DUSA Pharmaceuticals Reports Fourth Quarter And Full Year 2004 Financial Results And Corporate Highlights; And Subsequent Events.WILMINGTON, Mass. -- DUSA DUSA Deputy Under Secretary of the Army DUSA Deakin University Student Association DUSA Dundee University Students' Association (Scotland) DUSA Designated Unclassified Subject Area Pharmaceuticals, 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 :DUSA) announced today its fourth quarter and full year 2004 financial results and corporate highlights. During the fourth quarter, the Company's revenues from product sales were $2,545,000, compared to $516,000 in 2003. Other highlights of the quarter included the initiation of a Phase II study using Levulan(R) PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT in the treatment of moderate to severe acne acne, common inflammatory disease of the hair follicles and sebaceous glands characterized by blackheads, whiteheads, pustules, nodules and, in the more severe forms, by cysts and scarring. The lesions appear on the face, neck, back, chest, and arms. ; the announcement of a clinical trial agreement with the National Cancer Institute (NCI See Liberate. ) Division of Cancer Prevention (DCP DCP - definitional constraint programming ), covering Levulan PDT development for the treatment of oral cavity oral cavity n. The part of the mouth behind the teeth and gums that is bounded above by the hard and soft palates and below by the tongue and the mucous membrane connecting it with the inner part of the mandible. dysplasia dysplasia Abnormal formation of a bodily structure or tissue, usually bone, that may occur in any part of the body. Several types are well-defined diseases in humans. ; and bringing the majority of Kerastick(R) distribution in-house. For the fourth quarter of 2004, end-user Kerastick sales to physicians totaled 26,322, consisting of 22,944 sold 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. (US), and 3,378 sold by Coherent-AMT, our Canadian marketing and distribution partner. During the fourth quarter of 2003, US Kerastick sales totaled 5,478, with no sales in Canada at that time. For full-year 2004, 76,482 Kerastick units were sold, including 69,870 in the US and 6,612 in Canada, versus a total of 11,172 sold during 2003, all in the US. The net number of BLU-U(R) units placed in doctors' offices during the fourth quarter was 44, consisting of 29 in the US and 15 in Canada. For the full year 2004, 508 BLU-U units (net) were placed and a total of 914 units were in doctor's offices by the end of 2004, consisting of 813 in the US and 101 in Canada, versus 406 at the end of 2003, all of which were installed in the US. For the full year, product sales increased to $7,988,000, from $970,000 in 2003, reflecting a major increase in awareness of, and demand for, our therapy among dermatologists. Other highlights for the year included expansion of our sales force over the course of the year from 8 to 22; initiation of a Phase II study using Levulan(R) PDT for the treatment of photo-damaged skin; a greatly increased presence at dermatology dermatology (dûrmətŏl`əjē), branch of medicine concerned with diagnosis and treatment of diseases and disorders of the skin. educational meetings and conferences; publication of numerous scientific papers highlighting the use of our products in dermatology; commencement of commercial Kerastick production at our Wilmington manufacturing facility; a financing that raised over $28 million; and the signing of our first clinical trial agreement with the NCI DCP, covering Levulan PDT in the treatment of high-grade dysplasia in patients with Barrett's esophagus Bar·rett's esophagus n. Chronic peptic ulcer of the lower esophagus due to the presence of columnar epithelium resembling the mucosa of the gastric cardia. . Subsequent to year-end, we announced the hiring of Bob Doman as President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. and Gary Talarico as Vice President of Sales, and the promotion of Rich Christopher to Vice President, Finance and Chief Financial Officer; we participated successfully at a number of important meetings, including the South Beach Dermatology Symposium February 10-13 and the annual meeting of the American Academy of Dermatology The American Academy of Dermatology (AAD) is the largest organization of dermatologists in the world. The Academy grants Fellowships and Associate Memberships, as well as Fellowships for Nonresidents (of the United States of America or Canada). (AAD AAD American Academy of Dermatology. AAD American Association of Dermatology ) February 18-22. We also received our new supplies of BLU-U units in time for these two meetings and were pleased to see increased reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. , effective January 1st, 2005, for Levulan PDT for actinic keratosis actinic keratosis n. A warty lesion, often premalignant, occurring on the sun-exposed skin of the face or hands, especially of light-skinned persons. Also called senile keratosis. . Based on the increasing demand for our products, we decided in January 2005 to increase the sales force from 22 to 34, including sales representatives, regional managers and the Vice President. Most of the new reps are already in place and we expect them to help deliver a significant increase in sales as the year progresses. With the development of this strong, specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. field force, we have also decided to place an increased emphasis on developing and/or licensing additional dermatology products for the sales force to sell. Our Levulan PDT dermatology development program also continues on track, with all patient treatments in our Phase II photo-damage and moderate-to-severe acne trials expected to be completed this year. As each of these indications represents major market opportunities for DUSA, we remain committed to moving these trials along as quickly as possible. Our cooperative agreements with the NCI are also progressing, with trials in both Barrett's esophagus and oral cavity dysplasia currently expected to get underway later this year. We continue to await AWAIT, crim. law. Seems to signify what is now understood by lying in wait, or way-laying. the Court's decision in the Australian litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. with PhotoCure and Galderma. Simultaneously, we are continuing with settlement discussions. Late in 2004 and early 2005, DUSA also instituted legal action against 2 compounding pharmacies alleging that they have violated vi·o·late tr.v. vi·o·lat·ed, vi·o·lat·ing, vi·o·lates 1. To break or disregard (a law or promise, for example). 