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| Cellegy Pharmaceuticals Reports 2004 Financial Results | Record Date: 9/2/2010
Company: Cellegy Pharmaceuticals |
Brisbane, California, March 29, 2005 -- Cellegy Pharmaceuticals, Inc. (Nasdaq: CLGY reported today its 2004 financial results. For the year ended December 31, 2004, revenues were $2,596,000, compared with $1,620,000 for the same period last year. Revenues in 2004 consisted of $563,000 in Australian Rectogesic® (nitroglycerin ointment) sales, $1,008,000 in grant revenue primarily from Cellegy's Biosyn subsidiary for the period from its acquisition on October 22, 2004 through year end 2004, $844,000 in licensing revenue reflecting the amortization of upfront payments received under license agreements relating to Cellegy's Fortigel™ (testosterone gel), Rectogesic and Tostrex® (testosterone gel) products and $181,000 in skin care product sales to Gryphon Development, the product development arm of a major specialty retailer.
Revenues in 2003 consisted primarily of $452,000 principally from Australian Rectogesic sales, $833,000 in licensing revenue from Fortigel and $316,000 in skin care product sales to Gryphon Development.
The net loss for the year ended December 31, 2004 was $28.2 million or $1.28 per share based on 22,021,000 weighted average shares outstanding, compared with the 2003 net loss of $13.5 million or $0.68 per share based on 19,964,000 weighted average shares outstanding. The 2004 net loss was significantly impacted by a charge of $15.0 million for purchased research and development expenses relating to the Biosyn acquisition in October 2004.
Conference Call: Today at 10:00 am (Pacific)
To participate in the live call by telephone, please dial (800) 399-4592 in the United States, or (706) 643-3820 for international callers. Those interested in listening to the conference call live via the internet may do so by visiting the Company’s website at www.cellegy.com. A telephone replay will be available for 48 hours by dialing (800) 642-1687 in the United States, or (706) 645-9291 for international callers, and entering Reservation Number 5013739.
Cash, restricted cash and investments at December 31, 2004 were $8.9 million, compared with $11.6 million at December 31, 2003 and $13.9 million at September 30, 2004. Cellegy's cash, restricted cash and investments declined by $5.0 million in the fourth quarter of 2004 primarily due to cash used in operations of $3.3 million and $3.2 million to extinguish certain Biosyn liabilities. This was offset somewhat by $1.0 million in upfront payments from the ProStrakan Rectogesic license agreement and $0.5 million in proceeds from a Kingsbridge Capital Secondary Structured Offering draw down.
Based on the current cash position and negative operating cash flows, Cellegy will receive a going concern qualification in the report of its independent registered public accounting firm included in the forthcoming Annual Report on Form 10-K for the year ended December 31, 2004. The Company's plans, with regard to its cash position, include raising additional required funds through one or more of the following options, among others: making further Kingsbridge SSO draw downs, seeking partnerships with other pharmaceutical companies to co-develop and fund research and development efforts, pursuing additional out-licensing arrangements with third parties, re-licensing and monetizing in the near term future milestone and royalty payments expected from existing licensees and seeking equity or debt financing. In addition, Cellegy will continue to implement further cost reduction programs and reduce discretionary spending, if necessary, to meet its obligations.
Additional Financial Information
Revenues
Cellegy expects Australian Rectogesic sales to continue to increase in 2005, but at a lower growth rate than compounded annual increases in excess of 40% achieved over the prior two years. Biosyn grant revenue of $1,005,000 for the October 22nd to December 31, 2004 period was primarily related to grant funding from several government and philanthropic agencies in support of its HIV/AIDs development programs. The Company expects total grant revenues from various funding agencies for 2005 to be in the $3.0 to $5.0 million range for the development of our Savvy (C31G Vaginal Gel), UC-781 and Cyanovirin-N product candidates. In addition to the direct grants to Biosyn, Biosyn will benefit from agency funding paid directly to third party contractors in support of its on going Phase 3 clinical trials.
Skin care moisturizer sales to Gryphon decreased by $135,000 or about 43% in 2004, compared with 2003. Cellegy does not now expect to receive any Gryphon sales orders through, at least, the first quarter of 2005 and is not able to estimate full year 2005 sales at this time.
In December 2002, Cellegy entered into an exclusive license agreement with PDI, Inc. for commercial rights to Fortigel in North American markets. In 2004, Cellegy recorded licensing revenue of $833,000 from PDI, with about $208,000 realized in each of the four quarters of 2004 reflecting the amortization, over the expected patent life of Fortigel, of the initial $15.0 million received from PDI on the agreement date in December 2002. The Company also recorded licensing revenue of $11,000 in the second half of 2004 associated with upfront payments of $0.5 and $1.0 million received from its European marketing partner, ProStrakan Group Limited, for the licenses of Tostrex and Rectogesic, respectively. Cellegy expects to record about $250,000 in licensing revenue for each of the four quarters of 2005 reflecting the amortization of these upfront payments over the expected useful lives of the products. The Company expects to receive initial royalty revenues from ProStrakan in the second half of 2005 from product sales of Rectogesic and Tostrex in the United Kingdom and Sweden, respectively, with milestone payments and royalties increasing in 2006 and beyond as other European country approvals are achieved.
Expenses
Operating expenses for the year ending December 31, 2004 were $15,738,000 higher than during the comparable 2003 period significantly impacted by purchased research and development expenses of $14,862,000 associated with the Biosyn acquisition in October 2004. Selling, general and administrative expenses increased by $1,873,000 in 2004 compared with 2003, due primarily to litigation costs of $1,215,000, accounting expenses of approximately $315,000, pre-launch Cellegesic™ (nitroglycerin ointment) marketing expenses of $540,000, and the inclusion of Biosyn expenses of $266,000 from October 22nd through year end 2004. These were offset somewhat by a net decrease in administrative expenses of $330,000 and a decrease in corporate development expenses of $150,000.
Research and Development expenses decreased by $959,000 in 2004, compared with 2003 due primarily to higher clinical spending, particularly for the Cellegesic clinical and regulatory programs of $2,300,000 in 2003. These were offset somewhat by research and development expenses of $800,000 incurred by Biosyn for the period from October 22nd to December 31, 2004 and other Cellegy research expenditures of $541,000 in 2004. |
Category: Financial Results |
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