CHICAGO, Feb. 11 /PRNewswire-FirstCall/ -- Advanced Life Sciences Holdings, Inc. (Nasdaq: ADLS), a biopharmaceutical company engaged in the discovery, development and commercialization of novel drugs in the therapeutic areas of infection, cancer and respiratory diseases, today announced its financial results for the fourth quarter and full year ended December 31, 2008.
The net loss allocable to common shareholders for the three months ended December 31, 2008 was $2.8 million or ($0.07) per share compared to a net loss allocable to common shareholders of $5.6 million or ($0.18) per share for the three months ended December 31, 2007. The net loss allocable to common shareholders for the full year 2008 was $23.0 million or ($0.59) per share compared to a net loss allocable to common shareholders of $32.5 million or ($1.12) per share for 2007. The decrease in the net loss for the full year 2008 is due to decreased costs involved in the clinical development of the Company's lead compound cethromycin.
The Company used approximately $12.2 million in cash in the fourth quarter of 2008 and ended the year with cash totaling $1.5 million. Cash use for the full year was $24.5 million. Fourth quarter and full year cash use included a $10.0 million milestone payment to Abbott Laboratories associated with the submission of the New Drug Application (NDA) for cethromycin.
"2008 was a transformative year in Advanced Life Sciences' history, marking our transition from a development-stage to a pre-commercial company, working toward the market launch of our first product," said Dr. Michael Flavin, Chairman and CEO of Advanced Life Sciences. "With the successful filing of our NDA for cethromycin, we have advanced our lead product candidate toward becoming a promising commercial product opportunity in a market that is in need of safe and effective new antibiotics. With the establishment of our Wyeth partnership in the Asia Pacific region, we have laid the cornerstone of our global commercialization strategy. In addition, the awarding of our multi- million dollar Defense Threat Reduction Agency (DTRA) contract is indicative of the potential for cethromycin and the significant market opportunity in the biodefense field."
Continued Dr. Flavin: "As we look forward to the July 31, 2009, PDUFA date set by FDA for cethromycin, we are realigning our resources and cost structure to focus on our upcoming commercial objectives and intend to raise capital to strengthen our financial position."
Operating Expense Analysis: 2008 versus 2007: * Research and development expense. Total research and development expense decreased $10.0 million to approximately $15.7 million for the year ended December 31, 2008 from approximately $25.7 million for the year ended December 31, 2007. The decrease in R&D expense is related to the conclusion of clinical trials and development costs associated with the Company's lead product, cethromycin. * General and administrative expense. General and administrative expense increased $0.3 million to $7.1 million for the year ended December 31, 2008. Fourth Quarter Expense Analysis: 2008 versus 2007: * Research and development expense. Total research and development expense decreased $3.1 million to approximately $0.9 million for the three months ended December 31, 2008 from approximately $4.0 million for the three months ended December 31, 2007. This decrease reflects a reduction in development expenses associated with the completion of clinical trials for cethromycin. * General and administrative expense. General and administrative expense increased $0.4 million to $1.9 million for the three months ended December 31, 2008. This increase reflects costs incurred for pre-commercial activities. 2008 Achievements * The successful submission and filing of the NDA to the U.S. Food and Drug Administration (FDA) for cethromycin in the treatment of mild- to-moderate community acquired pneumonia (CAP); * The signing of a development and commercialization agreement with Wyeth in the Asia Pacific region (excluding Japan), which includes a substantial up-front equity investment as well as milestones and payments based on successful achievement of clinical, regulatory and commercial objectives in specific markets that could potentially exceed $100 million; * The awarding of a DTRA biodefense contract valued at up to $3.8 million to fund the advanced development of cethromycin as a potential broad-spectrum medical countermeasure against bioterror agents such as tularemia, plague and melioidosis; * Establishment of a strategic relationship with Inventiv Health to support pre-commercialization activities; * The completion of a debt transaction increasing our bank line of credit from $4.0 million to $10.0 million to strengthen our balance sheet and help fund commitments associated with our cethromycin NDA submission and pre-commercialization activities; * The implementation of a Standby Equity Distribution Agreement (SEDA) with YA Global Investments, L.P. for the sale of up to $15 million of shares of our common stock over a two-year period; * The publication of a research article in the Journal of Antimicrobial Chemotherapy supporting the additional role for cethromycin as a potential treatment for infections caused by community associated methicillin resistant Staphylococcus aureus (CA-MRSA) as well as presentation of clinical and microbiological data in posters and an oral presentation pertaining to cethromycin at the 48th Annual ICAAC/IDSA Meeting. Cethromycin Objectives for 2009 * Advance discussions with prospective U.S. and E.U. partners for the commercialization of cethromycin; * Initiate clinical trials with Wyeth in the Asia Pacific region in the moderate CAP patient population to support commercialization and build on our regulatory package; * Continue supplemental NDA enabling studies of cethromycin as a broad spectrum biodefense countermeasure under the DTRA contract; * Continue pre-launch activities including manufacturing, strategic marketing, medical education, pricing and reimbursement strategies.
