Pharmos Corporation Reports 2010 Second Quarter Results
Iselin NJ, August 4, 2010 – Pharmos Corporation (OTCBB: PARS.PK) today reported financial results for the second quarter and six-month period ended June 30, 2010. These results are included in the Company’s Quarterly Report on Form 10-Q which has been filed with the SEC.
During the quarter the Company kept expenses to a minimum level while pursuing potential partners for Dextofisopam, its drug for irritable bowel syndrome diarrhea predominant patients. The Company believes that a Phase 2c trial will be the next step in this compound’s development and continues a dialog with potential partners and other sources of capital for that trial. Pharmos is also exploring the potential of S-Tofisopam, an enantiomer of racemic tofisopam, in several indications in which it has shown signals of activity in prior clinical trials or preclinical models.
Second Quarter Ended June 30, 2010
The Company recorded a net loss of $0.4 million, or $0.01 per share, for the second quarter 2010 compared to a net loss of $2.2 million, or $0.05 per share, in the second quarter 2009. Total operating expenses decreased 75% to $0.4 million from $1.6 million. Cash and cash equivalents totaled $3.6 million at June 30, 2010.
Research & development expenses decreased by $1,101,295 from $1,204,657 in 2009 to $103,362 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.
General and administrative expenses for the second quarter of 2010 decreased by $124,304 from $424,796 in 2009 to $300,492 in 2010. The primary reductions are in consultant and professional fees, various facility related expenses and salaries and benefits.
Other expense net, decreased by $590,980 from $618,920 in other expense in 2009 to $27,940 in other expense in 2010. The majority of this decrease is related to the conversion of debentures into equity resulting in an expense of $596,104 in 2009.
Six-months Ended June 30, 2010
For the six months ended June 30, 2010, Pharmos recorded a net loss of $0.9 million, or $0.02 per share compared to a net loss of $5.9 million, or $0.16 per share for the six months ended June 30, 2009. Total operating expenses decreased 83% to $0.9 million from $5.2 million.
Research & development expenses decreased by $2,992,719 from $3,219,077 in 2009 to $226,358 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.
In the first half of 2010, In process research and development costs which were related to the Vela milestone decreased by $1,180,000 from $1,180,000 in 2009 to $0 in 2010. The expense of the milestone of $1,180,000 was reflected in the 1Q 2009 results. As noted in Commitments and Contingencies in the 10Q, the $1 million cash portion of the milestone expense was reversed in 4Q 2009 as the milestone criteria was ultimately not achieved.
General and administrative expenses for the first half of 2010 decreased by $119,739, or 16%, from $759,545 in 2009 to $639,806 in 2010. The primary reductions are in consultant and professional fees and various facility related expenses. This is offset by an increase in salaries and benefits, the majority of which results from higher stock compensation in 2010 and a non cash bonus reversal in 2009.
Other expense net, decreased by $709,534 from $766,077 in other expense in 2009 to $56,543 in other expense in 2010. The majority of this decrease is related to the conversion of debentures into equity resulting in an expense of $596,104 in 2009 and an $110,627 reduction in interest expense attributable to reduced debt outstanding in 2010.
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.
PHARMOS CORPORATION
Condensed Consolidated Statements of Operations
Three months ended
June 30,
--------
2010 2009
---- ----
Expenses
Research and development $103,362 $1,204,657
In-process research &
development Vela milestone - -
General and administrative 300,492 424,796
Depreciation and
amortization 185 2,127
Total operating expenses 404,039 1,631,580
------- ---------
Loss from operations (404,039) (1,631,580)
-------- ----------
Other (expense) income
Debt conversion expense - (596,104)
Interest income 342 2,087
Interest expense (27,929) (47,092)
Other income (expense) (353) 22,189
---- ------
Other expense, net (27,940) (618,920)
------- --------
Net loss ($431,979) ($2,250,500)
========= ===========
Net loss per share
- basic and diluted ($0.01) ($0.05)
====== ======
Weighted average shares
outstanding
- basic and diluted 58,400,211 49,215,356
========== ==========
Six months ended
June 30,
--------
2010 2009
---- ----
Expenses
Research and development $226,358 $3,219,077
In-process research &
development Vela milestone - 1,180,000
General and administrative 639,806 759,545
Depreciation and
amortization 650 4,253
Total operating expenses 866,814 5,162,875
------- ---------
Loss from operations (866,814) (5,162,875)
-------- ----------
Other (expense) income
Debt conversion expense - (596,104)
Interest income 629 7,373
Interest expense (56,303) (166,930)
Other income (expense) (869) (10,416)
---- -------
Other expense, net (56,543) (766,077)
------- --------
Net loss ($923,357) ($5,928,952)
========= ===========
Net loss per share
- basic and diluted ($0.02) ($0.16)
====== ======
Weighted average shares
outstanding
- basic and diluted 58,306,062 38,018,706
========== ==========
Select Consolidated Balance Sheet
Data
June 30, December 31,
2010 2009
--------- -------------
Cash and short-term investments $3,554,602 $4,629,486
Working capital $3,461,431 $4,238,033
Shareholder's equity $2,489,801 $3,271,891