Emisphere Technologies, Inc.
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
EMISPHERE ANNOUNCES THIRD QUARTER FINANCIAL RESULTS FOR 2003
- PROVIDES UPDATE ON DEVELOPMENT PROGRAMS-
Tarrytown, NY - November 12, 2003 - Emisphere Technologies, Inc. (Nasdaq: EMIS)
today announced financial results for the third quarter ended September 30,
2003. The Company also provided an update on development programs involving its
proprietary eligen(TM) oral drug delivery technology.
Michael M. Goldberg, M.D., Chairman and Chief Executive Officer of Emisphere,
commented on the third quarter, stating, "This past quarter we continued to
execute our key strategic objective of creating improved dosage forms of our
lead product candidates. During this quarter, we progressed enhanced dosage
forms of both insulin and heparin into clinical testing. In addition, we
commenced the manufacture of clinical supplies for early-stage studies in our
qualified good manufacturing practices (GMP) facility. We believe that we will
clearly benefit from our focused structure, given our continued decrease in
research spending, while dedicating our resources to the advancement of our
programs."
Third Quarter Results
Emisphere reported a net loss for the three months ended September 30, 2003 of
$14.3 million, or $0.79 per share, compared to a net loss of $13.0 million, or
$0.72 per share, for the same period in 2002. The net loss includes a non-cash
asset impairment charge of $4.3 million, or $0.24 per share, in 2003 and a
restructuring charge of $0.2 million and a non-cash impairment charge of $0.2
million, or $0.02 per share in total, in 2002.
In the third quarter ended September 30, 2003, Emisphere reduced its occupancy
costs by surrendering 27% of its total leased space, primarily consisting of a
portion of its offices at its Tarrytown, New York facility. The estimated impact
of this decision is to lower annual rental cost by $1.5 million, in addition to
receiving operating lease payments of approximately $1.0 million for leasehold
improvements and furniture expenditures with reimbursements spread out over the
next nine years, subject to certain terms and conditions. This transaction
triggered the previously mentioned $4.3 million, or $0.24 per share, non-cash
asset impairment charge on assets related to the surrendered space.
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Excluding impairment and restructuring charges for both years, the net loss for
the three months ended September 30, 2003 was $10.0 million, or $0.55 per share,
compared to a net loss of $12.7 million, or $0.70 per share, for the same period
in 2002. The $2.7 million reduction in net loss resulted from a $3.3 million
decrease in operating expense, partially offset by a $0.6 million decrease in
contract research revenue over the same period last year.
In the third quarter of 2003, excluding charges outlined above, operating
expense decreased by $3.3 million, or 25%, from $12.9 million to $9.6 million,
over the same period last year. The reduction in operating expense was primarily
due to decreases of $2.6 million, or 31%, in research and development costs,
$0.6 million, or 21%, in general and administrative expenses, and $0.1 million,
or 4%, in depreciation and amortization expenses. The larger portion 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 facility, all of which were announced in
2002.
Revenue in the third quarter decreased by $0.6 million compared to the same
period in 2002. This was primarily due to the completion of Emisphere's
early-stage clinical studies in collaboration with Eli Lilly and Company, that
amounted to $0.7 million in 2002, which was partially offset by cost
reimbursements from an undisclosed collaborator on a clinical feasibility study.
Contract research revenue consists of revenue from collaborative agreements and
feasibility studies, and is comprised of reimbursed research and development
costs.
Net investment expense for the third quarter remained unchanged when compared to
the same period last year. During the quarter ended September 30, 2003,
Emisphere received higher interest income from a gain on the sale of bonds
offset by higher non-cash interest expense.
Nine Months Results
For the first nine months ended September 30, 2003, Emisphere reported a net
loss of $35.6 million, or $1.97 per share, compared with a net loss of $59.3
million, or $3.32 per share, for the same period last year. This net loss
includes a restructuring credit of $0.1 million and a non-cash asset impairment
charge of $5.3 million, or $0.29 per share, in 2003 and a restructuring charge
of $1.5 million and a non-cash impairment charge of $4.6 million, totaling $6.1
million, or $0.34 per share, in 2002.
Excluding impairment and restructuring charges for both years, the net loss for
the nine months ended September 30, 2003 was $30.4 million, or $1.68 per share,
compared to a net loss of $53.3 million, or $2.98 per share, for the same period
in 2002. This $22.9 million reduction in net loss resulted from a $26.6 million
or 48% decrease in operating expense, partially offset by a $2.1 million
decrease in contract research revenue and $1.6 million increase in net
investment expense compared to the same period last year. The major portion 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 facility, all of which were
announced in 2002.
The rate of cash consumption continued to trend lower during the third quarter
2003. In the third quarter, cash consumption was $6.8 million, a decrease from
the prior quarter ended June 30, 2003, in which consumption was $7.8 million,
and from the first quarter of 2003, in which cash consumption was $8.2 million.
As of September 30, 2003, Emisphere held cash, cash equivalents and investments
totaling $50.9 million.
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 primarily in its Tarrytown facility. In
addition, during the third quarter of 2002, management decided to dispose of its
Farmington research facility. The Farmington facility discontinued operations in
December 2002.
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Discussions are ongoing with potential buyers of the Farmington facility. To
date, current options include preserving the facility as a research facility and
converting the site to commercial use. As of September 30, 2003, based on
current estimates of expected proceeds, an impairment loss of the carrying value
of the land, building and related equipment has not been triggered. Based on
current proposals, Emisphere anticipates that not all of the Farmington facility
equipment will be sold with the facility. After a financial review of the
equipment, Emisphere recorded an impairment charge of approximately $1.0 million
in the second quarter of 2003. Based on a Company review as of September 30,
2003, Emisphere concluded that no further charges are necessary at this time.
