.
.
.
EXHIBIT 99.1
Contact:
Investors: Media:
Ann Tanabe Daniel Budwick
Director, Investor Relations and Corporate Communications BMC Communications
Encysive Pharmaceuticals (212) 477-9007 ext. 14
(713) 796-8822
Stephen L. Mueller
Vice President, Finance and Administration
Encysive Pharmaceuticals
(713) 796-8822
Hershel Berry
The Trout Group
(415) 392-3385
FOR IMMEDIATE RELEASE
ENCYSIVE PHARMACEUTICALS REPORTS SECOND QUARTER 2004 RESULTS
COMPANY COMPLETES ENROLLMENT IN STRIDE-4
CONFERENCE CALL SCHEDULED FOR 4:30 P.M. ET TODAY
HOUSTON, TX - JULY 28, 2004 - Encysive Pharmaceuticals (NASDAQ: ENCY) today
announced financial results for the second quarter ended June 30, 2004. The
Company also announced that it has closed enrollment in STRIDE-4, a placebo
controlled trial evaluating two dosages of Thelin(TM) versus placebo in patients
with pulmonary arterial hypertension (PAH).
"We have made significant progress in the second quarter towards the completion
of our comprehensive Thelin clinical program," said Bruce D. Given, M.D.,
President and Chief Executive Officer of Encysive Pharmaceuticals. "With
STRIDE-4 and STRIDE-6 fully enrolled and our pivotal study STRIDE-2 on track to
complete enrollment in the third quarter, the Company is successfully advancing
its commercialization strategy of marketing the first selective endothelin
antagonist in PAH."
SECOND QUARTER 2004 FINANCIAL OVERVIEW
For the second quarter of 2004, the Company reported a net loss of approximately
$12.3 million, or $0.23 per basic and diluted share, compared to a net loss of
approximately $14.1 million, or $0.32 per basic and diluted share, for the same
period last year. The loss in 2003 included a one-time charge of $8.4 million
related to acquiring full rights to Thelin(TM). After removing the $8.4 million
charge in 2003, the increased loss in 2004 over 2003 in the second quarter is
primarily
the result of increased research and development costs associated with our
late-stage clinical trial program supporting Thelin(TM).
Revenue for the second quarter of 2004 was approximately $3.4 million compared
to $2.2 million for same period in 2003. In the second quarter, the Company's
royalties on net sales of Argatroban by GlaxoSmithKline (GSK) increased to $2.0
million from $1.1 million earned in the same period in 2003, an increase of 76
percent.
Cash, cash equivalents and investments at June 30, 2004, were approximately
$60.6 million compared to approximately $85.5 million on December 31, 2003.
UPDATED GUIDANCE
Previously, the Company had announced plans to license rights for marketing
Thelin(TM) outside North America. In June 2004, the Company announced its
intention to reserve all marketing rights for Thelin(TM). As a result of this
change in strategy, the Company expects to incur additional development costs,
including costs associated with regulatory filings in countries outside North
America. Additionally, during the first six months of 2004, the Company elected
to accept patients beyond its original expectations in certain of the clinical
trials and added additional human pharmacology studies. The revised outlook for
expenses in 2004, detailed below, reflects these additional Thelin(TM)
development costs.
Royalty revenues during the first six months of 2004 have exceeded original
estimates due to higher-than-expected sales of Argatroban by GSK. Encysive has,
therefore, revised royalties guidance, also detailed below.
<Table>
<Caption>
Original Outlook Revised Outlook
---------------- ---------------
Royalties $6.7 to $7.6 million $7.5 to $8.5 million
Revenues (including royalties) $9.0 to $10.0 million $10.0 to $11.0 million
Expenses (net of Revotar minority interest) $55.0 to $58.0 million $64.0 to $67.0 million
Investment income $0.8 to $1.0 million $0.8 to $1.0 million
Net loss $(46.0) to $(48.0) million $(54.0) to $(57.0) million
Cash and investments at year end $32.0 to $34.0 million $25.0 to $27.0 million
</Table>
SECOND QUARTER HIGHLIGHTS
o GlaxoSmithKline's dedicated hospital sales force continues to make sales
inroads for Argatroban, increasing net sales by 76% for the quarter.
Encysive is increasing its full-year guidance for Argatroban royalties
from $6.7 - $7.6 million to $7.5 - $8.5 million.
o The Company presented new data on Thelin(TM) at the American Thoracic
Society Meeting in May, including results from long-term exposure to
Thelin(TM) and data demonstrating that 100 mg of Thelin(TM) was as
effective as 300 mg.
o Enrollment was closed in STRIDE-6 (bosentan failure study) in June with
top line clinical data expected in the fourth quarter of 2004.
o The Company announced its intention to reserve all marketing rights to
Thelin(TM). It had previously planned to license rights for marketing the
product outside of North America, while preserving for itself U.S. and
Canadian rights. The Company intends to allow the market to continue to
grow globally before making a final decision on any marketing plans
outside North America.
o J. Kevin Buchi, Chief Financial Officer of Cephalon, Inc., joined
Encysive's Board of Directors.
STRIDE-4 CLOSES ENROLLMENT
The Company today also announced that STRIDE-4, a phase III, randomized
double-blind, placebo controlled, 18-week safety and efficacy study in patients
with PAH, has exceeded itS target of enrolling 90 patients. In this trial,
patients were randomized to receive one of three treatments: Thelin(TM) 50 mg
once daily; Thelin(TM) 100 mg once daily; or placebo.
