EpiCept Corporation Reports Third Quarter 2011 Operating and Financial
Results
Conference Call Begins at 9:00 A.M. Eastern Time
TARRYTOWN, N.Y.--(BUSINESS WIRE (http://www.businesswire.com/))--
Regulatory News:
EpiCept Corporation (Nasdaq OMX Stockholm Exchange and OTCQX: EPCT)
today announced operating and financial results for the three and nine
months ended September 30, 2011, and provided an update with respect to
the Company's key business initiatives.
“During the third quarter of 2011, our R&D efforts were increasingly
focused on regulatory matters regarding AmiKet™ and Ceplene®,” stated
Jack Talley, President and Chief Executive Officer of EpiCept.
“Following the receipt in June of the U.S. Food and Drug
Administration's initial comments on our proposed Special Protocol
Assessment (SPA) for Ceplene®, in September we reported on the outcome
of the meeting the Company held with the FDA to better understand the
Agency's position regarding the data required to re-file a new drug
application (NDA). We also drafted a proposed Phase III program intended
to result in an NDA for AmiKet™, and requested a meeting with the FDA to
review our plans in light of our desire to obtain an SPA for AmiKet™. We
have become more excited and confident about the investment and time
required to exploit the opportunity AmiKet™ presents as an effective
treatment for pain associated with peripheral neuropathies, a condition
affecting millions of patients where no effective therapy currently
exists. We also continue to have concerns about the feasibility, cost
and likelihood of success with the FDA regarding Ceplene®as a therapy
for remission maintenance in AML patients. We are critically reviewing
both programs and, in light of all the available information, will
determine soon which program should be pursued as our lead opportunity.”
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 half of
2011, EpiCept announced positive results from a Phase IIb trial
evaluating the efficacy and safety of AmiKet™ in chemotherapy-induced
peripheral neuropathy (CIPN) and commenced designing a Phase III program
intended to support an NDA. During the third quarter of 2011, EpiCept
submitted its request for a meeting with the FDA to review clinical,
nonclinical, regulatory and CMC plans for AmiKet™ in CIPN that would
support FDA marketing approval. A meeting has been set for December
2011. In advance of the meeting, EpiCept has submitted to the FDA a
briefing document that proposes a Phase III clinical trial protocol
designed to support an NDA filing for AmiKet™ for the treatment of CIPN
in patients who have previously received taxane-based chemotherapy. The
FDA meeting is expected to provide the Company greater clarity with
respect to the clinical data required for approval of AmiKet™ in CIPN.
This guidance is expected to support ongoing partnership discussions
with several interested parties.
In cancer patients, pain due to peripheral neuropathy is a dose-limiting
side effect that frequently occurs following systemic chemotherapy. CIPN
is most often characterized by
pain (http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fen
.wikipedia.org%2Fwiki%2FPain&esheet=50060492&lan=en-US&anchor=pain&index
=1&md5=6190e7aaf3ac061a42747436d65e7e70) in the hands and feet (glove
and stocking distribution). The risk of CIPN typically increases with
cumulative exposure to chemotherapy, and may interrupt, delay or even
prevent completion of potentially curative chemotherapy regimens. CIPN
may also have detrimental effects on functional capacity and
quality-of-life.
As no treatment has yet been approved by the FDA for CIPN, EpiCept
believes that a safe and effective therapeutic option for neuropathic
pain associated with CIPN represents a significant unmet medical need.
Based on this unmet need and on the encouraging data from its Phase IIb
trial, the Company plans to focus its development efforts for AmiKet™ on
the treatment of neuropathic pain associated with CIPN following
taxane-based chemotherapy.
During the third quarter of 2011, EpiCept engaged a third party to
perform a CIPN U.S. market evaluation and to estimate the market
opportunity for AmiKet™ in this indication. The study determined that
the number of cases of malignant cancer diagnoses of breast, prostate,
lung and ovarian cancers currently exceeds 3.5 million, and estimated
that 90% of all prostate and ovarian cancer patients, 75% of all breast
cancer patients and more than 60% of all lung cancer patients are
treated with taxanes, either alone or in combination with other
chemotherapeutic drugs. Based on physician interviews, expert opinions
and a review of the medical literature, the study concluded that a
significant percentage of this group develops some form of CIPN. This
market evaluation will be completed in the fourth quarter of 2011.
The Company has enrolled more than 1,700 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.
Ceplene®is currently on the list of pre-approved products for
reimbursement in Germany, England, Sweden, Denmark and Italy (a
temporary approval); additionally, it is available on a named-patient
basis in many other countries in the European Union (EU). Reimbursement
is being negotiated in France and Spain, among other countries in the
EU. Following Ministry of Health approval of labeling and other
technical matters, Megapharm Ltd. is expected to commence the commercial
launch of Ceplene®in Israel, until which it is available there on a
named-patient basis. Sales of Ceplene®were not material in the first
nine months of 2011.
