EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Contact:
(Company) (Corporate Communications)
Barbara Duncan Kathleen Eppolito
Chief Financial Officer Scientia Communications, Inc.
DOV Pharmaceutical, Inc. (718) 281-1809
(201) 968-0980
DOV PHARMACEUTICAL, INC. ANNOUNCES THIRD QUARTER 2004 RESULTS
Hackensack, NJ, November 8, 2004. DOV Pharmaceutical, Inc. (Nasdaq: DOVP) today
announced results for the third quarter ending September 30, 2004.
THIRD QUARTER 2004 PERFORMANCE
For the third quarter of 2004, the Company reported a net loss of $12.0 million,
or $0.56 per share, compared with $7.4 million, or $0.45 per share, for the
comparable period last year. For the nine months ended September 30, 2004, the
Company reported a net loss of $28.0 million, or $1.46 per share, compared with
$14.7 million, or $0.97 per share, for the comparable period last year. On
August 5, 2004, the Company entered into an agreement with a subsidiary of Merck
& Co. Inc., or Merck, for the development and commercialization of the
antidepressants DOV 21,947 and DOV 216,303. Pursuant to the agreement, DOV
received a $35.0 million upfront licensing payment. The upfront payment will be
deferred and amortized to revenue over the estimated research and development
period of 51 months. At September 30, 2004, cash and cash equivalents and
marketable securities totaled $77.6 million.
The comparative increase in net loss of $4.6 million for the third quarter was
primarily the result of an increase of $2.5 million in license expense for a
milestone payment due to Wyeth related to the Merck licensing agreement, $1.9
million in research and development expenses as the Company advances its
products through clinical and preclinical trials and $453,000 in general and
administrative expense as the Company increased expenses to support public
company administration, incurred expenses in relation to the closing of the
Merck licensing agreement and added new employees, offset by an increase in
revenue related to the Merck licensing agreement of $343,000 and a decrease in
interest expense of $602,000. In addition, because the Company expects to have
taxable income for the full year 2004 as a result of the $35.0 million upfront
licensing payment from Merck, the Company recorded $679,000 of income tax
expense in the third quarter of 2004.
The comparative increase in net loss for the nine months ended September 30,
2004 of $13.3 million was attributable in part to the decrease of $2.5 million
in revenue that had been recorded following the termination of a license
agreement with Biovail offset by the increase in revenue recognized for the
Merck licensing agreement of $343,000 and an increase of $1.5 million in related
license expenses. Further factors leading to the increased loss included an
increase in research and development of $6.2 million as the Company advances its
products through clinical and preclinical development and added new employees to
support its expanded product development operations and increased its general
and administrative expenses by $652,000 owing to new employees, increased
expenses to support public company administration and incurred increased
expenses in relation to the closing of the Merck licensing agreement. In
addition, the Company reported an increase in interest expense of $382,000 for
the nine months ended September 30, 2004 primarily related to the beneficial
conversion feature of the interest accrued on the promissory notes originally
issued to Elan, decreased interest income of $129,000 and a net decrease in
other income, net of $1.1 million primarily due to the $1.6 million of income
recognized from an insurance recovery. Because the Company expects to have
taxable income for the full year 2004 as a result of the $35.0 million upfront
licensing payment from Merck, the Company recorded $679,000 of income tax
expense in the third quarter of 2004.
FINANCIAL GUIDANCE FOR 2004
In March 2004, the Company provided guidance for 2004 revenue and research and
development expense. At that time the Company expected to recognize $2.0 million
in milestone revenue relating to the planned NDA filing for indiplon by
Neurocrine in first half of 2004,which has now been achieved in the fourth
quarter of 2004. Revenue for the year is now expected to be $4.4 to $5.0
million, up from $2.0 million. The increase is primarily attributable to the
recognition of revenue in 2004 of $2.4 million from the Merck licensing
agreement.
