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 OMX Stockholm Exchange and OTCQX: EPCT) today
reported net income of $3.0 million for the three months ended June 30, 2012 and
a reduced net loss for the six months ended June 30, 2012 to $0.6 million,
primarily as a result of the Company’s sale of its Ceplene®-related assets and
contract rights to Meda AB. The net loss for the three and six month periods
ended June 30, 2011 was $4.3 million and $6.8 million, respectively. The Company
also provided an update on the Company’s key business initiatives.
“EpiCept achieved an important strategic goal during the second quarter of 2012
by completing the sale of our rights to Ceplene®for Europe and several Asia
Pacific countries to Meda,” remarked Jack Talley, President and Chief Executive
Officer. “We pursued this course of action after concluding that for at least
the next several years Ceplene®is unlikely to generate sufficient revenue for us
to fund the ongoing post-approval trial and the requirements for product
manufacturing. By completing the transaction with Meda we not only received cash
to help fund our ongoing operations, but we also freed ourselves of millions of
dollars of future Ceplene obligations that we would have had to fund via
additional debt or equity financing. Additionally we have implemented several
initiatives in terms of reduced head count and other operating activities to
reduce our cash burn as evidenced in the year to year comparisons.”
Business Highlights
· Sold all rights to Ceplene®in the territories previously licensed to Meda
AB, and a portion of its remaining Ceplene®inventory, to Meda for approximately
$2.6 million in net cash and the assumption of EpiCept's ongoing
responsibilities related to the manufacture of and maintenance of the marketing
authorization for Ceplene®in the European Union.
· Received written advice from the Committee for Medicinal Products for Human
Use (CHMP) of the European Medicines Agency (EMA) in June concerning the
clinical and nonclinical development and subsequent Marketing Authorization
Approval (MAA) filing of AmiKet™ for the treatment of chemotherapy-induced
peripheral neuropathy (CIPN) that was broadly consistent with guidance received
from the FDA earlier this year.
· Granted Fast Track Status by the U.S. Food and Drug Administration (FDA) for
AmiKet™ for the treatment of CIPN. The FDA's Fast Track program is designed to
facilitate the development and expedite the review of drugs intended to treat
serious or life-threatening conditions and address unmet medical needs. Fast
Track may reduce the standard review time of a New Drug Application by half.
· New preclinical research for the licensed apoptosis inhibitor drug candidate
F573 (previously named EP1013) concluded that F573 is a new therapeutic drug
candidate for the treatment of late-stage viral infection-induced hepatitis. The
data were published in the Chinese Pharmacological Bulletin (2102 Volume 28
(1):136-139). F573 was discovered by EpiCept and licensed to GNI Group Ltd. in
2008 for clinical development in Asia, Australia and New Zealand.
Product Portfolio Update
· Ceplene®- approved in the EU and Israel for administration with low-dose
interleukin-2 (IL-2) for the remission maintenance and prevention of relapse of
patients with Acute Myeloid Leukemia (AML) in first remission; AML is the
deadliest form of leukemia in adults. In June 2012, the Company sold all of its
rights to Ceplene®in the territories previously licensed to Meda AB, and a
portion of its remaining Ceplene®inventory, to Meda for approximately $2.6
million in cash and the assumption of EpiCept's ongoing responsibilities related
to the manufacture of, and maintenance of the marketing authorization for,
Ceplene®in the European Union. EpiCept also agreed to relinquish all future
milestone payments and royalties on future sales of Ceplene®by Meda. In
conjunction with the closing of this transaction EpiCept will close its EpiCept
GmbH facility in Munich, Germany over the next several months. Ceplene®is
licensed to Megapharm Ltd. to market and sell in Israel. Following Ministry of
Health approval of labeling and other reimbursement matters expected this year,
Megapharm Ltd. is expected to commence the commercial launch of Ceplene®in
Israel, until which time it is available there on a named-patient basis. EpiCept
retains rights to Ceplene®in all other countries, including countries in North
and South America.
