Advanced Life Sciences Announces Fourth Quarter and Full Year 2006 Results
WOODRIDGE, Ill., March 21 /PRNewswire-FirstCall/ — Advanced Life Sciences Holdings, Inc. , a biopharmaceutical company engaged in the discovery, development and commercialization of novel drugs in the therapeutic areas of infection, cancer and inflammation, today announced its financial results for the fourth quarter and full year ended December 31, 2006.
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The net loss allocable to common shareholders for the three months ended December 31, 2006 was $5.9 million or ($.21) per share compared to a net loss allocable to common shareholders of $2.6 million or ($.15) per share for the three months ended December 31, 2005. The net loss allocable to common shareholders for the full year 2006 was $20.7 million or ($.78) per share compared to a net loss allocable to common shareholders of $6.6 million or ($.49) per share for 2005. The increase in the net loss for both periods is due to increasing costs involved in the ongoing clinical development of the Company’s lead compound cethromycin.
“During 2006, Advanced Life Sciences initiated 200 clinical sites in 16 countries and made substantial progress in the enrollment of our two phase III clinical trials for cethromycin in community acquired pneumonia (CAP),” said Michael T. Flavin, Ph.D., chairman and chief executive officer of the Company. “In addition, during this past year, we set the stage for a timely and robust NDA submission and commercial partnership negotiations to insure a successful market launch of cethromycin. The competitive landscape has narrowed due to patent expirations and regulatory changes, creating an increased market opportunity for cethromycin.”
“We are looking forward to the achievement of key clinical and commercial milestones in 2007,” continued Dr. Flavin. “In conjunction with this we are pleased to announce the completion of enrollment for one of our two pivotal phase III clinical trials and we expect enrollment in our second trial to finish in the near future.”
The Company ended 2006 with cash, cash equivalents and investments totaling approximately $27.1 million. Cash used was $5.0 million in the fourth quarter and $21.8 million for the full year period.
Operating Expense Analysis 2006 versus 2005: — Research and development expense. Total research and development expense increased $14.1 million to approximately $17.2 million for the twelve months ended December 31, 2006 from approximately $3.1 million for the twelve months ended December 31, 2005. The increase in R&D expense is related to ongoing clinical trials associated with the Company’s lead product cethromycin. — General and administrative expense. General and administrative expense increased $2.2 million to $5.5 million for the twelve months ended December 31, 2006. Incremental costs as we operated as a public company for a full year totaled $1.7 million, representing an increase of $1.1 million over the previous year. Marketing expenses totaled $557,000, an increase of $487,000 over the previous year, which was the result of an expanded presence at key scientific conferences held throughout 2006. The remaining increase of $613,000 was primarily attributable to overall expenses of additional personnel hired throughout the year as well as higher patent protection costs for our proprietary portfolio of compounds. Fourth Quarter Expense Analysis 2006 versus 2005: — Research and development expense. Total research and development expense increased $4.1 million to approximately $5.6 million for the three months ended December 31, 2006 from approximately $1.5 million for the three months ended December 31, 2005. The increase in R&D expense is related to ongoing clinical trials associated with the Company’s lead product cethromycin. — General and administrative expense. General and administrative expense increased $0.3 million to $1.5 million for the three months ended December 31, 2006 from approximately $1.2 million for the three months ended December 31, 2005. This increase is mainly due to increased personnel costs and increased costs associated with operating as a public company. Operational and Financial Highlights:
Advanced Life Sciences is developing cethromycin, a novel once-a-day ketolide antibiotic, in response to the emerging antibiotic resistance observed in the treatment of community acquired pneumonia (CAP). Cethromycin has previously been tested in approximately 4,400 human subjects during clinical trials, and the Company has initiated pivotal phase III clinical trials for the treatment of mild-to-moderate CAP.
