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Oxygen Biotherapeutics Reports Second Quarter FY2013 Financial Results
-Management to host teleconference to discuss financial results on December 17-
MORRISVILLE, NC, December 17, 2012 — Oxygen Biotherapeutics, Inc. (NASDAQ:OXBT), a development stage biomedical company focused on developing oxygen-rich intravenous and topical products, today announced results for the three and six months ended October 31, 2012. Oxygen’s management will host a live teleconference on Monday, December 17, 2012 at 11 a.m. EST to discuss the results. (See access details below.)
Highlights (through Dec. 14, 2012)
| ● | We completed one study that showed that Oxycyte® had little to no effect on platelet activation, aggregation or adhesion when tested in vitro at clinically relevant concentrations on normal human blood. We have initiated a repeat study using blood from traumatic brain injury patients. |
| ● | Revenue earned under our U.S. Army funded research grant was $509,000 for the second quarter of 2013 compared to $78,000 for the three months ended October 31, 2011. |
| ● | Initiated four studies to assess the impact of Oxycyte on the overall health of the immune system, bacterial opsonization and phagocytic activity, innate immunity, and its effect on the primary immune response cells of the liver and spleen. |
| ● | Net cash used in operating activities was $1.1 million for the second quarter of 2013 compared to $2.5 million for the same period in the prior year. |
| ● | Reduced financial loss from operations to $0.7 million for the second quarter of 2013 compared to $2.1 million for same period last year. |
| ● | Secured a new Cooperative R&D Agreement with the U.S. Navy to research using Oxycyte PFC Emulsion as an intravenous treatment for infected wounds and related injuries. |
| ● | Engaged global contract research organization Pharmaceutical Product Development (PPD) to manage STOP-TBI Phase IIb trial for Oxycyte PFC Emulsion. |
Second-Quarter Results
Oxygen Biotherapeutics reported net revenue of $514,872 for the second quarter of fiscal 2013, compared to $95,159 for the comparable quarter in the previous fiscal year. The increase was due primarily to direct cost reimbursements for work performed under our preclinical Oxycyte PFC studies funded by the U.S. Army, partially offset by a decrease in product sales. The decrease in product sales was due to a reduction in the size of our internal sales force during the quarter and termination of existing distribution agreements in the prior year.
Total operating expenses for the three months ended October 31, 2012 were $1,197,715 compared to $2,149,387 for the same period in 2011. The reduction in total operating expenses for the quarter was due primarily to decreases in marketing and sales and general and administrative expenses of approximately $80,000, and $1.2 million, respectively, partially offset by an increase of approximately $120,000 in research and development expense. Additionally, during the quarter, we recorded approximately $170,000 in restructuring costs associated with the closure of our California lab facility that were not incurred during the same period in the prior year.
Marketing and sales expense for the three months ended October 31, 2012 was $53,293 compared to $134,035 for the same period in the prior year. The decrease in marketing and sales expense for the quarter was driven primarily by reductions in compensation costs, direct marketing and advertising costs, fees paid to a third-party public relations firm and travel and marketing sample expenses.
General and administrative expense for the three months ended October 31, 2012 were $369,550 compared to $1,526,775 for the same period in 2011. The reduction in general and administrative expense for the quarter was due primarily to decreases in compensation costs, legal and professional fees and facilities costs, partially offset by a slight increase in depreciation and amortization expenses. Additionally, during the quarter, we reduced our estimate of potential costs associated with our contingent liability, related to Section 409A of the Internal Revenue Code, by approximately $530,000.
Research and development expense for the three months ended October 31, 2012 were $604,574 compared to $488,577 for the same period in 2011. The increase in research and development expense for the period was due primarily to an increase in costs incurred for preclinical studies and Oxycyte development, partially offset by decreases in costs incurred for compensation, consulting fees, lab supplies and facilities costs.
Interest and other expenses for the three months ended October 31, 2012 were $874,435 compared to $875,695 for the same period in 2011.
For the second quarter ended October 31, 2012, the Company reported a net loss of $1,557,278, or $0.05 per share, compared to a net loss of $2,929,923, or $0.12 per share, for the same period in the prior year.