· 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. During the second quarter of 2012, EpiCept
received written advice from the Committee for Medicinal Products for Human Use
(CHMP) of the European Medicines Agency (EMA) concerning the clinical and
nonclinical development and subsequent Marketing Authorization Approval (MAA)
filing of AmiKet™. In its written advice the CHMP recommended that the proposed
clinical program consist of a single 12-week, four-arm, factorial-designed trial
in CIPN that would seek to demonstrate AmiKet™’s superiority compared with
placebo and with each of the component drugs of AmiKet™, amitriptyline and
ketamine. An additional two-arm efficacy study in CIPN or another neuropathy is
required to complete the clinical requirements of the application. The advice
provided a summary of the additional nonclinical program requirements to file an
MAA, which included a 90-day dermal toxicity study in a non-rodent species, a
dermal phototoxicity study in a rodent and an ocular toxicity study. The advice
received from the CHMP is consistent with the guidance given to the Company by
the FDA in January 2012, in which the FDA waived several expensive and time
-consuming non-clinical toxicology studies, and indicated that a single four-arm
factorial trial might suffice for regulatory approval if combined with other
pivotal data in another neuropathy such as diabetic peripheral neuropathy. The
FDA granted Fast Track Status to AmiKet™ in April 2012 and has agreed that a
Special Protocol Assessment (SPA) would be available upon formal submission and
agreement on the Phase III trial protocol.
In addition to the positive outcome previously reported for AmiKet™ in CIPN,
EpiCept has reported statistically significant positive results in the treatment
of pain from post-herpetic neuralgia in several Phase II studies, the non
-inferiority of AmiKet™ compared with gabapentin in another placebo controlled
study and a positive trend in the treatment of pain in a diabetic neuropathy
Phase II study.
· F573 (previously known as EP1013) - a di-peptide small-molecule compound
licensed by EpiCept to GNI Group Ltd. in China, Japan and other key Asian
territories that has demonstrated a potent inhibitory effect on caspases, a
class of enzymes involved in cell death and inflammation. Drug efficacy has been
shown in animal models relating to liver failure, brain ischemia and myocardial
infarction. Data published in the Chinese Pharmacological Bulletin (2102 Volume
28 (1):136-139) during the first quarter of 2012 concluded that F573 is a new
therapeutic drug candidate for the treatment of late-stage viral infection
-induced hepatitis. F573 delivered intravenously demonstrated a therapeutic
effect in a study involving 60 mice with acute liver injury, including a
reduction in TNF-aand cell apoptosis. As part of its license agreement with GNI
Group Ltd., EpiCept received a small upfront fee upon signing the agreement and
is eligible to receive milestone payments of more than $12 million based on the
clinical advancement of F573 in in the licensed territories, as well as
royalties on commercial sales. EpiCept retains the commercial rights to
F573/EP1013 in all other markets. The next potential milestone payment will be
in conjunction with initiation of a Phase I trial in any of the territories
outlined in the agreement. In July 2011 Shanghai Genomics, a wholly owned
subsidiary of GNI Group Ltd., filed an Investigational New Drug (IND)
application for F573 in China.
· CrolibulinTM- 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 with crolibulinTMto assess safety and
efficacy in combination with cisplatin in patients with anaplastic thyroid
cancer. Trial enrollment has progressed to the third and final dosing cohort for
the Phase Ib portion of this trial. The Phase II randomized proof-of-concept
efficacy portion of the trial is anticipated to begin later in 2012.
· Azixa™* - a vascular disruption agent discovered by EpiCept and licensed to
Myrexis, Inc. as part of an exclusive, worldwide development and
commercialization agreement. Azixa ™ has received orphan drug status in the U.S.
for the treatment of glioblastoma multiforme. In February 2012 Myrexis suspended
development activities of all its preclinical and clinical programs in oncology
and autoimmune diseases, and in May 2012 the company stated that it is focused
on the identification, evaluation and acquisition of appropriate commercial
-stage assets. EpiCept believes that in light of its new strategic direction,
Myrexis does not intend to comply with its development obligations; therefore,
the Company intends to enforce its rights under the license agreement with
Myrexis.
