SOPHIA ANTIPOLIS, France, Oct. 29 /PRNewswire/ -- NicOx S.A. (Eurolist: COX) today reported financial results for the nine months ended September 30, 2007.
Financial summary of the first nine months of 2007:
NicOx achieved a significant increase (175%) in revenues during the first nine months of 2007, which reached euro 18.4 million, compared to euro 6.7 million for the corresponding period of 2006. This increase is primarily due to payments from Merck & Co., Inc. and Pfizer Inc. recognized during this period.
NicOx was successful in managing operating expenses and conserving financial resources during the first nine months of 2007, while also initiating the 302 and 303 phase 3 trials for naproxcinod. Naproxcinod is NicOx’ lead investigational drug and the first compound in the COX-Inhibiting Nitric Oxide Donator (CINOD) class for the treatment of the signs and symptoms of osteoarthritis. Operating expenses were euro 35.8 million for the first nine months of 2007, of which 75.4% were attributable to R&D expenses. Net loss was euro 13.7 million during the first nine months of 2007.
On September 30, 2007, NicOx had cash, cash equivalents, and current and non-current financial instruments of euro 187.3 million, compared to euro 81.7 million on December 31, 2006. This increase was primarily due to the capital increase with preferential subscription rights completed in February 2007.
Eric Castaldi, Chief Financial Officer of NicOx, declared: “We have been focused on our phase 3 clinical plan for naproxcinod and especially the initiation of the 302 and 303 studies. We have also made the important step of establishing a U.S. headquarters and core Commercial Affairs team. Consequently, we have seen an expected increase in operating expenses during the period which we anticipate will continue over the next few quarters. Nevertheless, these expenses have been partially mitigated by increasing revenues, notably by payments from Pfizer and Merck. Over the past three months we have received a euro 5 million milestone from Merck that was linked to another important step in our promising antihypertensive collaboration. Our solid cash position should enable us to maximize the value of our investigational drug portfolio and provide flexibility for the strategic growth of the Company.”
Review of the financial results for the first nine months of 2007:
Revenues
During the nine months ended September 30, 2007, NicOx’ revenues increased by euro 11.7 million to reach euro 18.4 million, compared to euro 6.7 million during the same period in 2006. This significant increase results from the following payments that were entirely recognized as revenues for the nine months ended September 30, 2007:
These amounts, received by the Company, result from a firm commitment by the other contracting party. The payments have been immediately recognized in revenues because NicOx will not have continuing involvement in the future development of the compounds that are the subject of the collaboration agreements mentioned above.
For the first nine months of 2007, NicOx also recognized the following sums, initially recorded as prepaid income, in revenues:
The initial March 2006 payments from Pfizer and Merck listed above were deferred over the estimated duration of NicOx’ involvement in the research and development programs provided for under the terms of the corresponding agreements. The terms surrounding the duration of NicOx’ involvements in these programs are revised periodically, if necessary. The payments received from Pfizer for the funding of the research activities are deferred over a period of 12 months from the date of invoice.
Operating expenses
For the nine months ended September 30, 2007, consolidated operating expenses totaled euro 35.8 million with 75.4% attributable to research and development expenses and 24.6% to selling and administrative expenses.
Research and development expenses reached euro 27.0 million during the first nine months of 2007 (including euro 1.6 million allocated to cost of sales). These expenses are primarily due to the costs associated with the phase 3 development of naproxcinod, such as expenses related to contract research organizations and suppliers involved in naproxcinod’s clinical development and manufacturing activities. At this time the cost of sales principally corresponds to the expenses incurred by NicOx in performing research activities under the contracts signed with Pfizer and Merck. Operational subsidies from the research tax credit, which are deducted from research and development expenses, amounted to euro 3.1 million for the nine months ended September 30, 2007. On September 30, 2007, the Company employed 79 people in research and development, compared to 64 people on December 31, 2006.
Administrative and selling expenses amounted to euro 8.8 million during the first nine months of 2007. General and administrative expenses were euro 5.6 million for the nine months ended September 30, 2007, and were primarily the result of personnel expenses in administrative and financial functions, as well as to the remuneration of corporate officers, including stock options, gratuitous share, and warrant attributions. These expenses also included structural costs such as leases, property service charges, and maintenance costs (excluding structural costs related to research and development activities), legal and accounting fees, and other external administrative costs.
