EpiCept Corporation Reports First Quarter 2009 Operating and Financial Results

EpiCept Corporation Reports First Quarter 2009 Operating and Financial Results 

TARRYTOWN, N.Y.--(BUSINESS WIRE)--EpiCept Corporation (Nasdaq and OMX Nordic
Exchange: EPCT) today announced operating and financial results for the three
months ended March 31, 2009. For the first quarter of 2009, EpiCept's loss from
operations, before other expense and income taxes, was $4.1 million compared
with a loss from operations of $6.0 million for the first quarter of 2008. 

During the first quarter of 2009, EpiCept recorded other expense, net of $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 25.0 million shares
of its common stock. Under the terms of the notes, the holders received a
make-whole payment in an amount equal to the interest payable through the
scheduled maturity of the converted notes, and this payment was funded from
restricted cash. As a result, EpiCept's net loss for the first quarter of 2009
was $22.5 million, or $0.23 per share, compared with a net loss of $6.1 million,
or $0.13 per share, for the first quarter of 2008. As of March 31, 2009, EpiCept
had cash and cash equivalents of $10.1 million and 115.9 million shares
outstanding. 

“During the first quarter we continued with preparations for the market launch
of Ceplene® in Europe, including manufacturing initial drug inventory and
working to engage a corporate partner,” stated Jack Talley, President and Chief
Executive Officer. “We also advanced the regulatory process for Ceplene® in the
U.S. and in Canada via discussions with relevant governing bodies, and reported
positive Phase II results with EpiCept™ NP-1 in patients suffering from
Post-herpetic Neuralgia (PHN). We shored up our financial position, raising
funds and reducing our burn rate with a workforce reduction and rationalization
of our drug discovery efforts. Importantly, cash available to fund our
operations was not impacted by the interest expense incurred during the first
quarter on the convertible notes, as it was funded from a restricted cash escrow
account established at the time of issuing the notes.” 

EpiCept today provided an update on several of its key product candidates: 

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 common type of leukemia in adults. EpiCept is in
advanced negotiations with a prospective partner to license the European
marketing rights to Ceplene®. Drug inventory was manufactured and shipped to the
European Union in preparation for the commercial launch of Ceplene later this
year. The Company held a pre-New Drug Application (NDA) meeting with the U.S.
FDA in January 2009 and is preparing to file an NDA with the FDA and a New Drug
Submission with Health Canada during 2009. EpiCept is also making preparations
to initiate the post-approval single arm clinical study that is required under
the marketing authorization with the European Commission. This study is expected
to commence in the second quarter of 2009 and will enroll approximately 150
patients in at least 20 leading European hematology centers. 
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 United States alone. In January 2009 EpiCept
reported positive results from a 360-patient Phase IIb trial of NP-1 in PHN
patients, where NP-1 achieved statistically significant pain relief as compared
to placebo and was statistically similar in pain relief to market leader
gabapentin, yet had fewer CNS side effects. EpiCept is seeking a strategic
partner to share the Phase III development costs of NP-1 and to market the
product in the U.S. 

Crinobulin (EPC2407) - a vascular disruption agent (VDA) which has demonstrated
potent anti-tumor activity in both preclinical and early clinical studies. In
preclinical in vitro and in vivo studies, crinobulin has been shown to induce
tumor cell apoptosis and selectively inhibit growth of proliferating cell lines,
including multi-drug resistant cell lines. In April 2008 EpiCept announced
positive clinical data from a Phase I study of crinobulin in patients with solid
tumors and is making preparations to initiate a Phase Ib combination trial for
the compound with other chemotherapeutic agents in the second half of 2009. 

Azixa™ - a compound discovered by EpiCept and licensed to Myriad Genetics, Inc.
as part of an exclusive, worldwide development and commercialization agreement.
Myriad Genetics is currently conducting Phase II trials for Azixa. If successful
these results could lead to Phase III registration trials for the compound,
which would trigger a milestone payment for EpiCept. 
Financial and Operating Highlights - First Quarter 2009 vs. First Quarter 2008 

General and Administrative Expense 

General and administrative expense decreased 


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