EpiCept Reports First Quarter 2012 Operating and Financial Results
CONFERENCE CALL BEGINS AT 9:00 A.M. EASTERN TIME TODAY
TARRYTOWN, N.Y.--(BUSINESS WIRE)--
Regulatory News:
EpiCept Corporation (Nasdaq OMX Stockholm Exchange and OTCQX: EPCT)
today announced operating and financial results for the three months
ended March 31, 2012, and provided an update on the Company's key
business initiatives.
"EpiCept achieved an important milestone with respect to AmiKet™ during
the first quarter of 2012," stated Jack Talley, President and CEO of
EpiCept. "Following a successful meeting with the U.S. Food and Drug
Administration (FDA) in December 2011 regarding the Phase III program
for AmiKet™, we were awarded Fast Track Status last month by the FDA in
the treatment of chemotherapy-induced peripheral neuropathy (CIPN). In
the meantime, our efforts to identify and execute a strategy to exploit
AmiKet™'s commercial opportunity have progressed to the point where
multiple parties are considering becoming involved in advancing the
development program, including a potential sale of the Company. We are
focused on securing a positive outcome to this effort as quickly as
possible."
Business Highlights
-
Applied for Fast Track Status for AmiKet™ in February 2012 for the
treatment of CIPN, which was awarded by the FDA in April. Also held a
meeting with the European Medicines Agency (EMA) to review the Phase
III requirements for obtaining marketing approval in the European
Union (EU).
-
The Phase I safety portion of the National Cancer Institute
(NCI)-sponsored trial of crolibulin™ in combination with cisplatin in
anaplastic thyroid cancer (ATC) is nearing conclusion, after which the
Phase II randomized efficacy proof-of-concept study is expected to
commence.
-
SunTrust Robinson Humphrey was engaged in January 2012 to assist in
exploring strategic options to exploit the commercial opportunity of
AmiKet™. The engagement is focused on the identification and execution
of a strategy that will optimize AmiKet™'s value for the Company's
stockholders, which includes the evaluation of potential transactions
involving the sale of the Company.
-
The Company believes that its cash is sufficient to fund operations
into the third quarter of 2012. The Company has reduced certain R&D
and G&A expenses in 2012 compared with 2011 and raised cash via a
repricing of expiring stock purchase warrants in January 2012, a $2.0
million registered direct financing in February 2012 and a $1.1
million registered direct financing in April 2012.
Product Portfolio Update
-
AmiKet™ - a prescription topical analgesic cream designed to provide
long-term relief from the pain of peripheral neuropathies, which
affect more than 15 million people in the U.S. alone. During the
fourth quarter of 2011, EpiCept received permission from the FDA to
commence Phase III clinical development of AmiKet™ for the treatment
of CIPN and was encouraged to apply for Fast Track designation, which
was granted in April 2012. The FDA further advised that a Special
Protocol Assessment (SPA) would be available upon formal submission
and agreement as to the Phase III trial protocol. The FDA waived
several expensive and time consuming non-clinical toxicology studies,
and indicated that a single, four-arm, factorial trial may suffice for
regulatory approval if combined with other pivotal clinical data in
another neuropathy such as diabetic peripheral neuropathy. EpiCept
also met with the EMA regarding AmiKet™ in CIPN during the first
quarter of 2012 to review the requirements for marketing approval in
the EU and is awaiting receipt of the agency's formal guidance.
Discussions with several prospective parties to finance the Phase III
development in the U.S. and/or Europe are continuing.
-
Ceplene® - approved in the EU and Israel for administration
with low-dose interleukin-2 (IL-2) for the remission maintenance and
prevention of relapse of patients with Acute Myeloid Leukemia (AML) in
first remission; AML is the deadliest form of leukemia in adults. The
product has been licensed to Meda AB of Sweden to market and sell in
Europe and certain Pacific Rim countries. Ceplene® is
licensed to Megapharm Ltd. to market and sell in Israel.
