Operating Expenses Continue to be Reduced
Construction at New Jersey Facility Underway
New Clinical Trial Initiated
PHILADELPHIA, Nov. 9, 2011 (GLOBE NEWSWIRE) -- Hemispherx Biopharma, Inc. (NYSE Amex:HEB) announced its financial results for the three months ended September 30, 2011. The net loss (including non-cash losses) for the period was approximately $2,740,000 or $(0.02) per share as compared to a net loss of $3,838,000 or $(0.02) per share for the same period in 2010. This decrease in net loss of $1,098,000 or 29% in 2011 was primarily due to the quarterly fair value revaluation of the estimated liability related to certain redeemable warrants resulting in a non-cash gain of $614,000 in 2011 as compared to a non-cash loss of $584,000 in 2010.
If the impact of the required revaluation of the estimated liability related to certain redeemable warrants was excluded from the financial results, the impact would be a net loss for the third quarter of 2011 of approximately $3,354,000 as compared to a net loss of $3,254,000 for the same period in 2010. With the exclusion of the non-cash impact of the redeemable warrants, the increase in the third quarter operating net loss between 2011 and 2010 would be approximately $100,000 or 3%. The unfavorable variance between 2011 and 2010 was primarily due to a decrease of $231,000 in interest income from invested marketable securities that was partially offset with net lower operating costs.
Cash, cash equivalents and marketable securities were approximately $37,323,000 as of September 30, 2011. Net cash used in operations in the nine months ended September 30, 2011 was approximately $7,073,000 as compared to $10,070,000 for the same period in 2010. This 2011 reduction in cash used in operations was primarily due to lower operating costs and the sale of prior years' New Jersey Net Operating Loss. Excluding the proceeds from this sale of New Jersey net operating loss carry forwards, Cash used in operating activities for the nine months ended September 30, 2011 decreased by approximately $725,000 over the comparable period in 2010.
The Company continues to utilize its Board of Directors' approval of up to $4.4 million for capital improvements, system upgrades and introduction of building management systems to enhance pharmaceutical production at the Company's New Brunswick, New Jersey facility. The project is in an active construction phase with approximately $1,156,000 spent to date. The Company has actively pursued cost savings where possible, including locating and acquiring equipment from major U.S. pharmaceutical manufacturers that have recently curtailed or eliminated certain manufacturing activities in the U.S. As a result, Management estimates a cost savings on equipment purchased of approximately $27,000 for the three months ending September 30, 2011 and $827,000 for the project's cumulative savings to date.
In August 2011, a study utilizing Ampligen® was initiated by investigators from the Tumor Vaccine Group at the University of Washington in Seattle, WA. As of September 30, 2011, seven patients have enrolled in this eighty-eight patient Phase I-II Study of human epidermal growth factor receptor 2 ("HER2") Vaccination with Ampligen® as an adjuvant in optimally treated Breast Cancer patients. The goal of this study is to see how well the combination works in treating patients with Stage II-IV HER2-positive breast cancer. Compounds that specifically stimulate TLR receptors are promising immune stimulators, and Ampligen®, an experimental therapeutic, has the potential to provide a profile of immune stimulation that could be clinically beneficial.
About Hemispherx Biopharma
Hemispherx Biopharma, Inc. is an advanced specialty pharmaceutical company engaged in the manufacture and clinical development of new drug entities for treatment of seriously debilitating disorders. Hemispherx's flagship products include Alferon N Injection® (FDA approved for a category of sexually transmitted diseases) and the experimental therapeutics Ampligen® and Alferon® LDO. Ampligen® is an experimental RNA nucleic acid being developed for globally important debilitating diseases and disorders of the immune system. Hemispherx's platform technology includes components for potential treatment of various severely debilitating and life threatening diseases. Hemispherx has patents comprising its core intellectual property estate and a fully commercialized product (Alferon N Injection®). The Company wholly owns and exclusively operates a GMP certified manufacturing facility in the United States for commercial products. For more information please visit www.hemispherx.net.
Information contained in this news release, other than historical information, should be considered forward-looking and is subject to various risk factors and uncertainties. For instance, the strategies and operations of Hemispherx involve risk of competition, changing market conditions, change in laws and regulations affecting these industries and numerous other factors discussed in this release and in the Company's filings with the Securities and Exchange Commission. Any specifically referenced investigational drugs and associated technologies of the Company (including Ampligen® and Alferon® LDO) are experimental in nature and as such are not designated safe and effective by a regulatory authority for general use and are legally available only through clinical trials with the referenced disorders. The forward-looking statements represent the Company's judgment as of the date of this release. The Company disclaims, however, any intent or obligation to update these forward-looking statements. The planning, completion, results or submission of clinical trials do not imply that any experimental product will ever be approved commercially for the studied or other treatment indications. The resumption of commercial sales of Alferon N Injection® is predicated on certain technical achievements and acceptance by FDA of resulting data reports, which may or may not occur. The new diagnostic initiatives of the Company in CFS may need to be validated in wider clinical trials and thus may not necessarily be accepted by the FDA as a basis for evaluating the potential efficacy of Ampligen®.