HOUSTON, Nov. 2, 2006 (PRIMEZONE) -- Encysive Pharmaceuticals (Nasdaq:ENCY) today announced financial results for the third quarter ended September 30, 2006.
Third Quarter Financial Overview
-- Revenues in the third quarter of 2006 were $6.3 million, as
compared to $3.0 million for the third quarter of 2005. This
increase was due to higher royalties on sales of Argatroban by
GlaxoSmithKline. Royalty income in the third quarter increased
to $6.0 million, as compared to $2.6 million earned in the
same period last year. Revenues for the nine month period to
date were $13.6 million, as compared to $8.4 million for the
same period last year. The growth in Argatroban royalty
income, which was responsible for the year-over-year increase
in revenues, was due to higher sales of Argatroban and a
corresponding higher royalty rate, as cumulative sales reached
a higher royalty tier within the agreement.
-- For the third quarter of 2006, the Company reported a net loss
of $25.5 million, or $0.44 per basic and diluted share,
compared to a net loss of $18.8 million, or $0.32 per basic
and diluted share, for the third quarter of 2005. The
increased loss in the current quarter, as compared to the third
quarter of 2005, was primarily the result of
commercialization-related expenses in the United States and
Europe. The nine month year-to-date loss this year was $83.5
million, or $1.43 per basic and diluted share, compared to
last year's nine month year-to-date loss of $55.5 million, or
$0.96 per basic and diluted share.
-- Cash, cash equivalents and short-term investments at September
30, 2006 were $49.9 million, compared to $127.9 million at
December 31, 2005, and $75.4 million at June 30, 2006. Due to
the continuing delay in the U.S. approval of THELIN(tm)
(sitaxsentan sodium), the Company's current cash position and
expected cash requirements going forward, the Company
anticipates the need to raise additional cash and is exploring
various financing options.
Third Quarter Highlights
-- On August 11, 2006, the European Commission granted Encysive a
marketing authorization for THELIN(r)(1) (sitaxentan sodium(2))
100 mg tablets for the treatment of patients with pulmonary arterial
hypertension (PAH) classified as World Health Organization (WHO)
functional class III, to improve exercise capacity. Efficacy has been
shown in primary pulmonary hypertension(3) and pulmonary hypertension
associated with connective tissue disease. THELIN is the first
selective endothelin A receptor antagonist and first once daily oral
treatment available for patients with PAH. Under the European
Commission's centralized licensing procedure, Encysive is permitted to
market THELIN in all 25 member states of the European Union.
-- The Company's European commercial organization, headquartered in
London, is currently preparing for the launch of THELIN in the United
Kingdom and Germany later this year. These preparations include
implementation of the THELIN distribution system and patient
surveillance program. THELIN will be launched in other European
countries, as government approvals for reimbursement are obtained.
-- On July 24, 2006, Encysive received a second approvable letter from
the U.S. Food and Drug Administration (FDA) for THELIN 100 mg tablets
for the treatment of PAH, pending resolution of one substantive
outstanding item included in the March 24, 2006 approvable letter.
During the third quarter, the Company continued to interact with the
FDA, in an attempt to resolve the remaining item.
Recent Company Events
-- On October 19, 2006, the Company secured an 18-month commitment from
Azimuth Opportunity Ltd. to purchase up to $75 million, or a maximum
of 11,853,012 shares of the Company's common stock. Under the
agreement, Encysive may, at its discretion, sell registered shares of
its common stock to Azimuth at a predetermined discount to the market
price. The Company may request up to 24 drawdowns during the 18-month
period, with each drawdown limited in size to the lesser of 2.5% of
our market capitalization or a fixed amount ranging from $6 million to
$29.5 million, based on our stock price. Encysive intends to use the
net proceeds from any such sales of common stock for general corporate
purposes, including for developing and commercializing the Company's
products. This transaction provides Encysive with an additional
financing option to meet its cash needs going forward.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of these securities. There shall not be any sale of these securities in any state or jurisdiction where such an offer, solicitation or sale would be unlawful under the securities laws of such state or jurisdiction. The shares will be offered pursuant to an effective registration statement filed with the Securities and Exchange Commission on June 4, 2004.
(1) THELIN is an E.U. registered trademark of Encysive Pharmaceuticals
Inc.
(2) "Sitaxentan" sodium is the spelling recognized by the World Health
Organization for Encysive Pharmaceuticals' sitaxsentan sodium.
(3) Primary pulmonary hypertension is also known as idiopathic
pulmonary arterial hypertension.
