EpiCept Corporation Reports Fourth Quarter and Full Year 2007 Operating and
Financial Results
TARRYTOWN, N.Y.--(BUSINESS WIRE)--Feb. 29, 2008--Regulatory News:
EpiCept Corporation (Nasdaq and OMX Nordic Exchange: EPCT) today
announced operating and financial results for the fourth quarter and
year ended December 31, 2007. For the fourth quarter and full year
2007, EpiCept's net loss attributable to common stockholders was $6.2
million, or $0.14 per share, and $28.6 million, or $0.79 per share,
respectively. As of December 31, 2007, EpiCept had cash and cash
equivalents of $4.9 million, and approximately 45.9 million shares
outstanding."In 2007, we made significant progress with our diversified
portfolio of product candidates for the treatment of cancer and the
management of pain," stated Jack Talley, President and Chief Executive
Officer. "In 2008, we will continue to build on this momentum. We
expect to have several near term announcements including the release
of Phase II active controlled results of our NP-1 cream vs. gabapentin
in post herpetic neuropathy and on-going clinical developments for our
novel vascular disruptive agent EPC2407 while we continue to pursue
the approval of Ceplene(R) in the EU and consider other important
markets. The Company has a diversified base of product candidates
under development."
EpiCept today provided an update on several of its key product
candidates:
-- Ceplene(R) - a registration-stage compound for the treatment
of Acute Myeloid Leukemia (AML), the most common type of
leukemia in adults. EpiCept recently presented at the Oral
Explanation meeting to the European Committee for Medicinal
Products for Human Use (CHMP), the scientific committee of the
European Medicines Agency (EMEA). A non-binding trend vote
taken after the Oral Explanation indicated that a slight
majority of votes by CHMP members was not in favor of
recommending a positive opinion. A final vote is expected in
March. The Company is assessing potential options to gain
approval and, if the final opinion is negative, whether that
decision should be appealed.
-- 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. Last month, 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). EpiCept anticipates completing
enrollment for the PHN trial in the second quarter of 2008.
-- EPC2407 - a vascular disruption agent (VDA) that also has
potent direct apoptotic activity on cancer cells. In October
2007, the Company announced that a Phase Ia clinical trial for
EPC2407 had been completed and that the trial met all of its
objectives. EpiCept is currently evaluating the
pharmacodynamic effects of EPC2407 with different dosage
schedules and expects to initiate a Phase Ib combination trial
for the compound with the chemotherapeutic agent cisplatin in
2008.
-- Azixa(TM) - a compound discovered by EpiCept and licensed to
Myriad Genetics, Inc. as part of an exclusive, worldwide
development and commercialization agreement. Myriad is
currently conducting three registration trials for Azixa(TM)
in patients with non-small cell lung cancer that has spread to
the brain, primary glioblastoma, and in melanoma that has
spread to the brain. If successful, these results are expected
to form the basis for an NDA submission by Myriad for
Azixa(TM), which would trigger a milestone payment for
EpiCept.
Financial and operating highlights
Fourth Quarter 2007 vs. Fourth Quarter 2006
Revenue
The Company recognized revenue of $22,000 during the fourth
quarter of 2007, compared with $1.4 million during the fourth quarter
of 2006. For the fourth quarter of 2007, revenue consisted primarily
of the recognition of license fee payments previously received from
Endo and Durect. For the fourth quarter of 2006, revenue consisted
primarily of the recognition of license fee payments previously
received from Endo and Durect, and the recognition of the remaining
deferred revenue relating to our terminated licensing agreement with
Adolor of approximately $1.2 million.
General and Administrative Expense
General and administrative expense in the fourth quarter of 2007
increased by 8%, or $0.2 million, to $2.7 million, compared with $2.5
million in the fourth quarter of 2006. The increase was primarily
related to higher insurance and public company reporting costs.
Research and Development (R&D) Expense
Research and development expense in the fourth quarter of 2007
increased by approximately 8%, or $0.2 million, to $3.6 million,
compared with $3.4 million in the fourth quarter of 2006. The increase
was primarily related to the two clinical trials of NP-1, and the
Phase Ia clinical trial of EPC2407.
