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LAKE BLUFF, Ill., Apr 28, 2009 (BUSINESS WIRE) -- NeoPharm, Inc. (Other OTC: NEOL.PK), today announced its first quarter 2009 financial results.
For the first quarter ended March 31, 2009, NeoPharm reported a net loss of $2.3 million, or ($0.08) per basic and diluted share, as compared to a net loss of $1.5 million, or ($0.05) per basic and diluted share, for the same period last year. The increase in the Company's 2009 first quarter net loss is primarily due to an increase in clinical trial and preclinical development activities, as the Company continues to progress its current drug compounds to their next stages of development, as well as a decrease in net interest income which was partially offset by a decrease in general and administrative expenses. This decrease in general and administrative expenses is primarily attributable to a reduction in internal and external accounting costs in connection with the Company's voluntary decision to delist and deregister its common stock in January 2009 and opt-out of SEC reporting requirements.
During the first quarter, the Company held its cash consumption to a level consistent with the prior quarter, allocating $2.4 million in cash to its operations, versus $2.3 million in the fourth quarter of 2008. NeoPharm anticipates future cash consumption levels to increase in-line with the advancement and progression of its clinical trials and preclinical development activities, as well as with final payments related to previous drug product candidates' trial obligations.
The Company borrowed an additional $0.5 million, in connection with an increase in the market value of its auction rate securities ("ARS") during the first quarter of 2009, under the terms of a loan agreement with UBS Bank USA and UBS Financial Services Inc. that provides NeoPharm with a credit line (the "Credit Line"), which is secured by the Company's ARS. In November 2008, the Company accepted an offer by UBS, whereby the Company can require UBS to repurchase at par value all of NeoPharm's ARS at any time during the period from June 30, 2010 through July 2, 2012. The Company is currently reviewing alternatives to raise additional capital, including but not limited to, additional drawings on the Credit Line, but also to fund operations into 2010.
Mr. Laurence Birch, President and Chief Executive Officer of NeoPharm, Inc. commented, "To date, we have received promising preliminary data for our Phase I and II trials for LE-DT and LEP-ETU, respectively, and we are actively working towards filing INDs for IL-13 for Idiopathic Pulmonary Fibrosis and LE-rafAON. Additionally, we are in the process of developing clinical protocols for Phase I and II studies of pancreatic cancer with LE-rafAON in combination with the drug gemcitabine."
Drug Candidate Pipeline Update
Cintredekin Besudotox, IL-13, for Glioblastoma Multiforme (GBM)
In the fourth quarter of 2008, the Company signed a Cooperative Research and Development Agreement ("CRADA") with the National Institute of Neurological Diseases and Stroke ("NINDS"), a part of the National Institutes of Health ("NIH"), for research on a therapeutic agent for untreatable brain diseases in humans. Under the terms of the CRADA, NINDS will deliver IL-13, in conjunction with a surrogate marker via NINDS' patented methodology of Convection Enhanced Delivery ("CED"), which was previously licensed to NeoPharm. The Company will provide its proprietary drug and technical resources to study its effects in various brain cancers in humans. NINDS Institutional Review Board (IRB) has approved the protocol and NeoPharm has granted NINDS authorization to cross-reference its IL-13 IND.
Dr. Aquil Rahman, Chief Scientific Officer Emeritus noted, "Our CRADA with the NINDS has opened many doors in terms of the numerous ways IL-13 could be used as a therapeutic agent for other untreatable brain diseases in humans. To that end, we received notice that the NINDS Institutional Review Board (IRB) has approved the protocol for NINDS to deliver IL-13, in conjunction with a surrogate marker via the organization's patented methodology of Convection Enhanced Delivery ("CED"), which was previously licensed to NeoPharm. The process of providing NINDS permission to cross-reference NeoPharm's IL-13 IND has occurred and we expect clinical trials in brain stem cell cancers of children to start soon."
During the second quarter of 2008, NeoPharm signed a contract with the contract research organization, SIRO ClinPharm, to oversee a planned initial confirmatory Phase III trial in India for its drug product candidate Cintredekin Besudotox (IL13-PE38QQR) ("IL-13"), for the treatment of patients suffering from Recurrent Glioblastoma Multiforme (GBM).
NeoPharm, subsequently received notification from the Directorate General of Health Services - Office of Drugs Controller General (India) ("DCGI") that it will not at this time grant regulatory approval for the Company to conduct its planned confirmatory IL-13 Phase III trial. In its previous correspondence, the DCGI requested concurrent enrollment of patients in the trial in the USA.
