Critical Therapeutics Reports Second Quarter 2006 Financial Results.LEXINGTON, Mass. -- Critical Therapeutics therapeutics Treatment and care to combat disease or alleviate pain or injury. Its tools include drugs, surgery, radiation therapy, mechanical devices, diet, and psychiatry. , Inc. (Nasdaq: CRTX), a biopharmaceutical company focused on the discovery, development and commercialization of products for respiratory, inflammatory and critical care diseases, today reported financial results for the quarter ended June 30, 2006. For the three months ended June 30, 2006, the Company posted a net loss of $14.4 million, or $0.42 per share, based on approximately 34.2 million weighted average shares outstanding. This compares with a net loss of $9.3 million, or $0.37 per share, for the same period in 2005, based on approximately 25.0 million weighted average shares outstanding. Financial results for 2006 reflect the adoption of Statement of Financial Accounting Standards No. 123(R) (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 123(R)), related to employee stock-based compensation expense. Product sales of ZYFLO Zileuton (Zyflo) A medication that interferes with the biosynthetic pathway that produces leukotrienes; used to help prevent asthma attacks. Mentioned in: Leukotriene Inhibitors Zyflo® Zileuton, see there (R) (zileuton zileuton /zi·leu·ton/ (zi-loo´ton) an inhibitor of leukotriene formation, used as an antiasthmatic. Zileuton (Zyflo) tablets), net of returns, increased 77 percent over the first quarter of 2006, accounting for approximately $1.8 million of total revenue during the second quarter of 2006, compared with $1.0 million during the first quarter of 2006. Total revenue for the second quarter of 2006 was $3.5 million, compared with $2.3 million in the first quarter of 2006. Cash 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 June 30, 2006 totaled $52.2 million, compared with $64.6 million at March 31, 2006. Net cash expenditures during the second quarter of 2006 were $12.4 million, less than the Company's previous guidance of $13 million to $16 million primarily as a result of cost cutting actions that were announced and implemented during the second quarter of 2006. "During the second half of 2006, we will concentrate on building the momentum of our zileuton program," said Frank Thomas Frank Thomas may refer to:
American Law Institute Formulation of zileuton (zileuton CR) submitted to the U.S. Food and Drug Administration (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. ), we are now focused on successfully completing the regulatory review process and finding a strategic partner to expand the market for this more convenient dosing formulation. "In preparation for the commercial launch of zileuton CR, pending regulatory approval, we plan to initiate one or more Phase IIIb clinical trials to assist physicians in identifying specific patient types or subgroups that could benefit from treatment with zileuton CR beyond current standard-of-care," added Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs . Recent Highlights Since the end of the first quarter of 2006, Critical Therapeutics announced that: --It has submitted an NDA for zileuton CR to the FDA for the prevention and chronic treatment of 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. in adults and children 12 years of age and older. Zileuton CR's dosing regimen regimen /reg·i·men/ (rej´i-men) a strictly regulated scheme of diet, exercise, or other activity designed to achieve certain ends. reg·i·men n. 1. allows patients to take two tablets twice daily. The Company anticipates launching zileuton CR during the second half of 2007, pending regulatory approval. --Its Board of Directors appointed lead independent director Robert Zeiger to serve as Executive Chairman and promoted Frank Thomas to president of the Company. --The Phase I/II clinical trial of the intravenous intravenous /in·tra·ve·nous/ (-ve´nus) within a vein or veins.intrave´nously in·tra·ve·nous adj. Abbr. IV Within or administered into a vein. formulation of zileuton (zileuton IV) has been completed and top line results are expected to be announced To be announced (TBA) A contract for the purchase or sale of an MBS to be delivered at an agreed-upon future date but does not include a specified pool number and number of pools or precise amount to be delivered. later in the third quarter of 2006. This trial is designed to assess the safety, tolerability tol·er·a·ble adj. 1. Capable of being tolerated; endurable. 