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Pharmos
Corporation Reports 2001 Results
Sale of Ophthalmic Business Results in Full Year Profit
Iselin,
NJ, March 7, 2002 - Pharmos Corporation (Nasdaq: PARS
and Nasdaq Europe: PHRM) today reported financial results
for the twelve months ended December 31, 2001. Including
a one-time gain of $16 million resulting from the sale
of its ophthalmic business to Bausch & Lomb in the
fourth quarter, Pharmos reported net income in 2001 of
$5,046,000, or $0.09 per share (basic and diluted), compared
to a net loss of $7,984,000, or $0.15 per share in 2000.
Also during the fourth quarter, Pharmos received a tax
credit of approximately $236,000 representing net proceeds
from the sale of a portion of its state NOL carryforward
under the New Jersey Technology Tax Certificate Program.
Cash and cash equivalents, including restricted cash,
were approximately $40 million as of December 31, 2001.
Pharmos
recorded revenues through the third quarter 2001, but
recognized no revenues in the fourth quarter as a result
of the sale of the ophthalmic business. This resulted
in a decrease of full year revenues to $4,298,000 in 2001,
compared to revenues of $5,099,000 in 2000. No such revenues
will be recorded in the future. Net research and development
expenses increased by 72% to $9,085,000 in 2001 from $5,283,000
in 2000 primarily due to increased employee headcount
in connection with the pivotal Phase III trial of dexanabinol
and expanded activity in pre-clinical programs studying
various dextrocannabinoid compounds.
"Through
the successful launch of dexanabinol's pivotal Phase III
clinical trial and divestiture of our ophthalmic business,
we have raised our profile and positioned Pharmos as an
important player in the discovery and development of novel
pharmaceuticals for neurological and inflammation-based
disorders," said Haim Aviv, Ph.D., Pharmos Chairman
and CEO.
In
January 2001, the Company commenced patient enrollment
for its international Phase III trial of dexanabinol for
traumatic brain injury (TBI) and showed steady progress
in the program throughout the year. No approved drugs
are currently available to prevent the cell death and
other secondary damage that results from severe trauma
to the brain, a market opportunity estimated at approximately
$1 billion worldwide. The sale of the ophthalmic business
in the fourth quarter, which generated $25 million in
initial gross proceeds, increased the Company's financial
strength to a level that should enable completion of the
current Phase III dexanabinol trial and fund the expansion
of the Company's R&D pipeline.
"Our
major goals for 2002 are focused in two key areas, "
Dr. Aviv continued. "First, we are devoting the resources
necessary to support the uninterrupted continuation of
the Phase III dexanabinol trial by completing the steps
necessary to initiate patient enrollment in the US and
in additional European countries. Second, we are continuing
to expand our pipeline by testing new compounds within
our dextrocannabinoid family so that we can advance a
second indication, independently or in conjunction with
partners, into the clinic." Pharmos expects to significantly
increase its net research and development expenses to
advance these goals, which in combination with the absence
of product revenues will result in a loss in 2002. To
further build its pipeline, Pharmos is also seeking partnering
arrangements, strategic collaborations, in-licensing and
other measures that would provide entirely new drug candidates
for clinical development.
Gad
Riesenfeld, President and COO and Robert Cook, Executive
Vice President and CFO, will host a conference call to
discuss 2001 results at 11:00 a.m. Eastern Time on March
11, 2002. A live webcast of the conference call will be
available in the Investor Relations section of Pharmos'
website at www.pharmoscorp.com and will be archived for
a limited time afterwards.
Pharmos
Corporation discovers, develops and commercializes novel
therapeutics to treat a range of neurological disorders
associated with inflammatory processes, such as traumatic
brain injury, stroke, neuropathic pain, Parkinson's disease
and other CNS and peripheral neuro-inflammatory indications.
Statements
made in this press release related to operational expectations
of the Company, to the prospective market penetration
of its drug products, and to the development and commercialization
of the Company's pipeline products 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 which 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.
(Tables
attached)
Pharmos
Corporation Financial Highlights
Condensed
Statements of Operations
(in thousands, except share and per share amounts)
| |
For
the three months ended
|
For
the year ended
|
| |
Dec.
31 , 2001
|
Dec.
31, 2000
|
Dec.
31 , 2001
|
Dec.
