CombinatoRx Reports Financial Results for the First Quarter 2006; Clinical Data in Hand Osteoarthritis and Asthma Validates cHTS(TM) Technology and Drug Discovery Approach.CAMBRIDGE Cambridge, city, Canada Cambridge (kām`brĭj), city (1991 pop. 92,772), S Ont., Canada, on the Grand River, NW of Hamilton. It was formed in 1973 with the amalgamation of Galt, Hespeler, and Preston, all founded in the early 19th cent. , Mass. -- CombinatoRx, Incorporated (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 : CRXX), today reported financial results for the first quarter ended March 31, 2006. "CombinatoRx has made significant progress in advancing its clinical pipeline during the first part of this year, including encouraging Phase 2 data for two of our synergistic synergistic /syn·er·gis·tic/ (sin?er-jis´tik) 1. acting together. 2. enhancing the effect of another force or agent. syn·er·gis·tic adj. 1. combination drug candidates; CRx-102 in hand osteoarthritis osteoarthritis or osteoarthrosis or degenerative joint disease Most common joint disorder, afflicting over 80% of those who reach age 70. It does not involve excessive inflammation and may have no symptoms, especially at first. and CRx-170 in asthma asthma (ăz`mə, ăs`–), chronic inflammatory respiratory disease characterized by periodic attacks of wheezing, shortness of breath, and a tight feeling in the chest. A cough producing sticky mucus is symptomatic. ," commented Alexis Alexis, czar of Russia Alexis (əlĕk`sĭs) (Aleksey Mikhailovich) (əlyĭksyā` mēkhī`ləvĭch), 1629–76, czar of Russia (1645–76), son and successor of Michael. Borisy, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of CombinatoRx. "In addition to our clinical accomplishments, we had marked success in a number of other key areas this quarter; including entering into collaborations that continue to mobilize mo·bi·lize v. 1. To make mobile or capable of movement. 2. To restore the power of motion to a joint. 3. To release into the body, as glycogen from the liver. our technology into new disease areas such as obesity obesity, condition resulting from excessive storage of fat in the body. Obesity has been defined as a weight more than 20% above what is considered normal according to standard age, height, and weight tables, or by a complex formula known as the body mass index. and ophthalmic ophthalmic /oph·thal·mic/ (of-thal´mik) ocular (1). oph·thal·mic adj. Of or relating to the eye; ocular. Ophthalmic Pertaining to the eye. disease and raising additional capital through a private offering. We look forward to reporting data on a number of other Phase 2 clinical programs during the year" First Quarter of 2006 Financial Results (Unaudited): Net Loss For the first quarter of 2006, CombinatoRx reported a net loss of $6.9 million or $0.29 per share, as compared to a net loss of $7.7 million in the first quarter of 2005. Revenue Total revenue was $3.2 million in the first quarter of 2006, an increase from the $196,000 reported in the first quarter of 2005. The increase is primarily due to the Company's entry into additional research and development collaboration Working together on a project. See collaborative software. agreements and payments related to these agreements. Research and Development Expenses Research and development expense totaled $7.2 million in the first quarter of 2006 compared to $4.6 million in the first quarter of 2005. The increase in research and development expense is due primarily to increased research and clinical development costs related to additional research and development collaborations. In addition, CombinatoRx has increased headcount head count or head·count n. 1. The act of counting people in a particular group. 2. The number of people counted in this way. Noun 1. for research and clinical development efforts as the Company has advanced its pipeline of product candidates into and through clinical trials. CombinatoRx also adopted Statement of Financial Accounting Standards No. 123 (revised 2004) "Share Based Payment" (SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 123R) effective January January: see month. 1, 2006, which resulted in an increase in stock based compensation expense for the Company. Stock based compensation expense related to research and development for the first quarter of 2006 was $609,000. General and Administrative Expenses General and administrative expense was $4.0 million in the first quarter of 2006 compared to $1.6 million in the first quarter of 2005. The increase in general and administrative expense is due primarily to higher costs associated with operating as a public company, including legal and professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. fees and increased general and administrative headcount with $919,000 of related stock based compensation expense. Cash, Cash Equivalents and Short-Term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. Investments As of March 31, 2006, CombinatoRx had cash, cash equivalents and short-term investments of $139.4 million compared to $102.4 million on December December: see month. 31, 2005. The increase in cash, cash equivalents and short-term investments is primarily due to the closing of our March 2006 private offering of common stock in which CombinatoRx raised net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of $45.3 million. 2006 Financial Guidance Based on current operating plans, expected timing and cost of clinical trials and other product development programs, CombinatoRx expects its net use of cash in operating activities to be between $32.0 million to $37.0 million in 2006 and to end the year with a net loss in the range of $31.0 million and $36.0 million, consistent with the guidance provided at our January 31, 2006 Analyst Briefing. As a result of its March 2006 private offering, CombinatoRx is updating its 2006 cash guidance and now expects to end the year with between $111.0 and $116.0 million in cash, cash equivalents and short-term investments. First Quarter 2006 and Recent Accomplishments Include:
