Exhibit 99.1
FOR IMMEDIATE RELEASE
[LOGO PHARMOS]
99 Wood Avenue South, Suite 311 Contact - U.S.: Gale T. Smith
Iselin, NJ 08830 732-452-9556
www.pharmoscorp.com Contact - Israel: Irit Kopelov
08-940-9679
Pharmos Corporation Reports 2002 Results
Cost Containment Program Tightens 2003 Expenses
Iselin, NJ, March 7, 2003 - Pharmos Corporation (Nasdaq: PARS and Nasdaq Europe:
PHRM) today reported financial results for the twelve months ended December 31,
2002. The Company recorded a net loss of $17,070,000, or $ .30 per share, in
2002 compared to a net income of $5,046,000, or $ .09 per share, recorded in
2001. The net income in 2001 resulted from a one-time gain of $16,285,000 from
the sale of Pharmos' ophthalmic business in October 2001. Operating expenses
increased 22% in 2002 compared to 2001, driven largely by growing activities in
connection with the Company's non-psychotropic cannabinoid drug development
programs, in particular those necessary to successfully advance the ongoing
pivotal clinical trial of dexanabinol for traumatic brain injury (TBI). Cash and
cash equivalents, including restricted cash, totalled $21,839,000 as of December
31, 2002.
"During 2002, we achieved several critical goals and gained important ground as
a leader in the central nervous system marketplace," said Haim Aviv, Ph.D.,
Pharmos Chairman and CEO. "In our TBI study with dexanabinol, we increased the
number of international centers by one third and the rate of patient enrollment
to roughly 30 per month. Concurrently, we completed and filed our application
with the FDA to begin enrolling U.S. TBI patients into the pivotal study. Now
that the application has been allowed, we are in the process of contracting with
trauma centers in the U.S."
"Enrollment of heart surgery patients in our next clinical study, a Phase II
feasibility study to test the effectiveness of dexanabinol in preventing
post-surgical mild cognitive impairment, should commence in a few weeks,"
continued Dr. Aviv. In 2002, Pharmos received authorization from Israel's
Ministry of Health to clinically test dexanabinol as a preventive agent against
the mild cognitive impairment that can occur in patients after undergoing
coronary artery bypass grafting (CABG). The Company recently completed the
training of clinical research personnel in the several Israel-based hospitals
that will be enrolling patients in the study.
"We are working to exploit the positive data released late last year from
preclinical pain studies of selected `bicyclic' compounds, a newer class of
compounds that specifically bind to the cannabinoid-2, or CB2, receptors, which
are expressed by immune and inflammatory cells," Dr. Aviv added. "The data
indicate continued studies are well warranted, and may represent potential
collaboration or out-licensing opportunities for Pharmos." In November 2002,
data presented by Pharmos at the Society for Neuroscience showed certain of its
CB2-selective agonist cannabinoids demonstrated efficacy in animal models for
noxious, inflammatory and neuropathic pain. Pharmos is also screening these
compounds for activity in other animal models of
inflammation-based and autoimmune diseases.
In order to better concentrate its resources on its most important programs,
Pharmos has implemented a company-wide cost cutting program that may ultimately
affect 20% of its total staff and will be concentrated in its Discovery & Early
Stage Research Group and in certain general and administrative areas. The
intended goal of this program is to reduce the Company's non-dexanabinol related
operating expenses by approximately $1 million in 2003.
Grant funding of $2,756,000 received by Pharmos in 2002 from the Office of the
Chief Scientist of Israel's Ministry of Industry and Trade helped offset
research and development expenses, primarily those related to the
dexanabinol/TBI project. Gross expenses in the dexanabinol/TBI project rose
approximately 79% in 2002 to $10,072,000, but should decrease in 2003 to
approximately $9 million. Pharmos also received a tax credit in 2002 of
approximately $215,000 representing net proceeds from the sale of a portion of
its state NOL carryforward under the New Jersey Technology Tax Certificate
Program.
