REDMOND, Wash., March 6, 2009 (GLOBE NEWSWIRE) -- ImaRx Therapeutics, Inc. (OTCBB:IMRX), a biopharmaceutical company focused on the development of new treatments for vascular disorders leveraging its proprietary microsphere and ultrasound technology, today reported financial results for the quarter and year ended December 31, 2008.
Corporate Updates
In June 2008, ImaRx Therapeutics announced a corporate restructuring that included a significant reduction in work force. At that same time, the Company indicated it would explore strategic alternatives for its commercial urokinase assets, clinical-stage SonoLysis program as well as its other assets. In furtherance of those activities the Company provided the following updates:
-- On September 23, 2008, the Company divested its urokinase assets
to Microbix Biosystems, Inc. Microbix acquired the remaining
urokinase inventory and related assets and assumed full
responsibility for ongoing commercial and regulatory activities
associated with the product. Microbix made an upfront payment of
$2.0 million and assumed up to $0.5 million in chargeback and
other liabilities for commercial product currently in the
distribution channel. An additional $2.5 million payment will be
made to ImaRx upon release by the FDA of the three lots of
urokinase that are currently subject to a May 2008 Approvable
Letter.
-- The Company continues to explore strategic alternatives for its
clinical-stage microsphere and ultrasound, or SonoLysis, program
as well as its other company assets to enhance shareholder value
and intends to provide further updates as such alternatives are
finalized.
Financial Results
Revenue for the fourth quarter ended December 31, 2008 was $1.0 million, compared to $2.7 million for the fourth quarter of 2007. Revenue for the year ended December 31, 2008 was $6.7 million, compared to $8.4 million for the year ended December 31, 2007. The decrease in revenues for the quarter and the year is due to a decrease in inventory in the channel and the lack of current dated inventory to replenish the channel.
Net loss for the fourth quarter of 2008 was $0.1 million as compared to $2.2 million for the fourth quarter 2007. The decrease in net loss was primarily attributable to a reduction of costs as a result of the restructuring announced in the second quarter of 2008. Net loss per share attributable to common stockholders was $0.01 per share for the three months ended December 31, 2008 and net loss per share attributable to common shareholders was $0.22 per share for the three months ended December 31, 2007 based on weighted average shares of 10,165,733 and 10,046,683, respectively.
The net loss for the year ended December 31, 2008 was $10.1 million as compared to $8.8 million for the prior year period. During the year ended December 31, 2008 there was a $10.0 million asset impairment charge, $0.8 million of costs associated with restructuring and increased general and administrative costs. These amounts were offset partially by the $5.6 million gain on extinguishment of debt in relation to the non-recourse note payable to Abbott Laboratories and the reduction of research and development expenses due to the June 2008 restructuring. Net loss per share attributable to common stockholders was a loss of $1.00 per share and $3.16 per share for the years ended December 31, 2008 and 2007, respectively, based on weighted average shares of 10,116,808 and 5,868,131, respectively.
Cost of product sales was $0.6 million in the fourth quarter of 2008 and $3.1 million for the year ended December 31, 2008. The cost of product sales was $1.0 million for the fourth quarter of 2007 and $3.5 million for the year ended December 31, 2007. The decrease is associated with the decrease in inventory in the channel and the lack of current dated inventory to replenish the channel. The cost of product sales includes the price paid to acquire the asset as well as labeling costs that are directly incurred in bringing the product to market.
Research and development expenses for the fourth quarter of 2008 decreased to $0.1 million, from $2.0 million for fourth quarter 2007. This decrease was principally a result of decreased clinical trial costs due to the wind down of our clinical trial and the reduction of salaries as a result of restructuring activities. Research and development expenses for the year ended December 31, 2008 decreased to $3.0 million, from 7.4 million for the year ended December 31, 2007. This decrease was principally a result of reduced clinical trial costs due to the wind down of our clinical trial and the reduced salaries associated with restructuring activities.
General and administrative expenses in the fourth quarter of 2008 decreased to $0.6 million, from $1.8 million in the fourth quarter of 2007. This decrease was principally a result of decreased salaries as a result of the second quarter 2008 restructuring. General and administrative expenses for the year ended December 31, 2008 were $6.4 million, an increase from $6.1 million for the year ended December 31, 2007. This increase was principally a result of severance costs, an increase in costs associated with maintaining public company infrastructure, increased marketing costs for product rebranding efforts and increased rent expense offset partially by a decrease in amortization expense.
