Endorex Announces Accomplishments and Results for Second Quarter, 2000.Business & Health Editors CHICAGO--(BW HealthWire)--Aug. 14, 2000 Endorex Corporation (AMEX AMEX See: American Stock Exchange : DOR Dor or Dora, Canaanite seaport, ancient Palestine (modern Israel), N of Caesarea Palestinae. It was never a Jewish city but rather a Phoenician outpost. It was rebuilt by the Romans; still visible are the ruins of a temple and a theater. ) announced business achievements for the second quarter of this year. Also announced were the Company's financial results for this period. Endorex is an innovative drug delivery company developing technologies for oral and mucosal Mucosal Refers to tissues that produce mucus, such as the digestive, genital and urinary tracts. Mentioned in: Intestinal Polyps mucosal pertaining to or emanating from mucosa. delivery of drugs and vaccines. Financial Accomplishments Endorex completed an $8.6 million private placement with institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. ; 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). were approximately $7.8 million after expenses. The proceeds of this offering will be used to fund research and development activities, to support efforts to take our products into clinical trials, and for general corporate purposes. From April 2000 through June 30, 2000, Endorex has used approximately $1.2 million to fund research and development, including capital improvements and equipment, and operations. As a result of these financing activities, the company had approximately $14.2 million in cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has at the end of June. Intellectual Property Accomplishments In April and June 2000, Endorex announced the issuance of three new U.S. patents covering drug and vaccine delivery technology it is developing. These patents add to several Orasome(TM) system patents that were issued over the past several years and expand the Company's overall patent portfolio. - U.S. 6,024,983 - "Composition for Delivering Bioactive bi·o·ac·tive adj. Of or relating to a substance that has an effect on living tissue. bioactive having an effect on or eliciting a response from living tissue. Agents for Immune Response immune response n. An integrated bodily response to an antigen, especially one mediated by lymphocytes and involving recognition of antigens by specific antibodies or previously sensitized lymphocytes. and its Preparation." This patent is part of the portfolio of vaccine delivery technology and intellectual property, which InnoVaccines Corporation licensed from the Southern Research Institute and the University of Alabama Research Foundation for oral delivery of vaccines. This patent represents the seventh U.S. patent to issue in this portfolio of more than 50 worldwide patents. - U.S. 6,008,333 - "Preparation of Glucosaminyl Muramic Acid mu·ram·ic acid n. An amino sugar, C9H17NO7, found in the peptidoglycan layer of the cell walls of many bacteria. [Latin m Derivatives." This patent is the fourth U.S. patent related to a group of proprietary Endorex immunomodulator compounds, which can be potentially used as vaccine adjuvants to enhance the overall performance of vaccination vaccination, means of producing immunity against pathogens, such as viruses and bacteria, by the introduction of live, killed, or altered antigens that stimulate the body to produce antibodies against more dangerous forms. by stimulating the patient's immune system immune system Cells, cell products, organs, and structures of the body involved in the detection and destruction of foreign invaders, such as bacteria, viruses, and cancer cells. Immunity is based on the system's ability to launch a defense against such invaders. . - U.S. 6,060,082 - "Polymerized liposomes Liposomes Aqueous compartments enclosed by lipid bilayer membranes; liposomes are also known as lipid vesicles. Phospholipid molecules consist of an elongated nonpolar (hydrophobic) structure with a polar (hydrophilic) structure at one end. targeted to M cells M cells special epithelial cells associated with Peyer's patches and lymphoid follicles that actively take up particulate matter from the intestinal contents. They are probably the portal of entry for bacteria and viruses. and useful for oral or mucosal delivery." This patent is the third U.S. patent that has been issued on Endorex's Orasome(TM) drug and vaccine delivery system which was developed and in-licensed exclusively on a worldwide basis from the Massachusetts Institute of Technology Massachusetts Institute of Technology, at Cambridge; coeducational; chartered 1861, opened 1865 in Boston, moved 1916. It has long been recognized as an outstanding technological institute and its Sloan School of Management has notable programs in business, . Second Quarter Financial Results The company reported a net loss of $1.3 million for the second quarter of 2000, a decrease of 41 percent versus a net loss of $2.2 million for the same period in 1999. After giving effect to dividends on preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. , which are paid in additional preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. , net loss available to common stockholders decreased $0.9 million to $1.6 million, or $0.13 per share, compared with $2.5 million, or $0.23 per share for the year-earlier period. Reduced spending on cancer product development and the absence of financial advisory warrant amortization were the major factors resulting in the decline in net loss. Proprietary