Exhibit 99.1
PharmaFrontiers Reports First Quarter 2006 Results
THE WOODLANDS, Texas--(BUSINESS WIRE)--May 15,
2006--PharmaFrontiers Corp. (OTCBB:PFTR), a company involved in the
development and commercialization of cell therapies, today reported
financial results for the quarter ended March 31, 2006.
Highlights of the first quarter of 2006 and recent weeks include:
-- Completion of $23 million financing to fund Phase IIb trial
for Tovaxin(TM) and other clinical programs
-- Reconstitution of board of directors with two new board
members
-- Lynne Hohlfeld, CPA named as vice president of finance
David B. McWilliams, chief executive officer of PharmaFrontiers,
commented, "We anticipate starting our Phase IIb trial during the
second quarter of this year, so we have moved aggressively to ensure
that our financial resources, capital structure and management team
are all optimally organized and aligned to support this important
milestone in our clinical program. We are ready in every sense to
focus our energy and resources on our next stage of development."
Financial Results
The Company reported no revenue for the three months ended March
31, 2006 or in its comparative period the year before. General and
administrative expenses during the three months ended March 31, 2006
were $1,075,882, compared with $1,206,715 during the same period in
2005. The decrease in general and administrative expenses is due
primarily to a reduction in legal fees associated with patent filings,
a lower allocation of facilities costs and overhead now allocated to
research and development. This was offset in part by an increase in
stock-based compensation expense. In January 1, 2006, we adopted
Statement of Financial Accounting Standards No. 123 (revised 2004),
"Share-Based Payment," ("SFAS 123R") which requires the measurement
and recognition of compensation expense for all share-based payment
awards made to our employees and directors including stock options and
restricted stock based on estimated fair values. We elected to adopt
the modified prospective transition method as provided by SFAS 123R
and, accordingly, prior year results have not been restated.
Stock-based compensation expense recognized under SFAS 123R for the
three months ended March 31, 2006 was $484,392.
Research and development expenses were $738,450 for the first
quarter of 2006, compared with $644,264 for the same period in 2005.
The increase is primarily related to an increase in consulting fees
related to the rheumatoid arthritis program and a higher allocation of
facilities and over costs to research and development due to increased
development activities.
Interest expense was $429 for the three months ended March 31,
2006, compared with $1,487,384 for the comparable quarter in 2005. The
interest expense during 2005 was due to notes that were outstanding
during the first quarter of 2005 which were subsequently converted
into equity in June 2005.
PharmaFrontiers had a net loss for the three months ended March
31, 2006 of ($2,224,450) or ($0.11) per share (basic and diluted),
compared with a net loss of ($3,747,304) or ($0.37) per share (basic
and diluted) for the same period of 2005.
The Company had cash of $1,059,856 as of March 31, 2006 as
compared with $2,560,666 as of December 31, 2005. After the close of
the first quarter of 2006, the Company completed a private placement
of equity, which raised $23,000,000.
About PharmaFrontiers Corp.
PharmaFrontiers' strategy is to develop and commercialize cell
therapies to treat several major disease areas such as multiple
sclerosis, rheumatoid arthritis, pancreatic and cardiac conditions.
PharmaFrontiers has exclusive license from Baylor College of Medicine
for individualized cell therapies that will be starting an FDA Phase
IIb clinical trial to evaluate effectiveness in treating MS. The
company also holds the exclusive worldwide license for an autologous T
cell vaccine for rheumatoid arthritis from the Shanghai Institutes for
Biological Sciences (SIBS), Chinese Academy of Sciences of the
People's Republic of China. The company also holds the exclusive
worldwide license from the University of Chicago, through its prime
contractor relationship with Argonne National Laboratory, for patents
relating to the use of adult pluripotent stem cells derived from
patients' own circulating blood.
For more information, visit PharmaFrontiers' website at
www.pharmafrontierscorp.com.
Safe Harbor Statement
This press release contains "forward-looking statements,"
including statements about PharmaFrontiers' growth and future
operating results, discovery and development of products, strategic
alliances and intellectual property, as well as other matters that are
not historical facts or information. These forward-looking statements
are based on management's current assumptions and expectations and
involve risks, uncertainties and other important factors, specifically
including those relating to PharmaFrontiers' ability to obtain
additional funding, develop its stem cell technologies, achieve its
operational objectives, and obtain patent protection for its
discoveries, that may cause PharmaFrontiers' actual results to be
materially different from any future results expressed or implied by
such forward-looking statements. PharmaFrontiers undertakes no
obligation to update or revise any such forward-looking statements,
whether as a result of new information, future events or otherwise.
(Tables to follow)
PHARMAFRONTIERS CORP.
FINANCIAL HIGHLIGHTS
(UNAUDITED)
Three Months Three Months Inception
Ended Ended through
March 31, March 31, March 31,
2006 2005 2006
------------- ------------- -------------
Consolidated Statements of
Operations Data:
Expenses
General and administrative $1,075,882 $1,206,715 $2,279,396
Depreciation and
amortization 432,333 418,315 2,432,362
Research and development 738,450 644,264 13,096,337
Loss on disposal of assets 362 - 480,294
------------- ------------- -------------
Operating Loss (2,247,027) (2,269,294) (18,288,389)
Interest income 19,621 6,930 107,543
Other income 3,385 2,444 33,938
Interest expense (429) (1,487,384) (8,238,408)
------------- ------------- -------------
Net Loss (2,224,450) (3,747,304) (26,385,316)
============= ============= =============
Basic and diluted loss per
share $(0.11) $(0.37) N/A
Weighted average shares
outstanding 20,654,294 10,224,456 N/A
As of As of
March 31, December 31,
2006 2005
------------- -------------
Consolidated Balance Sheet
Data:
Cash and cash equivalents
and prepaid expenses $1,268,344 $2,743,190
Intangible assets 25,846,159 26,130,441
Fixed Assets 549,574 479,996
Other assets 450,943 388,210
------------- -------------
Total assets $28,115,020 $29,741,837
============= =============
Current liabilities $2,363,019 $2,429,776
Common stock 1,048,351 1,030,977
Additional paid in capital 51,088,966 50,441,948
Deficit accumulated during
the development stage (26,385,316) (24,160,864)
------------- -------------
Total stockholders' equity 25,752,001 27,312,061
------------- -------------
Total liabilities and
stockholders' equity $28,115,020 $29,741,837
============= =============
CONTACT: PharmaFrontiers Corp.
Lynne Hohlfeld, 281-719-3421
lhohlfeld@pharmafrontierscorp.com
or
Investor Relations Contacts:
Lippert/Heilshorn & Associates
Kim Sutton Golodetz, 212-838-3777
kgolodetz@lhai.com
or
Bruce Voss, 310-691-7100
bvoss@lhai.com