EpiCept Reports Fourth Quarter and Full Year 2011 Operating and Financial Results


EpiCept Reports Fourth Quarter and Full Year 2011 Operating and Financial
Results

CONFERENCE CALL BEGINS AT 9:00 A.M. EASTERN TIME TODAY

TARRYTOWN, N.Y.--(BUSINESS WIRE (http://www.businesswire.com/))-- Regulatory
News:

EpiCept Corporation (Nasdaq OMX Stockholm Exchange and OTCQX: EPCT) today
announced operating and financial results for the fourth quarter and full year
ended December 31, 2011, and provided an update on the Company’s key business
initiatives.

“EpiCept has marked several important achievements and milestones since our last
quarterly report,” stated Jack Talley, EpiCept President and CEO. “Our most
significant milestone was the outcome of our End-of-Phase II meeting with the
U.S. Food and Drug Administration (FDA) concerning AmiKet™, a combination
topical cream of amitriptyline 4% and ketamine 2%. We were pleased to receive
FDA approval to start Phase III activities with AmiKet™. We were also delighted
with the encouragement we received from the FDA to file for Fast Track status
and a suggestion to consider alternative strategies with respect to the type of
confirmatory pivotal study needed to file a New Drug Application (NDA). The
granting of Fast Track status should provide us the opportunity to regularly
consult with the FDA in order to determine the optimum path towards approval. We
believe that the meaningful guidance provided to us by the FDA will positively
advance our ongoing discussions with several potential partners identified by
SunTrust Robinson Humphrey.”

Business Highlights

  · Successfully completed End-of-Phase II discussions with the FDA regarding
the Phase III development of AmiKet™ for the treatment of chemotherapy-induced
peripheral neuropathy (CIPN).
  · Obtained agreement with the FDA that EpiCept may file the NDA based on
§505(b)(2) of the Federal Food, Drug, and Cosmetic Act, which is available to
filers based in part, on the agency’s findings for a previously approved drug,
including amitriptyline and ketamine. AmiKet™’s nonclinical program requirements
to file an NDA notably included only a single dermal carcinogenicity study along
with other standard expected toxicology studies.
  · Upon FDA suggestion, an application for Fast Track designation was submitted
in February 2012 for AmiKet™ in the treatment of CIPN.
  · EpiCept’s partner Meda AB continues to aggressively pursue the
commercialization of Ceplene®in several key European countries.
  · The Phase I safety-portion of the National Cancer Institute-sponsored trial
of crolibulin™ in combination with cisplatin in anaplastic thyroid cancer (ATC)
is nearing conclusion, after which the Phase II randomized efficacy proof of
concept study is expected to commence.
  · SunTrust Robinson Humphrey was engaged in January 2012 to assist in
exploring strategic options to exploit the commercial opportunity of AmiKet™.
The engagement is focused on the identification and execution of a strategy that
will optimize AmiKet™’s value for the Company’s stockholders, which includes the
evaluation of potential transactions involving the sale of the Company.
  · The Company believes that its cash is sufficient to fund operations into the
third quarter of 2012. The Company has reduced certain R&D and G&A expenses in
2012 compared with 2011 and raised cash via a repricing of expiring stock
purchase warrants in January 2012 and a $2 million registered direct financing
in February 2012.

