ISELIN, N.J., Aug. 7 /PRNewswire-FirstCall/ -- Pharmos Corporation
(Nasdaq: PARS) today reported results for the second quarter ended June 30,
2008. The Company recorded a net loss of $2.7 million, or $0.10 per share, for
the second quarter 2008 compared to a net loss of $4.6 million, or $0.18 per
share, in the second quarter 2007. Cash and cash equivalents totaled
$9.0 million at June 30, 2008.
The decrease in net loss for the second quarter 2008 is due primarily to a
46% decrease in operating expenses to $2.6 million from $4.9 million in the
second quarter 2007. The decline in operating expenses resulted from a 41%
decrease in gross research and development expenses to $2.1 million compared
to $3.7 million in the second quarter 2007. Also general and administrative
expenses decreased 66% to $0.5 million from $1.3 million in the second quarter
2007.
During the second quarter, the Company advanced a Phase IIb trial of its
lead compound, dextofisopam, in female IBS patients. The Phase IIb trial is
expected to enroll approximately 480 patients in about 70 sites in the United
States. Costs of $1,470,000 were incurred during the quarter in connection
with the trial, comprising CRO-related activities and patient recruitment
costs. During the second quarter, the Company engaged a second CRO to identify
and manage additional sites. As the Company is currently behind its planned
enrollment schedule, additional expenses were incurred in conducting a
centralized advertising campaign to enhance patient enrollment. Dextofisopam
was one of the compounds the Company obtained through the acquisition of Vela
Pharmaceuticals Inc which closed in October 2006. The continued development of
this compound through late-stage clinical testing will significantly increase
the research and development expenses going forward.
A Phase 2a clinical trial with the Company's NanoEmulsion delivery
technology for topical application of analgesic and anti-inflammatory agents
commenced in June 2007 targeting 126 patients. The Company believes that it
has sufficient patient data to measure efficacy and, given the typically slow
recruitment encountered in the summer, the Company has decided to cease
enrollment, complete those patients currently in screening, and evaluate and
analyze the results of the 100+ patients who have completed the trial.
General and administrative expenses for the second quarter of 2008
decreased by 66%, from $1.3 million in 2007 to $0.5 million. The decline
reflects decreases in virtually every general and administrative expense
category. The primary reductions include a $450,000 reduction in payroll and a
$160,000 reduction in consultant and professional fees. The decrease in
payroll costs reflect the impact of the third and fourth quarter 2007
restructuring plans which have reduced the Company's head count from 51
employees in March 2007 to 11 employees at the end of June 2008. The decrease
in consulting and professional fees in 2008 result from a decline in legal
costs and investor relation costs, and a one time IRS section 382 tax analysis
cost incurred in 2007.
For the first half ended June 30, 2008, Pharmos recorded a net loss of
$6.3 million, or $0.24 per share compared to a net loss of $9.4 million, or
$0.37 per share in the first half 2007. Total operating expenses decreased 38%
to $6.2 million from $10.0 million. Gross research and development expenses
decreased 25% to $4.9 million from $6.6 million in the first half 2007
primarily related to the Company's focus of cash resources on the Dextofisopam
Phase 2b trial and the downsizing and curtailment of general research and
development programs. Also a 67% decrease in general and administrative
expenses to $1.3 million from $3.8 million due to the decrease in consulting
and professional fees in 2008 result from non recurring 2007 costs related to
contractual payment obligations associated with the retirement of the
Company's chief executive officer, higher legal and accounting fees in 2007, a
one time IRS section 382 tax analysis cost incurred in 2007 and a non
recurring recruitment fee of $42,000 in 2007.
The company believes that the current cash and cash equivalents totaling
$9.0 million as of June 30, 2008 will be sufficient to support the currently
planned continuing operations through at least December 31, 2008. The company
is actively pursuing efforts to raise additional capital but there can be no
assurance that such efforts will be successful.
About Pharmos Corporation
Pharmos discovers and develops novel therapeutics to treat a range of
indications including specific diseases of the nervous system such as
disorders of the brain-gut axis (GI/IBS), pain/inflammation, and autoimmune
disorders. The Company's lead product in development, dextofisopam, is
undergoing Phase 2b testing in IBS patients. Dextofisopam has completed a
Phase 2a IBS study in which it demonstrated a statistically significant effect
compared to placebo on the primary efficacy endpoint of adequate relief
(n=141, p=0.033). The Company also has a proprietary technology platform
focusing on discovery and development of synthetic cannabinoid compounds with
a focus on CB2 receptor selective agonists. Various CB2-selective compounds
from Pharmos' pipeline are in preclinical studies targeting pain, multiple
sclerosis, rheumatoid arthritis, inflammatory bowel disease and other
disorders. Pharmos is also working to commercialize its proprietary
NanoEmulsion drug delivery system, which is in clinical-stage development for
topical application of analgesic and anti-inflammatory agents.
Safe Harbor Statement
Statements made in this press release related to the business outlook and
future financial performance of Pharmos, to the prospective market penetration
of its drug products, to the development and commercialization of its pipeline
products and to its expectations in connection with any future event,
condition, performance or other matter, are forward-looking and are made
pursuant to the safe harbor provisions of the Securities Litigation Reform Act
of 1995. Such statements involve risks and uncertainties that may cause
results to differ materially from those set forth in these statements.
Additional economic, competitive, governmental, technological, marketing and
other factors identified in Pharmos' filings with the Securities and Exchange
Commission could affect such results.
PHARMOS CORPORATION
(Unaudited)
Condensed Consolidated Statements of Operations
Three months ended Six months ended
June 30, June 30,
2008 2007 2008 2007
Expenses
Research and
development, gross $2,147,992 $3,667,030 $4,926,226 $6,573,769
Grants (18,199) (194,308) (18,199) (530,949)
Research and
development, net
of grants 2,129,793 3,472,722 4,908,027 6,042,820
General and
administrative 454,065 1,337,435 1,250,989 3,798,131
Depreciation and
amortization 30,109 67,067 64,661 136,635
Total operating
expenses 2,613,967 4,877,224 6,223,677 9,977,586
Loss from operations (2,613,967) (4,877,224) (6,223,677) (9,977,586)
Other (expense) income
Interest income 64,392 264,720 195,092 594,878
Interest expense (123,852) - (246,714) -
Other income (expense) 5,869 (24,899) 12,858 (7,790)
Other (expense)
income, net (53,591) 239,821 (38,764) 587,088
Net income (loss) ($2,667,558) ($4,637,403) ($6,262,441) ($9,390,498)
Net income (loss)
per share
- basic and diluted ($0.10) ($0.18) ($0.24) ($0.37)
Weighted average
shares outstanding
- basic and diluted 25,761,637 25,600,920 25,750,746 25,582,247
Select Consolidated Balance Sheet Data
June 30, 2008 December 31, 2007
Cash and short-term investments $9,036,652 $11,168,309
Working capital $7,483,021 $9,504,348
Shareholder's equity $3,928,834 $9,984,665
.gif)
