SOUTH SAN FRANCISCO, Calif., Nov 8, 2001 /PRNewswire via COMTEX/ -- Pain Therapeutics, Inc. (Nasdaq: PTIE chart, msgs), a drug development company, today reported financial results for the three and nine months ended September 30, 2001.
Research and development expenses for the three months ended September 30, 2001 increased to $2.5 million from $2.1 million for the same period in 2000. This increase in research and development spending was driven by the achievement of clinical milestones and accelerated development of the Company's clinical program. In addition, Pain Therapeutics continues to expand its business operations as part of the overall growth of the Company, resulting in general and administrative expenses for the three months ended September 30, 2001 of $1.1 million compared to $0.8 million for the same period in 2000.
"We continue to make significant progress in accruing patients for our clinical trials and drug development efforts," commented Remi Barbier, Pain Therapeutics' president and chief executive officer. "We are also pleased that our novel drug candidates are increasingly being recognized by the scientific and clinical research communities as significant potential advances in pain management."
For the quarter ended September 30, 2001, the Company reported a net loss of $3.4 million, or $0.13 per share, compared to a net loss of $5.3 million, or $0.26 per share, in the third quarter of 2000. Net loss for the nine months ended September 30, 2001 was $8.6 million, or $0.35 per share, compared to a net loss of $14.6 million or $1.43 per share for the same period in 2000. The net loss for the nine months ended September 30, 2000 excludes a one-time non-cash charge (a "deemed dividend") of $14.2 million described below.
As of September 30, 2001, Pain Therapeutics had approximately $68.4 million of cash and cash equivalents.
Total operating costs and expenses for the three months ended September 30, 2001 were $4.0 million, compared with $6.3 million for the equivalent three-month period in 2000. Excluding non-cash charges (or credits) related to the amortization of deferred compensation associated with options granted to employees and non-employees of $0.4 million in the 2001 quarter and $3.4 million in the 2000 quarter, operating expenses were $3.6 million for the three months ended September 30, 2001 compared to $2.9 million for the same period in 2000.
Total operating costs and expenses for the nine months ended September 30, 2001 were $11.2 million, compared with $16.1 million for the equivalent nine-month period in 2000. Excluding non-cash charges related to the amortization of deferred compensation associated with options granted to employees and non-employees and restricted stock awards of $0.01 million in the 2001 period and $8.7 million in the 2000 period, operating expenses were $11.2 million for the nine months ended September 30, 2001 compared to $7.4 million for the same period in 2000.
Excluding non-cash compensation expenses, the increase in operating expense was primarily attributable to increased preclinical and clinical development related activities and the expansion of the organization and infrastructure to support the company's activities.
Additionally, the Board of Directors recently revised the Company's securities trading policy to permit the adoption of written predetermined plans for structured personal sales of Pain Therapeutics common stock by the Company's officers and directors. The plans, which will be put in place under Rule 10b5-1 of the Securities Exchange Act of 1934, will permit the Company's officers and directors to diversify a portion of their stock holdings in the Company by committing, in advance, to the times at which the securities will be sold, the amount of securities to be sold and the corresponding prices at which sales will take place. The Company anticipates that its officers and directors will engage in transactions pursuant to such plans and at other times permitted under the Company's securities trading policy and applicable securities laws.
About Deferred Compensation
Under accounting principles generally accepted in the United States of America, we record a non-cash charge for the amortization of "deferred compensation" within each reporting period. Deferred compensation largely refers to the difference between a stock option's fair market value and its exercise price. A portion of deferred compensation is re-measured each quarter using a Black-Scholes option pricing model. The model considers a number of factors, including the market price and the volatility of our common stock at the end of each quarter. As a result, the amount of compensation expense we record each quarter will fluctuate with the price of our common stock. In general, a higher stock price will result in a higher compensation expense, and vice-versa.
In the first quarter of 2000, the Company issued its series C redeemable convertible preferred stock for approximately $14.2 million, net of issuance costs, and determined that it was issued with a beneficial conversion feature. Proceeds allocated to the beneficial conversion feature of $14.2 million have been treated as a deemed dividend and recognized as a return to the series C preferred shareholders in arriving at the loss available to common shareholders for the nine months ended September 30, 2000. Loss available to common shareholders for the nine months ended September 30, 2000 was $28.8 million, or $2.82 per share.
About Opioid Painkillers
Opioid painkillers are a $3 billion market in the United States and account for about five percent of all drug prescriptions. Opioids are drugs derived from the poppy plant. The clinical use of opioids to treat severe pain is widely accepted throughout the world. Despite their widespread use, opioid drugs have debilitating effects that limit their usefulness at all doses. Chronic use may lead to tolerance, dependence, addiction or medical abuse. As a result, some patients prefer to suffer through pain rather than to endure the adverse effects of opioid drugs. Effective pain management is a growing and unmet need in the United States. For example, according to the National Institutes of Health, over 40 million Americans are unable to find relief from their pain.