Business Update

  · AmiKet™ - a prescription topical analgesic cream designed to provide
long-term relief from the pain of peripheral neuropathies, which affect more
than 15 million people in the U.S. alone. In the first half of 2011, EpiCept
announced positive results from a Phase IIb trial evaluating the efficacy and
safety of AmiKet™ in chemotherapy-induced peripheral neuropathy (CIPN). During
the fourth quarter of 2011, EpiCept met with the FDA to review clinical,
regulatory and CMC plans for AmiKet™ in CIPN that would support an application
for FDA marketing approval. The Company received permission to commence Phase
III clinical development of AmiKet™ for the treatment of CIPN, was encouraged to
apply for Fast Track designation, and was advised that a Special Protocol
Assessment (SPA) would be available upon formal submission and agreement as to
the Phase III trial protocol. The FDA acknowledged that painful symptoms due to
CIPN represent a significant unmet medical need. Further, the FDA waived several
expensive and time consuming non-clinical toxicology studies, and indicated that
a single, four-arm, factorial trial may suffice for regulatory approval if
combined with other pivotal clinical data in another neuropathy such as diabetic
peripheral neuropathy. This guidance is expected to support ongoing partnership
discussions with several interested parties, and potentially improves the value
of AmiKet™.
During the fourth quarter of 2011, a U.S. market evaluation of the CIPN
opportunity for AmiKet™ was completed by an independent market assessment firm
engaged by EpiCept. Among the study’s conclusions was that peak annual revenue
for AmiKet™ for this indication in the U.S. alone could exceed $400 million
through a specialty pharmaceutical sales force of fewer than 150 targeting the
top six deciles of prescribing oncologists, pain specialists and neurologists.
The study also found that of the 3.5 million cases of malignant cancer diagnoses
of breast, prostate, lung and ovarian cancers, an estimated 90% of all prostate
and ovarian cancer patients, 75% of all breast cancer patients and more than 60%
of all lung cancer patients are treated with taxanes, either alone or in
combination with other chemotherapeutic drugs. Based on physician interviews,
expert opinions and a review of the medical literature, the study concluded that
a significant percentage of this group develops some form of CIPN, which EpiCept
believes further illuminates the commercial potential of AmiKet™ in this
indication.
In cancer patients, pain due to peripheral neuropathy is a dose-limiting side
effect that frequently occurs during and following systemic chemotherapy. CIPN
is most often characterized by
pain (http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fen.wikiped
ia.org%2Fwiki%2FPain&esheet=50186390&lan=en-US&anchor=pain&index=1&md5=843b039aa
eb98642eea8c8a47bf99268) in the hands and feet (glove and stocking
distribution). The risk of CIPN typically increases with cumulative exposure to
chemotherapy, and may interrupt, delay or even prevent completion of potentially
curative chemotherapy regimens. CIPN may also have detrimental effects on
functional capacity and quality-of-life.
The Company has enrolled more than 1,700 patients into clinical trials of
AmiKet™, including a 360-patient trial that studied the efficacy of AmiKet™
compared with gabapentin and placebo in post-herpetic neuralgia (PHN), for which
positive results were previously reported.

  · Ceplene®- approved in the European Union and Israel for administration with
low-dose interleukin-2 (IL-2) for the remission maintenance and prevention of
relapse of patients with Acute Myeloid Leukemia (AML) in first remission; AML is
the deadliest form of leukemia in adults. The product has been licensed to Meda
AB of Sweden to market and sell in Europe and certain Pacific Rim countries.
Ceplene®is also licensed to Megapharm Ltd. to market and sell in Israel.
Ceplene® is currently on the list of pre-approved products for reimbursement in
Germany, England, Sweden, Denmark and Italy (a temporary approval);
additionally, it is available on a named-patient basis in many other countries
in the European Union (EU). Reimbursement is being negotiated in France and
Spain, among other countries in the EU. Meda continues to make progress in its
long term strategy to position Ceplene® as the standard of care in AML relapse
prevention by concentrating on gaining patient access to Ceplene® through its
inclusion in clinical trials that are being conducted by key opinion leaders and
by incorporating the use of Ceplene® into treatment guidelines in major
countries. Following Ministry of Health approval of labeling and other technical
matters, Megapharm Ltd. is expected to commence the commercial launch of
Ceplene® in Israel, until which time it is available there on a named-patient
basis. Sales of Ceplene® were not material in 2011.
The Company filed its protocol for a Phase III confirmatory clinical trial for
Ceplene® with the FDA in the second quarter of 2011, and a meeting with the FDA
was held in September 2011 to reconcile the major protocol elements. At the
meeting, the FDA indicated that as part of a registration study, the effect of
Ceplene® must be isolated from the effect of IL-2; therefore the FDA’s preferred
study design is a comparison of Ceplene®/IL-2 vs. IL-2 monotherapy at the same
IL-2 dosing regimen as those patients receiving Ceplene®/IL-2 in combination.
The FDA also indicated the need to demonstrate as the primary endpoint a
significant benefit of Ceplene®/IL-2 vs. IL-2 monotherapy on overall survival.
At this time, the Company remains concerned about its ability to conduct this
trial given that IL-2 monotherapy has failed to demonstrate any significant
statistical or clinical benefit in maintaining AML remission in six separate
clinical trials conducted by several prominent international study groups in the
past several years; further, the significant cost to run such a trial and the
time required to achieve a meaningful overall survival endpoint render its
undertaking by the Company impractical at this time.
EpiCept is continuing patient enrollment for its European post-approval clinical
study of Ceplene®.This study is intended to measure immune activation and the
eradication of detectable minimal residual disease in AML patients serving as
their own controls. More than 75 patients have been enrolled to date. Biomarker
data from the first 75 patients enrolled are expected to be reported later in
2012. Thirty centers across Europe are participating in this study, with sites
in Sweden, Belgium, France, the U.K., Spain, Germany and Italy. The Company
intends to use the data from this single-arm, open-label trial to meet its
post-approval commitment and to seek a refinement of Ceplene’s EU labeling. The
data also are expected to have value for Meda in marketing Ceplene® to
prescribing hematologists.

