EPICEPT CORPORATION REPORTS FIRST QUARTER 2008 OPERATING AND FINANCIAL RESULTS
Provides Update on Liquidity and Cash Position
TARRYTOWN, N.Y.--(BUSINESS WIRE)--May 15, 2008--Regulatory News:
EpiCept Corporation (Nasdaq and OMX Nordic Exchange: EPCT) today
announced operating and financial results for the three months ended
March 31, 2008. For the first quarter of 2008, EpiCept's net loss
attributable to common stockholders was $6.1 million, or $0.13 per
share, compared with a net loss attributable to common stockholders of
$7.7 million, or $0.24 per share, for the first quarter of 2007. As of
March 31, 2008, EpiCept had 51.3 million shares outstanding.
EpiCept today provided an update on several of its key product
candidates:
-- Ceplene(R) - a registration-stage compound for the remission
maintenance and prevention of relapse of patients with Acute
Myeloid Leukemia (AML) in first remission, the most common
type of leukemia in adults. In March 2008, the European
Committee for Medicinal Products for Human Use (CHMP), the
scientific committee of the European Medicines Agency (EMEA),
issued a negative opinion regarding the marketing
authorization application for Ceplene. EpiCept has formally
requested a re-examination of this opinion through the appeal
process, which is expected to occur in the third quarter of
2008.
-- EpiCept NP-1 - a prescription topical analgesic cream designed
to provide long-term relief from the pain of peripheral
neuropathies, which affect more than 15 million people in the
U.S. alone. In February 2008, EpiCept reported encouraging
results from a Phase II trial for NP-1 in Diabetic Peripheral
Neuropathy (DPN), which the Company believes support the
advancement of NP-1 to a pivotal Phase III trial in DPN.
EpiCept NP-1 is currently being studied in two additional
clinical trials: a Phase III trial in chemotherapy-induced
peripheral neuropathy (CPN) being conducted by the National
Cancer Institute (NCI)-funded Community Clinical Oncology
Program; and a Phase II comparative trial versus gabapentin
and placebo in post-herpetic neuralgia (PHN). Enrollment for
the PHN trial is complete, and topline results are expected
early in the third quarter of 2008.
-- EPC2407 - a vascular disruption agent (VDA) that also has
potent direct apoptotic activity on cancer cells. In April
2008, the Company announced that it is currently evaluating
the pharmacodynamic effects of EPC2407 with different dosage
schedules. Additional information on EPC2407 will be presented
at the upcoming American Society of Clinical Oncology (ASCO)
meeting in June.
-- Azixa(TM) - a compound discovered by EpiCept and licensed to
Myriad Genetics, Inc. as part of an exclusive, worldwide
development and commercialization agreement. EpiCept received
a milestone payment in March 2008 as a result of Myriad's
dosing of the first patient in one of its three Phase II
trials. EpiCept is eligible to receive an additional milestone
payment upon the dosing of the first patient in a Phase III
trial.
Financial and Operating Highlights - First Quarter 2008 vs. First
Quarter 2007
General and Administrative Expense
General and administrative expense decreased by 21%, or $0.7
million, from $3.3 million in the first quarter of 2007 to $2.6
million in the first quarter of 2008. The decrease was primarily
attributable to lower personnel, accounting, and other miscellaneous
costs.
Research and Development (R&D) Expense
Research and development expense decreased by 8%, or $0.3 million,
from $3.7 million in the first quarter of 2007 to $3.4 million in the
first quarter of 2008. The decrease was primarily attributable to
lower license fees. R&D activity during the first quarter of 2008 was
focused on the completion of the clinical trials of NP-1 and
preparation for the Oral Explanation meeting with the CHMP regarding
the MAA for Ceplene.
Net Cash Used in Operating Activities
Net cash used in operating activities decreased by 32%, or $1.8
million, from $5.7 million in the first quarter of 2007 to $3.9
million for the first quarter of 2008. During the first quarter of
2008, cash was used primarily to fund the Company's net loss for
research and development and general and administrative expenses. The
2008 net loss was partially offset by non-cash charges of $0.6 million
of FAS 123R stock-based compensation and $0.1 million of depreciation
and amortization expenses. Deferred revenue increased by $1.0 million
as a result of the $1.0 million milestone payment from Myriad.
