3.0 million stress echoes and 8.9 million nuclear stress tests performed in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Using an assumed $200 price per procedure for AI-700, this represents a potential U.S. market for AI-700 of approximately $2.4 billion. As previously reported, build-out of the Company's AI-700 manufacturing facility was substantially completed in 2005 and it is now undergoing qualification of AI-700 operations within the facility in compliance with current good manufacturing practices Good Manufacturing Practice or GMP (also referred to as 'cGMP' or 'current Good Manufacturing Practice') is a term that is recognized worldwide for the control and management of manufacturing and quality control testing of foods and pharmaceutical products. or cGMPs. The Company anticipates that this process facility will be ready to support an NDA (Non Disclosure Agreement) An agreement signed between two parties that have to disclose confidential information to each other in order to do business. In general, the NDA states why the information is being divulged and stipulates that it cannot be used for any filing for AI-700 in the first half of 2007. Nycomed, Acusphere's European partner for AI-700, in late 2005 and early 2006, agreed to make payment to Acusphere of up to $2 million earmarked to fund certain activities associated with branding of AI-700 and manufacturing facility qualification. These payments represent an acceleration of a milestone payment previously due upon acceptance of Nycomed's filing of the MAA MAA abbr. macroaggregated albumin , the European equivalent of an NDA, for AI-700. In 2005, Acusphere continued to advance its proprietary HDDS HDDS Hazards Data Distribution System HDDS High-Density Data System HDDS Hull Design Database System HDDS Hazardous Device Disposal Squad HDDS Hold Deck Deck Switch HDDS Hydro-Dynamic Device Simulator and PDDS PDDS Peoria District Dental Society PDDS Porsche Design Driver's Selection PDDS Personal Desk Delivery Support technologies. The Company signed a master agreement to conduct a feasibility study "A Feasibility Study" is an episode of the original The Outer Limits television show. It first aired on 13 April, 1964, during the first season. It was remade in 1997 as part of the revived The Outer Limits series with a minor title change. for a large pharmaceutical company to reformulate Verb 1. reformulate - formulate or develop again, of an improved theory or hypothesis redevelop formulate, explicate, develop - elaborate, as of theories and hypotheses; "Could you develop the ideas in your thesis" one of its anti-cancer drugs. Acusphere's expenses for this study are being paid by the partner and Acusphere expects to provide an update on this study early in the second quarter of 2006. Commenting on the fourth quarter and year 2005, Sherri C. Oberg, President and Chief Executive Officer, said "we have made tremendous clinical and manufacturing progress this year toward the goal of commercializing our lead product candidate, AI-700." Oberg added, "We expect 2006 to be an exciting year with numerous important milestones including announcing results from both of our Phase 3 pivotal trials." Upcoming Milestones Looking ahead, the Company expects to continue on the progress in 2005 with important milestones for 2006: --Results of the 32 trial in Q2 --Completion of enrollment in the 33 trial in Q2 --Production of AI-700 development batches in Q2 at the Tewksbury facility --An update on the HDDS feasibility study The analysis of a problem to determine if it can be solved effectively. The operational (will it work?), economical (costs and benefits) and technical (can it be built?) aspects are part of the study. Results of the study determine whether the solution should be implemented. in early Q2 --Results of the 33 trial in Q4 and, --Future HDDS and/or PDDS collaborations Conference Call Information Acusphere plans to hold a conference call with investors today, Monday, March 20, 2006, commencing at 10:00 AM (Eastern Time). The conference call will include a discussion of the Company's operating results, business outlook and status of Acusphere's technology and manufacturing by Dr. Howard Bernstein, S.V.P. of Research and Development for Acusphere, who will also be available for investor questions. The conference may be heard live via the investor relations Investor relations The process by which the corporation communicates with its investors. section of the Company's website at www.acusphere.com or by dialing 1-866-314-5232, or internationally 1-617-213-8052, using the confirmation code: 44335324. After the conference call, a replay of the call webcast will be made available via the Company's web site and a telephone replay will be available through April 3, 2006 by dialing 1-888-286-8010, or internationally 1-617-801-6888, using the confirmation code: 48283796. About Acusphere, Inc. Acusphere (NASDAQ: ACUS) is a specialty pharmaceutical company that develops new drugs and improved formulations of existing drugs using its proprietary microparticle technology. Acusphere's three initial product candidates are designed to address large unmet clinical needs within cardiology cardiology Medical specialty dealing with heart diseases and disorders. It began with the 1749 publication by Jean Baptiste de Sénac of contemporary knowledge of the heart. Diagnostic methods improved in the 19th century, and in 1905 the electrocardiograph was invented. , oncology and asthma. These product candidates were created using proprietary technology that enables Acusphere to control the porosity porosity /po·ros·i·ty/ (por-os´it-e) the condition of being porous; a pore. po·ros·i·ty n. 1. The state or property of being porous. 