Mr. Birch continued, "Although the decision of the DGCI with respect to our confirmatory Phase III trial for IL-13 is not uncommon within the drug development arena, we are disappointed with this result. However, we view this decision as an opportunity to re-allocate the resources devoted to this trial to other promising drug candidates within our portfolio, which includes our CRADA with NINDS. Our strategy is unchanged; we remain committed to progressing our robust drug candidate portfolio. We have a strong, experienced team that is dedicated to realizing the full value of NeoPharm's cache of intellectual property, and are encouraged by the strides NeoPharm has made over the last several years."
LEP-ETU, Liposomal Encapsulated Paclitaxel
In March 2008, the Company initiated a Phase II open-label, multicenter outpatient study for LEP-ETU, Liposomal Paclitaxel, designed to evaluate the anti-tumor effect and safety/tolerability of LEP-ETU in metastatic breast cancer. The targeted enrollment of 35 patients for the first part of this Phase II trial has been completed and the preliminary data in terms of tumor response and protection of toxicities related to free Paclitaxel appears promising. Based on these encouraging results, the Company has submitted a request to expand the targeted enrollment to 70 patients with recurrent breast cancer to get a better understanding of the clinical role of LEP, and to define more broadly the protection from peripheral neurotoxicity and bone marrow toxicities. All of the patients in this study have received a dose of 275 mg/m2 every three weeks without the detection of any significant infusion related problems. A request to expand the study to an additional patients (35) was submitted to the Directorate General of Health Services - Office of Drugs Controller General (India) ("DCGI") on March 13, 2009 for their review and approval.
LE-DT, Liposomal Encapsulated Taxotere(R)
In the second quarter of 2008, NeoPharm began enrolling patients at The Lombardi Comprehensive Cancer Center at Georgetown University and at TGen Clinical Research Services at Scottsdale Healthcare in a multi-center Phase I clinical trial for LE-DT, a novel, proprietary liposomal delivery system of docetaxel, the active ingredient of Taxotere(R), for the treatment of patients with metastatic solid tumors. Patient enrollment continues in this Phase I trial to more accurately define the maximum tolerated dose (MTD), and completion is currently targeted for the second quarter of 2009.
Based upon the preliminary results from the LE-DT Phase I trial, the Company is planning a Phase II study of LE-DT in hormone refractory metastatic prostate cancer patients. This open-label, Phase II study will be designed to determine the antitumor effect as defined by the serum Prostate Specific Antigen (PSA) levels, disease response, progression free survival, and quality of life in patients with metastatic prostate cancer. The Company currently anticipates enrollment of 40 patients in this Phase II trial to begin at three locations in the third quarter of 2009.
LE-rafAON, for Pancreatic Cancer with Gemcitabine
The Company currently expects to complete the IND submission for LE-rafAON in the third quarter of 2009 for pancreatic cancer. All preclinical studies related to the IND submission are completed, and the preclinical data is positive. NeoPharm is developing clinical protocols for Phase I and II studies of pancreatic cancer with LE-rafAON in combination with the drug gemcitabine.
Cintredekin Besudotox, IL-13, for Idiopathic Pulmonary Fibrosis (IPF)
NeoPharm has licensed IL13-PE38 from NIH, FDA, and The University of Michigan as a potential therapeutic agent for the treatment of pulmonary fibrosis and asthma. NeoPharm's collaborators have completed extensive preclinical studies in animal models for the control and reversal of pulmonary fibrosis with this agent.
Earlier this month the Company completed a two week inhalation toxicology study in non-human primates performed by the Lovelace Respiratory Research Institute. This study was designed to provide a detailed safety evaluation of this product through nebulization to fully characterize the distribution in the lungs and other tissues and to identify any toxicity related to any organ with IL-13 inhalation along with the physio-chemical behavior of the nebulized product. Based upon the initial results from this study, and other preclinical studies, NeoPharm anticipates filing an IND related to IL-13 for IPF towards the middle of 2009.
About NeoPharm, Inc.
NeoPharm, Inc., based in Lake Bluff, Illinois, is a publicly traded biopharmaceutical company dedicated to the research, development and commercialization of new and innovative cancer and other drugs for therapeutic applications. Additional information can be obtained by visiting NeoPharm's web site at www.neopharm.com.
