Columbia Laboratories Reports Second Quarter 2006 Financial Results; Management to Host Conference Call at 11:00 am Today.LIVINGSTON, N.J. -- Columbia Laboratories, 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 : CBRX) today announced financial results for the second quarter ended June 30, 2006. Key quarterly results and recent events include: --Net revenues of $5.5 million, compared to $6.3 in the second quarter of 2005. Net revenues increased 22% from $4.5 million in the first quarter of 2006. --Operating expenses of $5.1 million, compared to $5.0 million in the second quarter of 2005. 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. were $4.8 million in the first quarter of 2006. --Loss from operations of $1.9 million, compared to the loss from operations of $1.0 million in the second quarter of 2005. Loss from operations decreased 10% from $2.1 million in the first quarter of 2006. --Net loss of $2.5 million, or $0.05 per basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to a net loss of $1.6 million, or $0.04 per basic and diluted share, in the second quarter of 2005. Net loss decreased 10% from $2.7 million, or $0.06 per share, in the first quarter of 2006. --Completed enrollment in the pivotal Phase III Noun 1. phase III - a large clinical trial of a treatment or drug that in phase I and phase II has been shown to be efficacious with tolerable side effects; after successful conclusion of these clinical trials it will receive formal approval from the FDA study of Prochieve(R) 8% (progesterone progesterone (prōjĕs`tərōn'), female sex hormone that induces secretory changes in the lining of the uterus essential for successful implantation of a fertilized egg. gel) for the prevention of preterm preterm /pre·term/ (-term´) before completion of the full term; said of pregnancy or of an infant. pre·term adj. birth. Robert S Robert, Henry Martyn 1837-1923. American army engineer and parliamentary authority. He designed the defenses for Washington, D.C., during the Civil War and later wrote Robert's Rules of Order (1876). Noun 1. . Mills, Columbia's president and chief executive officer, stated, "During the first half of 2006 we fine-tuned our user-based selling strategy and increased the emphasis on our OB/GYN audience, resulting in a 10% increase in prescriptions of Prochieve 8% that will contribute to future orders from wholesalers. We will continue to focus our energies on women's health Women's Health Definition Women's health is the effect of gender on disease and health that encompasses a broad range of biological and psychosocial issues. for the foreseeable fore·see tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees To see or know beforehand: foresaw the rapid increase in unemployment. future to further penetrate the infertility infertility, inability to conceive or carry a child to delivery. The term is usually limited to situations where the couple has had intercourse regularly for one year without using birth control. market with Prochieve 8% while raising awareness Raising awareness is a common phrase advocacy groups use to justify a particular event, brochure or even the entire organization. Raising awareness refers to alerting the general public that a certain issue exists and should be approached the way the group desires. of the potential benefits of using progesterone to prevent preterm birth. "Our intense, sustained R&D efforts throughout the first half of 2006 enabled us to complete enrollment in the Phase III study of Prochieve 8% for the prevention of preterm birth two months ahead of our stated guidance. This significant achievement should allow Columbia to complete this large-scale, global trial around the end of this year and to announce initial results toward the end of the first quarter of 2007. "Preterm births in the U.S. cost an average of $51,600 per infant in 2005. We are hopeful that our study will demonstrate that Prochieve 8% can reduce the incidence of preterm birth in women who are predisposed pre·dis·pose v. pre·dis·posed, pre·dis·pos·ing, pre·dis·pos·es v.tr. 1. a. To make (someone) inclined to something in advance: to this problem and thereby positively affect the impact of this vexing problem on the U.S. healthcare U.S. Healthcare is a now-defunct healthcare company. The logo had an apple. The merger with Aetna In 1996, the company merged with Aetna, calling it Aetna U.S. Healthcare. The U.S. Healthcare apple logo was next to the Aetna name, and U.S. Healthcare under it. U.S. system," concluded Mills. Prochieve(R) 8% (progesterone gel) for Preterm Birth During the second quarter of 2006, Columbia continued to successfully implement its strategies to enroll patients in the Prochieve(R) preterm study, which culminated in the completion of enrollment in late July. This randomized ran·dom·ize tr.v. ran·dom·ized, ran·dom·iz·ing, ran·dom·iz·es To make random in arrangement, especially in order to control the variables in an experiment. , double-blind, placebo-controlled Phase III study trial involves over 600 patients at more than 60 centers throughout 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. , Europe, South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. , Asia and South Africa South Africa, Afrikaans Suid-Afrika, officially Republic of South Africa, republic (2005 est. pop. 44,344,000), 471,442 sq mi (1,221,037 sq km), S Africa. . It is designed to assess the ability of Prochieve(R) 8% to safely, effectively and tolerably