EXHIBIT 99.1
ACCESS NEWS
Contact: Company Contact: Investor Relations
Kerry P. Gray Donald C. Weinberger
President & CEO Wolfe Axelrod
(214) 905-5100 (212) 370-4500
ACCESS PHARMACEUTICALS, INC. ANNOUNCES
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SECOND QUARTER FINANCIAL RESULTS
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-Progress on Product Developments-
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DALLAS, TEXAS, August 12, 2003, ACCESS PHARMACEUTICALS, INC. (AMEX: AKC)
today reported its results for the second quarter and six months
ended June 30, 2003. The Company reported net income of $316,000
or $0.02 per share, for the second quarter, as compared to a net loss of
$2,308,000, or $0.18 per share, for the corresponding quarter in 2002.
The net loss for the six-month period ended June 30, 2003 was
$2,095,000, or $0.16 per share compared with a net loss of $4,174,000,
or $0.32 per share for the corresponding period in 2002.
Revenue for the second quarter of 2003 was $683,000
compared to $263,000 for the comparable quarter in
2002. This increase reflects product sales of
Aphthasol(R) in the United States of $229,000 and
an increase in licensing payments of $184,000.
Operating expenses decreased $4,000 due to lower
research and development expenses ($214,000) offset
by an increase in cost of product sales ($104,000)
and increased administrative expenses, principally
additional patent costs ($59,000) and additional
depreciation and amortization of licenses and
patents ($47,000). The decrease in research and
development expenses reflects lower product
development costs for products in clinical trials
and preclinical product testing.
Revenue for the first six months of 2003 was
$1,076,000, an increase of $697,000 over the prior
year, principally due to product sales of
Aphthasol(R) in the United States of $532,000 and
additional Zindaclin(R) licensing payments. The
advancement of Access' clinical development
candidates, expansion of its research and
development capabilities and cost of product sales
are the principal reasons operating expenses
increased to $4,964,000, $704,000 higher than the
prior six month period. Research and development
expenses increased $260,000 in the six month
period, primarily as a result of incremental
development costs associated
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Access Pharmaceuticals, Inc.
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with our Phase III OraDisc(TM) clinical study, our
polymer platinate program and compensation expense
resulting from expanded internal capabilities. Cost
of product sales ($213,000), general and
administration expenses ($97,000) and depreciation
and amortization ($134,000) also contributed to the
increase in expenses for the first six months.
General and administration increased in the first 6
months mainly as a result of increased patent
expenses. Depreciation and amortization increased
in the same period as a result of increased
depreciation resulting from the acquisition of
additional capital assets and increased
amortization of acquired patents.
As previously reported in our first quarter
announcement, in the second quarter we recorded a
significant one-time non-recurring item in Other
Income which contributed to the Company achieving a
break-even cash flow and generating earnings of
$0.02 per share. This one-time non-recurring item
is the result of a settlement of a contract dispute
with the Company's previous supplier of
Aphthasol(R). Not only does this settlement result
in a significant gain in the current quarter, it
also eliminates the requirement to pay future
milestone payments that were due under the
agreement pursuant to which the Company purchased
the amlexanox assets.
Commenting on the results, Kerry P. Gray, President
and CEO of Access, stated, "Our operating results
are beginning to reflect the execution of our
strategy of building a diverse company with a
number of revenue streams being generated from our
extensive technology portfolio. We continue to
focus on generating near term product revenues
through the development of our novel lower
development risk technologies to support the
advancement of our potentially large market
opportunity product candidates. Cost effective drug
development remains a high priority which is
reflected in our quarterly results, where despite
significant progress in our development projects,
our expenditure for research and development has
increased less than 10 percent year-to-date. We are
particularly pleased with our financial results,
despite anticipated payments totaling $400,000 not
being received until the third quarter."
Significant progress was made during the last
quarter, including:
- - Granting of US Patent 6,585,997 covering our
OraDisc(TM) technology.
- - Closing of the 700 patient Phase III OraDisc(TM)
clinical study and the reporting of the positive outcome.
- - Closing of the 100 patient 28 day OraDisc(TM)
safety study with no adverse findings.
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Access Pharmaceuticals, Inc.
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- - Advancement of the AP5346 Phase I clinical study.
- - Completion of the enrollment in the weekly
dosing AP5280 Phase I study.
- - Advancement of the preclinical development of
our nanoparticle aggregate technology.
- - Advancement of strategic alliance discussions
for several of our product candidates and technologies.
