CEDAR KNOLLS, N.J., Aug. 16, 2010 (GLOBE NEWSWIRE) -- Emisphere Technologies, Inc. (OTCBB:EMIS) today announced financial and operational results for the three and six months ended June 30, 2010.
SECOND QUARTER FINANCIAL RESULTS
For the three months ended June 30, 2010, Emisphere reported a net loss of $13.7 million, or $0.32 per basic and diluted share, compared to a net loss of $4.2 million, or $0.14 per basic and diluted share for same period last year.
The operating loss for the three months ended June 30, 2010 was $3.1 million, compared to an operating loss of $3.0 million in same period last year.
Total operating expenses for the three months ended June 30, 2010 were $3.2 million, compared to $3.0 million for the same period last year including a $0.8 million one time gain on the sale of laboratory equipment. Total operating expenses for the three months ended June 30, 2010 include research and development costs of $0.7 million and general and administrative expenses of $2.1 million, compared to $0.7 million and $2.9 million respectively, for the same period last year.
Other expense for the three months ended June 30, 2010 was $10.6 million, including an $8.6 million charge related to the change in fair value of derivative instruments related to an increase to the Company's stock compared to other expense of $1.2 million for the same period last year.
YEAR TO DATE FINANCIAL RESULTS
For the six months ended June 30, 2010, Emisphere reported a net loss of $32.2 million, or $0.75 per basic and diluted share, compared to a net loss of $9.6 million, or $0.32 per basic and diluted share for the six months ended June 30, 2009.
Total operating expenses for the six months ended June 30, 2010 were $6.2 million, a decrease of approximately $1.5 million, or 19% compared to $7.7 million for the same period last year including a $0.8 million one time gain from sale of laboratory equipment. Total operating expenses for the six months ended June 30, 2010 include research and development costs of $1.3 million and general and administrative expenses of $4.5 million, compared to $2.7 million and $5.9 million respectively, for the same period last year.
Other expense for the six months ended June 30, 2010 was $26.0 million, including a $22.6 million charge related to the change in fair value of derivative instruments related to an increase to the Company's stock compared to other expense of $1.9 million in the same period last year.
LIQUIDITY
At June 30, 2010, Emisphere reported cash and restricted cash totaling $0.7 million, compared to $3.3 million at March 31, 2010. On July 29, 2010, the Company issued a $525,000 promissory note to MHR Institutional Partners IIA LP and MHR Institutional Partners II LP. We anticipate that our existing cash resources, including the amounts provided by MHR in connection with the Note but not accounting for an approximately $2.6 million arbitration award in favor of the Company's former CEO, will enable us to continue operations through approximately August 31, 2010 or earlier if unforeseen events arise that negatively affect our liquidity. During July 2010, the Company announced that it is engaged in ongoing discussions with a potential licensee for its high dose oral Eligen® B12 1000mcg as a Medical Food for individuals with B12 deficiency. In addition, the Company is evaluating other potential licensees as well as the possibility of marketing the product without a partner. We anticipate our plans will be finalized during the fourth quarter 2010. We continue to implement aggressive cost controls to conserve cash and to evaluate potential financing opportunities to address our cash needs for ongoing operations and programs, including a potential equity financing. Please refer to the Quarterly Report on Form 10-Q for additional information.
KEY PRODUCT AND CORPORATE DEVELOPMENTS
-- Oral Eligen® B12
- Our recently completed clinical trial showed that high dose Eligen® B12 1000mcg can efficiently and quickly restore Vitamin B12 levels in deficient individuals compared to the current standard of care. As a Medical Food, Emisphere's Eligen® B12 (1000 mcg) is designed as a specially formulated and processed oral formulation for the specific dietary management of patients under medical supervision who, because of a limited or impaired capacity to absorb Vitamin B12, have a diagnosed Vitamin B12 deficiency. It is planned to be available early in 2011. It is estimated that as many as 10 million people in the U.S. and over 100 million people worldwide may be B12 deficient. Oral Eligen® B12 and the foregoing statements have not been evaluated by the Food and Drug Administration. Oral Eligen® B12 is not intended to diagnose, treat, cure, or prevent any disease.