  · CrolibulinTM- a vascular disruption agent that has demonstrated potent
anti-tumor activity in both preclinical and early clinical studies. In December
2010 the NCI initiated a Phase Ib/II trial for crolibulinTMto assess safety and
efficacy in combination with cisplatin in patients with anaplastic thyroid
cancer (ATC). Trial enrollment has progressed to the third and final dosing
cohort for the Phase Ib portion of this trial. The Phase II randomized proof of
concept efficacy portion of the trial is anticipated to begin in the first half
of 2012.

  · Azixa™* - a compound discovered by EpiCept and licensed to Myrexis, Inc. as
part of an exclusive, worldwide development and commercialization agreement.
AzixaTMhas received orphan drug status in the U.S. for the treatment of
glioblastoma multiforme (GBM). In June 2011, Myrexis presented Phase II clinical
results at the American Society of Clinical Oncology (ASCO) Annual Meeting from
the Company’s open-label study in patients with recurrent GBM, concluding that
AzixaTMwas active and well tolerated in patients who failed first-line therapy.
Myrexis announced in February 2012 that it has suspended company-wide operations
pending the outcome of an evaluation of available strategic alternatives to
enhance shareholder value that is being undertaken by its investment bank on
behalf of Myrexis’ Board of Directors. Myrexis is initiating an alignment of
resources consistent with its decision to suspend further development
activities. EpiCept is closely monitoring the developments and intends to
enforce its rights as appropriate under its license agreement with Myrexis.

Financial and Operating Highlights

EpiCept’s net loss for the fourth quarter of 2011 was $3.5 million, or $0.05 per
share, compared with a net loss of $3.0 million, or $0.06 per share for the
fourth quarter of 2010. The net loss for the full year 2011 was $15.7 million,
or $0.23 per share, compared with a net loss of $15.5 million, or $0.32 per
share, for the full year 2010.

Fourth Quarter 2011 vs. Fourth Quarter 2010

Revenue

The Company recognized revenue of $0.2 million during the fourth quarter of
2011, a decrease of $0.1 million compared with $0.3 million in the fourth
quarter of 2010. The decrease was primarily related to lower product revenue
from the sales of Ceplene®in 2011.

Cost of Goods Sold

Cost of goods sold in the fourth quarters of 2011 and 2010 was $0.3 million and
$0.6 million, respectively, consisting primarily of a $0.3 million and $0.5
million expense, respectively, for Ceplene®inventory the Company believes will
not be sold prior to reaching its product expiration date.

Selling, General and Administrative (SG&A) Expense

SG&A expense in the fourth quarter of 2011 decreased by 38%, or $0.6 million, to
$1.0 million compared with $1.6 million in the fourth quarter of 2010. The
decrease in SG&A expense was primarily related to the elimination of the
Company’s marketing staff in late 2010 following the FDA’s refusal to accept the
Ceplene NDA, lower salary-related expenses and the reversal of a legal reserve
that was previously recorded.