Advanced Life Sciences accomplished the following milestones in the first quarter of 2007:
— Completed enrollment of approximately 500 patients in cethromycin Phase III pivotal trial CL-06 in Europe, Israel and South America — Initiated a formal competitive process with prospective commercial partners to assist in the sales and marketing activities associated with cethromycin — Received FDA Orphan Drug designation for the use of cethromycin in the prophylactic treatment of patients exposed to inhalation anthrax — Completed successful non-human primate pharmacokinetic studies to support cethromycin dosing selection in inhalation anthrax — Completed dosing portion of anthrax efficacy study under FDA’s animal rule comparing cethromycin to ciprofloxacin and placebo — Successfully manufactured batches of cethromycin active pharmaceutical ingredient and final dosage form at scale to support the CMC section of the NDA submission — Engaged key expert advisors and Octagon Research as resources in the anticipated NDA submission for cethromycin — Continued preparation of ALS-357 clinical supplies and began to identify clinical trial sites for our Phase I/II in-transit metastatic melanoma trial. Advanced Life Sciences completed the following activities in 2006: Cethromycin Milestones- — Initiated 200 clinical sites in 16 countries and enrolled patients in two pivotal phase III clinical trials with cethromycin in CAP — Hosted an infectious disease and hepatology expert panel call and webcast series to discuss antimicrobial drug development — Began investigating the use of cethromycin in the prophylactic treatment of inhalation anthrax in non-human primates — Sponsored a satellite symposium on CAP treatment options and presented data on cethromycin in CAP, bronchitis and anthrax in five posters and one oral presentation at the 46th Interscience Conference on Antimicrobial Agents and Chemotherapy (ICAAC) — Presented key clinical data in sinusitis in two posters which were selected for an oral summary presentation at the 44th Annual Infectious Disease Society of America (IDSA) conference — Engaged DSM and Cardinal Health as manufacturing partners for cethromycin. Corporate and Scientific Milestones- — Elected Theron (Ted) Odlaug, Ph.D., a pharmaceutical industry veteran with extensive commercial and regulatory experience, to our board of directors — Completed the sale of our interest in the HIV drug Calanolide A to the government of Sarawak, Malaysia — Raised gross proceeds of $36 million in our March, 2006 equity offering — Presented data on the ALS-357/melanoma analogue program at the 232nd American Chemical Society National Meeting. 2007 Operational and Financial Guidance:
The Company anticipates the following upcoming milestones in the clinical and commercial development of cethromycin:
— Release of top-line data from cethromycin pivotal phase III CAP clinical program in June of 2007 — Complete a partnership agreement with a commercial partner to support the launch and sales of cethromycin — Report top-line efficacy data from prophylactic treatment of anthrax post-exposure in primate study in the second quarter of 2007 — Submit a new drug application (NDA) for cethromycin in CAP.
Advanced Life Sciences anticipates cash requirements of $15.0 million for first half 2007 operating activities.
With the current cash on hand, we believe we have sufficient financial resources to complete the cethromycin clinical trial program during the first half of 2007. In order to fund our post-NDA cethromycin development costs, we intend to consummate a commercial partnership in the second half of 2007 to support marketing, commercialization and general corporate activities.
Conference Call Details:
Advanced Life Sciences will host a conference call and live webcast at 10:00 a.m. Eastern Time on Thursday, March 22, 2007 to discuss the Company’s fourth quarter financial results.
The conference call will be webcast simultaneously over the Internet. Please visit the Investor Relations section of Advanced Life Sciences’ corporate website at http://www.advancedlifesciences.com/ . Alternatively, callers may participate in the conference call by dialing 866-356-3377 (domestic) or 617-597-5392 (international). The passcode for the conference call is 35320290. A replay of the conference call will be available until April 22, 2007. Callers may access the telephone replay by dialing 888-286-8010 (domestic) or 617-801-6888 (international), passcode 70415045.
About Advanced Life Sciences
Advanced Life Sciences is a biopharmaceutical company engaged in the discovery, development and commercialization of novel drugs in the therapeutic areas of infection, cancer and inflammation. The Company’s lead candidate, cethromycin, is a novel once-a-day ketolide antibiotic in late-stage clinical development for the treatment of respiratory tract infections including CAP.
Forward-Looking Statements
Any statements contained in this press release that relate to future plans, events or performance are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward- looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include, among others, those relating to technology and product development, market acceptance, government regulation and regulatory approval processes, intellectual property rights and litigation, dependence on collaborative relationships, ability to obtain financing, competitive products, industry trends and other risks identified in Advanced Life Sciences’ filings with the Securities and Exchange Commission. Advanced Life Sciences undertakes no obligation to update or alter these forward-looking statements as a result of new information, future events or otherwise.
