MONTVALE, N.J., February 22, 2007 -- Memory Pharmaceuticals Corp. (Nasdaq:
MEMY), a biopharmaceutical company focused on the discovery and development of
innovative drug candidates for the treatment of a broad range of central
nervous system (CNS) conditions, today reported its financial results for the
fourth quarter and year ended December 31, 2006.
"2006 was a significant year both clinically and strategically for Memory
Pharmaceuticals. In addition to achieving multiple milestones under our
collaborations, we also advanced our clinical pipeline with two ongoing Phase
2a trials. We also made important progress on the business front by expanding
our nicotinic alpha-7 collaboration with Roche, and by strengthening our
balance sheet," said Jim Sulat, President and Chief Executive Officer. “We
anticipate that 2007 will bring additional significant clinical advances as we
expect to complete by the end of the year proof-of-concept trials for MEM 1003
in bipolar disorder and Alzheimer's disease and for MEM 3454 in Alzheimer's
disease."
For the quarter ended December 31, 2006, the Company reported a net loss of
$14.7 million, or $0.23 per share, compared to a net loss of $3.6 million, or
$0.10 per share, for the same period in 2005. Net loss for the quarter ended
December 31, 2006 includes a non-cash loss of $6.0 million related to the
warrants issued in the Company's September 2005 private placement and a
non-cash charge of $0.5 million related to Statement of Financial Accounting
Standards 123R, “Share-based Payments” (SFAS 123R). For the quarter ended
December 30, 2006, after removing the effects of the two non-cash items noted
above, the Company’s non-GAAP net loss was $8.1 million, or $0.13 per share.
For the year ended December 31, 2006, the Company reported a net loss of $31.1
million, or $0.70 per share, compared to a net loss of $31.7 million, or $1.20
per share, in 2005. The 2006 net loss includes a non-cash loss of $0.2 million
related to the warrants issued in the Company's September 2005 private
placement and a non-cash charge of $2.6 million related to SFAS 123R. After
removing the effects of the two non-cash items noted above, the Company’s
non-GAAP net loss for 2006 was $28.3 million, or $0.64 per share.
In calculating non-GAAP earnings, management excludes any unrealized gains or
losses on the warrants issued in the Company’s 2005 private placement and the
expense associated with SFAS 123R. Current GAAP requires that the fair value of
the warrants issued in the 2005 private placement be classified as a liability
on the Company's Balance Sheet, with the change in fair value recognized in the
Company's Statement of Operations as unrealized gains or losses. This treatment
results from the potential magnitude for cash penalties if the Company fails to
maintain the registration statement related to its 2005 private placement. A
reconciliation of GAAP to non-GAAP earnings is presented in the tables at the
end of this press release.
For the quarter ended December 31, 2006, the Company reported revenue of $2.6
million, compared to revenue of $3.7 million for the same period in 2005. For
the year ended December 31, 2006, revenue was $9.3 million, compared to revenue
of $11.1 million in 2005. Revenue relates to the Company's two agreements with
Hoffmann La-Roche, one of which is for the development of PDE4 inhibitors and
the other for the development of nicotinic alpha-7 agonists, and the Company's
agreement with Amgen for the development of PDE10 inhibitors. This revenue
includes the amortization of upfront non-refundable fees and milestone
payments, in addition to payments received for research and development
funding.
Research and development expenses for the quarter ended December 31, 2006 were
$10.5 million compared to $8.2 million for the same period in 2005. The
increase in operating cost included $3.2 million in increased costs associated
with the clinical development of MEM 1003 and MEM 3454 and $0.1 million
increased personnel and personnel-related costs. Included in the 2006 personnel
and personnel-related costs is a $0.3 million non-cash compensation charge
related to SFAS 123R. Research and development expenses for the quarter ended
December 31, 2005 included a $1.0 million milestone payment to Bayer associated
with the commencement of the Phase 2a clinical trial of MEM 1003 in November
2005.
Research and development expenses for the year ended December 31, 2006 were
$33.8 million compared to $33.7 million for the same period in 2005. The
increase in operating cost included $2.2 million in increased costs associated
with the clinical development of MEM 1003 and MEM 3454 and a $0.1 million
increase in insurance cost. These cost increases were partially offset by $0.9
million in reduced personnel and personnel-related costs, and $0.3 million in
reduced laboratory supply costs. Personnel and personnel-related costs in 2006
include a $1.4 million non-cash compensation charge related to SFAS 123R.
