POZEN Logo
Print Page   Close Window

Press Release

POZEN Inc. Second-Quarter Results Meet Expectations

CHAPEL HILL, N.C., July 26 /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 second quarter and six months ended June 30, 2001. The financial performance met management's expectations.

Second-Quarter Results

POZEN is a development-stage company that did not record revenues for the second quarter of 2001 or 2000.

For the second quarter of 2001, the company had operating expenses of $4.6 million compared with $5.4 million for the 2000 second quarter, excluding the non-cash amortization of deferred compensation. The non-cash amortization of deferred compensation in connection with employee stock option grants was $787,000 and $652,000 for the 2001 and 2000 periods, respectively.

POZEN's net loss attributable to common stockholders was $4.4 million, or $0.16 per common share, for the quarter ended June 30, 2001 compared with $5.8 million, or $0.98 per common share, for the 2000 quarter, excluding dividends on preferred stock of $391,000.

On a pro forma basis that assumes the conversion of all outstanding stock into common stock as of the date of the original issuance, the loss for the second quarter of 2000, excluding dividends on preferred stock, would have been $0.31 per common share.

Six-Month Results

POZEN did not record revenues for the six months ended June 30, 2001 or during 2000.

For the first six months of 2001, the company had operating expenses of $9.6 million compared with $8.0 million for the 2000 six-month period, excluding the non-cash amortization of deferred compensation. The non-cash amortization of deferred compensation in connection with employee stock option grants was $1.6 million and $1.3 million for the 2001 and 2000 periods, respectively. The increased operating expenses during the first six months of 2001 compared to 2000 resulted from the increased clinical development costs associated with MT 300 and MT 400, and increased operational infrastructure, offset by decreased MT 100 clinical trial costs.

POZEN's net loss attributable to common stockholders was $8.9 million, or $0.32 per common share, for the six months ended June 30, 2001 compared with $9.0 million, or $1.54 per common share, for the 2000 six-month period, excluding a charge related to preferred stock sold in March 2000 and dividends on preferred stock of $391,000. The charge related to the preferred stock sales was a non-cash charge of $16.9 million that recognized the difference between the deemed fair value of the preferred stock and the fair value of the common stock.

On a pro forma basis that assumes the conversion of all outstanding stock into common stock as of the date of the original issuance, the loss for the first six months of 2000 would have been $1.56 per common share. Excluding the charge related to preferred stock sold in March 2000 and dividends on preferred stock, POZEN's pro forma net loss per share would have been $0.54 for the six months ended June 30, 2000. 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 chairman, president and chief executive officer, noted that the company's performance was in line with management's expectations. ``As we anticipated, our quarter-over-quarter expenses were lower due to the completion of several large Phase III clinical trials for MT 100 that were underway in the second quarter of 2000. We expected that our operating expenses during the second quarter, excluding the non-cash amortization of deferred compensation, would run between $4.5 million and $5.5 million for the quarter, and they fell within that range.''

Company Update

POZEN's initial focus is on developing products for migraine therapy, a global market expected to exceed $2.0 billion this year. The company has four products in development. Its lead product candidate, MT 100, is intended to be a first-line, oral treatment. MT 300 is being developed for relief of severe migraine. MT 400 is designed to provide fast and long lasting relief for migraine sufferers, while MT 500 is a product candidate for the prophylactic treatment of migraine. This portfolio serves distinct segments of the migraine market.

MT 100 has completed all planned Phase III pivotal clinical trials. MT 300 is expected to enter Phase III clinical testing in the third quarter of 2001. MT 400 has completed one Phase II clinical study and MT 500 is in initial clinical trials.

Dr. Plachetka noted that POZEN has submitted data from four additional genotoxicity studies in support of its request that the Food and Drug Administration reconsider the need for the company to conduct a two-year carcinogenicity study of the effects of MT 100 prior to approval of the MT 100 New Drug Application.

With respect to MT 500, Dr. Plachetka announced that POZEN had commenced its Phase I Tolerance study in June as scheduled.

Dr. Plachetka also noted that POZEN continues to evaluate new product opportunities using both its ``license back'' model as well as new, self- invented combination products.

Dr. Plachetka stated that POZEN believes it has sufficient cash to fund the development of its current product portfolio. ``At June 30, 2001, we had $83.3 million in cash and equivalents. For the third quarter, we expect our cash operating expenses will be in the range of $5.0 to $6.0 million. For the year we now expect that our cash operating expenses are more likely to be slightly below $25.0 million.''

Second-Quarter Conference Call

POZEN will hold a conference call to discuss second-quarter results and management's outlook for the remainder of the year at 11:00 a.m. EDT on Thursday, July 26, 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 Annual Report on Form 10-K/A under ``Management's Discussion and Analysis of Financial Condition and Results of Operations.'' 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.
                           Statement of Operations
                                 (Unaudited)

                          Three Months Ended            Six Months Ended
                               June 30,                   June 30,
                           2001          2000         2001          2000
    Operating expenses:
     General and
      administrative    $1,586,608    $1,185,985   $3,089,126    $2,083,482
     Research and
      development        3,795,135     4,848,279    8,051,769     7,263,556
    Total operating
     expenses            5,381,743     6,034,264   11,140,895     9,347,038
    Interest income,
     net                   972,825       255,737    2,198,517       304,812
    Net loss            (4,408,918)   (5,778,527)  (8,942,378)   (9,042,226)

    Non-cash preferred
     stock charge                -             -            -    16,875,115
    Preferred stock
     dividends                   -       390,575            -       390,575
    Net loss
     attributable to
     common
     stockholders      $(4,408,918)  $(6,169,102) $(8,942,378)  $(26,307,916)

    Basic and diluted
     net loss per
     common share           $(0.16)       $(1.05)      $(0.32)       $(4.48)

    Shares used in
     computing basic
     and diluted net
     loss per common
     share              27,915,699     5,872,699   27,877,138     5,866,269

    Pro forma net loss
     per common share-
     basic and diluted                    $(0.33)                    $(1.56)

    Pro forma weighted
     average common
     shares outstanding-
     basic and diluted                18,746,830                 16,810,821


                                  POZEN Inc.
                                Balance Sheet
                                 (Unaudited)

                                                  June 30,      December 31,
                                                     2001           2000
    ASSETS
    Current assets:
     Cash and cash equivalents                   $83,334,264    $92,350,583
     Prepaid expenses                                220,564        198,144
     Accrued interest receivable                       6,714        113,160
     Other current assets                              8,000          9,091
      Total current assets                        83,569,542     92,670,978
    Equipment, net of accumulated depreciation       155,156        158,780
       Total assets                              $83,724,698    $92,829,758



    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
     Accounts payable                               $125,097       $128,329
     Accrued expenses                              1,777,311      3,633,531
       Total current liabilities                   1,902,408      3,761,860
    Total stockholders' equity                    81,822,290     89,067,898
       Total liabilities and stockholders'
        equity                                   $83,724,698    $92,829,758

CONTACT:
Matt Czajkowski
Chief Financial Officer, of POZEN
+1-919-913-1040