UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
March 1, 2002
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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
February 27, 2002:
ENTROPIN REPORTS YEAR-END 2001 FINANCIAL RESULTS
AND ESTEROM(R) CLINICAL PROGRESS
INDIO, Calif. (February 27, 2002) - Entropin, Inc. (Nasdaq: ETOP, ETOPW),
a specialty pharmaceutical company developing new topical therapeutics for
painful soft tissue injuries and diseases, today reported financial results
for the year ended December 31, 2001, and provided a clinical progress
update.
The Company provided an update on its progress toward developing and
commercializing Esterom(R), a revolutionary new topical pharmaceutical
product that is currently being tested in Phase II/III clinical trials.
This study is examining patients between the ages of 18 and 65 years who
have a soft tissue affliction resulting in impaired function of the
shoulder. The prior Phase II study, demonstrated that Esterom(R) provided
statistically significant improvement for soft tissue afflictions for both
the shoulders and lower back.
It is management's opinion that Esterom(R) has the potential to replace other
current therapeutics for treating impaired physical function resulting from
soft tissue injuries and diseases - such as tendonitis, impingement
syndrome, bursitis and lower back sprain, and possibly, forms of arthritis.
Esterom(R) is Entropin's investigational drug for patients suffering from
these painful and limiting range of motion medical conditions.
Highlights of 2001 include:
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* Esterom(R) Phase II/III clinical trial underway
* Eight clinical trial sites currently enrolling patients
* Interim results reported on Mechanism of Action research - in progress
at Brigham & Women's Hospital at Harvard Medical School
* European Patent Office approved Entropin's composition-of-matter
patents
* Generation II Esterom(R) formulation being developed by Mayron
Laboratories
* Pharmacokinetic studies of Esterom(R) progressing at the University of
Kansas
* Manufacturing process patent application filed with the U.S. Patent
Office
* Randall Carpenter, M.D., expert in clinical development, joined
Entropin Board
* Bruce Manning, R.Ph., expert in product development and regulatory
affairs, joined Entropin Board
* Dennis Metzler, attorney and entrepreneur joined Entropin Board
* Entropin embarked on comprehensive investor relations program
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Clinical Progress
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Entropin's President and Chief Executive Officer, Thomas G. Tachovsky,
Ph.D., commented, "Our Phase II/III study with Esterom(R) in treating
impaired range of motion associated with acute painful shoulder is now well
underway. Since the last week in January, 26 patients have completed the
study. Our advertising efforts have resulted in a backlog of potential
patients and we receive additional inquiries daily from individuals
interested in participating in our study."
In mid-January 2002, the Company began a radio advertising campaign and
established a website at www.painfulshoulder.com to reach a broader
audience of potential patients. The Company also added two new clinical
trial sites, Physicians Research Network in Avon, CT and Physicians
Research Network in Bristol, CT bringing the total number of sites to
eight. These new sites are primary care facilities with the potential to
enroll numerous patients in the Company's Phase II/III Clinical Trial.
"We are pleased with the current pace of patient enrollment and continue to
be enthusiastic about the potential outcome of this study. However, as we
have said previously, the Company anticipates the need for at least one
additional clinical study and we remain on track to file a New Drug
Application (NDA) for Esterom(R) in 2004," added Dr. Tachovsky.
December 31, 2001 Financial Results
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The Company's net cash used in operating activities was approximately $3.1
million for full-year 2001, compared with approximately $3.9 million for
2000. The cash used was primarily related to funding clinical trials,
expanding research and development activities and maintaining the
administrative infrastructure. As of December 31, 2001, the Company had
approximately $8.7 million in cash, cash equivalents and short-term
investments.
Entropin's Chief Financial Officer, Patricia G. Kriss, commented, "Our
average burn rate during 2001 was approximately $258,000 per month. We
expect our monthly burn rate to average $300,000 to $500,000 as we move
forward with our Phase II/III trial and continue to expand our research
program."
The net loss for the year ended December 31, 2001, was approximately $3.9
million, or $0.40 per basic and diluted share on approximately 9.7 million
weighted average common shares outstanding. In comparison, the net loss
for the full-year 2000 was approximately $5.2 million, or $0.57 per share
on approximately 9.1 million weighted average common shares outstanding.
Research and development expenses for full-year 2001 were approximately
$2.3 million, compared with approximately $3.1 million for 2000. This
decrease reflects the fact that the Company was analyzing the results of
the previous clinical trial and preparing the protocol for its current
Phase II/III Study rather than being actively involved in clinical trials
during much of 2001. General and administrative (G&A) expenses were
approximately $2.0 million for 2001, compared with approximately $2.7
million for 2000. The decrease of approximately $700,000 in G&A expenses
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
approximately $1.4 million in 2001, compared with
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approximately $1.2 million in 2000. This slight increase relates primarily
to increased costs for professional services.
Interest income was approximately $497,000 for 2001, compared with
approximately $689,000 for 2000. This decrease results from a combination
of lower interest rates and declining cash, cash equivalent and short-term
investment balances during 2001, compared with 2000.
About Entropin
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Entropin, Inc. is a pharmaceutical research and development company,
initially focused on the development of Esterom(R), a novel topical
therapeutic for the treatment of painful soft tissue injuries, such as
tendonitis or back sprain, that result in impaired function.
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 PRE-CLINICAL AND 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.
--Financial Tables Follow--
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ENTROPIN, INC.
(A Development Stage Company)
CONDENSED BALANCE SHEETS
December 31, 2001 December 31, 2000
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ASSETS
Current Assets:
Cash and Cash Equivalents $ 4,609,562 $ 6,018,187
Short-term Investments 4,098,692 5,821,069
Other Current Assets 33,327 231,639
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Total Current Assets 8,741,581 12,070,895
Other Assets 381,186 335,096
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TOTAL ASSETS $ 9,122,767 $ 12,405,991
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities $ 142,986 $ 271,035
Redeemable Preferred Stock 4,035,536 4,130,105
Stockholders' Equity:
Common Stock 9,798 9,688
Additional Paid-in Capital 29,037,558 28,241,665
Deficit Accumulated During the Development Stage (24,040,331) (20,159,066)
Unearned Stock Compensation (62,780) (87,436)
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Total Stockholders' Equity 4,944,245 8,004,851
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TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 9,122,767 $ 12,405,991
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ENTROPIN, INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF OPERATIONS
For the year ended
December 31,
2001 2000
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OPERATING COSTS AND EXPENSES
Research and Development $ 2,315,076 $ 3,102,424
General and Administrative 1,973,401 2,691,669
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Operating Loss (4,288,477) (5,794,093)
Other Income 497,462 688,938
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NET LOSS (3,791,015) (5,105,155)
Dividends Applicable to Series B Preferred Stockholders (96,384) (120,772)
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NET LOSS APPLICABLE TO COMMON STOCKHOLDERS $ (3,887,399) $ (5,225,927)
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Basic and Diluted Net Loss Per Common Share $ (0.40) $ (.57)
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Weighted Average Common Shares Outstanding 9,739,000 9,134,000
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# # #
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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: March 1, 2002 ENTROPIN, INC.
By /s/ THOMAS G. TACHOVSKY
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Thomas G. Tachovsky
President and Chief Executive Officer
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