About Pain Therapeutics, Inc.
Pain Therapeutics, Inc. is an emerging leader in the area of pain management. The Company is developing novel painkillers that address the deficiencies of oxycodone, morphine and other opioid painkillers that are widely used in clinical medicine. The Company is currently in Phase II clinical trials with several proprietary painkillers. Pain Therapeutics has headquarters in South San Francisco, California and is traded on NASDAQ under the symbol PTIE. For additional information, please visit the Company's web site at www.paintrials.com.
Note Regarding Forward-Looking Statements: This press release contains forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995 and it is Pain Therapeutics' intent that such statements be protected by the safe harbor created thereby. Examples of such statmited to, those risks and uncertainties relating to difficulties or delays in development, testing, regulatory approval, production and marketing of the Company's drug candidates, unexpected adverse side effects or inadequate therapeutic efficacy of the Company's drug candidates that could slow or prevent product approval or market acceptance (including the risk that current and past results of clinical trials are not necessarily indicative of future results of clinical trials), the uncertainty of patent protection for the Company's intellectual property or trade secrets and the Company's ability to obtain additional financing if necessary. For further information regarding these and other risks related to the Company's business, investors should consult the Company's filings with the Securities and Exchange Commission, including its Form 10-K for the year ended December 31, 2000 and its subsequent quarterly filings.
-Financial Tables Follow-
PAIN THERAPEUTICS, INC.
(A Development Stage Enterprise)
CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three months ended Nine months ended
September 30, September 30,
2001 2000 (1) 2001 2000 (1)
Operating expenses:
Research and development $2,469 $2,090 $8,032 $5,643
General and administrative 1,146 844 3,176 1,729
Stock compensation expense (2) 394 3,354 9 8,716
Total operating expenses 4,009 6,288 11,217 16,088
Operating loss (4,009) (6,288) (11,217) (16,088)
Other income:
Interest income 639 1,017 2,570 1,496
Net loss (3,370) (5,271) (8,647) (14,592)
Return to series C preferred
shareholders for beneficial
conversion feature -- -- -- (14,232)
Loss available to common
shareholders $(3,370) $(5,271) $(8,647) $(28,824)
Basic and diluted loss per share $(0.13) $(0.26) $(0.35) $(2.82)
Weighted-average shares used in
computing basic and diluted loss
per share (3) 25,619 19,906 25,028 10,207
ADDITIONAL INFORMATION
Amounts per share applicable to net loss, return to series C preferred shareholders and loss available to common shareholders are as follows:
Net loss $(0.13) $(0.26) $(0.35) $(1.43)
Return to series C preferred
shareholders for beneficial
conversion feature -- -- -- (1.39)
Loss available to common
shareholders $(0.13) $(0.26) $(0.35) $(2.82)
Weighted-average shares used in
computing basic and diluted loss
per share (3) 25,619 19,906 25,028 10,207
Notes:
1) Certain reclassifications have been made to the financial statements
to conform with the presentation at September 30, 2001.
2) Includes stock compensation expense (credit) attributable to:
(a) research and development of $141,000 and $2,199,000 for the three
months ended September 30, 2001 and 2000,
respectively and ($659,000) and $4,223,000 for the nine months
ended September 30, 2001 and 2000, respectively.
(b) general and administrative of $253,000 and $1,155,000 for the
three months ended September 30, 2001 and 2000,
respectively and $668,000 and $4,493,000 for the nine months
ended September 30, 2001 and 2000, respectively.
3) Includes: (a) the common shares issued as a result of the initial
public offering completed in July 2000, from the date such shares
began trading and (b) the Company's convertible preferred and
redeemable convertible preferred stock which converted into common
stock on a one to one basis upon the closing of such offering. The
computation does not consider other potentially dilutive securities,
consisting of shares issued and outstanding subject to the Company's
repurchase rights, shares issuable to holders of unexercised stock
options and outstanding warrants, as their effect is anti-dilutive.
PAIN THERAPEUTICS, INC.
(A Development Stage Enterprise)
BALANCE SHEET DATA
(in thousands)
(unaudited)
September 30, December 31,
2001 (1) 2000 (1)
Cash and cash equivalents $68,442 $78,927
Working capital 67,577 77,320
Total assets 71,470 81,147
Total stockholders' equity 70,084 78,695<<
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Cheers, Tuck |
