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Lipid Sciences, Inc. Reports Financial Results for the Second Quarter 2008 Lipid Sciences Receives Staff Determination Pursuant to Marketplace Rule 4310(c)(4) From Nasdaq; Company Requests Hearing With Listing Qualifications Panel PLEASANTON, CA--(MARKET WIRE)--Aug 14, 2008 -- Lipid Sciences, Inc. (LIPD - News) today
reported financial results for the second quarter of 2008.
For the three
months ending June 30, 2008, the Company reported a net
loss of $2.0
million, or $0.05 per share on a basic and diluted basis.
This compares
with a net loss of $2.7 million, or $0.07 per share, on
a basic and diluted
basis, for the same period in 2007. The financial results
for the second
quarter of 2007, included revenue of $137,000 related to
a collaborative
research agreement entered into with Elanco Animal Health
in November 2006.
Operating expenses for the second quarter reflected a 34% decrease over the same period for the previous year. The research and development component, which represents 63% of the total operating expenses, decreased by $807,000 or 39%. This decrease is attributable to the conclusion of the HDL Selective Delipidation clinical trial and the completion of the 22-month study of SIV-infected non-human primates using the Company's Viral Immunotherapy platform. Partially offsetting this decrease was increased spending related to the Company's HDL Mimetic Peptide program including peptide formulation development, intellectual property protection, and business development. For the six months ending June 30, 2008, the Company reported a net loss of $4.2 million or $0.11 per share, on a basic and diluted basis. This compares with a net loss of $5.2 million or $0.14 per share on a basic and diluted basis, for the same six-month period in 2007. Included in the net loss for the six months ending June 30, 2008 is revenue of $250,000 compared to revenue of $196,000 in the same period in the prior year. Revenue from both periods is related to a collaborative research agreement with Elanco Animal Health, a division of Eli Lilly and Company. Operating expenses for the first six months ending June 30, 2008 decreased by 21% to $4.5 million down from $5.8 million for the same period in the previous year. R&D expenses, which accounted for 64% of the Company's operating expenses for the six months ending June 30, 2008, decreased 25% to $2.9 million from $3.9 million for the same period last year. The decrease was primarily attributed to the conclusion of the HDL Selective Delpidation clinical trial and completion of the 22-month study of SIV-infected non-human primates using the Company's Viral Immunotherapy platform. Partially offsetting this decrease was increased spending related to the Company's HDL Mimetic Peptide program including peptide formulation development, intellectual property protection, and business development. At June 30, 2008, the Company had $2.4 million in cash and cash equivalents. The Company anticipates that sufficient capital is available to fund its operations, including current development projects, into the fourth quarter of 2008. The Company also announced today that it had received a letter, dated August 13, 2008, from The Nasdaq Stock Market Inc. stating that the Company's common stock was subject to delisting from The Nasdaq Capital Market because the Company has not regained compliance with the $1.00 minimum bid price requirement for continued listing on The Nasdaq Capital Market set forth in Marketplace Rule 4310(c)(4). The Company had announced on February 15, 2008, that the Nasdaq notified the Company of its noncompliance with the minimum bid rule and that the Company would have 180 calendar days, or until August 11, 2008, from the date of notification to achieve compliance. As previously announced with respect to other continued listing requirements, the Company has the right to appeal the Nasdaq Staff determination to a Nasdaq Listings Qualifications Panel. The Company has requested a hearing which will automatically stay the delisting of the Company's common stock until the Panel reaches a decision. There can be no assurance that the Panel will grant the Company's request for continued listing. S. Lewis Meyer, Ph.D., President and Chief Executive Officer of Lipid Sciences, commented, "On August 12, 2008 we announced the engagement of Rodman & Renshaw, LLC to assist the Company in exploring a broad range of options to maximize shareholder value. We anticipate that these options will include corporate partnerships and joint ventures as well as a merger or sale of the Company or its assets. Lipid Sciences has built a strong base of innovative development programs combined with a broad and strategic portfolio of intellectual property assets covering all of our development programs which we believe will provide significant value to a potential partner or acquirer." Lipid Sciences, Inc. is a development-stage biotechnology company engaged in the research and development of products and processes intended to treat major medical indications, in which lipids, or fat components, play a key role. The Company's HDL Therapy platform (HDL Mimetic Peptides and HDL Selective Delipidation) aims to develop treatments to reverse atherosclerosis, a systemic disease caused by the build-up of cholesterol-filled plaques in the vascular system and, most critically, in the coronary arteries. Regression of such plaques may have a major impact on reducing the risk of acute coronary events. The Company's Viral Immunotherapy platform focuses on the removal of the lipid coatings from lipid-enveloped viruses and other lipid-containing infectious agents by applying Lipid Sciences' proprietary delipidation technologies. The Company believes that removing the virus' protective lipid coating enhances the processing and presentation of viral proteins to stimulate the body's immune system to effectively fight the disease. Conditions that could potentially be impacted by these technologies include HIV, SARS, and influenza. In addition, Lipid Sciences believes that this Viral Immunotherapy platform also has applicability to a wide range of viruses impacting animal health -- a diverse market with diseases affecting both food and companion animals. Forward-Looking Statements: This release contains forward-looking statements concerning plans, objectives, goals, strategies, study results, anticipations, expectations, future events or performance as well as all other statements that are not statements of historical fact. The forward-looking statements contained in this release reflect our current beliefs and expectations on the date of this release. Actual results, performance or outcomes may differ materially from what is expressed in the forward-looking statements. Readers should refer to the documents filed by us with the SEC, specifically the most recent reports on Form 10-K and Form 10-Q which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. In addition to those risk factors, other factors that could cause actual results to differ materially include the following: our inability to obtain adequate funds; our technologies not proving to be safe or effective; our inability to obtain regulatory approval of our technologies, which are only in the clinical development stage; delay or failure to complete clinical studies; our dependence on our license agreement with Aruba International B.V.; our reliance on collaborations with strategic partners and consultants; our reliance on key suppliers to provide the material necessary to conduct successful pre-clinical and clinical studies; competition in our industry, including the development of new products by others that may provide alternative or better therapies; failure to secure and enforce our intellectual property rights; risks associated with use of biological and hazardous materials; acceptance of our potential products by healthcare providers and patients; and our dependence on key personnel. This release should be read in conjunction with the consolidated financial statements and notes thereto included in our most recent reports on Form 10-K and Form 10-Q. Copies are available through the SEC's Electronic Data Gathering Analysis and Retrieval system (EDGAR) at www.sec.gov. Lipid Sciences assumes no obligation to update the forward-looking statements included in this document. Press releases for Lipid Sciences, Inc. are available on our website: www.lipidsciences.com. To receive the Company's press releases via email, please contact: info@lipidsciences.com.
