BETHESDA, Md., May 13, 2011 /PRNewswire/ -- Spherix Incorporated (NASDAQ: SPEXD) -- an innovator in biotechnology for therapy in diabetes, metabolic syndrome and atherosclerosis, and providers of technical and regulatory consulting services to food, supplement, biotechnology and pharmaceutical companies -- today reported financial results for the three months ended March 31, 2011.
Recent and Upcoming Highlights
Financial Results for the Three Months Ended March 31, 2011The net loss for the first quarter of 2011 was $0.2 million or $0.10 per share, compared with a net loss for the first quarter of 2010 of $2.1 million or $1.25 per share. The narrowing of the net loss was attributed mainly to lower research and development expenses, and gain on settlement of obligations of $0.8 million of which $0.6 million related to a settlement of future purchase obligations with the Company's manufacturer of D-tagatose and $0.2 million related to an agreement with the Company's founders, Gilvert V. Levin and M. Karen Levin.
Spherix reported research and development (R&D) expense for the first quarter of 2011 of $0.4 million, a decrease of $1.0 million from R&D expense of $1.3 million in the prior year's first quarter. R&D expenses are entirely incurred by Biospherics, the Company's pharmaceutical development subsidiary. The decrease in R&D was attributed to lower spending following completion of a Phase 3 clinical trial and a Phase 2 dose-ranging trial to develop D-tagatose for the treatment of Type 2 diabetes. First quarter 2011 R&D expense is related to the Company's preclinical trials for the use of both D-tagatose and SPX10624258 in lowering triglyceride levels. D-Tagatose, a naturally occurring sugar, is a low-calorie, full-bulk sweetener previously approved by the Food and Drug Administration (FDA) as a GRAS (Generally Recognized as Safe) food ingredient.
The Company had cash and cash equivalents of $6.5 million and working capital of $6.6 million as of March 31, 2011, compared with $5.6 million and $4.9 million, respectively, as of December 31, 2010. The Company raised $2.77 million in a registered direct offering of common stock and warrants during the first quarter.
Commenting on the quarter and recent weeks, Dr. Kruger said, "We have been very pleased thus far with the progress and results of our preclinical studies with D-tagatose in the treatment of high triglycerides and other metabolic disorders. We also tested our new pipeline compound for treating dyslipidemia, SPX10624258, which was licensed from the University of Kentucky last year, in conjunction with D-tagatose and were encouraged by the results. Although it's very early to draw conclusions, it appears that the combination of the two compounds are worthy of further preclinical study. Combination therapy is an important tool in many complex disease settings, such as the metabolic syndrome. The Company also expects to conduct a human proof-of-concept trial that may begin in 2012 once a new IND is in place for the SPX10624258/D-tagatose combination. We estimate that it will likely take three or more years to complete the studies necessary to attract a pharma partner to complete the development, and an additional two to four years to complete all necessary studies for an NDA filing for D-tagatose or SPX10624258."
Dr. Kruger continued, "With respect to the Type 2 diabetes indication, we continue to actively search for an appropriate partner to develop the drug further. As we previously reported, because it would likely take several additional years of clinical trials and could cost as much as several hundred million dollars to secure FDA approval for D-tagatose as a diabetes drug, Spherix does not have the resources to continue development for this indication. We are hopeful partners will be attracted to our Phase 3 trial in Type 2 diabetes and the stellar safety record for D-tagatose," Dr. Kruger added.
Until June 2010 Biospherics' activities were limited to developing D-tagatose as a novel, first-in-class treatment for Type 2 diabetes. In June 2010 the Company announced that it will actively seek a pharma partner to continue the diabetes development and that it will also explore D-tagatose as a potential treatment for high triglycerides, a risk factor for atherosclerosis, myocardial infarction and stroke. The clinical trials in the use of D-tagatose for the treatment of Type 2 diabetes have been the primary focus of the Biospherics segment.