Research and Development Expense

Research and development expense in the fourth quarter of 2011 increased by 7%,
or $0.1 million, to $1.6 million compared with $1.5 million in the fourth
quarter of 2010. This increase was primarily related to higher clinical trial
expenses for Ceplene®and for expenses incurred in preparation for the AmiKet™
End-of-Phase II meeting with the FDA.

Other Income (Expense)

Other income (expense) during the fourth quarters of 2011 and 2010 amounted to
net expense of $0.8 million and net income of $0.4 million, respectively. The
primary component of other expense in 2011 was interest expense on the Company’s
senior secured debt and foreign exchange loss. The primary component of other
income in the fourth quarter of 2010 was a tax grant of $0.7 million received
from the Internal Revenue Service (IRS) as part of the Qualifying Therapeutic
Discovery Project Program, partially offset by interest expense and a foreign
exchange loss.

Full Year 2011 vs. Full Year 2010

Revenue

During the years 2011 and 2010, the Company recognized revenue of $0.9 million
and $1.0 million, respectively. Revenue was primarily related to the recognition
of deferred revenue from the Company’s license agreements with its partners, as
well as to royalties with respect to certain technology and sales of
Ceplene®during 2011 and 2010.

Cost of Goods Sold

Cost of goods sold in 2011 and 2010 was $0.7 million and $1.0 million,
respectively, consisting primarily of a $0.7 million and $0.9 million expense,
respectively, for Ceplene®inventory the Company believes will not be sold prior
to reaching its product expiration date.

Selling, General and Administrative Expense

SG&A expense in 2011 decreased by approximately 10%, or $0.7 million, to $6.5
million compared with $7.2 million in 2010. The decrease in SG&A expense can be
attributed to lower salary-related expenses and the elimination of the Company’s
marketing staff in late 2010, which was partially offset by certain
financing-related activities.

Research and Development Expense

Research and development expense in 2011 decreased by approximately 2%, or $0.2
million, to $7.9 million compared with $8.1 million in 2010. The decrease
compared with 2010 was primarily attributable to lower salary-related expenses
and lower patent maintenance fees.

Other Income (Expense)

Other income (expense) during 2011 amounted to a net expense of $1.6 million
compared with a net expense of $0.2 million during 2010. The $1.4 million
increase in other expense, net was primarily related to a $0.9 million increase
in interest expense and amortization of debt issuance costs and discount related
to the Company’s senior secured debt and receipt of a $0.7 million tax grant in
2010 from the IRS as part of the Qualifying Therapeutic Discovery Project
Program, for which no grant was received in 2011. Other income (expense) was
positively impacted by a $0.3 million foreign exchange loss in 2011, compared
with a $0.5 million foreign exchange loss in 2010.

EpiCept also announced today that in its Annual Report on Form 10-K for the year
ended December 31, 2011, the Company’s independent registered public accounting
firm is expected to express an unqualified opinion on the December 31, 2011
consolidated financial statements and will include an explanatory paragraph
expressing substantial doubt about the Company’s ability to continue as a going
concern. EpiCept’s Annual Report will be available on or about April 15, 2012 on
the Company’s website and at
www.sec.gov (http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww
.sec.gov&esheet=50186390&lan=en-US&anchor=www.sec.gov&index=2&md5=f5e33dc22b92b4
d783b8104f5fe2d4bf). EpiCept expects to release its interim results for the
period ending March 31, 2012 on or about May 11, 2012.

Liquidity

EpiCept had approximately $6.4 million in cash and cash equivalents as of
December 31, 2011. In February 2012 the Company announced that it received
approximately $1.8 million cash, net of $0.2 million in transaction costs, from
the issuance of 2,000 shares of the Company’s Series A 0% Convertible Preferred
Stock, at a price of $1,000 per share, and warrants to purchase 5.0 million
shares of the Company’s Common Stock. The Shares of Preferred Stock are
convertible into an aggregate of 10.0 million shares of the Company’s Common
Stock. The Company believes that its current cash is sufficient to fund
operations into the third quarter of 2012.

