EpiCept Corporation Reports Second Quarter 2011 Financial Results and
Provides Business Update
Conference Call Begins at 9:00 A.M. Eastern Time Today
TARRYTOWN, N.Y.--(BUSINESS WIRE (http://www.businesswire.com/))--
Regulatory News:
EpiCept Corporation (Nasdaq and Nasdaq OMX Stockholm Exchange: EPCT)
today announced operating and financial results for the three and six
months ended June 30, 2011, and provided an update with respect to the
Company's key business initiatives.
“We are encouraged by the clinical, regulatory and commercial progress
we made during the second quarter,” commented Jack Talley, President and
Chief Executive Officer of EpiCept. “We continue to believe that AmiKet™
represents a substantial opportunity to create shareholder value,
especially in chemotherapy-induced neuropathic pain (CIPN). We are
working towards a meeting with the U.S. Food and Drug Administration
(FDA) later this year, while the trial investigators who conducted the
study are preparing a manuscript for publication in a peer-reviewed
journal. Meda continues to make progress with Ceplene®in Europe, and we
look forward to working with the FDA to finalize the design of a
Ceplene®clinical trial that is both ethical and feasible for
demonstrating remission maintenance in patients with Acute Myeloid
Leukemia (AML).”
Business Update
· AmiKet™ - 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 the first quarter of
2011, EpiCept announced positive results from a Phase IIb trial
evaluating the efficacy and safety of AmiKet™ in CIPN. During the second
quarter of 2011, the Company commenced designing a Phase III program
intended to support a New Drug Application (NDA) for AmiKet™ in this
indication. A Phase III clinical trial protocol is being prepared and is
expected to be submitted to the FDA later this year. A Special Protocol
Assessment will be sought for this program. A successful outcome of an
end-of-Phase II meeting with the FDA will provide clarity with respect
to clinical data required for approval of AmiKet™ in CIPN and will help
advance ongoing partnership discussions.
The multi-center, double-blind, randomized, placebo-controlled Phase IIb
study of AmiKet™ in CIPN was conducted by the National Cancer Institute
(NCI)-funded Community Clinical Oncology Program. More than 460 cancer
survivors suffering from painful CIPN were enrolled in the six-week
study. The results of the trial in the intent-to-treat (ITT) population
demonstrated that the change in average daily neuropathy intensity
scores in the AmiKet™ group achieved a statistically significant
reduction in CPN intensity versus placebo (p<0.001), which was the
trial's primary endpoint. Additionally, a pre-specified subgroup of the
ITT population, those patients who previously received taxane
chemotherapy, also showed a statistically significant reduction in
average daily neuropathy intensity scores (p=0.034). This subgroup
constituted more than 50% of the ITT population. Secondary efficacy
endpoints confirmed the superiority of AmiKet™ compared with placebo.
Furthermore, the safety profile of AmiKet™ was comparable to placebo.
The NCI estimates that 30%-40% of cancer patients treated with
chemotherapy experience symptoms of CIPN, which impairs their quality of
life and ability to function. The debilitating, chronic pain of CIPN is
one of the most common reasons cancer patients discontinue their
treatment prematurely. More than one million breast cancer survivors in
the U.S. alone suffer from this disease, for which there is no effective
therapy. The Company believes that CIPN is a significant market
opportunity given the large number of patients who are afflicted with
the condition and the lack of efficacious treatments currently
available.
The results of this trial build upon EpiCept's clinical development of
AmiKet™ in both diabetic and post-herpetic neuropathies. The Company has
enrolled more than 1,600 patients into clinical trials of AmiKet™,
including a 360-patient trial that studied the efficacy of AmiKet™
compared with gabapentin and placebo in post-herpetic neuropathy, for
which positive results were previously reported.
· Ceplene®- approved in the European Union and Israel for
administration with low-dose interleukin-2 (IL-2) for the remission
maintenance and prevention of relapse of patients with AML in first
remission; AML is the deadliest form of leukemia in adults. The product
has been licensed to Meda AB of Sweden to market and sell in Europe and
certain Pacific Rim countries, and to MegaPharm Ltd. to market and sell
in Israel.