Mr. Gray added, "Considerable interest has been
expressed in the Company's product candidates and
technology portfolio. The technologies in
development address numerous limitations in
currently available technologies including,
reducing the toxicity and improving the
effectiveness of chemotherapeutics, alternate
delivery forms for injectable products, improved
delivery of topically applied oral products and the
potential oral delivery of macromolecules. Given
the numerous applications for our technology, we
plan to seek multiple collaborations with partners
to utilize the same technology for numerous
different products. With the advancement of our
technology developments, we believe that the
potential increases to secure strategic partners
for our programs and to enter collaborative
research partnerships."
Mr. Gray continued, "I am very pleased with the
considerable interest being expressed by companies
in our product candidates and in the application of
our technologies to enhance the delivery of
numerous compounds. We believe that a considerable
opportunity exists to utilize our technologies for
over-the-counter pharmaceuticals, particularly our
OraDisc(TM) technology, which could result in the
launch of a number of products over the upcoming 24
months. This could provide an additional revenue
stream to accelerate the achievement of our
objective of generating profitability from the sale
of marketed products."
Access Pharmaceuticals, Inc. is an emerging
pharmaceutical company focused on developing both
novel low development risk product candidates and
technologies with longer-term major product
opportunities. Access markets Aphthasol(R), the
only FDA-approved product for the treatment of
canker sores, and is developing products for
mucositis and other dermatological indications.
Access is also developing unique polymer platinates
for use in the treatment of cancer and has
developed, in conjunction with its partner Strakan,
Ltd., the marketed product Zindaclin(R), which
utilizes ResiDerm(R), our topical zinc delivery
system that provides rapid delivery and reservoir
of a drug in the skin.
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Access Pharmaceuticals, Inc.
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This press release contains certain statements that
are forward-looking within the meaning of Section
27a of the Securities Act of 1933, as amended, and
that involve risks and uncertainties, including but
not limited to statements made relating to the
advancement of our clinical development candidates,
our ability to achieve and maintain break-even cash
flow, the generation of multiple revenue streams
from our product portfolio, the generation of near-
term product revenue, the interest expresses in the
company's development and technology portfolio, our
ability to enter into collaboration agreements and
the ability to achieve over the counter approval of
any of our products. These statements are subject
to numerous risks, including but not limited to the
uncertainties associated with research and
development activities, clinical trials, our
ability to raise capital, the timing of and our
ability to achieve regulatory approvals, dependence
on others to market our licensed products,
collaborations, future cash flow, the timing and
receipt of licensing and milestone revenues,
projected future revenue growth and our ability to
generate near term revenues, the future success of
the Company's marketed products Aphthasol(R) and
products in development including polymer
platinate, OraDisc(TM) and our Mucositis
technology, our ability to develop products from
our platform technologies, our ability to
manufacture amlexanox products in commercial
quantities, our sales projections and the sales
projections of our licensing partners, our ability
to achieve licensing milestones and other risks
detailed in the Company's Annual Report on Form 10-
K for the year ended December 31, 2002, and other
reports filed by us with the Securities and
Exchange Commission.
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Access Pharmaceuticals, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
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(unaudited)
Three months ended Six months ended
June 30, June 30,
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2003 2002 2003 2002
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Revenues
Licensing revenues $ 447,000 $ 263,000 $ 533,000 $ 379,000
Product sales 229,000 - 532,000 -
Royalty income 7,000 - 11,000 -
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Total revenues 683,000 263,000 1,076,000 379,000
Expenses
Research and development 1,497,000 1,711,000 3,294,000 3,034,000
Cost of product sales 104,000 - 213,000 -
General and administrative 630,000 571,000 1,167,000 1,070,000
Depreciation and amortization 146,000 99,000 290,000 156,000
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Total expenses 2,377,000 2,381,000 4,964,000 4,260,000
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Loss from operations (1,694,000) (2,118,000) (3,888,000) (3,881,000)
Other income (expense)
Interest and miscellaneous
income 2,334,000 127,000 2,432,000 341,000
Interest expense (324,000) (317,000) (639,000) (634,000)
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2,010,000 (190,000) 1,793,000 (293,000)
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Net income (loss) $ 316,000 $(2,308,000) $(2,095,000) $(4,174,000)
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Basic and diluted income
(loss) per common share $0.02 $(0.18) $(0.16) $(0.32)
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Weighted average basic
and diluted common
shares outstanding 13,218,747 13,159,728 13,209,375 13,047,618
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BALANCE SHEET DATA
June 30, December 31,
2003 2002
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(unaudited)
Cash and cash equivalents $ 3,290,000 $ 1,444,000
Short-term investments and
certificates of deposit 4,181,000 8,332,000
Accounts receivable and inventory 1,209,000 1,645,000
Total assets 16,340,000 19,487,000
Working capital 5,678,000 7,594,000
Convertible notes and other obligations 14,009,000 15,019,000
Accumulated deficit (49,387,000) (47,292,000)
Total stockholders' equity (deficit) (1,339,000) 489,000
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