ACCESS NEWS
Contact: Company Contact: Investor Relations
Kerry P. Gray Budd Zuckermann
President & CEO Genesis Select
(214) 905-5100 (303) 415-0200
ACCESS PHARMACEUTICALS, INC. ANNOUNCES
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FOURTH QUARTER AND FULL-YEAR 2003 FINANCIAL RESULTS
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DALLAS, TEXAS, March 25, 2004, ACCESS PHARMACEUTICALS, INC. (AMEX: AKC)
today reported its results for the fourth quarter and full year
ended December 31, 2003. The Company reported a net
loss for the fourth quarter of $2,634,000 or $.19
per share, compared to a net loss of $2,352,000 or
$.18 per share for the corresponding quarter in
2002. For the full year the net loss was reduced
from $9,384,000 or $0.72 per share, for the year
ended December 31, 2002 to a net loss of $6,935,000
or $0.52 per share in 2003.
Revenue in the fourth quarter of 2003 was $208,000
compared to $677,000 in 2002, reflecting a decrease
in product sales ($194,000) and licensing revenues
($280,000). For the full year revenue increased to
$1,295,000 compared with $1,147,000 in 2002. The
increase in product sales ($338,000) accounted for
the increased revenues in 2003 but were partially
offset by reduced Zindaclin licensing revenues due
to the achievement of commercial milestones in
2002. Product sales in the second half of 2003 were
impacted by the previously reported supply
interruption for which Access received compensation
in the second quarter 2003 from the settlement
agreement executed with GlaxoSmithKline.
Operating expenses in the fourth quarter of 2003
were $2,590,000 a decrease of $231,000 compared
with 2002. This decline was entirely due to
decreased research and development expense, as 2002
included significant clinical development expenses
associated with OraDisc A. This reduction in
expense was accomplished despite incurring a
$250,000 expense associated with the establishment
of a contract manufacturer for Aphthasol (which
amount had previously been reimbursed as part of the settlement
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Access Pharmaceuticals, Inc.
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agreement with GSK). General and administrative
expense in the fourth quarter of 2003 exceeded the
fourth quarter of 2002 ($77,000) principally due to
increased investor relations and patent expenses.
Full year 2003 operating expenses decreased
$339,000 to $9,508,000. Decreased expenditures on
research and development expenses ($928,000) was
offset by increased depreciation and amortization
($182,000) resulting from the acquisition of
additional capital assets and higher amortization
of acquired patents and increased general and
administration costs ($237,000) as a result of
higher professional fees ($151,000) and patent
expense ($60,000). The reduction in 2003 research
and development expense reflects lower OraDisc A
clinical development costs ($812,000) and the
completion of one of our polymer platinate clinical
trials ($773,000). These decreases are partially
offset by the expansion of our scientific
organization, ($278,000) and the full year impact
of the cost of our Australian operations ($254,000).
Loss from operations in the fourth quarter of 2003
was $2,382,000 an increase of $238,000 over 2002
and for the full year the operating loss declined
by $487,000 to $8,213,000.
Interest expense remained constant at $1,281,000
with other income increasing $1,965,000 in 2003 as
a result of the previously reported settlement
agreement.
Kerry P. Gray, President and CEO of Access, stated,
"Compared with our original business plan there
were a number of variances, with product sales and
the cost associated with establishing a contract
manufacturer for Aphthasol unfavorably impacting
our operating results, however, this was more than
offset by the settlement agreement with GSK.
Additionally, the costs associated with Sarbanes
Oxley compliance have negatively impacted our
results. As a result of strict cost controls we
have however been able to maintain our expenses in
line with our plan. With costs projected to remain
relatively constant and revenues projected to
significantly increase from royalties, product
sales, licensing and research funding, it is
anticipated that our loss in 2004 will be reduced."
2003 has been a year of great achievement for the
company. Since the beginning of 2003 significant
progress, both from a commercial and development
perspective, has been made including:
- - Filing the OraDisc(TM) A NDA and having this
filing accepted by the FDA.
- - Execution of a licensing agreement with Wyeth
Consumer Healthcare, a division of Wyeth, granting
Wyeth the North American rights to market an OTC
product utilizing our OraDisc(TM)
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Access Pharmaceuticals, Inc.
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technology.
- - Execution of two collaborative research
agreements to evaluate our preclinical
technologies.