The Company filed its protocol for a Phase III confirmatory clinical
trial for Ceplene®with the FDA in the second quarter of 2011, and
received initial written responses in June. A meeting with the FDA was
held in September 2011 to reconcile the major protocol elements. At the
meeting, the FDA indicated that as part of a registration study, the
effect of Ceplene®must be isolated from the effect of IL-2; therefore
its preferred study design is a comparison of Ceplene®/IL-2 vs. IL-2
monotherapy at the same IL-2 dosing regimen as those patients receiving
Ceplene®/IL-2 in combination. The FDA also indicated the need to
demonstrate as the primary endpoint a significant benefit of
Ceplene®/IL-2 vs. IL-2 monotherapy on overall survival. Leukemia-free
survival (LFS) can be a secondary endpoint. EpiCept is working with key
opinion leaders in the preparation of a revised trial protocol, and
intends to submit a revised protocol to the FDA in order to receive
further guidance and approval for an SPA. This next FDA submission is
anticipated to be made in the first quarter of 2012.
EpiCept is continuing patient enrollment for its European post-approval
clinical study of Ceplene®. Approximately 70 patients have been enrolled
to date. Data from the first 75 patients enrolled are expected to be
reported beginning in 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 also are
expected to have value for prescribing hematologists.
· 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 third and final dosing cohort for the Phase Ib portion
of this trial. The Phase II efficacy portion of the trial is anticipated
to begin in the first half of 2012.
· 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. In September 2011 Myrexis suspended further development of
AzixaTMin order to advance lead candidates from its earlier stage
programs, and has announced its intentions to out-license the compound.
EpiCept will protect its rights to Azixa™ and share in any licensing
proceeds while Myrexis seeks a partner to continue development.
Financial and Operating Highlights
EpiCept's net loss for the third quarter of 2011 was $5.4 million, or
$0.08 per share, compared with a net loss of $3.2 million, or $0.06 per
share, for the third quarter of 2010. EpiCept's net loss for the nine
months ended September 30, 2011 was $12.2 million, or $0.18 per share,
compared with a net loss of $12.6 million, or $0.27 per share, for the
nine months ended September 30, 2010. As of September 30, 2011, EpiCept
had cash and cash equivalents of $10.6 million.
Third Quarter and Nine Months 2011 vs. Third Quarter and Nine Months
2010
Revenue
The Company recognized revenue of $0.3 million during each of the third
quarters of 2011 and 2010. The Company recognized revenue of $0.7
million during each of the nine months ended September 30, 2011 and
2010. For each of the third quarters of 2011 and 2010, revenue consisted
primarily of the recognition of license fee payments previously received
from the Company's strategic alliances, revenues from the sales of
Ceplene®to Meda and product royalties.
Selling, General and Administrative (SG&A) Expense
SG&A expense in the third quarter of 2011 was $2.0 million, an increase
of approximately 5%, or $0.1 million, compared with SG&A expense of $1.9
million in the third quarter of 2010. SG&A expense for the nine months
ended September 30, 2011 decreased by approximately 4%, or $0.2 million,
to $5.4 million, from $5.6 million for the nine months ended September
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 third quarter of 2011 was $2.6 million, compared with
$2.1 million in the third quarter of 2010, an increase of approximately
24%, or $0.5 million. The increase was primarily related to higher
clinical trial costs related to the Company's post-approval trial of
Ceplene®. R&D expense for the nine months ended September 30, 2011 was
$6.3 million, compared with $6.7 million for the nine months ended
September 30, 2010, a decrease of approximately 6%, or $0.4 million. The
decrease in R&D expense was primarily related to lower regulatory fees
associated with the Company's NDA filing of Ceplene®, partially offset
by higher clinical trial expenses related to the post-approval trial of
Ceplene®.
Other Income (Expense)
Other income (expense) during the third quarter of 2011 amounted to
other expense, net of $1.0 million, compared with other income, net of
$0.8 million in the third quarter of 2010. The primary component of
other income (expense) in both quarters is interest expense and foreign
exchange gain (loss). The third quarter of 2011 was negatively impacted
by a $0.6 million foreign exchange loss incurred as a result of the
increased strength of the U.S. dollar compared with the euro in
comparison to the third quarter of 2010, which was positively impacted
by a $0.9 million foreign exchange gain. Other income (expense) for the
nine months ended September 30, 2011 amounted to other expense, net of
$0.8 million, compared with other expense, net of $0.5 million for the
nine months ended September 30, 2010. Other expense, net for the nine
months ended September 30, 2011 was impacted by $0.9 million in interest
expense related to the prepayment of the Company's February 2009
convertible debt and the senior secured term loan that the Company
entered into in May 2011. Other expense, net for the nine months ended
September 30, 2010 was impacted by a $0.4 million foreign exchange loss
incurred as a result of the increased strength of the U.S. dollar
compared with the euro.
