Exhibit 99.1
Critical Therapeutics Reports Fourth Quarter
and Full Year 2004 Financial Results
LEXINGTON, Mass.--(BUSINESS WIRE)--Feb. 17, 2005--Critical
Therapeutics, Inc. (Nasdaq: CRTX), a biopharmaceutical company focused
on the discovery, development and commercialization of products for
respiratory, inflammatory and critical care diseases, today reported
financial results for the fourth quarter and year ended December 31,
2004.
For the three months ended December 31, 2004, the net loss was
$11.2 million, or $0.47 per common share, based on approximately 23.7
million weighted average common shares outstanding. This compares with
a net loss of $11.1 million, or $13.63 per common share, for the three
months ended December 31, 2003, based on approximately 816,000
weighted average common shares outstanding. The increase in common
shares outstanding principally resulted from the issuance of new
shares in connection with the Company's initial public offering (IPO)
on May 27, 2004 and the conversion of all outstanding preferred stock
to common stock.
The Company has completed manufacturing scale-up in preparation
for the U.S. introduction of its version of ZYFLO(R) Filmtab(R)
(zileuton tablets) for asthma. Paul Rubin, M.D., Critical
Therapeutics' president and chief executive officer, stated, "We are
on track to submit our supplemental new drug application for ZYFLO to
the U.S. Food and Drug Administration by the end of the first quarter
of 2005. In addition, we are seeking to broaden our zileuton franchise
beyond asthma through the development of new formulations targeting a
range of disease indications."
Recent Highlights
Since the end of the third quarter of 2004, Critical Therapeutics
has:
-- Completed enrollment in its Phase II clinical trial of ZYFLO
in patients with moderate to severe acne. The randomized,
placebo-controlled trial, which is evaluating safety and
efficacy, enrolled 100 patients. The Company expects to have
top line data from this trial by the end of the second quarter
of 2005.
-- Signed an exclusive agreement with Beckman Coulter, Inc.,
licensing certain intellectual property rights to Critical
Therapeutics' proprietary High Mobility Group Protein 1
(HMGB1) technology. Beckman Coulter intends to use the HMGB1
technology to develop an immunoassay for the detection and
management of inflammatory diseases. Elevated levels of HMGB1,
a pro-inflammatory cytokine, have been linked to several
diseases, including rheumatoid arthritis, sepsis and septic
shock.
-- Signed a long-term supply agreement with Rhodia Pharma
Solutions for the production of the active pharmaceutical
ingredient (API) used in various formulations of zileuton,
including ZYFLO. The API will be manufactured at Rhodia's
facilities in the United Kingdom.
-- Initiated a placebo-controlled Phase II clinical trial of
CTI-01, the Company's anti-inflammatory compound, in patients
undergoing major cardiac surgery involving cardiopulmonary
bypass (CPB), such as coronary artery bypass graft and/or
valve replacement or repair. In addition to evaluating safety,
this double-blind trial will examine the efficacy of the
compound in preventing organ damage following CPB in up to 150
patients at multiple centers in the United States.
-- Received U.S. patent No. 6,846,842 B2, entitled, "Pyruvate
Ester Composition and Method of Use for Resuscitation After
Events of Ischemia and Reperfusion." The patent encompasses
broad methods of use for CTI-01, and/or other related
compounds, to counteract ischemia and reperfusion injury
resulting from a variety of conditions.
"I am very pleased with the efficiency and success of our drug
discovery initiatives," Dr. Rubin said. "We are building a strong
pipeline of product candidates aimed at modulating cytokine
production. The most advanced compound in this program, CTI-01, has
reached Phase II clinical testing, and we expect clinical candidates
for our HMGB1 and alpha-7 programs to be identified in the second half
of 2005."