For the fourth quarter ended December 31, 2002, Pharmos reported a net loss of
$3,302,000, or $.06 per share, compared to a net income of $12,160,000, or $.22
per share, for the same period in 2001. The income in the 2001 fourth quarter
was generated by a one-time gain of $16,285,000 from the sale of the Company's
ophthalmic business in October 2001. Total operating expenses decreased
approximately 18% in the fourth quarter 2002 compared to the fourth quarter
2001, primarily due to decreased research & development expenses. Research and
development expenses decreased approximately 23% in the fourth quarter 2002
primarily as a result of lower consulting-related expenses in connection with
the dexanabinol/TBI phase III clinical trial and lower staff-related expenses
compared to the fourth quarter 2001.
Pharmos discovers, develops, and commercializes novel therapeutics to treat a
range of indications, in particular neurological and inflammation-based
disorders. The Company's first neuroprotective product is dexanabinol, a
tricyclic dextrocannabinoid, currently undergoing clinical testing as a
treatment for TBI and as a preventive agent against post-surgical cognitive
impairment. Other dextrocannabinoid compounds and CB2 receptor agonist compounds
from Pharmos' proprietary synthetic cannabinoid library are being studied in
pre-clinical programs targeting stroke, pain, multiple sclerosis and other
disorders.
Statements made in this press release related to the business outlook and future
financial performance of the Company, to the prospective market penetration of
its drug products, to the development and commercialization of the Company's
pipeline products and to the Company's expectations in connection with any
future event, condition, performance or other matter, are forward-looking and
are made pursuant to the safe harbor provisions of the Securities Litigation
Reform Act of 1995. Such statements involve risks and uncertainties which may
cause results to differ materially from those set forth in these statements.
Additional economic, competitive, governmental, technological, marketing and
other factors identified in Pharmos' filings with the Securities and Exchange
Commission could affect such results.
(Tables attached)
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Pharmos Corporation Financial Highlights
Condensed Statements of Operations
(in thousands, except share and per share amounts)
For the three months ended For the year ended
Dec. 31, 2002 Dec. 31, 2001 Dec. 31, 2002 Dec. 31, 2001
------------- ------------- ------------- -------------
Revenues
Product sales $ -- $ -- $ -- $ 4,219
License fee -- -- -- 80
------- ------- -------- ------
Total revenues -- -- -- 4,299
Cost of goods sold -- -- -- 1,269
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Gross margin -- -- -- 3,030
------- ------- -------- ------
Expenses
Research &development, net 2,322 3,026 12,338 9,349
Selling, general & administrative 921 849 3,829 3,666
Depreciation & amortization 175 281 692 774
------- ------- -------- ------
Total operating expenses 3,418 4,156 16,859 13,789
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Other (expense) income
Interest income 92 237 534 979
Interest expense (200) (436) (973) (1,714)
Other income 9 4 13 29
Gain from sale of LE business -- 16,285 -- 16,285
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Other (expense) income, net (99) 16,090 (426) 15,579
------- ------- -------- ------
Net (loss) income before
income tax credit (3,517) 11,934 (17,285) 4,820
Income tax credit (215) (226) (215) (226)
------- ------- -------- ------
Net (loss) income ($3,302) $12,160 ($17,070) $5,046
======= ======= ======== ======
Net (loss) income -
basic and diluted ($0.06) $0.22 ($0.30) $0.09
======= ======= ======== ======
Weighted average shares outstanding
-basic 56,573,838 55,301,200 56,534,191 54,678,932
========== ========== ========== ==========
Weighted average shares outstanding
-diluted 56,573,838 55,805,302 56,534,191 55,298,063
========== ========== ========== ==========
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Condensed Balance Sheets at
(in thousands)
Dec. 31, 2002 Dec. 31, 2001
------------- -------------
Cash and cash equivalents $19,579 $35,269
Restricted cash 2,200 2,275
Receivables 699 690
Prepaid expenses and other current assets 324 998
------- -------
Total current assets 22,802 39,232
Fixed assets, net 1,792 1,918
Restricted cash 60 3,091
Other assets 33 22
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Total assets $24,687 $44,263
======= =======
Accounts payable $ 3,742 $ 2,197
Accrued expenses 3,242 5,810
Accrued wages and other compensation 1,000 1,318
Convertible debentures, net 3,447 1,949
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Total current liabilities 11,431 11,274
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Other liabilities 10 --
Convertible debentures, net -- 5,848
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Total liabilities 11,441 17,122
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Total shareholders' equity 13,246 27,141
------- -------
Total liabilities and shareholders' equity $24,687 $44,263
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