Research and development expenses for the year ended December 31, 2005 included
a $1.0 million milestone payment to Bayer associated with the commencement of
the Phase 2a clinical trial of MEM 1003 in November 2005.
General and administrative expenses for the quarter ended December 31, 2006
were $1.8 million, compared to $2.0 million for the same period in 2005. For
the fourth quarter of 2006, these expenses include a $0.4 million reduction in
legal and patent fees, offset by a $0.2 million increase in personnel and
personnel-related costs. Included in the personnel and personnel related costs
is a non-cash compensation charge of $0.2 million related to SFAS 123R.
General and administrative expenses for the year ended December 31, 2006 were
$8.4 million compared to $8.4 million for the same period in 2005. For the year
ended December 31, 2006, these expenses include a non-cash compensation charge
of $1.2 million related to SFAS 123R that was offset by decreased legal and
patent fees of $0.6 million, decreased personnel and personnel-related costs of
$0.3 million and reduced administrative cost of $0.3 million.
At December 31, 2006, the Company had cash, cash equivalents and marketable
securities of approximately $51.3 million, compared to $44.1 million at the end
of 2005. The Company expects that its existing cash, cash equivalents, and
marketable securities, together with payments required to be made under its
collaboration agreements, should be sufficient to fund operating expenses,
repayment of equipment notes, and capital equipment requirements through the
middle of 2008.
Fourth Quarter Highlights and Recent Developments
-- MEM 3454
Investigational new drug application (IND) approved for MEM 3454 for
Alzheimer’s disease. In December 2006, the Company announced that the
U.S. Food and Drug Administration had released the clinical hold on
MEM 3454 after completing its review of the IND for this drug
candidate. The Company plans to start the Phase 2a trial of MEM 3454
in Alzheimer’s disease in the first quarter of 2007.
Achieved Milestone for Development of MEM 3454 from Roche. In October
2006, the Company announced that Roche elected to maintain its option
to obtain an exclusive license for MEM 3454, the lead compound from
the Company’s nicotinic alpha-7 receptor agonist alliance, triggering
a milestone payment to the Company of $2.0 million. Roche's decision
was based upon the Company’s Phase 1 work on MEM 3454, which satisfied
a set of criteria that was pre-defined by Roche.
-- MEM 1003
Completed Dosing of Phase 2a Trial of MEM 1003 in Bipolar Disorder.
In November 2006, the Company announced that it had completed
enrollment in its Phase 2a trial of MEM 1003 in patients with acute
mania in bipolar disorder, which the Company is conducting as part of
its agreement with The Stanley Medical Research Institute (SMRI).
The Company has now completed dosing patients in the trial and expects
to report top-line results in the first quarter of 2007.
Achieved Milestone for Phase 2a Trial of MEM 1003 in Bipolar Disorder.
In November 2006, the Company announced that it had earned a milestone
payment of $960,000 from SMRI related to the ongoing Phase 2a trial of
MEM 1003 in patients with acute mania in bipolar disorder. In January
2007, the Company earned its second milestone of $640,000 from SMRI
related this trial. These milestone payments were triggered by a set
of criteria, pre-defined by SMRI, regarding the progress of the trial.
-- Financial Position
Closed $32.2 Million Private Placement. In October and December 2006,
the Company raised gross proceeds of approximately $32.2 million
through a private placement of 28.2 million shares of common stock at
$1.11 per share and warrants for the purchase of an aggregate of 7.1
million shares of common stock at an exercise price of $1.33 per share.
Conference Call and Webcast Information
Memory Pharmaceuticals will hold a conference call on Thursday, February 22,
2007, at 9:00 a.m. EST to discuss the Company's fourth quarter and full year
2006 financial results. The conference call will also be broadcast live from
the "Investors" section of the Company's website. Memory Pharmaceuticals'
senior management will host the conference call. Investors and other interested
parties may access the call as follows:
Date: Thursday, February 22, 2007
Time: 9:00 a.m. EST
Telephone (U.S.): 866.356.4281
Telephone (international): 617.597.5395
Participant Passcode: 11640389
Webcast: http://www.memorypharma.com under the
"Investors" section
An audio replay of the conference call will be available from 11:00 a.m. EST on
Thursday, February 22, 2007, until Thursday, March 1, 2007. To access the
replay, please dial 888.286.8010 (U.S.) or 617.801.6888 (international) and
enter passcode number 50028326. An audio replay of the conference call will
also be available under the "Investors" section of the Company's website during
the same period.