Ceplene®
is currently on the list of pre-approved products for reimbursement in
Germany, England, Sweden, Denmark and Italy (a temporary approval);
additionally, it is available on a named-patient basis in many other
countries in the EU. Reimbursement is being negotiated in France and
Spain, among other countries in the EU. Meda continues to make
progress in its long-term strategy to position Ceplene® as
the standard of care in AML relapse prevention by securing inclusion
of Ceplene® in clinical trials that are being conducted by
key opinion leaders and by incorporating the use of Ceplene®
into treatment guidelines in major countries. Following Ministry of
Health approval of labeling and other reimbursement matters expected
this year, Megapharm Ltd. is expected to commence the commercial
launch of Ceplene® in Israel, until which time it is
available there on a named-patient basis. Sales of Ceplene®
were not material in the first quarter of 2012.
-
CrolibulinTM - a vascular disruption agent that has
demonstrated potent anti-tumor activity in both preclinical and early
clinical studies. In December 2010 the NCI initiated a Phase Ib/II
trial with crolibulinTM to assess safety and efficacy in
combination with cisplatin in patients with anaplastic thyroid cancer
(ATC). Trial enrollment has progressed to the third and final dosing
cohort for the Phase Ib portion of this trial. The Phase II randomized
proof-of-concept efficacy portion of the trial is anticipated to begin
later in 2012.
-
F573 (previously known as EP1013) - a di-peptide small-molecule
compound licensed by EpiCept to GNI Group Ltd. in China, Japan and
other key Asian territories that has demonstrated a potent inhibitory
effect on caspases, a class of enzymes involved in cell death and
inflammation. Drug efficacy has been shown in animal models relating
to liver failure, brain ischemia and myocardial infarction. Data
published in the Chinese Pharmacological Bulletin (2102 Volume 28
(1):136-139) during the first quarter of 2012 concluded that F573 is a
new therapeutic drug candidate for the treatment of late-stage viral
infection-induced hepatitis. F573 delivered intravenously demonstrated
a therapeutic effect in a study involving 60 mice with acute liver
injury, including a reduction in TNF-a and cell apoptosis. As
part of its license agreement with GNI Group Ltd., EpiCept received a
small upfront fee upon signing the agreement in 2008 and is eligible
to receive milestone payments of more than $12 million based on the
clinical advancement of F573 in in the licensed territories, as well
as royalties on commercial sales. EpiCept retains the commercial
rights to F573/EP1013 in all other markets. The next potential
milestone payment would occur in conjunction with initiation of a
Phase I trial in any of the territories outlined in the agreement. In
July 2011, Shanghai Genomics, a wholly owned subsidiary of GNI Group
Ltd., filed an Investigational New Drug (IND) application for F573 in
China.
-
Azixa™* - a compound discovered by EpiCept and licensed to Myrexis,
Inc. as part of an exclusive, worldwide development and
commercialization agreement. AzixaTM has received orphan
drug status in the U.S. for the treatment of glioblastoma multiforme
(GBM). Myrexis announced in February 2012 that it has suspended
company-wide operations pending the outcome of an internal evaluation
of available strategic alternatives to enhance shareholder value.
EpiCept is closely monitoring developments and intends to enforce its
rights as appropriate under its license agreement with Myrexis.
Financial and Operating Highlights
EpiCept's net loss attributable to common stockholders for the first
quarter of 2012 was $4.7 million, or $0.06 per share, compared with a
net loss attributable to common stockholders of $2.5 million, or $0.04
per share, for the first quarter of 2011. The net loss attributable to
common stockholders for the first quarter of 2012 includes $1.2 million
of deemed dividends on convertible preferred stock.
First Quarter 2012 vs. First Quarter 2011
Revenue
The Company recognized revenue of $0.2 million during each of the first
quarters of 2012 and 2011. Revenue consisted primarily of the
recognition of license fee payments previously received from the
Company's partners, as sales of Ceplene® continued to be
immaterial.
Cost of Goods Sold
Cost of goods sold in the first quarter of 2011 consisted primarily of a
$0.1 million expense for Ceplene® inventory the Company
believes will not be sold prior to reaching its product expiration date.
Cost of goods sold in the first quarter of 2012 was immaterial.