-- Validated the CombinatoRx combination high throughput
screening (cHTS(TM)) technology and drug discovery approach
with positive Phase 2 clinical results, including CRx-102 in
osteoarthritis of the hand and CRx-170 in asthma:
-- CRx-102 demonstrated a statistically significant 31%
improvement in pain relief with six weeks of treatment, as
measured by the AUSCAN visual analogue pain scale,
compared to baseline.
-- CRx-170 demonstrated a statistically significant 6% mean
percentage improvement in FEV1 with one week of treatment,
a measure of breathing capacity, from treatment baseline.
-- Presented data on the discovery of novel synergistic
combinations for glioblastoma multiforme, a deadly form of
brain cancer, at the annual meeting of the American
Association of Cancer Research.
-- Raised net proceeds of $45.3 million through a private
placement of common stock, providing CombinatoRx with the
financial flexibility to move into later-stage clinical trials
based on promising human data and to advance early stage
product candidates into clinical development.
-- Leveraged the CombinatoRx cHTS drug discovery technology into
new collaborations with:
-- Fovea, to develop product candidates for ophthalmic
diseases.
-- Adipogenix, to jointly discover and develop novel
synergistic combinations for the systemic treatment of
obesity.
-- the Economic Development Board of Singapore Biomedical
Sciences Group, with a grant to support infectious disease
research and development.
-- Built upon existing management and development strengths with
the appointment of Lynn Baird, Ph.D. as Senior Vice President
of Regulatory Affairs, QA/QC.
About CombinatoRx CombinatoRx, Incorporated is a biopharmaceutical company focused on developing new medicines built from synergistic combinations of approved drugs In the United States, the FDA approves drugs. Before a drug can be prescribed, it must undergo an extensive FDA approval process. This process involves first testing the drug on animals or in medical labs. , designed to attack disease on multiple fronts. CombinatoRx applies its proprietary combination drug discovery technology to identify new combination product candidates in a number of disease areas, including immunoinflammatory disease, oncology oncology /on·col·o·gy/ (ong-kol´ah-je) the sum of knowledge regarding tumors; the study of tumors. on·col·o·gy n. , metabolic disease metabolic disease, n a disorder that causes dysfunction of the metabolic action of the body, resulting in loss of control of homeostasis. paraneoplastic syndrome , neurodegenerative disease Neurodegenerative disease A disease in which the nervous system progressively and irreversibly deteriorates. Mentioned in: Amnesia , and infectious disease Infectious disease A pathological condition spread among biological species. Infectious diseases, although varied in their effects, are always associated with viruses, bacteria, fungi, protozoa, multicellular parasites and aberrant proteins known as prions. . By applying our proprietary screening technology, we have discovered and advanced into clinical trials a portfolio of six product candidates targeting multiple diseases. For further information, please visit the CombinatoRx website at www.combinatorx.com. Forward-Looking Statement 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. This press release contains forward-looking statements within the meaning of 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 concerning CombinatoRx, its financial condition and results of operations, its plans for its product candidates, its drug discovery technology and corporate development. These forward-looking statements about future expectations, plans and prospects of CombinatoRx involve significant risks, uncertainties and assumptions, including risks related to the 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 nature of the Company's drug discovery technology, the Company's ability to initiate INITIATE. A right which is incomplete. By the birth of a child, the husband becomes tenant by the curtesy initiate, but his estate is not consummate until the death of the wife. 2 Bouv. Inst. n. 1725. and successfully complete clinical trials of its product candidates, potential difficulty and delays in obtaining regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. approval for the sale and marketing of its product candidates, the Company's ability to obtain additional funding for its research and development and those other risks that can be found in the "Risk Factors" section of CombinatoRx'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. on file with the Securities and Exchange Commission, and the other filings made by CombinatoRx with the Securities and Exchange Commission. No forward-looking statement can be guaranteed and actual results may differ materially from those CombinatoRx projects. No forward-looking statement can be guaranteed and actual results may differ materially from those CombinatoRx projects. CombinatoRx is providing this information as of this date and does not undertake any obligation to publicly update any forward-looking statements contained in this document as a result of new information, future events or otherwise, except as required by law.
