SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
August 17, 2001
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(Date of Report)
ENTROPIN, INC.
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(Exact Name of Registrant as specified in its charter)
Colorado 33-23693 84-1090424
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
45926 OASIS STREET, INDIO, CALIFORNIA 92201
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(Address of principal executive offices including zip code)
(760) 775-8333
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(Registrant's telephone number including area code)
N/A
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(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS.
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Entropin, Inc. ("Entropin") issued the following press release on
August 14, 2001:
NEWS RELEASE
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ENTROPIN REPORTS JUNE 30, 2001 FINANCIAL RESULTS
PATIENT ENROLLMENT ANTICIPATED FOR UPCOMING PHASE II/III STUDY
INDIO, Calif. (August 14, 2001) - Entropin, Inc. (NASDAQ: ETOP; ETOPW), a
specialty pharmaceutical development company focused on commercializing
Esterom(R), a revolutionary new topical drug with the potential to replace
other current therapeutics for treating impaired physical function
resulting from painful soft tissue injuries and diseases - such as
tendonitis, bursitis and lower back sprain, today reported financial
results for the six months ended June 30, 2001.
HIGHLIGHTS OF FIRST HALF 2001 AND SUBSEQUENT WEEKS INCLUDE:
* $10.2 million in cash, cash equivalents and short-term investments as
of June 30, 2001
* Cash used in operating activities of approximately $1.6 million during
first half 2001
* Esterom(R) commercial packaging contract awarded to Automatic Liquid
Packaging
* Mechanism of Action studies underway at Brigham & Women's Hospital at
Harvard Medical School
* Entropin issued composition-of-matter patents for all countries in the
European Union
* New Phase II/III protocol designed by Blue Ribbon panel of experts and
accepted by the U.S. Food and Drug Administration (FDA)
* Four clinical study sites of excellence selected for upcoming
Esterom(R) Phase II/III Study
* New experienced clinical team assembled for upcoming Phase II/III
study
* Online, centralized data capture system developed to simplify the
collection and analysis of Phase II/III clinical study data
* Generation II Esterom(R) study in process at Mayron Laboratories
* Pharmacokinetic studies of Esterom(R) started at the University of
Kansas
* Randall Carpenter, M.D., expert in clinical development, joins
Entropin Board
* Bruce Manning, R.Ph., expert in product development and regulatory
affairs, joins Entropin Board
* Deloitte & Touche LLP appointed as independent auditors
Entropin's President and Chief Executive Officer, Thomas G. Tachovsky,
Ph.D., commented, "We look forward to an exciting and successful second
half of this year. In the next few weeks, we plan to begin patient
enrollment for our Phase II/III study with Esterom(R) in treating impaired
range of motion associated with acute painful shoulder. To conduct this
study, which will be led by renowned medical experts, we have partnered
with recognized centers of excellence in orthopedics and rheumatology."
Beyond the upcoming Phase II/III trial, the Company anticipates the need
for at least one additional clinical study. "We are planning to file a New
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Drug Application (NDA) for Esterom(R) in 2004. This should allow
sufficient time to address all of the FDA requirements prior to filing our
NDA," added Dr. Tachovsky.
JUNE 30, 2001 FINANCIAL RESULTS
The Company's net cash used in operating activities was approximately $1.6
million during the first half of 2001, compared with $1.7 million for the
same period in 2000. The cash used in operations was primarily related to
general operating expenses and expansion of research and development
activities. As of June 30, 2001, the Company had approximately $10.2
million in cash, cash equivalents and short-term investments. Entropin's
Chief Financial Officer, Patricia G. Kriss, commented, "Our average burn
rate for the six months ended June 30, 2001, was approximately $267,000 per
month. We expect our average monthly burn rate to increase to
approximately $500,000 as we begin our Phase II/III trial."
The net loss for the six months ended June 30, 2001, was $1.8 million, or
$0.19 per basic and diluted share on approximately 9.7 million weighted
average common shares outstanding. In comparison, the net loss for the six
months ended June 30, 2000 was $2.6 million, or $0.31 per share on
approximately 8.6 million weighted average common shares outstanding.
Research and development (R&D) expenses for the first half of 2001 were
$1.12 million, compared with $1.15 million for the first half of 2000.
General and administrative (G&A) expenses were $956,000 for the six months
ended June 30, 2001, compared with $1.7 million for the six months ended
June 30, 2000. The decrease of approximately $750,000 resulted primarily
from a decrease in non-cash charges associated with compensation expense
related to stock options granted in exchange for services. G&A expenses,
exclusive of these non-cash charges, were $692,000 for the six months ended
June 30, 2001, compared with $783,000 for the same period in 2000.
