POZEN Reports Second Quarter 2004 Results; POZEN Reports Profitability for the First Time in Company History.CHAPEL HILL, N.C. -- POZEN 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 : POZN), today announced results for the second quarter and six months ended June June: see month. 30, 2004. Second-Quarter Results POZEN reported a net income of $11.3 million, or $0.38 per share on a fully 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. basis, for the second quarter of 2004 compared with a net loss of $4.7 million, or $0.17 per share on a fully diluted basis, for the second quarter of 2003. For the second quarter of 2004, POZEN reported revenue of $16.9 million. POZEN did not report any revenue for the second quarter of 2003. Revenue for the quarter ended June 30, 2004 resulted from the amortization of payments received under collaboration Working together on a project. See collaborative software. agreements for MT 100(TM), MT 300(TM), and Trexima(TM) and the receipt of a $15.0 million milestone payment from GlaxoSmithKline GlaxoSmithKline plc (LSE: GSK NYSE: GSK) is a British based pharmaceutical, biological, and healthcare company. GSK is a research-based company with a wide portfolio of pharmaceutical products covering anti-infectives, central nervous system (CNS), respiratory, ("GSK GSK GlaxoSmithKline plc (pharmaceutical company) GSK Glycogen Synthase Kinase GSK Gruppentraining Sozialer Kompetenzen (Germany) GSK Greenland Shark (FAO fish species code) ") for commencement of 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 activities for Trexima. 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 quarter ended June 30, 2004 were $5.7 million as compared to $4.8 million for the same period in 2003. The increase in operating expenses was due primarily to commencement of Trexima Phase III clinical trial activities and product costs incurred in connection with current exploratory programs, including lornoxicam Lornoxicam is a non-steroidal anti-inflammatory drug. • • [ , offset by a reduction in MT 100 and 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. . At June 30, 2004, cash and cash equivalents totaled $67.5 million compared to $60.5 million at December December: see month. 31, 2003. Six-Month Results POZEN reported a net income of $9.0 million, or $0.30 per share on a fully diluted basis, for the six-month period ended June 30, 2004, compared with a net loss of $9.5 million, or $0.34 per share on a fully diluted basis, for the same period of 2003. For the six months ended June 30, 2004 POZEN reported revenue of $18.8 million. POZEN did not report any revenue for the same period of 2003. Revenue for the period ended June 30, 2004 resulted from the amortization of payments received under collaboration agreements for MT 100, MT 300, and Trexima and the receipt of a $15.0 million milestone payment from GSK for commencement of Phase III clinical trial activities for Trexima. Total operating expenses for the six months ended June 30, 2004, were $10.0 million as compared to $9.8 million for the same period in 2003. The increase in operating expenses was due primarily to commencement of Trexima Phase III clinical trial activities and product costs associated with current exploratory programs, including lornoxicam, offset by a reduction in MT 100 and general and administrative costs. Corporate Highlights POZEN achieved profitability for the first time in the second quarter of 2004 due to the recognition of a licensing milestone payment. On May 18, 2004, POZEN announced the initiation of a 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 program for Trexima, which is being developed for the acute treatment of migraine migraine (mī`grān), headache characterized by recurrent attacks of severe pain, usually on one side of the head. It may be preceded by flashes or spots before the eyes or a ringing in the ears, and accompanied by double vision, nausea, . Pozen will conduct two Phase III pivotal trials, designed to determine the efficacy of Trexima, in addition to a long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. , open-label safety study. On May 20, 2004, Arthur Arthur, king of Britain: see Arthurian legend. Arthur king and hero of Scotland, Wales, and England. [Arthurian Legend: Parrinder, 28] See : Heroism S. Kirsch kirsch n. A colorless brandy made from the fermented juice of cherries. [French, short for German Kirschwasser; see kirschwasser. was appointed to POZEN's board of directors and audit committee. Mr. Kirsch is a founding member and managing director of Vector Securities LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , an investment and merchant-banking firm. On May 28, 2004, POZEN received a not-approvable letter 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. for MT 100, POZEN's product candidate for the acute treatment of migraine. POZEN subsequently has had communications with the FDA relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc issues raised in the not-approvable letter. POZEN expects to have further communications with the FDA regarding the MT 100 submission. Financial Guidance For the third quarter of 2004, POZEN expects total revenues to be approximately $1.9 million. POZEN expects total operating expenses for the third quarter of 2004 to be in the range of $8.5 million to $10.5 million. For the 2004 year, POZEN expects total revenue to be approximately $23 million. POZEN expects total operating expenses for the 2004 year to be in the range of $24 million to $28 million. These estimates of revenue and expenses reflect the commencement of Phase III clinical trials for Trexima in 2004. The estimate of 2004 operating expenses is lower than our earlier guidance and reflects