2. To assault (a person) sexually. 3. U.S. patent law. One of them, the Cosmetic Pharmacy pharmacy, art of compounding and dispensing drugs and medication. The term is also applied to an establishment used for such purposes. Until modern times medication was prepared and dispensed by the physician himself. In the 18th cent. , was also allegedly involved in the recent incidents involving the use of non-FDA approved botulinum toxin Botulinum toxin (botulin) A neurotoxin made by Clostridium botulinum; causes paralysis in high doses, but is used medically in small, localized doses to treat disorders associated with involuntary muscle contraction and spasms, in addition to strabismus. , causing that company to be restrained from committing violations of the Food Drug and Cosmetic Act Federal Food, Drug and Cosmetic Act a regulation in the United States which requires all drugs used in animals to be approved by the Food and Drug Administration. by the United States District Court United States District Court In the U.S., any of the 94 trial courts of general jurisdiction in the federal judicial system. Each state, as well as the District of Columbia and the Commonwealth of Puerto Rico, has at least one federal district court. in the Southern District of Florida. DUSA has reported the actions of these pharmacies with respect to ALA to 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 is pursuing legal action in order to protect our IP. Financial Highlights: For the three months ended December 31, 2004, DUSA's net loss was ($4,056,000), or ($0.24) per common share, compared to a loss of ($3,770,000), or ($0.27) per common share for 2003. For the twelve months ended December 31, 2004, the Company incurred a net loss of ($15,629,000), or ($0.96) per common share, as compared to a net loss for 2003 of ($14,827,000), or ($1.06) per common share. The decrease in net loss per share in 2004 as compared to 2003 is primarily due to an increase in the number of weighted average of common shares outstanding during 2004 as a result of our private placement earlier in 2004. As discussed below, the increase in total net loss in 2004 is due to the increase in operating costs operating costs npl → gastos mpl operacionales offset, in part, by an increase in revenues. Revenues for the three months ended December 31, 2004 increased to $2,545,000, compared to $516,000 in 2003, due primarily to the significantly higher Kerastick end-user sales. Revenues for the twelve months ended December 31, 2004 were comprised of $7,988,000 in product sales, as compared to product sales of $970,000 in 2003. With respect to U.S. Kerastick sales, we have increased our direct selling Direct selling is the marketing of products or services to consumers through sales tactics including presentations, demonstrations, and phone calls. It is sometimes also considered to be a sale that does not utilize a "middle man" such as a retail outlets, distributors or brokers. and distribution efforts, while maintaining the services of one external distributor in the United States. We increased our internal distribution capabilities in order to increase our net profit per unit and gross revenue per unit, although our costs to support this function have also increased. During the second quarter of 2004, DUSA also commenced selling the BLU-U and Kerastick in Canada through an exclusive marketing and distribution agreement with Coherent-AMT Inc., a leading Canadian medical device and laser distribution company. A breakdown of revenues for the current quarter and 2004 as compared to the prior year were as follows:
Three Months Ended Twelve Months Ended
December 31, December 31,
--------------------- --------------------
2004 2003 2004 2003
---------- ---------- ----------- --------
Kerastick(R) product
sales
United States $1,937,000 $447,000 $5,450,000 $901,000
Canada 217,000 - 402,000 -
---------- ---------- ---------- ---------
Total $2,154,000 $447,000 $5,852,000 $901,000
BLU-U(R) product sales
United States $314,000 $69,000 $1,795,000 $69,000
Canada 77,000 - 341,000 -
---------- ---------- ---------- ---------
Total $391,000 $69,000 $2,136,000 $69,000
---------- ---------- ---------- ---------
Total product sales $2,545,000 $516,000 $7,988,000 $970,000
---------- ---------- ---------- ---------
---------- ---------- ---------- ---------
Total product sales for the fourth quarter of 2004 reflect the highest level of product sales to date. However, Kerastick sales must continue to increase significantly in order for DUSA to become a profitable operating company operating company A business that engages in transactions with outsiders. . Total operating costs for the three months ended December 31, 2004 were $7,056,000, compared to $4,711,000 in 2003. For the twelve months ended December 31, 2004, total operating costs were $25,196,000 compared to $17,723,000 in 2003. These increases were primarily due to significantly higher marketing and sales costs related to our expanding sales force and related marketing and sales activities, and higher research and development costs in support of our various research projects discussed above. We expect such costs to continue to increase as we continue to expand our sales force and invest in our clinical programs. The full year operating costs also include a higher level of general and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. due to an increase in audit and consulting fees primarily related to Sarbanes Oxley compliance work, higher personnel related costs, and an increase in general corporate expenses. Included in general and administrative expenses are patent defense of $2,150,000 in 2004 as compared to $2,447,000 in 2003. We expect these patent defense costs to decrease in 2005 even with the current legal disputes in which we are engaged. As of December 31, 2004, total cash, cash equivalents, and United States government securities United States government securities Debt issues of the U.S. government, as distinguished from government-sponsored agency issues. United States government securities See governments. , including long-term instruments, were $49,292,000, compared to $37,969,000 at the end of 2003. This increase is primarily due to $28,463,000 of gross proceeds raised from the private placement earlier in March and April 2004, net of operating cash expended ex·pend tr.v. ex·pend·ed, ex·pend·ing, ex·pends 1. To lay out; spend: expending tax revenues on government operations. See Synonyms at spend. 2. during 2004 and the repayment of long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. in June 2004.
