EpiCept Corporation Reports First Quarter 2010 Operating and Financial Results
Conference Call Begins at 9:00 a.m. Eastern Time Today
TARRYTOWN, N.Y.--(BUSINESS WIRE)--Regulatory News:
EpiCept Corporation (Nasdaq and Nasdaq OMX Stockholm Exchange: EPCT) today
announced operating and financial results for the three months ended March 31,
2010, and provided an update with respect to the Company's key business
initiatives.
“Most recently, EpiCept achieved a milestone we have been working towards for
many years, namely the full commercial launch of Ceplene® in a major market,”
said Jack Talley, president and chief executive officer of EpiCept. “With the
launch by our partner Meda AB, we have provided hope to people in Europe with
Acute Myeloid Leukemia in first remission. We are excited to be able to play a
part in helping these patients. We are looking forward to progressing our
application along the regulatory pathways in Canada and the United States, with
the goal of expanding the number of patients who can receive this very important
therapy,” Mr. Talley added.
Business Update
Ceplene® - approved in the European Union for the remission maintenance and
prevention of relapse of patients with Acute Myeloid Leukemia (AML) in first
remission; AML is the most deadly form of leukemia in adults.
In January 2010 EpiCept completed an agreement with Meda AB of Sweden to market
and sell Ceplene® in Europe and certain Pacific Rim countries. EpiCept received
$3 million upon signing the agreement and earned another $2 million upon the
first commercial sale, which recently occurred and is not included in first
quarter financial results. Future payments include a $5 million fee upon
achievement of a regulatory milestone and up to $30 million in sales milestones.
In addition, EpiCept is entitled to an escalating, double-digit royalty on net
sales of Ceplene® by Meda. EpiCept is responsible for the manufacture and supply
of Ceplene® for sale by Meda.
The commercial launch of Ceplene® occurred in the United Kingdom on April 20,
2010 in conjunction with the British Society for Haematology 50th Annual
Scientific Meeting in Edinburgh, Scotland. Meda held a Satellite Symposium
session at the meeting entitled “Maintaining Remission in AML - The Challenge,”
which was co-chaired by Dr. Alan K. Burnett and Dr. Jonathen Kell, both of the
School of Medicine at Cardiff University in Cardiff, Wales. Dr. Burnett is also
chairman of the collaborative group of the Medical Research Council in the U.K.
Ceplene® is expected to be rolled out to other countries in the European Union
over the next 12 months.
EpiCept continued its association with European LeukemiaNet (ELN) during the
quarter. In February 2010 EpiCept representatives attended this foundation's
annual meeting and participated in discussions with the goal of including
Ceplene® in local European guidelines to treat AML patients in remission. An
article entitled “Is there a Role for Immunotherapy in Maintaining Complete
Remission in Acute Myeloid Leukemia?” by Dr. G. Ossenkoppele of the University
Medical Center in Amsterdam that appeared in the ELN's February 2010 newsletter,
noted that “The combination of Ceplene®/IL-2 is the first and only approved
remission maintenance immunotherapy for AML and has the potential to
significantly improve post-consolidation management of AML patients.” In January
2010 the Swedish AML Group included Ceplene® in its guidelines entitled
“National Guidelines for Diagnosis and Treatment of Acute Myeloid Leukemia in
Adults.”
EpiCept continues to make regulatory progress with Ceplene® in North America.
The Company's New Drug Submission for Ceplene® is currently under active review
by Health Canada, which has established a performance target for the completion
of its review and a decision by the fourth quarter of 2010. EpiCept also
continues its preparation of a New Drug Application (NDA) that will be filed
with the U.S. Food and Drug Administration (FDA). The Company is on track to
submit the application during the second quarter of 2010.
EpiCept's efforts to expand the uses for Ceplene® in other hematologic diseases
via a study led by Groupe Francophone des Myélodysplasies continued during the
quarter. Necessary approvals are being sought to commence a study that will
examine the effects of Ceplene® and low-dose IL-2 in combination with Vidaza®
(azacitidine) in the treatment of patients with higher risk myelodysplastic
syndrome (MDS), a bone marrow disease that can progress to AML. This study is
expected to enroll patients beginning later this year.