Selling expenses, which reached euro 3.2 million during the first nine months of 2007, were the result of market analysis activities for naproxcinod, as well as business development and communication activities. The increase in selling expenses also is due to the hiring of new personnel following the creation of a commercial department whose primary function is to develop commercial strategies for NicOx’ product portfolio. On September 30, 2007, the Company employed 32 people in selling, general, and administrative departments, compared to 25 people on December 31, 2006.
Operating loss
The operating loss amounted to euro 17.4 million during the first nine months of 2007. This situation is explained primarily by the strong increase in revenues recognized during the period as explained above.
Other results
Net financial income amounted to euro 3.7 million during the first nine months of 2007. Net financial income has benefited from the increase in the Company’s cash, cash equivalents, and financial instruments following the capital increase completed in February 2007.
The income tax expense incurred by NicOx during the first nine months of 2007 relates principally to its Italian subsidiary and amounts to euro 0.03 million.
Net loss
The Company recorded a net loss of euro 13.7 million for the nine months ended September 30, 2007. This is primarily due to the operating expenses being offset by a strong increase in the revenues recognized over the period, the significant increase in the research tax credit over the period and its impact on the research and development expenses, and the increase in the net financial income following the investment of the net proceeds of the rights offering completed in February 2007.
Balance sheet items
On September 30, 2007, the Company’s current and non-current financial instruments and cash and cash equivalents amounted to euro 187.3 million, compared to euro 81.7 million on December 31, 2006. This significant increase in cash, cash equivalents, and current and non-current financial instruments is primarily attributed to the increase of capital with preferential rights completed in February 2007, the net proceeds of which amounted to euro 120.7 million.
The indebtedness incurred by NicOx is mainly short-term operating debt. As of September 30, 2007, the Company’s current liabilities amounted to euro 15.4 million, including notably euro 8.0 million in accounts payable to suppliers and external collaborators, euro 3.7 million of deferred revenues through payment received under collaboration agreements, euro 2.3 million in accrued compensation for employees, and euro 1.0 million in taxes payable.
NicOx had no outstanding loans and the Company’s long-term financial leasing commitments amounted to euro 0.03 million as of September 30, 2007.
NicOx (Bloomberg: COX:FP, Reuters: NCOX.PA) is a product-driven biopharmaceutical company dedicated to the development of nitric oxide- donating drugs to meet unmet medical needs. NicOx is targeting the therapeutic areas of inflammation and cardio-metabolic disease. Resources are focused on two lead compounds, naproxcinod (formerly HCT 3012); in phase 3 development for the treatment of signs and symptoms of osteoarthritis, and NCX 4016, in phase 2 for type 2 diabetes.
NicOx has strategic partnerships with some of the world’s leading pharmaceutical companies, including Pfizer Inc. and Merck & Co., Inc.
NicOx S.A. is headquartered in Sophia-Antipolis, France, and is a public company listed on the Eurolist of Euronext(TM) Paris (segment: Next Economy).
The elements included in this communication may contain forward-looking statements subject to certain risks and uncertainties. Actual results of the company may differ materially from those indicated in the forward-looking statements because of different risks factors described in the Company’s document of reference.
http://www.nicox.comhanks@nicox.comlburns@burnsmc.comjsnowden@burnsmc.comjbirt@fd-us.comvalerie.auffray@citigatedr.co.ukdavid.dible@citigatedr.co.uk
CONTACT: Karl Hanks, Manager of Corporate Relations and Market Analysis of
NicOx, +33(0)4-97-24-5342, hanks@nicox.com; or Investors in the United
States, Lisa Burns, lburns@burnsmc.com, or Juliane Snowden,
jsnowden@burnsmc.com, both of Burns McClellan, +1-212-213-0006; or Media in
the United States, Jonathan Birt of FD, +1-212-850-5634, jbirt@fd-us.com;
or Media in Europe, Valerie Auffray, +44(0)207-282-2979,
valerie.auffray@citigatedr.co.uk, or David Dible, +44(0)207-282-2949,
david.dible@citigatedr.co.uk, both of Citigate Dewe Rogerson, all for NicOx
S.A.
Web site: http://www.nicox.com/