DUSA PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31,
-------------------------------
2004 2003
----------- -----------
ASSETS
Current Assets
Cash and cash equivalents $2,928,143 $4,294,482
Marketable securities 46,222,969 30,284,841
Accounts receivable 711,016 229,483
Inventory 1,417,160 712,831
Other current assets 1,472,692 1,534,209
----------- -----------
Total current assets 52,751,980 37,055,846
Restricted cash 140,764 139,213
Restricted marketable securities - 3,250,940
Property and equipment, net 3,481,888 4,251,489
Deferred charges and other assets 276,256 -
----------- -----------
TOTAL ASSETS $56,650,888 $44,697,488
----------- -----------
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued
expenses $3,722,716 $2,818,039
Current maturities of
long-term debt - 270,000
Deferred revenue 230,715 129,900
----------- -----------
Total current liabilities 3,953,431 3,217,939
Other liabilities 190,439 -
Long-term debt, net of
current maturities - 1,247,500
----------- -----------
TOTAL LIABILITIES 4,143,870 4,465,439
TOTAL SHAREHOLDERS' EQUITY 52,507,018 40,232,049
----------- -----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $56,650,888 $44,697,488
----------- -----------
----------- -----------
DUSA PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------- --------------------------
2004 2003 2004 2003
------------- ------------ ------------- -------------
REVENUES
Product sales $2,545,324 $516,309 $7,987,656 $970,109
OPERATING COSTS
Cost of product
sales and
royalties 1,262,134 1,016,581 3,875,018 3,481,248
Research and
development 1,639,564 1,236,840 6,489,723 5,403,961
Marketing and
sales 2,720,293 895,801 7,622,106 2,494,405
General and
administrative 1,434,036 1,561,295 7,209,536 6,343,680
------------ ------------ ------------- -------------
TOTAL OPERATING
COSTS 7,056,027 4,710,517 25,196,383 17,723,294
------------ ------------ ------------- -------------
LOSS FROM
OPERATIONS (4,510,703) (4,194,208) (17,208,727) (16,753,185)
OTHER INCOME,
NET 454,456 424,301 1,579,747 1,926,331
------------ ------------ ------------- -------------
NET LOSS $(4,056,247) $(3,769,907) $(15,628,980) $(14,826,854)
------------ ------------ ------------- -------------
------------ ------------ ------------- -------------
BASIC AND
DILUTED NET
LOSS PER
COMMON SHARE $ (.24) $ (.27) $ (0.96) $ (1.06)
------------ ------------ ------------- -------------
------------ ------------ ------------- -------------
WEIGHTED
AVERAGE
NUMBER OF
COMMON SHARES
OUTSTANDING 16,871,219 13,965,540 16,317,078 13,936,482
------------ ------------ ------------- -------------
------------ ------------ ------------- -------------
DUSA Pharmaceuticals, Inc. is a biopharmaceutical company engaged primarily in the development of Levulan Photodynamic Therapy photodynamic therapy n. A type of phototherapy in which a nontoxic light-sensitive compound that has been injected into a patient is exposed selectively to light, whereupon it becomes toxic to targeted malignant and other diseased cells. (PDT) and Photodetection (PD) for multiple medical indications, with its primary focus in dermatology. PDT and PD utilize light-activated compounds such as Levulan to induce a therapeutic or detection effect. The Company maintains offices in Wilmington, MA, Valhalla, NY, and Toronto, Ontario. Except for historical information, this news release contains certain 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. that involve known and unknown risk and uncertainties, which may cause actual results to differ materially from any future results, performance or achievements expressed or implied by the statements made. These forward-looking statements relate to management's expectations for delivery of increased sales by the new sales representatives, for completion of Phase II photodamage and acne clinical trials and initiation of NCI trials, for increases in marketing and sales and research and development costs and decreases in patent defense costs. Such risks and uncertainties include, but are not limited to, the Company's ability to continue to penetrate the market, patient enrollment and the clinical trial process, regulatory approvals, uncertainties relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc litigation, maintenance of its patent portfolio, and other risks identified in DUSA's SEC filings from time to time. DUSA PHARMACEUTICALS INC. (NASDAQ:DUSA) |
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