|POZEN Inc. Reports Fourth-Quarter and Full-Year Results That Meet Expectations|
CHAPEL HILL, N.C., March 1 /PRNewswire/ -- POZEN Inc. (Nasdaq: POZN), a pharmaceutical development company with a portfolio of product candidates for the treatment of migraine, today announced results for the fourth quarter and year ended December 31, 2000. The financial performance met management's expectations.
POZEN is a development-stage company that did not record revenues for the fourth quarter of 2000 or 1999. For the fourth quarter of 2000, the company had operating expenses, excluding non-cash amortization of deferred compensation, of $5.2 million compared with $4.5 million for the 1999 fourth quarter. Non-cash deferred compensation in connection with employee stock option grants was $881,000 and $182,000 for the 2000 and 1999 periods, respectively.
The net loss for the quarter was $4.9 million, or $0.21 per common share, compared with a net loss of $4.6 million, or $0.78 per common share, for the 1999 fourth quarter. On a pro forma basis that assumes the conversion of all outstanding stock and accrued preferred dividends into common stock as of the date of the original issuance or at the beginning of the reporting period, if later, the loss for the fourth quarter of 2000 would have been $0.19 compared with a loss of $0.32 for the comparable 1999 period. POZEN's basic and diluted net loss per common share and pro forma net loss per common share are set forth in the following schedule.
For 2000 and prior years, POZEN did not record revenues. Operating expenses for 2000, excluding non-cash deferred compensation, were $21.1 million compared with $11.2 million for 1999. Non-cash deferred compensation in connection with employee stock option grants was $3.1 million and $613,000 for 2000 and 1999, respectively.
POZEN's net loss attributable to common stockholders was $19.3 million, excluding non-cash deferred compensation, a charge related to preferred stock sold in March and August 2000, and dividends on preferred stock, as compared to $11.5 million for the comparable 1999 period. The charge related to the preferred stock sales was a non-cash charge of $27.6 million that recognized the difference between the deemed fair market value of the preferred stock and the fair market value of the common stock. The dividends on preferred stock totaled $934,000. Excluding these items, POZEN's pro forma net loss per share would have been $0.97 and $0.96 for 2000 and 1999, respectively. POZEN's basic and diluted net loss per common share and pro forma net loss per common share are set forth in the following schedule.
John R. Plachetka, Pharm.D., POZEN's president and chief executive officer, noted that the company's performance was in line with management's expectations. "As we anticipated, our year-over-year operating expenses were higher due to increased clinical trial activities. We expected that our operating expenses, excluding non-cash deferred compensation, would run between $21 million and $23 million, and they fell within that range."
Late-Stage Product Pipeline Update
POZEN's initial focus is on developing products for migraine therapy, a market estimated to exceed $2.0 billion for 2001. The company currently has four products in development. Its lead product candidate, MT 100, is intended to be a first-line, oral treatment. MT 300, which is being developed for relief of severe migraine, will soon enter Phase III testing. MT 400, designed to provide faster relief and a reduced relapse rate for migraine sufferers, recently commenced initial Phase II testing while MT 500, a product candidate for the prophylactic treatment of migraine, is in initial clinical trials.
"We continue to be pleased by the clinical performance of MT 100, our lead product," Plachetka said. "All of our Phase III clinical trials have shown that its unique dual action provides rapid and long-lasting migraine symptom relief and clearly outperforms its two components and placebo. Furthermore, several market research studies have confirmed that physicians and patients prefer MT 100 as first-line therapy both for its efficacy and because of its low potential for side effects.
"Our other products continue to move through the pipeline in a timely fashion," he added. "We just completed in the clinic, several months ahead of schedule, our Phase II trial with MT 400, which included over 800 patients. We expect to complete the analysis of these data during the second quarter of this year. After successful discussions with FDA recently concerning our MT 300 New Drug Application program, we are about to begin the agreed upon Phase III studies. And, lastly, we plan to initiate in the second quarter our MT 500 tolerance study as a prelude to commencing the Phase II proof-of-concept trial later this year."