Financial Results
Revenue for the three months ended December 31, 2004, increased to
approximately $1.0 million, compared with revenue of $620,000 for the
three months ended December 31, 2003. This revenue resulted from the
Company's collaboration agreement with MedImmune, Inc. The Company is
amortizing the initial $12.5 million payment from MedImmune and
quarterly payments made by MedImmune for certain Critical
Therapeutics' employees working on the program over the initial
41-month term of the agreement. The Company recognizes revenue under
this agreement based on cumulative costs incurred to date versus an
estimate of total costs for the program.
As of December 31, 2004, Critical Therapeutics had approximately
$78.8 million in cash and short-term investments, compared with $86.2
million at September 30, 2004 and $40.1 million at December 31, 2003.
The Company used approximately $7.4 million in cash during the three
months ended December 31, 2004 to fund its operations and capital
expenditures. The increase in cash since December 31, 2003 resulted
primarily from the proceeds from the Company's IPO and from the
issuance of preferred stock prior to the IPO, offset in part by cash
used to fund operations during 2004.
Total operating expenses for the three months ended December 31,
2004 were $12.5 million, compared with $10.8 million for the three
months ended December 31, 2003, an increase of approximately 15
percent. In addition, total operating expenses in the fourth quarter
increased approximately $3.7 million, or 42 percent, compared to the
third quarter of 2004. The increase in operating expenses in the
fourth quarter of 2004, as compared to these previous periods,
reflects costs related to enrolling patients in the Company's ongoing
Phase II study of ZYFLO in moderate to severe acne and increased
manufacturing costs related to the technology transfer and scale-up of
production at the Company's third party manufacturers of ZYFLO and the
controlled release formulation of zileuton.
Research and development costs during the fourth quarter of 2004
decreased $609,000, or 6 percent, to $8.9 million, from $9.5 million
for the three months ended December 31, 2003. Research and development
costs principally related to the development of the Company's pipeline
of drug candidates, including all formulations of zileuton, which the
Company licensed in late 2003 and early 2004. The decrease in research
and development expenses resulted from certain payments to third
parties under licensing agreements on zileuton paid in 2003 that did
not recur in 2004, offset in part by higher discovery and development
costs on the Company's product candidates in the fourth quarter of
2004.
General and administrative expenses increased approximately $2.3
million, or 173 percent, to $3.6 million in the fourth quarter of
2004, compared with $1.3 million for the three months ended December
31, 2003. This increase primarily was attributable to certain costs
related to building the Company's sales and marketing organization to
support the expected launch of ZYFLO in late 2005, as well as an
increase in the number of employees performing general and
administrative functions after the Company's IPO.
Non-cash stock-based compensation expense totaled $1.5 million for
the three months ended December 31, 2004, compared with $2.8 million
for the three months ended December 31, 2003. Stock-based compensation
expense varies each period and is calculated based upon a number of
variables such as the number of underlying securities, the price of
the Company's stock and the vesting period associated with each grant.
For the year ended December 31, 2004, revenue increased to $4.4
million, compared with $1.0 million for the year ended December 31,
2003. The net loss available to common stockholders for the year ended
December 31, 2004 was $33.3 million, or $2.28 per common share. This
compares with a net loss available to common stockholders of $22.4
million, or $33.99 per common share, for the year ended December 31,
2003. Results for 2004 include total operating expenses of $36.5
million, compared with $21.2 million for the year ended December 31,
2003, an increase of 72 percent, resulting from increased costs of
advancing our pipeline of product candidates. Non-cash stock-based
compensation expense was $3.6 million for the year ended December 31,
2004, compared with $5.1 million for the year ended December 31, 2003.
Financial Guidance
For the three months ending March 31, 2005, net cash expenditures
are expected to be between $11 million and $12 million. For the year
ended December 31, 2005, the Company is projecting net cash
expenditures of between $45 million and $50 million, net of cash
received from any product sales and payments received under
collaboration agreements. The increase in expenditures will be focused
on building the Company's commercial organization and sales force to
prepare the Company for its expected launch of ZYFLO in the asthma
market in the fourth quarter of 2005 and continued investment in the
Company's research and development programs to support upcoming
milestones.
