EXHIBIT 99.1
For further information contact:
AT EMISPHERE TECHNOLOGIES, INC.:
Dory Lombardo-Valiquette
Senior Manager, Investor Relations
and Corporate Communications
(914) 785-4742
AT FRB | WEBER SHANDWICK:
George Zagoudis Leslie Loyet Cindy Martin
General Information Analysts/Investors Media Inquiries
(312) 640-6663 (312) 640-6672 (312) 640-6741
gzagoudis@webershandwick.com lloyet@webershandwick.com clmartin2@webershandwick.com
FOR RELEASE
EMISPHERE ANNOUNCES SECOND QUARTER FINANCIAL RESULTS FOR 2003
- PROVIDES UPDATE ON DEVELOPMENT PROGRAMS-
Tarrytown, NY - August 12, 2003 - Emisphere Technologies, Inc. (Nasdaq: EMIS)
today announced financial results for the second quarter ended June 30, 2003.
The Company also provided an update on development programs involving its
proprietary eligen(TM) oral drug delivery technology.
"Most notably in the second quarter, we executed on our key strategic objective
of creating improved dosage forms of our lead product candidates," commented
Michael M. Goldberg, M.D., Chairman and Chief Executive Officer of Emisphere.
During the second quarter we created enhanced dosage forms of both insulin or
heparin and synthesized clinical supplies in our newly validated manufacturing
facility. We also initiated U.S. clinical studies of insulin under an
Investigational New Drug application while continuing to tightly manage our
usage of cash. At the same time, we formed a new research collaboration with the
U.S. Army for the potential development of an oral anthrax antigen, in line with
our strategy to increase the throughput of new programs for which to apply our
eligen(TM) technology, in different and broadly applicable therapeutic areas."
Second Quarter Results
The net loss for the three months ended June 30, 2003 was $11.4 million or $0.63
per share, compared to a net loss of $24.9 million or $1.39 per share, for the
same period in 2002 including restructuring and impairment charges of $1.0
million and $5.7 million respectively. In the second quarter ended June 30,
2003, a $1.0 million charge was recorded as an impairment of the equipment at
the company's discontinued operations located in Farmington, Connecticut.
Excluding the impairment and restructuring charges, the net loss for the three
months ended June 30, 2003 was $10.5 million or $0.58 per share, compared to a
net loss of $19.2 million or $1.07 per share, for the same period in 2002. The
$8.7 million reduction in net loss resulted from a $10.1 million decrease in
operating expenses, partially offset by a $0.8 million decrease in contract
research revenues and a $0.6 million increase in net investment expense over the
same period last year.
In the second quarter of 2003, excluding charges outlined above, operating
expenses decreased by $10.1 million or 51% from $19.9 million to $9.8 million
over the same period last year. This was primarily due to decreases of $4.9
million in clinical costs and $5.2 million in research activities. The majority
of this decrease in operating expense was due to the completion of Emisphere's
Phase III PROTECT Trial and related studies as well as the subsequent staff
reduction and closing of the Farmington, Connecticut research facility, all of
which were announced in 2002.
Revenues for the second quarter decreased by $0.8 million compared to the same
period in 2002, primarily due to the completion of Emisphere's early stage
clinical studies in collaboration with Eli Lilly and Company, which amounted to
$0.7 million, as well as a reduction in pre-clinical work performed for Cubist
Pharmaceuticals, Inc. and Regeneron Pharmaceuticals, Inc. Contract research
revenues consist of revenue from collaborative agreements and feasibility
studies and are comprised of reimbursed research and development costs. As these
studies reach conclusion of the first stage of pre-clinical or Phase I clinical
trials, payments made by collaborators are anticipated to be lower, reflecting
the reduced efforts of Emisphere.
Net investment expense for the quarter increased expenses by $0.6 million. This
increase was primarily due to lower investment balances and lower interest rates
generating investment income in addition to higher interest expenses.
Cash consumption continues to slow each quarter. In the second quarter of 2003,
cash, cash equivalents and investments decreased $7.8 million from the prior
quarter, compared to an $8.2 million decrease in the first quarter of 2003. As
of June 30, 2003, Emisphere held cash, cash equivalents and investments totaling
approximately $57.7 million.
Update on Current Partnerships
Emisphere also announced today in a joint press release issued with
collaborator, Eli Lilly and Company ("Lilly"), the continued development of the
oral parathyroid hormone 1-34 (PTH) program (for the potential treatment of
osteoporosis), and the reacquisition of all rights to the oral recombinant human
growth hormone (rhGH) program (for the potential treatment of growth hormone
deficiency). While the rhGH program was successful in demonstrating that the
eligen(TM) technology orally delivered rhGH to blood levels that exceeded
physiological peak values in normal adults, Lilly stated in the release that the
decision to discontinue the program results from its need to prioritize among a
very promising pipeline of programs. Lilly also stated that it remains committed
to Emisphere's technology, as evidenced by its continued joint efforts on PTH.
