Redpoint Bio Corporation Reports Fourth Quarter and Year-End 2010 Results

EWING, N.J., March4, 2011 /PRNewswire/ -- Redpoint Bio Corporation (OTCQB: RPBC), a company focused on the development of healthier foods and beverages and new approaches to the treatment of diabetes and obesity, today announced financial and operational results for the quarter and year ended December 31, 2010.

Revenues for the fourth quarter of 2010 were $0.7 million, compared to no revenue for the fourth quarter of 2009. Revenues for the year ended December 31, 2010 were $1.2 million, compared to $1.9 million for the year ended December 31, 2009. The revenues for the year ended December 31, 2010 included a $0.5 million upfront payment in connection with a Licensing and Commercialization Agreement that the Company entered into with International Flavors & Fragrances Inc. (“IFF”) in June 2010 as well as a $0.5 million regulatory approval milestone payment which the Company received from IFF in the fourth quarter of 2010. Also in the fourth quarter of 2010, the Company received a grant for its diabetes program in the amount of approximately $0.25 million in connection with the Qualifying Therapeutic Discovery Project Program under section 48D of the Internal Revenue Code. The revenues for the year ended December 31, 2009 were primarily from the Company’s prior collaboration with Givaudan.

Research and development expenses for the fourth quarter of 2010 were $0.6 million, compared to $1.0 million for the fourth quarter of 2009. Research and development expenses for the year ended December 31, 2010 were $3.0 million, compared to $5.6 million in the same period of 2009. The decrease in expenses was primarily attributable to the reductions in workforce as a result of the corporate restructurings that the Company announced in February and May of 2009.

General and administrative expenses for the fourth quarter of 2010 were $0.7 million, compared to $0.8 million for the fourth quarter of 2009. General and administrative expenses for the year ended December 31, 2010 were $3.6 million, compared to $5.0 million in the same period of 2009.

Redpoint reported a net loss for the fourth quarter of 2010 of $0.6 million, or $0.01 per common share, compared to $1.8 million, or $0.02 per common share, for the fourth quarter of 2009.

The net loss for the year ended December 31, 2010 was $5.5 million, or $0.07 per common share, compared to $8.8 million, or $0.11 per common share, for the year ended December 31, 2009.

Redpoint had approximately $1.1 million in cash and cash equivalents at December 31, 2010. In addition, in January 2011 Redpoint sold a portion of its New Jersey State net operating loss carryforwards recognizing a cash benefit of approximately $0.4 million. As of March 4, 2011, Redpoint has cash and cash equivalents of approximately $0.7 million. Redpoint believes that its current capital resources are sufficient to meet its operating and capital requirements through April 2011. Thus, absent additional funding, Redpoint will run out of funds in the second quarter of 2011. Redpoint continues to actively seek additional corporate collaborations, equity investments from third parties and license agreements from various strategic partners to enhance our liquidity position. If the Company is unable to raise additional funds, it will be required to eliminate its spending plans, license or sell assets it would otherwise seek to commercialize on its own, or file for bankruptcy. There can be no assurance that the Company can obtain financing, if at all, on acceptable terms.

2010 Highlights

In June 2010, the Company entered into a license and commercialization agreement with IFF, a global leader in the food and beverage industry, covering the commercialization of RP44, Redpoint’s all-natural sweetness enhancer. In October 2010, IFF received notification by the Flavor and Extract Manufacturers Association (FEMA) that RP44 had been determined to be Generally Recognized As Safe (GRAS), triggering a $0.5 million milestone payment to the Company.

Redpoint also recently reported that it had advanced its discovery program for all-natural enhancers of salty taste. The objective of the salt enhancer program is to identify natural flavor ingredients that can provide a significant reduction in the amount of sodium in food and beverage products, yet maintain the salty taste that consumers desire.

Redpoint is using its proprietary MOG assay technology for its salt enhancer discovery program. The MOG technology was developed specifically to deal with the complex sensory and experimental issues associated with the discovery of all-natural compounds, which are often derived from plant or fermentation sources containing complex mixtures of taste ingredients. Historically, natural tastants or enhancers have been discovered by trial and error using human tasters. The MOG is an enabling technology that facilitates high throughput screens of tastant libraries and natural product extracts by rodents trained to discriminate specific taste standards. MOG-trained rodents are “expert” taste testers capable of rapidly identifying taste from small samples with a high level of accuracy, providing an effective means of evaluating the taste properties of complex natural product extracts.

Redpoint originally developed its MOG technology to discover natural high-potency sweeteners and sweetener enhancers. More recently, Redpoint scientists have developed and optimized a high-throughput salt-taste detection system, in which MOG-trained rodents discriminate salt from other essential tastes (savory, sweet, sour, and bitter). The MOG approach will be used to evaluate the salt-tasting and salt-enhancing potential of natural sources such as fermentation products and edible plant extracts, with a focus on isolating active components from ingredients already used in the food industry.

Regarding its diabetes research program, in November 2010, the Company received a grant relating to its diabetes program in the amount of approximately $0.25 million in connection with the Qualifying Therapeutic Discovery Project Program under section 48D of the Internal Revenue Code. The TRPm5 ion channel was originally identified as an important component of taste signaling circuits responsible for sensing sweet, savory, and bitter compounds on the tongue. Recently, an emerging body of scientific evidence has demonstrated that the TRPm5 ion channel is also found in the pancreas and gastrointestinal tract, suggesting a potential role in the regulation of metabolism and satiety.

Specifically, TRPm5 may be involved in the secretion of important hormones like GLP1 and insulin that control sugar uptake and metabolism. Consequently, modulators of TRPm5 could potentially find application as a new therapy for adult-onset diabetes and obesity. Redpoint is seeking a large pharmaceutical company as a partner for a collaborative research and development program to further develop its TRPm5 modulators for diabetes and obesity therapeutic applications.

About Redpoint Bio Corporation

Redpoint’s understanding of the biology of taste and its relationship to metabolism, satiety, and diabetes impact both the development of healthier foods and potentially, new approaches for treating diabetes and obesity. Redpoint is developing taste modulators for the food and beverage industry with the aim of enhancing sweet and savory flavors in food and beverage products which can lead to reductions in added sugar and salt. The development of healthier and more tasteful food can contribute to improving the overall health of the world’s population, since many modern diseases are related to excess dietary sugar and salt. Recent scientific research suggests that many of the same taste-signaling components found on the tongue are also expressed as part of a nutrient-sensing system located in the gastrointestinal tract which could lead to new opportunities for the discovery of novel diabetes or obesity therapeutics. For more information, please visit the Company’s website at www.redpointbio.com.

Safe Harbor Statement

In addition to historical facts or statements of current condition, this press release contains forward-looking statements within the meaning of the “Safe Harbor” provisions of The Private Securities Litigation Reform Act of 1995. Forward-looking statements provide the Company’s current expectations or forecasts of future events. The Company’s performance and financial results could differ materially from those reflected in these forward-looking statements due to, among other factors, the uncertain economic viability of production of RP44 on a commercial scale, the Company’s inability to enter into additional collaboration agreements or raise additional capital to sustain operations, uncertainty inherent in the discovery phase of technological development, any efforts by third parties to invalidate or limit any patents, the marketplace acceptance of its products, the decisions of regulatory authorities, the results of clinical trials and general financial, economic, regulatory and political conditions affecting the food and beverage, biotechnology and pharmaceutical industries generally. Given these risks and uncertainties, any or all of these forward-looking statements may prove to be incorrect. The Company undertakes no obligation to update publicly any forward-looking statement.