PharmaPrint Reports Fourth Quarter and Fiscal 1999 Results.IRVINE, Calif.--(BUSINESS WIRE)--June 24, 1999-- Announces Plans to Use Major Portion of Proceeds from Private Placement to Manufacture and Market Private-Label Vitamin/Herbal Product Line PharmaPrint Inc. (Nasdaq: PPRT PPRT Personal Property Replacement Tax PPRT Pharmacy Practice Research Trust (UK) PPRT Partial Product Reduction Tree PPRT Problem Property Resolution Team PPRT Permanent Primer Replacement Topcoat ), a leader in the development of pharmaceuticals and dietary supplements Noun 1. dietary supplement - something added to complete a diet or to make up for a dietary deficiency diet - a prescribed selection of foods vitamin pill - a pill containing one or more vitamins; taken as a dietary supplement from natural plant extracts, today reported record revenues from manufacturing of $6.15 million for the fourth quarter ended March 31, 1999, up 40 percent from $4.38 million in manufacturing revenues for the prior quarter. The Company reported a net loss of $4.97 million, or $0.36 per share for the quarter, compared to a net loss of $5.66 million, or $0.45 per share, for the quarter ended March 31, 1998. Revenues for the twelve months ended March 31, 1999, the first year that the Company was not engaged solely in research and development activities, totaled $22.29 million. The net loss for the year was $14.78 million, or $1.08 per share on 13,654,976 weighted average common shares outstanding (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. ), compared to a net loss of $18.12 million, or $1.59 per share on 11,363,130 weighted average common shares outstanding (basic and diluted) for the twelve months ended March 31, 1998. The Company also announced that it intends to allocate To reserve a resource such as memory or disk. See memory allocation. a major portion of the proceeds from its recently completed $10 million private placement to support the private-label manufacturing of a combination vitamin/herbal product line, which it is marketing to mass marketers and Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the retailers. In making this announcement, the Company noted that it expects the margins from these private-labeling activities to be significantly higher than those of its current manufacturing activities. Elliot Friedman, PharmaPrint's chairman and chief executive officer, stated, "This has been an outstanding year for PharmaPrint. It was a year that marked the first time that the Company derived financial benefits from the time, energy and resources invested in the development of our proprietary PharmaPrint(TM) Process technology." Friedman said that the year was highlighted by the successful launch in October 1998 of American Home For the American mortgage lender, see . The American Home is a center of intercultural exchange located in Vladimir, Russia. The home is designed to model a typical American suburban home and its main focus is the ESL school that provides lessons for Russian students. Products' line of Centrum centrum /cen·trum/ (sen´trum) pl. cen´tra [L.] 1. a center. 2. the body of a vertebra. cen·trum n. pl. cen·trums or cen·tra 1. (R) Herbals, for which PharmaPrint has an exclusive manufacturing contract. He noted that the product line has not only been successful for PharmaPrint, but it is also delivering sales for American Home Products. "Our manufacturing revenues for the year were in excess of $14 million, and American Home Products, in its most recent quarterly filing with the Securities and Exchange Commission, reported that its worldwide consumer health care sales increased 12 percent for the first quarter `due primarily to higher sales of nutritional supplements Nutritional Supplements Definition Nutritional supplements include vitamins, minerals, herbs, meal supplements, sports nutrition products, natural food supplements, and other related products used to boost the nutritional content of the diet. ,' citing, in particular, the performance of its Centrum(R) products, including Centrum(R) Herbals," Friedman said. He added, "American Home Products has indicated that it is solidly behind Centrum(R) Herbals and is committed to making the brand a success. To achieve this goal they are embarking upon one of the most aggressive marketing plans in the herbal herbal, early botanical book containing descriptions and illustrations of herbs and plants with their properties, chiefly those qualities that made them useful as medicines or condiments. Most of the herbals were written between c.1470 and c. supplement category, including television advertising and product tie-ins with the Centrum(R) product line, its leading vitamin/mineral supplement. Friedman said, "The Company's exclusive manufacturing arrangement with American Home Products not only