EpiCept Corporation Reports Second Quarter 2008 Operating and Financial Results
Ceplene Launch Plans for EU Progressing
TARRYTOWN, N.Y.--(BUSINESS WIRE)--Aug. 11, 2008--Regulatory News:
EpiCept Corporation (Nasdaq and OMX Nordic Exchange: EPCT) today
announced operating and financial results for the second quarter and
six months ended June 30, 2008. For the second quarter of 2008,
EpiCept's net loss attributable to common stockholders was $7.8
million, or $0.15 per share, compared with a net loss attributable to
common stockholders of $7.0 million, or $0.22 per share, for the
second quarter of 2007. For the six months ended June 30, 2008,
EpiCept's net loss attributable to common stockholders was $13.8
million, or $0.28 per share, compared to $14.7 million, or $0.45 per
share, for the six months ended June 30, 2007. As of June 30, 2008,
EpiCept had approximately 59.3 million shares outstanding."The second quarter was challenging for the Company as we filed
and then prepared to present the grounds for the re-examination of the
negative opinion of Ceplene(R) issued by the Committee for Medicinal
Products for Human Use (CHMP) of the European Medicines Agency (EMEA)
in March," stated Jack Talley, President and CEO of EpiCept. "Our
liquidity was negatively affected by the earlier decision on
Ceplene(R). This required us to reduce expenses and renegotiate our
loan with our senior secured lender. However, with the overwhelming
support for Ceplene we received from key opinion leaders in hematology
across Europe we were able to successfully prevail in our appeal, and
as a result we believe we are now in a much more favorable position to
improve the Company's liquidity while we simultaneously make
preparations to launch Ceplene in Europe through a marketing partner."
EpiCept today provided an update on several of its key product
candidates:
-- Ceplene(R) - is intended for the remission maintenance and
prevention of relapse of patients with Acute Myeloid Leukemia
(AML) in first remission, the most common type of leukemia in
adults. In July 2008, the CHMP issued a positive opinion
regarding the marketing authorization application (MAA) for
Ceplene(R). EpiCept is working with the EMEA to finalize the
product labeling, the package insert or SPC, the risk
management plan and the phamacovigilance plan for post
introduction monitoring of adverse reactions. EpiCept expects
final marketing authorization to occur in September/October
2008. Several marketing partners are under consideration for
the licensing of the European marketing rights to Ceplene at
this time. First commercial introduction of Ceplene is
expected to occur in Europe in the first quarter of 2009.
-- EpiCept 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 February 2008, EpiCept reported encouraging
results from a Phase II trial for NP-1 in Diabetic Peripheral
Neuropathy (DPN), which the Company believes support the
advancement of NP-1 to a pivotal Phase III trial in DPN.
EpiCept NP-1 is currently being studied in two additional
clinical trials: a Phase III trial in chemotherapy-induced
peripheral neuropathy (CPN) being conducted by the National
Cancer Institute (NCI)-funded Community Clinical Oncology
Program, and a Phase II comparative trial versus gabapentin
and placebo in post-herpetic neuralgia (PHN). Enrollment for
the PHN trial is complete and top line results are expected in
the fourth quarter of 2008.
-- EPC2407 - a vascular disruption agent (VDA) that also has
potent direct apoptotic activity on cancer cells. In April
2008, the Company announced that it is evaluating the
pharmacodynamic effects of EPC2407 with different dosage
schedules and expects to initiate a Phase Ib combination trial
for the compound with other chemotherapeutic agents in 2009.
-- Azixa(TM) - a compound discovered by EpiCept and licensed to
Myriad Genetics, Inc. as part of an exclusive, worldwide
development and commercialization agreement. EpiCept received
a milestone payment in March 2008 as a result of Myriad's
dosing of the first patient in the first of its three Phase II
trials. EpiCept will earn an additional milestone payment upon
the dosing of the first patient in the first Phase III trial.
Financial and Operating Highlights
General and Administrative Expense
General and administrative expense decreased by 33%, or $1.1
million, from $3.3 million in the second quarter of 2007 to $2.2
million in the second quarter of 2008. The decrease was primarily
attributable to lower personnel, accounting, public reporting and
investor relations costs for the second quarter of 2008 as compared to
the same period in 2007. In addition, for the second quarter of 2007,
we incurred a $0.4 million charge for liquidating damages as a result
of a registration statement not being declared effective by the
required date and a $0.3 million charge relating to a release and
settlement agreement with our senior secured lender. General and
administrative expense decreased by 27%, or $1.8 million from $6.6
million for the six months ended June 30, 2007 to $4.8 million for the
six months ended June 30, 2008.
