Pharmos Corporation Reports 2000 Results; Expanded R&D Supported by 55% Increase in Revenues
ISELIN, N.J., March 7 /PRNewswire/ -- Pharmos Corporation (Nasdaq: PARS - news; Easdaq: PHRM) today reported financial results for the year ended December 31, 2000. The Company reported a loss of $7,984,202, or $.15 per share, on revenues of $5,098,504, compared to a loss of $4,618,190, or $.11 per share, on revenues of $3,279,397 for the comparable period in 1999. The 55% revenue growth is attributable primarily to increased sales and market shares of Lotemax® and Alrex®. The 2000 net loss exceeded 1999 results due to higher expense levels in 2000, particularly in research & development, and a non-cash charge related to the Company's convertible debt financing completed in the third quarter of 2000. Excluding this non-cash charge, the net loss for the full year would have been approximately $6.2 million, or $0.12 per share.
``Pharmos has committed itself to complete the Phase III trial of dexanabinol in 2002 for traumatic brain injury, a major indication for which no effective treatment is available, and to file the NDA as soon as possible thereafter,'' said Haim Aviv, Pharmos Chairman and CEO. ``Based on the success of our first neuroprotective product in clinical trials, we are also investing the resources to more quickly develop new products from our growing library of additional cannabinoid compounds for stroke and other CNS and inflammatory conditions.''
In addition to the recent commencement of the pivotal trial for dexanabinol in traumatic brain injury (TBI), the year 2000 marked several significant scientific events for Pharmos. The Company successfully completed its Phase II trial for dexanabinol in TBI and presented the results at the annual meeting of the Congress of Neurological Surgeons. Pharmos presented results from its preclinical trial of dexanabinol in stroke at the Society for Neuroscience Annual Meeting and disclosed data from a preclinical trial of dexanabinol in Multiple Sclerosis, which had been published in the Journal of Neuroimmunology.
Research and development expenses in 2000 grew approximately 38% above those in 1999 due to increased expenditures related to the pivotal trial of dexanabinol for TBI and to increased activity in the Company's cannabinoid program to treat various CNS and inflammation-based conditions. General and administrative expenses for 2000 increased approximately 55% over 1999, primarily as a result of higher staffing and increased investor relations activity. Cost of goods in 2000 grew faster than product revenues as a result of higher expenses for product samples, higher LE product license expenses, and higher royalties on payments to BIRD-F in accordance with the terms of the agreement. Cash and cash equivalents, including restricted cash, were approximately $26.5 million as of December 31, 2000.
In addition to its pivotal trial of dexanabinol for TBI, Pharmos and its ophthalmic product line partner, Bausch & Lomb Pharmaceuticals, a division of Bausch & Lomb Incorporated, are conducting an advanced study of LE-T, a combination of the ophthalmic anti-inflammatory Lotemax with tobramycin, an anti-bacterial. The Company anticipates that the successful conclusion of this trial will permit an NDA filing this year. On approval, LE-T will compete in a combination market that is estimated at about $155 million in the US and comprises mostly post-surgical eye conditions.
2000 results were also affected by the application of Emerging Issues Task Force Issue No. 98-5, Accounting for Convertible Securities with Beneficial Conversion Features or Contingently adjustable Conversion ratios (EITF 98-5). EITF 98-5 requires that the Beneficial Conversion Feature be calculated and amortized from the date of closing of the agreement until the earliest date on which investors have the right to convert the debt into common shares. The BCF was computed at $1.8 million, all of which has been expensed in 2000. |