Financial Guidance for 2009
Advanced Life Sciences expects its 2009 cash requirements, excluding milestone payments that become due upon cethromycin NDA approval, to fall in the range of $12.0 million and $15.0 million. Cash use in the first quarter of 2009 is expected to fall in the range of $1.5 million and $2.0 million. The cash use will be applied toward cethromycin NDA regulatory support, pre- commercial activities and general operating expenses.
As the Company transitions towards commercialization of cethromycin, the following initiatives are being undertaken to conserve capital and strengthen the balance sheet:
* In February, Advanced Life Sciences reduced its workforce by approximately 30% to focus resources on the cethromycin program. With these cost reductions, the Company will take a severance charge in the first quarter in the amount of $60,000. The Company expects to save approximately $1.0 million annually due to this initiative; * In addition to establishing commercial partnerships for cethromycin, the Company intends to raise capital through the sale of equity using its Stand-by Equity Distribution Agreement with YA Global Investments, L.P. and through the additional sale of equity.
Nasdaq Marketplace Rule 4350(b)(1)(B)
The Company's independent registered public accounting firm included an explanatory paragraph in its report on the Company's 2008 financial statements related to uncertainty in the Company's ability to continue as a going concern. We anticipate that our independent registered public accounting firm will include a similar opinion in its report on the Company's 2008 financial statements. There can be no assurance that it will be able to secure a commercial partnership or obtain adequate capital funding in the future to continue operations and implement its strategy, which would have an adverse effect on the Company's business and operations.
Conference Call Details
Advanced Life Sciences will host a conference call and live webcast at 10:00 a.m. Eastern Time on Wednesday, February 11, 2009 to discuss the Company's financial results for the fourth quarter and full year ended December 31, 2008.
The conference call will be webcast simultaneously over the Internet. Please visit the Investor Relations section of the Advanced Life Sciences corporate website http://www.advancedlifesciences.com. Alternatively, callers may participate in the conference call by dialing 888-680-0879 or 617-213-4856 (international). The passcode for the conference call is 25253515. A replay of the conference call will be available until February 18, 2009. Callers may access the telephone replay by dialing 888-286-8010 (domestic) or 617-801-6888 (international), passcode 89150902. Investors are advised to dial into the call at least ten minutes prior to the call to register. Participants may pre- register for the call at https://www.theconferencingservice.com/prereg/key.process?key=PNXL8438C. Pre- registrants will be issued a pin number to use when dialing into the live call which will provide quick access to the conference by bypassing the operator upon connection.
About Community Acquired Pneumonia (CAP)
CAP is the sixth most common cause of death in the United States. CAP and other respiratory tract infections are caused by pathogens such as Streptococcus pneumoniae and Haemophilus influenzae. Approximately 5.6 million cases of CAP are diagnosed each year in the United States with 10 million physician visits, resulting in an estimated total annual expenditure of $2.0 billion dollars for prescribed antibiotics to treat CAP. CAP is potentially fatal if not treated properly, and the bacteria that cause CAP are developing resistance to current standard of care treatments.
Macrolides and penicillins are currently the front-line treatments for respiratory tract infections such as CAP. As macrolide and penicillin resistance grows and has the potential to cause more clinical failures, there is a need for new antibiotics with unique mechanisms of action that can overcome this emerging resistance.
Cethromycin has shown higher in vitro potency and a broader range of activity than macrolides against Gram-positive bacteria associated with respiratory tract infections, and, again in in vitro tests, it appears to be effective against penicillin- and macrolide-resistant bacteria. Cethromycin has a mechanism of action that may slow the onset of future bacterial resistance. In addition to its utility in CAP, cethromycin is also being investigated for the prophylactic treatment of inhalation anthrax post- exposure. The FDA has designated cethromycin as an orphan drug for the prophylactic treatment of inhalation anthrax post exposure, but the drug is not yet approved for this or any other indication.
About Advanced Life Sciences
Advanced Life Sciences is a biopharmaceutical company engaged in the discovery, development and commercialization of novel drugs in the therapeutic areas of infection, cancer and inflammation. The Company's lead candidate, cethromycin, is a novel once-a-day oral antibiotic under review by the FDA for the treatment of mild-to-moderate community acquired pneumonia. For more information, please visit us on the web at http://www.advancedlifesciences.com.
Any statements contained in this press release that relate to future plans, events or performance are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements represent our management's judgment regarding future events. The Company does not undertake any obligations to update any forward-looking statements whether as a result of new information, future events or otherwise. Our actual results could differ materially from those discussed herein due to several factors including the success and timing of our clinical trials and our ability to obtain and maintain regulatory approval and labeling of our product candidates; our plans to develop and commercialize our product candidates; the loss of key scientific or management personnel; the size and growth of potential markets for our product candidates and our ability to serve those markets; regulatory developments in the U.S. and foreign countries; the rate and degree of market acceptance of any future products; the accuracy of our estimates regarding expenses, future revenues and capital requirements; our ability to obtain financing on terms acceptable to us; our ability to obtain and maintain intellectual property protection for our product candidates; the successful development of our sales and marketing capabilities; the success of competing drugs that become available; and the performance of third party collaborators and manufacturers. These and additional risks and uncertainties are detailed in the Company's filings with the Securities and Exchange Commission.