Research and Development (R&D) Expense
Research and development expense was $3.3 million in the second
quarter of 2008, unchanged from the second quarter of 2007. During the
second quarter of 2008, EpiCept's clinical efforts were focused
primarily on the completion of the clinical trials of NP-1 and
preparation for the reexamination of the negative determination issued
by the CHMP regarding EpiCept's MAA for Ceplene(R). During the second
quarter of 2007, EpiCept commenced two clinical trials of NP-1 and
continued our Phase I clinical trial of EPC 2407. EpiCept also
reviewed the Day 80 report and the Day 120 List of Questions related
to the Ceplene MAA, and commenced preparation of our response to the
EMEA. For the six months ended June 30, 2008, research and development
expenses decreased by 3%, or $0.2 million from $7.0 million for the
six months ended June 30, 2007 to $6.8 million for the six months
ended June 30, 2008.
Other Expense, Net
Other expense, net increased by $1.7 million to $2.2 million in
the second quarter of 2008 from $0.5 million in the second quarter of
2007. The increase in other expense, net was primarily attributable to
a $2.0 million non-cash loss on the extinguishment of debt recorded in
the second quarter of 2008. In June 2008, EpiCept entered into a
second amendment to the original debt agreement with its senior
secured lender, which was considered a substantial modification. As a
result of the modification to the original debt agreement, EpiCept
recorded the new debt at its fair value and recorded a loss on the
extinguishment of the original debt of $2.0 million.
Cash from Operations
Net cash used in operating activities for the first six months of
2008 was $7.8 million as compared to $10.5 million in the first six
months of 2007. During the first six months of 2008, cash was used
primarily to fund EpiCept's net loss for the period, partially offset
by non-cash charges of $1.7 million related to the extinguishment of
debt, $1.3 million of FAS 123R stock-based compensation and $0.1
million of depreciation and amortization expenses. Deferred revenue
increased by $1.0 million as a result of receiving a $1.0 million
milestone payment from Myriad.
Nasdaq Listing Update
On August 6, 2008, the Company received a letter from the Nasdaq
Office of the General Counsel stating that the Nasdaq Hearings Panel
had granted the Company's request for continued listing on The Nasdaq
Stock Market, subject to the Company's ability to (i) maintain a
market value of listed securities above $35 million for ten (10)
consecutive trading days, on or before August 29, 2008, and (ii)
comply with all requirements for continued listing on The Nasdaq Stock
Market. The market value of the Company's listed securities has
exceeded $35 million for each of the six consecutive trading days
ending August 8, 2008. The Company has until October 13, 2008 to
regain compliance with Marketplace Rule 4320(e)(2)(E)(ii), which
requires that the closing bid price of the Company's common stock be a
minimum of $1.00.
About EpiCept Corporation
EpiCept is focused on unmet needs in the treatment of cancer and
pain. The Company's broad portfolio of pharmaceutical product
candidates includes Ceplene(R), a cytokine immunomodulator that
recently received a positive opinion from the CHMP in Europe for the
remission maintenance of AML patients, and several pain therapies in
clinical development. In addition, EpiCept's ASAP technology, a
proprietary live cell high-throughput caspase-3 screening technology,
can efficiently identify new cancer drug candidates and molecular
targets that selectively induce apoptosis in cancer cells. Two
oncology drug candidates currently in clinical development that were
discovered using this technology have also 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, contains 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 EpiCept's 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, our need to raise
additional financing to continue to meet our capital needs 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 or that we may default on our loans or that our lenders may
declare the Company in default or that our secured lender would seek
to sell our assets, the risk that the Company's securities may be
delisted by The Nasdaq Capital Market or the OMX Nordic Exchange, the
risk that we do not receive final regulatory marketing approval by the
European Commission for Ceplene(R), the risk that Ceplene(R), if
approved, will not be launched in the first quarter of 2009 or achieve
significant commercial success, the risk that we are unable to find a
suitable marketing partner for Ceplene(R) on attractive terms, a
timely basis or at all, the risk that Myriad's development of
Azixa(TM) will not be successful, the risk that Azixa(TM) 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 our
ASAP technology will not yield any successful product candidates, the
risk that clinical trials for NP-1 or EPC2407 will not be successful,
the risk that NP-1 or EPC2407 will not receive regulatory approval or
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; risks associated with prior material
weaknesses in our internal controls; and risks associated with our
ability to protect our intellectual property. These factors and other
material risks are more fully discussed in EpiCept's periodic reports,
including its 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 EpiCept's
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.