Financial and Operating Highlights
EpiCept’s net income attributable to common stockholders for the second quarter
of 2012 was $2.2 million, or $0.03 per diluted share, compared with a net loss
attributable to common stockholders of $4.3 million, or $0.06 per share, for the
second quarter of 2011. Net income attributable to common stockholders for the
second quarter of 2012 includes $0.8 million of deemed dividends on convertible
preferred stock. EpiCept’s net loss attributable to common stockholders for the
six months ended June 30, 2012 was $2.5 million, or $0.03 per share, compared
with a net loss of $6.8 million, or $0.10 per share, for the six months ended
June 30, 2011. The net loss attributable to common stockholders for the six
months ended June 30, 2012 includes $1.9 million of deemed dividends on
convertible preferred stock.
Second Quarter and Six Months 2012 vs. Second Quarter and Six Months 2011
Revenue
The Company recognized revenue of $6.6 million during the second quarter of
2012, compared with $0.2 million during the second quarter of 2011. The Company
recognized revenue of $6.8 million during the six months ended June 30, 2012,
compared with $0.5 million during the six months ended June 30, 2011. For the
second quarter of 2012, revenue consisted primarily of license fee payments and
product revenue from the sale of the Company’s rights to Ceplene®to Meda AB. For
the second quarter of 2011, revenue consisted primarily of the recognition of
license fee payments previously received from strategic alliances.
Cost of Goods Sold
Cost of goods sold in the second quarter of 2012 consisted solely of the costs
from the sale of Ceplene®to Meda AB. Cost of goods sold in the second quarter of
2011 consisted primarily of a $0.3 million expense for Ceplene®inventory the
Company believed would not be sold prior to reaching its product expiration
date. Cost of goods sold was $0.4 million for each of the six months ended June
30, 2012 and 2011.
Selling, General and Administrative (SG&A) Expense
SG&A expense in the second quarter of 2012 decreased by approximately 30%, or
$0.6 million, to $1.4 million, compared with $2.0 million in the second quarter
of 2011. The decrease was primarily attributable to lower legal expenses, lower
salary and salary related expenses as the result of a reduction in projected
bonus payments for 2012 and lower investor relations expenses. SG&A expense for
the six months ended June 30, 2012 decreased by approximately 18%, or $0.6
million, to $2.8 million, compared with $3.4 million for the six months ended
June 30, 2011. 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 2012 decreased by 50%, or $1.0 million, to
$1.0 million from $2.0 million in the second quarter of 2011. R&D expense for
the six months ended June 30, 2012 decreased by approximately 38%, or $1.4
million, to $2.3 million, compared with $3.7 million for the six months ended
June 30, 2011. The decrease was primarily attributable to lower clinical trial
costs for Ceplene®, lower salary and salary related expenses and lower patent
expenses. Our clinical efforts during the second quarters of 2012 and 2011 were
focused on our open label trial of Ceplene® that is intended to meet our post
-approval requirements with the EMA. . We expect research and development
expenses to remain at approximately current levels over the next few quarters.
Other Income (Expense)
Other income (expense) during the second quarter of 2012 was net expense of $0.9
million, compared with net expense of $0.3 million in the second quarter of
2011. Other expense for the six months ended June 30, 2012 was $1.9 million,
compared with other income of $0.2 million for the six months ended June 30,
2011. The primary components of other expense in 2012 were warrant amendment
expense of $0.9 million, interest expense of $0.7 million related primarily to
the Company’s senior secured term loan and a foreign exchange loss. Other
income, 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, which was partially offset by interest
expense of $0.5 million.
