NeoPharm Announces September 30, 2005 Financial Results.WAUKEGAN, Ill. -- NeoPharm, Inc. (Nasdaq:NEOL): --Third Quarter and Nine-Month Losses and Cash Usage Notably Below Year Earlier Amounts --Full Year 2005 Cash Use Projection Improved to $34 Million or Less --Facilities Consolidation Completed and New Corporate Headquarters Address Announced NeoPharm, Inc. (Nasdaq:NEOL) today announced financial results for the third quarter and first nine months ended September 30, 2005. Operating Results and Cash Used in Operations The Company reported a net loss of approximately $10.5 million, or $0.45 per basic and diluted share, for the third quarter of 2005. The third quarter loss is down $3.5 million, or 25% from a net loss of approximately $14.0 million, or $0.60 per basic and diluted share for the third quarter of 2004. For the nine-month period ended September 30, 2005, the Company reported a net loss of approximately $29.1 million, or $1.23 per basic and diluted share, down $13.9 million or 32% from a net loss of approximately $43.0 million, or $1.88 per basic and diluted share for the nine-month period ended September 30, 2004. Net cash used in operations in the third quarter of $8.7 million and $24.2 million in the nine-month period were $4.1 million, or 32%, and $14.9 million, or 38%, respectively, lower than the year earlier periods, reflecting the items noted below. The third quarter 2005 lower operating losses reflect the Company's cost reduction activities initiated in the fourth quarter of 2004 and enhanced during 2005, along with continuing efforts to utilize capital prudently. In addition, the 2005 operating results for the nine month period ended September 30, 2005 reflect the second quarter 2005 receipt of $2.5 million in connection with a loan repayment agreement associated with a note receivable note receivable A debt due from borrowers and evidenced by a written promise of payment. Note receivable, an entry on the asset side of many corporate balance sheets, indicates the dollar amount of loans due to be repaid by borrowers. deemed impaired in 2003, and $350,000 recognized as revenue in the second quarter of 2005 upon delivery of a customized NeoPhectin formulation to a customer, a privately held biotechnology company. The Company's cash and cash equivalents approximated $40.1 million at September 30, 2005, down from approximately $8.2 million and $23.0 million, respectively, when compared to June 30, 2005 and $63.1 million as of December 31, 2004. Financial Projections The Company currently projects a net loss range for 2005 of approximately $37 million to $38 million, or approximately $1.57 to $1.61 per share in 2005. The Company estimates that the 2005 projected net loss will result in cash used in operations of less than $34 million. NeoPharm believes that the current level of cash and cash equivalents can support the Company's activities into the fourth quarter of 2006 at current and projected levels of development and general corporate activity. Business Update Cintredekin besudotox (IL13-PE38QQR) As of October 31, 2005, 277 patients have been enrolled, including a total of 45 patients enrolled in the third quarter of 2005, and 22 patients in October, 2005. Assuming the Company continues to enroll an average of 15 patients per month, PRECISE trial enrollment will be completed by December 31, 2005. Current patient enrollment information for PRECISE is updated monthly at www.precisetrial.com.
Estimated Milestones for cintredekin besudotox (IL13-PE38QQR):
1) 2nd Futility Analysis (100 Deaths) 4Q05
2) iDMC recommendation on 2nd Futility Analysis 4Q05
3) Enrollment Completion By 12/31/05
4) Interim Efficacy Analysis (160 Deaths) 1H06
5) Potential BLA Submission based on Interim Efficacy 2H06
LEP-ETU - Liposome liposome (lī`pəsōm', lĭp`ə–), microscopic, fluid-filled pouch whose walls are made of layers of phospholipids identical to the phospholipids that make up cell membranes. Entrapped Paclitaxel paclitaxel /pac·li·tax·el/ (pak?li-tak´sel) an antineoplastic that promotes and stabilizes polymerization of microtubules, isolated from the Pacific yew tree (Taxus brevifolia); During the third quarter, the Company announced that its NeoLipid drug candidate LEP-ETU, has been determined to be bioequivalent bi·o·e·quiv·a·lent n. A value indicating the rate at which a substance enters the bloodstream and becomes available to the body. to Taxol(R). Under the FDA's 505(b)(2) pathway, and guidance from 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. , the Company plans to initiate a 100-patient comparator comparator Instrument for comparing something with a similar thing or with a standard measure, in particular to measure small displacements in mechanical devices. In astronomy, the blink comparator is used to examine photographic plates for signs of moving bodies. study in metastatic Metastatic The term used to describe a secondary cancer, or one that has spread from one area of the body to another. Mentioned in: Coagulation Disorders metastatic pertaining to or of the nature of a metastasis. breast cancer. The Company estimates the 100-patient comparator study, in which 50 patients would receive LEP-ETU and 50 patients would receive Taxol, will take approximately eight to ten months to enroll with a six-month treatment period. The Company is finalizing preparations for such a study, and currently projects commencing enrollment in the first quarter of 2006. LE-SN38 - Liposome Entrapped SN-38 A Phase II study for the Company's NeoLipid drug candidate, LE-SN38 for colorectal cancer colorectal cancer Malignant tumour of the large intestine (colon) or rectum. Risk factors include age (after age 50), family history of colorectal cancer, chronic inflammatory bowel