Exhibit 99.1
Opexa Reports Second Quarter Financial Results
THE WOODLANDS, Texas--(BUSINESS WIRE)--Aug. 14, 2006--Opexa
Therapeutics, Inc. (OTCBB:OPXA), a company involved in the development
and commercialization of cell therapies, today reported financial
results for the three and six months ended June 30, 2006. Highlights
of the second quarter of 2006 include:
-- Changed corporate name to Opexa Therapeutics, Inc., and OTC/BB
trading symbol to "OPXA"
-- Raised gross proceeds of $23 million in a private placement
-- Effected a 1-for-10 reverse stock split in preparation for
application to Nasdaq for a listing
-- Initiated Phase IIb clinical trial with Tovaxin(TM) for the
treatment of multiple sclerosis (MS)
-- Named Lynne Hohlfeld as chief financial officer
-- Appointed Michael S. Richmond, Gregory H. Bailey, M.D., David
Hung, M.D. and Scott B. Seaman to the board of directors
Commenting on the quarter, David B. McWilliams, chief executive
officer of Opexa, stated, "This has been a very dynamic and rewarding
time for Opexa. We implemented an important capital restructuring and
name change during the quarter, and completed a $23 million financing
that provides the financial underpinnings for our Phase IIb trial with
Tovaxin and funds our other business activities. We also strengthened
our corporate governance with the addition of four new directors, each
of whom brings a valuable skill set and perspective to Opexa."
He added, "On the clinical front, we achieved a very significant
milestone with the initiation of our randomized, placebo-controlled
Phase IIb trial to evaluate the effectiveness of our T cell-based
therapeutic vaccine, Tovaxin, for treating MS. We believe that Tovaxin
attacks the underlying cause of MS and has advantages over existing
treatments for the disease, including lower relapse rates, quick onset
of action, minimal side effects, less frequent injections and reduced
patient fatigue."
Second Quarter Financial Results
Opexa reported no revenues for the three months ended June 30,
2006 or in the comparable prior-year period. General and
administrative expenses in the second quarter of 2006 were $3,169,832,
compared with $2,677,941 in the second quarter of 2005. The increase
primarily is due to the increase in stock-based compensation expense
in the 2006 period. On January 1, 2006 Opexa 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
employees and directors including stock options and restricted stock
based on estimated fair values. The Company elected to adopt the
modified prospective transition method as provided by SFAS 123R and,
accordingly, prior-year results have not been restated.
Research and development expenses were $1,554,912 in the 2006
second quarter, compared with $611,212 in the 2005 second quarter. The
increase primarily was related to the initiation of the Phase IIb
clinical trial, and a higher allocation of facilities and overhead
costs to research and development due to increased development
activities.
Interest expense was $184 in the second quarter of 2006, compared
with $4,450,955 in the prior year. Interest expense in the 2005
quarter was due to notes payable that were then outstanding, which
subsequently were converted into equity in June 2005 resulting in
acceleration of the amortization of the discount related to the notes.
The Company recognized a loss on derivative instruments of
$3,532,348 in the quarter. This loss was a result of the net
unrealized (non-cash) change in the fair value of derivative
instrument liabilities related to certain warrants.
Opexa reported a net loss for the second quarter of 2006 of
$8,475,868, or $1.40 per share, compared with a net loss for the
second quarter of 2005 of $7,747,740, or $6.99 per share. The increase
in net loss primarily was due to stock-based compensation expense and
loss on derivative instruments, offset in part by the decrease in
interest expense.
The Company had cash and cash equivalents of $19,931,542 as of
June 30, 2006, compared with $2,560,666 million as of December 31,
2005. In April 2006 the Company raised approximately $23 million in
gross proceeds through a private placement of units to institutional
and other accredited investors.
During the quarter, Lynne Hohlfeld, CPA, was named chief financial
officer of Opexa, and Michael S. Richmond, Gregory H. Bailey, M.D.,
David Hung, M.D., and Scott B. Seaman were appointed to the Company's
board of directors.
Year-to-Date Financial Results
Opexa reported no revenues in the six months ended June 30, 2006
or in the comparable prior-year period. General and administrative
expenses for the first half of 2006 were $4,245,714, compared with
$3,465,745 for the first half of 2005.
Opexa reported a net loss for the first half of 2006 of
$10,446,178, or $2.57 per share, compared with a net loss for the
first half of 2005 of $11,495,046, or $10.78 per share. The decrease
in net loss primarily is due to the decrease in interest expense,
partially offset by stock-based compensation expense and the loss on
derivative instruments.
About Opexa Therapeutics
Opexa Therapeutics develops and commercializes cell therapies to
treat several major disease areas such as MS, rheumatoid arthritis,
pancreatic and cardiac conditions. Opexa has exclusive license from
Baylor College of Medicine for individualized cell therapies and has
initiated a Phase IIb clinical trial to evaluate effectiveness in
treating MS. The Company holds the exclusive worldwide license for an
autologous T cell vaccine for rheumatoid arthritis from the Shanghai
Institutes for Biological Sciences, Chinese Academy of Sciences of the
People's Republic of China. Opexa 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 the Opexa Therapeutics
website at www.opexatherapeutics.com.
