CPEX Pharmaceuticals, Inc. (NASDAQ: CPEX) today reported financial results for the third quarter ended September 30, 2009. For the quarter CPEX reported revenues of $5.0 million and a net loss of $872,000.
CPEX began operating as an independent publicly traded company after its spin-off from Bentley Pharmaceuticals, Inc. on June 30, 2008. The results of operations for the three and nine months ended September 30, 2009, the three months ended September 30, 2008 and the balance sheets as of September 30, 2009 and December 31, 2008 represent stand-alone financial information of CPEX. The financial results reported for the nine months ended September 30, 2008 (which include six months before the spin-off) include costs associated with the spin-off transaction and other allocated expenses of Bentley, the amount of which may differ from the costs associated with operating as an independent public company. Therefore, the results for the nine months ended September 30, 2008 are not indicative of the results that might have occurred if CPEX had operated as an independent public company during the entire period.
Third-Quarter Highlights
For the third quarter of 2009 compared to the third quarter of 2008;
- Revenues increased 26% to $5.0 million from $3.9 million.
- Operating expenses increased 17% to $5.8 million from $5.0 million.
- Net loss was $872,000, or $0.34 per share, compared to $1.0 million, or $0.43 per share.
The growth in revenues for the third quarter of 2009 was due to increased royalties on sales of Testim®. This growth is due to a reported 17% increase in prescriptions for Testim during the third quarter of 2009 compared to the same period in 2008. Operating expenses in the third quarter of 2009 increased $853,000, primarily due to clinical trial expenses associated with CPEX’s ongoing NasulinTM clinical program and legal costs associated with its on-going litigation with Upsher-Smith Laboratories regarding Testim. These increases were partially offset by a decrease in share-based compensation expense. Operating expenses for the three months ended September 30, 2008 include a $1.2 million non-cash charge resulting from the modification of equity awards associated with the spin-off from Bentley.
General and administrative expenses for the third quarter of 2009 decreased $234,000 compared to the third quarter of 2008 primarily due to lower share-based compensation expense and lower professional fees. Partially offsetting these decreases was a $921,000 increase in litigation costs. Research and development expenses for the third quarter of 2009 increased $1.1 million compared to the third quarter of 2008. This increase is due to higher clinical trial expenses of $1.4 million, primarily related to the ongoing Phase 1 and 2 Nasulin clinical trials, partially offset by lower share-based compensation expense. Research and development expenses are expected to vary from period to period, primarily due to the number, size and recruitment levels of clinical trials in any given reporting period.
Year-to-Date Highlights
For the first nine months of 2009 compared to the comparable period in 2008;
- Revenues increased 18% to $13.4 million from $11.3 million.
- Operating expenses increased 9% to $16.1 million from $14.8 million.
- Net loss decreased to $2.5 million, or $1.02 per share, from $3.2 million, or $1.40 per share.
The increase in revenues for the nine months ended September 30, 2009 was due to increased royalties on sales of Testim®. General and administrative expenses increased $1.3 million in the first nine months of 2009 compared to the same period in 2008. The increase was primarily due to increased litigation costs of $1.9 million, partially offset by a $678,000 decrease in non-cash share-based compensation expense. Research and development expenses increased $2.5 million during the first nine months of 2009 compared to 2008. Clinical trial expenses increased $3.4 million, primarily due to the ongoing Phase 1 and 2 Nasulin clinical trials. These increases were partially offset by lower employee-related expenses of $740,000. Operating expenses in 2008 included $2.5 million of expenses related to the spin-off from Bentley.
On June 30, 2008, CPEX had approximately 2,274,000 common shares outstanding primarily as a result of the spin-off. The same number of shares is being used for the basic and diluted loss per share computation for all periods presented prior to June 30, 2008 because no CPEX equity awards were outstanding prior to the spin-off.
As of September 30, 2009, CPEX had unrestricted cash of approximately $13.8 million, working capital of $16.8 million and no debt.
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