Pain Therapeutics Announces Second Quarter 2006 Financial Results
SOUTH SAN FRANCISCO, Calif., Aug. 9 -- Pain Therapeutics, Inc. (Nasdaq: PTIE), a biopharmaceutical company, today reported financial results for the three and six months ended June 30, 2006. Net income for the quarter ended June 30, 2006 was $1.4 million, or $0.03 per share, compared to a net loss of $10.2 million, or $0.23 per share, in the second quarter of 2005. The net income for the six months ended June 30, 2006 was $2.2 million, or $0.05 per share, compared to a net loss of $18.8 million, or $0.43 per share, for the same period in 2005.
Cash, cash equivalents and marketable securities were $205.3 million at June 30, 2006. Pain Therapeutics continues to expect its cash requirements for 2006 to be $15 million, plus or minus 10%.
"We believe we're in strong financial shape and we continue to make solid progress across our business," said Remi Barbier, Pain Therapeutics' president and chief executive officer. "We are pleased with the continued advancement of our existing pipeline and we continue to uncover attractive and affordable potential in-licensing opportunities from top academic labs in the areas of pain management and hematology/oncology."
Pain Therapeutics recently received a $5 million milestone payment from King Pharmaceuticals, Inc., its worldwide strategic partner for Remoxy(TM), PTI-202 and two other abuse-resistant opioids painkillers. This was the first milestone payment under the strategic alliance between the two companies. A total of up to $150 million may be paid by King Pharmaceuticals to Pain Therapeutics, contingent upon the achievement of regulatory and clinical milestones over the course of the strategic alliance.
2006 Financial Highlights
- We have a strategic alliance with King Pharmaceuticals, Inc. ("King") to develop Remoxy, PTI-202 and two other abuse-resistant opioid painkillers. Collaboration revenue of $7.2 million reflects actual and expected reimbursement from King of our collaboration expenses incurred during the second quarter of 2006.
- King gave us an upfront cash payment of $150 million in December 2005. For accounting purposes, we plan to recognize a portion of this cash payment as "program fee revenue" each quarter through mid-2011. We recognized program fee revenue of $6.6 million this quarter.
- On January 1, 2006 we adopted Statement No. 123(R), Share-Based Payment, or FAS 123R, as required by the Financial Accounting Standards Board. In adopting FAS 123R, we began to recognize employee non-cash stock-based compensation related expenses in our financial statements.
- Research and development expenses for the second quarter of 2006 increased to $10.2 million from $9.5 million for the second quarter of 2005. Research and development expenses for the six months ended June 30, 2006 increased to $23.0 million from $17.6 million for the same period in 2005. The increase in research and development expenses for the second quarter was primarily due to the timing of the Phase III clinical trials for Remoxy and increases in development activities with Remoxy and other abuse-resistant product candidates as well as increases in non-cash stock related compensation costs associated with the adoption of FAS 123R.
- General and administrative expenses increased to $2.0 million from $1.1 million in the three months ended June 30, 2006 and 2005, respectively, and to $4.0 million from $2.2 million in the six months ended June 30, 2006 and 2005, respectively. The increases were primarily due to increases in non-cash stock related compensation costs associated with the adoption of FAS 123R.
- We have an income tax expense of $2.6 million for the three months ended June 30, 2006 that consists of the second quarter portion of currently estimated alternative minimum tax for 2006. Our income tax expense for alternative minimum taxes will fluctuate between quarters during 2006.
About Pain Therapeutics, Inc.
Pain Therapeutics is a biopharmaceutical company that develops novel drugs. We have three investigational drug candidates in clinical programs. Remoxy and PTI-202 are proprietary, abuse-resistant forms of currently prescribed opioid drugs. Oxytrex(TM) is a novel, next-generation painkiller that potentially offers less physical dependence than currently marketed opioid painkillers. These three drugs target different segments of the multi-billion dollar market to treat severe chronic pain, such as persistent low-back pain or pain due to advanced stages of osteoarthritis. The FDA has not yet evaluated the merits, safety or efficacy of our drug candidates. For more information, please consult our website: www.paintrials.comwww.paintrials.com.
Our Strategic Alliance with King Pharmaceuticals, Inc.