EpiCeptTM 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 January 2010 NP-1 received orphan
drug designation in the U.S. for the treatment of post-herpetic neuralgia. The
receipt of orphan drug status provides marketing exclusivity for seven years for
this indication in the U.S. EpiCeptTM NP-1 is currently being studied in a
chemotherapy-induced peripheral neuropathy trial being conducted by the National
Cancer Institute (NCI)-funded Community Clinical Oncology Program. Enrollment in
this 400 patient study is progressing very well and the study should be fully
enrolled by the end of the second quarter. EpiCept intends to partner NP-1 prior
to the commencement of the Phase III program in order to share the costs and
development risk, and ultimately to have that partner market the product
globally upon approval.
CrolibulinTM (EPC2407, previously known as crinobulin) - a vascular disruption
agent that has demonstrated potent anti-tumor activity in both preclinical and
early clinical studies. The Company is anticipating the initiation this year of
a Phase Ib trial for the compound in combination with the standard dose of
appropriate chemotherapy in several solid tumor types. Although the prior name
was approved by the United States Adoptive Names Council in 2009, the compound's
name was recently modified to crolibulinTM at the request of the International
Nonproprietary Names Expert Committee of the World Health Organization to avoid
potential confusion with another product
Azixa™ - a compound discovered by EpiCept and licensed to Myriad Genetics, and
subsequently Myriad Pharmaceuticals, as part of an exclusive, worldwide
development and commercialization agreement. Myriad Pharmaceuticals is currently
conducting Phase II trials for Azixa™ and is expected to provide an update on
the progress of the trials at the upcoming meeting of the American Society of
Clinical Oncology in June 2010. The dosing of the first patient in a Phase III
trial for Azixa™ triggers a milestone payment to EpiCept.
Financial and Operating Highlights
For the first quarter of 2010, EpiCept's net loss attributable to common
stockholders was $4.5 million, or $0.10 per share, compared with a net loss
attributable to common stockholders of $22.5 million, or $0.68 per share, for
the first quarter of 2009. For the first quarter of 2009, other expense, net
amounted to $18.4 million consisting primarily of interest expense incurred as a
result of the conversion during the quarter of $22.5 million of the Company's
7.5556% convertible subordinated notes due 2014 into approximately 8.3 million
shares of its common stock. As of March 31, 2010, EpiCept had cash and cash
equivalents of $3.6 million and 44.2 million shares outstanding.
First Quarter 2010 vs. First Quarter 2009
Revenue
The Company recognized revenue of $0.2 million during the first quarter of 2010
compared with $0.1 million during the first quarter of 2009. For the first
quarter of 2010, revenue consisted primarily of the recognition of license fee
payments previously received from Meda, Myriad Genetics, Endo Pharmaceuticals
and Durect. For the first quarter of 2009, revenue consisted primarily of the
recognition of license fee payments previously received from Myriad Genetics,
Endo Pharmaceuticals and Durect.
General and Administrative Expense
General and administrative expense in each of the first quarters of 2010 and
2009 was $2.0 million. Selling expense is expected to increase during the year
and to offset reductions in general and administrative expenses as the Company
prepares to market Ceplene in the U.S. upon receipt of marketing approval.
Research and Development (R&D) Expense
R&D expense in the first quarter of 2010 decreased by approximately 6%, or $0.1
million, to $2.1 million compared with $2.2 million in the first quarter of
2009. The decrease was primarily related to lower salary and salary-related
expenses and facility costs related to closing our research facility in San
Diego in 2009, partially offset by higher regulatory fees and clinical trial
expenses for Ceplene®.
Other Income (Expense)
Other income (expense) during the first quarter of 2010 amounted to net expense
of $0.6 million, compared with net expense of $18.4 million in 2009. The primary
component of other income (expense) in both quarters is interest expense and
foreign exchange loss. The first quarter of 2009 included $18.1 million of
interest expense, which included $9.6 million in amortization of debt issuance
costs and debt discount related to the conversion of $22.5 million of the
Company's 7.5556% convertible subordinated notes due 2014 into approximately 8.3
million shares of its common stock.
Liquidity
As of March 31, 2010 EpiCept had $3.6 million in cash and cash equivalents. In
January 2010 the Company received $3 million from Meda in connection with the
signing of the Ceplene® European marketing and distribution agreement. On May 3,
2010, the Company announced the first commercial sale of Ceplene® in a major
European country had occurred, which triggered a $2 million payment from Meda.
The Company believes that its cash resources are sufficient to fund operations
into the third quarter 2010. The Company may receive cash from certain licensing
activities during 2010 and upon achievement of specified clinical milestones.
