HUNTINGDON VALLEY, Pa., May 16 /PRNewswire-FirstCall/ -- Cellegy Pharmaceuticals, Inc. announced its first quarter 2006 financial results today.
Revenues for the first three months of 2006 were $1,402,000 compared with $1,606,000 for the same period in 2005. The first quarter revenues in 2006 consisted primarily of $914,000 in grant revenue realized by Biosyn, $65,000 in licensing revenue and $423,000 in sales of its Rectogesic(R) (nitroglycerin ointment) product in Australia and inventory sale at cost to ProStrakan. The licensing revenue consisted of amortization of upfront payments received from licensee in connection with the Company’s existing licensing agreements.
Research and development expenses the first quarters of 2006 and 2005 were $1,106,000 and $2,777,000, respectively. The decrease of $1,671,000 was primarily attributable to decreased clinical testing fees, professional fees and a reduction in research and development salary expense.
Selling, general and administrative expenses during the first quarter of 2006 were $2,104,000 compared to $4,018,000 for the same period in 2005. The decrease of $1,914,000 was primarily attributable to decrease in legal and professional fees and office salaries.
Net loss for the quarter ended March 31, 2006 was approximately $2,351,000 or $0.08 per share based on 29,832,000 weighted average shares outstanding, compared with a net loss of approximately $5,086,000 or $0.19 per share for the same quarter in 2005 based on 26,136,000 weighted average shares outstanding. The net loss increased the Company’s accumulated deficit since the inception to approximately $134.7 million at March 31, 2006.
The Company had cash, cash equivalents and restricted cash of $1.1 million at March 31, 2006 compared to $2.3 million at December 31, 2005 and $3.9 million at March 31, 2005.
About Cellegy
Cellegy Pharmaceuticals is a specialty biopharmaceutical company that develops and commercializes prescription drugs for the treatment of women’s health care conditions, including sexual dysfunction, HIV prevention and gastrointestinal disorders. Savvy(R) (C31G vaginal gel), a novel microbicide gel product for contraception and the reduction in transmission of HIV in women, is currently undergoing Phase 3 clinical studies in the United States and Africa.
Cellegesic(TM) (nitroglycerin ointment), branded Rectogesic(R) outside the United States, is approved and is being marketed in the United Kingdom by ProStrakan, for the treatment of pain associated with chronic anal fissures. A similar formulation of Rectogesic is currently being sold in Australia, New Zealand, Singapore and South Korea.
Forward Looking Statements
This press release contains forward-looking statements. Investors are cautioned that these forward-looking statements are subject to numerous risks and uncertainties, known and unknown, which could cause actual results and developments to differ materially from those expressed or implied in such statements. Such risks and uncertainties relate to, among other factors: the timing and outcome of FDA action following the FDA Advisory Committee’s review and recommendation regarding the Company’s Cellegesic NDA; completion, timing and outcome of clinical trials, including primarily the Savvy prevention and contraceptive Phase 3 studies; the need and ability to complete corporate partnerships and additional financings. For more information regarding risk factors, refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, Quarterly Report on Form 10-Q for the quarter ended March 31, 2006 and other filings with the Securities and Exchange Commission.
Based on the current cash position and negative operating cash flows, Cellegy received a going concern qualification in the report of its independent registered public accounting firm included in the Annual Report on Form 10-K for the year ended December 31, 2005, expressing substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company’s cash resources are limited and the Company is currently considering sales of certain assets, including its technologies, partnering with other firms for the development and commercialization of its product candidates and further reductions in expense.
Cellegy believes that available cash resources will be adequate to satisfy its capital needs through at least June 30, 2006 assuming no material adverse financial impact associated with the PDI litigation. At present, our revenues from existing licensing arrangements, funding agreements and other sources are not sufficient to offset our ongoing operating expenses or to pay in full our current obligations as reflected on our financial statements. The Company’s plans with regard to these matters include raising additional required funds through one or more of the following options, among others: sales of assets, seeking partnerships with other pharmaceutical companies or private foundations to co-develop and fund research and development efforts, pursuing additional out-licensing arrangements with third parties, re-licensing and monetizing the Company’s expected future payments from existing licensees and seeking equity or debt financing. In addition, the Company will continue to implement cost reduction programs and reduce discretionary spending, if necessary. Funds provided from sales of subsidiaries, assets, equity or debt financing, or other arrangements, if obtained, would permit satisfaction of capital needs for a longer period of time. There is no assurance that any of the above options will be implemented on a timely basis or that the Company will be able to obtain additional financing on acceptable terms, if at all. The FDA Advisory Committee’s determination on April 26, 2006, concerning our Cellegesic NDA, particularly if the FDA subsequently makes a favorable determination with respect to the NDA, may improve the prospects for one or more such transactions although there can be no assurances that this will be the case. The existence and extent of our obligations could adversely affect our business, operations and financial condition. Failure to obtain additional funds as described above may affect the timing of development, clinical trials or commercialization activities relating to certain products and could require us to curtail our operations, reduce personnel, sell part or all of our assets or seek protection under bankruptcy laws. There is a risk that one or more of our creditors could bring lawsuits to collect amounts to which they believe they are entitled. In the event of lawsuits of this type, if we are unable to negotiate settlements or satisfy our obligations, we could be forced into bankruptcy.
CELLEGY PHARMACEUTICALS, INC. SUMMARY FINANCIAL RESULTS March 31, 2006 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except per share amounts) Three Months ended March 31, 2006 2005 Revenues $1,402 $1,606 Cost and expenses: Cost of product sales 284 21 Selling, general and administrative 2,104 4,018 Research and development 1,106 2,777 Purchased Research and development -- -- Total costs and expenses 3,494 6,816 Operating Loss (2,092) (5,210) Interest and other income, net (259) 124 Net Loss $(2,351) $(5,086) Basic and diluted net loss per common share $(0.08) $(0.19) Weighted average common shares used in computing basic and diluted net loss per common share 29,832 26,136 CELLEGY PHARMACEUTICALS, INC. SUMMARY FINANCIAL RESULTS March 31, 2006 CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands) Three Months ended March 31, 2006 2005 Cash, restricted cash and investments $1,143 $3,911 Other assets 2,485 4,838 Total assets $3,628 $8,749 Current liabilities 8,640 7,318 Deferred revenue 3,323 7,986 Other long-term payables and derivative instrument 484 5,239 Stockholders’ deficit (8,819) (11,794) Total liabilities and stockholders’ deficit $3,628 $8,749
Cellegy Pharmaceuticals, Inc.
CONTACT: Richard C. Williams, Chairman and Interim CEO, +1-650-616-2200,or Robert J. Caso, Vice President, Finance & CFO, +1-215-914-0900, ext.603, both of Cellegy Pharmaceuticals, Inc.
Web site: http://www.cellegy.com/