research and development expenditures for the three months ended June 30, 2000 decreased approximately $0.2 million, or 50%, as compared to the corresponding period ended June 30, 1999. On March 1, 2000 Endorex announced its decision to divest To deprive or take away. Divest is usually used in reference to the relinquishment of authority, power, property, or title. If, for example, an individual is disinherited, he or she is divested of the right to inherit money. our 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. business. Spending on cancer-related programs during the second quarter of 2000 was reduced by approximately $260 thousand as compared to the previous year. General and administrative expenses for the three months ended June 30, 2000 decreased $0.3 million, or 35 percent, as compared to the same period in 1999. The decline was due substantially to the absence of amortization of the cost of financial advisory warrants issued in association with capital raising transactions in 1997, which were fully amortized as of the beginning of 2000. Endorex has two joint ventures with Elan (Emulated LAN) A virtual LAN in the ATM world. See LANE and virtual LAN. Elan - ["Top-down Programming with Elan", C.H.A. Koster, Ellis Horwood 1987]. Corporation, plc. InnoVaccines Corporation is developing the Orasome(TM) delivery system for oral and mucosal vaccines. Endorex Newco, Ltd. is developing Elan's MEDIPAD(R) drug delivery system, which consists of a small, disposable drug delivery device that combines a microinfusion pump with the convenience of patch technology, for the delivery of iron chelation Chelation The process by which a molecule encircles and binds to a metal and removes it from tissue. Mentioned in: Heavy Metal Poisoning chelation drugs. The Company's share of research and development expenditures through these joint ventures is recorded as equity in losses from joint ventures. During the second quarter of 2000, the Company's equity losses from joint venture activities was reduced by approximately $0.3 million, or 29 percent, as compared to the same period of 1999. During the 1999 period Endorex incurred approximately $215 thousand of patent license expense to fund its share of InnoVaccines' acquisition of a vaccine delivery patent portfolio from the Southern Research Institute/University of Alabama Research Foundation. These expenses did not recur in the second quarter of 2000. Endorex is a drug delivery company developing technologies for oral and mucosal delivery of drugs and vaccines to improve patient compliance, convenience and quality of life for therapies that can only be administered by injection. Additional information is available on the Endorex web site at www.endorex.com. This press release contains 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 21E of the Securities Exchange Act of 1934, as amended, that involve a number of known and unknown risks and uncertainties. These statements are only predictions and actual events or results in future periods may differ materially from what is currently anticipated. In particular, we cannot assure you that we will ever achieve any economic benefit from our patents, that we will be able to successfully commercialize products based on our technology, particularly in light of the significant uncertainty inherent in developing drug delivery products, conducting clinical trials and obtaining regulatory approvals, that our technologies will prove to be safe and effective, that we will be successful in maintaining our patent rights, that our InnoVaccines joint venture, our other joint venture or our collaborations with other companies will successfully develop products or become profitable, that we will become profitable, that we will be able to obtain future financing, or that we will be able to carry out our current plans for 2000. In addition to the matters described in this press release, risk factors as described from time to time in Endorex's filings with the Securities and Exchange Commission, including, but not limited to, our most recent reports on Form 10-QSB and Form 10-KSB, may affect our financial results. We assume no obligation to update the information in this release.
Endorex Corporation 2000 Second Quarter Results
Results of Operation
Three Months Ended June 30, Six Months Ended June 30,
2000 1999 2000 1999
Revenues $ -- $ -- $ -- $ --
Research &
development
expenses 217,112 436,386 468,193 1,017,074
General &
administrative
expenses 615,559 950,542 981,521 1,747,166
Total Operating
Expenses 832,671 1,386,928 1,449,714 2,764,240
Operating Loss (832,671) (1,386,928) (1,449,714) (2,764,240)
Equity Losses in
Joint Ventures (648,779) (914,246) (1,578,855) (1,491,851)
Other Income 186,944 96,800 297,945 228,846
Net Loss (1,294,506) (2,204,374) (2,730,624) (4,027,245)
Preferred stock
dividends (342,747) (306,542) (687,378) (618,350)
Net Loss
available
to common
shareholders $ (1,637,253) $ (2,510,916)$ (3,418,002) $ (4,645,595)
Basic &
diluted net
loss per
share
available
to common
stockholders $ (0.13) $ (0.23)$ (0.29) $ (0.43)
Average shares
outstanding 12,488,842 10,755,319 11,646,663 10,755,319
Financial Position June 30, 2000
Cash and securities $ 14,200,663
Working capital 12,267,644
Total assets 15,012,487
Long-term debt 271,139
Stockholders'
equity & preferred stock 12,629,851
Stock Information August 11, 2000
Symbol (Amex) DOR
Recent price $ 2.187
Shares outstanding 12,700,000
Market capitalization $ 28,800,000
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