Sheffield Pharmaceuticals, Inc. Reports Results for the Third Quarter And First Nine Months of 2002; Completes Unsecured Debt Financing With Elan
Thursday November 14, 5:34 pm ET
ST. LOUIS, Nov. 14 /PRNewswire-FirstCall/ -- Sheffield Pharmaceuticals, Inc. (Amex: SHM - News) today announced its financial results for the third quarter and first nine months of 2002. The Company reported a net loss of $1.9 million, or $0.06 per share, for the third quarter of 2002 compared to a net loss of $3.1 million, or $0.11 per share, for the third quarter of 2001. The net loss for the first nine months of 2002 was $9.4 million, or $0.32 per share, compared to a net loss of $8.0 million, or $0.28 per share for the same period last year. At September 30, 2002, total assets were $1.8 million, of which $0.3 million were cash and cash equivalents. The Company's long-term debt was $11.5 million.
The decreased net loss of $1.2 million for the third quarter of 2002 primarily resulted from lower Premaire® development costs associated with finalizing the to-be-marketed device in December 2001 as well as reduced formulation work on the Premaire® budesonide product, lower design and development costs associated with finalizing the industrialization of the Tempo(TM) Inhaler in the third quarter of 2002 for Phase I and II trials, and higher third quarter 2001 development expenses reflecting preparation of a Phase I trial of the Company's unit-dose budesonide product that was completed in the first quarter 2002. In addition, the decreased net loss between periods was due to lower general and administrative expenses reflecting cost reduction efforts implemented during the third quarter of 2002.
The increased net loss of $1.4 million for the first nine months of 2002 primarily resulted from higher general and administrative expenses due to expanded business development activities in the areas of licensing and partnering of the Company's development products, activities related to potential acquisitions of complementary pulmonary delivery technologies and companies and potential combinations, as well as costs associated with the departure of certain executive officers, partially offset by cost reduction efforts implemented in the third quarter of 2002. The increased net loss also reflects higher development costs related to formulation work on the Tempo(TM) DHE product, partially offset by lower development expenses related to the Company's unit-dose budesonide product and certain Tempo(TM) respiratory products, and lower design and development costs associated with industrialization of the Tempo(TM) Inhaler. In addition, the higher net loss is due to increased interest expense reflecting higher average borrowing levels in 2002 as compared to 2001.
On November 8, 2002, Sheffield received proceeds of $.5 million provided under an agreement between the Company and Elan Pharma International Ltd., an affiliate of Elan Corporation, plc. The borrowing under the agreement is evidenced by a $.5 million unsecured demand promissory note that provides for a fixed interest rate of 10% per annum, compounded semi-annually. Also, the parties terminated the 1999 license agreement for the Elan NanoCrystal technology made between Elan and Respiratory Steroid Delivery, Ltd. ("RSD"), an 80% owned subsidiary of the Company. As provided in the 1999 license agreement, upon termination of this license, all intellectual property of RSD was transferred to and jointly owned by Elan and Sheffield.
As of November 14, 2002, the Company had cash and equivalents of approximately $.7 million and accounts payable and accrued liabilities of $2.9 million. Unless the Company is able to raise significant capital ($1 million to $2.5 million) within the next 60 days, management believes that it is unlikely that the Company will be able to meet its obligations as they become due and to continue as a going concern. To meet this capital requirement, the Company is evaluating various financing alternatives including private offerings of the Company's securities, other debt financings, collaboration and licensing arrangements with other companies, and the sale of non-strategic assets and/or technologies to third parties. Should the Company be unable to meet its capital requirement through one or more of the above-mentioned financing alternatives, the Company may file for bankruptcy or similar protection under the 1978 Bankruptcy Code.
Sheffield Pharmaceuticals, Inc. provides innovative, cost-effective pharmaceutical therapies by combining state-of-the-art pulmonary drug delivery technologies with existing and emerging therapeutic agents. Sheffield is developing a range of products to treat respiratory and systemic diseases using pressurized metered dose, solution-based and dry powder inhaler and formulation technologies, including its proprietary Premaire® Delivery System and Tempo(TM) Inhaler. Sheffield focuses on improving clinical outcomes with patient-friendly alternatives to inconvenient or sub-optimal methods of drug administration. Investors can learn more about Sheffield Pharmaceuticals on its Web site at www.sheffieldpharm.com |
