Pharmos Corporation Reports 2011 Fourth Quarter and Full Year Results
ISELIN, N.J., Feb. 17, 2012 /PRNewswire/ — Pharmos Corporation (OTC-PINK: PARS) today reported financial results for the fourth quarter and twelve-month period ended December 31, 2011. These results are included in the Company’s Yearly Report on Form 10-K which has been filed with the SEC.
Fourth Quarter Ended December 31, 2011
The Company recorded a net loss of $0.4 million, or $0.01 per share, for the fourth quarter 2011 compared to a net loss of $0.2 million, or $0.00 per share, in the fourth quarter 2010.
During the quarter, the Company paid for some preliminary administrative costs to prepare for the start of a proof-of-concept trial in Gout patients using Levotofisopam in January of 2012. In connection with this trial the Company also incurred consulting fees and costs for the completion of a non-human primate toxicology study. The Company continued to spend for G&A on a conservative basis.
Gross research and development expenses were $198,992 compared to $117,771 in 2010. The Company received a $244,479 cash grant in 2010 under the Federal Qualifying Therapeutic Discovery Project related to the Dextofisopam program and this was shown as a credit to gross R&D in 2010, resulting in a net R&D credit of $126,708. The majority of the increased spending in 2011 was for clinical study fees as the Company paid for preliminary administrative fees for the proof-of-concept Gout trial that commenced in January of 2012 at Duke University.
General and administrative expenses for the fourth quarter of 2011 decreased by $44,409, or 18%, from $251,593 in 2010 to $207,184 in 2011. The primary reductions were a $26,000 reduction in salaries and benefits and an $18,000 reduction in various other areas. The decrease in payroll costs in 2011 reflects lower stock compensation costs and the elimination of an administrative position in 2010. There was also a reduction of various facility related expenses.
At December 31, 2011, the Company had approximately $1.5 million in cash and cash equivalents which is expected to be sufficient to fund current operations, through at least June of 2012 including the Gout trial.
Twelve-months Ended December 31, 2011
For the twelve months ended December 31, 2011, Pharmos recorded a net loss of $2.0 million, or $0.03 per share compared to a net loss of $1.5 million, or $0.03 per share for the twelve months ended December 31, 2010.
During the year, the Company conducted work in preparation for initiating a proof-of-concept trial in Gout patients using Levotofisopam and also incurred costs related to manufacturing capsules needed for this trial. Additionally, costs were incurred related to conducting a non-human primate toxicology study. At the end of 2011, the Company paid for some preliminary administrative costs for the start of the Gout trial in 2012. On a G&A basis the Company was able to reduce the overall spending in comparison to 2010.
Net Research & development (R&D) expenses increased by $617,136 or 244% from $253,456 in 2010 to $870,592 in 2011 due to the addition of research and development activities on a proof-of-concept trial in Gout patients using Levotofisopam. The increase was reflected in virtually every research and development category. The primary additions include an $112,000 increase in professional fees and consulting and a $355,000 increase in clinical fees which was offset by a reduction of $94,000 in various facility related expenses. The Company received a $244,000 cash grant in 2010 under the Federal Qualifying Therapeutic Discovery Project for work completed on Dextofisopam in 2009. 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 in the first half of the year. Clinical study fees increased due to costs related to manufacturing capsules needed for this trial, costs related to conducting a non-human primate toxicology study and preliminary administrative startup trial costs for the trial that began in the first quarter of 2012. These increases were offset by a reduction of various facility related expenses as the Company continued to reduce overall facility costs.
General and administrative expenses decreased by $181,788 or 15%, from $1,187,335 in 2010 to $1,005,548 in 2011. The decrease in general and administrative expenses is due to a reduction in every expense category. Significant reductions occurred in salaries and benefits of $77,000, professional & consulting fees of $55,000 and facility related expenses of $50,000 when comparing 2011 to 2010. The decrease in payroll costs in 2011 reflects lower stock compensation costs and the elimination of an administrative position in 2010. Accounting fees have decreased as there were higher accounting fees related to the filing of a Registration 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 the facility related expenses were a reduction of various facility related expenses as the Company continued to reduce overall facility costs.
About Pharmos Corporation
Pharmos discovers and develops novel therapeutics to treat a range of metabolic and nervous system disorders, including gout, disorders of the brain-gut axis (e.g., Irritable Bowel Syndrome), pain/inflammation, and autoimmune disorders. The Company’s lead products are the two enantiomers of tofisopam. S-tofisopam (levotofisopam) is being investigated for the treatment of gout under a US IND. 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 as well as for Levotofisopam after the current gout trial. The Company also has a proprietary technology platform centering 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.
PHARMOS CORPORATION Consolidated Statements of Operations Three months ended Twelve months ended December 31, December 31, ------------ ------------ 2011 2010 2011 2010 ---- ---- ---- ---- Expenses Research and development $198,992 $117,771 $870,592 $497,935 Grants - (244,479) - (244,479) --- -------- --- -------- Research and development, net 198,992 (126,708) 870,592 253,456 General and administrative 207,184 251,593 1,005,548 1,187,335 Depreciation and amortization 664 538 2,720 1,551 --- --- ----- ----- Total operating expenses 406,840 125,423 1,878,860 1,442,342 ------- ------- --------- --------- Loss from operations (406,840) (125,423) (1,878,860) (1,442,342) -------- -------- ---------- ---------- Other (expense) income Interest income 45 313 253 1,520 Interest expense (25,000) (26,977) (102,789) (110,744) Other income (expense) 2,420 - 2,420 5,822 ----- --- ----- ----- Other expense, net (22,535) (26,664) (100,116) (103,402) ------- ------- -------- -------- Net loss ($429,375) ($152,087) ($1,978,976) ($1,545,744) ========= ========= =========== =========== Net income (loss) per share -basic and diluted ($0.01) $0.00 ($0.03) ($0.03) ====== ===== ====== ====== Weighted average shares outstanding -basic and diluted 59,392,314 58,798,196 59,195,445 58,529,204 ========== ========== ========== ==========
Select Consolidated Balance Sheet Data December 31, 2011 December 31, 2010 ----------------- ----------------- Cash and short-term investments $1,535,137 $3,139,347 Working capital $296,654 $3,015,068 Shareholder's equity $301,147 $2,020,681
SOURCE Pharmos Corporation