CombinatoRx, Incorporated
Consolidated Statements of Operations
(in thousands, except share and per share amounts)
(Unaudited)
Three months ended
March 31,
2006 2005
----------- ----------
Revenue:
Collaborations $3,247 $196
Operating expenses:
Research and development (1) 7,151 4,587
General and administrative (1) 3,985 1,624
----------- ----------
Total operating expenses 11,136 6,211
Loss from operations (7,889) (6,015)
Interest income 1,083 177
Interest expense (130) (86)
----------- ----------
Net loss (6,936) (5,924)
Accretion of preferred stock dividends -- 1,748
----------- ----------
Net loss applicable to common shareholders $(6,936) $(7,672)
=========== ==========
Net loss per share applicable to common
stockholders - basic and diluted $(0.29) $(8.41)
=========== ==========
Weighted average number of common shares used in
calculation of basic and diluted
net loss per share 23,739,960 912,310
=========== ==========
(1) Amounts include stock-based compensation
expense, as follows:
Research and development 609 464
General and administrative 919 447
----------- ----------
Total stock-based compensation expense $1,528 $911
=========== ==========
CombinatoRx, Incorporated
Consolidated Balance Sheets
(in thousands, except per share amounts)
(Unaudited)
As of As of
March 31, December 31,
2006 2005
------------ ------------
Assets
Current assets:
Cash and cash equivalents $4,406 $9,079
Short-term investments 130,848 90,668
Restricted cash 148 148
Prepaid expenses and other current assets 6,326 3,204
------------ ------------
Total current assets 141,728 103,099
Property and equipment, net 7,639 2,702
Restricted cash 4,000 2,500
------------ ------------
Total assets $153,367 $108,301
============ ============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $4,228 $1,230
Accrued expenses 2,421 2,312
Deferred revenue 9,355 9,334
Current portion of notes payable 1,291 1,048
Current portion of lease incentive
obligation 365 87
------------ ------------
Total current liabilities 17,660 14,011
Convertible notes payable of subsidiary 5,447 5,362
Notes payable, net of current portion and
discount 1,125 816
Deferred revenue, net of current portion 14,246 16,250
Deferred rent 500 109
Lease incentive obligation, net of current
portion 3,591 861
Minority Interest in subsidiary 2,575 2,542
Stockholders' equity:
Common stock, $0.001 par value: 60,000
shares authorized; 28,227 and 23,285 shares
issued and outstanding at March 31, 2006
and December 31, 2005, respectively 28 23
Additional paid-in capital 213,624 177,777
Deferred compensation -- (11,052)
Stock subscription receivable (50) --
Accumulated other comprehensive loss (78) (65)
Accumulated deficit (105,301) (98,333)
------------ ------------
Stockholders' equity 108,223 68,350
------------ ------------
Liabilities and stockholders' equity $153,367 $108,301
============ ============
(c) 2006 CombinatoRx, Incorporated. All rights reserved. |
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