UPCOMING EVENTS
o Adams, Harkness and Hill Inc. investor presentation on August 5, 2004
o Thelin(TM) data to be presented at European Society of Cardiology meeting
from August 28 to September 1 in Germany and the European Respiratory
Society meeting from September 4-8, 2004, in Scotland.
o Closure of STRIDE-2 enrollment expected in the third quarter 2004
o Participation in UBS investor conference September 27-30, 2004
o Corporate presence at The American College of Chest Physicians, American
Heart Association, American College of Rheumatology
o STRIDE-6 (bosentan failure study) top line clinical data
Conference Call Information
You may access the conference call scheduled for Wednesday, July 28, 2004, at
4:30 p.m. ET either through the call-in number or an audio webcast. The access
number for the call is (612) 332-0720.
Or, you may participate live online via Encysive's web site at www.encysive.com.
The webcast replay will be available, in addition to a call replay, beginning
July 28, 2004, at 8 p.m. ET through August 2, 2004. The telephone replay can be
accessed by calling (320) 365-3844 and entering passcode 738874.
ABOUT THELIN(TM) AND PAH
Thelin(TM) is a small molecule that blocks the action of endothelin, a potent
mediator of blood vessel constriction and growth of smooth muscle in vascular
walls. Endothelin receptor antagonists may prove to be effective in the
treatment of a variety of diseases where the regulation of vascular constriction
is important. Thelin(TM) is 6,500 fold selective in the targeting of the
endothelin A receptor.
Pulmonary arterial hypertension is a condition that involves high blood pressure
and structural changes in the walls of the pulmonary arteries, which are the
blood vessels that connect the right side of the heart to the lungs. PAH causes
shortness of breath, limits activity, and is eventually fatal unless treated
successfully with heart and lung transplant. Primary and secondary PAH are
estimated to afflict approximately 80,000 to 100,000 people worldwide, many of
whom are children and young women.
Side effects of Thelin(TM) seen in the program to date, and which occurred more
frequently than in placebo, include liver dysfunction (increased ALT and AST),
headache, edema, constipation, nasal congestion and flushing. Because Thelin(TM)
inhibits the metabolism of warfarin, the dose of warfarin should be adjusted
downward when co-administered with Thelin(TM).
ABOUT ENCYSIVE PHARMACEUTICALS
Encysive Pharmaceuticals Inc., a biopharmaceutical company focused on the
discovery, development and commercialization of novel drugs, is recognized for
our expertise in small molecule drug development and vascular biology.
Argatroban, our first FDA-approved product, is being marketed by GlaxoSmithKline
for heparin-induced thrombocytopenia. Encysive Pharmaceuticals is in Phase III
development of the endothelin antagonist, Thelin(TM), for pulmonary arterial
hypertension. Our majority-owned affiliate, Revotar Biopharmaceuticals AG, is in
Phase II development with the selectin antagonist, bimosiamose, in asthma,
psoriasis and atopic dermatitis. Encysive Pharmaceuticals has several other
research and development programs ongoing for a range of cardiovascular and
inflammatory diseases. To learn more about Encysive Pharmaceuticals please visit
our web site: http://www.encysive.com.
This press release contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking statements
are subject to certain risks, trends and uncertainties that could cause actual
results to differ materially from those projected. Among those risks, trends and
uncertainties are timing and cost of our clinical trials, attainment of research
and clinical goals and milestones of product candidates, attainment of required
government approvals, sales levels of our products and availability of financing
and revenues sufficient to fund development of product candidates and
operations. In particular, careful consideration should be given to cautionary
statements made in the various reports Encysive Pharmaceuticals, including as
Texas Biotechnology Corporation, has filed with the Securities and Exchange
Commission. The Company undertakes no duty to update or revise these
forward-looking statements.
ENCYSIVE PHARMACEUTICALS INC. AND SUBSIDIARIES
UNAUDITED SELECTED FINANCIAL DATA
AMOUNTS IN THOUSANDS (EXCEPT PER SHARE DATA)
Consolidated Summary of Operations
<Table>
<Caption>
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- ---------------------------
2004 2003 2004 2003
-------- -------- -------- --------
Revenues $ 3,390 $ 2,228 $ 6,225 $ 5,444
Operating Expenses
Research and development 13,193 6,304 25,208 10,523
Purchase of in-process R&D -- 8,363 -- 8,363
Equity in loss of Encysive, L.P. -- -- -- 2,386
General and administrative 2,742 2,258 5,227 4,412
-------- -------- -------- --------
Total expenses 15,935 16,925 30,435 25,684
-------- -------- -------- --------
Operating loss: (12,545) (14,697) (24,210) (20,240)
Investment income, net 135 264 485 637
Minority interest in Revotar 104 313 298 503
-------- -------- -------- --------
Net loss $(12,306) $(14,120) $(23,427) $(19,100)
======== ======== ======== ========
Net loss per common share:
(basic and diluted) $ (0.23) $ (0.32) $ (0.45) $ (0.44)
Weighted average common shares
outstanding:
(basic and diluted) 52,550 43,764 52,364 43,745
</Table>
Condensed Consolidated Balance Sheets
June 30, 2004 December 31, 2003
------------- -----------------
Cash, cash equivalents and investments $60,599 $85,488
and accrued interest
Other assets 8,902 8,910
------- -------
Total assets 69,501 94,398
======= =======
Total liabilities less deferred revenue 10,903 15,918
Deferred revenue 1,960 2,241
Minority interest in Revotar 1,085 1,383
Stockholders' equity 55,553 74,856
------- -------
Total liabilities and stockholders' equity $69,501 $94,398
======= =======
</Table>
# # #