PLYMOUTH MEETING, Pa., March 14 /PRNewswire-FirstCall/ -- Genaera Corporation today announced its financial results for the year and quarter ended December 31, 2006. The net loss for the year ended December 31, 2006 was $21.2 million, or $(0.24) per share basic and diluted, as compared to a net loss of $26.4 million, or $(0.44) per share basic and diluted, for the year ended December 31, 2005. The net loss for the quarter ended December 31, 2006 was $3.6 million, or $(0.03) per share basic and diluted, as compared to a net loss of $7.8 million, or $(0.11) per share basic and diluted, for the quarter ended December 31, 2005. The loss from operations for the year and quarter ended December 31, 2006 was $22.8 million and $4.0 million, respectively, as compared to $27.2 million and $8.2 million for the same periods in 2005.
Genaera's research and development expenses for the year and quarter ended December 31, 2006 were $17.7 million and $3.1 million, respectively, compared to $21.8 million and $6.0 million, respectively, for the same periods in 2005. The decrease was due principally to decreases in costs related to the EVIZON(TM) (squalamine lactate) program for the treatment of wet age-related macular degeneration, clinical trial costs for the LOMUCIN(TM) program and third-party contract research for the IL9 program. These decreases were partially offset by increases in costs related to the trodusquemine (MSI-1436) obesity therapeutic program and increases in indirect expenses due to stock- based compensation relating to the adoption of Statement of Financial Accounting Standards No. 123R, Share-Based Payment (SFAS 123R).
Genaera's general and administrative expenses for the year and quarter ended December 31, 2006 were $6.0 million and $1.5 million, respectively, compared to $5.9 million and $2.3 million, respectively, for the same periods in 2005. The increase in general and administrative expenses for the year ended December 31, 2006 as compared to the same period in 2005 was due principally to an increase in stock-based compensation relating to the adoption of SFAS 123R. This increase was partially offset by decreases in personnel and severance costs, bonus expense and restricted stock compensation expense related to the resignation of the Company's prior Chief Executive Officer in the prior year. The decrease in general and administrative expenses for the quarter ended December 31, 2006 as compared to the same period in 2005 was due principally to decreases in personnel and severance costs. These decreases were partially offset by an increase in stock-based compensation relating to the adoption of SFAS 123R.
The Company's cash, cash equivalents and short-term investment balance was $33.8 million at December 31, 2006.
"We accomplished many of the goals during 2006 that we set in the beginning of the year," stated Jack Armstrong, President and Chief Executive Officer of Genaera Corporation. "While some of the decisions we made were more difficult than others, we look forward to capitalizing on the opportunities before us and unlocking the unrecognized market value of Genaera."
About Genaera
Genaera Corporation is a biopharmaceutical company committed to developing medicines to address substantial unmet medical needs in major pharmaceutical markets. The Company is focusing on the development of trodusquemine (MSI- 1436) as a treatment for obesity. Genaera's other programs include squalamine lactate for the treatment of cancer; interleukin-9 antibody, a potential treatment for asthma and associated respiratory disorders; LOMUCIN(TM), a mucoregulator to treat the overproduction of mucus and secretions involved in cystic fibrosis and other chronic respiratory diseases; and LOCILEX(TM) (pexiganan acetate), a topical antimicrobial (for which the Company is actively seeking a development partner).
This announcement contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties, known and unknown. Forward-looking statements reflect management's current views and are based on certain expectations and assumptions. Such statements include, among others, statements regarding these preliminary results, clinical development plans and prospects for Genaera's programs including trodusquemine (MSI-1436). You may identify some of these forward-looking statements by the use of words in the statements such as "anticipate," "believe," "continue," "develop," "expect," "plan" and "potential" or other words of similar meaning. Genaera's actual results and performance could differ materially from those currently anticipated and expressed in these and other forward-looking statements as a result of a number of risk factors, including, but not limited to: Genaera's history of operating losses since inception and its need for additional funds to operate its business; the costs, delays and uncertainties inherent in scientific research, drug development, clinical trials and the regulatory approval process; the risk that clinical trials for Genaera's product candidates, including trodusquemine (MSI-1436), may be delayed or may not be successful; the risk that Genaera may not obtain regulatory approval for its products, whether due to adequacy of the development program, the conduct of the clinical trials, changing regulatory requirements, different methods of evaluating and interpreting data, regulatory interpretations of clinical risk and benefit, or otherwise; Genaera's reliance on its collaborators in connection with the development and commercialization of Genaera's product candidates; market acceptance of Genaera's products, if regulatory approval is achieved; competition; general financial, economic, regulatory and political conditions affecting the biotechnology and pharmaceutical industry; and the other risks and uncertainties discussed in this announcement and in Genaera's filings with the U.S. Securities and Exchange Commission, all of which are available from the Commission in its EDGAR database at www.sec.gov as well as other sources. You are encouraged to read these reports. Given the uncertainties affecting development stage pharmaceutical companies, you are cautioned not to place undue reliance on any such forward-looking statements, any of which may turn out to be wrong due to inaccurate assumptions, unknown risks, uncertainties or other factors. Genaera does not intend (and it is not obligated) to publicly update, revise or correct these forward-looking statements or the risk factors that may relate thereto.
GENAERA CORPORATION STATEMENTS OF OPERATIONS (In thousands, except per share data) Year Ended Quarter Ended December 31, December 31, 2006 2005 2006 2005 Revenues $892 $446 $528 $42 Costs and expenses Research and development 17,669 21,792 3,057 6,037 General and administrative 5,996 5,891 1,505 2,252 23,665 27,683 4,562 8,289 Loss from operations (22,773) (27,237) (4,034) (8,247) Interest income, net 1,542 870 422 392 (Loss) gain on sale of fixed assets (3) 6 (3) 6 Net loss $(21,234) $(26,361) $(3,615) $(7,849) Net loss per share - basic and diluted $(0.24) $(0.44) $(0.03) $(0.11) Weighted average shares outstanding - basic and diluted 87,075 60,580 104,611 68,677 CONDENSED BALANCE SHEETS (In thousands) December 31, 2006 December 31, 2005 Cash, cash equivalents and investments $33,806 $32,215 Prepaid expenses and other current assets 629 892 Fixed assets, net 759 848 Other assets 56 56 Total assets $35,250 $34,011 Current liabilities $2,427 $5,946 Long-term liabilities 1,770 1,781 Stockholders' equity 31,053 26,284 Total liabilities and stockholders' equity $35,250 $34,011
Genaera CorporationCONTACT: Genaera Corporation: Investor Relations, +1-610-941-5675; orMedia Inquiries: Mike Beyer of Sam Brown Inc., +1-773-463-4211,beyer@sambrown.com
Web site: http://www.genaera.com/