Liquidity
As of September 30, 2011 EpiCept had approximately $10.6 million in cash
and cash equivalents. During the first nine months of 2011, the Company
raised $20.3 million gross proceeds 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 November 8, 2011 beginning at 9:00 a.m. Eastern Standard
Time.
To participate in the live call and to be able to participate in the
question and answer session, please dial from the United States or
Canada (877) 809-8594 or from international locations (706) 758-9407
(please reference access code 25161626) 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=50060492&lan=en-US&anchor=www.epicept.co
m&index=2&md5=c4c3856a5e3b9ca276b4557b588befd9). 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 United States or Canada (855) 859-2056 or from
international locations (404) 537-3406 (please reference reservation
number 25161626).
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 oncology 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 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., 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=50060492&lan=en-US&anchor=www.sec.gov&ind
ex=3&md5=ec4372949154b8f97237711bf76f9a68) 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=50060492&lan=en-US&anchor
=www.epicept.com&index=4&md5=b7c7340de18a0b1eee9732373bcb0b4a). 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)
September 30, December 31,
2011 2010
Cash and cash equivalents $
10,616 $ 2,435
Inventory
644 1,004
Property and equipment, net
139 222
Total assets $
12,191 $ 4,689
Accounts payable and other accrued liabilities $
4,302 $ 3,389
Deferred revenue
13,158 13,826
Notes and loans payable
8,252 972
Total stockholders' deficit
(14,254 ) (14,135 )
Total liabilities and stockholders' deficit $
12,191 $ 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 For Nine
Months Ended
September 30,
September 30,
2011
2010 2011
2010
Product net revenues 34
16 35
80
Licensing and other revenues 241
241 702
623
Total net revenues $ 275
$ 257 $ 737
$ 703
Operating expenses:
Cost of product net revenues 51
333 411
423
Selling, general and administrative 1,977
1,855 5,413
5,632
Research and development 2,617
2,077 6,292
6,669
Total operating expenses 4,645
4,265 12,116
12,724
Loss from operations (4,370
) (4,008 ) (11,379 )
(12,021 )
Other income (expense):
Interest income 4
2 10
5
Foreign exchange gain (loss) (621
) 887 38
(357 )
Interest expense (409
) (49 ) (870 )
(187 )
Other income (expense), net (1,026
) 840 (822 )
(539 )
Net loss before income taxes (5,396
) (3,168 ) (12,201 )
(12,560 )
Income taxes (1
) — (4 )
(5 )
Net loss $ (5,397
) $ (3,168 ) $ (12,205 )
$ (12,565 )
Basic and diluted loss per common $ (0.08
) $ (0.06 ) $ (0.18 )
$ (0.27 )
share
Weighted average common shares 71,003,667
50,393,488 67,406,765
46,298,964
outstanding *
* Reflects a 1:3 reverse split effected in January 2010.
EpiCept Corporation and Subsidiaries
(Unaudited)
Selected Consolidated Statement of Cash Flows Data
(in $000s)
Nine Months Ended Sept. 30,
2011 2010
Net cash used in operating activities
$ (10,085 ) $ (7,279 )
Net cash provided by investing activities
111 45
Net cash provided by financing activities
18,156 5,673
Effect of exchange rate changes on cash
(1 ) (1 )
Net increase (decrease) in cash and cash equivalents
8,181 (1,562 )
Cash and cash equivalents at beginning of period
2,435 5,142
Cash and cash equivalents at end of period
$ 10,616 $ 3,580
EpiCept Corporation and Subsidiaries
(Unaudited)
Selected Consolidated Statement of Stockholders' Deficit Data
(in $000s)
Nine Months Ended Sept. 30,
2011 2010
Stockholders' deficit at beginning of period
$ (14,135 ) $ (9,079 )
Net loss for the period
(12,205 ) (12,565 )
Stock-based compensation expense
753 684
Foreign currency translation adjustment
(83 ) 468
Share, option and warrant issuance
11,416 6,259
Exercise of options and warrants
— 39
Stockholders' deficit at end of period
$ (14,254 ) $ (14,194 )
EPCT-GEN
EpiCept Corporation
Robert W. Cook, 914-606-3500
rcook@epicept.com (rcook@epicept.com)
or
Feinstein Kean Healthcare
Media:
Greg Kelley, 617-577-8110
gregory.kelley@fkhealth.com (gregory.kelley@fkhealth.com)
or
LHA
Investors:
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 Third Quarter 2011 Operating and Financial Results
| Source: Immune Pharmaceuticals Inc
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