2. Fairly good; passable. See Synonyms at average. tol and pharmacokinetics pharmacokinetics /phar·ma·co·ki·net·ics/ (fahr?mah-ko-ki-net´iks) the action of drugs in the body over a period of time, including the processes of absorption, distribution, localization in tissues, biotransformation, and excretion. of zileuton IV in 60 patients with asthma. --U.S. Patent No. 7,060,504, "Antagonists antagonists, n muscles that counterbalance agonists during specific movements. opioid Neurology A pain-attenuating peptide that occurs naturally in the brain, which induces analgesia by mimicking endogenous opioids at opioid of HMG hMG menotropins (human menopausal gonadotropin). HMG abbr. human menopausal gonadotropin 1 for Treating Inflammatory Conditions" issued for methods of diagnosing and monitoring the severity of several inflammatory conditions, including arthritis arthritis, painful inflammation of a joint or joints of the body, usually producing heat and redness. There are many kinds of arthritis. In its various forms, arthritis disables more people than any other chronic disorder. and lupus lupus (l  `pəs), noninfectious chronic disease in which antibodies in an individual's immune system attack the body's own substances. , by measuring the concentration of HMGB1 present in
a patient's bloodstream blood·streamn. The flow of blood through the circulatory system of an organism. bloodstream the blood flowing through the circulatory system in the living body. . --The Centers for Medicare and Medicaid Services The Centers for Medicare and Medicaid Services (CMS), previously known as the Health Care Financing Administration (HCFA), is a federal agency within the United States Department of Health and Human Services (DHHS) that administers the Medicare program and created a unique Formulary formulary /for·mu·lary/ (for´mu-lar?e) a collection of recipes, formulas, and prescriptions. National Formulary see under N. for·mu·lar·y n. Key Drug Type category for ZYFLO under guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. developed specifically for the Medicare Medicare, national health insurance program in the United States for persons aged 65 and over and the disabled. It was established in 1965 with passage of the Social Security Amendments and is now run by the Centers for Medicare and Medicaid Services. Prescription Drug prescription drug Prescription medication Pharmacology An FDA-approved drug which must, by federal law or regulation, be dispensed only pursuant to a prescription–eg, finished dose form and active ingredients subject to the provisos of the Federal Food, Drug, Benefit (Part D). "In addition to the management changes that we announced during the quarter, we undertook a series of steps to intensify in·ten·si·fy v. in·ten·si·fied, in·ten·si·fy·ing, in·ten·si·fies v.tr. 1. To make intense or more intense: our focus and improve our execution," said Thomas. "In the second quarter of 2006, we reduced our cash burn rate by 32 percent compared with the first quarter of 2006, reduced our headcount, streamlined our sales territories, deferred certain manufacturing expenses and reduced spending on early-stage discovery and research programs to concentrate on our most promising later-stage programs." Financial Results for the Three Months Ended June 30, 2006 and 2005 Total revenue for the three months ended June 30, 2006 was $3.5 million, compared with $1.4 million for the same period in 2005. Critical Therapeutics' HMGB1 collaboration with MedImmune, Inc. and its license agreement with Beckman Coulter This article needs sources or references that appear in reliable, third-party publications. Alone, primary sources and sources affiliated with the subject of this article are not sufficient for an accurate encyclopedia article. , Inc. to develop diagnostic assays Noun 1. diagnostic assay - an assay conducted for diagnostic purposes diagnostic test assay - a quantitative or qualitative test of a substance (especially an ore or a drug) to determine its components; frequently used to test for the presence or accounted for $1.7 million in revenue during the second quarter of 2006 and all of the Company's revenue during the second quarter of 2005. Critical Therapeutics began selling ZYFLO in the U.S. in October 2005. Product sales of ZYFLO, net of returns, increased 77 percent to $1.8 million of total revenue during the second quarter of 2006, compared with $1.0 million during the first quarter of 2006. For the quarter ended June 30, 2006, net shipments of ZYFLO to wholesalers, third-party distributors Third-Party Distributor The name given to institutions that sell or distribute mutual funds to investors for fund management companies without direct relation to the fund itself. and pharmacies This article is a list of major pharmacies (also known as chemists and drugstores) by country. Australia Pharmacies in Australia are mostly independently-owned by pharmacists, often operated as franchises of retail brands offered by the three major