2. and size of nanoparticles and microparticles in a versatile manner that allows particles to be customized to address the delivery needs of a variety of drugs. Acusphere's lead product candidate, AI-700, is a cardiovascular drug in Phase 3 clinical development. AI-700 is designed to enable ultrasound to compete more effectively with nuclear stress testing Determining the durability of a system by pushing it to its limits. Stress testing a network is performed by transmitting excessive numbers of packets or attempting to break in illegally. , the leading procedure for detecting coronary heart disease coronary heart disease: see coronary artery disease. coronary heart disease or ischemic heart disease Progressive reduction of blood supply to the heart muscle due to narrowing or blocking of a coronary artery (see atherosclerosis). . An estimated 11.9 million procedures are done each year in the U.S. to detect coronary heart disease, the leading cause of death in the United States. For more information about Acusphere visit the Company's web site at www.acusphere.com. "Acusphere" is a trademark of Acusphere, Inc. Forward-looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. The above press release contains forward-looking statements which are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of Section 21E of the Securities Exchange Act of 1934. Investors are cautioned that statements in this press release, including statements regarding future revenue projections, the commercial prospects of AI-700, AI-700 trial and results timing, qualification of the Company's commercial manufacturing facility for AI-700 and partnership prospects constitute forward-looking statements which involve risks and uncertainties. The Company's actual results may differ materially from those anticipated in these forward-looking statements based upon a number of factors, including anticipated operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. and existing capital obligations, uncertainties associated with research, development, testing and related regulatory approvals, including uncertainties regarding the ultimate outcome of Acusphere's Phase 3 clinical trials phase 3 clinical trial Phase 3 study. See Phase study. for AI-700 and uncertainties regarding the number of patients required to complete the Phase 3 clinical trials, unproven unproven Dubious, nonscientific, not proven, quack, questionable, unscientific adjective Relating to that which has not been validated by reproducible experiments or other scientific methods for determining effect or efficacy markets, future capital needs and uncertainty of additional financing, lack of sales and marketing experience, uncertainties associated with intellectual property, uncertainties regarding the cost, timing and ultimate success of the qualification of the Company's commercial manufacturing facility in accordance with applicable regulatory requirements Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. , , complex manufacturing, high quality requirements, lack of commercial manufacturing experience, dependence on third-party manufacturers, suppliers and collaborators, competition, loss of key personnel, uncertainties associated with market acceptance and adequacy of reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. , technological change and government regulation, and other risks and challenges detailed in the Company's filings with the U.S. Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended December 31, 2005. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this press release. The Company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances that occur after the date of this press release or to reflect the occurrence of unanticipated events.
ACUSPHERE, INC.
FINANCIAL HIGHLIGHTS
In Thousands (except per share data)
CONDENSED CONSOLIDATED OPERATING RESULTS
(Unaudited) Twelve Months Ended
Three Months Ended
---------------------------------------
December December December December
31, 31, 31, 31,
2004 2005 2004 2005
Collaboration revenue $ 857 $ 857 $ 1,714 $ 3,428
Operating expenses:
Research and development 8,395 10,398 25,976 42,159
General and administrative 1,703 1,838 6,165 7,446
-------- --------- --------- ---------
Total operating expenses 10,098 12,236 32,141 49,605
Interest and other expense
(income) (145) 220 (468) (1,551)
-------- --------- --------- ---------
Net loss ($9,096) ($11,599) ($29,959) ($44,625)
Dividends on preferred stock - (655) - (2,418)
-------- --------- --------- ---------
Net loss available to common
stockholders ($9,096) ($12,254) ($29,959) ($47,044)
Net loss per common share -
basic and diluted ($0.51) ($0.56) ($1.92) ($2.49)
Weighted-average shares
outstanding - basic and
diluted 17,665 22,032 15,603 18,897
CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION
December 31, December 31,
2004 2005
--------------------------
Cash and short-term investments $ 45,180 $ 51,112
Current assets 47,277 52,254
Total assets 62,003 95,839
Current portion of deferred revenue 3,429 3,429
Other current liabilities 9,705 17,814
Long-term liabilities 3,360 17,179
Stockholders' equity 45,509 57,416
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