The Company now expects to report research and development expense of $25 to $27
million, down $8.0 million from the $33 to $35 million anticipated in March
2004. This decrease is the result in part of the decreased expenditures of
approximately $3.6 million forecast for DOV 21,947 as Merck has taken on the
financial responsibility for its development. In addition, the Company has
experienced a delay in initiating the Phase III clinical trial for ocinaplon and
the two Phase III clinical trials for bicifadine due to discussions with the FDA
on the protocols. Both clinical trials for bicifadine were initiated in
September 2004 and the Phase III clinical trial for ocinaplon is scheduled to
begin shortly. In addition, the Company has experienced a delay in initiating
the Phase I clinical trial for DOV 51,892.
RECENT HIGHLIGHTS:
AUGUST 2004
The Company:
o Initiated and completed a Phase I bioequivalence study for
bicifadine.
o Filed a patent application covering certain polymorphic forms of DOV
21,947, which was subsequently licensed to Merck.
SEPTEMBER 2004
The Company:
o Received notice from its partner Neurocrine Biosciences, Inc. that
it had received positive efficacy and safety results from a Phase
III clinical trial with indiplon modified release 15 mg in 229
elderly patients with chronic insomnia.
o Initiated a pivotal Phase III U.S. clinical trial of bicifadine, its
novel analgesic, in approximately 600 patients with moderate to
severe chronic lower back pain under a special protocol assessment
by the FDA.
o Initiated a pivotal Phase III U.S. clinical trial of bicifadine in
approximately 480 patients with moderate to severe acute pain
following bunionectomy surgery.
o Closed the licensing agreement with Merck previously announced by
both parties on August 5, 2004. The closing followed termination of
the waiting period required under the Hart-Scott-Rodino Antitrust
Improvements Act. Under the licensing agreement, Merck has licensed
exclusive worldwide rights to DOV 21,947, which is in Phase I
development, for all therapeutic indications. Merck has also
licensed exclusive worldwide rights to DOV 216,303 for the treatment
of depression, anxiety and addiction. DOV retains rights to DOV
216,303 for other indications. Under the agreement, DOV received a
$35.0 million upfront licensing payment. In addition, the Company is
entitled to receive milestone payments of up to $420.0 million, as
well as royalties on worldwide net sales, if any.
OCTOBER 2004
The Company:
o Received notice from its partner Neurocrine Biosciences, Inc. that
it had submitted a New Drug Application, or NDA, to the FDA for
regulatory approval of indiplon immediate release capsules for the
treatment of insomnia. The application contains safety and efficacy
results from seven Phase III clinical trials with indiplon immediate
release conducted in adult and elderly patients with transient and
chronic insomnia. Neurocrine is developing two formulations of
indiplon, an immediate release capsule and modified release tablet,
for the treatment of multiple forms of insomnia. Neurocrine states
it expects to submit a second NDA for indiplon modified release
tablets in November 2004. This first NDA submission contains
non-clinical, clinical and manufacturing information that is common
to both applications.
o Initiated a Phase I study for bicifadine in normal volunteers to
examine the effects of bicifadine on blood levels of co-administered
drugs.
o Received notice from the FDA that it had accepted our submitted
protocol which enables the Company to begin its planned Phase III
pivotal clinical trial for ocinaplon in patients with generalized
anxiety disorder in the fourth quarter of 2004.
NOVEMBER 2004
o The Company filed a patent application for a novel therapeutic use
of bicifadine.
DOV is a biopharmaceutical company focused on the discovery, acquisition,
development and commercialization of novel drug candidates for central nervous
system and other disorders, including cardiovascular, that involve alterations
in neuronal processing. Our product for insomnia, indiplon, has recently been
submitted to the FDA in a NDA. We have six product candidates undergoing
clinical development that address therapeutic indications with significant unmet
needs.