prevent preterm birth in pregnant women who are predisposed to this problem. The ultimate goal of this program is to expand the Prochieve(R) 8% label beyond infertility and secondary amenorrhea secondary amenorrhea n. Amenorrhea in which menstruation begins at puberty but then is subsequently suppressed. secondary amenorrhea , for which it is currently FDA-approved and commercially available, to include the prevention of preterm birth in women who are at risk for this problem. Financial Overview Net revenues for the second quarter of 2006 were $5.5 million, compared to $6.3 million in the second quarter of 2005. Net revenues in the second quarter of 2005 reflect a $1.6 million provision for product returns. During that quarter, the Company re-evaluated its estimate for product returns to take into consideration additional factors related to inventory and return practices of its primary trade customers. Revenues from promoted products were $1.1 million in the second quarter of 2006, compared to $1.7 million in the second quarter of 2005, primarily as a result of lower sales of Striant and the Prochieve line of products in the 2006 quarter, reflecting the trend among wholesalers to reduce their inventory levels of pharmaceutical products to a one-to-two month supply. Revenues from partnered products were $4.4 million in the second quarter of 2006, compared to $4.6 million in the second quarter of 2005, primarily due to reduced orders of RepHresh by one of the Company's marketing partners. The higher level of orders of RepHresh in the 2005 quarter reflected that marketing partner's orders to support its launch of the product. Gross profit as a percentage of revenues was 58% in the second quarter of 2006, versus 65% in the second quarter of 2005. The decrease was the result of a change in product mix and a lower effective rate on royalties Synopsis On Royalty: A Very Polite Inquiry into Some Strangely Related Families is the attempt of Jeremy Paxman to examine and understand how the increasingly irrelevant institution that is Monarchy has managed to continue to hold to the imaginations of the public. paid to Serono in the 2005 period. Cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold for Prochieve includes royalties paid to Serono based on net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of Prochieve. Selling and distribution expenses were $1.7 million in the second quarter of 2006, a 17% decrease from $2.1 million in the second quarter of 2005, reflecting decreases in sales force costs and salary costs. General and administration costs increased 4% to $1.8 million in the second quarter of 2006 from $1.7 million in the corresponding period a year ago. The increase is predominantly pre·dom·i·nant adj. 1. Having greatest ascendancy, importance, influence, authority, or force. See Synonyms at dominant. 2. due to the 2006 expense for stock-based compensation and increased insurance premiums, partially offset by reductions in salaries and professional fees. Research and development costs were $1.6 million in the second quarter of 2006, a 32% increase from $1.2 million in second quarter of 2005. This increase stems primarily from higher costs related to the ongoing Phase III trial for Prochieve(R) 8% in preventing preterm birth in pregnant women who are at increased risk for this problem. There were 61 study centers and 599 patients enrolled in the Prochieve preterm study at June 30, 2006, compared to 33 study centers and 175 patients enrolled at June 30, 2005. As a result, the Company reported a net loss of $2.5 million, or $0.05 per basic and diluted share, for the second quarter of 2006, as compared to a net loss of $1.6 million, or $0.04 per basic and diluted share, in the second quarter of 2005. On April 14, 2006, the Company made an advance payment of $11.6 million on a contractually required true-up payment to PharmaBio Development. This amount represented the present value of a $12 million true-up payment due November 14, 2006, calculated using a six percent annual discount factor. Although the Company paid and will record approximately $415,000 less in interest expense during 2006 due to this early payment, for accounting purposes, the payment resulted in a non-cash loss of approximately $280,000 during the second quarter of 2006. As of June 30, 2006, Columbia had cash and cash equivalents of $22.0 million. Quarterly Conference Call As previously announced, Columbia Laboratories will hold a conference call on August 9, 2006 at 11:00 AM ET to review financial results of the second quarter ended June 30, 2006. Access information
Date: August 9, 2006
Time: 11:00 AM ET
U.S./Canada dial-in number: (866) 558-6338
International dial-in number: (702) 477-7800
Access code: 3151
Live webcast: www.columbialabs.com, under "Events"
in the Investor section