During the first half of 2011, Ceplene®was added to the list of
reimbursed products in Italy, permitting reimbursement for one year,
following which permanent reimbursement approval is expected.
Reimbursement has been approved in Sweden and is being negotiated in
France, while talks remain in a pre-negotiation phase in Spain.
Reimbursement negotiations in several other European countries are
ongoing. Sales of Ceplene®were not material in the first half of 2011
and are not expected to grow significantly before 2012.
The Company recently filed its protocol for a Phase III confirmatory
clinical trial for Ceplene®with the FDA, and received initial written
responses in June 2011. Among those responses, the FDA noted that, in
contrast to its position disclosed in October 2010, it is now proposing
that the trial attempt to isolate Ceplene's effect by including an IL-2
monotherapy arm in the trial protocol. EpiCept expects to meet with the
FDA to reconcile major protocol differences later in the third quarter
of 2011. Ceplene®has been granted orphan drug status in the U.S., which
provides seven years of market exclusivity from the approval date.
EpiCept is continuing patient enrollment for its European post-approval
clinical study of Ceplene®. Approximately 62 patients have been enrolled
to date. Data from the first 75 patients enrolled are expected to be
reported beginning in early 2012. Thirty centers across Europe are
participating in this study, with sites in Sweden, Belgium, France, the
U.K., Spain, Germany and Italy. The Company intends to use the data from
this single-arm, open-label trial to meet its post-approval commitment
and to seek a refinement of Ceplene's EU labeling. The data are also
expected to have value for prescribing hematologists.
In early March 2011, EpiCept announced that it had submitted additional
U.S. and global provisional patent applications based on the discoveries
of the efficacy of Ceplene®plus IL-2 in AML of monocyte origin. The
Company believes that these provisional patents, if granted, would
provide an additional 20 years of market exclusivity for Ceplene®from
the date of patent filing.
· Crolibulin - a vascular disruption agent that has demonstrated
potent anti-tumor activity in both preclinical and early clinical
studies. In December 2010, the NCI initiated a Phase Ib/II trial for
crolibulin to assess safety and efficacy in combination with cisplatin
in patients with anaplastic thyroid cancer (ATC). Trial enrollment has
progressed to the second dosing cohort and the combination is
demonstrating good tolerability to date.
· Azixa™* - a compound discovered by EpiCept and licensed to Myrexis,
Inc. as part of an exclusive, worldwide development and
commercialization agreement. AzixaTMhas received orphan drug status in
the U.S. for the treatment of glioblastoma multiforme (GBM). In June
2011, Myrexis presented Phase II clinical results at the American
Society of Clinical Oncology (ASCO) Annual Meeting from the Company's
open-label study in patients with recurrent GBM, concluding that
AzixaTMwas active and well tolerated in patients who failed first-line
therapy. Of the 31 patients enrolled in this arm of the Phase II study
who had failed temozolomide therapy and were naïve to Avastin treatment,
two patients (6.5%) achieved partial response as assessed by Macdonald
criteria, one patient (3.2%) with two tumor lesions at baseline
responded with no detectable disease after cycle 13 of Azixa treatment,
and five patients (16.1%) achieved stable disease. The median
progression-free duration was 1.8 months (range 0.04 -13.1) and the
median overall survival was 9.9 months (range 1.1-17.2). In December
2010, Myrexis initiated a Phase IIb trial of Azixa in patients newly
diagnosed with GBM. Up to 120 patients will be randomized to receive
either Azixa in combination with standard of care therapy or standard of
care therapy alone. The dosing of the first patient in a Phase III trial
for Azixa™ triggers a milestone payment to EpiCept.
Financial and Operating Highlights
EpiCept's net loss for the second quarter of 2011 was $4.3 million, or
$0.06 per share, compared with a net loss of $4.9 million, or $0.11 per
share, for the second quarter of 2010. EpiCept's net loss for the six
months ended June 30, 2011 was $6.8 million, or $0.10 per share,
compared with a net loss of $9.4 million, or $0.21 per share, for the
six months ended June 30, 2010. As of June 30, 2011, EpiCept had cash
and cash equivalents of $14.6 million.