EPCT-GEN
*Azixa is a registered trademark of Myriad Genetics, Inc.
Selected financial information follows:
EpiCept Corporation and Subsidiaries
(Unaudited)
Selected Consolidated Balance Sheet Data
(in $000s)
December
June 30, 31,
--------
2008 2007
-------- --------
Cash and cash equivalents $1,326 $4,943
Property and equipment, net 581 599
Total assets 3,093 7,398
Accounts payable and other accrued liabilities 6,552 4,028
Deferred revenue 7,765 6,837
Notes and loans payable 7,719 9,928
Total stockholders' deficit (19,505) (14,177)
Total liabilities and stockholders' deficit $3,093 $7,398
EpiCept Corporation and Subsidiaries
(Unaudited)
Selected Consolidated Statement of Operations Data
(in $000s except share and per share data)
For Three Months For Six Months Ended
Ended
June 30, June 30, June 30, June 30,
2008 2007 2008 2007
Revenue $42 $100 $91 $259
---------- ---------- ---------- ----------
Operating expenses:
General and administrative 2,248 3,354 4,837 6,648
Research and development 3,314 3,280 6,786 7,012
---------- ---------- ---------- ----------
Total operating
expenses 5,562 6,634 11,623 13,660
---------- ---------- ---------- ----------
Loss from operations (5,520) (6,534) (11,532) (13,401)
---------- ---------- ---------- ----------
Other income (expense):
Interest income 5 18 20 64
Foreign exchange gain (11) 63 384 108
Interest expense (377) (591) (850) (1,207)
Loss on extinguishment of
debt (1,975) -- (1,975) --
Change in value of warrants
and derivatives 113 -- 113 (278)
---------- ---------- ---------- ----------
Other income
(expense), net (2,245) (510) (2,308) (1,313)
---------- ---------- ---------- ----------
Net loss before income
taxes (7,765) (7,044) (13,840) (14,714)
Income taxes -- -- (2) (4)
---------- ---------- ---------- ----------
Net loss $(7,765) $(7,044) $(13,842) $(14,718)
Basic and diluted loss per
common share $(0.15) $(0.22) $(0.28) $(0.45)
========== ========== ========== ==========
Weighted average common
shares outstanding 52,012,245 32,404,185 49,703,971 32,399,800
========== ========== ========== ==========
EpiCept Corporation and Subsidiaries
(Unaudited)
Selected Consolidated Statement of Cash Flows Data
(in $000s)
Six Months Ended
June 30,
2008 2007
-------- ---------
Net cash used in operating activities $(7,790) $(10,546)
Net cash provided by (used in) investing activities 297 (137)
Net cash provided by (used in) financing activities 3,818 (1,528)
Effect of exchange rate changes on cash 58 (1)
-------- ---------
Net decrease in cash and cash equivalents (3,617) (12,212)
Cash and cash equivalents at beginning of period 4,943 14,097
-------- ---------
Cash and cash equivalents at end of period $1,326 $1,885 ======== ---------
EpiCept Corporation and Subsidiaries
(Unaudited)
Selected Consolidated Statement of Stockholders Deficit Data
(in $000s)
Six Months Ended
June 30,
2008 2007
--------- ---------
Stockholders' deficit at beginning of period $(14,177) $(9,373)
Net loss for the period (13,842) (14,718)
Stock-based compensation expense 1,313 1,203
Foreign currency translation adjustment (558) (157)
Share, option and warrant issuance 7,759 1,028
Financing Costs -- (63)
Reclassification of warrants from liability to
equity, net -- 794
--------- ---------
Stockholders' deficit at end of period $(19,505) $(21,286)
========= =========
EPCT-GEN
CONTACT: 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 Second Quarter 2008 Operating and Financial Results
| Source: Immune Pharmaceuticals Inc
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