A recording of the conference call will be available two hours after completion until August 14, 2006 at 11:59 PM ET at (866) 800-3850 (U.S.) and (808) 237-2390 (International). The replay password is 3151. The webcast will be archived for on-demand listening for one year on Columbia Laboratories' website, www.columbialabs.com, under "Events" in the Investor section. About Columbia Laboratories Columbia Laboratories, Inc. is a U.S.-based international pharmaceutical company dedicated to the development and commercialization of women's health care and endocrinology endocrinology Medical discipline dealing with regulation of body functions by hormones and other biochemicals and treatment of endocrine system imbalances. In 1841 Friedrich Gustav Henle first recognized “ductless glands,” which secrete products directly into products that use its novel bioadhesive drug delivery technology. Columbia markets Prochieve(R) 8% (progesterone gel) for progesterone supplementation as part of an Assisted Reproductive Technology Assisted reproductive technology (ART) is a general term referring to methods used to achieve pregnancy by artificial or partially artificial means. It is reproductive technology used in infertility treatment, which is the only application routinely used today of treatment for infertile in·fer·tile adj. Not capable of initiating, sustaining, or supporting reproduction. infertile, adj unable to produce offspring. women with progesterone deficiency and Prochieve(R) 4% (progesterone gel) for the treatment of secondary amenorrhea. The Company also markets Striant(R) (testosterone testosterone (tĕstŏs`tərōn), principal androgen, or male sex hormone. One of the group of compounds known as anabolic steroids, testosterone is secreted by the testes (see testis) but is also synthesized in small quantities in the buccal buc·cal adj. 1. Of, relating to, adjacent to, or in the direction of the cheek. 2. Of or relating to the mouth cavity. buccal system) for the treatment of hypogonadism Hypogonadism Definition Hypogonadism is the condition more prevalent in males in which the production of sex hormones and germ cells are inadequate. in men. The Company recently completed enrollment in a large-scale pivotal Phase III study to evaluate the potential utility of Prochieve(R) 8% (progesterone gel) to prevent preterm birth, for which there is currently no FDA-approved treatment. The Company's additional research and development programs include a vaginally-administered lidocaine lidocaine /li·do·caine/ (li´do-kan) an anesthetic with sedative, analgesic, and cardiac depressant properties, applied topically in the form of the base or hydrochloride salt as a local anesthetic; also used in the latter form as a product to treat dysmenorrhea dysmenorrhea Pain or cramps before or during menstruation. In primary dysmenorrhea, caused by endocrine imbalances, severity varies widely. Irritability, fatigue, backache, or nausea may also occur. . For more information, please visit www.columbialabs.com. 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. Statement Under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: Except for historical information contained herein, certain statements of Columbia Laboratories, Inc.'s expectations made in this press release, including those regarding the Company's clinical research programs, strategic direction, prospects and future results, constitute 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. within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve certain risks and uncertainties. Those statements include statements regarding the intent, belief or current expectations of Columbia Laboratories and its management team. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements. Given these uncertainties, investors should not place undue reliance on these forward-looking statements. Factors that might cause future results to differ include, but are not limited to, the following: the successful marketing of Prochieve(R) 8% (progesterone gel), Prochieve(R) 4% (progesterone gel), and Striant(R) (testosterone buccal tablet See digitizer tablet and tablet computer. TABLET - A query language. ["Human Factor Comparison of a Procedural and a Non-procedural Query Language", C. Welty et al, ACM Trans Database Sys 6(4):626-649 (Dec 1981)]. ) in the U.S.; whether Prochieve is dispensed dis·pense v. dis·pensed, dis·pens·ing, dis·pens·es v.tr. 1. To deal out in parts or portions; distribute. See Synonyms at distribute. 2. To prepare and give out (medicines). 3. to patients of physicians on Serono's target list of fertility specialists at a rate of less than 10% the amount of Crinone(R) dispensed to those patients as further described in the Company'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. , the timing and size of orders for out-licensed products from our marketing partners; the timely and successful completion of clinical studies, including the Prochieve(R) 8% study for preventing preterm birth and vaginally-administered lidocaine studies; success in obtaining acceptance and approval of new products and indications for current products by the FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. and international regulatory agencies regulatory agency Independent government commission charged by the legislature with setting and enforcing standards for specific industries in the private sector. The concept was invented by the U.S. , including acceptance and approval of an indication for preventing preterm birth for Prochieve(R) 8% from the FDA; the timely and successful development of products; the impact of competitive products and pricing; competitive economic and regulatory factors in the pharmaceutical and health care industry; general economic conditions; and other risks and uncertainties that may be detailed, from time-to-time, in Columbia's reports filed with the Securities and Exchange Commission. Columbia Laboratories undertakes no obligation to publicly update any forward-looking statements. Prochieve(R), Crinone(R) and Striant(R) are registered trademarks of Columbia Laboratories, Inc.
COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Six Months Ended Three Months Ended
June 30, June 30,
2006 2005 2006 2005
------------ ------------ ------------ -----------
NET REVENUES $ 10,068,490 $ 10,614,422 $ 5,523,113 $ 6,333,845
COST OF REVENUES 4,182,007 4,062,440 2,303,739 2,245,435
------------ ------------ ------------ -----------
Gross profit 5,886,483 6,551,982 3,219,374 4,088,410
------------ ------------ ------------ -----------
OPERATING
EXPENSES:
Selling and
distribution 3,239,490 5,000,396 1,739,511 2,101,793
General and
administrative 3,348,796 3,522,722 1,761,146 1,696,964
Research and
development 3,370,370 2,540,822 1,643,753 1,248,597
------------ ------------ ------------ -----------
Total
operating
expenses 9,958,656 11,063,940 5,144,410 5,047,354
------------ ------------ ------------ -----------
Loss from
operations (4,072,173) (4,511,958) (1,925,036) (958,944)
------------ ------------ ------------ -----------
OTHER INCOME
(EXPENSE):
Interest income 355,899 86,399 255,404 40,561
Interest
expense (1,216,470) (1,365,966) (545,479) (625,353)
Other, net (291,173) (13,218) (262,484) (46,300)
------------ ------------ ------------ -----------
(1,151,744) (1,292,785) (552,559) (631,092)
------------ ------------ ------------ -----------
Net loss ($5,223,917) ($5,804,743) $(2,477,595) $(1,590,036)
============ ============ ============ ===========
NET LOSS PER
COMMON SHARE: $ (0.11) $ (0.14) $ (0.05) $ (0.04)
(Basic and ============ ============ ============ ===========
diluted)
WEIGHTED AVERAGE
NUMBER OF COMMON
SHARES
OUTSTANDING: 46,467,128 41,751,934 49,555,297 41,751,934
(Basic and ============ ============ ============ ===========
diluted)
COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, December 31,
2006 2005
----------- ------------
ASSETS (Unaudited)
Current assets-
Cash and cash equivalents $ 22,003,677 $ 7,136,854
Accounts receivable, net 3,794,605 4,020,019
Inventories 1,768,756 1,821,433
Prepaid expenses and other current
assets 724,575 625,908
------------ ------------
Total current assets 28,291,613 13,604,214
Property and equipment, net 878,884 1,002,580
Other assets 120,204 124,756
------------ ------------
TOTAL ASSETS $ 29,290,701 $14,731,550
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current liabilities-
Current portion of financing
agreements $ 754,611 $ 12,840,161
Accounts payable 1,763,166 1,905,381
Accrued expenses 2,303,628 2,329,475
----------- ------------
Total current liabilities 4,821,405 17,075,017
Deferred revenue 4,535,920 4,058,327
Long-term portion of financing
agreements 10,235,635 8,747,743
----------- ------------
TOTAL LIABILITIES 19,592,960 29,881,087
----------- ------------
Stockholders' equity (deficiency)-
Preferred stock, $0.01 par value;
1,000,000 shares authorized:
Series B Convertible Preferred
Stock, 130 shares issued and
outstanding in 2006 and 2005 1 1
Series C Convertible Preferred
Stock, 3,250 shares issued and
outstanding in 2006 and 2005 32 32
Series E Convertible Preferred
Stock, 69,000 shares issued and
outstanding in 2006 and 2005 690 690
Common stock, $0.01 par value;
100,000,000 authorized:
49,635,303 and 41,754,784 shares
issued and outstanding in 2006
and 2005, respectively 496,533 417,548
Capital in excess of par value 205,308,479 175,340,023
Accumulated deficit (196,308,891) (191,084,974)
Accumulated other comprehensive
income 200,897 177,143
------------- -------------
TOTAL STOCKHOLDERS' EQUITY
(DEFICIENCY) 9,697,741 (15,149,537)
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIENCY) $ 29,290,701 $ 14,731,550
============= =============
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