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Press Release

POZEN Reports Second Quarter Results; Company Anticipates a Lower Loss for the Year
CHAPEL HILL, N.C., Aug 1, 2002 (BUSINESS WIRE) -- 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, 2002.

Second-Quarter Results

POZEN is a development-stage company that did not record revenues for the second quarter of 2002 or 2001.

For the second quarter of 2002, the company reported operating expenses, excluding the non-cash amortization of deferred compensation, of $6.2 million compared to $4.6 million in the second quarter of 2001. The non-cash amortization of deferred compensation in connection with employee stock option grants was $736,000 and $787,000 for the 2002 and 2001 three-month periods, respectively. The increase in operating expenses was due primarily to increased costs associated with the development of MT 300 and MT 400, offset by a decrease in development costs for MT 100 and the elimination of development costs for MT 500.

POZEN's net loss attributable to common stockholders was $6.6 million, or $0.24 per common share, for the quarter ended June 30, 2002 compared to $4.4 million, or $0.16 per common share, for the 2001 quarter. At June 30, 2002, the company had $61 million in cash and equivalents.

Six-Month Results

POZEN did not record revenues for the six months ended June 30, 2002 or during 2001.

For the first six months of 2002, the company reported operating expenses, excluding the non-cash amortization of deferred compensation, of $12.7 million compared to $9.6 million for the 2001 six-month period. The non-cash amortization of deferred compensation in connection with employee stock option grants was $1.5 million and $1.6 million for the 2002 and 2001 six-month periods, respectively.

POZEN's net loss attributable to common stockholders was $13.6 million, or $0.49 per common share, for the six months ended June 30, 2002 compared with $8.9 million, or $0.32 per common share, for the 2001 six-month period.

Business Highlights

POZEN announced today that it reached an agreement with the U.S. Food and Drug Administration (FDA) and the Medicines Control Agency (MCA) of the United Kingdom on the development program for MT 400 that will allow it to proceed directly to Phase III clinical trials, resulting in significant cost savings in developing the product candidate. MT 400 is the company's next generation product candidate for the treatment of migraine.

POZEN's intellectual property position was strengthened by the Notice of Allowance it received from the United States Patent and Trademark Office for MT 100, an oral tablet designed for first-line migraine therapy. Upon issuance, the new patent will provide expanded patent coverage for MT 100, by providing claims relating to additional pharmaceutical compositions and treatment methods that can be used for migraine patients.

MT 300, the company's injectable product candidate for the treatment of severe migraine, advanced in the clinic. Preliminary results for the first Phase III clinical trial indicated that patients taking MT 300 were nearly twice as likely to have sustained pain relief - relief within two hours of dosing and neither relapsing nor using rescue medicine over the next 22 hours - than patients who took a placebo. The second Phase III trial for MT 300 is nearing completion and submission of the NDA remains on schedule for the end of 2002.

"We made significant progress in all three of our product candidates with planned expanded patent coverage for MT 100, the announcement of positive results from our first Phase III pivotal study for MT 300, and the agreements reached with two regulatory bodies on the development program for MT 400. We also continue to look at promising new product candidates to enhance our pipeline," said John R. Plachetka, Pharm.D., chairman, president and chief executive officer of POZEN. "As a result of the favorable news on MT 400, we are lowering our guidance for operating expenses, excluding non-cash deferred compensation, for the second half and for the year."

Financial Guidance

POZEN expects operating expenses for the third quarter to be in the range of $4 million to $5 million, excluding non-cash deferred compensation. For the year, the company is lowering its guidance for operating expenses, excluding non-cash deferred compensation, to a range of $21 million to $23 million. The prior announced range for operating expenses, excluding non-cash deferred compensation, was between $23 million and $25 million.

Second-Quarter Conference Call

POZEN will hold a conference call to discuss second-quarter results and management's outlook at 11:00 a.m. Eastern time on Thursday, August 1, 2002. The call can be accessed live and will be available for replay over the Internet via www.pozen.com.

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 our products; costs and delays in the development and FDA approval of our 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 Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2002 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,
                    ------------------------  -------------------------
                        2002         2001          2002         2001
                    -----------  -----------  ------------  -----------
Operating expenses:
  General and
   administrative  $ 1,683,405  $ 1,586,608  $  3,440,906  $ 3,089,126
  Research and
   development       5,223,281    3,795,135    10,802,725    8,051,769
                    -----------  -----------  ------------  -----------
Total operating
 expenses            6,906,686    5,381,743    14,243,631   11,140,895
Interest income,
 net                   281,937      972,825       598,609    2,198,517
                    -----------  -----------  ------------  -----------
Net loss
 attributable
 to common
 stockholders      $(6,624,749) $(4,408,918) $(13,645,022) $(8,942,378)
                    ===========  ===========  ============  ===========
Basic and diluted
 net loss per common
 share             $     (0.24) $     (0.16) $      (0.49) $     (0.32)
                   ===========  ===========  ============  ===========
Shares used in
 computing basic and
 diluted net loss
 per common share   28,077,945   27,915,699    28,058,130   27,877,138
                   ===========  ===========  ============  ===========
                              POZEN Inc.
                             Balance Sheet
                              (Unaudited)
                                          June 30,       December 31,
                                            2002             2001
                                        ------------     -------------
        ASSETS
Current assets:
  Cash and cash equivalents            $ 61,004,528     $  73,958,724
  Prepaid expenses                          126,081            67,498
  Other current assets                        8,000             8,688
                                        ------------     -------------
    Total current assets                 61,138,609        74,034,910
Equipment, net of accumulated
 depreciation                               431,599           109,014
                                        ------------     -------------
    Total assets                       $ 61,570,208     $  74,143,924
                                        ============     =============
        LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                     $      58,958    $     194,138
  Accrued expenses                         2,907,311        3,328,881
                                         ------------     ------------
    Total current liabilities              2,966,269        3,523,019
Total stockholders' equity                58,603,939       70,620,905
                                         ------------     ------------
    Total liabilities and stockholders'
     equity                            $  61,570,208    $  74,143,924
                                         ============     ============

CONTACT:
POZEN Inc.
Matt Czajkowski
Chief Financial Officer
919-913-1030
or
Lisa Barthelemy
Director, Investor Relations
919-913-1044