totaled approximately $2.2 million. Revenue from sales of ZYFLO is recognized when prescriptions are filled, net of any discounts or rebates, rather than when the product is shipped to third parties. The Company currently estimates prescriptions filled based on distribution channel data provided by external sources. This accounting treatment resulted in approximately $1.8 million being recorded as net product sales in the second quarter of 2006, with $1.3 million remaining as deferred product revenue on the Company's balance sheet at June 30, 2006. During the second quarter of 2006, the Company obtained additional distribution channel data from mail order pharmacies and non-retail facilities, such as clinics and hospitals, allowing the Company to better estimate total prescriptions filled. This resulted in the recognition of $173,000 of additional revenue from 792 prescriptions in the second quarter of 2006 that related to the period from launch in October 2005 to the end of the first quarter of 2006. The number of total prescriptions recorded during the second quarter of 2006 increased nearly 68 percent to 8,921, including the 792 prescriptions, compared with 5,317 prescriptions recorded in the first quarter of 2006. The increase in product sales would have been 37 percent over the first quarter of 2006 had the additional revenue of $173,000 been recorded during the first quarter of 2006. Total 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. for the three months ended June 30, 2006 increased $7.4 million to $18.6 million, compared with $11.1 million for the same period in 2005. The increase over the prior year was primarily due to costs associated with the launch of the Company's first marketed product, ZYFLO, and severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when and other related charges associated with the Company's restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and change in management that occurred during the second quarter of 2006. Specifically, increases in operating expenses over the prior year resulted principally from changes in the following areas: --Cost of products sold in the second quarter of 2006 totaled $890,000. Included in the cost of products sold was approximately $187,000 related to the write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of certain ZYFLO inventory that was nearing its expiration date Expiration Date The day on which an options or futures contract is no longer valid and, therefore, ceases to exist. Notes: The expiration date for all listed stock options in the U.S. . --Research and development (R&D) expenses increased $283,000 to $6.9 million in the second quarter of 2006, compared with $6.7 million for the second quarter of 2005. This increase primarily related to clinical costs associated with the intravenous and controlled-release formulations of zileuton. --Sales and marketing expenses totaled $5.7 million in the second quarter of 2006, compared with $1.8 million in the second quarter of 2005. This increase primarily is related to the commercial launch of ZYFLO, including costs associated with the increased number of employees performing sales and marketing functions, product samples and marketing and promotional materials. Sales and marketing expenses in the second quarter of 2006 also include $302,000 of severance and $525,000 of stock-based compensation expense related to the departure of the Company's senior vice president of sales and marketing. --General and administrative expenses totaled $5.1 million in the second quarter of 2006, compared with $2.7 million in the second quarter of 2005. This increase primarily is related to $671,000 of severance and $1.3 million of stock-based compensation expense related to the departure of the Company's president and chief executive officer and $79,000 of severance associated with the restructuring that occurred during the second quarter of 2006. --Stock-based compensation expense totaled $3.1 million in the second quarter of 2006, which includes $1.8 million related to the changes in management that occurred during the second quarter of 2006. In the second quarter of 2005, stock-based compensation expense totaled $633,000. Stock-based compensation expense for 2006 is calculated under SFAS 123(R). Stock-based compensation expense for 2005 was calculated under Accounting Principles Board The Accounting Principles Board (APB) is the former authoritative body of the American Institute of Certified Public Accountants (AICPA). It was created by the American Institute of Certified Public Accountants in 1959 and issued pronouncements on accounting principles until 1973, Opinion No. 25. Financial Results for the Six Months Ended June 30, 2006 Total revenue for the six months ended June 