-- Novartis Note and Collaboration Agreement
- During June 2010, the Company announced that it has entered into an expanded relationship with Novartis Pharma AG ("Novartis") pursuant to which Novartis has cancelled the Company's Convertible Promissory Note (the "Note"). The parties agreed to modify the royalty and milestone payment schedule for the Research Collaboration and Option Agreement and License Agreement for the development of an oral salmon calcitonin product for the treatment of osteoarthritis and osteoporosis. Additionally, the Company granted Novartis the right to evaluate the feasibility of using Emisphere's Eligen® Technology with two new compounds to assess the potential for new product development opportunities.
The company is continuing with a number of pre-clinical programs in collaboration with other companies as well as projects on its own using the Eligen® Technology to improve the oral absorption of selected molecules.
A live webcast of today's scheduled 10:00 AM EDT conference call can be accessed through the Company's website at: www.emisphere.com. The live conference call dial-in number is: 1-888-359-3613 (United States and Canada) or 1-719-457-2657 (International). In addition, an archive of the webcast can be accessed through the same link; an audio replay of the call will be available beginning at 1:00 PM EDT today, through midnight on August 24, 2010 by calling 1-888-203-1112 (United States and Canada) or 1-719-457-0820 (International). The conference replay PIN is 4395932.
About Emisphere Technologies, Inc.
Emisphere is a biopharmaceutical company that focuses on a unique and improved delivery of therapeutic molecules or nutritional supplements using its Eligen® Technology. These molecules and compounds could be currently available or in development. Such molecules are usually delivered by injection; in many cases, their benefits are limited due to poor bioavailability, slow on-set of action or variable absorption. The Eligen® Technology can be applied to the oral route of administration as well other delivery pathways, such as buccal, rectal, inhalation, intra-vaginal or transdermal. The company's website is: www.emisphere.com.
Safe Harbor Statement Regarding Forward-looking Statements
The statements in this release and oral statements made by representatives of Emisphere relating to matters that are not historical facts (including without limitation those regarding the timing or potential outcomes of research collaborations or clinical trials, any market that might develop for any of Emisphere's product candidates and the sufficiency of Emisphere's cash and other capital resources) are forward-looking statements that involve risks and uncertainties, including, but not limited to, the likelihood that future research will prove successful, the likelihood that any product in the research pipeline will receive regulatory approval in the United States or abroad, the ability of Emisphere and/or its partners to develop, manufacture and commercialize products using Emisphere's drug delivery technology, Emisphere's ability to fund such efforts with or without partners, and other risks and uncertainties detailed in Emisphere's filings with the Securities and Exchange Commission, including those factors discussed under the caption "Risk Factors" in Emisphere's Annual Report on Form 10-K (file no. 000-17758) filed on March 25, 2010, Emisphere's Quarterly Report on Form 10-Q filed on May 17, 2010, and Emisphere's Quarterly Report on Form 10-Q filed on August 16, 2010 .