ADVANCED LIFE SCIENCES HOLDINGS, INC. AND SUBSIDIARY (A Development Stage Company) CONSOLIDATED STATEMENTS OF OPERATIONS Three months ended December 31, 2008 2007 Revenue: Management fees $- $- Grants 208,824 - Royalty-related party - - Total revenue 208,824 - Expenses: Research and development 911,120 4,013,585 Contracted research and development-related party - - Selling, general and administrative 1,878,971 1,476,806 Total expenses 2,790,091 5,490,391 Loss from operations (2,581,267) (5,490,391) Net other (income) expense: Interest income (22,517) (79,488) Interest expense 215,407 116,695 Gain on sale of interest in Sarawak Medichem Pharmaceuticals joint venture - - Net other (income) expense 192,890 37,207 Net loss (2,774,157) (5,527,598) Less accumulated preferred stock dividends for the period 43,750 43,750 Net loss available to common shareholders $(2,817,907) $(5,571,348) Net loss per share available to common shareholders - basic and diluted $(0.07) $(0.18) Weighted average shares outstanding - basic and diluted 40,808,378 30,743,566 Period From Inception (January 1, 1999) Twelve months ended Through December 31, December 31, 2008 2007 2008 Revenue: Management fees $- $- $1,161,180 Grants 240,830 - 1,276,401 Royalty-related party - - 45,238 Total revenue 240,830 - 2,482,819 Expenses: Research and development 15,709,293 25,735,759 90,580,401 Contracted research and development-related party - - 7,980,299 Selling, general and administrative 7,116,549 6,839,575 27,048,637 Total expenses 22,825,842 32,575,334 125,609,337 Loss from operations (22,585,012) (32,575,334) (123,126,518) Net other (income) expense: Interest income (306,846) (717,884) (2,948,862) Interest expense 525,703 466,963 3,148,853 Gain on sale of interest in Sarawak Medichem Pharmaceuticals joint venture - - (939,052) Net other (income) expense 218,857 (250,921) (739,061) Net loss (22,803,869) (32,324,413) (122,387,457) Less accumulated preferred stock dividends for the period 175,000 175,000 1,669,792 Net loss available to common shareholders $(22,978,869) $(32,499,413) $(124,057,249) Net loss per share available to common shareholders - basic and diluted $(0.59) $(1.12) Weighted average shares outstanding - basic and diluted 39,098,943 28,910,041 ADVANCED LIFE SCIENCES HOLDINGS, INC. AND SUBSIDIARY (A Development Stage Company) December 31, December 31, CONSOLIDATED BALANCE SHEETS 2008 2007 (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $1,527,108 $18,324,991 Grant receivable 63,444 - Prepaid insurance 227,313 251,493 Prepaid clinical trial expenses - 926,168 Other prepaid expenses and deposits 143,808 140,359 Total current assets 1,961,673 19,643,011 PROPERTY AND EQUIPMENT: Furniture and fixtures 244,072 221,417 Laboratory equipment 159,186 159,186 Computer software and equipment 258,786 242,707 Leasehold improvements 505,804 177,253 Total property and equipment-at cost 1,167,848 800,563 Less accumulated depreciation (760,329) (542,032) Property and equipment-net 407,519 258,531 OTHER ASSETS: Deferred offering and financing costs 450,861 - Other long-term assets - 10,000 Total other assets 450,861 10,000 TOTAL ASSETS $2,820,053 $19,911,542 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) CURRENT LIABILITIES: Accounts payable $1,379,941 $2,685,751 Accrued clinical trial and NDA expenses 458,260 2,776,543 Accrued payroll 506,537 68,094 Other accrued expenses 352,466 262,347 Accrued interest payable 72,572 22,756 Short-term lease payable 8,468 7,259 Total current liabilities 2,778,244 5,822,750 Long-term lease payable 4,350 12,818 Long-term grant payable 500,000 500,000 Long-term notes payable - related party 2,000,000 2,000,000 Line of credit 9,915,000 3,915,000 Total liabilities 15,197,594 12,250,568 COMMITMENTS AND CONTINGENCIES MINORITY INTEREST - - STOCKHOLDERS' EQUITY (DEFICIT): Common stock, $0.01 par value - 60,000,000 shares authorized; 40,810,932 issued and outstanding at December 31, 2008; 38,502,987 shares issued and outstanding at December 31, 2007 408,109 385,030 Additional paid-in capital 109,601,807 106,859,532 Deficit accumulated during the development stage (122,387,457) (99,583,588) Total stockholders' equity (deficit) (12,377,541) 7,660,974 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $2,820,053 $19,911,542
|SOURCE Advanced Life Sciences Holdings, Inc.|
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