30, 2006 increased $3.0 million to $5.8 million, compared with $2.8 million for the same period in 2005. Critical Therapeutics' HMGB1 collaboration with MedImmune and its license agreement with Beckman Coulter to develop diagnostic assays accounted for $2.9 million in revenue during the first half of 2006, and all of the Company's revenue during the first half of 2005. Product sales of ZYFLO accounted for $2.8 million of revenue during the first half of 2006. Total operating expenses for the six months ended June 30, 2006 were $38.3 million, compared with $22.0 million for the same period in 2005. This increase was primarily due to costs associated with the commercialization of ZYFLO. The net loss for the six months ended June 30, 2006 was $31.2 million, or $0.91 per share, based on approximately 34.2 million weighted average common shares outstanding. This compares with a net loss of $18.4 million, or $0.75 per share, for the six months ended June 30, 2005, based on approximately 24.5 million weighted average common shares outstanding. The increase in common shares outstanding resulted primarily from the private placement of approximately 9.9 million common shares in June 2005. Stock-based compensation expense for the six months ended June 30, 2006 totaled $4.5 million, as calculated under SFAS 123(R). Stock-based compensation expense for the same period in 2005 totaled $952,000, as calculated under Accounting Principles Board Opinion No. 25. Financial Guidance Critical Therapeutics expects that net cash expenditures will be between $13 million and $15 million in the third quarter of 2006. This anticipated increase over actual second quarter 2006 net cash expenditures of $12.4 million primarily is related to milestone payments owed to two third parties as a result of the Company's NDA submission to the FDA for zileuton CR. In the third quarter, revenue from sales of ZYFLO will continue to be recognized based on prescriptions filled, net of any discounts or rebates. For the second half of 2006, the Company expects research and development expenses to be between $15 million and $18 million, sales and marketing expenses to be between $8 million and $10 million, and general and administrative expenses to be between $4 million and $6 million. These estimates for 2006 include the impact of expensing stock options to employees under SFAS 123(R). The non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. related to stock-based compensation expense for employees and non-employees are projected to be between $3 million and $4 million for the second half of 2006. Conference Call Information Critical Therapeutics will hold an audio webcast and conference call to discuss the Company's second quarter 2006 financial results, strategy, upcoming milestones and financial guidance. Investors and other interested parties can access the call as follows: Date: Thursday, August 3, 2006 Time: 5:00 p.m. ET Dial-in: (800) 289-0730 (domestic) (913) 981-5509 (international) Conference ID: 4240445 Webcast Information: www.crtx.com A live and archived audio webcast of the conference call also will be available on the "Investors" section of the Critical Therapeutics website. From the home page, click on "Investors" and then on "Webcasts & Presentations." About ZYFLO ZYFLO is indicated for the prevention and chronic treatment of asthma in adults and children 12 years of age and older. ZYFLO, which contains the active ingredient An active ingredient, also active pharmaceutical ingredient (or API), is the substance in a drug that is pharmaceutically active. Some medications may contain more than one active ingredient. zileuton, blocks the formation of leukotrienes Leukotrienes A class of small molecules produced by cells in response to allergen exposure; they contribute to allergy and asthma symptoms. Mentioned in: Leukotriene Inhibitors leukotrienes that may contribute to asthma symptoms. Zileuton is an orally active inhibitor inhibitor /in·hib·i·tor/ (in-hib´i-tor) 1. any substance that interferes with a chemical reaction, growth, or other biologic activity. 