CAUTIONARY NOTE
Statements in this press release that are not historical facts constitute
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act, each as amended,
including statements regarding our expectations with respect to the progress of
and level of expenses for our clinical trial programs. You can also identify
forward-looking statements by the following words: may, will, should, expect,
intend, plan, anticipate, believe, estimate, predict, potential, continue or the
negative of these terms or other comparable terminology. We caution you that
forward-looking statements are inherently uncertain and are simply point-in-time
estimates based on a combination of facts and factors currently known by us
about which we cannot be certain. Actual results or events will surely differ
and may differ materially from our forward-looking statements as a result of
many factors, some of which we may not be able to predict or may not be within
our control. Such factors may also materially adversely affect our ability to
achieve our objectives and to successfully develop and commercialize our product
candidates, including our ability to:
o demonstrate the safety and efficacy of product candidates at each
stage of development;
o meet our development schedule for our product candidates, including
with respect to clinical trial initiation, enrollment and
completion;
o meet applicable regulatory standards and receive required regulatory
approvals on our anticipated time schedule or at all;
o meet obligations and required milestones under our license and other
agreements;
o obtain collaborations as required with pharmaceutical partners;
o obtain substantial additional funds;
o obtain and maintain all necessary patents or licenses; and
o produce drug candidates in commercial quantities at reasonable costs
and compete successfully against other products and companies.
Factors that may cause our actual results to differ materially from our
forward-looking statements include (i) one or more of our product candidates
could be shown to cause harmful side effects, (ii) one or more of our product
candidates may not exhibit the expected therapeutic results, (iii) we or the FDA
may suspend one or more of our clinical trials, (iv) patient recruitment may be
slower than expected or patients may drop out of our clinical trials, (v) we may
not receive regulatory approval for our product candidates or approval may be
delayed, and (vi) our success depends on the performance of our licensees and
collaborative partners who among other things may not fulfill their obligations
to us. You should also refer to the risks discussed in our other filings with
the Securities and Exchange Commission including those contained in our annual
report on Form 10-K filed on March 15, 2004. We qualify all our forward-looking
statements by these cautionary statements. There may be other factors that may
materially affect our forward-looking statements and our future results. Readers
should not, therefore, place undue reliance on our forward-looking statements.
We do not undertake any obligation and do not intend to update any
forward-looking statement.
DOV PHARMACEUTICAL, INC.
CONSOLIDATED BALANCE SHEET DATA
DECEMBER 31, SEPTEMBER 30,
2003 2004
-------------- ---------------
(Unaudited) (Unaudited)
Cash and cash equivalents ........ $22,290,999 $49,005,031
Marketable securities ............ 29,870,926 28,585,098
Working capital .................. 46,516,202 44,379,287
Total assets ..................... 53,851,860 79,339,624
Total stockholders' equity ....... 35,905,293 32,634,221
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------------- ------------------------------
2003 2004 2003 2004
(Unaudited) (Unaudited)
Revenue ....................................... $ -- $ 343,137 $ 2,968,750 $ 343,137
Operating expenses:
License expense ............................ -- 2,500,000 1,000,000 2,500,000
Research and development expense ........... 5,146,689 7,037,700 12,513,114 18,708,344
General and administrative expense ......... 1,480,009 1,933,021 3,985,026 4,637,368
------------- ------------- ------------- -------------
Loss from operations .................... (6,626,698) (11,127,584) (14,529,390) (25,502,575)
Interest income ............................... 243,195 209,188 678,800 549,402
Interest expense .............................. (1,015,668) (413,877) (2,022,185) (2,404,022)
Other income (expense), net ................... 520 2,938 1,128,205 (3,819)
------------- ------------- ------------- -------------
Loss before income tax .................. (7,398,651) (11,329,335) (14,744,570) (27,361,014)
Income tax expense ...................... -- (679,000) -- (679,000)
Net loss ................................ $ (7,398,651) $(12,008,335) $(14,744,570) $(28,040,014)
------------- ------------- ------------- -------------
Basic and diluted net loss per share .......... $ (0.45) $ (0.56) $ (0.97) $ (1.46)
============= ============= ============= =============
Weighted average shares used in computing basic
and diluted net loss per share ............. 16,322,794 21,327,987 15,165,913 19,150,738