Farmington Sale Discussions Continue
In late May 2002, following the conclusion of the PROTECT Trial, Emisphere
implemented a restructuring plan, scaling back its infrastructure associated
with the oral liquid heparin program. Also, in the second quarter of 2002, the
Company reported that further reorganization of its operations at its two
locations in Tarrytown, New York and Farmington, Connecticut was under
consideration. During the third quarter of 2002, management reached the decision
to dispose of its Farmington, Connecticut research facility. The facility
discontinued operations in December 2002.
Discussions are ongoing with potential buyers of the Farmington, Connecticut
research facility. To date, current proposals include preserving the facility as
a research facility and converting the site to commercial retail use. Based on
current estimates of expected proceeds as of June 30, 2003, an impairment loss
of the
carrying value of the land, building and attached equipment has not been
triggered. Based on current proposals, the Company anticipates that not all of
the equipment will be sold with the facility. After review of this equipment,
the Company has concluded that an impairment charge of approximately $1.0
million is necessary and has been recorded as of June 30, 2003.
Presentation of Two Positive Oral Insulin Studies at ADA Sessions
Emisphere along with its clinical collaborators announced promising results from
two clinical studies evaluating an oral insulin prototype, both of which were
presented at the 63rd Annual Scientific Sessions of the American Diabetes
Association (ADA) Meeting. Results from a 'glucose clamp' study and an
'overnight study' in type 2 diabetics demonstrated that using Emisphere's
eligen(TM) technology, orally delivered insulin induced clinically relevant
activity. The glucose clamp study highlighted the eligen(TM) technology's
ability to deliver insulin orally with speed and efficiency by having meaningful
activity of insulin within the first hour. The overnight study highlights how,
with the eligen(TM) technology, insulin travels to the right place at the right
time with the potential to spare insulin-producing cell function. These results
support the prospect of an oral insulin product for use in both the early and
later phases of diabetes.
Dr. Goldberg concluded, "Additional studies related to our oral insulin
candidate continue to be value-added for the potential partnering of this
program. In fact, since the initiation of testing in the United States, we have
created a tablet prototype that has demonstrated better performance in patients
with Type 2 diabetes than the capsules evaluated thus far. We plan to use this
prototype in planned multi-dose testing."
Additional Second Quarter Highlights
o New Research Collaboration: Emisphere announced that it signed a
cooperative research and development agreement (CRADA) with the U.S. Army
Medical Research Institute of Infectious Diseases (USAMRIID), the U.S.
Department of Defense's lead laboratory for medical aspects of biological
warfare defense. USAMRIID will evaluate the use of Emisphere's
eligen(TM)technology to create oral vaccines against anthrax using a new
recombinant protein antigen. USAMRIID has agreed to grant Emisphere an
exclusive license to each U.S. patent application or issued patent as a
result of the work performed under the CRADA. Should an oral Anthrax
vaccine ultimately be developed, Emisphere would be eligible to receive
royalties under a license agreement with the ultimate vaccine developer.
o New Programs: Emisphere concluded a pilot study in primates conducted to
assess the feasibility of using its eligen(TM) technology with PYY 3-36, a
peptide that promotes appetite suppression. Results were successful in
demonstrating "proof-of-concept" that the eligen(TM) technology could
orally deliver the PYY 3-36 peptide in an in vivo model. Emisphere is
investigating next steps to potentially develop a program in this area.
o New Clinical Study: Emisphere announced in May it would initiate clinical
testing of an oral insulin formulation in type 2 diabetic patients in the
United States under an Investigational New Drug (IND) application filed
with the United States Food and Drug Administration (FDA). The formulation
being tested is unoptimized and uses Emisphere's eligen(TM) oral drug
delivery technology to deliver the insulin in a capsule. This is the first
oral insulin clinical study in the United States using Emisphere's
technology.
Conference Call Information
Emisphere Technologies, Inc. (Nasdaq: EMIS) will hold a conference call on
Tuesday, August 12, 2003 at 10:30 a.m. Eastern Time (7:30 a.m. Pacific), to
discuss the Company's second quarter financial results for the quarter ended
June 30, 2003. A replay of the call will be accessible approximately 2 hours
following the end of the call and will be archived for one week.
The live conference call dial-in number is: 877-381-5116 (U.S./Canada)
706-634-7378 (international)
To access a replay of the call: 800-642-1687 (U.S./Canada)
706-645-9291 (international)
Conference ID: 2083092
Emisphere will simultaneously be webcasting this teleconference. To access the
live broadcast in listen-only mode or the subsequently archived recording please
go to the investor relations portion of the Company's website:
http://www.emisphere.com/html/ir.html or access directly at
http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=EMIS&script=1010&item_id=
769830. Please visit the site at least five minutes prior to start time for
instructions and to allow adequate time for any software download that may be
needed to listen to the webcast.
