>>SOUTH SAN FRANCISCO, Calif., Aug. 9 /PRNewswire/ -- Pain Therapeutics, Inc. (Nasdaq: PTIE - news), a developer of novel opioid painkillers, today reported financial results for the three and six months ended June 30, 2001.
For the quarter ended June 30, 2001, the Company reported a net loss of $3.1 million, or $0.12 per share, compared to a net loss of $3.5 million, or $0.62 per share, in the second quarter of 2000. Net loss for the six months ended June 30, 2001 was $5.3 million, or $0.21 per share, compared to a net loss of $9.3 million, or $1.64 per share, for the same period in 2000. The net loss for the six months ended June 30, 2000 excludes a one-time non-cash charge (a ``deemed dividend'') of $14.2 million described below. At June 30, 2001, cash and cash equivalents totaled approximately $71.6 million.
``We are aggressively accelerating development of our clinical pipeline and continue to meet our goals,'' said Remi Barbier, the Company's president and chief executive officer. ``We expect to announce additional Phase II clinical trial results for PTI-555, our proprietary morphine product, in the third quarter. We also plan to initiate important clinical trials with PTI-801, our proprietary version of oxycodone, by the end of 2001. While we continue to execute on our pipeline goals and build the Company, we are also maintaining tight discipline over our cash burn.''
Total operating costs and expenses for the three months ended June 30, 2001 were $3.9 million compared with $3.7 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 ($0.1 million) in the 2001 quarter and $1.5 million in the 2000 quarter, operating expenses were $4.0 million for the three months ended June 30, 2001 compared to $2.2 million for the same period in 2000.
Total operating costs and expenses for the six months ended June 30, 2001 were $7.2 million compared with $9.8 million for the equivalent six-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 and restricted stock awards of ($0.4 million) in the 2001 period and $5.4 million in the 2000 period, operating expenses were $7.6 million for the six months ended June 30, 2001 compared to $4.4 million for the same period in 2000.
The overall increase in operating expenses in the 2001 periods, excluding non-cash stock compensation expense, is largely due to increased preclinical and clinical development related activities, higher headcount and infrastructure costs.
The Company expects its 2001 operating cash burn to be approximately $20 million. This will be largely dependent on the timing of clinical trials and excludes non-cash charges relating to stock compensation.
About Deferred Compensation and Beneficial Conversion Feature
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 six months ended June 30, 2000. Loss available to common shareholders for the six months ended June 30, 2000 was $23.6 million, or $4.14 per share.
About Opioid Painkillers
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 side effects that limit their usefulness at all doses. Common side effects include nausea, vomiting, respiratory depression, dizziness, constipation and other adverse events. Chronic use may lead to tolerance and addiction. Some patients prefer to suffer through pain rather than to endure the adverse side effects of opioid pain medications. 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.<<
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Cheers, Tuck |