Second Quarter and Six Months 2011 vs. Second Quarter and Six Months
2010
Revenue
The Company recognized revenue of $0.2 million during the second quarter
of 2011, compared with $0.3 million during the second quarter of 2010.
The Company recognized revenue of $0.5 million during the six months
ended June 30, 2011, compared with $0.4 million during the six months
ended June 30, 2010. For each of the second quarters of 2011 and 2010,
revenue consisted primarily of the recognition of license fee payments
previously received from strategic alliances, revenues from the sales of
Ceplene®to Meda and product royalties.
Selling, General and Administrative Expense
Selling, general and administrative expense in the second quarter of
2011 increased by approximately 19%, or $0.3 million, to $2.0 million,
compared with $1.7 million in the second quarter of 2010. The increase
was primarily attributable to higher legal expenses in connection with a
complaint filed by a licensor of certain technology the Company is no
longer developing. Selling, general and administrative expense for the
six months ended June 30, 2011 decreased by approximately 9%, or $0.4
million, to $3.4 million, compared with $3.8 million for the six months
ended June 30, 2010. Selling expense has been significantly reduced, and
the Company expects general and administrative expenses to remain at
approximately current levels over the next few quarters.
Research and Development (R&D) Expense
R&D expense in the second quarter of 2011 decreased by approximately
22%, or $0.6 million, to $2.0 million, compared with $2.6 million in the
second quarter of 2010. R&D expense for the six months ended June 30,
2011 decreased by approximately 20%, or $0.9 million, to $3.7 million,
compared with $4.6 million for the six months ended June 30, 2010. The
decrease in R&D expense was primarily related to lower regulatory fees
for Ceplene®. A substantial portion of the Company's R&D expense in 2010
related to costs associated with its NDA filing of Ceplene® and
follow-up with respect to its New Drug Submission in Canada.
Other Income (Expense)
Other income (expense) during the second quarter of 2011 was net expense
of $0.3 million, compared with net expense of $0.8 million in the second
quarter of 2010. Other income for the six months ended June 30, 2011 was
$0.2 million, compared with net expense of $1.4 million for the six
months ended June 30, 2010. The primary component of other income
(expense) in both second quarters is interest expense and foreign
exchange gain (loss). Other expense, net for the six months ended June
30, 2011 was impacted by a $0.7 million foreign exchange gain incurred
as a result of the decreased value of the U.S. dollar compared with the
euro. Other expense, net for the six months ended June 30, 2010 was
impacted by a $1.2 million foreign exchange loss incurred as a result of
the increased value of the U.S. dollar compared with the euro.
Liquidity
As of June 30, 2011 EpiCept had $14.6 million in cash and cash
equivalents. During the first six months of 2011, the Company raised
$20.3 million from borrowing under a senior secured term loan facility,
and the sale of common stock and warrants. The Company has an additional
$2.0 million available under the senior secured term loan facility that
may be utilized by December 31, 2011 upon meeting certain conditions.
The Company believes that existing cash resources are sufficient to fund
operations into the second quarter of 2012. The Company is continuing
its efforts to secure financing that will extend its operations beyond
2012 and fund an anticipated Phase III clinical trial. Financing may be
in the form of additional debt or equity. The Company also expects to
receive cash from sales of Ceplene®to Meda, royalties on the sales of
Ceplene®by Meda and Megapharm, and from certain licensing activities.
Conference Call
EpiCept will host a conference call to discuss these results and answer
questions on August 15, 2011 beginning at 9:00 a.m. Eastern Time.
To participate in the live call and be able to participate in the
question and answer session, please dial from the U.S. or Canada (877)
809-8594 or from international locations (706) 758-9407 (please
reference access code 3872170) prior to the start of the conference. The
conference call will also be broadcast live in listen-only mode on the
Internet and may be accessed at
www.epicept.com (http://cts.businesswire.com/ct/CT?id=smartlink&url=http
%3A%2F%2Fwww.epicept.com&esheet=6829796&lan=en-US&anchor=www.epicept.com
&index=1&md5=7f295c2d3a0841ca683b5c2371c65e2a). The web cast will be
archived for 90 days.