About The eligen(TM) technology
Emisphere's broad-based oral drug delivery technology platform, known as the
eligen(TM) technology, is based on the use of proprietary, synthetic chemical
compounds, known as EMISPHERE(R) delivery agents, or "carriers". These molecules
facilitate the transport of the therapeutic macromolecules across biological
membranes such as the small intestine. Emisphere's eligen (TM) technology makes
it possible to orally deliver a therapeutic molecule without altering its
chemical form or biological integrity.
About Emisphere Technologies, Inc.
Emisphere Technologies, Inc. (Nasdaq: EMIS) is a biopharmaceutical company
pioneering the oral delivery of otherwise injectable or inhaled drugs. It is in
the business of licensing its proprietary eligen(TM) oral drug delivery
technology to partners who apply it directly to their marketed drugs. Emisphere
conducts proof-of-concept trials and other early-stage trials to advance the
technology and increase value for potential partnering opportunities.
Emisphere's eligen(TM) technology has facilitated the oral delivery of proteins,
peptides, macromolecules and charged organics. Emisphere and its partners have
advanced oral formulations of salmon calcitonin, heparin, insulin, parathyroid
hormone, human growth hormone and cromolyn sodium into clinical trials. Four
oral drug formulations containing EMISPHERE(R) delivery agents have been
accepted for clinical testing in the U.S. Emisphere develops pharmaceutical
products for its own portfolio and has strategic alliances with some of the
world's leading pharmaceutical and biotechnology companies. For further
information, please visit www.emisphere.com.
Safe Harbor Statement Regarding Forward-looking Statements
The statements in this release and oral statements made by representatives of
Emisphere relating to matters that are not historical facts (including without
limitation those regarding the timing or potential outcomes of research
collaborations or clinical trials, any market that might develop for any of
Emisphere's product candidates and the sufficiency of Emisphere's cash and other
capital resources) are forward-looking statements that involve risks and
uncertainties, including, but not limited to, the likelihood that future
research will prove successful, the likelihood that any product in the research
pipeline will receive regulatory approval in the United States or abroad, the
ability of Emisphere and/or its partners to develop, manufacture and
commercialize products using Emisphere's drug delivery technology, Emisphere's
ability to fund such efforts with or without partners, and other risks and
uncertainties detailed in Emisphere's filings with the Securities and Exchange
Commission, including those factors discussed under the caption "Risk Factors"
in Emisphere's Annual Report on Form 10-K (file no. 1-10615) filed on March 31,
2003.
- Tables to Follow -
EMISHPERE TECHNOLOGIES, INC.
Selected Financial Information
For the three months and six months ended June 30, 2003 and 2002
(in thousands, except share and per share data)
(unaudited)
Condensed Statement of Operations
For the three months ended For the six months ended
June 30, June 30,
----------------------------- -----------------------------
2003 2002 2003 2002
----------- ----------- ----------- -----------
Contract research revenues $ 246 $ 1,089 $ 272 $ 1,818
----------- ----------- ----------- -----------
Costs and expenses:
Research and development 5,430 15,582 10,394 33,214
General and administrative expense 2,806 2,795 5,345 5,998
Restructuring (73) 1,331 (73) 1,331
Loss on impairment of intangible and fixed assets 1,036 4,404 1,040 4,404
Depreciation and amortization 1,562 1,536 3,079 2,952
----------- ----------- ----------- -----------
Total Expenses 10,761 25,648 19,785 47,899
Operating Loss (10,515) (24,559) (19,513) (46,081)
----------- ----------- ----------- -----------
Investment income and expense:
Investment income and other income 380 706 758 1,907
Loss on Sale of Fixed Assets (66) (66)
Interest expense (1,245) (1,077) (2,489) (2,157)
----------- ----------- ----------- -----------
Total investment income and expense (931) (371) (1,797) (250)
Net Loss $ (11,446) $ (24,930) $ (21,310) $ (46,331)
=========== =========== =========== ===========
$ (0.63) $ (1.39) $ (1.18) $ (2.60)
----------- ----------- ----------- -----------
Weighted average shares outstanding,
basic and diluted 18,048,000 17,872,000 18,034,000 17,845,000
=========== =========== =========== ===========
Condensed Balance Sheet
June 30, December
2003 31, 2002
-------- --------
Assets:
Cash, cash equivalents, and investments 57,656 73,701
Prepaid expenses and other current assets 1,291 2,285
Equipment and leasehold improvements, net 20,662 23,282
Land, building and equipment held for sale, net 3,734 4,520
Intangible assets, net 2,632 2,752
Other assets 1,432 1,426
-------- --------
Total Assets $ 87,407 $107,966
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Liabilities and Stockholder's Equity:
Current Liabilities 3,867 5,736
Notes payable 35,669 33,181
Deferred lease liability, net of current portion 1,305 1,509
Stockholders' equity 46,566 67,540
-------- --------
Total Liabilities and stockholder's equity $ 87,407 $107,966
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