================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported)
August 9, 2006
----------
PAIN THERAPEUTICS, INC.
(Exact name of registrant as specified in its charter)
Delaware 000-29959 91-1911336
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
416 Browning Way
South San Francisco, California 94080
(Address of principal executive offices, including zip code)
(650) 624-8200
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
================================================================================
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On August 9, 2006, Pain Therapeutics, Inc. (the "Company") issued a press
release announcing the Company's financial results for the three and six months
ended June 30, 2006. A copy of the press release has been furnished as an
exhibit to this report and is incorporated by reference herein.
The information in this Current Report on Form 8-K and in Exhibit 99.1 shall not
be deemed to be "filed" for the purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by
reference into any registration statement or other document filed or furnished
pursuant to the Exchange Act or the Securities Act of 1933, as amended, except
as shall be expressly set forth by specific reference in such document.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
The following exhibit is furnished as part of this Current Report on Form 8-K.
EXHIBIT
NUMBER DESCRIPTION
- ------- ----------------------------------------------------------------------
99.1 Press Release of Pain Therapeutics, Inc. dated August 9, 2006.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PAIN THERAPEUTICS, INC.
/s/ Peter S. Roddy
-------------------------
Peter S. Roddy
Chief Financial Officer
Dated: August 9, 2006
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------- ----------------------------------------------------------------------
99.1 Press Release of Pain Therapeutics, Inc. dated August 9, 2006.
Exhibit 99.1
PAIN THERAPEUTICS ANNOUNCES
SECOND QUARTER 2006 FINANCIAL RESULTS
SOUTH SAN FRANCISCO, CALIF. - AUGUST 9, 2006 - 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
- -------------------------
o 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.
o 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.
o 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.
o 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.
o 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.
o 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.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 $793 thousand
and $642 thousand, respectively, totaling $1,435 thousand for the three
months ended June 30, 2006 and $1,750 thousand in research and development
and $1,370 thousand in general and administrative, totaling $3,120 thousand
for the six months ended June 30, 2006. The non-cash stock-based
compensation expense included in our financial statements for the three and
six months ended June 30, 2005 was immaterial.
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.