About the Company
Memory Pharmaceuticals Corp., a biopharmaceutical company, is focused on
developing innovative drugs for the treatment of debilitating CNS disorders
such as Alzheimer's disease, schizophrenia, depression and bipolar disorder.
For additional information, please visit our website at
http://www.memorypharma.com.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 that are subject to risks and
uncertainties. All statements, other than statements of historical facts,
regarding management's expectations, beliefs, goals, plans or Memory
Pharmaceuticals’ prospects, future financial position, future revenues and
projected costs should be considered forward-looking. Readers are cautioned
that actual results may differ materially from projections or estimates due to
a variety of important factors, including the risks and uncertainties
associated with: obtaining additional financing to support Memory
Pharmaceuticals' R&D and clinical activities and operations; conducting
preclinical and clinical trials of Memory Pharmaceuticals’ drug candidates that
demonstrate these candidates' safety and effectiveness; receiving unfavorable
results from clinical trials of Memory Pharmaceuticals’ drug candidates;
obtaining regulatory approvals to conduct clinical trials and to commercialize
Memory Pharmaceuticals’ drug candidates; Memory Pharmaceuticals’ ability to
enter into and maintain collaborations with third parties for its drug
development programs; Memory Pharmaceuticals’ dependence on its collaborations
and its license relationship with Bayer; achieving milestones under Memory
Pharmaceuticals’ collaborations; Memory Pharmaceuticals’ dependence on
third-party preclinical or clinical research organizations, manufacturers and
consultants; and protecting the intellectual property developed by or licensed
to Memory Pharmaceuticals. These and other risks are described in greater
detail in Memory Pharmaceuticals’ filings with the Securities and Exchange
Commission. Memory Pharmaceuticals may not actually achieve the goals or plans
described in its forward-looking statements, and investors should not place
undue reliance on these statements. Memory Pharmaceuticals disclaims any intent
or obligation to update any forward-looking statements as a result of
developments occurring after the date of this press release.
MEMORY PHARMACEUTICALS CORP.
CONDENSED STATEMENTS OF OPERATIONS AND NON-GAAP ADJUSTMENTS
(in thousands - except share and per share information)
(unaudited)
Three Months Ended Year Ended
December 31, December 31,
2006 2005 2006 2005
Revenue $2,640 $3,705 $9,322 $11,116
Operating expenses:
Research and development 10,534 8,174 33,800 33,684
General and administrative 1,767 2,018 8,444 8,443
Total operating expenses 12,301 10,192 42,244 42,127
Loss from operations (9,661) (6,487) (32,922) (31,011)
Unrealized gain/(loss) on (6,048) 2,243 (247) (1,641)
warrants
Interest income, net 586 375 1,674 750
Loss before income taxes (15,323) (3,869) (31,695) (31,902)
Income tax benefit (396) (224) (388) (217)
Net loss attributable to $(14,727) $(3,645) $(31,107) $(31,685)
common stockholders
Basic and diluted net $ (0.23) $ (0.10) $ (0.70) $ (1.20)
loss per share of common
stock
Basic and diluted 63,831,072 37,417,068 44,334,129 26,350,193
weighted average number
of shares of common
stock outstanding
Non-GAAP adjustments:
Net loss attributable $(14,727) $ (3,645) $ (31,107) $(31,685)
to common stockholders
Unrealized (gain)/loss 6,048 (2,243) 247 1,641
on warrants
Non-cash compensation 544 - 2,606 -
charge associated with
SFAS 123R
Non-GAAP net loss
attributable to common
stockholders $ (8,135) $ (5,888) $ (28,254) $(30,044)
Non-GAAP basic and
diluted net loss per
share of common stock1 $ (0.13) $ (0.16) $ (0.64) $ (1.14)
MEMORY PHARMACEUTICALS CORP.
CONDENSED BALANCE SHEETS
(in thousands)
(unaudited)
December 31, 2006 December 31, 2005
ASSETS
Cash, cash equivalents and
marketable securities $ 51,323 $ 44,079
Other current assets 1,397 2,562
Restricted cash 509 505
Property and equipment, net 7,413 9,167
Total assets $ 60,642 $ 56,313
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
(excluding deferred revenue) $ 7,664 $ 5,901
Warrant Liability 8,724 8,477
Equipment notes payable,
less current portion 345 1,089
Deferred revenue 20,707 19,895
Total liabilities 37,440 35,362
Stockholders’ equity 23,202 20,951
Total liabilities and
stockholders’ equity $ 60,642 $ 56,313
SOURCE Memory Pharmaceuticals Corp.
http://www.memorypharma.com/