Other Income (Expense)
Other income (expense) during the fourth quarter of 2007 amounted
to net income of $0.1 million, compared with a net expense of $0.5
million in 2006. The fourth quarter of 2007 included a $0.5 million
gain on extinguishment of debt resulting from the restructure of
EpiCept's 10 year, non-amortizing loan, which is now payable in June
2008.
Full Year 2007 vs. Full Year 2006
Revenue
The Company recognized deferred revenue of $0.3 million in 2007,
compared with $2.1 million in 2006. During 2007, revenues were
primarily related to the recognition of deferred revenue from our
agreements with Endo and Durect. During 2006, revenues were primarily
related to the recognition of deferred revenue from our agreements
with Endo, Durect and Adolor, of which approximately $1.5 million
related to our terminated licensing agreement with Adolor.
General and Administrative (G&A) Expense
General and administrative expense decreased by approximately 17%
or $2.5 million to $11.8 million for 2007 from $14.2 million in 2006.
For 2007, stock-based compensation expense was $2.1 million or a
decrease of $1.6 million from 2006. In addition, the Company's
premises, legal, personnel and insurance expenses decreased $2.1
million in 2007 compared with 2006. These decreases were partially
offset by increases in investor relations, public reporting costs and
other administrative expenses.
Research and Development (R&D) Expense
Research and development expense decreased by approximately 2% or
$0.4 million to $15.3 million for 2007 from $15.7 million for 2006.
Our preclinical activity was lower in 2007 as compared to 2006 as we
advanced EPC2407 into clinical development. Stock-based compensation
was also lower in 2007 as compared to 2006. These reductions were
partially offset by an increase in clinical activity in 2007 as the
Company completed preparations for the clinical trials of NP-1, two of
which commenced in April 2007, and continued its Phase Ia clinical
trial of EPC2407. Consulting expenses also increased significantly as
EpiCept received and reviewed regulatory assessments, and prepared
responses and presentations related to the Marketing Authorization
Application for Ceplene(R).
Other Income (Expense)
Other income (expense) during 2007 amounted to a net expense of
$1.9 million as compared with a net expense of $4.3 million during
2006. In 2006, other expense included a $4.3 million beneficial
conversion charge relating to the conversion of certain debt
instruments into equity in connection with EpiCept's acquisition of
Maxim Pharmaceuticals completed in January 2006 and the reversal of an
accrual for contingent interest of approximately $1.0 million.
EpiCept also announced today that in its Annual Report on Form
10-K for the year ended December 31, 2007, its independent registered
public accounting firm is expected to express an unqualified opinion
on the December 31, 2007 consolidated financial statements and will
include an explanatory paragraph expressing substantial doubt about
the Company's ability to continue as a going concern.
Conference Call
EpiCept will host a conference call to discuss these results
today, February 29, 2008 at 9:00 a.m. Eastern Standard Time.
To participate in the live call, please dial (888) 802-7346 from
the United States and Canada or (973) 582-2785 from international
locations (please reference access code 37237578). The conference call
will also be broadcast live on the Internet and may be accessed at
www.epicept.com. The webcast will be archived for 90 days.
A telephone replay of the call will be available for seven days by
dialing (800) 642-1687 from the United States and Canada or (706)
645-9291 from international locations (please reference reservation
number 37237578).
About EpiCept Corporation
EpiCept is focused on unmet needs in the treatment of pain and
cancer. The Company's broad portfolio of pharmaceutical product
candidates includes several pain therapies in clinical development and
a lead oncology compound for AML with demonstrated efficacy in a Phase
III trial; a marketing authorization application for this compound is
approaching a decision in Europe. 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 VDA's 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 our need to raise additional financing to continue to meet our
capital needs and our ability to continue as a going concern, the risk
that Ceplene(R) will not receive regulatory approval or marketing
authorization in the EU or that any appeal of an adverse decision will
not be successful, the risk that Ceplene(R), if approved, will not
achieve significant commercial success, 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.