represents a significant potential ongoing revenue stream, but in a broader sense, it represents a powerful endorsement of our proprietary PharmaPrint(TM) Process technology by an acknowledged industry leader. The due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. that they conducted prior to entering into this manufacturing arrangement was extraordinary, as they simply could not risk aligning a·lign v. a·ligned, a·lign·ing, a·ligns v.tr. 1. To arrange in a line or so as to be parallel: align the tops of a row of pictures; aligned the car with the curb. their enormously successful Centrum(R) brand with a product that was not of superior quality." He said that in addition to the successful launch of Centrum(R) Herbals, PharmaPrint had a number of other notable achievements in fiscal 1999. He observed that in March the Company announced the successful completion of a Phase II clinical trial Noun 1. phase II clinical trial - a clinical trial on more persons than in phase I; intended to evaluate the efficacy of a treatment for the condition it is intended to treat; possible side effects are monitored phase II of PPRT-321, a pharmaceutical candidate derived from saw palmetto saw palmetto Any of several shrubby palms chiefly of the southern U.S. and West Indies that have spiny-toothed petioles (leafstalks), especially a common palm (Serenoa repens) of the southeastern U.S., with a usually creeping stem. . In this study it was demonstrated that the product was safe, and it appeared to improve symptoms associated with an enlarged prostrate pros·trate tr.v. pros·trat·ed, pros·trat·ing, pros·trates 1. To put or throw flat with the face down, as in submission or adoration: gland gland, organ that manufactures chemical substances. A gland may vary from a single cell to a complex system of tubes that unite and open onto a surface through a duct. The endocrine glands, e.g. . Based upon these positive results, the Company is aggressively moving forward with efforts to enter into a partnership with a major pharmaceutical company to support the next phase of clinical testing. If approved, PPRT-321 could be the first herbal supplement of its kind to be classified as a pharmaceutical. To accelerate the development of pharmaceutical applications of our proprietary technology, we hired Kenneth J. Gorelick, M.D. as senior vice president of drug development and chief medical officer. Dr. Gorelick recently served as vice president, product planning Product Planning is the ongoing process of identifying and articulating market requirements that define a product’s feature set. See also
Friedman said, "During the year we also continued to make excellent progress in the development of new product applications of our PharmaPrint technology, such as an entry into the rapidly expanding $10 billion functional food market, where we believe that our proprietary PharmaPrint(TM) Process technology provides us with both a technological and competitive advantage. Functional foods, such as calcium fortified fortified (fôrt  ´fīd),adj containing additives more potent than the principal ingredient. orange juice, as well as bran and soy products, are particularly applicable to our technology that can identify and consistently replicate rep·li·cate v. 1. To duplicate, copy, reproduce, or repeat. 2. To reproduce or make an exact copy or copies of genetic material, a cell, or an organism. n. A repetition of an experiment or a procedure. the active ingredients An active ingredient, also active pharmaceutical ingredient (or API), is the substance in a drug that is pharmaceutically active. Some medications may contain more than one active ingredient. that provide the beneficial health effects." Private-Labeling of Combination Vitamin/Herbal Product Line "Looking ahead, we believe that we have just scratched the surface in terms of taking advantage of the various product applications embodied em·bod·y tr.v. em·bod·ied, em·bod·y·ing, em·bod·ies 1. To give a bodily form to; incarnate. 2. To represent in bodily or material form: in our proprietary PharmaPrint(TM) Process technology. Now that the Centrum(R) Herbal product line has been successfully launched and the products are selling well, our number one priority going forward is to complete the launch of a combination vitamin-herbal product line, which we are making available for private labeling to mass marketers and Internet retailers. We believe that private labeling will provide us with higher margins than we are currently achieving from our current manufacturing activities, and we are therefore allocating a major portion of the proceeds from our recently completed private placement to support the manufacturing and marketing of this new product line," Friedman concluded. About PharmaPrint PharmaPrint develops, manufactures and markets pharmaceuticals and dietary supplements derived from natural plant extracts. The Company is the exclusive manufacturer for American Home Products line of Centrum(R) Herbals. The Company's proprietary PharmaPrint(TM) Process technology enables the precise identification and consistent replication In database management, the ability to keep distributed databases synchronized by routinely copying the entire database or subsets of the database to other servers in the network. There are various replication methods. of the active ingredients from these extracts that are believed to provide the desired health benefits. 