diseases, benign polyps, physical inactivity, and a diet high in fat. , is being planned with the Cancer and Leukemia Group B Cancer and Leukemia Group B (CALGB) is a cancer research cooperative group in the United States. CALGB research is focused on seven major disease areas: leukemia, lymphoma, breast cancer, lung cancer, gastrointestinal malignancies, genito-urinary malignancies, and melanoma. (CALGB CALGB Cancer and Leukemia Group B ), an NCI See Liberate. funded clinical study group, with final protocol submission to, and acceptance by, NCI CTEP CTEP Cancer Therapy Evaluation Program CTEP Community Transportation Enhancement Program (Montana) CTEP Chartered Trust and Estate Planner CTEP Community Technology Empowerment Project CTEP Collaborative Teacher Education Program and FDA, currently anticipated in the fourth quarter of this year. Facilities Consolidation and Corporate Headquarters Location Change In October 2005, the Company completed a previously announced initiative to consolidate as much of its operations as possible into its Waukegan, Illinois Waukegan (IPA: /wɔˈkiːgən/) is a city in Lake County, Illinois. As of the 2000 census, the city had a total population of 87,901. Estimated population in 2006: 93,389 . facility, reducing operating costs operating costs npl → gastos mpl operacionales for 2006 and beyond. As part of that undertaking, the Company's executive offices have been moved to its Waukegan facility. Clinical Trials Management remains at the Lake Forest, Illinois Lake Forest is a city in Lake County, Illinois, United States. The population was 20,059 at the 2000 census. The city is south of Waukegan, Illinois, on the shore of Lake Michigan, and is a part of the Chicago metropolitan area and the North Shore. facility. Conference Call NeoPharm will host a conference call to discuss these financial results and other recently announced corporate developments. The Company's new 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. , Guillermo Herrera will participate in the call. The conference call will be held on:
Tuesday, November 1, 2005 at 11:00 a.m. Eastern/8:00 a.m. Pacific
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Domestic: 866-831-6247, passcode 11200980
International: 617-213-8856, passcode 11200980
Audio replays will be available through November 8, 2005.
Domestic: 888-286-8010, passcode 23290099
International: 617-801-6888, passcode 23290099
The live call and replay will also be available via webcast at www.neophrm.com. About PRECISE PRECISE, an acronym for Phase III Noun 1. phase III - 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 FDA Randomized ran·dom·ize tr.v. ran·dom·ized, ran·dom·iz·ing, ran·dom·iz·es To make random in arrangement, especially in order to control the variables in an experiment. Evaluation of Convection Enhanced Delivery of IL13-PE38QQR with Survival Endpoint, www.precisetrial.com, is a randomized, controlled Phase III clinical trial 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 . It is designed to enroll up to 300 patients, and compare overall survival, drug safety and quality of life of patients receiving cintredekin besudotox with patients receiving GLIADEL(R) Wafer in the treatment of first recurrent GBM GBM 1 Glioblastoma multiforme, see there 2. Glomerular basement membrane following surgical tumor resection (removal). Patients are randomized so that up to 200 patients receive cintredekin besudotox via Convection Enhanced Delivery (CED (Capacitance Electronic Disc) An earlier videodisc technology from RCA that was released in 1981 and abandoned five years later. Like phonograph records, the analog disc contained grooves that a stylus rode over. ) using catheters placed following the resection, and up to 100 patients receive GLIADEL(R) Wafer placed at the time of resection. About LEP-ETU LEP-ETU is the Company's NeoLipid(R) liposomal formulation of the widely used cancer drug, paclitaxel. Paclitaxel has been approved in the U.S. as Taxol(R). Common side effects Side effects Effects of a proposed project on other parts of the firm. of this approved anticancer agent include nausea, vomiting vomiting, ejection of food and other matter from the stomach through the mouth, often preceded by nausea. The process is initiated by stimulation of the vomiting center of the brain by nerve impulses from the gastrointestinal tract or other part of the body. , hair loss, and nerve and muscle pain. In addition, Taxol cannot be introduced into the body unless it is first formulated in a mixture of castor oil castor oil, yellowish oil obtained from the seed of the castor bean. The oil content of the seeds varies from about 20% to 50%. After the hulls are removed the seeds are cold-pressed. (Cremophor(R) EL) and ethanol, which can lead to another set of debilitating de·bil·i·tat·ing adj. Causing a loss of strength or energy. Debilitating Weakening, or reducing the strength of. Mentioned in: Stress Reduction side effects including hypersensitivity reactions hypersensitivity reactions, n.pl any of several forms of overly responsive actions of the immune system to normally encountered, antigens. Also called allergic reactions. . NeoLipid(R) technology is intended to eliminate the need for Cremophor. As a result, LEP-ETU may overcome many of the current limitations of Taxol treatment for cancer patients and may limit the adverse side effects. About LE-SN38 LE-SN38 is the Company's NeoLipid(R) liposomal formulation of SN-38, the active metabolite active metabolite Therapeutics A drug metabolite with therapeutic activity similar to the parent compound, which must be considered in therapeutic pharmacokinetics of irinotecan (Camptosar(R)), a chemotherapeutic prodrug prodrug /pro·drug/ (-drug) a compound that, on