Upcoming Presentations
-- Nov. 6 Rodman & Renshaw 8th Annual Healthcare Conference
New York City(a)
-- Nov. 7 Cowen & Co. 7th Annual Global Healthcare Conference
London(a)
(a) The presentation will be webcast at www.encysive.com
Conference Call Information
Encysive Pharmaceuticals will host a conference call to discuss third quarter 2006 earnings today at 8:00 a.m. ET. You may access the call either through the call-in number below or through the audio webcast. Please dial in 15 minutes prior to the start time to allow for call processing. The access number for the call is:
Number: (612) 332-0725
Passcode: Encysive Pharmaceuticals
This call is being webcast and can be accessed via Encysive's web site at www.encysive.com.
A replay of the webcast will be available on the Company's web site through November 30, 2006. Additionally, a replay of the call will be available from Thursday, November 2, 2006, at 11:30 a.m. ET until Monday, November 6, 2006, at 11:59 p.m. ET. The call replay can be accessed by calling:
Number: (320) 365-3844
Access Code: 845481
About Encysive Pharmaceuticals
Encysive Pharmaceuticals Inc. is a biopharmaceutical company engaged in the discovery, development and commercialization of novel, synthetic, small molecule compounds to address unmet medical needs. Our research and development programs are predominantly focused on the treatment and prevention of interrelated diseases of the vascular endothelium and exploit our expertise in the area of the intravascular inflammatory process, referred to as the inflammatory cascade, and vascular diseases. To learn more about Encysive Pharmaceuticals, please visit our web site: www.encysive.com.
The Encysive Pharmaceuticals Inc. logo is available at http://media.primezone.com/prs/single/?pkgid=843
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Among those risks, trends and uncertainties are our estimate of the sufficiency of our existing capital resources, our ability to raise additional capital to fund cash requirements for future operations, the possibility of obtaining regulatory approval of THELIN in the U.S., the market acceptance of THELIN in the European Union, our ability to quickly and successfully commercialize THELIN in the European Union, the speed with which pricing and reimbursement approvals and product launches for THELIN may be achieved in countries within the European Union, difficulties or delays in manufacturing, packaging or distributing THELIN in the European Union, our ability to discover new drugs in the future, and our ability to establish future collaborative arrangements. In particular, careful consideration should be given to cautionary statements made in the various reports Encysive, including as Texas Biotechnology Corporation, has filed with the Securities and Exchange Commission. Encysive undertakes no duty to update or revise these forward-looking statements.
ENCYSIVE PHARMACEUTICALS INC. AND SUBSIDIARIES
UNAUDITED SELECTED FINANCIAL DATA
Amounts in thousands (except per share data)
Consolidated Summary of Operations
----------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------- --------------------
2006 2005 2006 2005
-------- -------- -------- --------
Revenues $ 6,332 $ 2,965 $ 13,555 $ 8,427
Expenses:
Cost of sales 14 -- 14 --
Research and
development 16,271 16,248 49,326 49,929
Sales and
marketing 10,039 3,573 31,642 7,953
General and
administrative 5,340 2,349 16,446 8,548
-------- -------- -------- --------
Total expenses 31,664 22,170 97,428 66,430
-------- -------- -------- --------
Operating loss (25,332) (19,205) (83,873) (58,003)
Investment income 846 1,351 3,230 3,284
Interest expense (988) (975) (2,946) (2,122)
-------- -------- -------- --------
Loss from
continuing
operations (25,474) (18,829) (83,589) (56,841)
Income from
discontinued
operations -- -- -- 1,335
-------- -------- -------- --------
Loss before
cumulative
effect of change
in accounting
principle $(25,474) $(18,829) $(83,589) $(55,506)
Cumulative effect
of change in
accounting
principle -- -- 107 --
-------- -------- -------- --------
Net loss $(25,474) $(18,829) $(83,482) $(55,506)
Net loss per
common share
Basic and diluted $ (0.44) $ (0.32) $ (1.43) $ (0.96)
======== ======== ======== ========
Weighted average
common shares
Outstanding:
basic and diluted 58,478 58,077 58,405 57,878
======== ======== ======== ========
Condensed Consolidated Balance Sheets
-------------------------------------
Sept. 30, Dec. 31,
2006 2005
---------- ---------
Assets:
Cash, cash
equivalents and
Accrued interest $ 49,928 $ 127,913
Other assets 19,459 18,789
--------- ---------
Total assets 69,387 146,702
========= =========
Liabilities and
stockholders' deficit
Current liabilities 26,784 26,151
Deferred revenue,
long-term 320 1,286
Long-term debt 130,000 130,000
--------- ---------
Total liabilities 157,104 157,437
Stockholders' deficit (87,717) (10,735)
--------- ---------
Liabilities and
stockholders'
deficit $ 69,387 $ 146,702
========= =========