Safe Harbor Statement
This press release contains "forward-looking statements,"
including statements about Opexa Therapeutics' 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 Opexa Therapeutics' ability to obtain
additional funding, develop its stem cell technologies, achieve its
operational objectives, and obtain patent protection for its
discoveries, that may cause Opexa Therapeutics' actual results to be
materially different from any future results expressed or implied by
such forward-looking statements. Opexa Therapeutics undertakes no
obligation to update or revise any such forward-looking statements,
whether as a result of new information, future events or otherwise.
OPEXA THERAPEUTICS, INC.
(formerly PharmaFrontiers Corp.)
(a development stage company)
CONSOLIDATED BALANCE SHEETS
(unaudited)
June 30, December 31,
2006 2005
------------ ------------
Assets
Current assets:
Cash and cash equivalents $19,931,542 $2,560,666
Other current assets 514,596 182,524
------------ ------------
Total current assets 20,446,138 2,743,190
------------ ------------
Intangible assets, net of $2,709,019 and
$1,888,891 of accumulated amortization 25,547,752 26,130,441
Property & equipment, net of $327,897 and
$256,082 of accumulated depreciation 1,262,048 479,996
Other assets - 388,210
------------ ------------
Total assets $47,255,938 $29,741,837
============ ============
Liabilities and Stockholder's Equity
Current liabilities:
Accounts payable $682,841 $689,467
Stock payable 112,440 -
Accrued expenses 643,088 240,309
Note payable 1,500,000 1,500,000
Derivative liability 10,039,863 6,761,655
------------ ------------
Total current liabilities 12,978,232 9,191,431
------------ ------------
Commitments and contingencies - -
Stockholders' equity:
Convertible preferred stock, no par value,
10,000,000 shares authorized, none issued
and outstanding - -
Common stock, $0.50 par value, 100,000,000
shares authorized, 6,696,784 and
2,061,955 shares issued and outstanding 3,348,351 1,030,977
Additional paid in capital 61,639,556 39,783,452
Deficit accumulated during the development
stage (30,710,201) (20,264,023)
------------ ------------
Total stockholders' equity 34,277,706 20,550,406
------------ ------------
Total liabilities and stockholders'
equity $47,255,938 $29,741,837
============ ============
OPEXA THERAPEUTICS, INC.
(a development stage company)
CONSOLIDATED STATEMENTS OF EXPENSES
Three and Six Months ended June 30, 2006 and 2005 and the
Period from January 22, 2003 (Inception) to June 30, 2006
(unaudited)
Three Months Three Months
Ended Ended
June 30, June 30,
2006 2005
-------------- --------------
General and administrative $3,169,832 $2,677,941
Depreciation and amortization 460,442 26,816
Research and development 1,554,912 611,212
Loss on disposal of assets - -
-------------- --------------
Operating loss (5,185,186) (3,315,969)
Interest income 198,785 11,979
Other income 43,065 7,501
Gain (loss) on derivative liability (3,532,348) -
Interest expense (184) (4,450,955)
Other expense - (296)
-------------- --------------
Net loss $(8,475,868) $(7,747,740)
============== ==============
Basic and diluted loss per share $(1.40) $(6.99)
Weighted average shares outstanding 6,039,561 1,108,215
Six Months Six Months Inception
Ended Ended through
June 30, June 30, June 30,
2006 2005 2006
--------------------------------------------
General and
administrative $4,245,714 $3,465,745 $5,449,227
Depreciation and
amortization 892,775 864,044 2,892,803
Research and development 2,293,362 1,255,476 14,651,249
Loss on disposal of
assets 362 - 480,294
--------------------------------------------
Operating loss (7,432,213) (5,585,265) (23,473,573)
Interest income 218,406 18,909 306,328
Other income 46,450 9,945 77,003
Gain (loss) on derivative
liability (3,278,208) - 618,633
Interest expense (613) (5,938,339) (8,238,592)
Other expense - (296) -
--------------------------------------------
Net loss $(10,446,178) $(11,495,046) $(30,710,201)
============================================
Basic and diluted loss
per share $(2.57) $(10.78) N/A
Weighted average shares
outstanding 4,063,473 1,066,461 N/A
CONTACT: Opexa Therapeutics, Inc.
Lynne Hohlfeld, 281-719-3421
lhohlfeld@opexatherapeutics.com
or
Investor Relations:
Lippert/Heilshorn & Associates
Kim Sutton Golodetz, 212-838-3777
kgolodetz@lhai.com
or
Bruce Voss, 310-691-7100
bvoss@lhai.com