Conference Call Information
Critical Therapeutics will hold a conference call for investors to
discuss the Company's fourth quarter and full year 2004 financial
results, strategy and upcoming milestones. Investors and other
interested parties can access the call as follows:
Date: Thursday, February 17, 2005
Time: 5:00 p.m. ET
Dial-in: (800) 967-7185 (domestic)
(719) 457-2634 (international)
Webcast: www.crtx.com
A replay of the conference call will be available from
approximately 8:00 p.m. ET February 17, 2005 until midnight ET
February 23, 2005. To hear the replay, dial (888) 203-1112 from the
U.S. and Canada and (719) 457-0820 from other locations. The replay
passcode is 4479009. To access the replay via webcast, visit
www.crtx.com, click on "Investors" and then on "Webcasts &
Presentations."
About Critical Therapeutics
Critical Therapeutics, Inc. is a biopharmaceutical company focused
on the discovery, development and commercialization of products for
respiratory, inflammatory and critical care diseases. The Company is
developing a sales and marketing infrastructure in connection with its
in-licensed product, ZYFLO(R), a tablet formulation of zileuton.
Critical Therapeutics also is developing treatments directed toward
the severe inflammatory response in acute diseases and conditions that
lead to admission to the emergency room or intensive care unit, and
acute exacerbations of chronic diseases that frequently lead to
hospitalization. For more information, please visit www.crtx.com.
Forward-Looking Statements
Any statements in this press release about future expectations,
plans and prospects for Critical Therapeutics, Inc., including
statements regarding the progress and timing of our drug development
programs and related trials, including, without limitation, the
availability of top-line data from the Phase II trial of ZYFLO(R) in
moderate to severe acne; the timing of regulatory approvals and
product launches; the efficacy of our drug candidates; our strategy,
future operations, financial position, future revenues, projected
costs, including our net cash expenditures for 2005, prospects, plans
and objectives of management; and all other statements that are not
purely historical in nature, constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of
1995. Without limiting the foregoing, the words "anticipate,"
"believe," "could," "estimate," "expect," "intend," "may," "plan,"
"project," "should," "will," "would" and similar expressions are
intended to identify forward-looking statements. Actual results may
differ materially from those indicated by such forward-looking
statements as a result of various important factors, including risks
and uncertainties relating to: conducting clinical trials, including
the timing and success of patient enrollment; the results of
preclinical studies and clinical trials with respect to our products
under development and whether such results will be indicative of
results obtained in later clinical trials; the timing and success of
submission, acceptance and approval of our regulatory filings; our
heavy dependence on the commercial success of ZYFLO(R) tablets and the
controlled-release formulation of zileuton; our ability to obtain the
substantial additional funding required to conduct our research,
development and commercialization activities; our dependence on our
strategic collaboration with MedImmune, Inc.; and our ability to
obtain, maintain and enforce patent and other intellectual property
protection for drug candidates and our discoveries. These and other
risks are described in greater detail in the "Factors That May Affect
Future Results" section of our most recent Report on Form 10-Q and
other filings that we make with the Securities and Exchange
Commission. If one or more of these factors materialize, or if any
underlying assumptions prove incorrect, our actual results,
performance or achievements may vary materially from any future
results, performance or achievements expressed or implied by these
forward-looking statements.
In addition, the statements in this release reflect our
expectations and beliefs as of the date of this release. We anticipate
that subsequent events and developments will cause our expectations
and beliefs to change. However, while we may elect to update these
forward-looking statements publicly at some point in the future, we
specifically disclaim any obligation to do so, whether as a result of
new information, future events or otherwise. These forward-looking
statements should not be relied upon as representing our views as of
any date subsequent to the date of this release.
ZYFLO(R) is a registered trademark of Critical Therapeutics, Inc.
Filmtab(R) is a registered trademark of the Abbott Group of Companies.