31, 2000
|
| |
|
|
|
|
| Revenues |
|
|
|
|
|
-
Product sales
|
$
-
- - - - - -
|
$1,133
|
$4,219
|
$4,874
|
|
-
License Fee
|
_______-
|
125
|
80
|
225
|
|
-
Total Revenues
|
-
|
1,258
|
4,299
|
5,099
|
| |
|
|
|
|
| Cost
of goods sold |
_______-
|
538
|
1,269
|
1,876
|
| |
|
|
|
|
| Gross
margin |
_______-
|
720
|
3,030
|
3,223
|
| |
|
|
|
|
| Express |
|
|
|
|
|
- R&D, net
|
2,957
|
1,550
|
9,085
|
5,283
|
|
-
Selling,
general & -administrative
|
849
|
1,206
|
3,666
|
4,045
|
|
-
Patents
|
69
|
31
|
264
|
160
|
|
-
Depreciation
& amortization
|
281
|
106
|
774
|
482
|
| Total
operating expenses |
4,156
|
2,893
|
13,789
|
9,970
|
| |
|
|
|
|
| Other
income (expenses) |
|
|
|
|
| -
Interest
income |
237
|
394
|
979
|
1,133
|
| -
Interest
expense |
(436)
|
(1,921)
|
(1,714)
|
(2,360)
|
| -
Other income (expense) |
4
|
(8)
|
29
|
(10)
|
| -
Gain
from sale of LE business |
16,285
|
______-
|
16,285
|
______-
|
| -
Other
income (expense), net |
16,090
|
(1,535)
|
15,579
|
(1,237)
|
| |
|
|
|
|
| Net
income (loss) |
11,934
|
(3,708)
|
4,820
|
(7,984)
|
| |
|
|
|
|
| Income
tax expense (credit) |
(226)
|
______-
|
(226)
|
______-
|
| |
|
|
|
|
| Net
income (loss) applicable to common shareholders |
$12,160
|
($3,708)
|
$5,046
|
($7,984)
|
| |
|
|
|
|
| Net
income (loss) per share applicable to common shareholders-basic
and diluted |
$0.22
|
($0.07)
|
$0.09
|
($0.15)
|
| |
|
|
|
|
| Weighted
average shares outstanding-basic |
55,301,200
|
53,898,481
|
54,678,932
|
52,109,589
|
| |
|
|
|
|
| Weighted
average shares outstanding-basic -diluted |
55,805,302
|
53,898,481
|
55,367,798
|
52,109,589
|
| |
|
|
|
|
|
|
|
|
|
Condensed
Balance Sheets at
(in thousands)
|
| |
|
|
| |
Dec.
31, 2001
|
Dec.
31, 2000
|
| |
|
|
| Cash
and cash equivalents |
$35,269
|
$22,481
|
| Restricted
cash |
2,275
|
-
|
| Inventories |
-
|
797
|
| Receivables |
690
|
1,189
|
| Prepaid
royalties |
-
|
6
|
| Prepaid
expenses and other current assets |
998
|
281
|
| |
39,232
|
24,754
|
| Fixed
assets, net |
1,918
|
1,681
|
| Prepaid
royalties, net of current portion |
-
|
143
|
Intangible
assets, net
|
-
|
152
|
|
Restricted
cash
|
3,091
|
4,035
|
| Other
assets |
______22
|
______18
|
| -
Total
assets |
$44,263
|
$30,783
|
| |
|
|
| Accounts
payable |
$2,197
|
$459
|
| Accrued
expenses |
5.810
|
1,162
|
|
Accrued
wages and other compensation
|
1,318
|
769
|
Convertible
debentures, net
|
1,949
|
-
|
|
Advances
against future sales
|
______-
|
_____619
|
| -
Total
current liabilities |
11,274
|
___3,009
|
|
Advances
against future sales, net of current portion
|
-
|
1,000
|
| Convertible
debentures, net |
5,848
|
6,581
|
|
Other
liabilities
|
______-
|
______100
|
| |
|
|
| -Total
liabilities |
_17,122
|
___10,690
|
| |
|
|
|
-Total
shareholders'
equity
|
__27,141
|
___20,093
|
| |
|
|
| -Total
liabilities and shareholders' equity |
$__44,263
|
$__30,783
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©Copyright
2001-2003, Pharmos Corporation. All Rights Reserved.
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