Pharmos Corporation Reports 2010 Third Quarter Results
Iselin NJ, October 27, 2010 – Pharmos Corporation (OTCBB: PARS.PK) today reported financial results for the third quarter and nine-month period ended September 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 isomer of racemic tofisopam, in several indications in which it has shown signals of activity in prior clinical trials or preclinical models.
Third Quarter Ended September 30, 2010
The Company recorded a net loss of $0.5 million, or $0.01 per share, for the third quarter 2010 compared to a net loss of $1.4 million, or $0.03 per share, in the third quarter 2009. Total operating expenses decreased 68% to $0.5 million from $1.4 million. The Company believes that the current cash and cash equivalents, totaling $3.2 million as of September 30, 2010, will be sufficient to support our currently planned continuing operations through at least December 31, 2011.
Research & development expenses decreased by $893,454 from $1,047,260 in 2009 to $153,806 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 third quarter of 2010 decreased by $46,384 from $342,320 in 2009 to $295,936 in 2010. The primary reductions are in consultant and professional fees, various facility related expenses and salaries and benefits offset by a reduction of an accrued marketing expense that was not paid in 2009.
Nine-months Ended September 30, 2010
For the nine months ended September 30, 2010, Pharmos recorded a net loss of $1.4 million, or $0.02 per share compared to a net loss of $7.3 million, or $0.17 per share for the nine months ended September 30, 2009. Total operating expenses decreased 80% to $1.3 million from $6.6 million.
Research & development expenses decreased by $3,886,173 from $4,266,337 in 2009 to $380,164 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 nine months 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. 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 nine months of 2010 decreased by $166,123, or 15%, from $1,101,865 in 2009 to $935,742 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. Also an increase was incurred by a reduction of an accrued marketing expense that was not paid in 2009.
Other expense net, decreased by $715,036 from $791,774 in other expense in 2009 to $76,738 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 $112,770 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.
Contacts
Pharmos U.S.
S. Colin Neill, President & CFO
(732) 452-9556
PHARMOS CORPORATION
Condensed Consolidated Statements of Operations
Three months ended
------------------
September 30,
-------------
2010 2009
---- ----
Expenses
Research and
development $153,806 $1,047,260
In-process research &
development Vela
milestone - -
General and
administrative 295,936 342,320
Depreciation and
amortization 363 2,030
Total operating
expenses 450,105 1,391,610
------- ---------
Loss from operations (450,105) (1,391,610)
-------- ----------
Other (expense) income
Debt conversion
expense - -
Interest income 578 776
Interest expense (27,464) (29,607)
Other income (expense) 6,690 3,134
----- -----
Other expense, net (20,196) (25,697)
------- -------
Net loss $(470,301) $(1,417,307)
========= ===========
Net loss per share
- basic and diluted ($0.01) ($0.03)
====== ======
Weighted average
shares outstanding
- basic and diluted 58,699,219 56,064,340
========== ==========
Nine months ended
-----------------
September 30,
-------------
2010 2009
---- ----
Expenses
Research and
development $380,164 $4,266,337
In-process research &
development Vela
milestone - 1,180,000
General and
administrative 935,742 1,101,865
Depreciation and
amortization 1,013 6,283
Total operating
expenses 1,316,919 6,554,485
--------- ---------
Loss from operations (1,316,919) (6,554,485)
---------- ----------
Other (expense) income
Debt conversion
expense - (596,104)
Interest income 1,207 8,149
Interest expense (83,767) (196,537)
Other income (expense) 5,822 (7,282)
----- ------
Other expense, net (76,738) (791,774)
------- --------
Net loss $(1,393,657) $(7,346,259)
=========== ===========
Net loss per share
- basic and diluted ($0.02) ($0.17)
====== ======
Weighted average
shares outstanding
- basic and diluted 58,438,554 44,100,019
========== ==========
Select Consolidated Balance Sheet Data
September 30, December 31,
2010 2009
-------------- -------------
Cash and short-term investments $3,219,908 $4,629,486
Working capital $3,102,634 $4,238,033
Shareholder's equity $2,129,331 $3,271,891