Six-Month Results
Total net revenue for the six months ended October 31, 2012 was $786,968 compared to total revenue of $120,032 for the same period in fiscal year 2012. The increase was due primarily to direct cost reimbursements for work performed under our preclinical Oxycyte PFC studies, partially offset by a decrease in product sales. The decrease in product sales was due to a reduction in the size of our sales force during the quarter and termination of existing distribution agreements in the prior year.
Total operating expenses for the six months ended October 31, 2012 were $3,145,252 compared to $4,602,337 for the same period in 2011. The reduction in total operating expenses for the period was due primarily to decreases in marketing and sales and general and administrative expenses of approximately $271,000 and $1.5 million, respectively, partially offset by an increase of approximately $100,000 in research and development expense. Additionally, during the period, we recorded approximately $218,000 in restructuring costs associated with the closure of our California lab facility that were not incurred during the same period in the prior year.
Marketing and sales expense for the six months ended October 31, 2012 was $91,898 compared to $363,368 for the same period in the prior year. The decrease in marketing and sales expense for the period was driven by reductions in compensation costs, direct marketing and advertising costs, fees paid to a third-party public relations firm and travel and marketing sample expenses.
General and administrative expense for the six months ended October 31, 2012 was $1,593,734 compared to $3,098,431for the same period in 2011. The reduction in general and administrative expense for the period was due primarily to decreases in compensation costs, legal and professional fees, facilities costs and depreciation and amortization expenses. Additionally, during the period, we reduced our estimate of potential costs associated with our contingent liability, related to Section 409A of the Internal Revenue Code, by approximately $530,000.
Research and development expense for the six months ended October 31, 2012 was $1,241,846 compared to $1,140,538 for the same period in 2011. The increase in research and development expense for the period was due primarily to an increase in costs incurred for preclinical studies and Oxycyte development, partially offset by decreases in costs incurred for compensation, consulting fees, lab supplies and facilities costs.
Interest and other expenses for the six months ended October 31, 2012 were $2,785,535 compared to $1,316,687 for the same period in 2011. The increase in interest and other expenses for the period was due primarily to the non-cash interest charges for dividends and fair value adjustments on our outstanding Series A convertible preferred stock that was not incurred in the prior year, partially offset by the non-cash interest charges for the accretion of the discount on our notes payable which were not incurred in the current period.
The Company reported a net loss of $5,143,819, or $0.17 per share for the six month period ended October 31, 2012, compared to a net loss of $5,798,992, or $0.25 per share for the same period in 2011.
As of October 31, 2012, the Company had cash and cash equivalents totaling $1,511,513, compared to $1,879,872 at April 30, 2012.
“Focus is one of the most important drivers of success,” said Michael Jebsen, Chief Financial Officer and Interim Chief Executive Officer, “and that is what we have strived to do over the last 18 months. Our focus has been on developing our most advanced product candidate, Oxycyte. We are progressing towards completion of our preclinical work to assess the impact of Oxycyte on platelet function, immune response and thrombocytopenia; the results of which we believe will support our response to the FDA’s existing hold on our NDA. We believe we are nearing the completion of the preliminary steps necessary to resume our Phase IIb clinical trials to evaluate the Safety and Tolerability of Oxycyte in Patients with Traumatic Brain Injury (STOP-TBI) in Israel and Switzerland. Our company’s focus is reflected in our financial results and we remain committed to investing a substantial amount of our resources on development of the programs that will lead us to success and build stockholder value.”
Conference Call Dial-In, Webcast Information
Management will host a conference call on Monday, December 17, 2012 at 11 a.m. EST. To access the live teleconference dial (800) 299-9630 (U.S. and Canada) or (617) 786-2904 (international.) The participant passcode is 40837151. A live webcast will be available on our web site http://www.oxybiomed.com/investors.htm.
A replay of the webcast will be available on the Oxygen Biotherapeutics website, or by phone for a limited time. To access the replay by phone, call (888) 286-8010 (U.S. and Canada) or (617) 801-6888 (international) for a limited time. The passcode for the replay is 90794929.
OXYGEN BIOTHERAPEUTICS, INC.
OXYGEN BIOTHERAPEUTICS, INC.
