Pharmos Corporation Reports First Quarter 2010 Results
Iselin NJ, May 12, 2010 – Pharmos Corporation (OTCBB: PARS.PK) today reported financial results for the first quarter ended March 31, 2010. The Company recorded a net loss of $0.5 million, or $0.01 per share, for the first quarter 2010 compared to a net loss of $3.7 million, or $0.14 per share, in the first quarter 2009.
Research & development expenses decreased by $1,891,425 or 94% from $2,014,420 in 2009 to $122,995 in 2010, related to the Company’s completion of the Dextofisopam Phase 2b trial and the downsizing and curtailment of general research and development programs. The decline reflects decreases in virtually every research and development expense category. The primary reductions include a $1,752,000 reduction in clinical studies, a $57,000 reduction in consultant and professional fees, a $43,000 reduction in various other areas and a $39,000 reduction in payroll. The decrease in these costs, reflect the fact that the Dextofisopam trial is complete.
General and administrative expenses for the first quarter of 2010 increased by $4,565, or 1%, from $334,749 in 2009 to $339,314 in 2010. The primary reductions are a $59,000 reduction in consultant and professional fees and an $11,000 reduction in various facility related expenses. This is offset by an increase of $74,000 in salaries and benefits, the majority of which results from higher stock compensation in 2010 and a non cash bonus reversal in 2009. Professional and accounting fees have decreased as a result of reduced accounting fees. The decrease in the facility related expenses were a combination of all expense items and overall was not a significant reduction. The increase in payroll costs in 2010 reflects higher stock compensation costs and a reversal of the 2008 bonus accrual in the first quarter of 2009, as it was not paid.
Other expense net, decreased by $118,554 from $147,157 in other expense in 2009 to $28,603 in other expense in 2010. The decrease is related to a $91,464 reduction in interest expense attributable to reduced debenture interest and a $32,089 decrease in translation gains and losses that were recorded at our Rehovot location in 2009. This was offset by the decreased interest income of $4,999 from a decline in cash and cash equivalents.
The Company’s lead product, Dextofisopam for diarrhea predominant irritable bowel syndrome (IBS-D) has been advanced through Phase 2b. The Phase 2a trial achieved statistical significance. The Phase 2b trial had a higher placebo response rate than the Phase 2a trial which may be one of the reasons the Phase 2b trial did not achieve statistical significance for the primary endpoint of overall adequate relief. The Company is currently seeking to achieve a collaboration with a pharmaceutical partner and/or to raise additional capital to advance Dextofisopam. Additionally the Company is exploring the feasibility of smaller trials using Dextofisopam in other therapeutic indications or commencing pre-clinical development on its other intellectual property assets.
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 (IBS), pain/inflammation, and autoimmune disorders. The Company’s lead product in development is Dextofisopam for the treatment of IBS which has been developed through Phase 2b clinical trials. 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 have completed preclinical studies targeting pain, multiple sclerosis, rheumatoid arthritis, inflammatory bowel disease and other disorders. These are available for licensing / partnering.
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.
S. Colin Neill, President & CFO
PHARMOS CORPORATION (Unaudited) Consolidated Statements of Operations Three months ended ------------------ March 31, --------- 2010 2009 ---- ---- Expenses Research and development $122,995 $2,014,420 In-process research & development milestone - 1,180,000 General and administrative 339,314 334,749 Depreciation and amortization 465 2,126 --- ----- Total operating expenses 462,774 3,531,295 ------- --------- Loss from operations (462,774) (3,531,295) -------- ---------- Other (expense) income Interest income 287 5,286 Interest expense (28,374) (119,838) Other income (expense) (516) (32,605) ---- ------- Other expense (28,603) (147,157) ------- -------- Net loss ($491,377) ($3,678,452) ========= =========== Net loss per share - basic and diluted ($0.01) ($0.14) Weighted average shares outstanding - basic and diluted 58,210,866 25,697,649 Select Consolidated Balance Sheet Data March 31, December 31, 2010 2009 ---------- ------------- Cash and cash equivalents $3,884,487 $4,629,486 Working capital $3,846,983 $4,238,033 Shareholder's equity $2,877,002 $3,271,891