We have a strategic alliance with King Pharmaceuticals for Remoxy, PTI-202 and two other abuse-resistant opioid painkillers. In December 2005, King paid us $150 million in cash as an up-front payment. King is also obligated to pay us up to $150 million in cash based upon the successful achievement of additional clinical or regulatory milestones for Remoxy, PTI-202 and two other abuse-resistant opioid painkillers. King funds development expenses pursuant to the strategic alliance and is obligated to pay us a 20% royalty on net sales of drugs, except as to the first $1 billion in cumulative net sales, for which the royalty is set at 15%. In exchange, King received worldwide commercial rights to Remoxy, PTI-202 and two other abuse-resistant drugs developed under the strategic alliance.
Note Regarding Forward-Looking Statements: This press release contains forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995 (the "Act"). Pain Therapeutics disclaims any intent or obligation to update these forward-looking statements, and claims the protection of the Safe Harbor for forward-looking statements contained in the Act. Examples of such statements include, but are not limited to, any statements relating to the timing, scope or expected outcome of the Company's clinical development of its drug candidates, the potential benefits of the Company's drug candidates, the Company's expected cash requirements and fluctuations in income tax expenses in 2006, and the size of the potential market for the Company's products. Such statements are based on management's current expectations, but actual results may differ materially due to various factors. Such statements involve risks and uncertainties, including, but not limited to, those risks and uncertainties relating to difficulties or delays in development and testing of the Company's drug candidates, unexpected adverse side effects or inadequate therapeutic efficacy of the Company's drug candidates (including the risk that current and past results of clinical trials are not necessarily indicative of future results of clinical trials), the uncertainty of patent protection for the Company's intellectual property or trade secrets and unanticipated research and development and other costs. For further information regarding these and other risks related to the Company's business, investors should consult the Company's filings with the Securities and Exchange Commission.
PAIN THERAPEUTICS, INC
CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
Revenue:
Program fee revenue $6,550 $-- $13,100 $--
Collaboration revenue 7,196 -- 15,972 --
Total revenue 13,746 -- 29,072 --
Operating expenses (1):
Research and development 10,188 9,518 23,042 17,640
General and administrative 2,049 1,139 4,019 2,177
Total operating expenses 12,237 10,657 27,061 19,817
Operating income (loss) 1,509 (10,657) 2,011 (19,817)
Other income
Interest income 2,468 475 4,556 1,046
Income (loss) before income tax 3,977 (10,182) 6,567 (18,771)
Income tax expense 2,610 -- 4,323 --
Net income (loss) $1,367 $(10,182) $2,244 $(18,771)
Earnings per share
Basic $0.03 $(0.23) $0.05 $(0.43)
Diluted $0.03 $(0.23) $0.05 $(0.43)
Weighted-average shares used to
compute earnings per share
Basic 44,138 43,744 44,067 43,704
Diluted 45,258 43,744 45,381 43,704
(1) Included in research and development and general and administrative
expenses are non-cash stock-based compensation expenses of $794 thousand
and $642 thousand, respectively, totaling $1,435 thousand for the three
months ended June 30, 2006 and $1,750
PAIN THERAPEUTICS, INC.
CONDENSED BALANCE SHEETS
(in thousands)
June 30, December 31,
2006 2005(2)
(Unaudited)
Assets
Current assets:
Cash, cash equivalents and
marketable securities $205,341 $212,652
Collaboration revenue receivable 6,305 889
Prepaid expenses 47 623
Total current assets 211,693 214,164
Property and equipment, net 1,475 1,556
Other assets 75 75
Total assets $213,243 $215,795
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $596 $998
Accrued development expense 5,641 4,461
Deferred program fee
revenue - current portion 26,200 26,200
Accrued compensation and benefits 325 501
Accrued income tax 4,357 --
Other accrued liabilities 84 187
Total current liabilities 37,203 32,347
Non-current liabilities:
Deferred program fee
revenue - non-current portion 106,988 120,088
Total liabilities 144,191 152,435
Stockholders' equity:
Common stock 44 44
Additional paid-in-capital 210,588 206,489
Accumulated other comprehensive
loss (1,130) (479)
Accumulated deficit (140,450) (142,694)
Total stockholders' equity 69,052 63,360
Total liabilities and
stockholders' equity $213,243 $215,795
(2) Derived from audited financial statements.
SOURCE Pain Therapeutics, Inc.
08/09/2006
CONTACT: Christi Waarich, Senior Manager of Investor Relations, Pain
Therapeutics, Inc., +1-650-825-3324, or cwaarich@paintrials.com; or Media,
Carney Duntsch, Burns McClellan, +1-212-213-0006
Web site: http://www.paintrials.com
(PTIE)