Selling, General and Administrative (SG&A) Expense
SG&A expense was $1.4 million in each of the first quarters of 2012 and
2011. The Company expects general and administrative expenses to remain
at approximately current levels over the next few quarters, which should
result in an approximate 20% reduction in SG&A expense by year-end 2012
when compared with 2011.
Research and Development (R&D) Expense
R&D expense in the first quarter of 2012 decreased by 24%, or $0.4
million, to $1.3 million from $1.7 million in the first quarter of 2011.
The decrease was primarily attributable to lower regulatory fees for
Ceplene®. The Company's clinical and regulatory efforts in
the first quarter of 2012 were focused on its open-label trial of Ceplene®
that is intended to meet its post-approval requirements with the EMA,
the Fast Track application to the FDA and its meeting with the EMA
regarding the Phase III development of AmiKet™ for the EU. The Company
expects R&D expense to trend lower over the next few quarters as a
result of a reduction in staff and reduced clinical and regulatory
activity.
Other Income (Expense)
Other income (expense) during the first quarter of 2012 amounted to net
expense of $1.0 million compared with net income of $0.5 million in the
first quarter of 2011. The primary components of other expense in 2012
were warrant amendment expense of $0.9 million and interest expense of
$0.4 million related primarily to the Company's senior secured term
loan, which was partially offset by foreign exchange gains. The primary
component of other income in 2011 was foreign exchange gains.
EpiCept expects to release its interim results for the period ending
June 30, 2012 on or about August 10, 2012.
Liquidity
EpiCept had approximately $5.1 million in cash and cash equivalents as
of March 31, 2012. In April 2012 the Company received approximately $1.0
million cash, net of $0.1 million in transaction costs, from the
issuance of 1,065 shares of the Company's Series B 0% Convertible
Preferred Stock, at a price of $1,000 per share, and warrants to
purchase 3.1 million shares of the Company's Common Stock. The Shares of
Series B Preferred Stock are convertible into an aggregate of 6.3
million shares of the Company's Common Stock. The Company believes that
its current cash is sufficient to fund operations into the third quarter
of 2012.
The Company engaged SunTrust Robinson Humphrey in January 2012 to assist
in exploring strategic alternatives to maximize the commercial
opportunity of AmiKet™ for the treatment of CIPN following taxane-based
therapy. The engagement is focused on the identification and
implementation of a strategy designed to optimize AmiKet™'s value for
the Company's stockholders, which includes the evaluation of potential
transactions involving the sale of the Company. EpiCept is considering
various financing opportunities to obtain additional cash resources to
fund operations and clinical trials, including the sale or licensing of
assets and the sale of equity securities. While the Company expects to
receive cash from sales of Ceplene® to Meda and royalties on
the sales of Ceplene® by Meda and Megapharm, such cash
payments are not expected to provide meaningful funding for the
Company's operations in 2012.
Conference Call
EpiCept will host a conference call to discuss these results and answer
questions on May 9, 2012 beginning at 9:00 a.m. Eastern time.
To participate in the live call, please dial from the United States or
Canada (877) 809-8594 or from international locations (706) 758-9407
(please reference access code 78786585). The conference call will also
be broadcast live in listen-only mode on the Internet and may be
accessed at www.epicept.com.
The webcast will be archived for 90 days.
A telephone replay of the call will be available for seven days by
dialing from the United States or Canada (855) 859-2056 or from
international locations (404) 537-3406 (please reference reservation
number 78786585).
About EpiCept Corporation
EpiCept is focused on the development and commercialization of
pharmaceutical products for the treatment of pain and cancer. The
Company's pain portfolio includes AmiKet™, a prescription topical
analgesic cream in late-stage clinical development designed to provide
effective long-term relief of pain associated with peripheral
neuropathies. The Company's lead oncology product is Ceplene®,
which has been granted full marketing authorization by the European
Commission for the remission maintenance and prevention of relapse in
adult patients with Acute Myeloid Leukemia (AML) in first remission. The
Company has other oncology drug candidates in clinical development that
were discovered using in-house technology and have been shown to act as
vascular disruption agents in a variety of solid tumors.