The Company engaged SunTrust Robinson Humphrey in January 2012 to assist in
exploring strategic alternatives to maximize the commercial opportunity of
AmiKet™ for the treatment of CIPN following taxane-based therapy. The engagement
is focused on the identification and implementation of a strategy designed to
optimize AmiKet™’s value for the Company’s stockholders, which includes the
evaluation of potential transactions involving the sale of the Company. EpiCept
is considering various financing opportunities to obtain additional cash
resources to fund operations and clinical trials, including the sale or
licensing of assets and the sale of equity securities. While the Company expects
to receive cash from sales of Ceplene®to Meda and royalties on the sales of
Ceplene®by Meda and Megapharm, such cash payments are not expected to provide
meaningful funding for the Company’s operations in 2012.

Conference Call

EpiCept will host a conference call to discuss these results and answer
questions on February 29, 2012 beginning at 9:00 a.m. Eastern time.

To participate in the live call, please dial from the United States or Canada
(877) 809-8594 or from international locations (706) 758-9407 (please reference
access code 56255177). The conference call will also be broadcast live in
listen-only mode on the Internet and may be accessed at
www.epicept.com (http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2
Fwww.epicept.com&esheet=50186390&lan=en-US&anchor=www.epicept.com&index=3&md5=aa
4c5afeb5c486dafd259cac6d804fdc). The webcast will be archived for 90 days.

A telephone replay of the call will be available for seven days by dialing from
the United States or Canada (855) 859-2056 or from international locations (404)
537-3406 (please reference reservation number 56255177).

About EpiCept Corporation

EpiCept is focused on the development and commercialization of pharmaceutical
products for the treatment of pain and cancer. The Company's pain portfolio
includes AmiKet™, a prescription topical analgesic cream in late-stage clinical
development designed to provide effective long-term relief of pain associated
with peripheral neuropathies. The Company's lead oncology product is Ceplene®,
which has been granted full marketing authorization by the European Commission
for the remission maintenance and prevention of relapse in adult patients with
Acute Myeloid Leukemia (AML) in first remission. The Company has other oncology
drug candidates currently in clinical development that were discovered using
in-house technology and have been shown to act as vascular disruption agents in
a variety of solid tumors.