administration, must undergo chemical conversion by metabolic processes before becoming an active pharmacological agent; a precursor of a drug. , which is currently approved for the treatment of advanced colorectal cancer. SN-38 is insoluble and can only be used to treat cancer by administering the prodrug, Camptosar(R), which is then converted into the active drug in the body. By employing the Company's proprietary NeoLipid(TM) technology, NeoPharm hopes to deliver SN-38 directly to tumor cells without the need for conversion. The Company is also studying the use of LE-SN38 to treat other types of cancers, such as lung cancer lung cancer, cancer that originates in the tissues of the lungs. Lung cancer is the leading cause of cancer death in the United States in both men and women. Like other cancers, lung cancer occurs after repeated insults to the genetic material of the cell. . About NeoPharm, Inc. NeoPharm, Inc., based in Waukegan, Illinois, is a publicly traded biopharmaceutical company dedicated to the research, development, and commercialization of new and innovative cancer drugs for therapeutic applications. The Company has a portfolio of cancer compounds in various stages of development. Additional information can be obtained by visiting NeoPharm's Website at www.neophrm.com. Forward Looking Statements - This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The Company has tried to identify such forward-looking statements by use of such words as "expects," "intends," "hopes," "anticipates," "believes," "could," "may," "evidences" and "estimates," and other similar expressions, but these words are not the exclusive means of identifying such statements. Such statements include, but are not limited to, any statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Company's drug development program, including, but not limited to the initiation, progress and outcomes of clinical trials of the Company's drug product candidates, including, but not limited to, the PRECISE trial, and patient enrollment, projections for such trials, projections regarding cash used in operations, financial projections, and any other statements that are not historical facts. Such statements involve risks and uncertainties, including, but not limited to, those risks and uncertainties relating to difficulties or delays in financing, development, testing, regulatory approval, production, and marketing of the Company's drug and non-drug compounds including, but not limited to cintredekin besudotox,LEP-ETU and LE-SN38, uncertainty regarding the outcomes of ongoing or proposed FDA studies, uncertainty regarding the availability of third party production capacity, uncertainty regarding the outcome of damage claims made by or against the Company, the Company's financial guidance and projections, the Company's ability to cut back on its funding of certain of its development projects in order to conserve its cash resources, the ability of the Company to procure additional future sources of financing, unexpected adverse side effects or inadequate therapeutic efficacy of the Company's drug and non-drug compounds, including, but not limited to, cintredekin besudotox, LEP-ETU and LE-SN38, that could slow or prevent products coming to market, uncertainty regarding the Company's ability to market its drug and non-drug products, including, but not limited to, cintredekin besudotox, LEP-ETU and LE-SN38, directly or through independent distributors, the uncertainty of patent protection for the Company's intellectual property or trade secrets, and other risks detailed from time to time in filings the Company makes with the Securities and Exchange Commission including its annual reports 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. and quarterly reports on Forms 10-Q. Such statements are based on management's current expectations, but actual results may differ materially due to various factors, including those risks and uncertainties mentioned or referred to in this press release. Accordingly, you should not rely on these forward-looking statements as a prediction of actual future results.
NeoPharm, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
Three-Months Ended Nine-Months Ended
September 30 September 30
---------------------------- ----------------------------
2005 2004 2005 2004
------------- -------------- -------------- -------------
Revenues $9,480 $84,740 $535,380 $116,020
Expenses:
Cost of
revenues 387 3,465 1,736 4,008
Research
and
development 8,538,368 10,621,195 24,573,044 33,875,052
Selling,
general,
and
admini-
strative 2,388,388 3,712,208 8,672,986 9,969,955
Recovery
of note
receivable - - (2,500,000) -
------------- -------------- -------------- -------------
Total
expenses 10,927,143 14,336,868 30,747,766 43,849,015
Loss from
operations (10,917,663) (14,252,128) (30,212,386) (43,732,995)
Interest
income 384,720 297,558 1,157,871 771,754
------------- -------------- -------------- -------------
Net loss $(10,532,943) $(13,954,570) $(29,054,515) $(42,961,241)
============= ============== ============== =============
Net loss per
share-basic
and diluted $(0.45) $(0.60) $(1.23) $(1.88)
============= ============== ============== =============
Shares used
in computation
of net loss
per share:
Basic and
diluted 23,640,393 23,284,925 23,557,757 22,815,559
============= ============== ============== =============
Balance Sheet Data:
(Unaudited)
September 30, December 31,
2005 2004
-------------- --------------
Cash and cash equivalents $40,105,417 $63,106,655
Total assets $43,593,418 $67,434,371
Current liabilities $10,263,561 $9,204,096
Accumulated deficit $(218,354,543) $(189,300,028)
Total stockholders equity $31,287,879 $58,230,275
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