Presentation of Salmon Calcitonin Phase IIa Data by Novartis
During the third quarter, results of a Phase IIa study conducted by partner
Novartis Pharma AG evaluating the performance of an oral tablet formulation of
the peptide, salmon calcitonin (calcitonin), were presented by Novartis at the
25th annual meeting of the American Society for Bone and Mineral Research.
Calcitonin is currently available only as a nasal spray or as an injectable
therapy. The study demonstrated activity on bone markers over a three month
dosing period when the peptide was delivered in combination with the
EMISPHERE(R) delivery agent.
The data from the study demonstrated that, in comparison to placebo, there was a
significant reduction in bone turnover markers observed for one of these doses
(1 mg/day; p = 0.0016). Furthermore, only two serious adverse events were
reported, neither of which was deemed related to the EMISPHERE(R) delivery agent
or to calcitonin.
Novartis plans to initiate Phase IIb testing of the oral form of calcitonin in
2004.
Additional Third Quarter Highlights
o Completion of a Clinical Study: Earlier this week, Emisphere
announced that results from a clinical study evaluating an oral
insulin tablet prototype (the EMISPHERE(TM) oral insulin tablet)
were presented in a plenary session at the Diabetes Technology
Society's 3rd Annual Meeting in San Francisco, California. The
Phase I study was designed to test the performance of novel insulin
tablet prototypes prepared with an EMISPHERE(R) delivery agent when
orally administered to Type 2 diabetic patients who were
subsequently either fasted or fed a standard meal. In addition to
safety and tolerability, blood glucose, insulin and C-Peptide
levels were monitored. The study demonstrated that an oral insulin
prototype could be dosed very close to mealtime.
o New Clinical Studies: Emisphere initiated a double-blind,
placebo-controlled, multiple dose study in Type 2 diabetics for an
oral insulin tablet. Separately, Emisphere also completed a
multiple arm dosing study to evaluate different formulations of
oral heparin in tablet and capsule dosage forms.
o New Programs: Emisphere advanced into non-human primate testing an
oral form of PYY 3-36, a peptide that has been shown to suppress
appetite in humans.
o New Appointments: Arthur Dubroff was elected to its Board of
Directors, increasing the number of independent members to six, and
the total number of members to seven. Mr. Dubroff qualifies as the
audit committee financial expert and serves as Chairman of the
Audit Committee.
o Partnership update: Emisphere announced with Eli Lilly and Company
that Lilly will continue to fund the development of the oral
parathyroid hormone 1-34 (PTH) program utilizing Emisphere's
eligen(TM) technology, but that all rights previously obtained by
Lilly and all data generated for the oral recombinant human growth
hormone (rhGH) program, will be returned to Emisphere. Lilly stated
that its decision to discontinue rhGH resulted from a need to
prioritize its development pipeline, and that it
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remains committed to Emisphere's technology, as evidenced by joint
efforts on PTH.
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 clinical 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. Emisphere disclaims any responsibility to update any of such
forward-looking statements.
- Tables to Follow -
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EMISPHERE TECHNOLOGIES, INC.
Selected Financial Information For
the three months and nine months ended September 30,
2003 and 2002
(in thousands, except share and per share data)
(unaudited)
Condensed Statement of Operations
- ---------------------------------
For the three months ended For the nine months ended
September 30, September 30,
---------------------------------- ----------------------------------
2003 2002 2003 2002
--------------- --------------- --------------- ---------------
Contract research revenue $ 162 $ 735 $ 434 $ 2,553
--------------- --------------- --------------- ---------------
Costs and expenses:
Research and development 5,833 8,432 16,227 41,645
General and administrative 2,282 2,881 7,627 8,879
Restructuring 163 (73) 1,494
Loss on impairment of intangible and fixed
assets 4,299 - 5,339 4,404
Depreciation and amortization 1,511 1,572 4,590 4,524
--------------- --------------- --------------- ---------------
Total Expense 13,925 13,048 33,710 60,946
Operating Loss (13,763) (12,313) (33,276) (58,393)
--------------- --------------- --------------- ---------------
Investment income and expense:
Investment income and other income 772 644 1,530 2,551
Loss on impairment of investment (190) (190)
Gain (Loss) on sale of fixed assets 13 (53)
Interest expense (1,337) (1,157) (3,826) (3,314)
--------------- --------------- --------------- ---------------
Total investment income and expense (552) (703) (2,349) (953)
Net Loss $ (14,315) $ (13,016) $ (35,625) $ (59,346)
=============== =============== =============== ===============
Net loss per share, basic and diluted $ (0.79) $ (0.72) $ (1.97) $ (3.32)
--------------- --------------- --------------- ---------------
Weighted average shares outstanding, basic and
diluted 18,070,000 17,975,000 18,046,000 17,889,000
=============== =============== =============== ===============
Condensed Balance Sheet
- -----------------------
September December 31,
30, 2003 2002
--------------- ---------------
(unaudited)
Assets:
Cash, cash equivalents, and investments 50,884 73,701
Prepaid expenses and other current assets 1,078 2,285
Equipment and leasehold improvements, net 15,184 23,282
Land, building and equipment held for sale, net 3,699 4,520
Intangible assets, net 2,572 2,752
Other assets 1,456 1,426
--------------- ---------------
Total Assets $ 74,873 $107,966
=============== ===============
Liabilities and Stockholder's Equity:
Current liabilities 4,748 5,736
Notes payable 37,007 33,181
Deferred revenue 28
Deferred lease liability, net of current portion 1,202 1,509
Stockholders' equity 31,888 67,540
--------------- ---------------
Total Liabilities and stockholder's equity $ 74,873 $107,966
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