Outlook for 2001
Plachetka confirmed that the company continues to hold discussions with parties interested in becoming marketing partners to commercialize POZEN's products. "One of our goals is to have a marketing partner for MT 100 by the end of 2001, and that has not changed." Plachetka also confirmed that POZEN believes it has sufficient cash to fund the development of its current product portfolio. "At December 31, we had $92.4 million in cash and equivalents. For the first quarter, we expect our operating expenses will be in the range of $4.5 million to $5.5 million, depending upon when we start various studies. This range excludes non-cash deferred compensation. During 2001 we expect that our operating expenses, again excluding non-cash deferred compensation, will be between $25 million and $30 million for the year."
Fourth-Quarter Conference Call
POZEN will hold a conference call to discuss fourth-quarter results and management's outlook for the year at 11:00 a.m. EST on Thursday, March 1, 2001. The call can be accessed live and will be available for replay over the Internet via www.streetevents.com . A replay will also be available on the company's website, www.pozen.com .
North Carolina-based POZEN Inc. is a pharmaceutical development company committed to building a portfolio of products with significant commercial potential in select therapeutic areas. The company's initial focus is migraine, where it has built a robust portfolio of four product candidates through a combination of innovation and in-licensing. The company's common stock is traded on The Nasdaq Stock Market under the symbol "POZN."
Statements included in this press release that are not historical in nature are "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. You should be aware that our actual results could differ materially from those contained in the forward-looking statements, which are based on management's current expectations and are subject to a number of risks and uncertainties, including, but not limited to, our failure to successfully commercialize MT 100 and our other products; costs and delays in the development of MT 100 and our other products; our inability to enter into or maintain, and the risks resulting from our dependence upon, collaboration or contractual arrangements necessary for the development, manufacture, commercialization, marketing, sales and distribution of our products; competitive factors; our inability to protect our patents or proprietary rights and obtain necessary rights to third party patents and intellectual property to operate our business; our inability to operate our business without infringing the patents and proprietary rights of others; general economic conditions; the failure of our products to gain market acceptance; our inability to obtain any additional required financing; technological changes; government regulation; changes in industry practice; and one-time events, including those discussed herein and in our Registration Statement filed on Form S-1 (File No. 333-35930) under "Business" or "Risk Factors." We do not intend to update any of these factors or to publicly announce the results of any revisions to these forward-looking statements.
POZEN is on the Internet at www.pozen.com .
POZEN Inc. Statements of Operations (Unaudited)
Three Months Ended Twelve Months Ended December 31, December 31, 2000 1999 2000 1999 Operating expenses: General and administrative $1,533,350 $877,006 $4,822,102 $2,319,939 Research and development 4,551,243 3,783,532 19,398,904 9,458,225 Total operating expenses 6,084,593 4,660,538 24,221,006 11,778,164 Interest income (expense), net 1,304,329 76,007 1,844,378 (367,282) Net loss (4,780,264) (4,584,531) (22,376,628) (12,145,446) Deemed dividend to preferred stockholders -- -- 27,617,105 -- Preferred stock dividends 104,596 -- 934,478 -- Net loss attributable to common stockholders $(4,884,860) $(4,584,531)
Basic and diluted net loss per common share $(0.21) $(0.78) $(4.95) $(2.08) Shares used in computing basic and diluted net loss per common share 23,622,858 5,845,194 10,293,605 5,845,304 Pro forma net loss per common shares basic and diluted $(0.19) $(0.32) $(2.56) $(1.01) Pro forma weighted average common shares outstanding -basic and diluted 26,328,444 14,481,629 19,915,147 12,017,944 POZEN Inc. Balance Sheet (Unaudited)
December 31, December 31, 2000 1999 ASSETS Current assets: Cash and cash equivalents $92,350,583 $4,171,086 Prepaid expenses 198,144 14,720 Accrued interest receivable 113,160 19,297 Other current assets 9,091 9,553 Total current assets 92,670,978 4,214,656 Furniture and fixtures, net of accumulated depreciation 158,780 110,351 Total assets $ 92,829,758 $4,325,007 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $128,329 $359,370 Accrued expenses 3,633,531 2,000,927 Total current liabilities 3,761,860 2,360,297 Total shareholders' equity 89,067,898 1,964,710 Total liabilities and shareholders' equity $ 92,829,758 $4,325,007