A telephone replay of the call will be available for seven days by
dialing from the U.S. or Canada (855) 859-2056 or from international
locations (404) 537-3406 (please reference reservation number 3872170).
About EpiCept Corporation
EpiCept is focused on the development and commercialization of
pharmaceutical products for the treatment of cancer and pain. The
Company's lead product is Ceplene®, approved in the EU and Israel for
the remission maintenance and prevention of relapse in adult patients
with AML in first remission. The Company has two other oncology drug
candidates currently in clinical development that were discovered using
in-house technology and have been shown to act as vascular disruption
agents in a variety of solid tumors. The Company's pain portfolio
includes AmiKet™, a prescription topical analgesic cream in late-stage
clinical development designed to provide effective long-term relief of
pain associated with peripheral neuropathies.
Forward-Looking Statements
This news release and any oral statements made with respect to the
information contained in this news release contain 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 our 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 risk that our securities may be delisted
from The Nasdaq Capital Market, the risks associated with the adequacy
of our existing cash resources 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, the risk that
Ceplene®will not receive regulatory approval or marketing authorization
in the U.S. or Canada, the risk that Ceplene® will not achieve
significant commercial success, the risk that any required post-approval
clinical study for Ceplene®will not be successful, the risk that we will
not be able to maintain our final regulatory approval or marketing
authorization for Ceplene®, the risk that Azixa™ will not receive
regulatory approval or achieve significant commercial success, the risk
that we will not receive any significant payments under our agreement
with Myrexis, the risk that the development of our other apoptosis
product candidates will not be successful, the risk that clinical trials
for AmiKet™ or crolibulin will not be successful, the risk that AmiKet™
or crolibulin will not receive regulatory approval or achieve
significant commercial success, the risk that we will not be able to
find a partner to help conduct the Phase III trials for AmiKet™ on
attractive terms, a timely basis or at all, 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 our periodic reports, including our 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 our filings which are available at
www.sec.gov (http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%
2F%2Fus.lrd.yahoo.com%2F_ylt%3DAgfqFPfVOEK5M4_Rv8aJvhTjba9_%3B_ylu%3DX3o
DMTEzM2pvaWgxBHBvcwMyBHNlYwNuZXdzYXJ0Ym9keQRzbGsDd3d3c2VjZ292%2FSIG%3D15
t064n6f%2F**http%253A%2Fcts.businesswire.com%2Fct%2FCT%253Fid%3Dsmartlin
k%2526url%3Dhttp%25253A%25252F%25252Fwww.sec.gov%2526esheet%3D6170045%25
26lan%3Den_US%2526anchor%3Dwww.sec.gov%2526index%3D2%2526md5%3D61ec7b720
44301e411e3335754ee5c07&esheet=6829796&lan=en-US&anchor=www.sec.gov&inde
x=2&md5=ffba0716b1b464eb7f31021d8b062f6c) or at
www.epicept.com (http://cts.businesswire.com/ct/CT?id=smartlink&url=http
%3A%2F%2Fus.lrd.yahoo.com%2F_ylt%3DAhBuoawHw6iS3RhJOH9dNNfjba9_%3B_ylu%3
DX3oDMTE2OGhhcWs4BHBvcwMzBHNlYwNuZXdzYXJ0Ym9keQRzbGsDd3d3ZXBpY2VwdGNv%2F
SIG%3D1659oglun%2F**http%253A%2Fcts.businesswire.com%2Fct%2FCT%253Fid%3D
smartlink%2526url%3Dhttp%25253A%25252F%25252Fwww.epicept.com%2526esheet%
3D6170045%2526lan%3Den_US%2526anchor%3Dwww.epicept.com%2526index%3D3%252
6md5%3D8b3a48c3367e26fcfbd15295b6d82118&esheet=6829796&lan=en-US&anchor=
www.epicept.com&index=3&md5=eeb56984c7c140716ade11680291ef35). 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 Myrexis, Inc.
