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Javelin Pharmaceuticals, Inc. Reports First Quarter 2008 Results

Wed, 05/14/2008 - 09:26 — Zangani

Javelin Pharmaceuticals, Inc. (Amex: JAV - News), a leading developer of specialty pharmaceutical products for pain management, recently reported its unaudited financial results for the first quarter ended March 31, 2008.

Financial highlights for the three months ending March 31, 2008 are as follows:

-- Ended the first quarter with $27.2 million in cash, cash equivalents, and short term investments.

-- Net loss increased to approximately $9.8 million, or $0.20 per share, in the first quarter of 2008 from approximately $5.9 million, or $0.15 per share, in the first quarter of 2007.

-- Reported non-cash stock based compensation expense for the three months ended March 31, 2008 of approximately $0.8 million, or $0.02 per share impact on operations, compared to $0.9 million, or $0.02 per share impact, for the comparable period of 2007, in accordance with Statement of Financial Accounting Standard 123R.

Financial Performance

For the first quarter ended March 31, 2008, our product revenue of $65,793 consists entirely of sales of Dyloject®. Full Commercial launch of the product occurred in January 2008.

Javelin incurred approximately $10.2 million in operating costs and expenses, which was partially offset by approximately $0.4 million of interest income in the first quarter of 2008. In the comparable period in 2007, we incurred $6.1 million in operating expenses which was partially offset by $0.2 million of interest income.

Research and development expenses for the first quarter of 2008 were $5.7 million, compared to $3.3 million in the first quarter of 2007. Total research and development expenses increased in the first quarter 2008 compared to the same period in 2007 resulting primarily from increased manufacturing costs, clinical trial expenses, and increased headcount and personnel costs associated with the advancement of each of our three product candidate development programs.

Selling, general and administrative expenses were $4.5 million in the first quarter of 2008 compared to $2.8 million for the first quarter of 2007. Total selling, general and administrative expenses increased in the first quarter 2008 compared to the same period in 2007 due primarily from increased sales and marketing costs related to the launch of Dyloject® in the UK. Additional increases were due to headcount and personnel costs as we expanded and improved our administrative infrastructure, as well as general administrative and professional fees in support of the launch.

Selected Financials

JAVELIN PHARMACEUTICALS, INC. AND SUBSIDIARIES

(A Development Stage Enterprise)

Condensed Consolidated Statements of Operations

(Unaudited)

             
               
    For the Three Months Ended  
    March 31,  
    2008 2007
   
Revenues:                
Product revenue   $ 65,793     $ —  
Government grants and contracts   — —
Total revenues     65,793       —  
Costs and expenses:                
Costs of product revenue     49,907       —  
Research and development     5,665,450       3,331,727  
Selling, general and administrative     4,476,271       2,773,646  
Depreciation and amortization   40,753 20,017
   
Total costs and expenses   10,232,381 6,125,390
   
Operating loss   (10,166,588 ) (6,125,390 )
   
Other income (expense):                
Interest income     357,020       223,441  
Interest expense     —       (699 )
Other income   36,603 —
   
Total other income (expense)   393,623 222,742
   
Net loss attributable to common stockholders   $ (9,772,965 ) $ (5,902,648 )
   
Net loss per share attributable to common stockholders:                
Basic and diluted   ($0.20 ) ($0.15 )
   
Weighted average shares   48,790,508 40,244,010

JAVELIN PHARMACEUTICALS, INC. AND SUBSIDIARIES

(A Development Stage Enterprise)

Condensed Consolidated Balance Sheets

             
    (Unaudited)          
    March 31,     December 31,  
    2008   2007
Assets                
Current assets:                
Cash and cash equivalents   $ 22,243,169     $ 15,931,243  
Short term marketable securities available for sale     4,975,000       21,319,150  
Accounts receivable, product sales     61,787       —  
Inventory     667,013       116,143  
Prepaid expenses and other current assets   1,312,891   1,289,809
   

 

           
Total current assets     29,259,860       38,656,345  
Fixed assets, at cost, net of accumulated depreciation     984,705       545,195  
Intangible assets, net of accumulated amortization     3,739,485       3,795,577  
Other assets   157,729   154,498
               
Total assets   34,141,779   43,151,615
               
Liabilities and Stockholders’ Equity                
Current liabilities:                
Accounts payable and accrued expenses     7,759,386       8,156,788  
Deferred lease liability   587,333   484,141
               
Total current liabilities   8,346,719   8,640,929
               
Commitments and contingencies                
Stockholders’ equity                
Preferred stock, $0.001 par value, 5,000,000 shares authorized as of
March 31, 2008 and December 31, 2007, none of which are outstanding 		    —       —  
Common stock, $0.001 par value; 200,000,000 shares authorized as of
March 31, 2008 and December 31, 2007; 49,097,367 and 48,990,845
shares issued and outstanding at March 31, 2008 and December 31,
2007, respectively 		    49,097       48,990  
Additional paid-in capital     145,988,611       144,922,785  
Other comprehensive income (loss)     —       8,594  
Deficit accumulated during the development stage   (120,242,648 )   (110,469,683 )
               
Total stockholders’ equity   25,795,060   34,510,686
               
Total liabilities and stockholders’
equity 		  $ 34,141,779   $ 43,151,615

About Javelin Pharmaceuticals, Inc.

With corporate headquarters in Cambridge, MA, Javelin applies innovative proprietary technologies to develop new drugs and improved formulations of existing drugs to target unmet and underserved medical needs in the pain management market. The Company has three drug candidates in US Phase 3 clinical development. One of these US Phase 3 drug candidates, Dyloject(TM) received Marketing Authorization Application (MAA) approval and favorable pricing in the UK, where it is now being sold. Previous clinical trials have demonstrated its safety and rapid onset of action. For additional information about Javelin, please visit the company's website at http://www.javelinpharmaceuticals.com.

Forward Looking Statement

This news release contains forward-looking statements. Such statements are valid only as of today, and we disclaim any obligation to update this information. These statements are subject to known and unknown risks and uncertainties that may cause actual future experience and results to differ materially from the statements made. These statements are based on our current beliefs and expectations as to such future outcomes. Drug discovery and development involve a high degree of risk. Factors that might cause such a material difference include, among others, uncertainties related to the ability to attract and retain partners for our technologies, the identification of lead compounds, the successful preclinical development thereof, the completion of clinical trials, the FDA review process and other governmental regulation, our ability to obtain working capital, our ability to successfully develop and commercialize drug candidates, and competition from other pharmaceutical companies.