The Company's Cash Position
EpiCept had cash and cash equivalents totaling $4.8 million as of
March 31, 2008. The Company believes its existing cash and cash
equivalents will be sufficient to meet its projected operating and
debt service requirements into June 2008, but it will not be
sufficient to meet its obligations thereafter. EpiCept needs to raise
additional funds, as soon as possible, to enable it to continue its
operations and to repay its existing indebtedness, including its EUR
1.5 million (approximately $2.4 million) loan that matures on June 30,
2008 and to make required monthly interest and principal payments due
to its secured lender. In addition, the Company is required to deliver
a term sheet for a funding transaction to its secured lender by May
19. . The Company is seeking to raise, as soon as possible, additional
equity capital, incur additional indebtedness or enter into
collaboration and licensing agreements. There can be no assurance that
such efforts will be successful. Any such funding may be dilutive to
existing stockholders, may involve restrictive covenants and increased
interest expense or may require the Company to forego certain
commercial rights to its product candidates. EpiCept is also in
discussions to extend the maturity of its euro-denominated loan. If
EpiCept is unsuccessful in these discussions or is unable to obtain
the requisite funding on a timely basis, the Company may default on
its loans or be declared in default under its loan agreements, which
would entitle the secured lender to sell the Company's intellectual
property and other assets. See our Quarterly Report on Form 10-Q for
the period ended March 31, 2008 for a further discussion of the
Company's liquidity and cash position.
About EpiCept Corporation
EpiCept is focused on unmet needs in the treatment of cancer and
pain. The Company's broad portfolio of pharmaceutical product
candidates includes several pain therapies in clinical development and
a lead oncology compound for AML with demonstrated efficacy in a Phase
III trial; a marketing authorization application for this compound
recently received a negative opinion and is being re-examined in
Europe. In addition, EpiCept's ASAP technology, a proprietary live
cell high-throughput caspase-3 screening technology, can efficiently
identify new cancer drug candidates and molecular targets that
selectively induce apoptosis in cancer cells. Two oncology drug
candidates currently in clinical development that were discovered
using this technology have also been shown to act as vascular
disruption agents in a variety of solid tumors.
Forward-Looking Statements
This news release and any oral statements made with respect to the
information contained in this news release, contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements include statements
which express plans, anticipation, intent, contingency, goals,
targets, future development and are otherwise not statements of
historical fact. These statements are based on EpiCept's current
expectations and are subject to risks and uncertainties that could
cause actual results or developments to be materially different from
historical results or from any future results expressed or implied by
such forward-looking statements. Factors that may cause actual results
or developments to differ materially include: the risks associated
with the adequacy of our existing cash resources and our need to raise
additional financing to continue to meet our operating and debt
service obligations and our ability to continue as a going concern,
the risks associated with our ability to continue to meet our
obligations under our existing debt agreements, including our
obligations to obtain additional financing, the risk that we may
default on our loans or that our lenders may declare the Company in
default or that our secured lender would seek to sell our assets, the
risks that we may not be able to extend the maturity of our
euro-denominated loan, the risk that the Company's securities may be
delisted by the Nasdaq Capital Market and that any appeal of the
delisting determination may not be successful, the risk that our
appeal of the negative opinion regarding the MAA for Ceplene(R) will
not be successful and that Ceplene(R) will not receive regulatory
approval or marketing authorization in the EU, the risk that
Ceplene(R), if approved, will not achieve significant commercial
success, the risk that Myriad's development of Azixa(TM) will not be
successful, the risk that Azixa(TM) will not receive regulatory
approval or achieve significant commercial success, the risk that we
will not receive any significant payments under our agreement with
Myriad, the risk that the development of our other apoptosis product
candidates will not be successful, the risk that our ASAP technologywill not yield any successful product candidates, the risk that
clinical trials for NP-1 or EPC2407 will not be successful, the risk
that NP-1 or EPC2407 will not receive regulatory approval or achieve
significant commercial success, the risk that our other product
candidates that appeared promising in early research and clinical
trials do not demonstrate safety and/or efficacy in larger-scale or
later stage clinical trials, the risk that we will not obtain approval
to market any of our product candidates, the risks associated with
dependence upon key personnel, the risks associated with reliance on
collaborative partners and others for further clinical trials,
development, manufacturing and commercialization of our product
candidates; the cost, delays and uncertainties associated with our
scientific research, product development, clinical trials and
regulatory approval process; our history of operating losses since our
inception; the highly competitive nature of our business; risks
associated with litigation; and risks associated with our ability to
protect our intellectual property. These factors and other material
risks are more fully discussed in EpiCept's periodic reports,
including its reports on Forms 8-K, 10-Q and 10-K and other filings
with the U.S. Securities and Exchange Commission. You are urged to
carefully review and consider the disclosures found in EpiCept's
filings, which are available at www.sec.gov or at www.epicept.com. You
are cautioned not to place undue reliance on any forward-looking
statements, any of which could turn out to be wrong due to inaccurate
assumptions, unknown risks or uncertainties or other risk factors.