Forward Looking Statements - This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The Company has tried to identify such forward-looking statements by use of such words as "expects," "intends," "hopes," "anticipates," "believes," "could," "may," "evidences" and "estimates," and other similar expressions, but these words are not the exclusive means of identifying such statements. Such statements include, but are not limited to, any statements relating to the Company's strategic review of projects and operations, the Company's drug development programs, the initiation, progress and outcomes of clinical trials of the Company's drug product candidates, projections regarding cash used in operations, financial projections, and any other statements that are not historical facts. Such statements involve risks and uncertainties, including, but not limited to, those risks and uncertainties relating to difficulties or delays in financing, development, testing, regulatory approval, production, and marketing of the Company's drug compounds including, but not limited to, the Company's ability to fund and pursue additional testing of Cintredekin Besudotox and its NeoLipid drug product candidates, uncertainty regarding the outcomes of ongoing or potential clinical studies, the Company's financial guidance and projection, including but not limited to, the fact that the Company's financial statements have not been subjected to a review by the Company's independent registered accounting firm in accordance with Statement of Auditing Standards No. 100, the Company's ability to evaluate the strategic alternatives available to the Company and to cut back on its funding of certain of its development projects in order to conserve its cash resources, the ability of the Company to procure additional future sources of financing, unexpected adverse side effects or inadequate therapeutic efficacy of the Company's drug compounds, including, but not limited to, Cintredekin Besudotox and its NeoLipid drug product candidates, that could slow or prevent products coming to market, uncertainty regarding the Company's ability to market its drug products, including, but not limited toCintredekin Besudotox and its NeoLipid drug product candidates, the uncertainty of patent protection for the Company's intellectual property or trade secrets, and other risks detailed from time to time in filings the Company makes with the Securities and Exchange Commission ("SEC"). Such statements are based on management's current expectations, but actual results may differ materially due to various factors, including those risks and uncertainties mentioned or referred to in this press release, and in the Company's most recent annual report on Form 10-K for the calendar year ended December 31, 2007, as the same have been subsequently updated by the Company in quarterly reports on Form 10-Q through the Form 10-Q for the third quarter of 2008.At the Company's request, the Company's obligation to file additional reports on Forms 10-K, 10-Q and 8-K with the SEC was suspended effective February 12, 2009 upon the Company's filing of Form 15, "Certification and Notice of Termination of Registration under Section 12(g) of the Securities Exchange Act of 1934 or Suspension of Duty to File Reports under Sections 13 and 15(d) of the Securities Exchange Act of 1934. Accordingly, you should not rely on these forward-looking statements as a prediction of actual future results.
| NEOPHARM, INC. | ||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||
| Three Months Ended March 31, 2009 and March 31, 2008 | ||||||||||
| Three Months Ended | ||||||||||
| (Unaudited) | ||||||||||
March 31, |
March 31, | |||||||||
| Total revenue | $ | - | $ | - | ||||||
| Expenses: | ||||||||||
| Research and development | 1,402,000 | 823,000 | ||||||||
| Selling, general, and administrative | 1,005,000 | 1,269,000 | ||||||||
| Facility consolidation costs | - | (75,000 | ) | |||||||
| Gain on sale of equipment | (21,000 | ) | (208,000 | ) | ||||||
| Total Expenses | 2,386,000 | 1,809,000 | ||||||||
| Loss from operations | (2,386,000 | ) | (1,809,000 | ) | ||||||
| Interest income | 133,000 | 296,000 | ||||||||
| Net loss | $ | (2,253,000 | ) | $ | (1,513,000 | ) | ||||
| Net loss per share - basic and diluted | $ | (0.08 | ) | $ | (0.05 | ) | ||||
| Weighted average shares outstanding - basic and diluted | 28,498,814 | 28,488,579 | ||||||||
| Selected Balance Sheet data | ||||||||||
March 31, |
December 31, | |||||||||
| (unaudited) | (unaudited) | |||||||||
| Cash and cash equivalents | 5,377,000 | 7,298,000 | ||||||||
| Auction rate securities (non-current) | 13,055,000 | 12,321,000 | ||||||||
| Put option on auction rate securities | 1,645,000 | 2,379,000 | ||||||||
| Total assets | 21,330,000 | 23,352,000 | ||||||||
| Total current liabilities | 3,166,000 | 3,541,000 | ||||||||
| Long-term liabilities | 9,760,000 | 9,259,000 | ||||||||
| Accumulated deficit | (282,705,000 | ) | (280,452,000 | ) | ||||||
| Total stockholders' equity | 8,404,000 | 10,552,000 | ||||||||
| The interim financial information presented above has not been subjected to a review | ||||||||||
| by the Company's independent registered public accounting firm. | ||||||||||
SOURCE: NeoPharm, Inc.
NeoPharm, Inc.
Laurence P. Birch
President & CEO
847-887-0800
lbirch@neopharm.com
Copyright Business Wire 2009