Selected financial information follows:
-0-
*T
EpiCept Corporation and Subsidiaries
(Unaudited)
Selected Consolidated Balance Sheet Data
(in $000s)
December 31,
------------------
2007 2006
--------- --------
Cash and cash equivalents $ 4,943 $14,097
Property and equipment, net 599 1,316
Total assets $ 7,398 $18,426
Accounts payable and other accrued liabilities $ 4,028 $ 6,425
Deferred revenue 6,837 7,121
Notes and loans payable 9,928 12,805
Total stockholders' deficit (14,177) (9,373)
Total liabilities and stockholders' deficit $ 7,398 $18,426
*T
-0-
*T
EpiCept Corporation and Subsidiaries
(Unaudited)
Selected Consolidated Statement of Operations Data
(in $000s except share and per share data)
Three Months Ended Year Ended
December 31, December 31,
2007 2006 2007 2006
------------ ------------ ------------ ------------
Revenue $ 23 $ 1,362 $ 327 $ 2,095
------------ ------------ ------------ ------------
Operating
expenses:
General and
administrative 2,751 2,466 11,759 14,242
Research and
development 3,629 3,408 15,312 15,675
Acquired in-
process research
and development -- -- -- 33,362
------------ ------------ ------------ ------------
Total
operating
expenses 6,380 5,874 27,071 63,279
------------ ------------ ------------ ------------
Loss from
operations (6,357) (4,512) (26,744) (61,184)
------------ ------------ ------------ ------------
Other income
(expense):
Interest income 25 42 113 312
Gain on marketable
securities -- 82 -- 82
Gain on
extinguishment of
debt 493 -- 493 --
Miscellaneous
income -- -- -- 100
Foreign exchange
gain (loss) 180 119 530 203
Interest expense (531) (740) (2,287) (6,331)
Reversal of
contingent
interest expense -- -- -- 994
Change in value of
warrants and
derivatives (79) 8 (794) 371
------------ ------------ ------------ ------------
Other income
(expense),
net 88 (489) (1,945) (4,269)
------------ ------------ ------------ ------------
Net loss before
income taxes (6,269) (5,001) (28,689) (65,453)
Income taxes -- -- (4) --
------------ ------------ ------------ ------------
Net loss (6,269) (5,001) (28,693) (65,453)
Deemed dividends
and redeemable
convertible
preferred stock
dividends -- -- -- (8,963)
------------ ------------ ------------ ------------
Loss
attributable
to common
stockholders $ (6,269) $ (5,001) $ (28,693) $ (74,416)
============ ============ ============ ============
Basic and diluted
loss per common
share $ (0.15) $ (0.19) $ (0.79) $ (3.07)
============ ============ ============ ============
Weighted average
common shares
outstanding 43,021,637 26,010,854 36,387,774 24,232,873
============ ============ ============ ============
*T
-0-
*T
EpiCept Corporation and Subsidiaries
(Unaudited)
Selected Consolidated Statement of Cash Flows Data
(in $000s)
Year Ended December 31,
2007 2006
---------- -----------
Net cash used in operating activities $(25,825) $ (25,229)
Net cash (used in) provided by investing
activities (165) 11,300
Net cash provided by financing activities 16,839 27,647
Effect of exchange rate changes on cash (3) (24)
---------- -----------
Net (decrease) increase in cash and cash
equivalents (9,154) 13,694
Cash and cash equivalents at beginning of year 14,097 403
---------- -----------
Cash and cash equivalents at end of year $ 4,943 $ 14,097
========== ===========
*T
-0-
*T
EpiCept Corporation and Subsidiaries
(Unaudited)
Selected Consolidated Statement of Stockholders Deficit Data
(in $000s)
Year Ended December 31,
2007 2006
----------- ----------
Stockholders' deficit at beginning of year $ (9,373) $ (60,122)
Net loss for the period (28,693) (65,453)
Stock-based compensation expense 2,457 4,081
Foreign currency translation adjustment (772) (594)
Share, option and warrant issuance 21,470 65,803
Exercise of options and warrants 592 1,175
Reclassification of warrants from liability to
equity, net 142 --
Accretion of preferred stock dividends -- (13)
Beneficial conversion features -- 4,362
Share issuance in connection with Maxim
acquisition -- 41,388
----------- ----------
Stockholders' deficit at end of year $ (14,177) $ (9,373)
=========== ==========
*T
*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 Fourth Quarter and Full Year 2007 Operating and Financial Results
| Source: Immune Pharmaceuticals Inc
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