Forward-Looking Statements

This news release and any oral statements made with respect to the information
contained in this news release contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements include statements which express plans, anticipation,
intent, contingency, goals, targets, future development and are otherwise not
statements of historical fact. These statements are based on our current
expectations and are subject to risks and uncertainties that could cause actual
results or developments to be materially different from historical results or
from any future results expressed or implied by such forward-looking statements.
Factors that may cause actual results or developments to differ materially
include: the risk that Ceplene®will not receive regulatory approval or marketing
authorization in the United States or Canada, the risk that Ceplene® will not
achieve significant commercial success, the risk that any required post-approval
clinical study for Ceplene®will not be successful, the risk that we will not be
able to maintain our final regulatory approval or marketing authorization for
Ceplene®, the risks associated with the adequacy of our existing cash resources
and our ability to continue as a going concern, the risks associated with our
ability to continue to meet our obligations under our existing debt agreements,
the risk that Azixa™ will not receive regulatory approval or achieve significant
commercial success, the risk that we will not receive any significant payments
under our agreement with Myrexis, the risk that clinical trials for AmiKet™ or
crolibulinTM will not be successful, the risk that AmiKet™ or crolibulinTM will
not receive regulatory approval or achieve significant commercial success, the
risk that we will not be able to find a partner to help conduct the Phase III
trials for AmiKet™ on attractive terms, a timely basis or at all, the risk that
our other product candidates that appeared promising in early research and
clinical trials do not demonstrate safety and/or efficacy in larger-scale or
later-stage clinical trials, the risk that we will not obtain approval to market
any of our product candidates, the risks associated with dependence upon key
personnel, the risks associated with reliance on collaborative partners and
others for further clinical trials, development, manufacturing and
commercialization of our product candidates; the cost, delays and uncertainties
associated with our scientific research, product development, clinical trials
and regulatory approval process; our history of operating losses since our
inception; the highly competitive nature of our business; risks associated with
litigation; and risks associated with our ability to protect our intellectual
property. These factors and other material risks are more fully discussed in our
periodic reports, including our reports on Forms 8-K, 10-Q and 10-K and other
filings with the U.S. Securities and Exchange Commission. You are urged to
carefully review and consider the disclosures found in our filings which are
available at
www.sec.gov (http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fus.
lrd.yahoo.com%2F_ylt%3DAgfqFPfVOEK5M4_Rv8aJvhTjba9_%3B_ylu%3DX3oDMTEzM2pvaWgxBHB
vcwMyBHNlYwNuZXdzYXJ0Ym9keQRzbGsDd3d3c2VjZ292%2FSIG%3D15t064n6f%2F**http%253A%2F
cts.businesswire.com%2Fct%2FCT%253Fid%3Dsmartlink%2526url%3Dhttp%25253A%25252F%2
5252Fwww.sec.gov%2526esheet%3D6170045%2526lan%3Den_US%2526anchor%3Dwww.sec.gov%2
526index%3D2%2526md5%3D61ec7b72044301e411e3335754ee5c07&esheet=50186390&lan=en-U
S&anchor=www.sec.gov&index=4&md5=20b930fa2ea0ceaf89abb5620b36ac05) or at
www.epicept.com (http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2
Fus.lrd.yahoo.com%2F_ylt%3DAhBuoawHw6iS3RhJOH9dNNfjba9_%3B_ylu%3DX3oDMTE2OGhhcWs
4BHBvcwMzBHNlYwNuZXdzYXJ0Ym9keQRzbGsDd3d3ZXBpY2VwdGNv%2FSIG%3D1659oglun%2F**http
%253A%2Fcts.businesswire.com%2Fct%2FCT%253Fid%3Dsmartlink%2526url%3Dhttp%25253A%
25252F%25252Fwww.epicept.com%2526esheet%3D6170045%2526lan%3Den_US%2526anchor%3Dw
ww.epicept.com%2526index%3D3%2526md5%3D8b3a48c3367e26fcfbd15295b6d82118&esheet=5
0186390&lan=en-US&anchor=www.epicept.com&index=5&md5=1ac0356820da5e158883f8d9f94
bd777). You are cautioned not to place undue reliance on any forward-looking
statements, any of which could turn out to be wrong due to inaccurate
assumptions, unknown risks or uncertainties or other risk factors.

 

EpiCept Corporation and
Subsidiaries                                                   
                                           

(Unaudited)                                                                     
                                                                            

Selected Consolidated Balance Sheet
Data                                             
                                           

(in
$000s)                                                                          
                                                                           

                                                                                
                                            December 31,

                                                                                
                                           
2011                                   2010

Cash and cash
equivalents                                                                     
                                                 $          6,378     
                $              2,435

Inventory                                                                       
                            360                                            1,004

Property and equipment,
net                                                                 
120                                            222

Total
assets                                                                          
     $           7,521                                            $          
4,689

Accounts payable and other accrued liabilities                 $          
3,333                                            $           3,389

Deferred
revenue                                                                         
       12,947                                            13,826

Notes and loans
payable                                                                    
8,022                                            972

Total stockholders’
deficit                                                              
(17,146)                                           (14,135)

Total liabilities and stockholders’ deficit                            
$           7,521                                            $           4,689

EpiCept Corporation and Subsidiaries                                    
                                                                  
(Unaudited)                                                    
                                                                    
                                Selected Consolidated Statement of Operations
Data                                              
                                (in $000s except share and per share
data)                                                                
                Three Months Ended December 31,      Year EndedDecember
31,                                                                          
2011                         2010                        
2011                       2010

Product net revenues                                    
                                                                  
4                                                                78          
               
                                                                          
39                             
                                                                   158

Licensing and other revenues                      
                                                             
203                                                                213        
               
                                                                          
905                                                             
                                836

Total net revenues                                       
                                  $                        
207                                                $              291        
               
$                                                                          
944                                                          
$                                994

Operating expenses:                                    
                                  ..................................
                                                               
                                Cost of product net
revenues                                                 
281                                                                  
573                         692                         997Selling, general
and administrative                                    
1,039                                                                  
1,612                      6,452     
                                                                          