Lipid Sciences, Inc.
(A Development Stage Company)
Condensed Consolidated Statements of Operations (Unaudited)
Period from
Inception
(May 21,
Three Months Ended Six Months Ended 1999) to
(In thousands, except June 30, June 30, June 30,
per share amounts) 2008 2007 2008 2007 2008
-------- -------- -------- -------- ---------
Revenue:
Collaboration agreement
revenue $ -- $ 137 $ 250 $ 196 $ 556
Grant revenue -- -- -- -- 100
-------- -------- -------- -------- ---------
Total revenue -- 137 250 196 656
-------- -------- -------- -------- ---------
Operating expenses:
Research and
development(1) 1,256 2,063 2,894 3,876 71,968
Selling, general and
administrative(2) 746 992 1,643 1,898 33,357
-------- -------- -------- -------- ---------
Total operating expenses 2,002 3,055 4,537 5,774 105,325
-------- -------- -------- -------- ---------
Operating loss (2,002) (2,918) (4,287) (5,578) (104,669)
Interest and other income 17 171 63 375 4,825
-------- -------- -------- -------- ---------
Loss from continuing
operations (1,985) (2,747) (4,224) (5,203) (99,844)
Income tax benefit -- -- -- -- 8,004
-------- -------- -------- -------- ---------
Net loss from continuing
operations (1,985) (2,747) (4,224) (5,203) (91,840)
-------- -------- -------- -------- ---------
Discontinued operations:
Income from
discontinued
operations -- -- -- -- 582
Income tax expense -- -- -- -- (179)
-------- -------- -------- -------- ---------
Income from discontinued
operations - net -- -- -- -- 403
-------- -------- -------- -------- ---------
Net loss $ (1,985) $ (2,747) $ (4,224) $ (5,203) $ (91,437)
======== ======== ======== ======== =========
Loss per share - basic
and diluted:
Net loss per share $ (0.05) $ (0.07) $ (0.11) $ (0.14)
Weighted average number
of common shares
outstanding - basic
and diluted 37,125 37,120 37,125 37,120
Non-cash stock option
compensation expense
included in operating
expenses:
(1) Research and
development (2) 103 88 181
(2) Selling, general and
administrative 76 167 199 287
Lipid Sciences, Inc.
(A Development Stage Company)
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except share amounts)
June 30, December 31,
2008 2007
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 2,374 $ 6,459
Accounts receivable -- 4
Prepaid expenses 311 508
Other current assets 5 25
----------- -----------
Total current assets 2,690 6,996
Property and equipment, net 259 267
Long-term lease deposits 18 18
----------- -----------
Total assets $ 2,967 $ 7,281
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 1,924 $ 2,317
Accrued related party royalties 500 250
Accrued compensation 369 604
Taxes payable 2 --
----------- -----------
Total current liabilities 2,795 3,171
Deferred rent 16 17
----------- -----------
Total liabilities 2,811 3,188
----------- -----------
Stockholders' equity:
Preferred stock, $0.001 par value; 10,000,000
shares authorized and issuable; no shares
outstanding -- --
Common stock, $0.001 par value; 125,000,000
shares authorized; 37,125,348 shares issued
and outstanding at both June 30, 2008 and
December 31, 2007 37 37
Additional paid-in capital 91,556 91,269
Deficit accumulated in the development stage (91,437) (87,213)
----------- -----------
Total stockholders' equity 156 4,093
----------- -----------
Total liabilities and stockholders' equity $ 2,967 $ 7,281
=========== ===========Contact: FOR FURTHER INFORMATION CONTACT:
S. Lewis Meyer, Ph.D.
President and Chief Executive Officer
Lipid Sciences, Inc.
925-249-4010
Email Contact
Sandra A. Gardiner
Chief Financial Officer
Lipid Sciences, Inc.
925-249-4025
Email Contact
Source: Lipid Sciences, Inc.
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