Essential Therapeutics Reports 1st Quarter 2002 Financial Results
WALTHAM, Mass., April 25 /PRNewswire-FirstCall/ -- Essential Therapeutics, Inc. (Nasdaq: ETRX - news) today announced financial results for the first quarter ended March 31, 2002. The consolidated financial results for the first quarter in 2002 include the results of operations of Maret Pharmaceuticals, Inc. (Maret) from March 11, 2002 onward as a result of the acquisition of Maret on that date.
Total revenues were $3.1 million in the first quarter of 2002 as compared to $2.7 million in the first quarter of 2001. The increase in total revenues was due primarily to increased research funding and a milestone payment from Schering-Plough Animal Health. The increase in revenues was partially offset by the conclusion of funded research with Pfizer and Daiichi at the end of the first quarter of 2001.
``With our acquisition of Maret Pharmaceuticals in the first quarter of 2002, we have made a significant step in accelerating our evolution into a product-focused company,'' commented Mark Skaletsky, Chairman, President and Chief Executive Officer. ``We expect to continue the development of our existing anti-infective programs while we advance our new clinical and pre-clinical programs in hematology and oncology.''
In connection with the acquisition of Maret, the Company recorded a non-recurring non-cash charge of $7.7 million for purchased in-process research and development in the first quarter of 2002.
Excluding this non-cash charge of $7.7 million, operating expenses increased from $5.2 million in the first quarter of 2001 to $7.7 million in the first quarter of 2002. This was primarily due to a $1.5 million increase in research and development expenses from $4.1 million in the first quarter of 2001 to $5.6 million in the first quarter of 2002, as well as a $1.1 million increase in general and administrative expenses from $1.1 million in the first quarter of 2001 to $2.2 million in the first quarter of 2002.
The increased research and development expenses reflect the first full quarter including the operations of The Althexis Company, Inc. (Althexis), which the Company acquired in October 2001, as well as the impact of including the operations of Maret from March 11, 2002 onward. Additionally, research and development expenses also slightly increased due to higher expenses for payroll and outside services, as well as rent expense increases and the termination of the facilities and support contract with Iconix in February 2002.
General and administrative expenses also increased due to the inclusion of the operations of Althexis and Maret in the first quarter of 2002. Additionally, general and administrative expenses slightly increased due to rent expense increases and the termination of the facilities and support contract with Iconix in February 2002.
Net loss allocable to common stockholders for the first quarter of 2002 was $12.5 million or $0.75 per share as compared to $2.4 million or $0.21 per share for the first quarter of 2001. The net loss allocable to common stockholders for the first quarter of 2002 includes the accretion of the discount associated with the beneficial conversion element of the preferred stock sold in the Company's $60.0 million private placement in October 2001.
At March 31, 2002, the Company's cash, cash equivalents and investments were $53.1 million.
About Essential Therapeutics
Essential Therapeutics is committed to the discovery and development of breakthrough biopharmaceutical products for the treatment of life-threatening diseases. With an emerging pipeline of lead programs and product candidates in the anti-infective and hematology/oncology therapy areas, Essential Therapeutics is dedicated to commercializing novel small molecule products addressing important unmet therapeutic needs. Additional information on Essential Therapeutics can be obtained at essentialtherapeutics.com.
The statements contained in this press release, which are not historical facts, may be deemed to contain forward-looking statements. Actual results may differ materially from those expressed or implied in any forward-looking statement as a result of certain risks and uncertainties. There is no assurance that the acquisitions of Althexis and Maret will result in any of the anticipated benefits therefrom. There is no assurance that any compounds discovered will successfully proceed through pre-clinical development and clinical trials, obtain requisite regulatory approvals for marketing or result in a commercially useful product. There is no assurance that Essential Therapeutics will successfully continue existing corporate collaborations or enter into further collaborations with respect to any of its internally funded research programs or that current collaborators will elect to proceed through the various stages of clinical development as currently anticipated or on the same schedule as the Company would proceed if the Company were conducting such trials independently. For a discussion of other risks and uncertainties affecting Essential Therapeutics' business, see the Company's Annual Report on Form 10-K for the year ended December 31, 2001. Actual results and timing of certain events could differ materially from those indicated in the forward-looking statements as a result of these or other factors.
Essential Therapeutics, Inc.
Condensed Statements of Operations and Balance Sheet Data
(unaudited)
(in thousands, except per share data)
Three Months Ended
March 31,
2002 2001
Revenues:
Research revenues $2,038 $1,770
Milestone, licensing and other revenues 1,067 892
Total revenues 3,105 2,662
Operating expenses:
Research and development 5,560 4,071
General and administrative 2,183 1,123
Purchased in-process research 7,702 ---
and development
Total operating expenses 15,445 5,194
Loss from operations (12,340) (2,532)
Interest and other income, net 254 171
Net loss
(12,086) (2,361)
Accretion of deemed dividend to
Series B preferred stockholders (425) ---
Net loss allocable to common
stockholders $(12,511) $(2,361)
Basic and diluted net loss per
common share $(0.75) $(0.21)
Weighted-average shares used in
computing basic and diluted net loss per 16,573 11,463
share
March 31,
2002
Cash, cash equivalents and investments
$53,079
Total assets 70,225
Notes payable - current and long-term 849
portions
Convertible redeemable preferred stock 52,200
Stockholders' equity 10,113
SOURCE: Essential Therapeutics, Inc. |