a decrease in discretionary costs in light of the regulatory status of MT 100 and MT 300. Second-Quarter Results Webcast POZEN will hold a webcast to present second-quarter results and management's outlook on Thursday, July 29, 2004 at 11:00 a.m. Eastern time. The webcast can be accessed live and will be available for replay at www.pozen.com. About POZEN POZEN is a pharmaceutical company committed to developing therapeutic advancements for diseases with unmet un·met adj. Not satisfied or fulfilled: unmet demands. medical needs where it can improve efficacy, safety, and/or patient convenience. Since its inception, POZEN has focused its efforts primarily on the development of pharmaceutical products for the treatment of migraine. POZEN has development and commercial alliances with GlaxoSmithKline, Xcel Pharmaceuticals, and Nycomed. The company's common stock is traded on The Nasdaq Stock Market Nasdaq stock market The first electronic stock market listing over 5000 companies. The Nasdaq stock market comprises two separate markets, namely the Nasdaq National Market, which trades large, active securities and the Nasdaq Smallcap Market that trades emerging growth companies. under the symbol "POZN". For detailed company information, including copies of this and other press releases, see POZEN's website: www.pozen.com. Statements included in this press release that are not historical in nature are "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 the "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " provisions 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. You should be aware that our actual results could differ materially from those contained in the forward-looking statements, which are based on management's current expectations and are subject to a number of risks and uncertainties, including, but not limited to, our failure to successfully commercialize our product candidates; costs and delays in the development and/or FDA approval of our product candidates, including as a result of the need to conduct additional studies, or the failure to obtain such approval of our product candidates; uncertainties in clinical trial results or the timing of such trials, resulting in, among other things, an extension in the period over which we recognize deferred revenue or our failure to achieve milestones that would have provided us with revenue; our inability to maintain or enter into, and the risks resulting from our dependence upon, collaboration or contractual arrangements necessary for the development, manufacture, commercialization, marketing, sales and distribution of any products; competitive factors; our inability to protect our patents or proprietary rights and obtain necessary rights to third party patents and intellectual property to operate our business; our inability to operate our business without infringing the patents and proprietary rights of others; general economic conditions; the failure of any products to gain market acceptance; our inability to obtain any additional required financing; technological changes; government regulation; changes in industry practice; and one-time events, including those discussed herein and in our Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the quarterly period ended March 31, 2004 under "Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of Operations." We do not intend to update any of these factors or to publicly announce the results of any revisions to these forward-looking statements. Financial Tables to Follow...
POZEN Inc.
Statement of Operations
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- -----------------------
2004 2003 2004 2003
----------------------- -----------------------
Revenue:
Licensing revenue $16,889,500 $ -- $18,779,000 $ --
Operating expenses:
General and
administrative 2,007,557 2,921,052 4,005,606 4,784,203
Research and
development 3,671,996 1,882,944 6,043,964 4,995,808
----------- ----------- ----------- -----------
Total operating
expenses 5,679,553 4,803,996 10,049,570 9,780,011
Interest income, net 134,823 123,292 260,973 266,561
----------- ----------- ----------- -----------
Net loss attributable
to common
stockholders $11,344,770 $(4,680,704)$ 8,990,403 $(9,513,450)
=========== =========== =========== ===========
Basic net income
(loss) per common
share $ 0.39 $ (0.17)$ 0.31 $ (0.34)
=========== =========== =========== ===========
Shares used in
computing basic net
income (loss) per
common share 28,786,486 28,270,902 28,671,070 28,210,610
=========== =========== =========== ===========
Diluted net income
(loss) per common
share $ 0.38 -- $ 0.30 --
=========== =========== =========== ===========
Shares used in
computing diluted net
income (loss) per
common share 29,704,675 -- 29,776,949 --
=========== =========== =========== ===========
POZEN Inc.
Balance Sheet
(Unaudited)
June 30, Dec. 31,
2004 2003
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $67,510,179 $60,480,690
Prepaid expenses and other current assets 414,108 698,209
----------- -----------
Total current assets 67,924,287 61,178,899
Equipment, net of accumulated depreciation 288,891 334,096
----------- -----------
Total assets $68,213,178 $61,512,995
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 253,077 $ 579,903
Accrued compensation 503,115 416,053
Accrued expenses 1,658,819 1,103,622
----------- -----------
Total current liabilities 2,415,011 2,099,578
Long-term liabilities:
Deferred revenue 20,003,978 23,782,978
----------- -----------
Total liabilities 22,418,989 25,882,556
Total stockholders' equity 45,794,189 35,630,439
----------- -----------
Total liabilities and stockholders' equity $68,213,178 $61,512,995
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