Net interest income was approximately $319,000 for the six months ended
June 30, 2001, compared with approximately $269,000 for the same period in
2000. The increase resulted from larger cash, cash equivalent and short-
term investment balances during 2001, reflecting the investment of proceeds
from the Company's secondary public offering completed in May 2000.
Entropin, Inc. is a specialty pharmaceutical research and development
company focused on the development of Esterom(R), a novel topical
therapeutic for the treatment of painful soft tissue injuries, such as
tendonitis, bursitis or back sprain, that result in impaired function. The
Company plans to begin its next clinical study with Esterom(R) in patients
with impaired shoulder function in August of 2001.
THIS NEWS RELEASE INCLUDES FORWARD-LOOKING STATEMENTS THAT REFLECT
ENTROPIN'S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND FINANCIAL
PERFORMANCE. THE WORDS "BELIEVE," "EXPECT," "ANTICIPATE," AND SIMILAR
EXPRESSIONS IDENTIFY FORWARD-LOOKING STATEMENTS. FORWARD-LOOKING
STATEMENTS ARE SUBJECT TO A VARIETY OF RISKS, UNCERTAINTIES, AND OTHER
FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
EXPRESSED IN ANY SUCH FORWARD-LOOKING STATEMENTS. THESE FACTORS INCLUDE,
BUT ARE NOT LIMITED TO: (1) THE ABILITY TO SUCCESSFULLY COMPLETE
DEVELOPMENT AND COMMERCIALIZATION OF PRODUCTS, INCLUDING THE COST, SCOPE
AND RESULTS OF PRECLINICAL AND
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CLINICAL TESTING; (2) THE ABILITY TO SUCCESSFULLY COMPLETE PRODUCT RESEARCH
AND FURTHER DEVELOPMENT, INCLUDING PRE-CLINICAL AND CLINICAL STUDIES; (3)
THE TIME, COST AND UNCERTAINTY OF OBTAINING REGULATORY APPROVALS; (4) THE
ABILITY TO OBTAIN SUBSTANTIAL ADDITIONAL FUNDING; (5) THE ABILITY TO
DEVELOP AND COMMERCIALIZE PRODUCTS BEFORE COMPETITORS; AND (6) OTHER
FACTORS DETAILED FROM TIME TO TIME IN FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION.
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--Financial Tables Follow--
ENTROPIN, INC.
(A Development Stage Company)
CONDENSED BALANCE SHEETS
June 30, 2001 December 31, 2000
(Unaudited) (Audited)
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ASSETS
Current Assets:
Cash and cash equivalents $ 4,259,887 $ 6,018,187
Short-term investments 5,981,003 5,821,069
Other current assets 173,711 231,639
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Total current assets 10,414,601 12,070,895
Other Assets 411,689 335,096
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TOTAL ASSETS $ 10,826,290 $ 12,405,991
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities $ 143,495 $ 271,035
Long-term Liabilities and Redeemable Preferred Stock 4,081,831 4,130,105
Stockholders' Equity:
Common Stock 9,712 9,688
Additional Paid-in Capital 28,730,439 28,241,664
Deficit accumulated during the development stage (21,918,725) (20,159,065)
Unearned Stock Compensation (220,462) (87,436)
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Total Stockholders' Equity 6,600,964 8,004,851
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 10,826,290 $ 12,405,991
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ENTROPIN, INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF OPERATIONS
For the six months ended
June 30, Inception through
2000 2001 June 30, 2001
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(Unaudited) (Unaudited)
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OPERATING COSTS AND EXPENSES:
Research and development $ 1,122,175 $ 1,147,374 $ 10,452,614
General and administrative 956,087 1,710,440 11,471,217
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Operating Loss (2,078,262) (2,857,814) (21,923,831)
Other Income 318,602 269,110 854,355
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NET LOSS (1,759,660) (2,588,704) (21,069,476)
Accrued Dividends - Series B Preferred Stock (45,750) (56,375) (930,407)
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NET LOSS APPLICABLE TO COMMON STOCKHOLDERS $ (1,805,410) $ (2,645,079) $(21,999,883)
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Basic and diluted net loss per common share $ (.19) $ (.31) $ (3.85)
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Weighted average common shares outstanding 9,696,000 8,595,000 5,719,000
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
Date: August 15, 2001 ENTROPIN, INC.
By /s/ THOMAS G. TACHOVSKY
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Thomas G. Tachovsky
President and Chief Executive Officer
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