In February 2010 EpiCept established an “At-the-Market” offering program through
which the Company may, from time to time, offer and sell shares of its common
stock having an aggregate offering price of up to $15.0 million through its
sales agent. Sales of the shares, if any, will be made by means of ordinary
brokers' transactions on The Nasdaq Capital Market or, to the extent allowable
by law, the Nasdaq OMX Stockholm Exchange, at market prices. EpiCept may utilize
this program at such times and in such amounts to minimize any disruption to the
trading of its stock. In times of low trading volume the Company may severely
limit or refrain altogether from using the program. The Company expects to use
this facility to meet liquidity needs that may arise in the event any of the
anticipated cash inflows are delayed or do not occur, and it may seek
alternative sources of financing, such as issuing additional debt or equity
should funds raised through the program be insufficient to timely meet the
Company's liquidity requirements. The Company began utilizing this program on a
limited basis in April 2010.
Conference Call
EpiCept will host a conference call to discuss these results and answer
questions on May 6, 2010 beginning at 9:00 a.m. Eastern Daylight Time.
To participate in the live call and 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
73229260) 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. 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 (800) 642-1687 or from international locations (706)
645-9291 (please reference reservation number 73229260).
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®, which has been granted full marketing authorization by the European
Commission for the remission maintenance and prevention of relapse in adult
patients with Acute Myeloid Leukemia (AML) in first remission. The Company has
two 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 EpiCept™ NP-1, 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 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 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 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 Myriad, the risk that
the development of our other apoptosis product candidates will not be
successful, the risk that clinical trials for EpiCeptTM NP-1 or crolibulinTM
will not be successful, the risk that EpiCept™ NP-1 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 EpiCept™ NP-1 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 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.
Selected financial information follows:
EpiCept Corporation and Subsidiaries
(Unaudited)
Selected Consolidated Balance Sheet Data
(in $000s)
March 31, December 31,
2010 2009
Cash and cash equivalents $ 3,579 $ 5,142
Inventory 1,632 1,315
Property and equipment, net 323 360
Total assets $ 6,300 $ 7,514
Accounts payable and other accrued liabilities $ 3,817 $ 4,054
Deferred revenue 12,455 9,622
Notes and loans payable 1,851 1,952
Total stockholders' deficit (12,742 ) (9,079 )
Total liabilities and stockholders' deficit $ 6,300 $ 7,514
EpiCept Corporation and Subsidiaries
(Unaudited)
Selected Consolidated Statement of Operations Data
(in $000s except share and per share data)
Three Months Ended
March 31,
2010 2009
Revenue $ 167 $ 115
Operating expenses:
General and administrative 2,057 2,027
Research and development 2,039 2,170
Total operating expenses 4,096 4,197
Loss from operations (3,929 ) (4,082 )
Other income (expense):
Interest income 3 6
Foreign exchange gain (516 ) (289 )
Interest and amortization of discount and expense (61 ) (18,119 )
Other income (expense), net (574 ) (18,402 )
Net loss before income taxes (4,503 ) (22,484 )
Income taxes 5 3
Net loss (4,508 ) (22,487 )
Basic and diluted loss per common share $ (0.10 ) $ (0.68 )
Weighted average common shares outstanding * 44,160,266 32,894,822
* Reflects a 1:3 reverse split effected in January 2010.
EpiCept Corporation and Subsidiaries
(Unaudited)
Selected Consolidated Statement of Cash Flows Data
(in $000s)
Three Months Ended March 31,
2010 2009
Net cash used in operating activities $ (1,518 ) $ (15,180 )
Net cash provided by (used in) investing activities 27 (948 )
Net cash provided by (used in) financing activities (74 ) 25,487
Effect of exchange rate changes on cash 2 (6 )
Net increase (decrease) in cash and cash equivalents (1,563 ) 9,353
Cash and cash equivalents at beginning of period 5,142 790
Cash and cash equivalents at end of period $ 3,579 $ 10,143
EpiCept Corporation and Subsidiaries
(Unaudited)
Selected Consolidated Statement of Stockholders Deficit Data
(in $000s)
Three Months Ended March 31,
2010 2009
Stockholders' deficit at beginning of period $ (9,079 ) $ (17,730 )
Net loss for the period (4,508 ) (22,487 )
Stock-based compensation expense 203 381
Foreign currency translation adjustment 603 386
Share, option and warrant issuance — 11,677
Exercise of options and warrants 39 —
Conversion of convertible subordinated notes into common stock —
22,500
Stockholders' deficit at end of period $ (12,742 ) $ (5,273 )
# # #
*Azixa is a registered trademark of Myriad Genetics, 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:
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 2010 Operating and Financial Results
| Quelle: Immune Pharmaceuticals Inc
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