Liquidity
EpiCept had $4.8 million in cash and cash equivalents as of June 30, 2012. The
Company engaged SunTrust Robinson Humphrey in January 2012 to assist in
exploring strategic alternatives to maximize the commercial opportunity of
AmiKet™ for the treatment of CIPN following taxane-based therapy. The engagement
is focused on the identification and implementation of a strategy designed to
optimize AmiKet™’s value for the Company’s stockholders, which includes the
evaluation of potential transactions involving the sale of the Company. EpiCept
is considering various transactions to obtain additional cash resources to fund
operations and clinical trials, including the sale or licensing of assets and
the sale of equity securities. Current cash is anticipated to be sufficient to
run operations into the fourth quarter of 2012. If EpiCept is unable to complete
a transaction or otherwise obtain funding on a timely basis, the Company may be
forced to further reduce expenses or curtail operations. See our Quarterly
Report on Form 10-Q for the period ended June 30, 2012 for a further discussion
of the Company’s liquidity and cash position.
Conference Call
EpiCept will host a conference call to discuss these results and answer
questions on August 8, 2012 beginning at 9:00 a.m. Eastern time.
To participate in the live call, please dial from the United States or Canada
(877) 809-8594 or from international locations (706) 758-9407 (please reference
access code 17527052). 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%2
F
www.epicept.com&esheet=50369728&lan=en
-US&anchor=www.epicept.com&index=1&md5=49d1c3b074ce80cce63d89d1a8cbb554). The
webcast 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 17527052).
About EpiCept Corporation
EpiCept is focused on the development and commercialization of pharmaceutical
products for the treatment of pain and cancer. 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. The Company's product Ceplene®, when used
concomitantly with low-dose IL-2 is intended as remission maintenance therapy in
the treatment of AML for adult patients who are in their first complete
remission. The Company sold all of its rights to Ceplene®in Europe and certain
Pacific Rim countries and a portion of its remaining Ceplene®inventory to Meda
AB in June 2012. Ceplene®is licensed to MegaPharm Ltd. to market and sell in
Israel and EpiCept has retained its rights to Ceplene®in all other countries,
including countries in North and South America. The Company has other oncology
drug candidates 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.
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 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 clinical trials for AmiKet™ or
crolibulinTM will not be successful, the risk that AmiKet™ or crolibulinTM 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
Ceplene®will not receive regulatory approval or marketing authorization in the
United States or Canada, the risk that Ceplene® will not 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 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.
l
rd.yahoo.com%2F_ylt%3DAgfqFPfVOEK5M4_Rv8aJvhTjba9_%3B_ylu%3DX3oDMTEzM2pvaWgxBHBv
c
wMyBHNlYwNuZXdzYXJ0Ym9keQRzbGsDd3d3c2VjZ292%2FSIG%3D15t064n6f%2F**http%253A%2Fct
s
.businesswire.com%2Fct%2FCT%253Fid%3Dsmartlink%2526url%3Dhttp%25253A%25252F%2525
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Fwww.sec.gov%2526esheet%3D6170045%2526lan%3Den_US%2526anchor%3Dwww.sec.gov%2526i
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dex%3D2%2526md5%3D61ec7b72044301e411e3335754ee5c07&esheet=50369728&lan=en
-US&anchor=www.sec.gov&index=2&md5=93cf7624d2e1d0479fb8455b01d738bd) or at
www.epicept.com (http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2
F
us.lrd.yahoo.com%2F_ylt%3DAhBuoawHw6iS3RhJOH9dNNfjba9_%3B_ylu%3DX3oDMTE2OGhhcWs4
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HBvcwMzBHNlYwNuZXdzYXJ0Ym9keQRzbGsDd3d3ZXBpY2VwdGNv%2FSIG%3D1659oglun%2F**http%2
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3A%2Fcts.businesswire.com%2Fct%2FCT%253Fid%3Dsmartlink%2526url%3Dhttp%25253A%252
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2F%25252Fwww.epicept.com%2526esheet%3D6170045%2526lan%3Den_US%2526anchor%3Dwww.e
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8&lan=en
-US&anchor=www.epicept.com&index=3&md5=feb49d28446e0a6bd33939f7325e6ee0). 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.