7,244Research and development                                                 
1,561                                                                  
1,459                      7,853     
                                                                          
8,127     Total operating expenses                        
                                                         
2,881                                                               
3,644                     
                                                                          
14,997                                                        
                                16,368     Loss from
operations                                                                 
                       (2,674)                                              
                (3,353)                  
                                                                          
(14,053)                                                     
                                (15,374)Other income
(expense):                                                               
                                                                  
                                                                Interest
income                                              
                                2                                  
                                1                              12          
                7Foreign exchange gain (loss)                       
                          (378)                                
                                (180)                      (340)     
                                                                          
(538)Interest expense                                             
                          (401)                                
                                (173)                      (1,271)  
                                                                          
(361)Miscellaneous income                                  
                                                               
—                                                                733        
               
                                                                          
—                                                                
                                733     Other income (expense),
net                                                     
                          (777)                                              
                381                        
                                                                          
(1,599)                                                       
                                (159)Net loss before income
taxes                                            
(3,451)                                                                
(2,972)                   (15,652)
                                                                          
(15,533)Income taxes                                                 
                                                                    
                     —                                      
                     —                         
(4)                                                                     
                   (4)Net loss
                                                           
$                   (3,451)                                
$                             (2,972)   $             (15,656)
$                                                                          
(15,537)Basic and diluted loss per common share
                                  $                            
(0.05)                                         $              (0.06)    
               
$                                                                          
(0.23)                                                       
$                            (0.32)Weighted average common shares outstanding
*                     
                                                                  
71,003,667                          
                                                                          
52,466,655             
                                                                  
68,313,381                          
                                                                          
47,853,560

* Reflects a 1:3 reverse split effected in January 2010.

EpiCept Corporation and
Subsidiaries                                                       
                                   

(Unaudited)                                                                     
                                                                        

Selected Consolidated Statement of Cash Flows Data                             

(in
$000s)                                                                          
                                                                       

                                                                                
                                                Year Ended December 31,

                                                                                
                                                2011                          
2010

Net cash used in operating
activities                                                                $  
(14,002) $   (10,400)

Net cash provided by (used in) investing
activities                                       97                           63

Net cash provided by financing
activities                                                      
                       17,840          7,637

Effect of exchange rate changes on
cash                                                                         8
                (7)

Net increase (decrease) in cash and cash
equivalents                                                                     
3,943               (2,707)

Cash and cash equivalents at beginning of year                               
2,435                                               5,142

Cash and cash equivalents at end of year                               
$         6,378                                    $         2,435

EpiCept Corporation and
Subsidiaries                                                       
                                   

(Unaudited)                                                                     
                                                                        

Selected Consolidated Statement of Stockholders Deficit Data

(in
$000s)                                                                          
                                                                       

                                                                                
                                                Year Ended December 31,

                                                                                
                                                2011                          
2010

Stockholders’ deficit at beginning of
year                                                      $   (14,135) $  
(9,079)

Net loss for the
period                                                                          
               (15,656)       (15,537)

Stock-based compensation
expense                                                        930    
                              959    

Foreign currency translation
adjustment                                                
299                                    661

Share and warrant
issuance                                                                 
10,872                                    8,088

Exercise of options and
warrants                                                                
—                                    773

Warrant
issuance                                                                        
                 544                                               —

                                                                                
                                               
                                   

Stockholders’ deficit at end of
year                                              $
(17,146)                                   $ (14,135)

As of February 29, 2012, EpiCept had 78,531,370 shares outstanding.

# # #

*Azixa is a registered trademark of Myrexis, Inc.

EPCT-GEN

 

EpiCept Corporation:
Robert W. Cook, 914-606-3500
rcook@epicept.com
or
Media:
Feinstein Kean Healthcare
Greg Kelley, 617-577-8110
gregory.kelley@fkhealth.com
or
Investors:
LHA
Kim Sutton Golodetz, 212-838-3777
kgolodetz@lhai.com
or
Bruce Voss, 310-691-7100
bvoss@lhai.com
@LHA_IR_PR

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