CRITICAL THERAPEUTICS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
in thousands except share
and per share data 2004 2003 2004 2003
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Revenue under
collaboration agreement $964 $620 $4,436 $1,021
Operating expenses:
Research and development 8,900 9,509 25,578 17,458
General and
administrative 3,563 1,305 10,878 3,771
Total operating expenses 12,463 10,814 36,456 21,229
Operating loss (11,499) (10,194) (32,020) (20,208)
Other income, net 320 63 926 98
Net loss (11,179) (10,131) (31,094) (20,110)
Accretion of dividends and
offering costs on
preferred stock 0 (989) (2,209) (2,264)
Net loss available to
common stockholders ($11,179) ($11,120) ($33,303) ($22,374)
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Net loss per share
available to common
stockholders ($0.47) ($13.63) ($2.28) ($33.99)
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Basic and diluted
weighted-average common
shares outstanding 23,735,544 815,840 14,631,371 658,204
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CRITICAL THERAPEUTICS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
December 31, December 31,
in thousands 2004 2003
- ----------------------------------------------------------------------
Assets:
Current assets:
Cash and cash equivalents $28,780 $40,078
Amount due under collaboration agreement 16 2,500
Short-term investments 50,049 0
Prepaid expenses and other 1,851 430
Total current assets 80,696 43,008
Fixed assets, net 2,205 1,556
Other assets 213 490
Total assets $83,114 $45,054
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Liabilities and Stockholders' Equity (Deficit):
Current liabilities:
Current portion of long-term debt $837 $552
Accounts payable 4,218 323
Accrued license fees 0 4,460
Accrued expenses 2,741 977
Revenue deferred under collaboration
agreement 8,543 11,478
Total current liabilities 16,339 17,790
Long-term debt, less current portion 1,367 720
Redeemable convertible preferred stock 0 51,395
Stockholders' equity (deficit):
Common stock 24 2
Additional paid-in capital 130,374 11,156
Deferred stock-based compensation (6,101) (8,536)
Due from stockholders 0 (40)
Accumulated deficit (58,527) (27,433)
Accumulated other comprehensive loss (362) 0
Total stockholders' equity (deficit) 65,408 (24,851)
Total liabilities and stockholders' equity
(deficit) $83,114 $45,054
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CRITICAL THERAPEUTICS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Twelve Months Ended
December 31,
in thousands 2004 2003
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Cash flows from operating activities:
Net loss ($31,094) ($20,110)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization expense 1,092 482
Loss on disposal of fixed assets 278 0
Loss on conversion of warrants 46 0
Stock-based compensation expense 3,562 5,072
Forgiveness of notes receivable 185 0
Changes in assets and liabilities:
Amount due under collaboration agreement 2,484 (2,500)
Prepaid expenses and other (1,421) (622)
Other assets 277 0
Accounts payable 3,895 (94)
Accrued license fees and other expenses (2,211) 5,267
Revenue deferred under collaboration
agreement (2,935) 11,479
Net cash provided by (used in) operating
activities (25,842) (1,026)
Cash flows from investing activities:
Purchases of fixed assets (2,019) (1,492)
Proceeds from sales and maturities of short-term
investments 7,200 0
Purchases of short-term investments (57,611) 0
Net cash used in investing activities (52,430) (1,492)
Cash flows from financing activities:
Net proceeds from issuance of convertible
preferred stock 28,050 27,906
Net proceeds from the initial public offering of
common stock 37,817 0
Proceeds from exercise of stock options 175 6
Repurchase of restricted common stock 0 (1)
Proceeds from notes receivable 0 145
Proceeds from long-term debt 1,623 1,388
Repayments of long-term debt (691) (387)
Net cash provided by financing
activities 66,974 29,057
Net increase (decrease) in cash and cash
equivalents (11,298) 26,539
Cash and cash equivalents at beginning of period 40,078 13,539
Cash and cash equivalents at end of period $28,780 $40,078
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CONTACT: Critical Therapeutics, Inc.
Frank Thomas, 781-402-5711
Chief Financial Officer
fthomas@crtx.com
or
Linda Lennox, 781-402-5708
Director of Corporate Communications
llennox@crtx.com