*Azixa is a registered trademark of Myriad Genetics, Inc.
Selected financial information follows:
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EpiCept Corporation and Subsidiaries
(Unaudited)
Selected Consolidated Balance Sheet Data
(in $000s)
March December
31, 31, --------
2008 2007
-------- --------
Cash and cash equivalents $4,809 $4,943
Property and equipment, net 585 599
Total assets $6,952 $7,398
Accounts payable and other accrued liabilities $4,930 $4,028
Deferred revenue 7,807 6,837
Notes and loans payable 9,023 9,928
Total stockholders' deficit (15,570) (14,177)
Total liabilities and stockholders' deficit $6,952 $7,398
*T
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EpiCept Corporation and Subsidiaries
(Unaudited)
Selected Consolidated Statement of Operations Data
(in $000s except share and per share data)
Three Months Ended
March 31,
2008 2007
---------------------
Revenue $49 $159
---------------------
Operating expenses:
General and administrative 2,601 3,294
Research and development 3,472 3,732
---------------------
Total operating expenses 6,073 7,026
---------------------
Loss from operations (6,024) (6,867)
---------------------
Other income (expense):
Interest income 14 46
Foreign exchange gain 395 45
Interest expense (473) (616)
Change in value of warrants and derivatives -- (278)
---------------------
Other income (expense), net (64) (803)
---------------------
Net loss before income taxes (6,088) (7,670)
Income taxes (2) (4)
---------------------
Net loss (6,090) (7,674)
Basic and diluted loss per common share $(0.13) $(0.24)
=====================
Weighted average common shares outstanding 47,421,064 32,395,366
=====================
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EpiCept Corporation and Subsidiaries
(Unaudited)
Selected Consolidated Statement of Cash Flows Data
(in $000s)
Three Months
Ended March 31,
2008 2007
-----------------
Net cash used in operating activities $(3,902) $(5,740)
Net cash used in investing activities (21) (127)
Net cash provided by (used in) financing activities 3,762 (1,663)
Effect of exchange rate changes on cash 27 --
-----------------
Net (decrease) increase in cash and cash equivalents (134) (7,530)
Cash and cash equivalents at beginning of period 4,943 14,097
-----------------
Cash and cash equivalents at end of period $4,809 $6,567
=================
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EpiCept Corporation and Subsidiaries(Unaudited)
Selected Consolidated Statement of Stockholders Deficit Data
(in $000s)
Three Months Ended
March 31,
2008 2007
-------------------
Stockholders' deficit at beginning of period $(14,177) $(9,373)
Net loss for the period (6,090) (7,674)
Stock-based compensation expense 620 616
Foreign currency translation adjustment (569) (64)
Share, option and warrant issuance 4,646 13
Financing Costs -- (63)
Reclassification of warrants from liability to
equity, net -- 794
-------------------
Stockholders' deficit at end of period $(15,570) $(15,751)
===================
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EPCT-GEN
CONTACT: EpiCept Corporation:
Robert W. Cook, 914-606-3500
rcook@epicept.com
or
Media:
Feinstein Kean Healthcare
Greg Kelley, 617-577-8110
gregory.kelley@fkhealth.com
or
Investors:
Lippert/Heilshorn & Associates
Kim Sutton Golodetz, 212-838-3777
kgolodetz@lhai.com
or
Bruce Voss, 310-691-7100
bvoss@lhai.com
EPICEPT CORPORATION REPORTS FIRST QUARTER 2008 OPERATING AND FINANCIAL RESULTS
| Source: Immune Pharmaceuticals Inc
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