Forward-Looking Statements
This news release and any oral statements made with respect to the
information contained in this news release contain forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements include statements
which express plans, anticipation, intent, contingency, goals, targets,
future development and are otherwise not statements of historical fact.
These statements are based on our current expectations and are subject
to risks and uncertainties that could cause actual results or
developments to be materially different from historical results or from
any future results expressed or implied by such forward-looking
statements. Factors that may cause actual results or developments to
differ materially include: the risk that Ceplene® will not
receive regulatory approval or marketing authorization in the United
States or Canada, the risk that Ceplene® will not achieve
significant commercial success, the risk that any required post-approval
clinical study for Ceplene® will not be successful, the risk
that we will not be able to maintain our final regulatory approval or
marketing authorization for Ceplene®, the risks associated
with the adequacy of our existing cash resources and our ability to
continue as a going concern, the risks associated with our ability to
continue to meet our obligations under our existing debt agreements, the
risk that Azixa™ will not receive regulatory approval or achieve
significant commercial success, the risk that we will not receive any
significant payments under our agreement with Myrexis, the risk that
clinical trials for AmiKet™ or crolibulinTM will not be
successful, the risk that AmiKet™ or crolibulinTM will not
receive regulatory approval or achieve significant commercial success,
the risk that we will not be able to find a partner to help conduct the
Phase III trials for AmiKet™ on attractive terms, a timely basis or at
all, the risk that our other product candidates that appeared promising
in early research and clinical trials do not demonstrate safety and/or
efficacy in larger-scale or later-stage clinical trials, the risk that
we will not obtain approval to market any of our product candidates, the
risks associated with dependence upon key personnel, the risks
associated with reliance on collaborative partners and others for
further clinical trials, development, manufacturing and
commercialization of our product candidates; the cost, delays and
uncertainties associated with our scientific research, product
development, clinical trials and regulatory approval process; our
history of operating losses since our inception; the highly competitive
nature of our business; risks associated with litigation; and risks
associated with our ability to protect our intellectual property. These
factors and other material risks are more fully discussed in our
periodic reports, including our reports on Forms 8-K, 10-Q and 10-K and
other filings with the U.S. Securities and Exchange Commission. You are
urged to carefully review and consider the disclosures found in our
filings which are available at www.sec.gov
or at www.epicept.com.
You are cautioned not to place undue reliance on any forward-looking
statements, any of which could turn out to be wrong due to inaccurate
assumptions, unknown risks or uncertainties or other risk factors.
Selected financial information follows:
|
EpiCept Corporation and Subsidiaries
|
|
(Unaudited)
|
|
Selected Consolidated Balance Sheet Data
|
|
(in $000s)
|
|
|
|
March 31,
|
|
December 31,
|
|
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
5,081
|
|
|
$
|
6,378
|
|
|
Inventory
|
|
|
374
|
|
|
|
360
|
|
|
Property and equipment, net
|
|
|
102
|
|
|