The Company ended the fourth quarter of 2008 with $0.8 million in cash and cash equivalents compared to $12.9 million in cash and cash equivalents at December 31, 2007. The decrease in the cash balance was primarily related to cash used in performing operating activities, severance payments and the $5.2 million payment to satisfy all outstanding liabilities to Abbott Laboratories. With the restructuring activities announced on June 11, 2008, management believes that there will be sufficient cash resources to fund operations into the third quarter of 2009.
We have received an audit report from our independent registered accounting firm containing an explanatory paragraph stating that our historical recurring losses from operations which has resulted in an accumulated deficit of $91.3 million at December 31, 2008 raises substantial doubt about our ability to continue as a going concern.
About ImaRx Therapeutics
ImaRx Therapeutics is a biopharmaceutical company with a research and development program focused on the development of new treatments for vascular disorders leveraging its proprietary microsphere and ultrasound or SonoLysis technology.
The ImaRx Therapeutics, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5321
Cautionary Statement For The Purpose Of The "Safe Harbor" Provisions Of The Private Securities Litigation Reform Act of 1995
Note: Statements made in this press release which are not historical in nature constitute forward-looking statements for purposes of the safe harbor provided by the Private Securities Litigation Reform Act of 1995. Such statements include those related to the Company's search for strategic alternatives to enhance shareholder value and, management belief that there will be sufficient cash resources to fund operations into the third quarter 2009. These statements are based on management's current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. A more complete description of these risks and the event that may cause such events not to occur can be found in the Company's filings with the Securities and Exchange Commission. All information in this press release is as of March 6, 2009, and the Company undertakes no duty to update this information.
ImaRx Therapeutics, Inc.
(A Development Stage Company)
Consolidated Statements of Operations
(in thousands except shares and per share data)
Three Months Ended Year Ended
December 31 December 31
----------------------- -----------------------
2008 2007 2008 2007
----------- ----------- ----------- -----------
Revenues:
Product sales, net $ 960 $ 2,472 $ 6,511 $ 7,841
Research and
development -- 178 223 519
----------- ----------- ----------- -----------
Total operating
revenue 960 2,650 6,734 8,360
Costs and expenses:
Cost of product
sales 575 989 3,051 3,518
Research and
development 87 2,033 3,040 7,424
General and
administrative 618 1,813 6,434 6,087
Asset impairment -- -- 9,978 --
----------- ----------- ----------- -----------
Total cost and
expenses 1,280 4,835 22,503 17,029
----------- ----------- ----------- -----------
Operating loss (320) (2,185) (15,769) (8,669)
Interest and other
income, net 15 159 49 548
Interest expense -- (187) (203) (862)
Gain on settlement
of payables 187 -- 187 --
Gain on
extinguishment
of debt -- -- 5,602 219
----------- ----------- ----------- -----------
Net loss (118) (2,213) (10,134) (8,764)
Deemed dividend
from beneficial
conversion feature
for Series F
redeemable
convertible
preferred
stock -- -- -- (13,842)
Accretion of
dividends on
preferred stock -- -- -- (867)
Reversal of
accretion of
dividends on
preferred stock
not paid -- -- -- 4,919
----------- ----------- ----------- -----------
Net loss attributed
to common
stockholders $ (118) $ (2,213) $ (10,134) $ (18,554)
=========== =========== =========== ===========
Net loss per share:
-- Basic and
diluted $ (0.01) $ (0.22) $ (1.00) $ (3.16)
=========== =========== =========== ===========
Shares used in
computing net loss
per share:
-- Basic and
diluted 10,165,733 10,046,683 10,116,808 5,868,131
ImaRx Therapeutics, Inc.
(A Development Stage Company)
Selected Balance Sheet Data (in thousands)
December 31 December 31
2008 2007
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 757 $ 12,861
Restricted cash -- 388
Accounts receivable, net -- 349
Inventory -- 11,138
Inventory subject to return 12 2,560
Assets held for sale 108 --
Prepaid expenses and other 144 589
----------- -----------
Total current assets 1,021 27,885
Long-term assets:
Other assets -- 19
Property and equipment, net 51 1,170
Intangible assets, net -- 1,633
----------- -----------
Total assets $ 1,072 $ 30,707
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 117 $ 1,277
Accrued expenses 82 837
Accrued chargebacks and administrative
fees -- 1,317
Deferred revenue 226 5,373
Notes payable -- 11,698
Other 154 --
----------- -----------
Total liabilities 579 20,502
Total stockholders' equity 493 10,205
----------- -----------
Total liabilities and stockholders'
equity $ 1,072 $ 30,707
=========== ===========