Selected financial information follows:
EpiCept Corporation and Subsidiaries
(Unaudited)
Selected Consolidated Balance Sheet Data
(in $000s)
June 30, December
31,
2011 2010
Cash and cash equivalents $ 14,578 $ 2,435
Inventory 670 1,004
Property and equipment, net 162 222
Total assets 16,847 $ 4,689
Accounts payable and other accrued liabilities 4,187 $ 3,389
Deferred revenue 13,380 13,826
Notes and loans payable 8,204 972
Total stockholders' deficit (9,725) (14,135)
Total liabilities and stockholders' deficit $ 16,847 $ 4,689
EpiCept Corporation and Subsidiaries
(Unaudited)
Selected Consolidated Statement of Operations Data
(in $000s except share and per share data)
For Three Months Ended
June 30, For Six Months Ended June 30,
2011 2010
2011 2010
Product net revenues 1 53
1 65
Licensing and other revenues 223 198
461 381
Total net revenues $ 224 $ 251
$ 462 $ 446
Operating expenses:
Cost of product net revenues 270 62
360 90
Selling, general and administrative 2,042 1,721
3,436 3,777
Research and development 1,991 2,552
3,675 4,592
Total operating expenses 4,303 4,335
7,471 8,459
Loss from operations (4,079) (4,084)
(7,009) (8,013)
Other income (expense):
Interest income 4 1
6 3
Foreign exchange (loss) gain 155 (728)
659 (1,244)
Interest expense (422) (78)
(461) (138)
Other income (expense), net (263) (805)
204 (1,379)
Net loss before income taxes (4,342) (4,889)
(6,805) (9,392)
Income taxes — —
(3) (5)
Net loss $ (4,342) $
(4,889) $ (6,808) $ (9,397)
Basic and diluted loss per common share $ (0.06) $ (0.11)
$ (0.10) $ (0.21)
Weighted average common shares outstanding * 70,993,924
44,274,642 65,578,505 44,217,770
* Reflects a 1:3 reverse split effected in January 2010.
EpiCept Corporation and Subsidiaries
(Unaudited)
Selected Consolidated Statement of Cash Flows Data
(in $000s)
Six Months
Ended June 30,
2011
2010
Net cash used in operating activities $ (6,344) $
(2,755)
Net cash provided by (used in) investing activities 116
45
Net cash provided by financing activities 18,362
5,916
Effect of exchange rate changes on cash 9
(1)
Net increase (decrease) in cash and cash equivalents 12,143
3,205
Cash and cash equivalents at beginning of period 2,435
5,142
Cash and cash equivalents at end of period $ 14,578 $
8,347
EpiCept Corporation and Subsidiaries
(Unaudited)
Selected Consolidated Statement of Stockholders Deficit Data
(in $000s)
Six Months Ended June
30,
2011 2010
Stockholders' deficit at beginning of period $ (14,135) $
(9,079)
Net loss for the period (6,808) (9,397)
Stock-based compensation expense 500 437
Foreign currency translation adjustment (698) 1,439
Share, option and warrant issuance 11,416 6,350
Exercise of options and warrants — 39
Stockholders' deficit at end of period $ (9,725) $
(10,211)
As of August 10, 2011 EpiCept had 71,003,667 common shares outstanding.
EPCT-GEN
EpiCept Corporation:
Robert W. Cook, 914-606-3500
rcook@epicept.com (rcook@epicept.com)
or
Media:
Feinstein Kean Healthcare
Greg Kelley, 617-577-8110
gregory.kelley@fkhealth.com (gregory.kelley@fkhealth.com)
or
Investors:
Lippert/Heilshorn & Associates
Kim Sutton Golodetz, 212-838-3777
kgolodetz@lhai.com (kgolodetz@lhai.com)
or
Bruce Voss, 310-691-7100
bvoss@lhai.com (bvoss@lhai.com)
EpiCept Corporation Reports Second Quarter 2011 Financial Results and Provides Business Update
| Source: Immune Pharmaceuticals Inc
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