Endorex Reports Second Quarter 2001 Results; Will Acquire Specialty Pharmaceutical Company with Phase III Program.Health/Medical Writers CHICAGO--(BW HealthWire)--Aug. 9, 2001 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 today its second quarter financial results for 2001. For the three-month period ended June 30, 2001, the Company reported a net loss of $1,552,779 or $0.12 per share, 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. , versus a net loss of $1,637,253 or $0.13 per share, basic and diluted, during the second quarter of 2000. This includes 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. dividends, consisting of paid-in-kind shares of preferred stock, paid during both periods. 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 quarter were $1,025,157 compared to $ $832,671 for the second quarter of last year. The increase in operating expenses is primarily due to additional research and development expenses related to the expansion of the company's proprietary drug delivery programs and expansion of its research and development personnel. This contrasts with a decrease in joint venture related expenses. During the second quarter of 2001, equity in losses from joint ventures were $260,603 compared to $648,779 during the second quarter of 2000. The Company had $9,808,676 in cash and cash equivalents on hand on June 30, 2001. On August 1, 2001, Endorex announced that it had entered into a definitive merger agreement with Corporate Technology Development, Inc. ("CTD CTD 1 Connective tissue disease, see there 2 Cumulative trauma disorder, see there "), a privately held development-stage specialty pharmaceutical company based in Miami, Florida “Miami” redirects here. For the Native American tribe, see Miami tribe. Miami is a major city in southeastern Florida, in the United States. It is the county seat of Miami-Dade County. Miami is a gamma world city with an estimated population of 404,048. , whereby Endorex would acquire all of the outstanding capital stock of CTD in a stock-for-stock merger. Both boards of directors have approved the merger and have agreed to recommend that their respective stockholders vote in favor of upon the side of; favorable to; for the advantage of. See also: favor the merger. Certain stockholders of CTD holding a majority of CTD's outstanding preferred stock and a majority of CTD's outstanding common stock have entered into a voting agreement pursuant to which they have agreed to vote for the merger. Upon completion of the merger, Endorex will possess a broadened product pipeline with the addition of two oral drug candidates currently in various stages of clinical development. One of these CTD product candidates is orBec(TM) which is being developed to treat graft versus host disease Graft versus host disease A life-threatening complication of bone marrow transplants in which the donated marrow causes an immune reaction against the recipient's body. Mentioned in: Bone Marrow Transplantation , a life-threatening disorder resulting from bone marrow transplantation Bone Marrow Transplantation Definition The bone marrow—the sponge-like tissue found in the center of certain bones—contains stem cells that are the precursors of white blood cells, red blood cells, and platelets. . Bone marrow transplantation is currently used as a modality modality /mo·dal·i·ty/ (mo-dal´i-te) 1. a method of application of, or the employment of, any therapeutic agent, especially a physical agent. 2. for treating various types of cancer. Endorex believes this portfolio of novel and proprietary formulations of off-patent small molecule drugs complements its oral delivery programs of large molecule (peptide- and protein-based) drugs such as human growth hormone human growth hormone (HGH): see growth hormone. , insulin insulin, hormone secreted by the β cells of the islets of Langerhans, specific groups of cells in the pancreas. Insufficiency of insulin in the body results in diabetes. Insulin was one of the first products to be manufactured using genetic engineering. and vaccines. Additionally, CTD currently has no debt and approximately $5 million in cash, and Endorex believes that there will be sufficient funds in the near term to continue the research and development of these two products and to take orBec(TM), CTD's lead drug candidate currently in phase III clinical trials Noun 1. phase III clinical trial - 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 , through 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. approval process. Endorex is a development-stage drug delivery company developing 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. formulations of protein- and peptide-based drugs that are traditionally delivered in an injectable in·ject·a·ble adj. Capable of being injected. Used of a drug. n. A drug or medicine that can be injected. format. Endorex anticipates that this alternative delivery system will enhance patient quality of life and potentially reduce the healthcare cost related to needle-based delivery. For further information regarding Endorex, please visit the company's website located 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 be able to successfully develop or 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 our cash expenditures will be at projected levels, that we will be able to obtain future financing or funds, that we or our joint ventures or our collaborations with other companies in the U.S. and abroad will successfully develop products or become profitable, that our joint ventures or our collaborations with other companies will continue, that our business strategy will be successful or that we will be able to carry out our plans for 2001 and beyond. This press release also contains forward-looking statements regarding Endorex's, CTD's, and the combined companies' plans, expectations, intentions and strategies. These statements include forward-looking statements about Endorex's, CTD's and the combined companies' products, product development and product pipeline. These statements are not guarantees of future performance or results and actual results could differ materially from current expectations. Factors that could cause or contribute to such differences include, but are not limited to, product integration risk, the possibility that the operations and management of Endorex and CTD will not be successfully integrated, the possibility that the merger might not be consummated con·sum·mate tr.v. con·sum·mat·ed, con·sum·mat·ing, con·sum·mates 1. a. To bring to completion or fruition; conclude: consummate a business transaction. b. , the effects of the public announcement on the progress of certain drug development projects and that benefits sought to be achieved by the transaction will not be achieved. Furthermore, Endorex, CTD, and the combined companies cannot assure you that they will be able to successfully develop or commercialize products based on their technology, particularly in light of the significant uncertainty inherent in developing drug and drug delivery products, conducting clinical trials and obtaining regulatory approvals, that their technologies will prove to be safe and effective, that their cash expenditures will be at projected levels, that product development and commercialization efforts will not be reduced or discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: due to difficulties or delays in clinical trials or due to lack of progress or positive results from research and development efforts, that they will be able to successfully patent, register or protect their technology, trademarks and products, or that the business strategies of Endorex, CTD, or the combined companies will be successful. 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, Form 10-KSB, as amended, and our Registration Statement on Form S-3, as amended, may affect our financial results. We assume no obligation to update the information in this release.
Endorex Corporation
Condensed Consolidated
Statement of Operations
(unaudited)
Three Months Six Months
Ended June 30 Ended June 30
2001 2000 2001 2000
Revenues $- $- $- $-
Research & development
expenses 585,642 217,112 1,171,494 468,193
General & administrative
expenses 439,515 615,559 908,269 981,521
Total Operating
Expenses 1,025,157 832,671 2,079,763 1,449,714
Operating Loss (1,025,157) (832,671) (2,079,763) (1,449,714)
Equity Losses in
Joint Ventures (260,603) (648,779) (577,661) (1,578,855)
Other Income - - (1,575) -
Net Interest Income 103,589 186,944 267,364 297,945
Net Loss (1,182,171)(1,294,506) (2,391,635) (2,730,624)
Preferred stock
dividends (370,608) (342,747) (737,142) (687,378)
Net Loss available to
common shareholders (1,552,779)(1,637,253) (3,128,777) (3,418,002)
Basic & diluted net
loss per share
available to
common shareholders $(0.12) $(0.13) $(0.25) $(0.29)
Weighted Average
shares outstanding 12,741,858 12,488,842 12,741,858 11,646,663
Balance Sheet Data: June 30, 2001 December 31, 2000
Cash and securities $9,808,676 $12,846,251
Working capital 6,626,974 10,112,440
Total assets 11,582,177 13,669,458
Long-term debt 162,754 204,162
Stockholders' equity
preferred stock 8,158,045 10,546,145
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