- - Continued advancement of our polymer platinate
program including the clinical advancement of
AP5346 and the development of significant
preclinical data supporting the program.
- - Expansion of our OraDisc technology through
additional development candidates and further
technology improvements.
- - Substantial completion of the development and
manufacturing scale-up of OraDisc B containing
benzocaine.
- - Significant expansion and advancement of our
corporate partnering discussions.
- - The issuance of two US patents, one covering our
polymer platinate technology and the other our
OraDisc technology.
- - Completion of a $9.7 million private placement
financing.
- - Significant expansion of the preclinical data
base supporting the nanoparticle aggregate
technology, vitamin mediated oral delivery and
polymer cancer therapeutics programs.
Mr. Gray continued, "The achievements of 2003
validate our business model. The filing of an NDA
and significant achievements in our priority
development programs clearly demonstrate that it is
possible to expeditiously develop products with a
small but focused development team. We are now
beginning to realize the benefits of a diverse
balanced product development portfolio, as we
anticipate the launch of two additional products
over the upcoming twelve months."
During the upcoming twelve months our plans include
the achievement of numerous commercial and
development milestones including:
- - Approval of OraDisc A in both the US and Europe.
- - Additional licensing agreements for a number of
our products and technologies.
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- - Research collaborations involving our preclinical
technologies.
- - OTC product development agreements.
- - Initiation of the next clinical development phase
for both polymer platinate and mucositis
technology.
- - Product launches in Europe and the US both for
existing approved products and the OraDisc
products.
- - Advancement of preclinical technologies toward
clinical development.
"We anticipate that 2004, both commercially and
from a product development viewpoint, will be not
only an exciting year but one where we will
commence realizing the benefits for our past
successes. We expect to generate revenue from in
excess of seven products and development programs
from product sales, royalties, licensing payments
and research collaborations" Mr. Gray stated.
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.
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 expected
significant increases in revenues in 2004,
anticipated reduced loss in 2004, the anticipated
launch of two additional products in the next
twelve months, the achievement of significant
milestones in 2004, including the approval of
OraDisc A in the US and Europe, additional
licensing, collaboration and development
agreements, additional product launches and the
generation of revenues from in excess of seven
products in 2004. 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, our ability to
perform under our plan to regain compliance with
AMEX listing standards, 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,
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Access Pharmaceuticals, Inc.
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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, 2003, and other reports
filed by us with the Securities and Exchange
Commission.
Access Pharmaceuticals, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
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Three months ended Twelve months ended
December 31, December 31,
----------------------- -----------------------
2003 2002 2003 2002
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Revenues
Licensing revenues $ 192,000 $ 472,000 $ 729,000 $ 853,000
Product sales - 194,000 532,000 194,000
Research and development - - - 89,000
Royalty income 16,000 11,000 34,000 11,000
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Total revenues 208,000 677,000 1,295,000 1,147,000
Expenses
Research and development 1,548,000 1,809,000 6,096,000 7,024,000
Cost of product sales 34,000 107,000 277,000 107,000
General and administrative 835,000 758,000 2,514,000 2,277,000
Depreciation and amortization 173,000 147,000 621,000 439,000
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Total expenses 2,590,000 2,821,000 9,508,000 9,847,000
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Loss from operations (2,382,000) (2,144,000) (8,213,000) (8,700,000)
Other income (expense)
Interest and miscellaneous
income 73,000 121,000 2,559,000 594,000
Interest expense (325,000) (329,000) (1,281,000) (1,278,000)
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(252,000) (208,000) 1,278,000 (684,000)
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Net income (loss) $(2,634,000)$(2,352,000)$(6,935,000)$(9,384,000)
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Basic and diluted income
(loss) per common share $(0.19) $(0.18) $(0.52) $(0.72)
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Weighted average basic and diluted
common shares outstanding 13,358,748 13,159,119 13,266,733 13,104,060
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Balance sheet data
December 31, December 31,
2003 2002
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Cash and cash equivalents $ 727,000 $ 1,444,000
Short-term investments and
certificates of deposit 1,860,000 8,332,000
Restricted cash 649,000 468,000
Accounts receivable and inventory 1,257,000 1,645,000
Total assets 11,811,000 19,487,000
Working capital 1,206,000 7,594,000
Convertible notes and
other obligations 14,361,000 15,019,000
Accumulated deficit (54,227,000) (47,292,000)
Total stockholders' equity (deficit) (5,825,000) 489,000
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