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Pro-Pharmaceuticals Reports Fourth Quarter and Full Year 2006 Financial Results

Posted on: Monday, 2 April 2007, 18:00 CDT

Pro-Pharmaceuticals, Inc. (Amex: PRW), a developer of first-in-class carbohydrate-based therapeutic compounds, today reported its fourth quarter and full year 2006 financial results, ended December 31, 2006. The Company's Annual Report on Form 10-K was filed with the Securities and Exchange Commission today.

For the fourth quarter of 2006, the Company reported a net loss of $768,000, or $(0.03) per share, compared with, as restated, a net loss of $2,271,000, or $(0.08) per share, for the same period in 2005. For the full year 2006, the Company reported a net loss of $3,193,000, or $(0.11) per share, compared with a restated net loss of $6,855,000, or $(0.25) per share, for the 2005 fiscal year.

"We continue to make progress towards our goal to develop and commercialize our proprietary carbohydrate-based therapeutic compounds," said David Platt, Ph.D., Chief Executive Officer, Pro-Pharmaceuticals. "We successfully completed a Phase Il colorectal cancer trial of our lead compound, DAVANAT® in combination with 5-FU, a widely used, FDA-approved chemotherapy agent. We have two ongoing Phase ll trials for the first-line treatment of colorectal cancer and bile duct cancer. We continue to develop and expand our product pipeline. Pharmaceutical companies continue to evaluate our technology for use with their chemotherapeutic agents. The need to improve drug therapies, particularly anti-cancer agents, is significant and represents a large market opportunity."

At December 31, 2006, the Company had cash and cash equivalents and a certificate of deposit totalling approximately $5.8 million. The Company believes it has adequate cash to fund its operations through at least June 2007. Since we do not have sufficent cash to fund operations for at least 12 months, the report of our independent registered accounting firm includes an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The Company plans to obtain adequate financing to fund its development activities and to achieve a level of revenues to support its costs structure. The Company may raise such capital through equity financings, collaborations with pharmaceutical companies, or through other sources. There are no assurances, however, that the Company will be able to obtain additional financing on favorable terms, or at all, or successfully market its products.

Research and development expense for the full year 2006 was $3,019,000, compared with $3,040,000 for 2005. Changes in R&D expense consisted primarily of a shift from Phase l and Phase ll end-stage clinical trials to two Phase ll, first line, clinical trials. A decrease in product manufacturing costs was offset by higher payroll costs associated with the addition of our chief scientist and clinical trials director, as well as the expensing of stock options required by the adoption of SFAS 123(R). General and Administrative expense for the full year 2006 was $4,029,000, or a 12% increase, compared with $3,615,000 incurred during 2005. The increase was due principally to expenses associated with our convertible debenture financing and the expensing of stock options as required by SFAS 123(R), offset in part by lower legal expense.

Fourth Quarter Business Highlights:

Began dosing patients in a Phase ll, first-line, colorectal cancer clinical trial.

James T. Gourzis, M.D., Ph.D., was appointed to the Board of Directors.

Signed an agreement with the Central European Society for Anti-Cancer Drug Research to recruit biliary cancer patients in Germany.

Annual Shareholders Meeting

The Company's Annual Meeting of Shareholders is scheduled to be held on May 24th at the Sheraton-Needham Hotel in Needham, Massachusetts.

About DAVANAT®

DAVANAT®, the Company's lead drug candidate, is a polysaccharide (carbohydrate polymer) composed of mannose and galactose (galactomannan). The Company believes DAVANAT®'s mechanism of action is based upon binding to lectins on the cell surface. It is theorized that DAVANAT® targets specific lectin receptors (Galectins) that are over-expressed on cancer cells. Current research indicates that Galectins affect cell development and play important roles in cancer, including tumor cell survival, angiogenesis and tumor metastasis. This form of targeted delivery may allow for higher doses of chemotherapy administration with no increase in toxicity.

Product Pipeline

DAVANAT® is a target delivery technology that may enhance the safety and efficacy profile of a number of FDA-approved chemotherapy drugs. The Company continues to develop and expand its pipeline of drug candidates using DAVANAT® and 5-FU in combination with other chemotherapeutics and biologics, such as irinotecan, leucovorin and AVASTIN®. The Company is using its carbohydrate technology to develop novel liver anti-fibrosis drugs through a research collaboration with Mount Sinai School of Medicine. The Company also is developing new chemical entities based on anti-fungal drugs and statin molecules.

Pro-Pharmaceuticals, Inc. -- Advancing Drugs Through Glycoscience®

Pro-Pharmaceuticals is a development stage pharmaceutical company engaged in the discovery, development and commercialization of carbohydrate-based therapeutic compounds for advanced treatment of cancer, liver, microbial, cardiovascular and inflammatory diseases. The Company's initial focus is the development and commercialization of a new generation of anti-cancer treatments using carbohydrate polymers with the intent of enhancing the safety and efficacy of standard cancer agents. The Company's technology capitalizes on the natural property of carbohydrates to increase the efficacy and reduce the toxicity of chemotherapeutics; "rescue" drugs that were shelved for toxicity or "half-life" issues; increase the solubility of existing drugs, and develop carbohydrate polymers as new chemical entities. The Company has been conducting clinical and pre-clinical studies with its lead compound, DAVANAT®, in combination with 5-FU, leucovorin, irinotecan, doxorubicin, oxaliplatin, paclitaxel, cisplatin, and bevacizumab (Avastin®). Results show that DAVANAT® exhibits a broad spectrum of activity with tested drugs. The Company is developing additional carbohydrate-based therapeutic compounds that are currently in the pre-clinical stage of development. Founded in 2000, the Company is headquartered in Newton, Mass. Additional information is available at www.pro-pharmaceuticals.com.

FORWARD LOOKING STATEMENTS: Any statements in this news release about future expectations, plans and prospects for the Company, including without limitation statements containing the words "believes,""anticipates,""plans,""expects," and similar expressions, constitute forward-looking statements as defined in the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and are subject to a number of factors and uncertainties, which could cause actual results to differ materially from those described in such statements. We caution investors that actual results or business conditions may differ materially from those projected or suggested in forward-looking statements as a result of various factors including, but not limited to, the following: uncertainties as to the utility and market for our potential products; uncertainties associated with pre-clinical and clinical trials of our product candidates; our limited experience in product development and expected dependence on potential licensees and collaborators for commercial manufacturing, sales, distribution and marketing of our potential products; possible development by competitors of competing products and technologies; lack of assurance regarding patent and other protection of our proprietary technology; compliance with and change of government regulation of our activities, facilities and personnel; uncertainties as to the extent of reimbursement for our potential products by government and private health insurers; our dependence on key personnel; our history of operating losses and accumulated deficit; and economic conditions related to the biotechnology and bio-pharmaceutical industry. We cannot assure you that we have identified all the factors that create uncertainties. Readers should not place undue reliance on forward-looking statements.

More information about those risks and uncertainties is contained and discussed in the "Management Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections of the Company's most recent quarterly or annual report and in the Company's other reports filed with the Securities and Exchange Commission. The forward-looking statements represent the Company's views as of the date of this news release and should not be relied upon to represent the Company's views as of a subsequent date. While the Company anticipates that subsequent events may cause the Company's views to change, the Company disclaims any obligation to update such forward-looking statements.

Source: Business Wire

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