| ITEM 1. FINANCIAL STATEMENTS | ||
| EMISPHERE TECHNOLOGIES INC. | ||
| BALANCE SHEETS | ||
| June 30, 2010 and December 31, 2009 | ||
| (in thousands, except share and per share data) | ||
| June 30, 2010 | December 31, 2009 | |
| (unaudited) | ||
| Assets: | ||
| Current assets: | ||
| Cash and cash equivalents | $418 | $3,566 |
| Accounts receivable, net | 38 | 158 |
| Inventories | 261 | 20 |
| Prepaid expenses and other current assets | 683 | 369 |
| Total current assets | 1,400 | 4,113 |
| Equipment and leasehold improvements, net | 107 | 138 |
| Purchased technology, net | 957 | 1,077 |
| Restricted cash | 259 | 259 |
| Deferred financing cost | 382 | 346 |
| Total assets | $3,105 | $5,933 |
| Liabilities and Stockholders' Deficit: | ||
| Current liabilities: | ||
| Notes payable, including accrued interest and net of related discount | $ — | $12,588 |
| Accounts payable and accrued expenses | 5,852 | 4,975 |
| Derivative instruments | ||
| Related party | 12,952 | 3,205 |
| Others | 4,183 | 2,984 |
| Restructuring accrual, current | 600 | 750 |
| Other current liabilities | 31 | 52 |
| Total current liabilities | 23,618 | 24,554 |
| Notes payable, including accrued interest and net of related discount, related party | 14,322 | 13,076 |
| Deferred revenue | 26,475 | 11,494 |
| Derivative instrument related party | 12,031 | 4,591 |
| Deferred lease liability and other liabilities | 65 | 82 |
| Total liabilities | 76,511 | 53,797 |
| Commitments and Contingencies | ||
| Stockholders' deficit: | ||
| Preferred stock, $.01 par value; authorized 1,000,000 shares; none issued and outstanding | — | — |
| Common stock, $.01 par value; authorized 100,000,000 shares; issued 44,222,054 shares (43,932,322 outstanding) as of June 30, 2010 and issued 42,360,133 shares (42,070,401 outstanding) as December 31, 2009 | 442 | 424 |
| Additional paid-in-capital | 398,945 | 392,335 |
| Accumulated deficit | (468,841) | (436,671) |
| Common stock held in treasury, at cost; 289,732 shares | (3,952) | (3,952) |
| Total stockholders' deficit | (73,406) | (47,864) |
| Total liabilities and stockholders' deficit | $3,105 | $5,933 |
| EMISPHERE TECHNOLOGIES, INC. | ||||
| STATEMENT OF OPERATIONS | ||||
| For the three and six months ended June 30, 2010 and 2009 | ||||
| (in thousands, except share and per share data) | ||||
| (unaudited) | ||||
|
For the three months ended June 30, |
For the six months ended June 30, |
|||
| 2010 | 2009 | 2010 | 2009 | |
| Net Sales | $39 | $ — | $51 | $ — |
| Costs and expenses: | ||||
| Research and development | 732 | 748 | 1,294 | 2,670 |
| General and administrative expenses | 2,129 | 2,933 | 4,463 | 5,855 |
| Restructuring costs | — | — | 50 | (353) |
| Gain on disposal of fixed assets | — | (779) | (1) | (822) |
| Lawsuit Adverse Award | 220 | — | 220 | — |
| Depreciation and amortization | 75 | 96 | 150 | 307 |
| Total costs and expenses | 3,156 | 2,998 | 6,176 | 7,657 |
| Operating loss | (3,117) | (2,998) | (6,125) | (7,657) |
| Other non-operating income (expense): | ||||
| Other income | 2 | 27 | 5 | 68 |
| Sublease income | — | — | — | 232 |
| Sale of patents | 500 | — | 500 | |
| Change in fair value of derivative instruments | ||||
| Related party | (6,208) | (193) | (15,328) | (80) |
| Other | (2,424) | (289) | (7,271) | (254) |
| Interest expense | ||||
| Related party | (1,797) | (1,097) | (3,069) | (2,140) |
| Other | (160) | (137) | (382) | (273) |
| Total other non-operating expense | (10,587) | (1,189) | (26,045) | (1,947) |
| Net loss | $(13,704) | $(4,187) | $(32,170) | $(9,604) |
| Net loss per share, basic and diluted | $(0.32) | $(0.14) | $(0.75) | $(0.32) |
| Weighted average shares outstanding, basic and diluted | 43,338,432 | 30,341,078 | 42,711,367 | 30,341,078 |