|
120
|
|
|
Total assets
|
|
$
|
6,162
|
|
|
$
|
7,521
|
|
|
|
|
|
|
|
|
Accounts payable and other accrued liabilities
|
|
$
|
3,042
|
|
|
$
|
3,333
|
|
|
Deferred revenue
|
|
|
12,724
|
|
|
|
12,947
|
|
|
Notes and loans payable
|
|
|
7,230
|
|
|
|
8,022
|
|
|
Total stockholders' deficit
|
|
|
(17,141
|
)
|
|
|
(17,146
|
)
|
|
Total liabilities and stockholders' deficit
|
|
$
|
6,162
|
|
|
$
|
7,521
|
|
|
EpiCept Corporation and Subsidiaries
|
|
(Unaudited)
|
|
Selected Consolidated Statement of Operations Data
|
|
(in $000s except share and per share data)
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
241
|
|
|
$
|
238
|
|
|
Costs and expenses:
|
|
|
|
|
|
Cost of goods sold
|
|
|
1
|
|
|
|
90
|
|
|
Selling, general and administrative
|
|
|
1,430
|
|
|
|
1,394
|
|
|
Research and development
|
|
|
1,296
|
|
|
|
1,684
|
|
|
Total costs and expenses
|
|
|
2,727
|
|
|
|
3,168
|
|
|
Loss from operations
|
|
|
(2,486
|
)
|
|
|
(2,930
|
)
|
|
Other income (expense):
|
|
|
|
|
|
Interest income
|
|
|
2
|
|
|
|
2
|
|
|
Foreign exchange gain
|
|
|
256
|
|
|
|
504
|
|
|
Interest expense
|
|
|
(363
|
)
|
|
|
(39
|
)
|
|
Warrant amendment expense
|
|
|
(935
|
)
|
|
|
—
|
|
|
Other income (expense), net
|
|
|
(1,040
|
)
|
|
|
467
|
|
|
Net loss before income taxes
|
|
|
(3,526
|
)
|
|
|
(2,463
|
)
|
|
Income tax expense
|
|
|
(2
|
)
|
|
|
(3
|
)
|
|
Net loss
|
|
$
|
(3,528
|
)
|
|
$
|
(2,466
|
)
|
|
Deemed dividends on convertible preferred stock and warrant
re-pricing
|
|
|
(1,175
|
)
|
|
|
—
|
|
|
Loss attributable to common stockholders
|
|
$
|
(4,703
|
)
|
|
$
|
(2,466
|
)
|
|
|
|
|
|
|
|
Basic and diluted loss per common share
|
|
$
|
(0.06
|
)
|
|
$
|
(0.04
|
)
|
|
Weighted average common shares outstanding
|
|
|
77,056,424
|
|
|
|
60,102,966
|
|
|
EpiCept Corporation and Subsidiaries
|
|
(Unaudited)
|
|
Selected Consolidated Statement of Cash Flows Data
|
|
(in $000s)
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
Net cash used in operating activities
|
|
$
|
(3,069
|
)
|
|
$
|
(3,420
|
)
|
|
Net cash used in investing activities
|
|
|
—
|
|
|
|
(1
|
)
|
|
Net cash provided by financing activities
|
|
|
1,781
|
|
|
|
11,200
|
|
|
Effect of exchange rate changes on cash
|
|
|
(9
|
)
|
|
|
(2
|
)
|
|
Net (decrease) increase in cash and cash equivalents
|
|
|
(1,297
|
)
|
|
|
7,777
|
|
|
Cash and cash equivalents at beginning of year
|
|
|
6,378
|
|
|
|
2,435
|
|
|
Cash and cash equivalents at end of year
|
|
$
|
5,081
|
|
|
$
|
10,212
|
|
|
EpiCept Corporation and Subsidiaries
|
|
(Unaudited)
|
|
Selected Consolidated Statement of Stockholders' Deficit Data
|
|
(in $000s)
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
Stockholders' deficit at beginning of year
|
|
$
|
(17,146
|
)
|
|
$
|
(14,135
|
)
|
|
|
|
|
|
|
|
Net loss for the period
|
|
|
(3,528
|
)
|
|
|
(2,466
|
)
|
|
Stock-based compensation expense
|
|
|
245
|
|
|
|
236
|
|
|
Foreign currency translation adjustment
|
|
|
(264
|
)
|
|
|
(531
|
)
|
|
Share and warrant issuance
|
|
|
1,833
|
|
|
|
10,873
|
|
|
Warrant amendment expense
|
|
|
935
|
|
|
|
—
|
|
|
Exercise of warrants
|
|
|
784
|
|
|
|
—
|
|
|
|
|
|
|
|
|
Stockholders' deficit at end of year
|
|
$
|
(17,141
|
)
|
|
$
|
(6,023
|
)
|
# # #
*Azixa is a registered trademark of Myrexis, Inc.
EPCT-GEN
EpiCept Corporation:
Robert W. Cook, 914-606-3500
rcook@epicept.com
or
Media:
Feinstein
Kean Healthcare
Greg Kelley, 617-577-8110
gregory.kelley@fkhealth.com
or
Investors:
LHA
Kim
Sutton Golodetz, 212-838-3777
kgolodetz@lhai.com
or
Bruce
Voss, 310-691-7100
bvoss@lhai.com
@LHA_IR_PR
Source: EpiCept Corporation
News Provided by Acquire Media
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