About Spherix Spherix Incorporated was launched in 1967 as a scientific research company under the name Biospherics Research. The Company now leverages its scientific and technical expertise and experience through its two subsidiaries – Biospherics Incorporated and Spherix Consulting, Inc. Biospherics is dedicated to development of D-tagatose and recently completed a Phase 3 clinical trial to study the use of D-tagatose as a treatment for Type 2 diabetes. Biospherics is actively seeking a pharma partner to continue the diabetes development while exploring D-tagatose as a potential treatment for high triglycerides, a risk factor for atherosclerosis, myocardial infarction, and stroke. Spherix's Consulting subsidiary provides scientific and strategic support for suppliers, manufacturers, distributors and retailers of conventional foods, biotechnology-derived foods, medical foods, infant formulas, food ingredients, dietary supplements, food contact substances, pharmaceuticals, medical devices, consumer products and industrial chemicals and pesticides. For more information, please visit www.spherix.com.
Forward-Looking Statements This release contains forward-looking statements which are made pursuant to provisions of Section 21E of the Securities Exchange Act of 1934. Investors are cautioned that such statements in this release, including statements relating to planned clinical study design, regulatory and business strategies, plans and objectives of management and growth opportunities for existing or proposed products, constitute forward-looking statements which involve risks and uncertainties that could cause actual results to differ materially from those anticipated by the forward-looking statements. The risks and uncertainties include, without limitation, risks that product candidates may fail in the clinic or may not be successfully marketed or manufactured, we may lack financial resources to complete development of D-tagatose, the FDA may interpret the results of studies differently than us, competing products may be more successful, demand for new pharmaceutical products may decrease, the biopharmaceutical industry may experience negative market trends, our continuing efforts to develop D-tagatose may be unsuccessful, our common stock could be delisted from the Nasdaq Capital Market, and other risks and challenges detailed in our filings with the U.S. Securities and Exchange Commission, including our current report on Form 8-K filed on October 10, 2007. Readers are cautioned not to place undue reliance on any forward-looking statements which speak only as of the date of this release. We undertake no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances that occur after the date of this release or to reflect the occurrence of unanticipated events.
- Tables Follow -Consolidated Statements of Operations(Unaudited)Three Months Ended March 31,20112010Revenue$
332,291Operating expenseDirect costs
(130,296)(119,629)Research and development expense
(355,503)(1,311,879)Selling, general and administrative expense
(932,204)(1,050,647)Total operating expense
(1,418,003)(2,482,155)Loss from operations(1,111,700)(2,149,864)Interest income
44,630-Gain on settlement of obligations
845,000-Loss before taxes
(220,851)(2,147,876)Income tax expense
(2,147,876)Net loss per share, basic
(1.25)Net loss per share, diluted
(1.25)Weighted average shares outstanding, basic
2,448,6471,715,065Weighted average shares outstanding, diluted
2,448,6471,715,065Consolidated Balance SheetsASSETSMarch 31, 2011
2010Current assetsCash and cash equivalents
5,575,310Trade accounts receivable, net of allowance of $0 and $65,000
105,68574,110Prepaid research expenses
404,032464,322Prepaid expenses and other assets
146,226155,261Total current assets
7,393,8616,824,990Property and equipment, net of accumulated depreciation of $215,008 and $197,971
139,498154,161Patents, net of accumulated amortization of $1,839 and $50,725
7,017,072LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilitiesAccounts payable and accrued expenses
,211,561Accrued salaries and benefits
96,515170,641Total current liabilities
818,8162,576,853Commitments and contingencies
--Stockholders' equityPreferred stock, $0.01 par value, 2,000,000 shares authorized;5,250 series B issued and 1 outstanding at March 31, 2011and December 31, 2010
--Common stock, $0.01 par value, 5,000,000 shares authorized; 2,570,531 and 2,143,631 issued, 2,562,487 and 2,135,587outstanding at March 31, 2011 and December 31, 2010,respectively
25,70521,436Paid-in capital in excess of par value
41,110,13738,568,814Treasury stock, 8,043 shares, at cost at March 31, 2011and December 31, 2010
(33,920,581)(33,685,245)Total stockholders' equity
6,750,4754,440,219Total liabilities and stockholders' equity
|SOURCE Spherix Incorporated|
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