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. Statement under 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: The Company notes that any 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. in this news release are subject to change based upon factors including, but not limited to, changes in the Company's relationship with American Home Products Corporation, the cost and availability of botanical bo·tan·i·cal also bo·tan·ic adj. 1. Of or relating to plants or plant life. 2. Of or relating to the science of botany. n. extracts, the cost and availability of manufacturing service contractors, the ability to obtain and enforce patents, limited manufacturing experience, dependence on third parties, uncertainties related to the PharmaPrint(TM) Process, government regulation and uncertainty of product approvals, ability to commercialize and market products, cost and results of research and development and clinical and toxicology toxicology, study of poisons, or toxins, from the standpoint of detection, isolation, identification, and determination of their effects on the human body. Toxicology may be considered the branch of pharmacology devoted to the study of the poisonous effects of drugs. studies, technological advances by third parties, competition, future capital needs of the Company and general economic and business conditions. Additional information on potential factors that could affect the Company's financial results are included in the Company's Registration Statement on Form S-8 dated February 12, 1999, its Annual Report on Form 10-KSB for the year ended March 31, 1998, and on Forms 10-Q SB for the periods ended June 30, 1998, September 30, 1998, and December 31, 1998 and will be included in the Company's Annual Report 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. to be filed on or prior to June 29, 1999. For more information, contact the Company's Website at www.pharmaprint.com, or call 1-800-PRO-INFO, and enter "PPRT." -0-
PHARMAPRINT INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended March 31, Year ended March 31,
1999 1998
(unaudited) (unaudited) 1999 1998
REVENUES:
Manufacturing $ 6,148,269 $ $ 14,789,063 $
Licensing and
development fees - - 7,500,000 -
Total revenues 6,148,269 - 22,289,063 -
COST OF SALES 5,257,143 - 12,255,491 -
GROSS PROFIT 891,126 - 10,033,572 -
OPERATING EXPENSES:
Research and
development 4,153,519 4,273,812 18,647,407 9,785,206
General and
administrative 1,564,813 1,351,964 5,646,452 4,534,643
Stock compensation 146,820 30,000 522,573 3,795,553
Total operating
expenses 5,865,152 5,655,776 24,816,432 18,115,402
NET LOSS $(4,974,026) $(5,655,776) $(14,782,860)$(18,115,402)
BASIC/DILUTED LOSS PER COMMON
SHARE ($0.36) ($0.45) ($1.08) ($1.59)
BASIC/DILUTED WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING 13,672,607 12,433,684 13,654,976 11,363,130
PHARMAPRINT INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS March 31,
CURRENT ASSETS 1999 1998
Cash and cash equivalents $ 2,299,959 $ 21,557,916
Accounts receivable 5,223,483 -
Inventories 13,478,116 2,183,282
Other current assets 998,088 899,724
Total current assets 21,999,646 24,640,922
FIXED ASSETS, net 1,056,192 354,769
OTHER ASSETS, net of
accumulated amortization of
$148,237 (1999) and $41,465 (1998) 464,685 443,394
Total assets $23,520,523 $ 25,439,085
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $14,644,023 $ 4,490,893
Accrued expenses 415,394 588,882
Deferred revenue - 2,500,000
Short-term debt and current
portion of long-term debt 4,107,143 -
Total current liabilities 19,166,560 7,579,775
LONG-TERM DEBT 392,857 -
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $0.001 par value -
1,000,000 shares authorized, no
shares issued or outstanding - -
Common stock, $0.001 par value -
24,000,000 shares authorized,
13,883,668 (1999) and 13,641,184
(1998) shares issued and outstanding 13,884 13,461
Additional paid-in capital 50,228,220 49,076,549
Deferred compensation (321,691) (54,433)
Accumulated deficit (45,959,307) (31,176,447)
Total stockholders' equity 3,961,106 17,859,310
Total liabilities and stockholders'
equity $23,520,523 $ 25,439,085
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