ADVANCED LIFE SCIENCES HOLDINGS, INC. AND SUBSIDIARY (A Development Stage Company) Year Ended December 31, CONSOLIDATED BALANCE SHEETS 2006 2005 ASSETS CURRENT ASSETS: Cash and cash equivalents $27,054,947 $4,749,932 Investments – available for sale – 10,475,000 Accounts receivable – related party – 6,160 Prepaid insurance 380,083 362,241 Prepaid clinical trial expenses 2,364,512 4,500 Other prepaid expenses and deposits 273,572 113,763 Total current assets 30,073,114 15,711,596 PROPERTY AND EQUIPMENT: Furniture and fixtures 250,308 147,275 Laboratory equipment 142,928 142,928 Computer software and equipment 231,022 187,771 Leasehold improvements 182,839 40,646 Total property and equipment – at cost 807,097 518,620 Less accumulated depreciation (398,486) (267,372) Property and equipment – net 408,611 251,248 OTHER LONG-TERM ASSETS: Deferred financing costs 26,502 53,004 Other assets 1,452 6,062 Total other long-term assets 27,954 59,066 TOTAL ASSETS $30,509,679 $16,021,910 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $1,011,396 $294,816 Accrued clinical trial expenses 1,410,894 83,186 Other accrued expenses 226,881 157,575 Accrued interest payable 22,756 5,334 Short-term lease payable 19,437 14,114 Short-term grant payable 476,708 – Short-term notes payable – related party 2,000,000 – Total current liabilities 5,168,072 555,025 Long-term lease payable 20,076 13,166 Accrued interest payable – related party – 765,514 Long-term grant payable 23,292 500,000 Notes payable – net of $11,266 debt discount December 31, 2006 & $22,532 December 31, 2005 3,903,734 3,892,468 Long-term notes payable – related party – 2,000,000 Total liabilities 9,115,174 7,726,173 COMMITMENTS AND CONTINGENCIES: MINORITY INTEREST – – STOCKHOLDERS’ EQUITY: Common stock, $0.01 par value – 60,000,000 shares authorized; December 31, 2006 28,282,677 issued and outstanding; December 31, 2005 17,990,322 shares issued and outstanding; 282,827 179,903 Additional paid-in capital 88,370,853 54,834,373 Deficit accumulated during the development stage (67,259,175) (46,718,539) Total stockholders’ equity 21,394,505 8,295,737 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $30,509,679 $16,021,910 ADVANCED LIFE SCIENCES HOLDINGS, INC. AND SUBSIDIARY (A Development Stage Company) CONSOLIDATED STATEMENTS OF OPERATIONS Three months ended Twelve months ended December 31, December 31, 2006 2005 2006 2005 Revenue: Management fees $- $8,358 $- $61,239 Grant 4,661 60,212 39,788 60,212 Royalty – related party – – – – Total revenue and income 4,661 68,570 39,788 121,451 Expenses: Research and development 5,632,428 1,516,867 17,202,113 3,121,616 Contracted research and development – related party – – – – Selling, general and administrative 1,479,881 1,159,751 5,457,395 3,237,997 Total expenses 7,112,309 2,676,618 22,659,508 6,359,613 Loss from operations (7,107,648) (2,608,048) (22,619,720) (6,238,162) Other (income) expense: Interest Income (384,483) (174,504) (1,651,916) (272,216) Interest expense 118,358 138,126 511,884 478,300 Gain on sale of interest in Sarawak-MediChem Pharmaceuticals Joint Venture (939,052) – (939,052) – Net other (income) expense (1,205,177) (36,378) (2,079,084) 206,084 Net loss (5,902,471) (2,571,670) (20,540,636) (6,444,246) Less accumulated preferred dividends for the period 43,750 43,750 175,000 175,000 Net loss allocable to common shareholders $(5,946,221) $(2,615,420) $(20,715,636) $(6,619,246) Basic and diluted net loss per share available to common shareholders $(0.21) $(0.15) $(0.78) $(0.49) Weighted average number common shares outstanding – basic and diluted 28,280,651 17,990,322 26,546,785 13,610,694
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Advanced Life Sciences Holdings, Inc.
CONTACT: Edward P. Flavin of Advanced Life Sciences Holdings, Inc.,+1-630-739-6744
Web site: http://www.advancedlifesciences.com/