2. of 5-lipoxygenase, the enzyme enzyme, biological catalyst. The term enzyme comes from zymosis, the Greek word for fermentation, a process accomplished by yeast cells and long known to the brewing industry, which occupied the attention of many 19th-century chemists. that catalyzes the formation of leukotrienes from arachidonic acid arachidonic acid /arach·i·don·ic acid/ (ah-rak?i-don´ik) a polyunsaturated 20-carbon essential fatty acid occurring in animal fats and formed by biosynthesis from linoleic acid; it is a precursor to leukotrienes, prostaglandins, and . The recommended dose is one 600 mg 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)]. four times a day. ZYFLO is not indicated for use in the reversal of bronchospasm bronchospasm /bron·cho·spasm/ (brong´ko-spazm) bronchial spasm; spasmodic contraction of the smooth muscle of the bronchi, as in asthma. bron·cho·spasm n. in acute asthma attacks, including status asthmaticus status asth·mat·i·cus n. A condition of severe, prolonged asthma. status asthmaticus Pulmonology A condition characterized by ↓ response in asthmatics to drugs for which they had previously been sensitive; . Therapy with ZYFLO can be continued during acute exacerbations of asthma. ZYFLO should be taken regularly, even during symptom-free periods. Zileuton CR is an investigational drug product and is not currently approved for marketing. Mild to moderate side effects Side effects Effects of a proposed project on other parts of the firm. associated with the use of ZYFLO are abdominal pain Abdominal pain can be one of the symptoms associated with transient disorders or serious disease. Making a definitive diagnosis of the cause of abdominal pain can be difficult, because many diseases can result in this symptom. Abdominal pain is a common problem. , upset stomach and nausea nausea, sensation of discomfort, or queasiness, in the stomach. It may be caused by irritation of the stomach by food or drugs, unpleasant odors, overeating, fright, or psychological stress. It is usually relieved by vomiting. . A small percentage of patients treated with ZYFLO show an increased release of a liver enzyme known as ALT (character) alt - /awlt/ 1. The alt modifier key on many keyboards, including the IBM PC. On some keyboards and operating systems, (but not the IBM PC) the alt key sets bit 7 of the character generated. See bucky bits. 2. . As a result, the level of liver enzymes Enzymes Organic substances (proteins) composed of amino acids that trigger and regulate chemical reactions in the body. There are over 700 identified human enzymes. Mentioned in: Interactions, Nutritional Supplements in patients treated with ZYFLO should be measured by a simple blood test. It is recommended that physicians perform this test before administering ZYFLO and repeat the test on a regular basis while patients are on the medication. ZYFLO is contraindicated in patients with active liver disease Liver Disease Definition Liver disease is a general term for any damage that reduces the functioning of the liver. Description The liver is a large, solid organ located in the upper right-hand side of the abdomen. or transaminase transaminase /trans·am·i·nase/ (-am´i-nas) aminotransferase. trans·am·i·nase n. See aminotransferase. elevations greater than or equal to three times the upper limit of normal. For full prescribing information, please visit www.crtx.com/pat_pi.html or call the Company's toll free telephone number 1-866-835-8216 to request medical information. About Critical Therapeutics Critical Therapeutics, Inc. is a biopharmaceutical company focused on the discovery, development and commercialization of products for respiratory, inflammatory and critical care diseases. The Company owns worldwide rights to the asthma drug ZYFLO(R) (zileuton tablets), as well as other formulations of zileuton. ZYFLO is the only 5-lipoxygenase inhibitor approved for marketing by the U.S. Food and Drug Administration. The Company's commercialization efforts for ZYFLO are carried out by its specialty sales force. Critical Therapeutics also is developing treatments directed toward the severe inflammatory response in acute diseases and conditions that lead to admission to the emergency room or intensive care unit, and acute exacerbations of other chronic diseases that frequently lead to hospitalization hospitalization /hos·pi·tal·iza·tion/ (hos?pi-t'l-i-za´shun) 1. the placing of a patient in a hospital for treatment. 2. the term of confinement in a hospital. . For more information, please visit www.crtx.com. 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. Any statements in this press release about future expectations, plans and prospects for Critical Therapeutics, Inc., including, without limitation, statements regarding possible therapeutic benefits, market acceptance and future sales of ZYFLO and, if approved, zileuton CR; the progress, timing and success of our regulatory filings, regulatory approvals and product launches, including for zileuton CR; the timing and magnitude of potential cost savings; the progress and timing of our drug development programs and related trials; the efficacy or safety of our drug candidates; our strategy, future operations, financial position, future revenues, and projected costs, including our net cash expenditures for the third quarter of 2006 and projected expenses for the second half of 2006; prospects, plans and objectives of management; and all other statements that are not purely historical in nature, constitute "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. Without limiting the foregoing, the words "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "project," "should," "will," "would" and similar expressions are intended to identify forward-looking statements. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including risks and uncertainties relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc : the extent of market acceptance of ZYFLO and, if approved, zileuton CR; our ability to successfully market and sell ZYFLO; our ability to transition our management team effectively; our ability to develop and maintain the necessary sales, marketing, distribution and manufacturing capabilities to commercialize ZYFLO; patient, physician and third-payer acceptance of ZYFLO as a safe and effective therapeutic product; adverse side effects experienced by patients taking ZYFLO and, if approved, zileuton CR; conducting clinical trials, including difficulties or delays in the completion of patient enrollment, data collection or data analysis; the results of preclinical studies preclinical studies, n.pl a term used to describe research done before a clinical study. May be laboratory or epidemiologic research. and clinical trials with respect to our products under development and whether such results will be indicative of results obtained in later clinical trials; the timing and success of submission, acceptance and approval of our regulatory filings, including, without limitation, the NDA submission for zileuton CR; our heavy dependence on the commercial success of ZYFLO and, if approved, zileuton CR; our ability to obtain the substantial additional funding required to conduct our research, development and commercialization activities; our dependence on our strategic collaboration with MedImmune, Inc.; and our ability to obtain, maintain and enforce patent and other intellectual property protection for ZYFLO, our drug candidates and our discoveries. These and other risks are described in greater detail in the "Risk Factors" section of our most recent Quarterly Report on Form 10-Q Form 10-Q See 10-Q. and other filings that we make with the Securities and Exchange Commission (SEC). If one or more of these factors materialize ma·te·ri·al·ize v. ma·te·ri·al·ized, ma·te·ri·al·iz·ing, ma·te·ri·al·iz·es v.tr. 1. To cause to become real or actual: By building the house, we materialized a dream. , or if any underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from any future results, performance or achievements expressed or implied by these forward-looking statements. In addition, the statements in this release reflect our expectations and beliefs as of the date of this release. We anticipate that subsequent events and developments will cause our expectations and beliefs to change. However, while we may elect to update these forward-looking statements publicly at some point in the future, we specifically disclaim dis·claim v. dis·claimed, dis·claim·ing, dis·claims v.tr. 1. To deny or renounce any claim to or connection with; disown. 2. To deny the validity of; repudiate. 3. any obligation to do so, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this release. ZYFLO(R) is a registered trademark of Critical Therapeutics, Inc. Financial Tables Follow
CRITICAL THERAPEUTICS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
in thousands except
share and per share
data 2006 2005 2006 2005
----------------------------------------------------------------------
Revenues:
Net product sales $1,809 $- $2,831 $-
Revenue under
collaboration
agreements 1,696 1,431 2,947 2,790
----------------------------------------------------------------------
Total revenues 3,505 1,431 5,778 2,790
----------------------------------------------------------------------
Costs and expenses:
Cost of products sold 890 - 1,394 -
Research and
development 6,935 6,652 16,328 13,226
Sales and marketing 5,663 1,755 12,570 2,992
General and
administrative 5,081 2,741 8,009 5,763
----------------------------------------------------------------------
Total costs and
expenses 18,569 11,148 38,301 21,981
----------------------------------------------------------------------
Operating loss (15,064) (9,717) (32,523) (19,191)
Other income
(expense):
Interest income 716 428 1,488 825
Interest expense (55) (38) (115) (80)
----------------------------------------------------------------------
Total other income 661 390 1,373 745
----------------------------------------------------------------------
Net loss ($14,403) ($9,327) ($31,150) ($18,446)
----------------------------------------------------------------------
Net loss per share ($0.42) ($0.37) ($0.91) ($0.75)
