Pharmos Corporation Reports 2011 Second Quarter Results
Iselin NJ, August 8, 2011 – Pharmos Corporation (OTC-PINK: PARS.PK) today reported financial results for the second quarter and six-month period ended June 30, 2011. These results are included in the Company’s Quarterly Report on Form 10-Q which has been filed with the SEC.
Second Quarter Ended June 30, 2011
The Company recorded a net loss of $0.5 million, or $0.01 per share, for the second quarter 2011 compared to a net loss of $0.4 million, or $0.01 per share, in the second quarter 2010.
During the quarter, the Company submitted an Investigational New Drug (IND) application to the FDA and received clearance to conduct human clinical trials, subject to first confirming the safety of the dose planned to be used in a proof-of-concept study in Gout patients. To confirm the safety of the planned dose, the Company is currently conducting a non-human primate toxicology study. Upon successful completion of the preclinical trial, the Company plans to conduct a proof-of concept clinical trial in the US in gout patients using Levotofisopam. This trial follows two ex-US Phase 1 clinical studies that were completed by Vela Pharmaceuticals (merged with Pharmos in October 2006). In these studies, conducted in healthy volunteers in the United Kingdom and The Netherlands, Levotofisopam treatment was generally well tolerated and was associated with a large and rapid reduction in mean uric acid values.
Research & development expenses for the second quarter increased by $111,108 or 108% from $103,362 in 2010 to $214,470 in 2011. The primary areas include a $72,000 increase in clinical study fees and a $52,000 increase in consultant and professional fees which were offset by a $13,000 reduction in various other areas. Consulting and professional fees increased substantially as the Company conducted work in preparation for initiating a proof-of-concept trial in gout patients using Levotofisopam. Clinical study fees increased due to costs related to conducting a non-human primate toxicology study needed for this trial. These increases were slightly offset by a reduction of various facility related expenses as the Company continued to reduce overall facility costs.
General and administrative expenses for the second quarter of 2011 decreased by $41,077, or 14%, from $300,492 in 2010 to $259,415 in 2011. The primary reductions were a $30,000 reduction in consultant and professional fees and an $11,000 reduction in salaries and benefits. Professional fees have decreased as there were business development fees in 2010 related to a possible reverse merger candidate which eventually was not pursued. The decrease in payroll costs in 2011 reflects lower stock compensation costs and the elimination of an administrative position in 2010.
At June 30, 2011, the Company had approximately $2.1 million in cash and cash equivalents which is expected to be sufficient to fund current operations through at least March 31, 2012.
Six-months Ended June 30, 2011
For the six months ended June 30, 2011, Pharmos recorded a net loss of $1.1 million, or $0.02 per share compared to a net loss of $0.9 million, or $0.02 per share for the six months ended June 30, 2010.
Research & development expenses for the first half of 2011 increased by $269,896 or 119% from $226,358 in 2010 to $496,254 in 2011. The primary areas include a $142,000 increase in clinical study fees and a $167,000 increase in consultant and professional fees which were offset by a $39,000 reduction in various other areas. Consulting and professional fees increased substantially as the Company conducted work in preparation for initiating a proof-of-concept trial in gout patients using Levotofisopam. Clinical study fees increased due to costs related to manufacturing capsules needed for this trial and costs related to conducting a non-human primate toxicology study. These increases were slightly offset by a reduction of various facility related expenses as the Company continued to reduce overall facility costs.
General and administrative expenses for the first half of 2011 decreased by $86,046, or 13%, from $639,806 in 2010 to $553,760 in 2011. The primary reductions were a $47,000 reduction in consultant and professional fees, a $31,000 reduction in salaries and benefits and an $8,000 reduction in various facility related expenses. Accounting fees have decreased as there were higher accounting fees related to the filing of a Regulation statement on Form S-1 in 2010. Also professional fees have decreased as there were business development fees in 2010 related to a possible reverse merger candidate which eventually was not pursued. The decrease in payroll costs in 2011 reflects lower stock compensation costs and the elimination of an administrative position in 2010. The decrease in the facility related expenses were a combination of all expense items and overall was not a significant reduction.
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 products are the two enantiomers of tofisopam. S-tofisopam (levotofisopam) is being evaluated for the treatment of gout, but has not yet entered clinical trials in the US. R-tofisopam (dextofisopam) has been developed through Phase 2b for IBS in the US. There is a large unmet need for new therapeutic alternatives for the treatment of IBS, a chronic and sometimes debilitating condition that affects roughly 10-15% of U.S. adults, primarily women. Pharmos is seeking a partnership with another pharmaceutical company to further develop this promising compound for IBS. 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’s pipeline have been the subject of 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
Condensed Consolidated Statements of Operations
Three months ended
Six months ended
2011 2010 2011 2010 Expenses Research and development $ 214,470 $ 103,362 $ 496,254 $ 226,358 General and administrative 259,415 300,492 553,760 639,806 Depreciation and amortization 671 185 1,297 650 Total operating expenses 474,556 404,039 1,051,311 866,814 Loss from operations (474,556) (404,039) (1,051,311) (866,814) Other (expense) income Interest income 60 342 156 629 Interest expense (25,937) (27,929) (52,406) (56,303) Other income (expense) – (353) – (869) Other expense (25,877) (27,940) (52,250) (56,543) Net loss $ (500,433) $ (431,979) $ (1,103,561) $ (923,357) Net loss per share – basic and diluted ($0.01) ($0.01) ($0.02) ($0.02) Weighted average shares outstanding – basic and diluted 59,095,703 58,400,211 59,045,622 58,306,062
|Select Consolidated Balance Sheet Data|
|June 30, 2011||December 31, 2010|
|Cash and short-term investments||$2,115,349||$3,139,347|