Selected financial information follows:
EpiCept Corporation and
Subsidiaries
(Unaudited)
Selected Consolidated
Balance Sheet Data
(in $000s)
June 30, December 31,
2012 2011
Cash and cash $ 4,773 $ 6,378
equivalents
Inventory 6 360
Property and equipment, 84 120
net
Total assets $ 5,302 $ 7,521
Accounts payable and $ 3,276 $ 3,333
other accrued
liabilities
Deferred revenue 8,700 12,947
Notes and loans payable 5,630 8,022
Total stockholders’ (12,557 ) (17,146 )
deficit
Total liabilities and $ 5,302 $ 7,521
stockholders’ deficit
EpiCept Corporation and
Subsidiaries
(Unaudited)
Selected Consolidated
Statement of Operations
Data
(in $000s except share
and per share data)
Three Six
Months Months
Ended Ended
June June
30, 30,
2012 2011 2012
2011
Product net revenues $ 577 $ 1 $ 583
$ 1
Licensing and other 6,025 223 6,260
461
revenues
Total net revenues 6,602 224 6,843
462
Operating expenses:
Cost of product net 396 270 396
360
revenues
Selling, general and 1,384 2,042 2,815
3,436
administrative
Research and development 963 1,991 2,259
3,675
Total operating expenses 2,743 4,303 5,470
7,471
Income (loss) from 3,859 (4,079 ) 1,373
(7,009 )
operations
Other income (expense):
Interest income 1 4 3
6
Foreign exchange (loss) (521 ) 155 (264
) 659
gain
Warrant amendment — — (936
) —
expense
Interest expense (380 ) (422 ) (743
) (461 )
Other income (expense), (900 ) (263 ) (1,940
) 204
net
Net income (loss) before 2,959 (4,342 ) (567
) (6,805 )
income taxes
Income taxes — — (2
) (3 )
Net income (loss ) $ 2,959 $ (4,342 ) $ (569
) $ (6,808 )
Deemed dividends on (750 ) — (1,926
) —
convertible preferred
stock
Income (loss) $ 2,209 $ (4,342 ) $ (2,495
) $ (6,808 )
attributable to common
stockholders
Basic and diluted income $ 0.03 $ (0.06 ) $ (0.03
) $ (0.10 )
(loss) per common share
Weighted average shares 83,772,960 70,993,924
80,414,692 65,578,505
- Basic
Weighted average shares 91,591,893 70,993,924
80,414,692 65,578,505
- Diluted
EpiCept Corporation and
Subsidiaries
(Unaudited)
Selected Consolidated
Statement of Cash Flows
Data
(in $000s)
Six Months Ended June 30,
2012 2011
Net cash used in operating $ (2,599 ) $ (6,344 )
activities
Net cash provided by — 116
investing activities
Net cash provided by 1,003 18,362
financing activities
Effect of exchange rate (9 ) 9
changes on cash
Net (decrease) increase in (1,605 ) 12,143
cash and cash equivalents
Cash and cash equivalents 6,378 2,435
at beginning of year
Cash and cash equivalents $ 4,773 $ 14,578
at end of year
EpiCept Corporation and Subsidiaries
(Unaudited)
Selected Consolidated Statement of Stockholders’ Deficit Data
(in $000s)
Six Months Ended June 30,
2012 2011
Stockholders’ deficit at beginning of year $ (17,146 ) $ (14,135 )
Net loss for the period (569 ) (6,808 )
Stock-based compensation expense 404 500
Foreign currency translation adjustment 257 (698 )
Share and warrant issuance 2,833 11,416
Warrant amendment expense 936 —
Exercise of warrants 728 —
Stockholders’ deficit at end of year $ (12,557 ) $ (9,725 )
EpiCept had 84,088,023 shares outstanding as of July 31, 2012. EpiCept expects
to release its interim results for the period ending September 30, 2012 on or
about November 10, 2012.
# # #
*Azixa is a registered trademark of Myrexis, Inc.
EPCT-GEN
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:
LHA
Kim Sutton Golodetz, 212-838-3777
kgolodetz@lhai.com
or
Bruce Voss, 310-691-7100
bvoss@lhai.com
@LHA_IR_PR
EpiCept Reports Second Quarter 2012 Operating and Financial Results
| Source: Immune Pharmaceuticals Inc
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