----------------------------------------------------------------------
Basic and diluted
weighted-average
common shares
outstanding 34,203,598 25,045,206 34,150,432 24,457,098
----------------------------------------------------------------------
CRITICAL THERAPEUTICS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, December
2006 31,
in thousands, except share data 2005
----------------------------------------------------------------------
Assets:
Current assets:
Cash and cash equivalents $37,292 $57,257
Accounts receivable, net 957 1,024
Amount due under collaboration agreements 250 205
Short-term investments 14,869 25,554
Inventory, net 2,786 1,869
Prepaid expenses and other 1,563 2,179
----------------------------------------------------------------------
Total current assets 57,717 88,088
----------------------------------------------------------------------
Fixed assets, net 3,333 3,563
Other assets 168 168
----------------------------------------------------------------------
Total assets $61,218 $91,819
----------------------------------------------------------------------
Liabilities and Stockholders' Equity:
Current liabilities:
Current portion of long-term debt and capital
lease obligations $1,151 $1,179
Accounts payable 4,292 4,615
Accrued expenses 4,568 4,876
Revenue deferred under collaboration agreements 3,259 5,706
Deferred product revenue 1,272 1,707
----------------------------------------------------------------------
Total current liabilities 14,542 18,083
----------------------------------------------------------------------
Long-term debt and capital lease obligations,
less current portion 930 1,489
Stockholders' equity:
Preferred stock, par value $0.001;
authorized 5,000,000 shares; no shares
issued and outstanding - -
Common stock, par value $0.001; authorized
90,000,000 shares; issued and outstanding
34,237,790 and 34,126,977 shares at June
30, 2006 and December 31, 2005,
respectively 34 34
Additional paid-in capital 182,806 181,718
Deferred stock-based compensation (296) (3,794)
Accumulated deficit (136,767) (105,617)
Accumulated other comprehensive loss (31) (94)
----------------------------------------------------------------------
Total stockholders' equity 45,746 72,247
----------------------------------------------------------------------
Total liabilities and stockholders' equity $61,218 $91,819
----------------------------------------------------------------------
The accompanying notes are an integral part of these condensed
consolidated financial statements.
CRITICAL THERAPEUTICS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
June 30,
in thousands 2006 2005
----------------------------------------------------------------------
Cash flows from operating activities:
Net loss ($31,150) ($18,446)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization expense 500 393
Amortization of premiums on short-term
investments and other (1) 585
Loss on disposal of fixed assets 51 -
Reserve for inventory 702 -
Stock-based compensation expense 4,523 952
Changes in assets and liabilities:
Accounts receivable 67 -
Amount due under collaboration agreements (45) (475)
Inventory (1,619) -
Prepaid expenses and other 616 (882)
Accounts payable (323) (1,445)
Accrued expenses (308) 114
Revenue deferred under collaboration agreements (2,447) (1,684)
Deferred product revenue (435) -
----------------------------------------------------------------------
Net cash used in operating activities (29,869) (20,888)
----------------------------------------------------------------------
Cash flows from investing activities:
Purchases of fixed assets (321) (827)
Proceeds from sales and maturities of short-term
investments 22,551 42,190
Purchases of short-term investments (11,802) (27,708)
----------------------------------------------------------------------
Net cash provided by investing activities 10,428 13,655
----------------------------------------------------------------------
Cash flows from financing activities:
Net proceeds from private placement of common
stock - 51,535
Proceeds from exercise of stock options 63 21
Proceeds from long-term debt - 418
Repayments of long-term debt and capital lease
obligations (587) (505)
----------------------------------------------------------------------
Net cash provided by (used in) financing
activities (524) 51,469
----------------------------------------------------------------------
Net decrease in cash and cash equivalents (19,965) 44,236
Cash and cash equivalents at beginning of period 57,257 11,980
----------------------------------------------------------------------
Cash and cash equivalents at end of period $37,292 $56,216
----------------------------------------------------------------------
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